I am concerned about problems he might encounter after my death if taxes are to be collected since he is not a US citizen and does not have a SSN. Yes, that is partly correct. I was medically retired at 16 years this past June and I elected SBP at time of retirement. You have to consider your specific situation. Im not sure you will be able to get DFAS to tell you who was covered under your fathers SBP, but I guess it doesnt hurt to ask. Ive never paid anything into spb, but have been recieving Bills forever. In particular, life insurance/survivor benefits and renting a house. I have done extensive research within SBP publications, but have never found this addressed. https://www.dfas.mil/retiredmilitary/about/aboutus/customer-service.html (Youre probably considered an annuitant even though youre not receiving an annuity.) Time passed and I just remembered about this when they sent me the certificate of my benefits and in the certificate it included SSIA amount, and so I called them to ask why is it showing that Im receiving an SSIA amount. When I received the return of SBP premiums they withheld about 10%. Im afraid the best advice I can give is to retain a lawyer and/or reach out to your elected representatives. There is one regular opportunity to cancel your SBP coverage after retirement. My mother is still alive but DFAS says that the word spouse is in the contract and because she is divorced from him and not his spouse she is not entitled to the SBP. blessings I realize that this is an uncomfortable thing to say, but I probably will not have the opportunity to chat with you again. All I know is that the retirement ended and all she ended up with was the Tri-Care For Life Insurance. Im guessing that I will still be making this payment in my early 90s. The instructions for applying for SBP are on this page: https://www.dfas.mil/retiredmilitary/survivors/Retiree-death/sbp.html Also, if your parents have any records from before his death, he should have been receiving Retiree Account Statements (RAS) that would show whether SBP premiums were being deducted. For example. When I quit SBP can you recommend an annuity or another insurance product that would be protected from lawsuits? This blog is strictly for informational and entertainment purposes only. Ms. Horrell, though I appreciate your consideration in my matter, I frankly would have thought it better if you had stopped yourself after the first sentence and left your personal comments out of the issue. Frankly, I think he may have been unaware. Background: J (my now adopted son) is in fact my great nephew and still a minor (11yrs old). Added to this difficult time often is the additional stress of not fully understanding what should or should not be done with your significant other's estate. That doesnt sound right to me. I have copy of 20 year retirement letter 6/23/92, he retired at 60. Every retiring member is automatically enrolled in SBP for full coverage unless the spouse consents in writing to reduced coverage or no coverage. tkOkin**k!rJJ2gtR3_y!im x/G06:wzXqhkfy$#3Ndb'TG)yE}O!UTI,o^'8*d4N'R|\$] @A4Dx%FK6rKPm.%k cQDeS ihYey5,a$p[%J-~SRr. Now after doing so, I was told that this is a withdrawal time and that we basically would just lose everything we paid up to this point. SBP premiums are deducted from retired military pay pre-tax, which reduces the overall cost of the premiums. SBP (a portion of your retirement) will be paid with no questions asked to your spouse at least till he/she deceases. From the 25th to 36th month of coverage, you can terminate your SBP election. To the best of my knowledge, there is not a separate form to request the refund. Can you give me any advice on what to do? Assuming the eligible beneficiaries are still eligible, the only window to terminate SBP coverage is between the 25th and 36th payment. If the survivor is eligible for DIC, the amount of their SBP will be reduced by the amount of DIC that they receive. pastorpete. When a Social Security beneficiary dies, his or her surviving spouse is eligible for survivor benefits. Question: Can I now op out of SBP and stop the SBP premiums from being deducted from my retired pay? Hi Kate. TOTAL REDUCTION = $3,730 or $310.83 per month annuity reduction. A surviving spouse or child may receive a special lump-sum death payment of $255 if they meet certain requirements. The amount of SBP is offset, or reduced, by the amount of DIC received by the beneficiary. The benefit drops from 55% to 35% assuming the spouse elects to receive social security. Those payments would be made on his full retirement pay, not the offset amount he has received. Im wondering if I can make a legitimate waiver request, and the best way to go about stating my case, to DFAS regarding The Barring Act, 31 U.S.C. You have had a total disability rating from the VA for at least 5 continuous years immediately following the last date of active duty. Im not sure if the retirement officer told you the wrong information, or explained it in a way that was confusing. section 3702 regarding SBP payment of any claim not received within 6 years from the date it accrues basically a claim for Arrears of Pay. Ive had lots of folks ask me what happens if they die before reaching 70 years or making 360 payments. You are very kind and thoughtful to do all this Q & A. You could elect to cover 2/3 of your retirement pay, pay a corresponding premium, and provide corresponding benefits. I do have my most recent Annuitants Statement from 9/24/2020 which