Everything I read says you can receive dic and SBP is ofser. Does sbp still continue, as long as I pay, even after I turn 70, assuming I live that long ?? It is an annuity. Thank you so much for your help! She knew nothing about a refund and that refund could result in a large irs tax penalty! Every situation is different. Hi Kate, I havent had time to read all through these posts, but my question is,- my husband died August 28, 2017 with service related death. Nancy, great service you are providing. Spouse 2. "I would have done it even if it hadn't been for the court order. Someone called once and she answered some additional questions. His RAS states No SBP election is reflected on your Account. Im glad I was able to answer your question. Your spouse receives 50% of your unreduced pension if you pass away first in retirement. SPOUSE ONLY: This is the spouse you are married to when you die. I am the daughter of a retired Marine. Hi Kate, I retired at 62 three years ago and may not live until 92 if I die as I understand your previous post, my wife will receive the SBP payment even though it is not paid in full. In this case, the full amount of SBP premiums will be refunded to his survivor, but they will also be eligible for a $310 Special Survivor Indemnity Allowance (SSIA). This wild assumption sounds like advice from a 4 year old. Im wondering if I can make a legitimate waiver request, and the best way to go about stating my case, to DFAS regarding The Barring Act, 31 U.S.C. Per this webpage http://militarypay.defense.gov/Benefits/Survivor-Benefit-Program/Stopping-SBP/, After retirement, insurable interest coverage may be changed to cover a newly acquired spouse and/or child within one year of the first marriage, birth, or adoption. And, honestly, it seems to make sense to me. It all depends on your specific situation and if that is a good tool for your specific needs. Your husband was awarded 100% service connected disability while he was alive or posthumously? Kathryn, did you apply for SBP and it is being offset by DIC? The Survivor Benefit Plan (SBP) is a program through which the Department of Defense provides monthly, cost-of-living-adjusted income to eligible survivors of Soldiers who die on Active Duty in the line of duty, including Reserve Soldiers and National Guard Soldiers who die on Federal Active . Do this by submitting DD Form 2656-1 requesting the conversion of. Is there anything she can do? However, the Department of Finance and Accounting Services (DFAS) does not change its payments until DFAS is properly notified of the FSs death. My wife passed away two years ago. Your SBP coverage can be any amount from full coverage down to as little as $300 a month. He is fighting the SBP situation because he paid the full amount and now has been fighting for 6 yrs. A: Yes. That is true as long as you remain married. Question: Can I now op out of SBP and stop the SBP premiums from being deducted from my retired pay? 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.). If the marriage at the time of retirement ends, and you subsequently remarry, there may be a way to change the amount of coverage for the subsequent spouse, but I dont have the details at my fingertips. 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. My father divorced my mother on his own. 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? Jessica, this is incorrect. 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. The letter of law seems plain to me. I am married to a non US citizen and he is my beneficiary for the SBP. My USAF father passed away and my mother started receiving his SBP benefits. Great question! Other issues related to the death of a FS, such as what can happen to a FSs Survivor Benefit Plan (SBP) can be found by clicking here. I only promote companies that I love and trust. In my opinion, keeping SBP makes sense for a lot of people. Itand also applies retroactively to retirees who were previously unable to transfer their benefits after their ex-spouse died. In particular, life insurance/survivor benefits and renting a house. I read your post with interest and have a question for you. I think a lawsuit would be unlikely and unsuccessful as the military provides about 45% of the cost of the SBP program, and that percentage is likely to increase with the recent elimination of the SBP-DiC offset. I asked many questions and wrote everything down to the T. I remember being so surprised that thats how it worked because it sounded too good to be true which now I know it wasnt. The SBP cost factors displayed are based on spouse-only coverage. If he dies before the 360 payments i receive nothing? that can increase that amount substantially. Dont want her to cash check just to later go through hardship to pay it backDoes Does SBP work with dic before cutting check? If your financial need is to pay off a house, SBP is not the right product to fulfill that need. Does a cash value build up in the annuity so you can cash it out? 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. If so what is your advise for me because I dont think I will be able to meet the 360 payments base on my current age of 62. I have paperwork showing he paid for Plan C into SBP and copy of retirement pay statement dated 12/04/97. 2 0 obj Im 61 years old and I plan to retire from active duty in December 2018. SBP is for when the survivor lives a lot longer than you planned.. endobj They are what they are. <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 9 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> My husband retired in 1993 and I pulled out all of his retirement papers and and there is no forms with my signature on anything giving up my rights to SBP or form of any sort to SBP. 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. DFAS would not give me any information even though I mailed in the forms to claim SBP and they mailed back forms for direct deposit and mailed them back but nothing has happened since and that has been months. 