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*** April 2020**
VOLUME 7B, CHAPTER 46: “SURVIVOR BENEFIT PLAN (SBP) – ANNUITIES”
SUMMARY OF MAJOR CHANGES
Changes are identified in this table and also denoted by blue font.
Substantive revisions are denoted by an asterisk (*) symbol preceding the section, paragraph, table, or figure that includes the revision.
Unless otherwise noted, chapters referenced are contained in this volume.
Hyperlinks are denoted by bold, italic, blue and underlined font.
The previous version dated March 2018 is archived.
PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE
All
Updated hyperlinks and formatting to comply with current administrative instructions.
Revision
(460101.B-C)
Deleted “Overview” subparagraphs B and C and redesignated all other subparagraphs in the section as it is properly represented in Chapter 44.
Deletion
(460101.E)
Added information on Dependency Indemnity Compensation reduction phase out over three years beginning in 2021.
Addition
(460103)
Updated language for “Authoritative Guidance” to comply with new requirements.
Revision
(460502)
Added information on Dependency Indemnity Compensation reduction phase out over three years beginning in 2021.
Addition
Deleted a section as it relates to the suspension and not to termination of the Survivor Benefit Plan due to Dependency Indemnity Compensation offset.
Deletion
References
Changed the name from “Bibliography” to “References” to comply with current instructions.
Revision
Table of Contents
- * April
- VOLUME 7B, CHAPTER 46: “SURVIVOR BENEFIT PLAN (SBP) – ANNUITIES”
- 1.0 GENERAL (4601)
- *1.1 Overview (460101)
- 1.2 Purpose (460102)
- 1.3 Authoritative Guidance (460103)
- 2.0 ANNUITIES (4602)
- 2.1 Eligible Annuitants (460201)
- 2.2 Payment of Annuity (460202)
- 2.3 Provisional Annuity Payments (460203)
- 3.0 DEATH OF MEMBER ON ACTIVE DUTY (4603)..................................................
- 3.1 Active Duty Deaths (460301)
- 3.2 Qualified Annuitants (460302)
- 3.3 Annuity Amount (460303)
- 3.4 Line of Duty Determination (460304)
- 3.5 Responsibilities (460305)...................................................................................
- 4.0 DEATH OF MEMBER ON INACTIVE DUTY TRAINING (IDT) (4604)
- SPECIAL SURVIVOR INDEMNITY ALLOWANCE (SSIA) (4605) 5.0 DEPENDENCY AND INDEMNITY COMPENSATION (DIC) OFFSETS AND
- 5.1 When Required (460501)
- *5.2 DIC Offset (460502)
- 5.3 Social Security Offset (460503)
- 6.0 CAUSES OF OVERPAYMENTS AND SUSPENSION OF PAYMENT (4606)
- 6.1 General Causes of Overpayment (460601)
- 6.2 General Reasons for Suspension of Payment (460602)
- 7.0 LIABILITY (4607)
- 7.1 Overview (460701)
- 7.2 Frequency of Certification (460702)
- 8.0 LIQUIDATION OF DEBT (4608)
- 8.1 Debt Liquidation (460801)
- 8.2 Direct Remittance (460802)
- 8.3 Reduced DIC (460803)
- 8.4 Reduced SBP Annuity (460804) Table of Contents (Continued)
- 9.0 WAIVER OF INDEBTEDNESS (4609)
- 9.1 Request a Waiver of Indebtedness (460901)
- 9.2 Receipt of Waiver Request (460902)
- 10.0 TERMINATION OF ANNUITY (4610)
- 10.1 Time of Termination (461001)...........................................................................
- *10.2 Reasons for Termination (461002)
- 11.0 REINSTATEMENT OF ANNUITY (4611)
- 11.1 Reinstatement of Spousal Annuity (461101)
- 11.2 Reinstatement of Child Annuity (461102)
- 12.0 CERTIFICATE OF ELIGIBILITY (COE) (4612)
- 12.1 Purpose (461201)
- 12.2 Failure to Furnish Certificate (461202)..............................................................
- 12.3 Method of Completing COEs (461203)
- 12.4 COE Not Required (461204)
- 13.0 Report of Existence (ROE) (4613)
- 13.1 Purpose (461301)
- 13.2 Frequency (461302)
- 13.3 Failure to Return ROE (461303)
- 14.0 TAXABILITY OF ANNUITIES (4614)
- 14.1 Taxability of SBP Annuity Payments (461401).................................................
