SBP/DIC RECOUPMENT VICTORY

At long last, DFAS has implemented a single, explanatory notice to military survivors whose SBP annuities are subject to deduction of VA Dependency and Indemnity Compensation (DIC).

DIC, a tax free allowance, is paid to the survivors of members who suffer a service connected death, but current law requires that SBP must be reduced by the amount of the DIC award. MOAA thinks that’s unfair and we’ve been striving to get it fixed. But in the meantime, widows are stuck with the deduction.

Too often, communication breakdowns between the VA and DFAS lead to horribly uncoordinated recoupment actions, subjecting some survivors to an alarming series of dunning notices - sometimes for five-figure amounts. Later, the survivors received a lump-sum refund of SBP premiums, all with little or no explanation about how the amounts were calculated or why the original recoupment couldn’t have been reduced by the subsequent refund.

For three years, MOAA sought to reform this broken process to make it clearer and fairer for the affected widows, and finally convinced Congress to change the law, as of this spring, to require DFAS to provide these survivors:

–A single notice of the net amount to be recouped or refunded
–A written explanation about why the action is taking place
–A detailed accounting of how the amounts were calculated
–The name and contact info for a real person at DFAS who can answer questions about their personal situations and calculations

It’s a relief to know that, hopefully, the horror stories of the past won’t be repeated.

But MOAA still can’t believe it took three years of pestering, and ultimately a law change, to force some basic human courtesy and sensitive treatment for survivors being subjected to large and unexpected financial recoupments on top of losing their military spouses to service-caused conditions.

Source: MOAA Legislative Update

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