SBP-DIC Offset for Survivors
Issue : Current law unfairly makes military survivors forfeit part or all of their military Survivor Benefit Plan (SBP) annuity when military service causes the member's death.
Background: SBP allows uniformed services retirees to elect to provide continuing financial support for an eligible survivor. SBP provides the survivor 55% of the servicemember's military retired pay. Enrollment is elected at the time of retirement, and the retired member pays 6.5% of retired pay as a premium. Automatic coverage is extended to survivors of servicemembers who die on duty.
Dependency and Indemnity Compensation is a VA program providing a modest annuity for survivors of veterans whose death is determined to have been caused by military service.
Under current law, survivors who are eligible for both SBP and DIC must forfeit a dollar of their SBP annuity for every dollar of DIC received from the VA. Often, the offset wipes out the SBP annuity the military retiree paid for. In such cases, the survivor receives a proportional refund of SBP premiums - with no interest on what often has been many years of premium payments.
The October 2007 report of the Veterans Disability Benefits Commission urged elimination of the offset for all SBP-DIC widows, asserting that when military service causes the member's death, the indemnity compensation from the VA should be paidin addition to SBP coverage, not subtracted from it.
In multiple Congresses, a majority of House and Senate members acknowledged the inequity and cosponsored corrective legislation to recognize SBP and DIC are paid for different reasons. SBP is a servicemember-purchased annuity, whereas DIC is an indemnity payment when military service caused the member's death. Further, service-disabled retirees have limited opportunities to purchase additional life insurance, and policies that are available impose exorbitant premiums.
In 2008, Congress acknowledged the inequity in law, authorizing a modest Special Survivor Indemnity Allowance (SSIA) for SBP-DIC widows to begin phasing out the offset. In June 2009, Congress took the next step, increasing SSIA monthly payments to $150 beginning in FY2014 and rising to $310 in FY2017.
The accompanying House Armed Services Committee press release said,"This legislation (SSIA) is latest step in our continuing effort to eliminate the so-called 'widow's tax', which has long denied surviving family members the full payment of their Survivor Benefit Plan benefits… this bill does not completely end the offset … the House Committee …will continue to explore every opportunity to pursue legislation that brings us closer to eliminating the 'widow's tax'."
In the ultimate irony, a separate law, validated by the courts, terminates the offset for SBP-DIC-eligibles who remarry at age 57 or later. So current law punishes survivors who remarry before age 55 by ending their SBP and DIC eligibility - and punishes survivors age 57 or older who don't remarry by imposing the SBP-DIC offset.
No other federal surviving spouse is required to forfeit his or her federal annuity because military service caused their sponsor's death. Further, the offset does not apply to surviving military children - only to the spouse. And no other federal survivor is required to remarry to avoid a reduction in his or her survivor annuity eligibility.
The FY2018 NDAA permanently extended SSIA payments at $310, and will adjust that payment according to COLA each year going forward.
Click on blue hyperlink below to complete an email.
Legislative Affairs November 2018 – by Barry Coyle
In Washington, the 2019 Authorization and Appropriations Bills for DoD, Dept. of Veterans Affairs and Military Construction were all signed into law by President Trump prior to the start of FY 2019 on 1 October. In North Carolina, the regular Session of the General Assembly remains adjourned, but several Special Sessions have been held to provide legislation for Hurricane Florence relief.
So with things quiet in the Legislative arena for now, I thought I would devote this month’s article to the upcoming election. Neither U.S. Senator from NC is up for election this year, but all U.S. Representatives are up for election. NC Senators and Representatives are also running. Counties are holding elections for Commissioners, School Boards, Judges and Sheriffs. I prepared a list of all candidates with interest or influence related to MOAA issues running for office in the counties and Districts served by our SENCLAND chapter. This list is available on our Web Site at: https://sencland.org/_legislative.php. Early/One-Stop Voting begins Wednesday 16 October 2018 and runs through 3 November. Official Election Day is 6 November. You can find your local Early Voting location and hours of operation on the NC State Board of Elections Web Site at: https://www.ncsbe.gov/index.html. This site also contains a variety of other useful information about the elections.
