Basic Employee Death Benefit Surviving Spouse. Speak with a qualified military divorce attorney if you have questions about military divorce. Every person has different factors to consider, but many families do have multiple insurance policies to meet different needs. For long-term income, there are a couple of significant risks to using a lump-sum payout. Kate, I am preparing to retire from the Air National Guard in May 2019 and among other things I am trying to get some clarity on the RCSBP. Heres the official instruction page: http://militarypay.defense.gov/Benefits/Survivor-Benefit-Program/Costs-and-Benefits/Children-Only/. The request for the change originally came from defense officials, said Dustin Walker, spokesman for the Senate Armed Services Committee. I will throw in a small note here about investments. Thanks. It may seem like youll never make it to 360 payments, but I actually know people who are paid up. He died 3 months ago. He finally was awarded 100% service conneted disability. It will now receive yearly Cost-of-Living Adjustments like other military pays. Have you reached out to DFAS for the answer to this question? There are 100 reasons why that plan could be derailed, and theyre all reasons that would make you want SBP more. The value in SBP is the inflation adjusted, lifetime guaranteed income. https://www.dfas.mil/retiredmilitary/provide/sbp/change.html. Thank You Kate, Very clearly stated. She should formally apply for benefits from DFAS using the instructions at this page: https://www.dfas.mil/retiredmilitary/survivors/Retiree-death/sbp.html Let me know what happens! You also should have received a copy but if not the casualty office has to keep them for a certain period of time. If your current investments are enough to make SBP unnecessary, great. Thank you for your reply, it is much appreciated. Please review this FAQ to see if your question has already been addressed, or visit NCA's helpful FAQ list here. The base amount covered may be any amount from $300 per month up to the entire amount of retired pay. SBP will cost me (at least) $585 (6.5% of $9K). When my husband found out that she would be eligible for SBP Benefits again, after her divorce from her second husband, he asked her for the divorce decree, but was just told that it is not of his business! Shouldnt I receive some kind of refund for the 360 payments he made to DFAS? My husband and I would have made another choice if we knew about the SBP/Offset ruling. I have not asked DFAS yet. So, if he withdraws next year, does he have to contact his first wife in order to do that? I elected SBP when I retired in 1977 and am now 82 years of age. Every retiring service member with an eligible spouse or child is automatically enrolled in the Survivor Benefit Plan at the maximum level. As you can see, theres a lot to consider. I guess my question ultimately is have you ever had a comment from anyone else that dealt with the Barring Act 31, and if they had success in receiving back pay that was out of the statue of limitations time period? Im curious what his beneficiary designations said at what points in time. You may choose to purchase or not purchase. There are additional costs for children. I had not heard from DFAS for over a year. Be aware that there are many regulations about SBP, including former spouse coverage, disabled child coverage, and insurable interest coverage. ***. FERS - To elect a full 50% survivor annuity for your spouse your annuity will be decreased by 10%. This program is called the Survivor Benefit Plan (SBP). Insurable interest coverage is more expensive than other coverage, and provides smaller benefits. Former Spouse 5. Hi Kate! Kate, Unlike some other military benefits, only one spouse/former spouse may be covered by SBP at any time, and there are a web of rules regarding changes. I calculate that an O-5 retiring at 31 years of service will receive approximately $5574 in retirement pay if retiring under the High 3 system. The Comprehensive Military Retirement Checklist, additional amounts for dependent children or special circumstances. But maybe Im a little biased as my Father was a Colonel in the JAG Corps. Author Jim Cramp is a retired active duty colonel and the founder and principal attorney at the Cramp Law Firm . Or is this deducted from his social security benefit? SBP is like insurance there is no refund of premiums. The Survivor Benefit Plan (SBP) is often the most important decision of your financial life, and it is also probably the most confusing. Are you saying that you waive all of your military pay to receive disability compensation, which is non-taxable? Generally, there are not SBP benefits for adult children, unless they are declared incapacitated by the branch of service (Navy) and listed as a secondary dependent on the retirees dependency record. My father divorced my mother on his own. Many, many people outlive life insurance proceeds. Hi Kate What if spouse dies before retiree so no money is paid out, can retiree get back premiums? SPB was stopped once she remarried and my husband obtained her marriage license. Please do not worry you are covered! My question is the retiree was retired and 100% VA disabled I have 1 minor children with him am I entitled for DIC also? Ill let you know what I find out. Thank you for your time. 