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M21-1, Part V, Subpart iii, Chapter 6 – Department of Defense (DoD) Survivor Annuities and Their Relationship to VA Death Pension and Parents’ Dependency and Indemnity Compensation (DIC)

Overview


In This Chapter

This chapter contains the following topics:
Topic
Topic Name
1
2
3
4
5

 1.  General Information on DoD Survivor Annuities


Introduction

This topic contains general information on Department of Defense (DoD) survivor annuities, including:

Change Date

June 15, 2015

V.iii.6.1.a.  Establishment of the SBP Under PL 92-425

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).

V.iii.6.1.b.  Retirement Pay as a Basis for SBP Annuity

Eligible persons can designate all or a part of military retirement pay as a basis for survivor’s annuity, payable to
  • a surviving spouse
  • children, or
  • persons having an insurable interest in the retiree.
Note:  The designated beneficiary receives 55 percent of the base amount selected.

V.iii.6.1.c.  MIW-SBP Minimum Annuity Income Plan

The SBP alternatively provided for a guaranteed minimum income for the limited class of eligible surviving spouses of military retirees who
  • did not participate in SBP, and
  • died before September 21, 1973.
This alternative plan is an annuity paid to Minimum Income Widow/ers and is referred to as the MIW–SBP.

V.iii.6.1.d.  Eligibility Requirements for MIW-SBP

To be eligible for MIW-SBP, the surviving spouse must
  • not be remarried
  • be eligible for Department of Veterans Affairs (VA) Survivors Pension, and
  • have income for VA purposes, excluding any SBP annuity, of less than the MIW-SBP annuity limitation.

V.iii.6.1.e.  ACMSS

Effective November 18, 1997, Annuities for Certain Military Surviving Spouses (ACMSS) was established under PL 105-85 to provide benefits to the surviving spouses of
  • retired regular or reserve members who
    • died before March 21, 1974, and
    • were receiving military retirement at the time of death, and
  • reserve members who
    • had completed 20 or more qualifying years of service toward retirement
    • were not receiving military retirement pay because they were under age 60, and
    • died before October 1, 1978.
Note:  ACMSS is often referred to as the “forgotten widows annuity.”

V.iii.6.1.f.  Relationship Between SBP and VA Benefits

SBP and VA benefits have the following relationship to each other:
  • MIW-SBP payments are countable income for current-law pension.
  • Payments under MIW-SBP are considered “retirement or annuity” income under 38 CFR 3.261(a)(14) and are therefore not countable income for Section 306 Pension, Old-Law Pension, or Parents’ Dependency and Indemnity Compensation (DIC).
  • DIC and SBP cannot be paid concurrently.  The Department of Defense (DoD) will reduce or discontinue a surviving spouse’s SBP survivor’s annuity if the surviving spouse becomes entitled to DIC.
  • Concurrent payment of SBP and DIC to children and parents is not prohibited.
Reference:  For more information on the prohibition that is honored by VA, seeM21-1, Part IV, Subpart iii, 3.F.

V.iii.6.1.g.  Where to Find Specific Instructions When a Surviving Spouse Claims Receipt of or Entitlement to SBP

If a surviving spouse states that he/she is receiving or entitled to receive SBP, or if there is indication of entitlement in the claims folder, see the following locations for specific instructions:

2.  Handling Referrals by the Service Department for Eligibility Determinations


Introduction

This topic contains information on handling referrals by the service department for eligibility determinations, including:

Change Date

June 15, 2015

V.iii.6.2.a.  Referrals for Eligibility Determinations

If a surviving spouse meets eligibility requirements for the SBP minimum income plan and has applied to DoD for such benefits, the service department forwards an original and one copy of DD Form 1895, Request for Veterans Administration Pension and Annual Income Information.

V.iii.6.2.b.  RSFPP Benefits

If the Retired Servicemember’s Family Protection Plan (RSFPP), the DoD annuity plan that preceded the SBP, is payable, the service department partially completes the Eligibility Determination portion of DD Form 1895
  • showing subtraction of the RSFPP annuity from the MIW-SBP income limitation, and
  • establishing the income limit that can be supplemented by the MIW-SBP annuity.
Note:  RSFPP annuities are not countable income for Section 306 or Old Law Pension per 38 CFR 3.261(a)(14).

V.iii.6.2.c.  Handling RSFPP Benefits in Current-Law Pension Cases

RSFPP is countable income for current-law pension.
In the Veterans Service Network (VETSNET), enter RSFPP annuities as OTHER RETIREMENT/ANNUITY MONTHLY.

V.iii.6.2.d.  Completing DD Form 1895 When a Surviving Spouse Is Entitled to Current-Law Pension

If a surviving spouse is entitled to current-law pension
  • complete the Entitlement Computation part of DD Form 1895, in addition to showing entitlement to VA pension, and
  • complete the Current Year column by
    • inserting the five-digit income for VA purposes (IVAP) on which pension payments are currently being made
    • subtracting this amount from the dollar amount as previously entered by the service department, and
    • entering the balance as the MIW-SBP payable, and
  • if a change in the surviving spouse’s income is anticipated for the following year
    • complete the lines on DD Form 1895 for IVAP and MIW-SBP payable, inserting the year in the caption under the Next Yearcolumn, and
    • see the following block, M21-1, Part V, Subpart iii, 6.2.e, for an example of DD 1895 completed for this type of anticipated income change.
Notes:
  • If the amount entered as the IVAP equals or exceeds the limit entered by the service department, enter None on the line for MIW-SBP payable.
  • Use locally-generated letters in Section 306 or Old-Law Pension cases.

