The. Comment * document.getElementById("comment").setAttribute( "id", "abdb2766c9bb6c7b9354065e65ae13d8" );document.getElementById("ef5eefa35b").setAttribute( "id", "comment" ); Notify me of follow-up comments by email. The spouse, who was originally denied benefits, nearly 30 years ago, has been approved benefits and they backdated them! Im 59 so remarriage cant change anything. %
In my opinion, keeping SBP makes sense for a lot of people. 1994 and he passed away in 2004. Parents married 18 years 1958-1976, Divorced 1976. For reasons that I cannot recall my wife and I chose the child only option. A request to withdraw from SBP coverage due to disability requires the written consent of the spouse or other beneficiary. The benefit is not split between the spouse and child(ren), and there are not multiple benefits going to multiple children. A surviving spouse can collect 100 percent of the late spouse's benefit if the survivor has reached full retirement age, but the amount will be lower if the deceased spouse claimed benefits before he or she reached full retirement age. Social Security. At this point we are still waiting to hear back from the Army on the extension. I have a similar circumstance where as my father passed away in 2018 however divorced in 2007. Information was not immediately available onwhether or when DFAS will have revised procedures in place to implement the new law, or whether retirees will simply be able to submit a standard DD Form 2656-6, as they did before May2013. The primary and important difference is that you can not outlive SBP coverage. <>
Hi Phil! This was just a terrible wrong.". Im looking up some information and it might take a little time. Was DFAS notified of your divorce when it occurred? Children over the age of 21 cannot be beneficiaries. Coverage after retirement requires a cost-benefit analysis, decision, and the signing of the appropriate paperwork. 10+ Places To Learn About The Survivor Benefit Plan, The Survivor Benefit Plan (SBP) Payback Period, From The Mailbag: Term Life Instead of SBP, From The Mailbag: SBP When You Marry After Retirement. Putting children on the plan (minors only, or under 22 if students) in inexpensive and may be worth it. So now no SBP, 1. Whatever is remaining DFAS will send to her in a lump sum amount. Sending prayers to your wife and you during this difficult time. The withholding tax rate is 30 percent of the payable annuity. If military retirement pay is a small part of your overall income strategy, then SBP may not be right for you. Or would SHE be liable to pay back the money? However, a program was established in 1972 to allow retiring service members to purchase coverage that provides monthly income to survivors after the service members death. Youre trying to get a refund of the SBP premiums that your father continued to pay after your mothers death? You also should have received a copy but if not the casualty office has to keep them for a certain period of time. It has taken me 6 months to get them to use the correct mailing address and I am still waiting for some of my pay from last year. If a couple gets divorced, the ex-spouse of a retiree can still be awarded his or her SBP. Since the physical separation and while working through the agreement and court review before final decree, I was promoted and continued to drill. For spousal coverage, the monthly premium is the lesser of: For example, $3000 of base amount covered would require a $195 monthly premium for spouse or former spouse coverage. If that situation were to occur, she could make an estimate tax payment to the IRS. My husband never had opportunity to get a retirement plan and now he is almost 50. Phil Odom, deputy director of government relations for the Military Officers Association of America, said that DFAS had allowedSBP transfers after the death of a former spouse from the time SBP was created in 1972 until the agency changed its interpretation of the law more than 2 years ago. Pat, Im sorry to hear that this has turned out this way. how does it work for veterans who were Medically retired at 8 years. There is both personal risk and market risk. One downside to SBP coverage is that you do not have the choice whether to pay premiums with pre-tax or post-tax money. A non-family member may include a business partner or joint owner of property. We have approximately $500K in equity (in the house, which we plan to sell in 6 years) and approximately $250K in savings and education accounts. As you can see, theres a lot to consider. Just curious did DFAS ever request repayment of your moms SBP since DIC gave back pay? As awful as it is to consider, you could be involved in a car accident or develop a completely unrelated medical condition during this time. %PDF-1.5
