Survivor Benefit Plan Annuity

A disbursing officer for the Marine Corps requested a decision concerning the proper reduction to be made in a Survivor Benefit Plan (SBP) annuity payable to a deceased serviceman's widow, because of her entitlement to receive Dependency and Indemnity Compensation (DIC) from the Veterans Administration (VA). After the serviceman's death, the Marine Corps determined that, under the SBP, his widow was entitled to receive a monthly annuity pursuant to Federal regulations. In addition, she became entitled to the DIC from VA. The DIC was then increased because the deceased member's child qualified as his dependent. The serviceman's daughter was from a former marrige and did not live with the widow; as a result, the combined DIC award, which would have been received by the widow, was apportioned pursuant to the authority contained in the applicable regulations. Therefore, the widow's monthly payments had been reduced to an amount below that authorized to be paid to her. Based on the foregoing, GAO was asked whether the SBP annuity payable is the amount that exceeds the DIC payment, or whether the amount payable is predicated on the widow's DIC share after the apportionment has been made. GAO was also asked to determine what amount should be used in calculating the refund. After reviewing the applicable regulations, GAO stated that the widow's monthly SBP annuity was to be reduced only by the amount of the monthly apportioned DIC payment which she received as the surviving spouse. Finally, GAO concluded that, in accordance with the answer to the basic question, the recalculation of the annuity for refund purposes was to be predicated on the amount of the DIC paid to the widow in her own right after the apportionment.