- 14.2 Taxability of SBP Cost Refunds (461402).........................................................
- 14.3 Federal Income Tax Withholding (FITW) (461403)
- 14.4 Income Exclusion (461404)
- 14.5 Amount of Annuity Subject to Federal Estate Tax (461405)
- 14.6 State Taxation (461406)
- 15.0 MINIMUM INCOME WIDOW/SURVIVING SPOUSE (4615)................................
- 15.1 Eligibility Criteria (461501)
- 15.2 Amount of Annuity (461502).............................................................................
- 15.3 Effective Date of Entitlement (461503)
- 15.4 Annuitant, Mentally or Physically Incapacitated (461504)
- 15.5 Changes and Termination (461505)
- 15.6 Reopened Claim (461506) Table of Contents (Continued)
- 15.7 Causes of Overpayment (461507)
- 15.8 Liability (461508)
- 15.9 Waiver of Indebtedness (461509)
- Table 46-1. Annuity for Surviving Spouse or Former Spouse
- Table 46-2. Refund of Monthly Premium for SBP Effective January 4,
- Table 46-3. Taxability of SBP Cost Refunds
- *REFERENCES
*** April 2020 CHAPTER 46**
SURVIVOR BENEFIT PLAN (SBP) – ANNUITIES
1.0 GENERAL (4601)
*1.1 Overview (460101)
1.1.1. The SBP provides a monthly annuity of up to 55 percent of the annuity base amount with a cost-of-living adjustment (COLA), to an eligible spouse or children. The monthly annuity for a natural person with an insurable interest, which also includes a COLA, is 55 percent of the amount of the gross retired pay after the cost of participation is subtracted.
1.1.2. Effective December 23, 2016, Public Law (PL) 114-328, Section 642 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, amended Title 10, United States Code (U.S.C.), sections 1448, 1450, and 1451. The amendments expanded entitlement to the Special Survivor Indemnity Allowance (SSIA) and updated the amount of the annuity payable and the processes for paying an annuity to the survivors of Reserve Component (RC) members who die in the line of duty and RC members who die after completing the years of service to be eligible for a non-regular retirement. See Chapter 54.
*1.1.3. Public Law (PL) 116-92, Section 622 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020, signed into law on December 20, 2019, amended 10 U.S.C. §1450(c). This legislation created a multi-year phase out of the SBP-Dependency Indemnity Compensation (DIC) offset, beginning in FY 2021, as follows:
1.1.3.1. For amounts payable for all periods prior to and including the period ending on December 31, 2020, the full amount of DIC paid by the VA to the surviving spouse and former spouse will continue to offset the SBP. The spouse or surviving spouse will continue to receive SSIA, if eligible.
1.1.3.2. For amounts payable for the period beginning on January 1, 2021, but ending on December 31, 2021, two-thirds of the amount of DIC paid by the VA to the surviving spouse or former spouse will offset the SBP annuity amount. The spouse or surviving spouse will continue to receive SSIA, if eligible.
1.1.3.3. For amounts payable for the period beginning on January 1, 2022, but ending on December 31, 2022, one-third of the amount of DIC paid by the VA the surviving spouse or former spouse will offset the SBP annuity. The spouse or surviving spouse will continue to receive SSIA, if eligible.
1.1.3.4. For amounts payable for all periods beginning on or after January 1, 2023, there will be no reduction.
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member/former spouse marriage. The annuity amount for the spouse or former spouse is shown on Table 46-l. The annuity for children is divided into equal shares.
2.1.4. Natural Person With an Insurable Interest. The annuity is payable only to the natural person with an insurable interest as designated by, or on behalf of, the member. The initial annuity amount is 55 percent of the member’s gross retired pay less the SBP premium cost at the time of member’s death.
2.2 Payment of Annuity (460202)
2.2.1. Payments in General. The SBP annuity is paid monthly to the eligible annuitant. The SBP payment is effective the first day after the death of a member unless death occurs on the 30th day of a 31-day month. In that case, the annuity starts on the first day of the next month. Annuity payments end effective the last day of the month before the month in which the annuitant becomes ineligible.