If SBP exceeds the DIC amount, the surviving spouse will receive the difference between the SBP annuity and DIC, plus a refund of SBP payments for that portion of the SBP annuity not. Is there anything she can do? Full SBP coverage is effective immediately upon retirement. Former Spouse 5. I am military retiree (24 years service) entered service 1971 and I was medically retiree with a 60 percent disability . Who can I contact to try and help Dad. A beneficiary cannot receive the full amount of both SBP and DIC. She knew nothing about a refund and that refund could result in a large irs tax penalty! Without SBP, if the retiree dies, the military retirement stops as well. Hi Kate You could elect to cover 2/3 of your retirement pay, pay a corresponding premium, and provide corresponding benefits. The surviving. Certain time limits and other conditions apply. Many people find that a combination of term insurance and SBP fulfill their needs better, and you dont have to opt to cover the full amount of your military retirement pay. Simple math shows that by putting that money is a savings account earning 2%, my spouse would earn $2000/mon with the exception that she also has $1,000,000 in the bank. My dad died in 2017 at the age of 80. Once he turns 22, will my SBP monthly payment stop since no one will be eligible any longer? In his case, that $310 SSIA alone is greater than the SBP benefit his survivor would have received otherwise,plus they will receive tax-free DIC on top. It took about a year. I hope that eases your mind. Ill have to check and see if anyone knows how taxes are withheld on the refund if it is withheld like a bonus or as directed on the W-4. This post is part ofThe Comprehensive Military Retirement Checklist. Hi Kate. Any discussion of SBP or insurance should be thinking strongly about the worst-case scenario, and this worst-case scenario cant assume that youll have a long and successful second career. Now if you have already been receiving the DIC payments, youre only going to receive one of the benefits fully unless you elect child only, advisable if your kids are still young but know that it ends after college. Mr. Mann, you can continue your SBP coverage by electing to have the SBP premiums deducted from your VA disability compensation or by paying the premiums directly. It also requires constant decision-making about how much to spend, finding the balance between spending enough to live will versus ensuring that you wont outlive your money. No, they do not. In addition my mother has suggested that my father put in his will that my younger sister (50 years old) be the beneficiary of this benefit. You may elect SBP spouse coverage for the first spouse you acquire after retirement; however, you must elect the coverage before the first anniversary of your marriage. The original commenter purchased SBP in order to provide income to a beneficiary if he died first. Thank you very much Kate. I am now divorced and my ex-wife is remarried. Retired in 1978 and died in 2021. endobj
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The SBP-Social Security offset was eliminated in the 2005 National Defense Authorization Act. Barrett, I just want to be sure that Im understanding correctly: it is all military disability retirement pay, and none of it is VA disability compensation? Walker said. Cant find gov info on that particular subject. How do I find out if my dad has SBP? My suspicion is that he did not sign up since I assume my mom had to provide death cert to USAF for the retirement to end and the Tri-Care to kick in but just want to be 100% sure. Premiums for child coverage are based upon the age of the retiree, the age of the youngest child at the time of retirement, and the age of the spouse/former spouse, if combination coverage is selected. If not, what other sources of income do you see for them? Im working on a long blog post about this very topic and I thought I could just link you to it, but it is taking much longer than I expected. When they requested documents, she sent them in. Basic Employee Death Benefit Surviving Spouse. For more information about the Survivor Benefit Plan - or other veterans benefits - contact the Navy Mutual education team at education@navymutual.org or by calling 888-298-4442. Have I a leg to stand on at all? My husband died in 1994 and I have been receiving SBP since then. Hi! And if you commit suicide, spouse wont get jack S**t. It is wonderful. I used to say it was absolutely right for everyone, and then I started working with some families who had enough other resources to make SBP unnecessary. My questions are: I thought that the SBP can not be cancelled without the spouses signature. Is it true that this benefit