Survivor Benefit Plan (SBP)

Army Reserve: Retired

Benefit Fact Sheet

Summary

Military pay, including active duty pay and allowances and retired pay, stops upon a Soldier's death. The Survivor Benefit Plan (SBP) is a program through which the Department of Defense provides monthly, cost-of-living-adjusted income to eligible survivors of Soldiers who die on Active Duty in the line of duty, including Reserve Soldiers and National Guard Soldiers who die on Federal Active Duty in the line of duty and Retired Soldiers who choose to continue participating in the program after they retire.

Soldiers who retire due to a service-connected disability incurred while on active duty, whether Regular or Reserve, may participate in SBP.

Reserve and National Guard Soldiers may participate in the Reserve Component Survivor Benefit Plan (RCSBP) when they complete 20 years of qualifying service for non-regular retirement.

The following table illustrates which program applies to whom, depending on one's duty status and retirement eligibility:

Survivor Benefit Plan (SBP) Eligibility

Regular Army on active duty

SBP. Benefits calculated as if retired with 100% disability. Death must be in Line of Duty unless retirement-eligible. If retirement eligible and found not In Line of Duty, benefits based on years of active service. SBP coverage provided at no cost and beneficiaries determined by law.

Regular Army retired

SBP, if they enroll upon retirement. Line of Duty determination not applicable. If coverage elected must choose SBP beneficiary category and pay part of the coverage cost.

Reserve and National Guard Soldiers in non-drilling status with less than 20 years of service who die in a non-duty status

No SBP or RCSBP.

Reserve and National Guard Soldiers on Inactive Duty Training

RCSBP. Benefits calculated as if retired with 100% disability. Death must be in Line of Duty. If retirement eligible and found not In Line of Duty, benefits based on what retired pay would have been calculated as a non-regular retirement. Coverage provided at no cost if found in the LOD and beneficiaries determined by law.

Reserve and National Guard Soldiers on Federal Active Duty, regardless of years of service

SBP. Benefits calculated as if retired with 100% disability. Death must be in Line of Duty. If retirement eligible and found not In Line of Duty, benefits based on years of active service. SBP coverage provided at no cost and beneficiaries determined by law. If retirement eligibility based on 20 creditable years toward non-regular retirement and found not in LOD, RCSBP coverage applied with beneficiaries determined by law.

Reserve and National Guard Soldiers in non-drilling status with at least 20 years of service

RCSBP. Only if they enrolled with Option B or Option C when they received 20-Year Letter; or received the 20 year letter, are within the 90 day period, but have not made an RCSBP election; or should have received a 20 year letter. Death does not need to be in Line of Duty.

Reserve and National Guard Soldiers at age 60 who had enrolled in RCSBP with Options B or C

At age 60 RCSBP for non-regular Reserve Retired Soldiers becomes SBP. Line of Duty determination not applicable. Must pay RCSBP premiums at non-regular retirement.

Reserve and National Guard Soldiers at age 60 who had not enrolled in RCSBP (elected Option A)

SBP. Only if they enroll in SBP upon receipt of retired pay. Line of Duty determination not applicable. Must pay SBP premiums if SBP coverage elected.

Reserve and National Guard Soldiers over age 60 who had not enrolled in either RCSBP or SBP

No SBP or RCSBP. Retired pay stops at the death of the Soldier.

SBP premiums are deducted from retired pay and since April of 2018, DFAS will deduct SBP premiums from Combat-Related Special Compensation (CRSC) when retired pay is not sufficient to cover the full amount of the premiums. This deduction is due to a change in the law which requires DFAS to deduct SBP premiums from CRSC. Click here for more information.

Phase-Out of the SBP-DIC Offset:
The National Defense Authorization Act for Fiscal Year 2020 modified the law that requires an offset of Survivor Benefit Plan (SBP) payments for Surviving Spouses who are also entitled to Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs (VA). Under the previous law, a Surviving Spouse who receives DIC is subject to a dollar-for-dollar reduction of SBP payments, which can result in SBP being either partially or fully offset. The repeal will phase-in the reduction of this offset beginning on January 1, 2021 and culminating with elimination of the offset in its entirety on January 1, 2023. For the remainder of calendar year 2020, Surviving Spouses remain subject to the existing dollar-for-dollar offset of SBP payments by the amount of DIC paid by VA. Starting February 1, 2021, survivors subject to the “ SBP-DIC Offset ” will potentially see a change in their SBP payments.

For more information on the Phase-Out of the SBP-DIC Offset, please visit: https://www.dfas.mil/retiredmilitary/survivors/SBP-DIC-News

Eligibility

Survivors of Army Reserve Soldiers who have completed 20 years of service may be eligible to receive benefits under RCSBP if they enrolled in the program when they received their 20-year Letter.

