Senator Bill Nelson's Widows SBP/DIC offset elimination Amendment SA-4979 likely to pass this year
Background:
In 2003, the Administration ended 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.
The main problem:
The large legacy 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. However, these same organizations are deluged with membership issues, so the SBP/DIC widows voices are often lost in lists of annual membership concerns.
Present Situation:
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 spouse's 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 member's 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 sponsor's 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 57,000 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 receiving DIC from the Department of Veterans Affairs.
The only Viable Solution:
Encourage your military associations to support the the elimination SBP/DIC offset as their highest priority this year. The OMB estimated cost of this proposed legislation is $520 million per year, and this cost is largely an entitlement. Like CRDP and CRSC, it does not directly affect the DOD budget.