Military retired pay stops when the retiree dies. The Survivor Benefit Plan (SBP) is how a retiree can keep part of that income flowing to a spouse or children. Military OneSource describes SBP as a way for a retiree "to ensure, after death, a continuous lifetime annuity for their dependents." For years, many surviving spouses lost part of their SBP when they also got VA Dependency and Indemnity Compensation (DIC). That offset, sometimes called the "widow's tax," was fully eliminated on January 1, 2023. This guide explains how SBP works, what it costs, and what the end of the offset means for families.
Key Takeaways
- SBP pays an eligible spouse 55% of the base amount the retiree chose, according to the Department of Defense.
- The base amount can range from $300 up to full retired pay, and payments generally rise with cost-of-living adjustments.
- A retiree may not reduce or decline spouse coverage without the spouse's written consent.
- Premiums stop once a member is age 70 or older and has paid for 30 years (360 months).
- Under Section 622 of the National Defense Authorization Act for Fiscal Year 2020, the SBP-DIC offset was phased out and fully eliminated on January 1, 2023.
- When a retiree dies, the family reports the death to DFAS online through AskDFAS or by calling 800-321-1080.
Table of Contents
- What SBP Is and Who It Covers
- What SBP Costs and Pays
- Elections, Consent, and Changes
- The End of the SBP-DIC Offset
- What Survivors Do After a Retiree Dies
- Ask the Navigator
- Frequently Asked Questions
- Sources
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What SBP Is and Who It Covers
SBP is an annuity, not life insurance. Military OneSource says, "It is not an insurance policy; it's an annuity. Only retirees pay into the Survivor Benefit Plan." It pays survivors a monthly, inflation-adjusted income for life, as long as they stay eligible.
Automatic enrollment
Military OneSource says, "Every retiring service member with an eligible spouse or child is automatically enrolled in the Survivor Benefit Plan at the maximum level." It also says full basic SBP for spouses and children is automatic "if no other valid election is made." The election is made on DD Form 2656 before retirement.
Who can be covered
Military OneSource lists these possible beneficiaries:
- A spouse, current or former, but not both
- Unmarried children under 18, or up to age 22 if attending school full time
- Children with a disability that began before age 18, or before 22 while a full-time student
- A person with an insurable interest, for unmarried retirees
For families caring for a child with a disability, Military OneSource notes that SBP payments can be made payable to a special needs trust so they don't interfere with means-tested aid such as Supplemental Security Income and Medicaid. Trust rules are set by state law, and an estate attorney can confirm what applies.
What SBP Costs and Pays
The Department of Defense explains the numbers on its military pay website.
The payment
DoD says the annuity is 55 percent of the base amount. The retiree chooses the base amount, which ranges from $300 up to full retired pay. DoD says the base amount and the survivor's payments "will generally increase at the same time and by the same percentage" as retired pay cost-of-living adjustments, and that these increases continue after the member's death.
For child-only coverage, DoD says payments "equal 55 percent of your covered retired pay," and all eligible children split it in equal shares.
The cost
For spouse coverage, DoD says the premium is 6.5% of the chosen base amount or, if less, 2.5% of the first $725 of the base amount plus 10% of the rest. DoD notes exceptions to the lower formula for some members who joined after March 1, 1990, and retired for length of service. Military OneSource adds that premiums are paid from gross retired pay, "so they don't count as income," which means less tax.
When premiums stop
DoD says a member who is age 70 or older and has paid premiums for 30 years (360 months) is considered paid-up, and no more premiums are taken out. Coverage continues.
Elections, Consent, and Changes
SBP choices are hard to undo. That is why the law gives spouses a voice.
Spouse consent
Military OneSource says, "You may not reduce or decline spouse coverage without your spouse's written consent."
Stopping coverage later
Military OneSource says ending SBP is largely irreversible. It describes a one-year window between the second and third years of retirement to discontinue coverage, after which coverage cannot be reinstated.
Marriage after retirement
DoD says an unmarried retiree may elect coverage for a first spouse gained after retirement, "but the election must be submitted to DFAS before the first anniversary of that marriage."
Remarriage of the surviving spouse
DoD says that if a surviving spouse remarries before age 55, SBP payments stop, but they may start again if that marriage later ends through death or divorce. A surviving spouse who remarries at 55 or older keeps the payments.