V.iii.6.2.e.  Example:  Noting an Anticipated Change in a Surviving Spouse’s Income

Situation:
  • A surviving spouse’s 1992 IVAP is $1,000.
  • Anticipated countable income for 1993 is $4,500.
Result:  Complete the eligibility determination of DD Form 1895 as shown below.

V.iii.6.2.f.  Completing DD Form 1895 When a Surviving Spouse Is Not Entitled to VA Pension

If a surviving spouse is not entitled to VA pension, then on DD Form 1895
  • appropriately complete the following items:
    • Is Widow Entitled to VA Pension?, and
    • Reason Widow Not Entitled to VA Pension, and
  • check either the box labeled
    • Income Exceeds if VA pension is not payable because IVAP exceeds the maximum annual pension rate (MAPR), or
    • Other and briefly state the other reason for the nonentitlement to VA pension in the Remarks section.
Example:  Excessive Net Worth, Relationship Not Established.

V.iii.6.2.g.  Completing DD Form 1895 When a Survivors Pension Claim Is Pending

If there is a pending claim for Survivors Pension, advise the service department of the status of the claim and that a final reply will be furnished at a later date.
On final disposition of the pending claim
  • dispose of DD Form 1895 as outlined in block M21-1, Part V, Subpart iii, 6.2.h
  • if no claim has been received
  • check the box entitled Other as the reason that the claimant is not entitled to VA pension, and
  • enter the appropriate information in Remarks, and
  • insert the form into the electronic claims folder (eFolder) or back-file a copy in the claims folder so it remains on top of all subsequent file material, ensuring that the service department will be informed if a pension claim is filed at a later date.
Note:  Do not use VA Form 1895 if the surviving spouse receives Section 306 Pension or Old-Law Pension.

V.iii.6.2.h.  Disposing of DD Form 1895

Properly dispose of DD Form 1895 by
  • finalizing completion of the form by
    • entering the RO
    • signing in the name of the Veterans Service Center Manager (VSCM) or Pension Management Center Manager (PMCM), and
    • dating the form
  • returning the original to the service department so that they may
    • initiate payments, or
    • furnish notice of denial when the MIW-SBP payable has been determined as None, and
  • signing and dating a copy and filing the copy in the claims folder or inserting the document into the eFolder.

V.iii.6.2.i.  Recalculating Income When MIW-SBP Is Determined to Be Payable

If it is determined that MIW-SBP is payable
  • recalculate the surviving spouse’s IVAP because this annuity is included as countable income for current-law pension, and
  • make the required adjustment of pension when the DD Form 1895 is released.

3.  Preparing Pension Awards Involving MIW-SBP


Change Date

June 15, 2015

V.iii.6.3.a.  Requirements for Preparing Awards Involving MIW-SBP

Use the table below for the specific requirements that apply to the preparation of current-law pension awards involving MIW–SBP in VETSNET.
If entering …
Then …
income data
enter the MIW-SBP payable as OTHER RETIREMENT/ANNUITY MONTHLY.
effective dates for reductions
reduce pension under either the end-of-the-month or the end-of-the-year rule, per 38 CFR 3.660(a)(2).

4.  Adjusting Awards Due to Changes in Income


Change Date

June 15, 2015

V.iii.6.4.a.  Subsequent Adjustment Actions Due to Changes in Income

If a change in income received or anticipated is reported, there must be
  • a recalculation of IVAP
  • a redetermination of the MIW-SBP payable (from an amount to None or from None to an amount), and
  • if required, an adjustment in the award.

5.  Notifying the Service Department of Changes in Entitlement


Introduction

This topic contains information on notifying the service department of changes in the entitlement of any survivor beneficiary having entitlement to SBP, including:

Change Date

June 15, 2015

V.iii.6.5.a.  Notification Requirements for Discontinuance of a Section 306 Pension Award

Notify the service department of
  • discontinuance for any reason, and
  • any changes to 1978 protected income.

V.iii.6.5.b.  Effect of Income Changes on MIW-SBP Payment in Section 306 Pension Cases

For Section 306 Pension cases, income changes do not affect MIW-SBP payment, except for a change to discontinue due to excess income or a change to 1978 protected income.
The service department continues payment based on the MIW-SBP rate during 1978, plus an amount equal to the cost-of-living adjustment (COLA) increase in the MIW-SBP limit.

V.iii.6.5.c.  Notification Requirements in Current-Law Pension Cases

Notify the service department of
  • discontinuance for any reason, and
  • all income changes, specifying recalculated
    • IVAP, and
    • MIW-SBP annuity.

V.iii.6.5.d.  Requirement for Notification of Death in SBP Survivor Annuity Cases

Advise the service department of the surviving spouse’s death or remarriage.

V.iii.6.5.e.  Notification to the Service Department for Cases Involving DIC

Advise the service department of the surviving spouse’s death or remarriage.
Transmittal-Sheet-05_14_07.doc May 20, 2019 51 KB
Change-June-15-2015-Transmittal-Sheet-M21-1MRV_iii_6_TS.docx May 20, 2019 39 KB
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