Regardless of your political affiliation or positions on issues, I urge you to vote and make your voice heard. This is setting up to be an important election, both nationally and in NC. The ballot, in addition to candidates for office, will include up to 6 proposed Amendments to the NC Constitution. It’s not every day we get a chance to vote on Constitutional Amendments. So please do your research and go out and cast a ballot! If I can assist you in any way, please feel free to contact me at 703-795-6987 or firstname.lastname@example.org.
As previously reported, during August, September and October, a coalition of NC Veterans Service Organizations, including the MOAA NC Council of Chapters developed a plan to keep retiree/veteran tax issues alive through the upcoming elections and then into the next General Assembly session. This plan and effort is being led by Jeri Graham and the 4th Branch organization (of which MOAA is a member) and consists of three steps:
Step One: Encourage all MOAA members to join 4th Branch. It is free to join and you can do so at: http://4thbranchnc.org/. Joining 4th Branch will allow you to receive direct email updates on activities and legislation as well as useful information and products that can be used during this lobbying campaign. Having as many people as possible join 4th Branch also permits an accurate count of the number of supporters of this issue – the more the better to help demonstrate our level of interest to candidates and elected officials. MOAA members’ participation in 4th Branch has been endorsed by the NC Council of Chapters BOD. So please sign up. NC Council of Chapters has developed a survey for MOAA members to gauge our interest in joining this effort. We will distribute this survey to all members in the near future.
Step Two: Prepare a standard question to be posed to all candidates for election this year by MOAA/4th Branch members who choose to do so. The same question asked of candidates state-wide is expected to demonstrate the strength of support for the issue. And who knows, the answers might help us decide who to vote for. This standard question has been finalized approved for use by 4th Branch and MOAA leadership. The question has been posted for your use to the SENCLAND Web sites at: https://sencland.org/_legislative.php. Hurricane Florence prevented us from completing this effort in time to offer it to our local news outlets for use in their Election issues. But please feel free to use it in any communications you may have with candidates for election.
Step Three: After the election, prepare standard letters and emails for members to use to contact their state Senators and Representatives to encourage them to support these tax relief measures. You will be hearing more on this step after the election.
A reminder that the TRICARE Retiree Dental Program ends 31 December 2018. If you are using this program, you will need to find replacement dental insurance. You may be eligible for FEDVIP, which also provides vision care insurance. Check out this program at tricare.benefeds.com. If you are using TRICARE Select or Prime, and want to make any changes to your coverage, that must be done during the Open Season that runs from 12 November to 10 December. Research your options at tricare.mil/openseason.
The Honorable [First Name] [Last Name] – Use “The Honorable” if incumbent up for reelection.
[Office/Institution/Campaign, depending upon whether incumbent or outside candidate]
[Address Line 1]
[Address Line 2]
Dear [Title = Senator or Representative if incumbent] [Last Name],
I am writing to you as a member of an organization that is part of the 4th Branch. The 4th Branch is a coalition of government employee and retiree organizations committed to leveling the playing field in North Carolina for all government retirees through fair taxation. A large number of your voting constituents are represented in this Coalition. You can learn more about this organization at www.4thbranchnc.org.
Currently, military, federal, state, and local retirees in North Carolina who started their careers by August 1984 are exempt from paying state income tax on their retirement benefits. Those now retiring will have to pay tax on their hard-earned benefits. During the 2017-2018 session of the North Carolina General Assembly, legislation was filed that would have eliminated this inequity.
While neither of the two bills introduced during the session passed before it ended, The 4th Branch will continue its work to see this unfair, unwise tax policy eliminated. Not only will it benefit hundreds of thousands of North Carolinians, but the state’s economy will also benefit. For every $1 a veteran or retired public servant saves in state income tax, North Carolina accrues $2.50 in economic benefits. (Source: 4thbranchnc.org/resources)
If elected in November, The 4th Branch would like to know if you will introduce, sponsor, or vote in favor of legislation to eliminate the state income tax on the retirement benefits of ALL of North Carolina’s retired veterans and public servants during the 2019-2020 session of the N.C. General Assembly. Please let us know by contacting either Chuck Stone at email@example.com or Robert Allen at firstname.lastname@example.org . We look forward to hearing from you soon.
Your Name and contact info
SENCLAND Chapter maintains a non-partisan policy just as the National and NC Council of Chapters. We are dedicated to maintaining a strong national defense and ensuring our nation keeps its commitment to all serving and all who have served our country.
Click Download Below.