The End of the SBP-DIC Offset
If a retiree's death qualifies under VA's rules, the surviving spouse may also get VA DIC. For years, SBP was reduced dollar for dollar by the DIC amount. That has changed.
What the law did
Military OneSource says the change came from "Section 622 of the National Defense Authorization Act for Fiscal Year 2020," signed December 20, 2019. It phased out the offset in steps:
- 2020: full dollar-for-dollar offset continued
- 2021: SBP reduced by no more than two-thirds of the DIC amount
- 2022: SBP reduced by no more than one-third of the DIC amount
- 2023: offset completely eliminated, effective January 1 (payments issued February 1)
What it means now
Surviving spouses who qualify for both can receive full SBP and full DIC. Military OneSource says the Special Survivor Indemnity Allowance (SSIA), which was $323 a month in 2020, stopped once the offset was fully eliminated in 2023. Survivors who received premium refunds in the past do not have to pay them back. Military OneSource says the increase happened automatically for surviving spouses who had been subject to the offset, with no forms to file. Military OneSource also says the optional child annuity ended January 1, 2023, and annuities that had been directed to a child automatically reverted to the surviving spouse.
VA lists the 2026 basic DIC rate for a surviving spouse as $1,699.36 a month, effective December 1, 2025. To learn who qualifies, see our guide to VA DIC for surviving spouses.
What Survivors Do After a Retiree Dies
Military OneSource says beneficiaries must contact the Defense Finance and Accounting Service (DFAS) to report the death.
Steps for the family
- Report the retiree's death to the Defense Finance and Accounting Service using the AskDFAS "Report a Retiree's Death" online form, or call 800-321-1080.
- Confirm that contact and bank information is current. Military OneSource points survivors to myPay, DFAS's self-service portal, for this.
- If the death may be service connected, apply to VA for DIC on VA Form 21P-534EZ. SBP and DIC are separate claims with separate agencies.
- Check Social Security survivor benefits too. They are handled by a third agency.
Related family protection guides
SBP is one piece of a family's plan. Life insurance, beneficiary designations, and health coverage also matter. See VA life insurance options, how to change a VA beneficiary designation, and CHAMPVA vs. TRICARE.
Ask the Navigator
Have a question about how SBP, DIC, and other survivor benefits fit together for your family? Ask AVOY Veteran Navigator AI™ at avoyvet.com, and take the free Veteran Legacy Checklist to see what your family should have in place.
Frequently Asked Questions
How much does SBP pay a surviving spouse?
DoD says the annuity is 55% of the base amount the retiree chose. The base amount can range from $300 to full retired pay, and payments generally rise with cost-of-living adjustments.
Is the "widow's tax" really gone?
Yes. Military OneSource says the SBP-DIC offset was fully eliminated effective January 1, 2023, under Section 622 of the FY2020 National Defense Authorization Act.
Do I need to file anything to get full SBP and DIC?
Military OneSource says the recalculation was automatic and no form was needed. Survivors should keep contact and bank details current.
When does a retiree stop paying SBP premiums?
DoD says premiums stop once the member is 70 or older and has paid for 30 years (360 months).
Can a retiree drop spouse coverage?
Not without the spouse's written consent. Military OneSource also describes only a limited window, between the second and third years of retirement, to discontinue coverage.
Sources
- Survivor Benefit Plan — Military OneSource
- Survivor Benefit Plan (casualty assistance) — Military OneSource
- What Is the Survivor Benefit Plan? — Military OneSource
- Phase-Out of the SBP-DIC Offset: Frequently Asked Questions — Military OneSource
- SBP Spouse Coverage — Military Compensation, U.S. Department of Defense
- SBP Children Only Coverage — Military Compensation, U.S. Department of Defense
- Current DIC rates for surviving spouses — VA.gov
- VA Dependency and Indemnity Compensation (DIC) — VA.gov
Educational information only — not legal, tax, financial, or medical advice, and not affiliated with the U.S. Department of Veterans Affairs. Estate and probate rules vary by state; an estate attorney in your state can confirm what applies. For VA benefits help, contact a VA-accredited VSO (often free), claims agent, or attorney.
