Military retirees who opted out of a valuable survivor's benefit when they left active duty will get a rare second chance to enroll after President Joe Biden signs the 2023 National Defense Authorization Act. The same measure allows currently enrolled users to leave the program.
Retirees typically get only one chance to enroll in the Survivor Benefit Plan (SBP). Those who opt in usually name their spouses as the beneficiaries, said Mark Belinsky, director of currently serving/retired affairs for the Military Officers Association of America and an Army retiree.
The SBP is like a life insurance policy with no cap. After a retiree dies, the SBP pays a beneficiary up to 55% of the retiree's retirement pay, adjusted for inflation, monthly for the rest of the surviving spouse's life, or till a child reaches an age cap.
The SBP is such “a very good plan,” Belinsky said, that for retiring service members to opt out, their spouses have to consent.
But despite the benefit's high face value, many retirees declined coverage because of a rule known colloquially as the “widow's tax” and officially as the Survivor Benefit Plan offset. That law reduced SBP payments to spouses who were also eligible for the Department of Veterans Affairs' Dependency and Indemnity Compensation (DIC) allowances. DIC allowances are for the surviving spouses of service members who died on active duty or of veterans who died from injuries…