can be taken away from me?? https://www.dfas.mil/retiredmilitary/survivors/Understanding-SBP-DIC-SSIA. /% J9G n`cc Y\ k_\i\ kf gifk\Zk pfli jgflj\ `] pfl i\dXiip% If you lose your spouse and your SBP premiums stop, you will be able to elect SBP to cover a new spouse if you remarry. My husband recently passed, after reporting to dfas etc, they have sent a letter saying that my Husband made an sbp election but payments had not been being deducted from his reitrement pay as elected at time of retirement. While it may seem on the surface that SBP serves you no purpose, there may be some reasons why thats not 100% true. What if you tried to cancel during the cancellation period and Military Finance sent you the wrong form and then did not honor the cancelation? What am I missing? "Your surviving spouse may remarry after age 55 and continue to receive SBP payments for life. https://www.dfas.mil/dam/jcr:aa27dddc-d902-4cde-bbc5-ce06ba54b62e/SBP%20Withdrawal%20Due%20to%20VA%20Disability%20Packet.pdf. VGLI may seem expensive as you go up on age, but usually thats when your health deteriorates more and commercial insurance companies can deny you coverage. DFAS said that, because the benefit would henceforth be considered part of the ex-spouse's property, the benefit "expired" if the ex-spouse died. This change affects surviving spouses who are, or who will become in the future, eligible for both Survivor Benefit Plan (SBP) payments and Dependency and Indemnity Compensation (DIC) payments, and who were previously subject to a full or partial SBP-DIC offset. Good luck to you! Since she is getting part of his military retirement she gets her own RAS from DFAS, correct? I am a retired US Army NCO. All I know is that the retirement ended and all she ended up with was the Tri-Care For Life Insurance. I read your post with interest and have a question for you. Whomever is eligible (former or current spouse) would just have the SBP payment apply until paid in full and then start receiving monthly SBP OR they can pay it up in full and the start receiving the monthly premium. SBP gives automatic coverage, at no cost to service members, to anyone . It is possible that you might be able to make a claim for the SBP benefits she should have received between his death and her death. Children: Children may be covered in conjunction with Spouse or Former Spouse Coverage, or they may be covered alone in the Children Only category. About SBP- If annuity payable amount is 55% and base amount is approximately $2350.00 will the monthly spouse cost of $277.00 come out of the approximate payable benefit of $1292.00 if spouse hasnt met the 360 month and 70 year requirement? My mother is still alive but DFAS says that the word spouse is in the contract and because she is divorced from him and not his spouse she is not entitled to the SBP. There are several reasons why you might want to continue having SBP coverage even if your husband is 100% disabled, including the Special Survivors Indemnity Allowance (SSIA), if the SBP benefit is larger than the DIC benefit, etc. The SBP can be assigned to a former spouse as part of divorce proceedings. My husband is retired Army Reserve. Jeff, are you asking about repaying that deficit now or how that deficit will impact annuity payments made to your survivors? Also with very few exceptions, any election made at retirement is irrevocable. <>>>
Ive read lots of things that va cuts check and then has to pay it back because retirement wasnt notified. Hi Kate, Which one will be off-set, and how? The coverage is cancelled when the veteran chooses to withdraw. I dont want to share too many of your details in a public forum. This is double the standard deduction for filing single in 2021, which is $12,550. It has been accruing over a deficit over that time. That depends on your situation. Your mother should change her income tax withholding via the online MyPay system or by physically mailing an IRS Form W-4P (available at https://www.irs.gov/pub/irs-pdf/fw4p.pdf) to DFAS at Defense Finance and Accounting Service, U.S. Military Annuitant Pay, 8899 E 56th Street, Indianapolis, IN 46249-1300. Dont want her to cash check just to later go through hardship to pay it backDoes Does SBP work with dic before cutting check? Another question: my wife is ~8 years older than I. I understand that if I die before I turn 60 that she will being receiving SBP; what happens to my premiums if she passes before I do? I have a new wife, would it be worth it to transfer to her and get up to date? If not the military is there an actual insurance company that runs the annuity? "We thought it was common sense to ensure service members are able to pass their benefits on to their loved ones,." If you choose to replace