shows exactly what I receive. All of pay is non taxable and I have SBP 55 percent for my spouse. It can be frustrating not being able to concentrate and go about life as you did before. Ill have to check and see if anyone knows how taxes are withheld on the refund if it is withheld like a bonus or as directed on the W-4. Is there anything she can do? Does a cash value build up in the annuity so you can cash it out? Every situation is different. In my opinion, keeping SBP makes sense for a lot of people. Im asking around. Im glad I was able to answer your question. Theres another whole book in that, but definitely read up! <> 4 0 obj There is no cash value to SBP. I am the current spouse and began receiving the survivor annuity. Walker said. I am so confused. The only thing that happens at 360 payments is that he does not make any more SBP premium payments. Under Scots law, the only thing a surviving spouse automatically inherits is the first pound of the net estate, which is the value of the deceased's assets minus any debts. Finally made calls and thats when I learned that there would be back payments that needed to be calculated. Income from the SBP annuity is fully taxable. I am also 100% disabled. Did your husband inform DFAS of his divorce and elect to continue former spouse coverage on his ex-wife. If a deceased person had legally made a will before they died, the will will decide who will inherit . I am a guardian for a adult disabled child,his deceased dad was a 30 year lifer in the army, after his death he did have survival insurance,but I filed for dic and pension from VA,denied,did I filed wrong insurance?and if so what can I do? My children will no longer be eligible to receive SBP if I die. Dependency and Indemnity Compensation (DIC) is a benefit paid to survivors of service members who die while on active duty, or veterans who die of a service-connected condition. Im looking up some information and it might take a little time. What are they going to do to resolve the non-payment issue? Ill let you know what I find out. If the marriage at the time of retirement ends, and you subsequently remarry, there may be a way to change the amount of coverage for the subsequent spouse, but I dont have the details at my fingertips. One month later I put my mom in for dic and in January 2018 it was approved. Hi Kate, I retired at 62 three years ago and may not live until 92 if I die as I understand your previous post, my wife will receive the SBP payment even though it is not paid in full. Pat, Im sorry to hear that this has turned out this way. If so, where do we find the appropriate form? I think maybe you are misunderstanding something, Anne. age 45 and die at age 47, your beneficiary will receive the monthly annuity effective the day after your death. Thanks again for what you do. I should be receiving his SBP in the next 2 months. It all depends on your specific situation and if that is a good tool for your specific needs. My question is I just recently found out I wouldnt be getting my husbands retired pension because he didnt elect to take out SBP when he retired from the military back in 1993 after serving 30 years in the Navy. Can I include in the decree that he elect me for SBP as well, or is it too late to alter his previous decision? But back pay from 12/29/2011 through 11/30/2017 would be valid. (The numbers vary, and that is rounded.) endobj Good luck to you! Jessica, this is incorrect. Answer: Yes, Your nonmilitary spouse can veto your election should you elect not to participate in SBP or elect not to participate at the maximum level. DFAS told me that it is listed all the time in the ECHOES publication and that he should have known to do that. If it is forced by the process, then another option may be needed. Since she didnt file the paperwork in time I was told by DFAS that I would receive the annuity. Hi! In many cases, it will not. The idea behind this is that the surviving spouse would be eligible for Dependency and Indemnity Compensation (DIC). I tend to look at this coverage as income insurance, not life insurance. Because of their varying needs, some families may want or need life insurance, some families may want or need an annuity, some families may want or need both. He doesnt get more then $150.00 dollars a month for retire pay (offset) since he didnt serve for 20+ years and his VA rating pay was higher then his medical retirement. The requirement for paying in is 360 payments, or until the retiree reaches 70. 2. But Im afraid she will now be in debt with the 20,000. I dont like that if my husband dies first I get nothing out of all of the premiums we paid to SBP which in my opinion is way to expensive for a 50% chance of getting nothing. Unfortunately, one of the reasons SBP is so affordable is that there is no provision for refund of premiums if the beneficiary passes before the retiree. The premiums will be automatically deducted by DFAS from your monthly retirement check. It is very helpful. The federal government does not make money off the SBP program. I am 70. Since I am claiming him as a dependent on taxes do I also include the 1099-R information on my tax return or should I also do a separate return under his social? In that case, perhaps 3% would be appropriate, giving your survivors $30,000 of income each year from that life insurance policy. Do you have any insight on either of these issues? Notice must include: PUBLIC NOTICE: Jim Cramp is the attorney who is responsible for the contents of this