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M21-1, Part IV, Subpart iii, Chapter 3, Section F – Survivor Benefit Plan

Overview


In This Section

This section contains the following topics:

1.  General Information on the SBP and DIC Offset


Introduction

This topic contains general information on the SBP and DIC offsets, including

Change Date

August 23, 2018

IV.iii.3.F.1.a.  Provisions of SBP

Effective September 21, 1972, the Survivor Benefit Plan (SBP) was established under Public Law (PL) 92-425 for
  • retired service personnel, and
  • commissioned officers of the
    • Public Health Service (PHS), and
    • National Oceanic and Atmospheric Administration (NOAA).
SBP is handled by the following Retired Pay Centers (RPCs):
  • Defense Finance and Accounting Service (DFAS) for survivors of Army, Navy, Air Force, and Marine Corps retirees, and
  • the Coast Guard for survivors of Coast Guard, PHS, or NOAA retirees.
Reference:  For more information on RPCs, see M21-1, Part III, Subpart v, 5.C.

IV.iii.3.F.1.b.  Payments to a Claimant Entitled to Both SBP and DIC

In general, a surviving spouse is not entitled to receive his or her full amount of SBP and Dependency and Indemnity Compensation (DIC) benefits concurrently.
When a claimant is entitled to both SBP and DIC, he or she is entitled to
  • only the amount of SBP in excess of the basic DIC rate payable to a surviving spouse, but
  • the full amount of SBP to a child or parent, since there is no bar against full payment of both benefits for those dependents.
Exception:  Per Sharp, et al. v. United StatesFed Circ (August 26, 2009), there is no bar to full payment of SBP and DIC, without offset of either benefit, when a surviving spouse is entitled to DIC by virtue of having remarried after age 57.
References:  For more information on
  • full concurrent payment of SBP and DIC when remarriage occurs after age 57, see 38 U.S.C. 1311(e), and
  • entitlement to DIC when remarriage occurs after age 57, see 38 CFR 3.55(a)(10).

IV.iii.3.F.1.c.  Handling an Overpayment of SBP

If SBP was paid to a surviving spouse entitled to DIC, the Department of Veterans Affairs (VA) offsets any overpayment of SBP from the DIC award in an amount not greater than the basic DIC payable.
Exception:  Under 38 U.S.C. 1311(e), there is no bar to full concurrent payment of SBP and the basic DIC rate when a surviving spouse is entitled to DIC under 38 CFR 3.55(a)(10) by virtue of having remarried after age 57.

IV.iii.3.F.1.d.  Effective Dates of DIC and SBP

The effective dates of DIC and SBP do not coincide, because the effective date of
  • an SBP annuity is always the day following the date of death, and
  • DIC is determined under 38 CFR 3.400.

IV.iii.3.F.1.e.  Reviewing for Potential Entitlement to SBP

Due to the potential for large overpayments in DIC awards to surviving spouses also entitled to SBP, a review of SBP entitlement should be completed prior to generating an original DIC award to a surviving spouse.
Review the claims folder and electronic systems to determine whether the surviving spouse is potentially eligible for SBP benefits.  Potential eligibility exists if the deceased Veteran was
  • retired, or
  • on active duty but eligible for retirement.
References:  For more information on

IV.iii.3.F.1.f.  Paying Full DIC Benefits Without Withholding in Certain Cases

In certain cases, VA can pay full DIC benefits without withholding.

After a review of the Veterans Information Solution (VIS) , if the surviving spouse is in receipt of SBP, but the following is true, then pay full DIC benefits without withholding or awaiting a response from DFAS as indicated in M21-1, Part IV, Subpart iii, 3. F.2.d:
  • the surviving spouse has been receiving SBP for 12 months or less, andthe current SBP effective date is 10 years or more from the date of the Veteran’s death, OR
  • the Veteran paid SBP premiums for 120 months, and the DIC award is no greater than 12 months retroactive.
Note:  See the SBP NUMBER OF MONTH PAID field in VIS in the SBP INFORMATION segment under the DFAS PAYMENTS tab for the number of months the SBP premiums were paid:
image of the number of months paid into SBP
Important:  Claims processors will still be required to submit the Phone Transaction Interface Veterans Affairs (PTIVA) form to DFAS notifying them that DIC has been paid in full.
Notes:
  • This does not apply to Coast Guard Veterans, as per M21-1, Part IV, Subpart iii, 3.F.2.j.
  • In all other cases regarding potential entitlement to SBP, VA must await a response from DFAS. However, claims processors may pay DIC as of the date last paid and continue the claim at authorization until a response is received. After a response is provided by DFAS, finalize the DIC award appropriately.
  • The current SBP effective date can be found in VIS under the SURVIVOR BENEFIT PLAN INFORMATION, under the CURRENT SBP EFFECTIVE DATE.
References:  For more information on:

IV.iii.3.F.1.g.Handling Cases With No Potential Entitlement to SBP

If there is no potential entitlement to SBP, the claims processor should enter No SBP payable in the REMARKS field of the DIC award.
Note:  If there are any questions as to whether or not SBP is payable, contact the applicable RPC as described in M21-1, Part IV, Subpart iii, 3.F.2.

2.  A Surviving Spouse’s Benefit and Potential Offset


Introduction

This topic contains information on a surviving spouse’s benefit and potential
offset, including

Change Date

February 20, 2019

IV.iii.3.F.2.a.  VA and RPC Policies Concerning Payment of DIC and SBP

VA and RPCs have no regulation preventing a surviving spouse from receiving DIC based on the death of one Veteran (A) while also receiving SBP based on the death of another Veteran (B).  There is no SBP offset in this case as the SBP offset is not related to the Veteran upon which the surviving spouse is receiving DIC.
Note:  Per Sharp, et al. v. United StatesFed Circ (August 26, 2009), there is no bar to full concurrent payment of the SBP and DIC, without offset of either benefit, when a surviving spouse is entitled to DIC by virtue of having remarried after age 57.
References:  For more information on
  • payment of DIC when remarriage occurs after 57, see 38 CFR 3.55(a)(10), and
  • full concurrent payment of SBP and DIC when remarriage occurs after age 57, see 38 U.S.C. 1311(e).

IV.iii.3.F.2.b.  Replying to RPC Inquiries Regarding SBP

RPCs submit requests to VA regarding a surviving spouse’s DIC payments.
When replying to RPC inquiries, furnish the
  • basic DIC rate per 38 CFR 3.5, and
  • award effective date (for example, the first day of the month of the Veteran’s death).
Notes:  The “basic DIC rate”
  • means the rate payable to the surviving spouse as if there were no children (total dependency code 10) based on the Veteran’s pay grade or the rate specified under 38 U.S.C. 1311(a)(1), as applicable, excluding any allowance for aid and attendance, and
  • includes the additional allowance payable under 38 U.S.C. 1311(a)(2) to the surviving spouse of a Veteran who was
    • rated as totally disabled for at least eight continuous years, and
    • married to the surviving spouse for the same period of time.
Important:
  • In an apportionment case, if the amount paid to the surviving spouse is less than the basic DIC, consider the lesser amount to be “basic DIC” for the purposes of this section.
  • Do not consider the Veteran’s rate for the month of death as the DIC rate for reporting purposes.
Reference:  For more information on the DIC rate payable, see M21-1, Part IV, Subpart iii, 1.A.2.

IV.iii.3.F.2.c.  Actions Taken if at the Time of the RPC Inquiry

If at the time of the RPC inquiry, a DIC claim is pending, wait to respond until afterthe claim is complete.
If at the time of the RPC inquiry, DIC has not been filed or has been denied, upload the form to the electronic claims folder (eFolder).

IV.iii.3.F.2.d.  Coordinating the Payment of DIC With DFAS

Before paying full DIC to a surviving spouse with potential eligibility for SBP benefits based on service in the Army, Navy, Air Force, and Marine Corps, contact DFAS to determine
  • whether the surviving spouse is receiving SBP benefits, and (if so)
  • whether payment of DIC will create an overpayment.
Many pension management center (PMC) employees have access to DFAS’s Annuity Pay Sub-system (APS).  PMC employees also have access to VIS, which is a web-based application that provides a consolidated view of eligibility and benefits data from the Veterans Benefits Administration and Department of Defense. This system often contains the information required to make the determinations referenced above without making direct contact with DFAS.  When it does not, or when access to APS or VIS does not exist, either the finance activity or PMC must send a request to DFAS through SAFE, using the template shown inM21-1, Part IV, Subpart iii, 3.F.2.e.
If a request is sent to DFAS, claims processors may pay DIC as of the date last paid and continue the claim at authorization until a response is received. After a response is provided by DFAS, finalize the DIC award appropriately.
If DFAS does not respond within 10 workdays, follow up by telephone at 1-800-321-1080.
Exception:  Do not postpone payment of full DIC benefits for a response from DFAS if:
  • a review of VIS shows that SBP payments have been received for 12 months or less, and the current SBP effective date is 10 years or more from the date of the Veteran’s death, OR
  • the Veteran paid SBP premiums for 120 months, and the DIC award is no greater than 12 months retroactive.

