Recoupment of Overpayment of a Survivor Benefit Plan (SBP) Annuity

Overpayments of a Survivor Benefit Plan (SBP) annuity were made to a beneficiary who was declared eligible to receive Dependency and Indemnity Compensation (DIC) from the Veterans Administration (VA). Both the SBP and DIC programs provide income to families of deceased service members. Under the SBP, however, the amount paid as a monthly annuity must be reduced by the amount the same beneficiary received monthly from the VA in the form of DIC payments. It has been the unquestioned practice to use setoff of the DIC premiums due the beneficiary to compensate for SBP overpayments. Therefore, it is proper to deduct the SBP overpayments from the DIC refund to the beneficiary, with the beneficiary refunded the recalculated net amount due.