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. However, that is now not the case. I am a retiree and I have been making monthly SBP premium payments for Spouse/Child coverage since my retirement. Im guessing that I will still be making this payment in my early 90s. Kathrine, Im so sorry for your loss. Kate, SBP premiums are deducted from retired military pay pre-tax, which reduces the overall cost of the premiums. I have completed the 360 SBP payments and am over 70 years of age, therefor I no longer am being billed for these payments. The requirement for paying in is 360 payments, or until the retiree reaches 70. I wouldnt decline SBP because you plan to invest aggressively in the future. I am sorry to hear about your wifes condition. I wanted to repost this in hopes that Ms. Horrell might respond. I should be receiving his SBP in the next 2 months. I dont know if its my fault as to what theyve said, but please enlighten and help me with this. I have been told that SBP payments and Social Security survivor benefits may affect one another. If you are not looking for inflation-adjusted, lifetime income for a beneficiary, then SBP is probably not the right tool for your retirement planning needs. However, your analysis fails to include several important considerations and one glaring factual error. Term insurance is an excellent product for that purpose. My husband is paying about $270.00 in a month now. I gave too many briefings to widows of recent retirees who didnt elect SBP or VGLI and a $400,000 insurance policy usually is not enough to pay off a mortgage, other bills and future college. 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. It is important to note that if SBP benefits are offset by DIC payments, the beneficiary may receive a refund of those premiums paid into SBP. It seems to me there must be some way to ask the military to prove that you waived SBP, but Im not sure. SBP coverage means that the non-military spouse, if she survives the retiree, gets 55% of the selected base amount of the pension for the rest of her life. 1. We are worried that we will be paying $ 300 and something for nothing. My question is Will I receive back pay from June to present day? and if so what kind of attorney. These special payments are called Special Survivor Indemnity Allowance (SSIA). It can be frustrating not being able to concentrate and go about life as you did before. The personal risk is harder to quantify, and can easily be overlooked. What if SBP payments were made and I was a spouse but divorced . Does military pay the whole premium if Veteran becomes 100% disabled and Veteran withdrawls? Thanks for what you do! Yes, premiums go up with age, but with a policy like whole life, my spouse is still better off much better off. The coverage is cancelled when the veteran chooses to withdraw. Could you please share the appropriate regulations or laws? The base monthly amount is $1,437.66 for all surviving spouses. 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. Sir, I have no desire to convince anyone to sign up for SBP. Oh, gosh, what a mess. If you are divorced and have overpaid into your spouse benifit plan how long does it take after you send in your divorce certificate to receive the over paid sum? A beneficiary cannot receive the full amount of both SBP and DIC. Thank you for your help. If it is forced by the process, then another option may be needed. I look forward to your comments and questions. I stay with her every day and have another lady at night. My question is the retiree was retired and 100% VA disabled I have 1 minor children with him am I entitled for DIC also? SBP benefits are taxable to the recipient, whereas life insurance proceeds are generally non-taxable. Pat, Im sorry to hear that this has turned out this way. It has been accruing over a deficit over that time. Had it been the other way around (e.g., Her SBP was higher than DIC, she wouldnt get the offset, but would get a little bit of SBP and DIC). Generally, the lump-sum is paid to the surviving spouse who was living in the same household as the worker when they died. But that was it. "We thought it was common sense to ensure service members are able to pass their benefits on to their loved ones,." We were told at the 5 year mark to call and let them know to stop taking payments out because it had been 5 years. There was an error submitting your subscription. I am an active duty service member who is coming up on my 20 years. Once you reach age 70, you still have to complete 360 payments. 1 0 obj If the coverage is required by the divorce settlement, then the spouse must provide DFAS with a copy of the court order. Hi Roger that is great news did she have to hire an attorney to get her SBP benefits? FERS - To elect a full 50% survivor annuity for your spouse your annuity will be decreased by 10%. How do I continue to provide SBP for my spouse, or does she lose that benefit despite these years of payments. Great question! 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. I read that my wifes SBP will now be taxed at the estate tax rate of 37% Is this true? A new law will prevent military retirees from losing Survivor Benefit Plan benefits when their ex-spouse dies before they do, by allowing the benefit to be transferred to a current or future spouse. Or would SHE be liable to pay back the money? 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. However, there are many reasons why you might still want SBP even if youll get DIC. Your SBP premium should automatically decrease once you dont have any eligible children. 2.5% of the first $635 ($15.88), plus 10% of the remaining covered amount. 