website. It also requires constant decision-making about how much to spend, finding the balance between spending enough to live will versus ensuring that you wont outlive your money. Kate does not represent the Department of Defense, the Department of Veterans Affairs, or any government agency. I dont understand this as unless this means I no longer have to pay for SBP, my benefit would be far greater than my DIC. the back amount debt would be paid by the SBP premiums + interest. I have no idea why. If you can provide me with more information, I can try to help with answers. Thank you for addressing my two questions and thank you in advance for your response. <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 9 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> There are several reasons why you might want to continue having SBP coverage even if your husband is 100% disabled, including the Special Survivors Indemnity Allowance (SSIA), if the SBP benefit is larger than the DIC benefit, etc. During this difficult time, we know that you will have questions about survivors benefits and how to obtain them. My husband was not good at money and to be honest I didnt know anything until he died that I would not be receiving his pension. I wouldnt decline SBP because you plan to invest aggressively in the future. Im glad you are happy with your decision not to purchase SBP, but please do not counsel others without all the facts.. I did see that you anticipate a second career after the military. So, I guess DFAS denied the former spouses claim and then the Appeal Board overturned it. It took me the surviving widow 15 years . If the coverage is required by the divorce settlement, then the spouse must provide DFAS with a copy of the court order. Thank you. Simple math shows that by putting that money is a savings account earning 2%, my spouse would earn $2000/mon with the exception that she also has $1,000,000 in the bank. Lets say my retirement is $2000/mon, then my spouse would receive approximately $1100/mon for life, with increases of Cost of Living. The check just showed up in the mail she told me at first she thought it wasnt real! However, if your ex-wife's second (or subsequent) marriage ends by annulment, divorce, or the death of her new spouse, then her eligibility to receive pension payments may resume. If you elect spouse/former spouse and child(ren) as beneficiaries, the spouse/former spouse is the primary beneficiary and the children are secondary beneficiaries. This does not seem likely.). 2. We were surprised that taxes withheld were very low; enough to require her to pay a penalty for underpayment. SBP payments to survivors are taxable, but spouses usually receive benefits when their total income is less and the extra tax exemption for being over age 65 is applicable. 2022 Kate Horrell and Kings High Media. Hi Katheryn. Depending on your husbands medical situation, you may be eligible for Dependency and Indemnity Compensation (DIC) if he pre-deceases you. Premiums are taken by reducing retired pay, so they don't count as income. SBP provides inflation-adjusted, lifetime coverage. Plus college stuff, landlording, moving, taxes. I appreciate all your explanations, and look forward to your reply. What does this mean and how is determined? Tony, please accept my condolences on the loss of your parents. She was not aware of the divorce nor the fact he cancelled the SBP for her. If married, the spouse is required to agree with the service member's SBP choice to elect anything less than full SBP. 4. My father passed away Jan 18th 2018 at the age of 75, he retired back in 1982 with 21 yrs. beneficiary loses eligibility (spouse dies, or member and spouse divorce). Its all about when something happens and if youre prepared. Hopefully she will still receive payment. I gave too many briefings to widows of recent retirees who didnt elect SBP or VGLI and a $400,000 insurance policy usually is not enough to pay off a mortgage, other bills and future college. Mom received DIC after 3 years. She faxed the Army to ask for an extension of time (this also was allowed). Parents married 18 years 1958-1976, Divorced 1976. As a drilling reservist, I have already passed the date of retirement eligibility and took no action so assume I I fall under Option C (spouse only, annuity benefit on full retired pay base). Please keep me updated! We were wondering about applying for spousal benefits, but were told we were supposed to apply for it within the 1st year of our marriage. The $310 SSIA offset is given when DIC is more than what she would have received for SBP monthly. The base amount covered may be any amount from $300 per month up to the entire amount of retired pay. Or is this deducted from his social security benefit? Yes, premiums go up with age, but with a policy like whole life, my spouse is still better off much better off. They didnt say what was going to happen, they just asked for a copy of our marriage license and his death certificate. Appeal appeal appeal! I have been paying SBP for 217 months. Thank you for your help. My question is since my retirement is totally non taxable will my spouse have to pay income tax on her SBP benefit ? Ive been paying into SBP for 1.5 years and am beginning to think it was a mistake. Great question. Can you please tell me who the insurance company is for SBP? It is hard at any age. I am unaware of any suicide-related qualifications for Survivor Benefit Plan payments. Thanks for any info/help you may have. Did