New legislation eliminates SBP-DIC annuity offset for eligible surviving spouses

     Congress included a phased elimination of the SBP-DIC offset in the 2020 National Defense Authorization Act, titled "Phase-Out of Reduction of Survivor Benefit Plan Survivor Annuities by Amount of Dependency and Indemnity Compensation."
     Defense Finance and Accounting Service officials have a new webpage called “SBP-DIC News” where they will post information on the status of the implementation of this new law. Officials are working on analyzing the change and making plans for the implementation. They will not be able to answer questions about the full effect of this change in the law until they obtain legal interpretation of the changes and identify all of the impacts on policy and procedures.
     Based on the NDAA, spouse SBP annuitants will see the first change in the SBP annuity payment they receive Feb. 1, 2021. Spouses do not need to notify DFAS that their SBP payment is affected by this change in the law. DFAS officials advise that the most important action SBP annuitants can take at this time is to ensure their annuity account information is up-to-date and includes their correct mailing address so DFAS can contact them, if needed. Also, if annuitants are not using myPay online, they can set up a profile now and add their email address. To create an online myPay account, visit https://mypay.dfas.mil/ and click on “Start here” next to the Create your myPay Profile heading on the lower right-hand side of the page. DFAS officials are unable to provide individual estimates of the upcoming changes in spouse SBP annuity payments because of this change in the law.
     Officials ask SBP annuitants not to call the DFAS Customer Care Center to request an individual estimate. The webpage also states that spouse annuitants who previously received a refund of SBP premiums paid because of the SBP-DIC offset won’t need to pay back that refund because of this change in the law.
     The "Repeal of Authority for Optional Annuity for Dependent Children" and "Restoration of Eligibility for Previously Eligible Spouses" in the NDAA only affect those spouses and children of service members who died on active duty when the surviving spouse previously elected to transfer the SBP annuity to a child or children. It does not affect previous or future SBP elections by retirees or SBP annuities for a retiree's beneficiaries.
     SBP provides a monthly income to eligible survivors of Airmen upon their death while DIC is paid to survivors of Airmen who die from a service-related injury or illness.