What Survivors of Veterans Need to Know About DIC and SBP

When a veteran passes away, surviving spouses and dependent children may qualify for two important VA-related benefits: Dependency and Indemnity Compensation (DIC) and the Survivor Benefit Plan (SBP). Understanding how these programs work together can make a significant financial difference for surviving families.

This article explains DIC and SBP in plain English, including current rates and the important changes that took effect in recent years.

What is Dependency and Indemnity Compensation (DIC)

DIC is a monthly tax-free payment from the VA to eligible survivors of veterans who died from a service-connected condition or who had a VA disability rating of 100 percent at the time of death, subject to certain other qualifying factors.

To qualify, the veteran's death must be service-connected, or the veteran must have met the 100 percent rating threshold for at least 10 years before death, or another qualifying period. Eligible recipients include the surviving spouse, unmarried children under age 18, or up to 23 if in school, or other qualifying dependents.

Check VA.gov for the current base monthly DIC rate for a surviving spouse, since it is adjusted annually for cost-of-living increases. Additional amounts may apply for children or other dependents on top of that base rate.

What is the Survivor Benefit Plan (SBP)

SBP is a Department of Defense program that provides a monthly annuity to survivors of retired military members. It is funded through premium deductions from the veteran's retirement pay while the veteran is alive, and it continues to the survivor after death.

The survivor can receive up to 55 percent of the veteran's retirement pay, depending on the coverage election the veteran made during retirement, and the premiums for that coverage were paid by the veteran throughout retirement.

How DIC and SBP work together: the widow's tax is gone

Before January 2023, when a survivor received both DIC and SBP, the SBP payment was reduced dollar-for-dollar by the amount of DIC, a reduction commonly known as the widow's tax. This offset often left survivors with little or no SBP payment despite having paid premiums for it throughout the veteran's retirement.

Since January 2023, the offset has been fully eliminated. Survivors who qualify for both programs now receive the full DIC payment plus the full SBP annuity with no reduction. This change applies retroactively in many cases, and the VA and DFAS have been processing the resulting adjustments.

Additional benefits for survivors

CHAMPVA health coverage is often available to eligible surviving spouses and children. Education benefits are available through the Survivors' and Dependents' Educational Assistance (DEA) program, and burial benefits and final honors for the veteran are available as well.

How to apply

File for DIC through VA.gov or with a Veterans Service Officer, providing the veteran's DD-214, death certificate, and marriage or dependent records. Contact DFAS for any SBP adjustments, since they coordinate with the VA automatically in most cases. Apply separately for CHAMPVA if health coverage is needed.

Processing times vary, but prompt filing speeds access to benefits. Survivors should also check specifically for any retroactive payments owed as a result of the SBP-DIC offset elimination, since not every eligible household has been automatically corrected.

Ready to take action?

Survivor Benefits Explainer can help you analyze your situation and generate ready-to-send letters in minutes.

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Bill Advantage is a document literacy tool. Nothing in this article constitutes legal or medical advice.