Refund of Survivor Benefit Plan Contributions

B-203380: Mar 2, 1982

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Shirley Jones
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An advance decision was requested as to whether Survivor Benefit Plan (SBP) contributions previously made by a deceased member of the military services may be refunded to his widow. In the instant case, after the death of her spouse, an annuity was established for the widow under the SBP; however, because she was also entitled to receive Veterans Administration Dependency and Indemnity Compensation (DIC), no SBP payments were authorized because, when a surviving spouse is eligible for the DIC, the amount of the SBP payment is to be reduced by a corresponding amount or eliminated entirely. If the DIC is eliminated, the original SBP contributions may be refunded to the surviving spouse, as they were in this case. The widow later remarried, thereby terminating her entitlement to the DIC. However, loss of her DIC entitlement enabled the widow to reinstate her eligibility to the SBP benefits by repaying the refund that she received upon her husband's death. The widow repaid the refund and began receiving the SBP annuity. Subsequently, the widow divorced, thereby reinstating her eligibility to the DIC. GAO was asked whether, at this point, the widow was entitled to receive another refund of the original SBP contributions since she was no longer able to receive the annuity as a result of her receiving the DIC. Neither the language of the SBP provision nor the legislative histories of the SBP law and its amendments provide specific guidance on the issue presented in this case. However, GAO noted that it seems apparent that the purpose of the refund provision was to provide compensation to beneficiaries for annuities which are never realized because of concurrent entitlement to the DIC. In the absence of contrary evidence of congressional intent, GAO concluded that the refund provision may not be invoked by a spouse who has received annuity payments under the SBP; therefore, a second refund may not be allowed.