you file your divorce decree with the Defense Finance and Accounting Service (DFAS)? Life insurance is a great tool for large, short-term expenses such as paying off debt, relocating, funding educational expenses, and giving the survivor a buffer to figure out how they are going to move forward. My husband never discussed pension amount or anything of the sort when he retired. We all carry insurance on our homes, but we hope to not make a claim. SBP coverage is effective immediately, on the first day of retirement. As long as he reaches 70 you are good to go. When we got married he has children from his previous marriage, and so he elected spouse and children( Me and the kids) but I never did anything in regards with this sbp entitlement. I plan on doing it the first week. Retirees agree to pay a portion of their retirement pay into their SBP so that, when theydie, the program will payan annuity to their surviving beneficiary based on a portion of the retiree's pay. How do I continue to provide SBP for my spouse, or does she lose that benefit despite these years of payments. Are you saying that you waive all of your military pay to receive disability compensation, which is non-taxable? I elected SBP when I retired in 1977 and am now 82 years of age. That child will be turning 18 in January and not attending college. Complete a DD Form 2656-6 requesting SBP coverage for your spouse, and provide your spouse's name, Social Security Dumb question Im sure but first time Ive heard the term SBP. Odom said that MOAA had brought the matter to the attention of defense officialsand staff members of House and Senate Aarmed Sservices Ccommittees. I used to say it was absolutely right for everyone, and then I started working with some families who had enough other resources to make SBP unnecessary. Do not want anything for X or for her to recieved anything from me. Your mother should change her income tax withholding via the online MyPay system or by physically mailing an IRS Form W-4P (available at https://www.irs.gov/pub/irs-pdf/fw4p.pdf) to DFAS at Defense Finance and Accounting Service, U.S. Military Annuitant Pay, 8899 E 56th Street, Indianapolis, IN 46249-1300. Have you reached out to DFAS for the answer to this question? If Brown had died before his ex-wife, the SBP would have paid a monthly annuity to herequal to 55 percent of his monthly retirement pay. Kate, I have been paying into the SBP for 11 years now. This is a separate program from military retirement pay, and it requires certain actions and payment for the coverage after retirement. My husband passed away back in December2017 and learned he did not elect to take out SBP when he retired in 1993. Heres the complete list of posts. He received benefits at age 60 he is now 73. /% J9G n`cc Y\ k_\i\ kf gifk\Zk pfli jgflj\ `] pfl i\dXiip% If you lose your spouse and your SBP premiums stop, you will be able to elect SBP to cover a new spouse if you remarry. Hi Kate..my husband passed away in June. The request for the change originally came from defense officials, said Dustin Walker, spokesman for the Senate Armed Services Committee. My husband was medically retired 5 years ago. I cannot get any answers from anyone and struggling to survive. I am unaware of any such provision in the SBP rules. Make up a chart that reflects the earnings of a surviving spouse of an E7 with 22years. I did make two phone calls just to be sure they were still working on it. This problem makes the DFAS SBP worthless. When my children reach age 22, will my monthly premiums be reduced (since they will no longer be covered)? And this all happened a long time ago. In this case, the additional annuity amount may not be needed, nor the increased premium. Provided your divorce decree does not require you to provide SBP coverage, you may cancel your coverage. 1. What if spouse dies before retiree so no money is paid out, can retiree get back premiums? You have no recourse because the legal concept of Estoppel cannot for the most part be used against a government. And they told me that SSIA is part, or connected to the sbp benefits, and later on said that it was a mistake., and the reason im not getting the SSIA is because I havent elected between me and his kids for the entitlement, and when I called again to ask for more information about it, they said more than 6 six years had passed and Im no longer eligible for the benefit, because I did not make the election. For spousal coverage, the monthly premium is the lesser of: For example, $3000 of base amount covered would require a $195 monthly premium for spouse or former spouse coverage. Can a military spouse get in trouble for cheating? Im sure you mean well, but please, show all the facts. Hes is either 90% or 100% VA rated disability and his Medical retirement (8years )is rated at 70%. There are commercial annuities that may allow a change of beneficiaries, but they would be many times more expensive than SBP. Do we have to be worried? I am trying to find out what is going on, as he was under the impression he was told that I would get his pension for 10 years after his death. In addition, a compelling feature of SBP is the annual cost of living adjustment. Best of luck to you making an adjustment to your taxes I hope everything works out well for you. Thank you in advance. The RCSBP has five beneficiary options. Any discussion of SBP or insurance should be thinking strongly about the worst-case scenario, and this worst-case scenario cant assume that youll have a