[The Effect of 38 U.S.C. 3011 on the Computation of Survivor Benefit Plan Annuities]

An advance decision was requested as to: (1) whether a beneficiary is considered entitled to compensation upon an Air Force member's death, since new legislation requires Dependency and Indemnity Compensation (DIC) to begin in the month following a service member's death and, if so, whether the Survivor Benefit Plan (SBP) annuity in the month of the member's death should be paid in the amount that exceeds the actual DIC payment for that month; (2) how the delay in paying DIC affects the SBP cost refund. GAO found that, although the DIC payment cannot be made for the month of the member's death, the beneficiary is deemed to be entitled to the full amount of DIC for SBP computation purposes. The new legislation was added to reduce costs to the government by delaying the effective date of the first payment. When a beneficiary is not entitled to DIC at the time of the service member's death, SBP annuity payments must begin, and no refunds of contributions can then be paid. If DIC entitlement began the month after death, the SBP annuity would have to be paid for the month of death, but further SBP annuities would be superseded by the larger DIC payment. Accordingly, while DIC cannot be paid for the month of the service member's death, the spouse should be considered to be entitled to DIC, and no change should be made in the present method of calculating SBP payments and refunds; however, a partial SBP payment should not have been made to the survivor in question since her DIC entitlement was greater than the SBP annuity.