If a deceased member’s surviving spouse remarries before age 57, his or her entitlement to monthly DIC payments will cease. If the remarriage ends, DIC payments may be reinstated. If the spouse’s SBP benefits were being reduced by those DIC payments, the spouse’s full SBP entitlement is restorable provided the spouse remarries after age 55 and the SBP refund is repaid. Surviving spouses who receive DIC and remarried after their 57th birthday are allowed to receive the SBP they are entitled to without the DIC offset effective 1 January 2004 or the date of remarriage, whichever is later. The Special Survivor Indemnity Allowance (SSIA) was established to offset the reduction in SBP caused by the receipt of DIC. In FY 2022 the maximum SSIA payment is $346. Further discussion of Dependency & Indemnity Compensation benefits, as well as amounts currently payable, is in Chapter 6. 5–8. ELIGIBILITY REQUIREMENTS. The basic eligibility requirements for participating in the Survivor Benefit Plan are outlined in the table on the preceding page. 5–9. ADDITIONAL PROVISIONS OF THE SBP. Cost Adjustments. As mentioned earlier, the cost of participating in the SBP will be adjusted when a member’s retired pay is increased by cost–of–living adjustments based on the Consumer Price Index (CPI). The cost of participating can also be adjusted as the result of: a. Advancement to a higher rank on the retirement list, provided his or her full retired pay was designated as the SBP base amount; b. A change from the Temporary Disability Retired List to the Permanent Disability Retired List, provided the member’s full retired pay was designated to be the SBP amount;
c. A recomputation of the member’s service because of a recall to active duty: or, d. Adjustment of retired pay at age 62 due to qualified public service for a Temporary Early Retirement Authority (TERA) retiree or a member who retired under the REDUX retirement plan due to accepting a Career Status Bonus. In all cases, the cost of participating remains proportional to the increased amount of retired pay. Benefit Adjustments. The amount a beneficiary receives in SBP annuity will be increased by the same percentage that is used to increase the member’s retired pay (increases are tied to annual changes in the Consumer Price Index). Also, whenever both DIC and SBP are being received, any adjustment to one benefit may affect the amount received under the other benefit. Waiver of Retired Pa y. Retirees who waive receipt of military retired pay so that their years of military service can be counted for civil service retirement purposes are required to deposit the cost of SBP coverage during the period of such waiver unless they elect survivor’s coverage offered to participants in the Civil Service Retirement Program. Provisions for Missing Service Members. If a member is missing for at least thirty days and circumstances make it reasonable to conclude that he or she is dead, the member’s branch of service can order SBP payments to be started to his or her designated beneficiaries. 5–10. TAXATION OF SBP ANNUITIES. The amount a retiree pays to participate in the SBP program is tax free and is not reported on the end of year wage and tax statement issued by the Defense Finance & Accounting Service (DFAS). Consequently, the amount paid to a member’s beneficiaries after his or her death is considered taxable income.
CHAPTER 5: THE SURVIVOR BENEFIT PLAN
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