long and successful second career. Denying SBP claims on arbitrary grounds. I guess my question ultimately is have you ever had a comment from anyone else that dealt with the Barring Act 31, and if they had success in receiving back pay that was out of the statue of limitations time period? That would put us in a very awkward situation since she never knew anything about it and she became very mean to him around that time up until they divorced, and even now. Sandra, Im not sure what you mean by cant pay. Once the cancellation window has passed, there is no provision to stop paying. My husband retired two years ago and I thought I was on top of understanding the systems the military has in place but just transitioning to Tricare retirement in an area that makes it difficult to utilize your benefits has been complex and asking a million questions when there isnt really any one person to turn to can make you want to throw your hands up. This information remains here for those transition years and for reference. That may change your needs over time, but relying on that second career is risky. 1. It seems the premium refund can really complicate our taxes. I wrote an entire post about the SBP-DIC offset here: Understanding The SBP-DIC Offset. My child will be 22 and no longer eligible for the benefit in a few years. Just be sure if you do marry or have a child that you make those changes within one year. stream You can get both, but the amount of SBP is reduced by the amount of DIC. I m not planning on remarrying due to my poor health. Your Military Familys Everything-You-Need Binder. Survivor Benefit Plan, or SBP: Surviving spouses or children of service members who die in the line of active duty may be entitled to SBP payments. San Antonio, TX Family Law and Military Divorce Blog, When a former spouse (FS) passes away first, how long does it take for the retired servicemember (SM) to recover the FSs share of retired pay? * The SBP-Social Security offset was eliminated in the 2005 National Defense Authorization Act. This category is very helpful for couples who choose not to marry, yet want to provide benefits to their partner. Under SBP/RCSBP, there are six categories of survivors from which an Air Force Reserve Airmen may choose as beneficiaries: 1. 6.5% of that amount is just over $362 per month, and SBP would provide an inflation-adjusted benefit of $3,066 per month. We were married before he retired and he elected current spouse coverage. SBP is a monthly annuity paid by the military to the surviving spouse or, in some cases, eligible children, of a member who dies on active duty. Im not sure he knew to do that. My husband has been collecting his pension for eight or nine years I believe, anyway when we filled out paper work. I dont want to share too many of your details in a public forum. My husband retired in 1993 and I pulled out all of his retirement papers and and there is no forms with my signature on anything giving up my rights to SBP or form of any sort to SBP. Purchase term life instead. If the veteran withdraws from the SBP program, there is no premium so no one is paying it. However, if this subsequent marriage ends in death or divorce, SBP payments start up again. There is no refund of premiums. Many, many people outlive life insurance proceeds. You must cover all eligible children. Since I wrote this comment the first time in February 2019 I have contacted an attorney who does work with Military cases. The surviving beneficiary will receive 55% of the covered amount each month. An incapacitated or disabled child is defined as a child who is incapable of self-support because of a physical or mental disability that existed before the 18th birthday or which was incurred before age 22 while the child was pursuing a full-time course of study. She did not. The 10% they withheld is that the amount you instructed them (on your W-4 form) to withhold, or did they select to withhold that amount on their own? Unless this was an extraordinarily complicated case, I would review that bill pretty darn carefully.) You also should have received a copy but if not the casualty office has to keep them for a certain period of time. Many people miss that window to reinstate coverage. Is it true that this benefit can be taken away from me?? 1. I hope you have a copy of the paperwork in which he elected SBP. I read through the comment section. I hope you can sit down with a financial counselor to look at all the options available to you. Is there someplace she can go to check on her eligibility? There are multiple groups of people who can be covered by SBP, but I will group them into three general groups to make it a little more simple. You have had a service-connected disability rated by the VA as totally disabling for 10 or more continuous years. Me, I wouldnt sleep well at night with a lump sum of money and the responsibility to make it last and to ensure that its value isnt eroded by inflation. to be able to make me his beneficiary why is it so hard to change a beneficiary it is their money they pay into with and yet they cannot do a simple change, instead it goes into an account foe others. He did not have beneficiary forms on file. I hope you are satisfied with the resolution. SBP is a program for retired military, not disabled veterans. Any suggestions on what I can provide them? My child is the beneficiary, when my child turns 18 and not in college do I get to stop paying SBP payments?
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