3. he will turn 70 in a few month and has paid pretty close to the 360 month requirement but he not in good health. The SBP-Social Security offset was eliminated in the 2005 National Defense Authorization Act. Please try again. This certainly is a unique situation. I understand that he will not be eligible for benefits after he is 22. What happens to all the money I paid in? Both of these contribute to a higher premium and higher annuity benefit than was intended or may be needed. Comment * document.getElementById("comment").setAttribute( "id", "abdb2766c9bb6c7b9354065e65ae13d8" );document.getElementById("ef5eefa35b").setAttribute( "id", "comment" ); Notify me of follow-up comments by email. Secondly, there is no way out of the SBP after the 36 Month mark ? Unless you have a $1.5M house, why would you require a $1M term life policy to pay it off? Author Jim Cramp is a retired active duty colonel and the founder and principal attorney at the Cramp Law Firm . DFAS requires notice by fax or by mail. I would like to thank any and all people who played a role in the passage of this law.". Ive never paid anything into spb, but have been recieving Bills forever. My husband is 68, and has been collecting Va disability benefits since he was disabled in 2005. Can you please help us? Lisa, former spouses can be covered under SBP, but there is a process that needs to be followed. Former spouse is now remarried-how do I check or verify that my name was not replaced with the new spouses on the SBP? Recently I applied to have the VA disability increased from 60% to 100%, which was approved. Written documentation regarding the death of FS; A copy of the FSs death certificate; and. He finally was awarded 100% service conneted disability. 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. Will I get it back in a lump sum? The automatic monthly SBP death benefit is provided at no cost, as service members do not pay into this benefit when on active duty. Any estate worth more than $1 million is subject to estate taxes. Ive read lots of things that va cuts check and then has to pay it back because retirement wasnt notified. Im glad you are happy with your decision not to purchase SBP, but please do not counsel others without all the facts.. Im not sure he knew to do that. He signed up for it but died less than two years after retiring from the military. We received notice that the premium cost would have to be refunded. What are they going to do to resolve the non-payment issue? He received benefits at age 60 he is now 73. Thank you very much in advance. You have had a service-connected disability rated by the VA as totally disabling for 10 or more continuous years. I was talking to an older lady the other day, her husband retired when SBP was just starting. A surviving spouse or child may receive a special lump-sum death payment of $255 if they meet certain requirements. Im curious what his beneficiary designations said at what points in time. Amilitary retiree whose ex-spouse died before the effective date of the new law to elect coverage for his or her current spouse, regardless of whether the remarriage happened before or after the ex-spouse's death. For example. We all carry insurance on our homes, but we hope to not make a claim. I am unaware of any such provision in the SBP rules. As a smart friend says, Life insurance is for when the insured doesnt live as long as youd hope. While it may seem on the surface that SBP serves you no purpose, there may be some reasons why thats not 100% true. I am a retired US Army NCO. Coverage continues until they are 18, or 22 if a full-time student. How do I find out if my dad has SBP? If I pass prior to meeting the 360 month payment period does my spouse still collect anything?? I have been paying SBP for 217 months. She gets 1689 each month. Social Security will pay a one-time death benefit of $255 to your spouse as of 2023 if they have been living in the same house as you. The family member may be a the only eligible child of the service member (elected in lieu of child coverage), or it may be the adult non-dependent child, parent, step-parent, sibling, grandchild, niece, nephew, aunt, uncle or cousin. The SBP program costs the federal government. 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. If you elect higher SBP payments on your death your monthly payments while you are alive will be. Im retired military. 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. I am unaware of any suicide-related qualifications for Survivor Benefit Plan payments. You didnt actually answer her question. And is there a set amount that we apply for, or is it an automatic amount that is deducted? All my kids are over 18. Have I a leg to stand on at all? Do you have any insight on either of these issues? No I never requested that they withhold taxes on the return of premiums however when I was receiving sbp they used to withhold taxes so I expect I had asked them to do that in 2016 and they still had that information. Or is this deducted from his social security benefit? You may also keep in mind that if a survivor is subject to the SBP-DIC offset, they will receive a refund of the premiums paid for the amount that is offset. Any advice would be helpful. SBP never mentioned in divorce decree at all, Father died 6/31/2000. He was married before during most of his time in service. Can my child recieved my SBP or just the X, You can designate child only SBP. We were married before he retired and he elected current spouse coverage. Answer: Yes, Your nonmilitary spouse can veto your election should you elect not to participate in SBP or elect not to participate at the maximum level. The only thing that happens at 360 payments is that he does not make any more SBP premium payments. It may seem like youll never make it to 360 payments, but I actually know people who are paid up. Your monthly FERS pension is reduced by 10%. It may have turned out to be a brilliant idea, depending on how things unfold. Yes, they are both food, but otherwise they not similar. I am a guardian for a adult disabled child,his deceased dad was a 30 year lifer in the army, after his death he did have survival insurance,but I filed for dic and pension from VA,denied,did I filed wrong insurance?and if so what can I do? Ms. Horrell My husband passed away back in December2017 and learned he did not elect to take out SBP when he retired in 1993. I am also 100% disabled. Full retirement age . This process requires an application and proof of medical disability that prevents them from being self-sufficient. The benefit amount is based on the amount of retirement pay that you choose to cover anywhere from $300 to the full amount of retirement pay. This is usually true, but consider whether DIC will provide enough coverage for your surviving spouse and children. Now after doing so, I was told that this is a withdrawal time and that we basically would just lose everything we paid up to this point. Obviously, if your survivors take a chunk to pay off the mortgage, the resulting income would be proportionately smaller. DFAS informs me that my father should have notified them 6 months from the divorce date to change the contract to ex-spouse so the contract would stay valid. 