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? It will make a tremendous difference to them," he said. I do not know the answer, but I will do my best to find out! Will they also reeimburse me for all my medical bills that I paid in the past? I have paperwork showing he paid for Plan C into SBP and copy of retirement pay statement dated 12/04/97. Whether you get it with spouse coverage or alone, the cost is insignificantly small. If you dont want insurance-adjusted, lifetime coverage in your portfolio, then SBP is not the right choice for you. his current monthly payment is around $13.00 dollars. The surviving. Obviously, if your survivors take a chunk to pay off the mortgage, the resulting income would be proportionately smaller. 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. Why do they impact each other when they are 2 different pools of money? Hi Phil! My husband is retired Army Reserve. A non-family member may include a business partner or joint owner of property. 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. SBP coverage can be transferred to the retiree's current spouse provided they notify DFAS of the former spouse's death within one year of its occurrence. Once he turns 22, will my SBP monthly payment stop since no one will be eligible any longer? If your spouse has the pension and you both choose to receive that pension as a lifetime benefit, while your spouse is alive, you might receive $1,600 a month in pension benefits. I have many people come to me and say that the offset is unfair. But after his ex-wife died, he said he simply wanted to name his new spouse, whom he married in 2010,as his SBP beneficiary. They seem to struggle with international issues. I see that youre still answering questions on this topic for over a year now and youre probably ready to be done with this, but your response will be greatly appreciated. Me, I wouldnt sleep well at night with a lump sum of money and the responsibility to make it last and to ensure that its value isnt eroded by inflation. I would be more than thrilled if you could at the least guide me in the right direction or phone number for me to call. My question is: What is DFAS currently saying about the situation? I am the current spouse and began receiving the survivor annuity. Thank you so much for your help! If your wife does pass, and you someday remarry, please know that SBP can be reinstated to cover a future spouse, but that election must be made within 1 year of the remarriage. 2. endobj Who cuts it? Let me know what you decide and what you learn. 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? I think maybe you are misunderstanding something, Anne. The law requiring spouses to agree to waive SBP was enacted in 1986, so you should have been asked to sign for anything less than full SBP. Hi Kate. A request to withdraw from SBP coverage due to disability requires the written consent of the spouse or other beneficiary. 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. The annuity for the surviving spouse can be reinstated if the remarriage ends. In this case, the additional annuity amount may not be needed, nor the increased premium. "It seemed to me the only honorable thing to do," he saidin an interview in March. They were mailed annually or whenever there was a change in pay. Spouse/Former Spouse: This is the primary category of SBP coverage, and may also include coverage for a former spouse. I assume my payments into the SBP will stop. For more information about the Survivor Benefit Plan - or other veterans benefits - contact the Navy Mutual education team at [email protected] or by calling 888-298-4442. I was deemed 100% P&T for one injury, but have many others die to combat. Yes, thats the reasoning behind the offer. What can I do here? Thank you! It would stop if/when your spouse dies. If the retiree was not married at the time of their former spouse's death, but later marries, the new spouse can still be listed as the SBP beneficiary. If the veteran withdraws from the SBP program, there is no premium so no one is paying it. I have been looking around some websites like DFAS, Military.com, DODWarrior to name a few and have found that upon retirement the spouse has to consent in writing to reduce coverage or elect no coverage, I have not found any paper work showing that my mother made this election nor have I found a SBP election certificate (DD-1883). 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. 1 0 obj My husband was not good at money and to be honest I didnt know anything until he died that I would not be receiving his pension. How do I continue to provide SBP for my spouse, or does she lose that benefit despite these years of payments. Your spouse receives 50% of your unreduced pension if you pass away first in retirement. Since I am claiming him as a dependent on taxes do I also include the 1099-R information on my tax return or should I also do a separate return under his social? DFAS told me that it is listed all the time in the ECHOES publication and that he should have known to do that. How is this possible? I am 70. Its not a hit on my credit. It is very important that retiring service members and their spouses understand all the aspects of SBP so that they can make the right election at the time of retirement. It provides non-taxable monthly cash payments for a set amount ($1257.95/mo for 2017, with additional amounts for dependent children or special circumstances.). <>>> Many people miss that window to reinstate coverage. 