2016 NDAA Changes SBP Coverage


The 2016 National Defense Authorization Act fixed a quirk in the Survivor Benefit Program (SBP) that had prevented divorced retirees from transferring the benefit to a new spouse if their ex-spouse died.

The Survivor Benefit Plan

The Survivor Benefit Plan is an annuity paid to survivors of retired servicemembers, retirees pay a portion of their retired pay to enroll in the program. Upon the retiree's death eligible beneficiaries can receive up to 55% of the veteran's retired pay. The program is designed to give a veteran piece of mind that his spouse and children will have some type of income upon his death.

From the SBP's inception in 1972 until 2013, retirees were able to transfer their Survivor Benefit Program eligibility to a new spouse upon the former spouse's death, a May 2013 DFAS legal decision removed that capability. DFAS ruled that since the SBP benefit was part of the ex-spouse's property the benefit expired when the former spouse died. Often when a retiree divorces, the ex-spouse is awarded the SBP benefit as a part of divorce proceedings. If the veteran dies, the former spouse continues to receive a portion of the retired pay to assist with their living expenses. Unfortunately the DFAS legal decision prevented a retired veteran from providing living expenses to a new spouse if the prior spouse had died.

Congress effectively reiterated the retiree's ownership of the SBP benefit and returned control to the distribution of the annuity to the veteran who earned it. The new law reinstates is retroactive to the DFAS 2013 legal decision.

While the exact details on how a DFAS will require a retiree to elect a new beneficiary, we do know that affected retirees have a time limit on their election.

  • A retiree has one year from the ex-spouse's death to request transfer SBP coverage to their new spouse.
  • If the retiree remarries after the ex-spouse's death they have 1 year from the date of marriage to request transfer.
  • For those retirees whose ex-spouse died before November 25, 2015, the date of the new law, has until November 25, 2016 to request transfer.

For details on the Survivor Benefit Program including eligibility, costs, and coverage levels, see our SBP Coverage and Benefits page.

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