2.2.1.1. Payments subject to offset:
2.2.1.1.1. When the payment of premiums is in arrears, no annuity may be paid until the unpaid premiums, with interest accrued at the rate approved by the Department of Defense (DoD) Board of Actuaries under 10 U.S.C. § 1465 for the purpose of determining the retirement accrual cost, has been recovered. See Office of the Actuary and subparagraph 6.2.3. For the establishment and collection of a debt for unpaid SBP premiums, see Volume 16, Chapter
2.2.1.1.2. Debts to the United States or any of its instrumentalities incurred by the annuitant may be offset from the annuity.
2.2.1.2. Debts of a deceased member, other than for delinquent premiums, are not the responsibility of the annuitant and may not be offset involuntarily against the annuity.
2.2.1.3. The annuity is neither assignable nor subject to execution, levy, attachment, or garnishment (except for alimony or child support).
2.2.1.4. If the Secretary of the Military Department concerned (or designee) determines that a participating member is presumed dead, the annuity accrues from the first day after retired or retainer pay was suspended or would have been suspended had the member been in receipt of pay on the basis that the member is missing.
2.2.1.5. Checks are not mailed to an annuitant living in a currency-blocked country. See Title 31, Code of Federal Regulations (CFR), section 211.1 for specific conditions for withholding the delivery of checks to addresses outside the United States.
*** April 2020** 2.2.2. Third Party Payees
2.2.2.1. Trustees in Bankruptcy. The annuity may be paid on behalf of an annuitant to a trustee in bankruptcy pursuant to an order of the bankruptcy court in a proceeding under Chapter 13 of the Bankruptcy Code since such proceeding is voluntary.
2.2.2.2. Incapacitated Annuitants. An annuity may be paid to a third party on behalf of an incapacitated annuitant only if the third party has been appointed as guardian, custodian, or other fiduciary pursuant to a state court order or has been designated a representative payee under subparagraph 2.2.3. Otherwise, the annuity may be paid only to the annuitant unless the annuitant has been determined to be incompetent of managing his or her own affairs by a state court, physician, or psychologist. If the annuity cannot be paid directly to the annuitant or to a third party, amounts will remain unpaid and credited on account until the annuitant is determined to be competent or until a third party has been properly appointed to receive the annuity on behalf of the annuitant. The annuity payment will still be treated as income to the annuitant. Regardless of whether the Representative Payee is a trustee (unless a trustee of Special Needs Trust as described in subparagraph 2.2.3.6.), an Internal Revenue Service (IRS) Form 1099, Miscellaneous Income, will be issued in the annuitant’s name.
2.2.2.3. Power of Attorney. An eligible annuitant who is physically or mentally incapacitated (but who has not been determined to be mentally incompetent by a state court, physician, or psychologist) may accept assistance from a person holding a power of attorney in completing (including the signature element) and filing the annuity application form. Benefit payments based on an annuity application signed by the person holding the power of attorney must be made payable directly to the annuitant.
2.2.2.4. Minor Child Annuitants. An annuity for a minor child is paid to the legal guardian or, if there is no legal guardian, to the natural parent who has care, custody, and control of the child as the custodian, or to a representative payee of the child. An annuity may be paid directly to the child when the child is considered to be of majority age under the law in the state of residence. The child is considered an adult for annuity purposes and a custodian or legal fiduciary is not required. See Appendix H for age of majority by state.
2.2.2.5. Surety Bonds. In cases where it appears necessary to protect the annuitant, the Secretary of the Military Department concerned may require a person receiving payments on behalf of the annuitant to provide a surety bond in an amount sufficient to protect the interests of the annuitant. The payee may pay for such bond(s) out of the SBP annuity. This is part of the periodic financial accounting by the payee. The Secretary of the Military Department concerned will determine the amount necessary in the surety bond(s) based on the amount of the SBP annuity payable. A surety bond ordinarily will not be required if the payee is a close family member or a government or financial institution.
2.2.2.6. Special Needs Trusts (SNT). A special needs trust is also known as a supplemental needs trust. An SNT is a legal instrument that can be established in order to ensure that assets are retained that can be used for the supplemental needs of a certain disabled individual, without disqualifying that individual from other Federal or State benefits that the disabled
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requested. In situations where a periodic accounting is required, it ordinarily will be submitted annually, unless the Secretary of the Military Department concerned determines that a more frequent submission is required.
2.2.2.7.1. Final financial reporting will be required upon the loss of a beneficiary’s eligibility, a change of representative payee, or the determination later that an annuitant is competent to manage their financial affairs.