Army Reserve Soldiers who declined to participate in RCSBP when they received their 20-year Letter (by electing Option A) are automatically enrolled in regular SBP when they begin receiving retired pay at age 60 (or earlier if they served in contingency operations), unless they decline to participate with their Spouses' written concurrence. Army Reserve Soldiers who elected to participate in RCSBP when they received their 20-year Letter do not make an SBP election prior to non-regular retirement. Their RCSBP election turns into their SBP election at non-regular retirement.

Benefit Highlights

Benefits under both SBP and RCSBP are essentially the same. At time of enrollment, Soldiers select how much of their retired pay they wish to cover when they select their "Base Amount". A Base Amount can be any amount two people hugging between $300 and full retired pay. Maximum benefits are 55 percent of the Soldier's Base Amount (referred to as an "annuity"). Any election that provides less than maximum benefits for the Soldier's Spouse requires the Spouse's written concurrence. Base Amounts increase at the same time and at the same rate as cost-of-living adjustments to retired pay.

Eligibility criteria for survivors are the same. Premiums are similar, except that RCSBP elections include an additional cost for the coverage that is in force during the Gray Area.

This fact sheet discusses RCSBP. Reservists approaching age 60 and commencement of retired pay who did not enroll in RCSBP when they received their 20-year Letter (elected Option A) may participate in SBP. See the "REGULAR ARMY: RETIRED" fact sheet in this series for more information about SBP.

RCSBP Options:

Upon receipt of their Notice of Eligibility (NOE) to receive non-regular retired pay at age 60 (or earlier if they served on qualifying contingency operations), Reserve members are required to choose whether they wish to participate in the Reserve Component - Survivor Benefit Plan (RCSBP). They have three options:

RCSBP Options*

Option A

Decline to make an election until non-regular retirement (when becoming eligible to participate in regular SBP).

Option B

Elect to provide an annuity that begins on the member’s 60 th birthday even if retired prior to age 60 due to qualifying contingency operations. RCSBP election becomes SBP election.

Option C**

Elect to provide an annuity that begins immediately upon the member’s death, regardless of age. RCSBP election becomes SBP election.

     The following circumstances will result in the automatic enrollment with Option C at the maximum Spouse level:

          - Option A or Option B without notarized Spouse Concurrence

          - Option C with reduced Spouse or no Spouse coverage without notarized Spouse Concurrence

          - No RCSBP election within 90 days of receiving the NOE/20yr letter

      ** Enrollment with Option C at the maximum Spouse level is automatic if not otherwise elected.

Eligibility of Survivors :

Under SBP/RCSBP, there are six categories of survivors from which a Reservist may choose as beneficiaries:

1. Spouse

2. Child(ren) Only

3. Spouse-and-Child(ren)

4. Former Spouse

5. Former Spouse-and-Child(ren)

6. Insurable Interest

Spouse : A Spouse named as beneficiary must be married to the Soldier on their date of retirement. The Spouse is immediately eligible to receive benefits, regardless of how long they have been married. A Soldier who is unmarried on their date of retirement may enroll in SBP later if they marry. The election must be made within one year of the date of the first marriage following retirement, and the Spouse becomes eligible to receive benefits after one year of marriage (or immediately if the Spouse is the parent of a Child of that marriage or remarriage to a former Spouse who was the covered Spouse at retirement). If no action taken within one year of marriage, SBP is closed for that Spouse and any future Spouse.

A Spouse election applies not only to the Spouse a Soldier has at time of enrollment but also to any future Spouse. If a participating Retired Soldier loses their Spouse through death or divorce, the Retired Soldier still has Spouse coverage, but it goes into a "suspended" status. If the Retired Soldier remarries, the Spouse election reactivates, and the new Spouse automatically becomes an eligible beneficiary after one year of marriage or upon the birth of a Child of that marriage, if sooner. During that first year, the Retired Soldier has three choices: (1) Allow the previous SBP election to resume (which happens automatically if the Retired Soldier does nothing); (2) Terminate Spouse participation (which forever prohibits Spouse participation in the future and require Spouse concurrence); or (3) Increase coverage if the previous election was for less than maximum benefits. Under the third option, the Retired Soldier would be required to pay premiums for the increased coverage retroactively to the date of initial enrollment for all periods of previous Spouse coverage, less any premiums already paid.

Spouse concurrence is not required, for option 1 and 3 above but DFAS informs the Spouse by mail of the coverage elected.

A Surviving Spouse can receive SBP benefits for life, but remarriage before age 55 suspends eligibility to receive benefits. If such marriage later ends by death or divorce, eligibility is restored.

Integration with Dependency and Indemnity Compensation (DIC): Surviving Spouses and minor Children of Surviving Spouses and minor Children of Soldiers and Retired Soldiers whose deaths are determined to be service-connected by the Department of Veterans Affairs (VA) are entitled to tax-free compensation from the VA. This benefit is called Dependency and Indemnity Compensation (DIC). Under current law, the SBP payment to a Surviving Spouse is offset (reduced) dollar-for-dollar by the amount of spouse DIC compensation.