SBP with life insurance, be sure to have a plan for how those insurance proceeds will be invested in a way that deals with how quickly inflation can erode the purchasing power of a dollar, and also a plan for how your beneficiaries can be assured of not out-living the proceeds from the insurance policy. I recently was awarded DIC and I am now Offset. I hope it works out for you. Theyre not charging anything under the section This Months Cost but keep tacking on 6% APR every time he gets one of these bills. Thanks for what you do! I found that the reason they offer the out after the 5 years is that you cannot get both and wouldnt need the SBP since youd get the DIC. She did not receive anything when my dad passed ins 2001 so not sure if that is cause he never signed up or there was something that needed to be provided to the USAF in 2001 when he passed. Please let me provide my thoughts. Your SBP premium should automatically decrease once you dont have any eligible children. I dont blame them though because even though its their job, I know they have a lot on their plate and tend to where many hats. There are several factors including children, VA disability, etc. If it was supposed to be deducted as they said in the letter then that should surely be automatic (after all deductions usually are). The more questions you ask, the more everyone learns. If your surviving spouse remarries before age 55, SBP payments will stop, but may be resumed if the marriage later ends due to death or divorce." I can not speak to being sent a wrong form. If that happened to me, I would pursue that with my finance department and DFAS. Child born after divorce with another woman. I am preparing to retire as a Navy O-5/commander after 31 years of service. Thank you very much in advance. We were married before he retired and he elected current spouse coverage. Have I a leg to stand on at all? Question 4. If it is forced by the process, then another option may be needed. "The remedy was essentially painless and did not threaten former spouses," he noted. Multiple children will share the total benefit if Children Only coverage is selected, or if Spouse/Former Spouse and Children coverage is selected and the Spouse/Former Spouse stops receiving benefits due to death or remarriage. Kate, I have been paying into the SBP for 11 years now. Making a chunk of money last a lifetime requires careful investing, balancing the need for growth with the need to protect the principal. They seem to struggle with international issues. I read through the comment section. Can you explain the best strategy to make sure enough taxes are taken from what she receives or is this a situation where she must file estimated taxes on the earnings? What would happen if they do not pay the 360 months? This blog is strictly for informational and entertainment purposes only. My question is: Can I include in the decree that he elect me for SBP as well, or is it too late to alter his previous decision? If your beneficiary was your spouse, and you remarry, you may add a new spouse to your SBP within one year of remarriage. Like DIC, SBP is affected by Social Security when the surviving spouse turns 62. Because DIC benefits are non-taxable, the net income is higher than if just SBP were received. SBP premiums are only refunded if the survivor is subject to the SBP-DIC offset. The request must be received by DFASwithin one year after the date of the ex-spouse's death. The payment for that SBP (policy) is roughly $130/mon. Insured Interest coverage also has variable premiums that are based upon the age of the retiree and the age of the beneficiary. My sister is not disabled and has no other issues that would typically qualify her as a dependent beneficiary. Dependency and Indemnity Compensation (DIC) is a benefit paid to survivors of service members who die while on active duty, or veterans who die of a service-connected condition. He finally was awarded 100% service conneted disability. The annuity for the surviving spouse can be reinstated if the remarriage ends. Those payments would be made on his full retirement pay, not the offset amount he has received. ***If your survivor is someone other than your spouse - your cost may be higher than 5% - but the benefit amount to your survivor would be the same. Im afraid the best advice I can give is to retain a lawyer and/or reach out to your elected representatives. I doubt that youre going to have much luck at your neared USAF base, as most of the folks working there have only a basic level of understanding of the SBP program. Nancy, great service you are providing. I am 70. An incapacitated or disabled child is defined as a child who is incapable of self-support because of a physical or mental disability