2.2.2.7.2. Major expenditures (i.e., those in excess of $1,000 or the value of the annuity for 1 year, whichever is less) from the payee’s bank account for the annuitant require prior written approval by the Secretary of the Military Department concerned.
2.2.2.7.3. If the Secretary of the Military Department concerned has evidence to suggest that the annuity funds have been or are being misused by the payee, the annuity may be suspended. An investigation will be conducted to determine if a new payee should be appointed or if payments may be resumed to the payee.
2.2.3. Representative Payee. The SBP annuity due a minor who is a mentally incompetent, or otherwise legally disabled person for whom a guardian or other fiduciary has not been appointed may be paid to a representative payee who, in the judgment of the Secretary of the Military Department concerned, is responsible for the care of the annuitant. The representative payee is required to spend or invest the amount paid on behalf of the annuitant solely for the benefit of the annuitant. The representative payee must certify that SBP payments received on the annuitant’s behalf are used for the annuitant’s benefit.
2.2.3.1. An annuitant is determined to be incompetent if the Secretary of the Military Department concerned receives an actual determination of incompetency made either by a state court or by a physician or psychologist. A representative payee will not be established solely on the basis of a letter from a third party that an annuitant is incapable of handling financial affairs. The annuitant will be notified of actions being taken to make a determination of incompetency and will be provided an opportunity to review the evidence being considered. The annuitant will also have the opportunity to submit additional evidence before a determination is made.
2.2.3.2. If a court order provides for payment of a fee to the representative payee, or if the Secretary of the Military Department concerned determines that payment of a fee is necessary in order to obtain the fiduciary services of a representative payee, a monthly fee will be allowed. In such circumstances, a fee of 4 percent of the monthly SBP annuity will be allowed, unless a court order dictates a lesser fee. In the case of a spouse or former spouse annuitant, the fee will be no more than 4 percent of the adjusted annuity (gross annuity less any DIC offset). Any court order that provides for a fee in excess of 4 percent will be limited to 4 percent. The representative payee will be notified of the fee percentage allowed. The fee is not a separate payment mailed to a representative payee, but can be withheld by the representative payee from the monthly annuity payment. The fee is part of the periodic financial accounting by the representative payee.
*** April 2020** 2.2.3.3. The selection of a representative payee will be made on the basis of the individual annuitant’s circumstances. Generally, the order of preference for appointing a representative payee is:
2.2.3.3.1. Spouse,
2.2.3.3.2. Son or daughter or legally adopted son or daughter,
2.2.3.3.3. Brother or sister,
2.2.3.3.4. Parents,
2.2.3.3.5. Head of federal or state institution,
2.2.3.3.6. Trustee of a private trust, or
2.2.3.3.7. Any other individual whose appointment appears to be in the best interest of the annuitant.
Note: If more than one person or institution requests to be named the representative payee of the annuitant, the Secretary of the Military Department concerned will determine which applicant is a more appropriate payee.
2.2.3.4. In addition to SBP annuity payments (including payments to Minimum Income Widows covered under section 15.0), annuity payments under the Uniformed Services Contingency Option Act Retired Serviceman Family Protection Plan (RSFPP), and RCSBP may also be made to a representative payee.
2.2.3.5. The representative payee will be required to submit a Report of Existence (ROE) and a Certificate of Eligibility (COE) as specified in section 12.0 or 13.0.
2.2.3.6. An annuity paid to a person on behalf of the annuitant in accordance with these provisions discharges the obligation of the United States for the payment to the annuitant in the amount of the annuity paid.
2.2.4. Rounding. Monthly annuities, if not a whole dollar, are rounded to the next lower whole dollar (for example, if a monthly annuity is calculated to be $500.99 the annuity paid will be $500).
2.2.5. COLA
2.2.5.1. Normally, SBP annuities increase at the same time and by the same percentage that retired pay increases. Exception: When the payment of increased retired pay due to a COLA is delayed by law, the increased annuity due to a COLA is not delayed. The COLA applies to the monthly gross annuity amount before any reductions, such as DIC.
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30 days. Limited benefits may be payable under this section when the death is not in the line of duty in the case of a member who is eligible to receive retired pay prior to the date of death.
3.1.2. Death in the Line of Duty. If the member was on active duty at the time of death and death is in the line of duty, the death qualifies for SBP benefits under this section.