Important:  Claims processors must still send the PTIVA to DFAS notifying them that DIC has been paid in full.

Notes:

  • It is acceptable to request information from DFAS by telephone, using the number provided above, but only when an expeditious response is required.
  • Document any telephone contact with DFAS on VA Form 27-0820, Report of General Information.
  • The Manila Regional Office (RO) contacts DFAS by teletype rather than by telephone.
  • SBP is not paid to the surviving spouse through DFAS for Veterans of the Coast Guard, PHS, or NOAA.  For SBP payments for Veterans of the Coast Guard, PHS, or NOAA, see M21-1, Part IV, Subpart iii, 3.F.2.f.
Reference:  For more information about VIS, see

IV.iii.3.F.2.e.  Template for Requesting Information from DFAS

Use the template below (PTIVA Case Form) when sending a request to DFAS for information about the payment of SBP benefits to a surviving spouse.   All of the fields under each of the following headings mustbe completed:
  • VETERAN INFORMATION
  • SPOUSE INFORMATION
  • VA POINT OF CONTACT FOR OVERPAYMENT INFORMATION, and
  • DIC INFORMATION.
Note:  The fields listed below have drop-down boxes. Users must select the appropriate option provided in the drop-down menu for each box.
  • BRANCH OF SERVICE
  • VARO
  • BASED ON VA HIGHEST GRADE HELD (YES/NO)
  • VA HIGHEST GRADE HELD (PLEASE TYPE)
  • INITIAL BASIC SPOUSAL RATE
  • INITIAL BASIC SPOUSAL RATE
  • PTIVA ATTEMPT NUMBER, and
  • DIC RETRO PAYMENT DISPOSITION.
Important:  When completing the fields under the VA POINT OF CONTACT FOR OVERPAYMENT INFORAMTION heading, users must provide the appropriate area code for the phone number and fax number fields.

IV.iii.3.F.2.f.  Urgent PTIVA Requests

Urgent PTIVA requests will be handled using the existing points of contact (POCs) between the PMCs and DFAS and do not have to follow the identified schedule.
If the PTIVA request has already been sent to DFAS, then the PMC POC should call the DFAS POC. Re-sending the PTIVA should not be necessary unless requested by DFAS.

IV.iii.3.F.2.g.  Sending Sensitive Documents Through DFAS

Use the table below for sending sensitive documents through DFAS.
Step
Action
1
Access the DFAS website.
2
On the DFAS home page, select the AskDFAS icon in the upper right hand corner of the page
 
3
Click on the Retirees and Annuitants picture.
A dropdown will appear with links.  Click on the All other questions link.
4
The All other question link will take the user to the AskDFAS website.  A Department of Defense consent prompt will appear.  Read the prompt and click the Agreebutton.  Click the Submit A Ticket button to start the ticket process.
5
The Submit A Ticket button will take the user to the category and subcategory section.  Click on the arrows next to For Branch of Service Use Only.  A list of subcategories will populate.  Click on the arrows next to PTIVA to open a ticket.
6
The Category will show For Branch of Service Use Only and the Subcategory is will show PTIVA.
7
After verifying the correct Category and Subcategory, the user will begin to complete the form.The required fields to complete the form are
  • NAME (first and last)
  • EMAIL
  • RE-ENTER EMAIL
  • PASSCODE  Note:  The same passcode can be used for all tickets.
  • PHONE NUMBER AND EXTENSION  Note:  If no extension is available, input NA, and
  • NUMBER OF UNIQUE SOCIAL SECURITY NUMBER’S (SSN’S) INCLUDED.
8
Click Choose File and navigate to the required documents to be submitted.  Click on the document and then click Open.  Repeat this Step to attach up to 10 documents to the Attachment Section.
Notes:
  • The maximum number of attachments is set to 10.  The size of the 10 attachments cannot exceed 35 MB.
  • Each attachment must be for a separate SSN.
  • Each attachment must be in Single PDF format.
  • The PDF cannot contain embedded attachments within the PDF.9
9
Click ^Upload File(s) to upload the files to the ticket.  A green check will appear next to the attachment as a confirmation.
10
Submit the ticket.
 
