For decades, military survivors who qualified for both SBP and DIC watched one cancel out the other. Families called it the widow’s tax, and it took roughly fifty years of advocacy to end.
It’s over. Since February 2023, an eligible surviving spouse receives the full SBP annuity from the Defense Department and the full DIC payment from the VA, side by side, with no offset between them.
How the Repeal Rolled Out
The FY2020 National Defense Authorization Act phased the offset out over three years rather than ending it at once.
| Year | What a surviving spouse received |
|---|---|
| 2020 and earlier | DIC in full, SBP reduced dollar-for-dollar by the DIC amount |
| 2021 | DIC in full, plus one-third of the SBP annuity restored |
| 2022 | DIC in full, plus two-thirds of the SBP annuity restored |
| 2023 onward | DIC in full and SBP in full — no offset |
The Tragedy Assistance Program for Survivors tracked the repeal through Congress and documents the phase-out schedule.
What SBP Actually Is
Military retired pay stops the day the retiree dies. SBP is the annuity that keeps a portion of it flowing to a survivor — it’s the only way that income continues at all.
- The annuity pays 55% of the base amount the retiree elected to cover.
- The premium for spouse coverage is 6.5% of that base amount, withheld from retired pay before it’s paid.
- You choose the base amount — full retired pay or a lower figure, down to a statutory minimum.
- Payments are adjusted for cost of living, which is the feature private annuities rarely match.
The Decision Happens Once
The election is made at retirement, on DD Form 2656, and it is effectively permanent. There is no annual open enrollment.
If a married retiree declines SBP or elects less than the maximum, the spouse must concur in writing, with notarization. That requirement has been in place for elections since March 1986, and it exists precisely so the decision can’t be made quietly.
Spouses: if you’re asked to sign that form, understand what you’re signing away before you do.
SBP, DIC, and Life Insurance Side by Side
| SBP | DIC | Life insurance | |
|---|---|---|---|
| Who pays it | Department of Defense | Department of Veterans Affairs | Insurer, or VA for SGLI/VGLI/VALife |
| Form of payment | Monthly annuity for life | Monthly benefit | Lump sum |
| Based on | Retired pay and your election | Service-connected death or a long-held total rating | The coverage you bought |
| Requires military retirement? | Yes | No | No |
| Cost-of-living adjusted? | Yes | Yes | No |
| Reduced by the others? | No, not since 2023 | No | No |
These stack. A family can receive all three, and none reduces another. Our guides to DIC and survivor benefits and SGLI, VGLI, and VALife cover the other two in detail.
Premiums Don’t Run Forever
SBP becomes paid up when both conditions are met: 360 months — thirty years — of premiums paid, and the retiree has reached age 70.
Both, not either. A retiree who paid for 30 years but is 66 keeps paying until 70. After that, withholding stops and the coverage stays in force for the survivor’s lifetime.
That structure changes the arithmetic considerably. Veterans who compare SBP to a private policy on monthly cost alone often forget that the premium eventually ends while the annuity does not.
The Child-Only Option Is Gone
During the offset years, some retirees directed the SBP annuity to their children instead of the spouse, because a child’s annuity wasn’t offset by DIC. It was a legitimate workaround to a bad rule.
That optional child annuity was eliminated effective January 1, 2023. Annuities that had been directed to children revert to the eligible surviving spouse — but the spouse has to submit documentation establishing eligibility for that to happen.
If you’re a surviving spouse whose family used that strategy and you’ve never received an SBP payment in your own name, that is worth chasing down. Payments don’t start on their own.
Is SBP Worth the Premium?
It’s a real question, and the honest answer depends on facts specific to your household.
| Points in favor | Points against |
|---|---|
| Lifetime income that can’t be outlived | Premium reduces retired pay every month for years |
| Adjusted for cost of living | Nothing is paid if the survivor dies first |
| No medical underwriting at all | The election is effectively irreversible |
| Premiums end at 30 years and age 70 | Term life may cost less for a healthy young retiree |
| Now stacks fully with DIC | Coverage is tied to retired pay, not a freely chosen amount |
Two factors usually decide it: the age gap between spouses, and whether the surviving spouse would have other income. A retiree with a much younger spouse and no other pension is the clearest case for full coverage.
The Congressional Research Service description of SBP provisions lays out the mechanics if you want the underlying detail.
Life Events That Change Your Election
The retirement election is close to permanent, but a handful of life changes open doors that most retirees don’t know exist.
- Marrying after retirement. A retiree who declined SBP because they were single at retirement generally has a one-year window after the marriage to elect spouse coverage.
- Divorce. Spouse coverage does not automatically convert to former-spouse coverage. It has to be elected, and there’s a deadline — a divorce decree alone doesn’t do it.
- A first child. Child coverage can be added when a retiree acquires a first eligible child, subject to its own timing rule.
- The spouse dies first. Premiums stop, and they can resume later if the retiree remarries and elects coverage again.
Every one of these runs on a clock measured in months. If your family situation has changed since you retired, that is a call to make now rather than at the next milestone.
Where This Sits With Everything Else
SBP is one piece of a survivor’s picture. CRDP and CRSC affect the retiree’s pay during life but not the SBP annuity itself, and burial benefits and a government headstone are separate again.
Families dealing with all of this at once should not try to sort it alone.
Frequently Asked Questions
Is the SBP-DIC offset still in effect?
No. It was fully eliminated as of January 2023. Eligible surviving spouses receive both benefits in full.
How much does SBP pay?
55% of the base amount of retired pay the retiree elected to cover, adjusted for cost of living.
What does SBP cost?
Spouse coverage is 6.5% of the elected base amount, withheld from retired pay.
When do SBP premiums stop?
When both conditions are met: 360 months of premiums paid and the retiree has reached age 70. Coverage then continues for the survivor’s lifetime.
Can I decline SBP without telling my spouse?
No. For elections since March 1986, a spouse must concur in writing and have it notarized before a retiree declines or reduces coverage.
What happened to the child-only SBP option?
It was eliminated effective January 1, 2023. Those annuities revert to the eligible surviving spouse, who must submit documentation to establish eligibility.
Get It Reviewed
If you’re approaching retirement, the SBP election is one of the few financial decisions in a military career you don’t get to revisit. Treat it accordingly.
If you’re a survivor, verify that both payments are actually arriving. An accredited service officer can check — our guide to free help from an accredited service officer explains how, or call Post 51 at (541) 451-1351.