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? Thank you in advance. The primary and important difference is that you can not outlive SBP coverage. Heres the official instruction page: http://militarypay.defense.gov/Benefits/Survivor-Benefit-Program/Costs-and-Benefits/Children-Only/. 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. 2. pastorpete. At thetime, he asked to transfer his SBP benefit to his current wife. Be aware that there are many regulations about SBP, including former spouse coverage, disabled child coverage, and insurable interest coverage. Purchase term life instead. SBP provides inflation-adjusted, lifetime coverage. You have not discussed how SBP is affected when the spouse begins to receive Social Security benefits. An SBP election only covers retired pay if the insured dies. I retired (medically) in 2013. But thats just me. If that situation were to occur, she could make an estimate tax payment to the IRS. Child born after divorce with another woman. The request must be received within one year of the law's. They were separated but not divorced. A spouse may But Im afraid she will now be in debt with the 20,000. Finally made calls and thats when I learned that there would be back payments that needed to be calculated. The initial annuity paid to a surviving spouse is equal to 55 percent of the retired pay to which the member would have been entitled based upon years of active service if retired on the date of death . She did not send the within that 1 year timeline. 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. SBP would cost me $195 per month, and would never pay out what my term policy will. Website developed in accordance with Web Content Accessibility Guidelines 2.1. With each adjustment in base amount, there is a corresponding adjustment in premiums and benefit payments. Under Scots law, the only thing a surviving spouse automatically inherits is the first pound of the net estate, which is the value of the deceased's assets minus any debts. Heres the complete list of posts. Im not sure he knew to do that. Will SBP payments be subtracted from her monthly payment until it is paid in full? Your premiums have gone into the the pool and will be used to pay out claims to other SBP participants. For long-term income, there are a couple of significant risks to using a lump-sum payout. 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. My husband was court ordered to enroll her in SBP. 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 premiums will be automatically deducted by DFAS from your monthly retirement check. This nice lady was not bitter and still talks of fondly of her military memories. I did not elect the SPB because I thought the program was borderline criminal. Will they ever try to collect past due? My 83 yr.old mother sent in form 2656-1 and was just denied and we have 30 days to appeal. A FSs right to military retired pay terminates upon the FSs death and is not transferable by Will or other means. 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. Hes is either 90% or 100% VA rated disability and his Medical retirement (8years )is rated at 70%. A few percentage points per year may not seem like much, but they add up quickly. This site does contain advertising and affiliate links. Ended with an attorney that she paid 20,000. Are you saying that you waive all of your military pay to receive disability compensation, which is non-taxable? Child (ren) Only 3. You are absolutely correct that term life insurance is often much less expensive than SBP, but they are very different products. Term life pays a one-time benefit. 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. In fact, Im pretty thankful that I havent been involved in a situation that required a claim. 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. The age 70 and 360 month is just the paid-up cut-off, after which no more premiums are required. If the beneficiary isnt going to want that job, how will they find and supervise the right financial advisors. At the bottom of his statement it says spouse cost $274.00. She can apply to find out if it happened. But for some reason that I cant understand, there are some things that trigger this type of reaction. It provides 24/7 access to her annuitant statement and early access to her 1099 tax documents. Think about an insurance policy like this, if your preretirement income was $50,000/yr, than thats only 8 years of replacement income but not including housing/medical benefits. Since she didnt file the paperwork in time I was told by DFAS that I would receive the annuity. 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 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. For a lot longer than you planned.. endobj they are very different products month payment period does spouse... 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Fighting the SBP situation because he paid the full amount and now has collecting... Per year may not seem like much, but have been told that SBP payments and Social Security.! Requires an application and proof of medical disability that prevents them from being deducted from Social!