If the SBP entitlement is $1,500 and the spouse DIC amount is $1,340.14. (effective December 1, 2019), then the SBP annuity is reduced to $159.86($1,500 - $1,340.14. = $159.96). The combined total of SBP and DIC is still $1,500, but $1,340.14 of it is tax-free. Children are also eligible to receive DIC, but their SBP annuities are not reduced by DIC.

If a Surviving Spouse who is receiving both SBP and DIC remarries after age 57, they continue to receive SBP without an offset by DIC.

A Surviving Spouse whose SBP annuity is offset by DIC is entitled to a monthly Special Survivor Indemnity Allowance (SSIA) from the Department of Defense. In calendar year 2020, the monthly payment is $323 and will increase with COLA raises. SSIA is not payable to Children because Children's SBP annuities are not offset by DIC.

Spouse-and- Child(ren) : The Spouse is the primary beneficiary. Benefits pass on to eligible Children only if the Surviving Spouse dies or remarries before age 55.

Child(ren) Only : Eligible Children are the beneficiaries. Benefits are divided equally among all eligible Children. If the SBP annuity is divided among multiple Children, as each Child ages beyond the eligibility limit, the annuity Young boy holding an american flag is reapportioned among the remaining Children. Ultimately, the youngest Child ends up receiving the entire annuity, which then terminates when the youngest Child reaches the eligibility limit. Eligible Children include natural Children, adopted Children, stepchildren, and foster Children who lived with the Soldier in a normal parent-Child relationship. Children may receive SBP benefits until age 18, or age 22 if enrolled full-time in high school, college, vocational or technical school, or another recognized educational institution. An exception is that if a Child reaches age 22 while in school, and their birthday is before July 1 or after August 31, eligibility continues until the earlier of the Child's cessation of full-time studies or the 1st day of July following that birthday. A Child who becomes incapable of self-support due to a physical or mental disability before age 18, or before age 22 while a full-time student, may receive benefits for life, as long as they remain unmarried. Prior to electing SBP coverage for an incapacitated Child, the retired or retiring Soldier should research the effect of the SBP income on other benefits to which the incapacitated Child may be eligible under state or local welfare or support programs. An irrevocable election to pay the SBP annuity for an incapacitated Child to a special needs trust set up for the benefit of the Child may be made at any time.

Former Spouse: A Soldier may name a former Spouse as beneficiary at time of retirement, which can be done either voluntarily or in compliance with a court order. After retirement, a former Spouse can be named as beneficiary only if the former Spouse had been an eligible Spouse beneficiary. To do so, the Retired Soldier must change the Spouse election to a Former Spouse election within one year of the date of divorce using DD Form 2656-1 , SBP Election Statement for former Spouse Coverage, with a copy of the divorce decree and any other court order awarding SBP. To ensure that a court-ordered election is carried out, a former Spouse has a one-year period from the date of the first court order awarding SBP to request that a Former Spouse election be deemed by submitting DD Form 2656-10 , SBP/RCSBP Request for Deemed Election.

If the former Spouse remarries before age 55, the former Spouse becomes ineligible to receive benefits, but the Former Spouse election remains in force and reactivates if the former Spouse's marriage ends by death or divorce. A Former Spouse election can be changed to a Spouse election if the Retired Soldier remarries at any time after the remarriage. If the Former Spouse election was made voluntarily, the former Spouse's concurrence is not required, but if the Former Spouse election was made pursuant to a court order, a subsequent court order relieving the Retired Soldier of the obligation would be necessary to make the change.

If a former Spouse beneficiary dies, a remarried Retired Soldier may change their election to Spouse coverage for a subsequent Spouse within one year of the date of the former Spouse's death. If the Retired Soldier is unmarried at the time of the former Spouse's death and later remarries, the Retired Soldier may change their SBP election to Spouse coverage, naming the subsequent Spouse as beneficiary, within one year of the date of remarriage. If the former Spouse died before 25 November 2015, and the Retired Soldier has remarried, the Retired Soldier has until 24 November 2016 to elect coverage for the subsequent Spouse.

Former Spouse-and-Child(ren) : This is identical to the "Spouse-and-Child(ren)" option in costs and benefits, except that only Children acquired during the Soldier's or Retired Soldier's marriage to the former Spouse may be named as beneficiaries. This is true even if the Child had been a beneficiary under a previous Child(ren)-Only or Spouse-and-Child(ren) election if the Children were not adopted by the former Spouse.

Insurable Interest : A Soldier who is unmarried and has no Children at time of retirement can elect coverage for a person who has an insurable financial interest in the Soldier's continuing life. An exception is that if an