3.1.3. Death is Not in the Line of Duty
3.1.3.1. If the member was on active duty and retirement eligible at the time of death, as described in paragraph 3.1 and death is not in the line of duty, the SBP base amount is equal to the member’s retired pay. The retired pay is computed as if the member were retired for length of service under applicable law of the respective service of the deceased member.
3.1.2.2. If the member was not on active duty, or was on active duty but was not eligible for retired pay and death is not in the line of duty, the member’s death does not qualify for SBP benefits.
3.2 Qualified Annuitants (460302)
The annuity payment will be made based on the following priority:
3.2.1. Former Spouse Based on the Court Order. The annuity is payable to a former spouse if the member is required by a court order or spousal agreement and has made an election to provide such coverage or if the former spouse has deemed an election in accordance with 10 U.S.C. § 1450(f)(3). If there are multiple court orders ordering the member to elect former spouse SBP coverage, the court order with the earliest date will take precedence.
3.2.2. Current Spouse. The annuity is payable to a surviving spouse unless the annuity is payable to a former spouse.
3.2.3. Child. The annuity is payable to the dependent children of the member when:
3.2.3.1. There is no eligible former spouse and either there is no eligible surviving spouse or the surviving spouse later dies; or
3.2.3.2. For a member who dies on or after October 7, 2001, but before January 1, 2023, the Secretary of the Military Department concerned, in consultation with the surviving spouse, determines it appropriate to provide an annuity for the dependent children instead of paying an annuity to the surviving spouse.
3.2.3.3. Effective January 1, 2023, if the annuity was payable to an eligible surviving spouse, who, in consultation with the Secretary of the Military Department concerned, previously elected to transfer the annuity to a surviving child or children under the provisions of 10 U.S.C. § 1448(d)(2)(B), will have their eligibility restored. If the surviving spouse is ineligible to receive SBP, the annuity shall continue to be paid to the eligible child or children, unless and until the spouse regains SBP eligibility.
*** April 2020** 3.2.4. Insurable Interest Deemed Election. If no annuity is payable under subparagraphs 3.2.1., 3.2.2., or 3.2.3., the Secretary of the Military Department concerned may pay an annuity to a natural person with an insurable interest in the member, if the person is a dependent of the member as defined in 10 U.S.C. § 1072(2).
3.3 Annuity Amount (460303)
3.3.1. Qualified Death in the Line of Duty. The SBP base amount is equal to the higher of the retired pay of the member based on length of service, or the retired pay as if the member retired with a total (100 percent) disability equal to 75 percent of the appropriate retired pay base. The annuity is computed at 55 percent of the SBP base amount. For members of the RCs who die while serving on active duty, the retired pay base will be computed as if the member had been entitled to basic pay for the 36 months preceding retirement or the entire period the member was a member of a uniformed service (if less than 36 months), regardless of whether the member served the entire period on active duty.
3.3.2. Qualified Death Not in the Line of Duty. The SBP base amount will be computed as if the member retired for length of service based on the final basic pay or high-36 average as applicable. However, for members who elected to receive the Career Status Bonus (see Volume 7A, Chapter 66), the SBP base will be computed using the Reduced Retirement (REDUX) method with the prescribed reduced COLA. The annuity is computed at 55 percent of the SBP base amount.
3.3.3. Insurable Interest Deemed Election. If an annuity is payable pursuant to subparagraph 3.2.4., the SBP base amount is equal to retired pay computed as if the member retired with a total (100 percent) disability, which is equal to 75 percent of the appropriate retired pay base, less the cost of participation. The annuity is computed at 55 percent of the SBP base amount.
3.4 Line of Duty Determination (460304)
3.4.1. Purpose. For the purpose of determining eligibility for SBP benefits, a member’s death will generally be considered to have occurred in the line of duty unless the death:
3.4.1.1. Occurred while the member was not serving on active duty;
3.4.1.2. Was the result of the member’s own intentional misconduct or willful negligence; or
3.4.1.3. Occurred during a period of unauthorized absence.
3.4.2. Investigation to Determine the Cause of Death. The Military Services will conduct an investigation and make a written finding as to whether a member’s death was in the line of duty while the member was on active duty. The written finding must describe the circumstances under which the member died, and it also must address whether the death was caused by the member’s own intentional misconduct or willful negligence, or whether the death occurred during a period of unauthorized absence.
