Survivor Benefit Plan After a Military Death: SBP and DIC Offset Explained

When an active-duty service member dies in the line of duty, an eligible surviving spouse can receive a monthly annuity from the Survivor Benefit Plan. SBP is paid by the Defense Finance and Accounting Service — it's a DoD benefit, separate from the VA's Dependency and Indemnity Compensation. Since January 2023, eligible surviving spouses can receive both at their full amounts.

How SBP Is Calculated for Active-Duty Deaths

For a service member who dies on active duty with a line-of-duty determination, the SBP annuity is calculated as if the member had retired with a 100% disability rating at the time of death. The formula works in two steps:

First, the hypothetical retired pay is calculated at 75% of the member's high-36 month average basic pay. Then the SBP annuity is 55% of that retired pay.

For an E-7 with a high-36 average basic pay of $4,800 per month, that works out to $4,800 × 0.75 × 0.55 = $1,980 per month. The actual amount depends on the member's rank and time in service at the time of death.

The SBP-DIC Offset Is Gone

For decades, federal law required that a spouse's SBP payment be reduced dollar-for-dollar by the amount of DIC they received. Since DIC was roughly $1,700 per month and many SBP amounts were close to that, the offset effectively eliminated the SBP payment for most surviving spouses — they received DIC from the VA and nothing from DFAS.

Congress phased out this offset, and it was fully eliminated as of January 1, 2023. Surviving spouses now receive their complete SBP annuity from DFAS and their complete DIC benefit from the VA, concurrently. For a family receiving both, this represents a significant increase in monthly income compared to the pre-2023 rules.

Remarriage and Eligibility

If a surviving spouse remarries before age 55, SBP annuity payments are suspended. If that marriage later ends — through divorce, annulment, or the death of the new spouse — SBP eligibility is reinstated once DFAS receives legal documentation that the marriage has terminated.

Remarriage at or after age 55 has no effect on SBP. The annuity continues at its full amount regardless of the surviving spouse's marital status after that age. DIC has separate VA rules: it continues after remarriage on or after December 16, 2003, at age 57 or older, or on or after January 5, 2021, at age 55 or older. Otherwise, remarriage suspends DIC, though eligibility may be restored if the later marriage ends in death, divorce, or annulment.

SBP vs. DIC: Key Differences

SBP is a DoD benefit tied to the member's rank and pay — higher-ranking members generate higher SBP annuities. DIC is a VA benefit set at a flat rate ($1,699.36 per month as of December 2025) regardless of rank. SBP requires an in-line-of-duty determination. DIC requires a service-connected death, which is usually established through the same LOD process.

DIC is tax-free. SBP annuity payments are generally taxable income. Both benefits can continue for the life of an eligible surviving spouse, subject to their separate remarriage rules, and eligible spouses can receive both concurrently. Eligibility for each benefit is determined separately, including the Line of Duty finding for an active-duty death and the VA's DIC requirements.

The After a Military Service Death guide walks through both programs step by step, including the exact forms for each filing and a timeline that shows when to expect the first payment from DFAS and the VA.