The plan to eliminate the dollar-for-dollar offset of Survivor Benefit Plan (SBP) payments to surviving spouses who receive Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs is underway. The first phase began at the beginning of the year.
According to the Defense Finance and Accounting Service (DFAS), some spouses will have seen an increase in their SBP annuity payments on Feb. 1. Other spouses will not see any changes until the first phase of the plan is complete, by January 2023. DFAS noted that the amount of SBP payments will not affect DIC amounts at all.
All Defense Department annuitants should have received an explanatory letter from DFAS sometime late last year. The letter would include estimated annual gross SBP, the estimated DIC offset, and the SBP payment after the DIC offset. Annuitants are advised to keep the letter on file as a reference, and make sure DFAS paymasters have up-to-date and accurate information about their accounts.