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authorizing the VA to collect any overpayment that may result. A multi-year phase out of the DIC offset of SBP annuities begins January 1, 2021. See subparagraphs 1.1.5.1 – 1.1.5.4 for details regarding the phase out periods and corresponding offset amounts.
5.2.1. Premium Refund Due to DIC Award
5.2.1.1. Partial Refund. When an annuity is reduced due to DIC entitlement, a refund of SBP premiums is made based on the difference between the actual premiums paid and the premiums that would have been needed to provide the annuity payable after the DIC reduction. If DIC entitlement is lost due to remarriage of the surviving spouse after age 55, but prior to age 57, SBP may be reinstated in full. See subparagraph 5.2.3.
5.2.1.2. Full Refund. For periods prior to January 1, 2020, when DIC is equal to or greater than the annuity, a portion of the SBP annuity is withheld, except under the conditions shown in subparagraph 5.2.3. The SBP premium is then refunded after any annuity debt is liquidated. If the annuitant dies before a refund of SBP premium is made, the refund must be made to the annuitant’s beneficiaries in the order of precedence. See Chapter 31 for further information.
5.2.1.3. Surviving spouses of retired members who received a refund of SBP or RC-SBP premiums, whether in part or in full, due to the DIC offset prior to January 1, 2020 will not be required to repay such premiums when SBP or RC-SBP payments are adjusted in accordance with subparagraph s 1.1.5.1 – 1.1.5.4.
5.2.1.4. Surviving spouses of retired members who died on or after January 1, 2020, but before January 1, 2023, will receive a prorated refund of SBP or RC-SBP premiums for the period of time that the surviving spouse is subject to the DIC offset. Surviving spouses of retired members who die on or after January 1, 2023, will not receive a refund of SBP or RC-SBP premiums.
5.2.1.5. Supplement Survivor Benefit Plan (SSBP). SSBP premiums are not refunded. SSBP was repealed effective April 1, 2008.
5.2.2. Sample Computation of Refund. See Tables 46-2 and 46-3 for a sample computation of a refund. SSBP was repealed effective April 1, 2008.
5.2.3. Reinstatement of SBP Annuity Upon Loss of Entitlement to DIC Because of Remarriage Between Ages 55 and 57
5.2.3.1. If the spouse whose SBP annuity entitlement was adjusted under subparagraph 5.2.1 subsequently loses entitlement to DIC because of remarriage occurring on or after the beneficiary's 55th^ birthday, but before age 57, the annuity is reinstated under conditions specified in subparagraph 5.2.3.2 on the effective date of the loss of DIC entitlement. The annuity is adjusted to reflect all authorized COLAs.
5.2.3.2. The surviving spouse who loses entitlement to DIC must repay all amounts refunded under subparagraphs 5.2.1.1 and 5.2.1.2, in either a lump sum or installments. If the
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repayment is in installments, the installment payments are deducted from the SBP annuity payable. The installment will be 50 percent of the DIC amount or 50 percent of the gross annuity, whichever is less. When annuity is increased by a COLA, the same percentage increase will be applied to the installment deduction. Thereafter, interest accumulates on any unpaid balance until the full amount has been repaid. Thus, the remaining amount on the date of each installment deduction will be increased by a monthly factor based on the 12th^ root of 1 plus the current annual interest rate approved by the DoD Board of Actuaries under 10 U.S.C. § 1465 for the purpose of determining the retirement accrual cost. For the establishment and collection of a debt for refunded SBP premiums, see Volume 16, Chapter 2.
5.2.4. Late Award of DIC. When a claim for DIC is not filed within 1 year after the member’s death, and the spouse received an SBP annuity, no cost refund is made when DIC is later awarded. The effective date of the reduced annuity is the date that the VA received the claim.
5.2.5. Special Survivor Indemnity Allowance (SSIA). A surviving spouse who is entitled to DIC under 38 U.S.C. § 1311 and who is not collecting the full amount of SBP due to receipt of DIC may be entitled to SSIA. SSIA is a separate fixed monthly entitlement, but may not exceed the amount of the annuity in any month that is subject to offset by the DIC. See 10 U.S.C. § 1450(m). Receipt of the SSIA is conditional upon the requirements enumerated in the law. See subparagraphs 1.1.5.1 – 1.1.5.4 for details on the DIC offset phase out period.
5.3 Social Security Offset (460503)
Effective April 1, 2008, the Social Security Offset Method was eliminated permanently for all annuitants.