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. However, your analysis fails to include several important considerations and one glaring factual error. But Im afraid she will now be in debt with the 20,000. Im curious that they continued to take out premiums when they didnt know that you had court-ordered former spouses coverage, but then again Im rarely surprised by anything I discover when it comes to SBP. I cannot get any answers from anyone and struggling to survive. I realize that this is an uncomfortable thing to say, but I probably will not have the opportunity to chat with you again. My questions are: Hi Kate..my husband passed away in June. Directions are located on this webpage: https://www.dfas.mil/retiredmilitary/provide/sbp/payment.html The link to the actual form is not good, but you will have the form number to ask for assistance from the VA. Be sure you understand how the SBP-DIC offset works. I guess I am trying to figure out what the term spouse cost is defined as and then if the the premiums do not continue if something were to happen to my husband. That depends on your situation. He does pay into the sbp with the understanding i would get a portion of his retirement should he die. (Theres a whole book in that statement, so be sure that you thoroughly understand the taxability of the proceeds of any insurance policy you purchase.) She said, I guess I am trying to figure out what the term spouse cost is defined as and then if the the premiums do not continue if something were to happen to my husband.. Cynthia I am doing some research but it is slow. The tax levy is not part of the SBP laws but results from individual tax treaties between the U.S. government and various foreign countries. Added to this difficult time often is the additional stress of not fully understanding what should or should not be done with your significant other's estate. I can not emphasize enough how vitally important it is to thoroughly understand the Survivor Benefit Plan if a member of your family will remain in the military until retirement. I'm Kate! However, there are several flaws in the 4% rule, and many people think that 4% is too high for many scenarios. I am nearing my 5 year mark and received a notice from the VA that I was eligible for the SBP-DIC offset. Heres hoping you can clearify this (possibly) unusual situation for me. Father died oct 2014. They are digging in their heels more and more now due to budgetary problems. Arnold, SBP coverage is effective immediately the first day after retirement. It took about a year. He never told my mom he did any of this. Whether or not it is unfair isnt particularly interesting to me, because it is what it is, and it has always been this way. What happens to all the years worth of payments I have made into the program (7 years worth) since Ive retired? I am still planning to live past 100 . The Survivor Benefit Plan allows retiring service members to allocate a portion of their retirement pay to a spouse or other eligible beneficiaries after their death. The terms of SBP are grossly unfair for the very high cost, do you know if there have been any lawsuits against the military for this program? My question is: If I become 100% in the next years (appeal in the mail) does it make sense to continue paying into SBP after the five-year mark? Must I live until 70 (hope I will) for her to receive payment? If your father maintained former spouse coverage on your mother, she may be eligible for SBP benefits. Have you ever heard of something like that? I receive SBP with DIC offset and SSIA (which is changning I am happy to find out). 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. There is no provision for a non-dependent adult child to receive SBP benefits. For example, if someone paid $20,000 into SBP over 30 years and became eligible for DIC then DFAS will do a cost of refund. I have paid SBP for 23 years. What do you think? 1. 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. the back amount debt would be paid by the SBP premiums + interest. I invite you to join Military Widows: SBP-DIC Offset on FB. Will they allow me to break down that deficit to catch up or will they take it all at once. It was only for my kids, and when I signed up for it I had no clue what I was doing. Unless he is disabled, or youre paying for him as an insurable interest, your son is no longer eligible for SBP payments. Do we have to be worried? I was also rated 60% disabled by the VA and received concurrent disability. I did not elect the SPB because I thought the program was borderline criminal. Former Spouse-and-Child (ren) 6. Thank you for your help. Denying SBP claims on arbitrary grounds. That would put us in a very awkward situation since she never knew anything about it and she became very mean to him around that time up until they divorced, and even now. Retirees