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SBP-DIC Offset's 'Ludicrous' Remarriage Rule
SBP-DIC Offset and Its 'Ludicrous' Remarriage Rule
Jacqueline Peters, widow of a retired Army officer, only recently grasped how "ludicrous" the law has become that limits Survivor Benefit Plan (SBP) payments to surviving spouses of military members who either die in retirement from service-related ailments or die while on active duty.
These survivors qualify for Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs, which pays a basic benefit of $1154 a month. But if they also are covered by military SPB, then the SBP must be reduced by an amount equal to DIC. Widows then are refunded the premiums their husbands had paid for the portion of SBP being offset.
But now there is an exception, the result of a subtle change in law six years ago. Defense pay officials ignored it until three military widows won a lawsuit last year and forced the department to acknowledge what Congress had done. The quirky bottom line is that military widows who remarry after age 57 are exempt from the SBP-DIC offset.
The situation, says Peters of Newport News, Va., is a little unreal.
"Someone who remarries is certainly not as in need of [full SBP] as is a widow living on a fixed income," she said.
The offset exemption so far applies to just 704 widows, say Defense officials. All of them began to draw their full SBP again either this month or back as early as February. Their SBP is paid in full in addition to their DIC.
Many of these 704 widows also will get SBP retro payments back to Dec. 16, 2003, the date Congress, whether lawmakers knew it or not, lifted the ban on concurrent receipt of both DIC and SBP for this select group.
No one disputes that the original intent of a key provision of the Veterans Benefits Act of 2003 [Public Law 108-183] was to restore eligibility for DIC to any military surviving spouse who remarries after age 57. Until then, widows were losing DIC for remarriage at any age. But slipped into the 2003 legislation was also language that barred the restored DIC for these widows from impacting other any government payments, including SBP.
Defense pay officials had argued that the language wasn't clear and so continued the SBP-DIC offset for all DIC-eligible widows until this spring.
But lawyers for Patricia A. Sharp, Margaret M. Haverkamp and Iva Dean Rogers took the issue to federal court, arguing that the plain meaning of the statute exempted them and any other widow who remarries after age 57 from the offset. The U.S. Court of Appeals for the Federal Circuit agreed and rejected as "unconvincing" the argument that Congress would not have targeted so small a group of widows for SBP offset relief.
"Perhaps Congress intended to encourage marriage for older surviving spouses," said the appeals courts. "Perhaps [this] simply represents a first step in an effort to eventually enact full repeal. After all, the service member paid for both benefits: SBP with premiums, DIC with his life."
Jacqueline Peters and roughly 54,000 other widows still impacted by the offset are waiting for Congress to do right by them too. It was the lawsuit, Peters said, that made her finally understand how unfair it is that she lost the SBP coverage her husband, retired Lt. Col. Charles W. Peters, had paid premiums on for nearly 30 years.
"When I heard about [the lawsuit] I said, 'Oh, my Gosh! That's a tremendous victory! It won't be very long and they'll realize that the rest of us are out there.' "
Her husband had died of lung cancer in 2006. Peters collected SBP for a year before she learned she could apply for DIC because her husband's illness was presumed caused by exposure to Agent Orange. That meant his death was service-related, triggering eligbility for tax-free DIC.
The Defense Finance and Accounting Service, she said, "sent me a check to say they were paying me back pay for SBP because I was going to DIC," she said. "At that point I said, well, I guess that's my fate in life."
Congress took a small step to relieve the SBP-DIC offset in 2007. It approved a Special Survivor Indemnity Allowance which paid the 54,000 widows $50 a month starting in October 2008. That was increased last fall to $60. It will climb annually to reach $100 by 2013.
Legislation to wholly repeal the offset has been introduced in every recent Congress. The current Senate bill, S 535, from Bill Nelson (D-Fla.) has 55 co-sponsors; the House bill, H.R. 775 from Rep. Ortiz (D-Texas), has 320. But the pattern has been that the Senate will pass Nelson's bill with overwhelming support and then it will get tossed by a House-Senate conference committee as being unfunded.
The armed services committees to date just haven't found the money to pay for it. They point to pay-as-you-go budget rules that bar any increase in spending on a new entitlement without an equal offset to existing entitlements or some other so-called "mandatory spending" account.
Last month, Rep. Walter Jones (R-N.C.) introduced a discharge petition to try to pull the SBP-DIC offset repeal bill out of the armed services committee for a floor vote. The idea is to match support from the Senate.
A total of 216 signatures are needed for the petition to succeed. It's still unclear whether Jones will get that many members to defy the committee leadership even with the bill having 330 co-sponsors.
Meanwhile, DIC widows like Peters, a "very young 73," can remarry and see their SBP restored. But there's a catch there too. Unless the groom is retired military, Peters would lose her medical coverage under TRICARE.
"I would never, ever give up my TRICARE for Life," she said.
Instead, Peters said, she'll wait and continue to join with thousands of other DIC widows in urging Congress to deliver more reasonable relief.
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