6.0 CAUSES OF OVERPAYMENTS AND SUSPENSION OF PAYMENT (4606)
6.1 General Causes of Overpayment (460601)
Generally, SBP annuity overpayments are caused by:
6.1.1. Failure to reduce an annuity by the amount of DIC;
6.1.2. Non-termination of annuity because of ineligibility;
6.1.3. Erroneous computation;
6.1.4. Insufficient or untimely information; or
6.1.5. A determination by the Secretary of the Military Department concerned (or designee) that a participating member is alive after the Secretary of the Military Department concerned previously determined that the member was presumed dead.
*** April 2020** 7.2.3.1 A payment to a student continues during any interval between school years that does not exceed 150 days if the student demonstrates, to the satisfaction of DFAS-CL, that the student has a bona fide intention of resuming or continuing a full-time course of study or training in a recognized educational institution immediately after that interval.
7.2.3.2. An eligible student annuitant under SBP properly enrolled in a recognized educational institution employing the usual quarter or semester system, who becomes ill or requires non-elective surgery during the school term, retains his or her student status for the rest of that term.
8.0 LIQUIDATION OF DEBT (4608)
8.1 Debt Liquidation (460801)
Upon discovery of an overpayment, the annuitant must be provided with due process notice in accordance with Volume 16, Chapter 2, or in other regulations pertaining to debt collection found elsewhere. The due process notice must include the amount of the debt and the method in which the overpayment is being, or may be, liquidated.
8.2 Direct Remittance (460802)
The annuitant may liquidate the overpayment by making direct remittance to DFAS-CL.
8.3 Reduced DIC (460803)
The VA may reduce DIC and remit the amount collected to DFAS-CL.
8.4 Reduced SBP Annuity (460804)
DFAS-CL may reduce later SBP annuity payments.
9.0 WAIVER OF INDEBTEDNESS (4609)
9.1 Request a Waiver of Indebtedness (460901)
When applicable, DFAS-CL advises the annuitant of the right to request a waiver of indebtedness. The right to request a waiver does not constitute removal of the responsibility for repayment of the debt. If a waiver request is granted, repayment of the debt is not required.
9.2 Receipt of Waiver Request (460902)
Suspension of collection action may be authorized upon receipt of a waiver request. Refund of an amount withheld before receipt of a request for a waiver is not authorized. When a waiver is granted, any amount collected after the receipt of the waiver request is refunded to the annuitant.
*** April 2020**
10.0 TERMINATION OF ANNUITY (4610)
10.1 Time of Termination (461001)
Entitlement to an SBP annuity terminates effective as of the first day of the month in which eligibility is lost. The annuity is terminated immediately if a determination is made by the Secretary of the Military Department concerned (or designee) that a participating member is alive after it was previously determined that the member was presumed dead.
*10.2 Reasons for Termination (461002)
The SBP annuity is terminated when:
10.2.1. The spouse or former spouse (spouse category) annuitant remarries before age 55 or dies. If the member also provided coverage for children, the full annuity is payable, in equal shares, to the remaining eligible dependent children effective on the first of the month in which the spouse or former spouse dies or remarries;
10.2.2. The child annuitant(s) lose eligibility because of:
10.2.2.1. Child’s attaining age 18 and not pursuing a full-time course of study;
10.2.2.2. Marriage or death of child annuitant;
10.2.2.3. An incapacitated child over age 18 becomes independently capable of earning amounts sufficient for his or her own particular personal needs through substantial and sustainable gainful employment. This termination is not automatic; an annuitant will be given an opportunity to submit rebutting evidence. This annuity may be reinstated; see paragraph 11.2;
10.2.2.4. Termination of student status (child over age 18 and under age 22). If the student reaches age 22 before July 1 or after August 31 of a calendar year, the child’s annuity terminates on the first of July after the student’s 22nd^ birthday. If a student reaches age 22 between July 1 and August 31 (inclusive) of a calendar year, the student loses eligibility and the annuity terminates on the first day of the month in which the age of 22 was reached; or
10.2.2.5. Reinstatement of a spouse or former spouse (spouse category) annuity following divorce or annulment;
10.2.3. A natural person with an insurable interest dies. The termination is final because there are no provisions for designating a contingent survivor annuitant; or
10.2.4. The Secretary of the Military Department concerned (or designee) determines that a participating member is alive after it was previously determined that the member was presumed dead.