that existed before the 18th birthday or which was incurred before age 22 while the child was pursuing a full-time course of study. I dont completely understand what youre trying to accomplish. J is receiving SBP via his fathers service. Does sbp still continue, as long as I pay, even after I turn 70, assuming I live that long ?? All three are big concerns with a lump sum payout. Did your husband inform DFAS of his new marriage and continue to elect his former spouse as beneficiaries even though he was married to you? Confused. It is an annuity, which means that it is a stream of payments, with premium payments made from the retired pay, and a large portion (between 40-50%) of the cost is paid by the government. In addition, a compelling feature of SBP is the annual cost of living adjustment. This process requires an application and proof of medical disability that prevents them from being self-sufficient. And what kind of documentation should I submit? His mother (my niece) died a couple years ago. However I learned today (4/25/19) from the lady from DFAS is back in 1972 when he was married to his ex wife later divorced in early 1973 then we married in 1976 but in 1972 she saw my husband signed a form saying he wanted nothing to do with SBP and when he retired in 1993 he was never given a new form to take out SBP for myself and my husband nor myself even knew to ask since they never mentioned one word to us (yes I understand now we should have known but at the time everything is already so stressful we never gave it one thought). However, its important to note that not all retiree deaths fit the criteria to receive DIC. I have not asked DFAS yet. For example. Sorry, Im a little confused after reading this article. Or is the annuity canceled? The request must be received within one year of the law's. I have completed the 360 SBP payments and am over 70 years of age, therefor I no longer am being billed for these payments. You also assume that everyone is insurable at such low rates. Im a former spouse was married with the retiree for 17 yrs.on our divorce decree stated that Im elected for SBP which I enrolled right away been paying it until retiree passed away last Jan.6,2019 I already sent my claim they received(DFAS) on Feb.1,2019 I had been calling them and they said they reuqusted to expedited it but also still under review. Oh, gosh, what a mess. My husband has been collecting his pension for eight or nine years I believe, anyway when we filled out paper work. For long-term income, there are a couple of significant risks to using a lump-sum payout. 6. Youve stated that the purpose of the term life policy would be to pay off your mortgage, and that you already have $500,000 in equity in your house. SBP provides inflation-adjusted, lifetime coverage. SBP premiums are always calculated as a percentage of the base amount of coverage. Ive been paying into SBP for 1.5 years and am beginning to think it was a mistake. My mother was just informed by DFAS that my father had not elected SBP when he retired. Now my sbp benefit was forfeited (expires). Will they reimburse me for the last 20 years and what should I really ave gotten since now his disability was 100%. Ive written I think everything there is to know in this article: https://www.katehorrell.com/understanding-sbp-dic-offset/ In it, Ive listed three good reasons why you would want to keep SBP even if you are guaranteed DIC: The SSIA entitlement, the possibility that the offset will be eliminated, and the fact that SBP is often more than DIC. They are what they are. Wait, so are you saying she paid in for 25 years and isnt going to see any of that? Steven, not that I know of. Since he is not longer eligible for benefits, what happens to the money I paid into the plan for 15 years? However, I am not a lawyer, nor do I know of every unusual interpretation of the law. SBP is a monthly annuity paid by the military to the surviving spouse or, in some cases, eligible children, of a member who dies on active duty. When a Social Security beneficiary dies, his or her surviving spouse is eligible for survivor benefits. I did some further digging into the matter after I asked here. She never received SBP prior to. Vet in question has a SPB for his spouse and kids. Whoever briefed you from casualty affairs should have automatically had you sign the forms for SBP and DIC and had you make your election after explaining the benefits accordingly. Gabriel, there are a couple of things going on here, but regardless he wont have wasted his money paying for SBP. They are digging in their heels more and more now due to budgetary problems. since he only receive $150 dollars a month for retirement. 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