agree to pay a portion of their retirement pay into their SBP so that, when theydie, the program will payan annuity to their surviving beneficiary based on a portion of the retiree's pay. Time passed and I just remembered about this when they sent me the certificate of my benefits and in the certificate it included SSIA amount, and so I called them to ask why is it showing that Im receiving an SSIA amount. Note: The RCSBP annuity is paid until the spouse dies, unless the surviving spouse remarries before age of 55. I understand that I must contact DFAS within one year of our marriage. I took sbp for my wife and retired in May 01. was told I had to stop payments and find insurance when I turned 70. Incapacitated or disabled children are at any age. But dont count on what your investments will do in the future. Im 50% from the Marine Corps. Premiums paid vs SBP received? Im guessing that I will still be making this payment in my early 90s. He was in the service for 27 years and retired in 1977. If you elect SBP coverage, your beneficiaries are fully covered as soon as you retire. While active duty members are covered by SBP, this coverage is automatic. Thank you. If your spouse dies first or you get divorced, SBP costs will stop (once you notify the Defense Finance and Accounting Service). I have a question. ? If the spouse receives DIC & SBP but (because of the offset) is getting very little SBP and so chose not to have any tax withheld from it will the (possibly large) SBP cost refund be given to her also without withholding any tax? Your email address will not be published. My husband was court ordered to enroll her in SBP. If you can provide me with more information, I can try to help with answers. pastorpete. Unless you have a $1.5M house, why would you require a $1M term life policy to pay it off? But there were years of struggle when her husband died; now all those years of struggle without support suddenly faded away. It all depends on your specific situation and if that is a good tool for your specific needs. (And honestly, $20,000? Finally made calls and thats when I learned that there would be back payments that needed to be calculated. Thank you, Shellie (daughter). Hi Kate, Possibly this matter should be reviewed and more mention or notification made on the Militarys part in regards to a beneficiarys death prior to the Veterans. My husband retired two years ago and I thought I was on top of understanding the systems the military has in place but just transitioning to Tricare retirement in an area that makes it difficult to utilize your benefits has been complex and asking a million questions when there isnt really any one person to turn to can make you want to throw your hands up. If the dad was carrying Survivor Benefit Plan coverage on his child, you should file for SBP benefits for him. Is it lost? "Your surviving spouse may remarry after age 55 and continue to receive SBP payments for life. To convert your SBP election to former spouse coverage you must notify DFAS in writing within one year of your divorce. I would assume over 24 years since my husbands death, I have received more SBP payments than SBP premiums we paid from 1982-1994 (retirement to death). Let me make sure I am understanding your situation correctly: When you retired, you elected child only coverage for SBP, but youve never made any payments? Partial Survivor Benefit: Your spouse receives 25% of your unreduced FERS pension, if you pass away first in retirement. https://www.dfas.mil/retiredmilitary/survivors/Understanding-SBP-DIC-SSIA. To continue SBP coverage for a former spouse, either (a) the retiree must voluntarily request coverage be continued for the former spouse, or, (b) the former spouse must request the coverage (but she/he may do so only if a court order requires the coverage). 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. Steven, not that I know of. Full SBP coverage is effective immediately upon retirement. The original commenter purchased SBP in order to provide income to a beneficiary if he died first. Ive not known anyone to that has been in your situation but it might be worth applying. How was I to know cancer would catch up with her and she would die before me?". My husband died 9 years ago( active duty) and I never got any payment from this sbp benefit. Im not sure you will be able to get DFAS to tell you who was covered under your fathers SBP, but I guess it doesnt hurt to ask. "There are others who are in much worse [financial] shape. If the coverage is voluntary, then the retiree has to inform DFAS of his or her intent to provide coverage to the former spouse. I wrote an entire post about the SBP-DIC offset here: Understanding The SBP-DIC Offset. Thank you so much for your answers. Survivor Benefit Plan, or SBP: Surviving spouses or children of service members who die in the line of active duty may be entitled to SBP payments. Military lobbying groups like MOAA have made this a top priority and I think it is possible that it may happen. 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. Are enough to make SBP unnecessary, great a what happens to sbp if spouse dies first adult child to receive SBP for. 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