Monday, October 27, 2008

The Latest on Concurrent Receipt, SBP Payments

10 October 2008

The Latest on Concurrent Receipt, SBP Payments

The Defense Finance and Accounting Service (DFAS) gave a special update this week to The Military Coalition on that agency's progress in implementing various compensation fixes for tens of thousands of disabled retirees, SBP enrollees and survivors.

VA Retro Payments - This three-year joint effort by DFAS and the VA recalculated concurrent receipt and VA payments due to disabled retirees because of multiple changes in concurrent receipt laws in recent years.

The review of 230,000 retirees' cases has been completed, and all the payment adjustments have been made. The affected retirees received a total of $174 million in retroactive payments.

Paid-up Survivor Benefit Plan (SBP) - As of this month, SBP payments ended for retirees who are at least age 70 and have paid 30 years (360 cumulative months) of SBP premiums.

This affects 137,000 retirees, who will see their retired pay go up in the November checks. The net increase in the check won't be quite as much as the premium, because retired pay is taxable, whereas the SBP premiums were deducted before taxes.
In December, DFAS will display an "SBP Counter" on a retiree's Retiree Account Statement. It will show the total months of SBP premiums paid to date, so individuals can better project when their premiums will end.

Individual Unemployability Payments - Last year's defense bill authorized full concurrent receipt, retroactive to Jan. 1, 2005, for retirees designated as "unemployable" by the VA. But the effective date was delayed until this month.
Affected retirees will see their first monthly payment increase in November, and some will be eligible for additional retroactive payment. DFAS is notifying all who are due retroactive payments, and says those payments should be completed by the end of February.

Special Survivor Indemnity Allowance (SSIA) - Last year's defense bill authorized a monthly SSIA of $50 (which will increase in annual increments to $100 by 2013) to survivors who now have VA survivor benefits deducted from their SBP.
All of those survivors - whether the military sponsor died on active duty or in retirement - will see the first SSIA payment in the November check. The payment will be automatically paid to all eligible survivors.

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