SBP DIC Offset Inequity
In 2003, the Bush administration ending a century old concurrent receipt offset (CRDP) at a cost to about almost $3B per year, and added a Combat - Related Special Compensation (CRSC) benefit that amounts to more than $1B annually. CRSC and CRDP is paid to hundreds of thousands of military retirees, but a small group of widows was left out.
These widows are represented by smaller organizations such as Gold Star Wives and the Society of Military Widows and often their grass roots efforts to end Widows Concurrent Receipt are not taken seriously by the larger, male dominated Veterans groups.
Most of the Service Organizations agree that Congress should repeal the law that reduces military Survivor Benefit Plan (SBP) payments by the amount of any survivor benefits payable from the VA Dependency and Indemnity Compensation (DIC) program, and last year, VETSPAC assisted efforts to end the offset.
Currently, the surviving spouse of a retired military member who dies from a service-connected cause is entitled to DIC from the Department of Veterans Affairs. If the military retiree was also enrolled in SBP, the surviving spouseás SBP benefits are reduced by the amount of DIC (currently $1067 per month.
A pro-rated share of SBP premiums is refunded to the widow upon the memberás death in a lump sum, but with no interest.
SBP and DIC payments are paid for different reasons. SBP is elected and purchased by the retiree based on his/her military career and is intended to provide a portion of retired pay to the survivor.
DIC payments represent special compensation to a survivor whose sponsorás death was caused directly by his or her uniformed service. In principle, this is a government indemnity payment for causing the premature loss of life of the member, to the extent a price can be set on human life. These payments should be additive to any military or federal civilian SBP annuity purchased by the retiree.
There are approximately 52,000 military widows/widowers affected by the DIC offset.
A significant inequity exists when compared with federal civil service in that surviving spouses of federal civil service retirees, who were also disabled military veterans or retirees and enrolled in civilian SBP, do not lose any of their purchased SBP benefits when receiving Veteranás Administration DIC payments.
The current OMB estimated cost of this proposed legislation is $520 million per year, and this cost is largely an entitlement, so like CRDP and CRSC is does not directly effect the DOD budget outlay.