11
After the ticket is submitted, an email notification will be sent to the user that a ticket has been opened.
12
The user will need to regularly check the link provided in the email.  Once the ticket is closed, a response will be provided in the link from the email notification.

IV.iii.3.F.2.h.  Coordinating the Payment of DIC With the Coast Guard

SBP is not paid to the surviving spouse through DFAS for Veterans of the Coast Guard, PHS, or NOAA. Therefore, the SBP information cannot be found in VIS or APS.  Before paying DIC to a surviving spouse based on the Veteran’s service in the Coast Guard, PHS, or NOAA, claims processors must contact the Coast Guard to obtain the following information:
  • whether the surviving spouse is receiving SBP benefits, and (if so)
  • whether payment of DIC will create an overpayment.
The contact numbers for the Coast Guard are
  • 1-800-772-8724 for telephone, and
  • 1-785-339-3770 for fax.
Notes:
  • Document any telephone contact with the Coast Guard on a VA Form 27-0820.
  • The Manila RO contacts the Coast Guard by teletype rather than by telephone.

3.  RPCs’ Handling of SBP Payments

 


Introduction

This topic contains information on RPCs’ handling of SBP payments, including

Change Date

July 12, 2015

IV.iii.3.F.3.a.  Initial Action Taken by RPCs

RPCs
  • begin payment, regardless of whether or not DIC is payable, if a surviving spouse is entitled to SBP, and
  • sends notification to the PMC of jurisdiction that provides information as to when SBP payments begin.
Note:  RPCs are not required to send VA a signed authorization from the surviving spouse to offset DIC based on SBP payments.  By signing the application for SBP, the surviving spouse authorizes VA to offset DIC based on SBP payments.

IV.iii.3.F.3.b.  Action Taken When No Claims Folder Exists

If notification is received from the RPC and the Beneficiary Identification and Records Locator Subsystem shows that no claims folder exists
  • establish an eFolder, and
  • include sufficient information to alert the next person who reviews the folder of a potential DIC-SBP payment overlap should DIC be awarded to the annuitant at a later date.

IV.iii.3.F.3.c.  How the PMC of Jurisdiction Is Determined

The PMC of jurisdiction is
  • indicated by the RPC’s records, and
  • determined, if not of record, based on
    • beneficiary residence, or
    • the address to which the payments are provided.

4.  Award Action for Claims Involving SBP


Introduction

This topic contains information on award action for claims involving SBP, including

Change Date

June 21, 2016

IV.iii.3.F.4.a.  Note About VBMS Award Processing

Use the Veterans Benefits Management System (VBMS) to process awards for DIC.
Reference:  For more information on processing awards in VBMS, see the  VBMS-Awards User Guide.

IV.iii.3.F.4.b.  Considering a DIC Claim Not Timely Filed

Deductions for an SBP overpayment can be made only from the effective date of the DIC award, instead of the effective date of SBP payments, if
  • a DIC claim is not filed within one year from the date of death of a Veteran, and
  • the claimant is receiving SBP.
Reference:  For more information on completing an SBP offset, see M21-1, Part IV, Subpart iii, 3.F.4.c.

IV.iii.3.F.4.c.  Action to Take to Complete an SBP Offset

The table below describes the actions to take to complete an SBP offset.
Stage
Who Is Responsible
Description
1
Claims Processor
  • Generates DIC award, and
  • forwards to authorizer for review.
2
Authorizer
  • Reviews award for accuracy, and
  • forwards the RPC payment information to the finance activity to request that they create a debt (offset) to recoup the SBP overpayment.
3
Finance
  • Creates a debt in the amount requested, and
  • notifies authorizer of completion.
4
Authorizer
  • Reviews corporate to verify that the debt was created, and
  • authorizes the award.
Note:  If the pay grade is required to generate the DIC award, but not known, the claims processor should check APS and VIS to see if the pay grade is available. The Retired Pay Coordinator must telephone DFAS to obtain the correct pay grade.

IV.iii.3.F.4.d.  Providing Notice to Claimant

In all DIC awards involving a SBP deduction, prepare a locally-generated award letter per 38 CFR 3.103(e) that fully advises the claimant
  • of the award, and
  • that the award is subject to offset for concurrent payments of the SBP annuity.
In original or reopened DIC awards involving SBP benefits, enclose VA Form 21-8765, Service-Connected Death Award Attachment, with the locally generated award letter.
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