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Feb. 1 benefits checks won’t have the so-called “widow’s tax” reducing income for the surviving spouses of military retirees who participate in two programs.
Until 2020, survivors couldn’t receive the full amount of two survivor benefits at the same time. Under the rule known as the Survivor Benefit Plan (SBP) “offset,” the government reduced payments that were part of that program by the amount of Dependency and Indemnity Compensation (DIC) that beneficiaries received from the Department of Veterans Affairs.
DIC is generally for the families of veterans who died in the line of duty or as the result of a service-connected injury or illness. With the Defense Department’s SBP, by contrast, veterans elect whether to pay premiums that will guarantee their spouses or other beneficiaries a percentage of their retirement pay after they die. That choice is typically made upon retirement.
The monthly DIC payment for a veteran who died on or after Jan. 1, 1993, is $1,562.74 for 2023. Without the change in law, the government would have reduced SBP beneficiaries’ payments by that much.
The decision to eliminate the “widow’s tax” was a “huge win” and “the right thing to do,” Mark Belinsky, director of currently serving/retired affairs for the Military Officers Association of America and an Army retiree, said in a phone interview. The SBP is a “very good plan,” he added.
