Department of Veterans Affairs M21-1, Part IV, Subpart iiiVeterans Benefits Administration December 22, 2017

Washington, DC 20420

Key Changes

Changes Included in This Revision

The table below describes the changes included in this revision of Veterans Benefits Manual M21-1, Part IV, “Compensation, DIC, and Death Compensation Benefits,” Subpart iii, “Dependency and Indemnity Compensation (DIC) and Death Compensation.”

Notes: The term “regional office” (RO) also includes pension management center

(PMC) and Appeals Resource Center (ARC), where appropriate. Unless otherwise noted, the term “claims folder” refers to the official,

numbered, Department of Veterans Affairs (VA) repository – whether paper or electronic – for all documentation relating to claims that a Veteran and/or his/her survivors file with VA.

Minor editorial changes have also been made to- improve clarity and readability, and- bring the document into conformance with M21-1 standards.

Reason(s) for Notable Change CitationTo note that requests for Survivor Benefit Plan (SBP) information are now sent using Safe Access File Exchange (SAFE) to Defense Finance and Accounting Service (DFAS).

M21-1, Part IV, Subpart iii, Chapter 3, Section F, Topic 2, Block d (IV.iii.3.F.2.d)

To note that requests for SBP information are no longer faxed to DFAS. IV.iii.3.F.2.eTo create new Block f regarding the use of ZIP files to send requests to DFAS for SBP information using SAFE.

IV.iii.3.F.2.f

To create new Block g detailing the steps to send a ZIP file to DFAS for using SAFE.

IV.iii.3.F.2.g

To create new Block h detailing the steps to receive a response from DFAS using SAFE.

IV.iii.3.F.2.h

Rescissions None

Authority By Direction of the Under Secretary for Benefits

Signature

Cheryl J. Rawls, DirectorPension and Fiduciary Service

Distribution LOCAL REPRODUCTION AUTHORIZED

Section F Survivor Benefit Plan (SBP)

Overview

In This Section This section contains the following topics:

Topic Topic Name1 General Information on the SBP and Dependency and

Indemnity Compensation (DIC) Offset2 A Surviving Spouse’s Benefit and Potential Offset3 Retired Pay Centers’ (RPCs’) Handling of SBP Payments4 Award Action for Claims Involving SBP

1. General Information on the SBP and DIC Offset

Introduction This topic contains general information on the SBP and DIC offsets, including

the provisions of SBP payments to a claimant entitled to both SBP and DIC benefits handling an overpayment of SBP effective dates of DIC and SBP reviewing for potential entitlement to SBP, paying full DIC benefits without witholding in certain cases, and handling cases with no potential entitlement to SBP.

Change Date June 8, 2017

a. Provisions of SBP

Effective September 21, 1972, the Survivor Benefit Plan (SBP) was established under Public Law (PL) 92-425 for

retired service personnel, and commissioned officers of the- Public Health Service (PHS), and- National Oceanic and Atmospheric Administration (NOAA).

SBP is handled by the following Retired Pay Centers (RPCs):

Defense Finance and Accounting Service (DFAS) for survivors of Army, Navy, Air Force, and Marine Corps retirees, and

U.S. Coast Guard (USCG) for survivors of USCG, PHS, or NOAA retirees.

Reference: For more information on RPCs, see M21-1, Part III, Subpart v, 5.C.

b. Payments to a Claimant Entitled to Both SBP and DIC

In general, a surviving spouse is not entitled to receive his or her full amount of SBP and Dependency and Indemnity Compensation (DIC) benefits concurrently.

When a claimant is entitled to both SBP and DIC, he or she is entitled to

only the amount of SBP in excess of the basic DIC rate payable to a surviving spouse, but

the full amount of SBP to a child or parent, since there is no bar against full payment of both benefits for those dependents.

Exception: Per Sharp et al. v. the United States, Fed Circ (August 26, 2009), there is no bar to full payment of SBP and DIC, without offset of either benefit, when a surviving spouse is entitled to DIC by virtue of having remarried after age 57.

References: For more information on full concurrent payment of SBP and DIC when remarriage occurs after age

57, see 38 U.S.C. 1311(e), and entitlement to DIC when remarriage occurs after age 57, see 38 CFR 3.55(a)

(10).

c. Handling an Overpayment of SBP

If SBP was paid to a surviving spouse entitled to DIC, the Department of Veterans Affairs (VA) offsets any overpayment of SBP from the DIC award in an amount not greater than the basic DIC payable.

Exception: Under 38 U.S.C. 1311(e), there is no bar to full concurrent payment of SBP and the basic DIC rate when a surviving spouse is entitled to DIC under 38 CFR 3.55(a)(10) by virtue of having remarried after age 57.

d. Effective Dates of DIC and SBP

The effective dates of DIC and SBP do not coincide, because the effective date of

an SBP annuity is always the day following the date of death, and DIC is determined under 38 CFR 3.400.

e. Reviewing for Potential Entitlement to SBP

Due to the potential for large overpayments in DIC awards to surviving spouses also entitled to SBP, a review of SBP entitlement should be completed prior to generating an original DIC award to a surviving spouse.

Review the claims folder and electronic systems to determine whether the surviving spouse is potentially eligible for SBP benefits. Potential eligibility exists if the deceased Veteran was

retired, or on active duty but eligible for retirement.

References: For more information on contacting RPCs if there is potential SBP eligibility, see M21-1, Part IV,

Subpart iii, 3.F.2, and processing DIC cases needing an SBP offset, see M21-1, Part IV, Subpart

iii, 3.F.4.c.

f. Paying Full DIC Benefits Without Witholding in Certain Cases

In certain cases, VA can pay full DIC benefits without withholding.

After a review of the Veterans Information Solution (VIS), if the surviving spouse is in receipt of SBP, but the following is true, then pay full DIC benefits without withholding or awaiting a response from DFAS as indicated in M21-1, Part IV, Subpart iii, 3.F.2.d:

The surviving spouse has been receiving SBP for 12 months or less, and The current SBP effective date is 10 years or more from the date of the

Veteran’s death.

Important: Claims processors will still be required to submit the PTIVA form to DFAS notifying them that DIC has been paid in full.

Notes: This does not apply to USGC Veterans, as per M21-1, Part IV, Subpart iii,

3.F.2.f. In all other cases regarding potential entitlement to SBP, VA must await a

response from DFAS. However, claims processors may pay DIC as of the date last paid and continue the claim at authorization until a response is received. After a response is provided by DFAS, finalize the DIC award appropriately.

The current SPB SBP effective date can be found in VIS under the SURVIVIORSURVIVOR BENEFIT PLAN INFORMATION, under the CURRENT SBP EFFECTIVE DATE.

References: For more information on: coordinating the payment of DIC with DFAS, see M21-1, Part IV, Subpart

iii, 3.F.2.d, and the PTIVA case form, see M21-1, Part IV, Subpart iii, 3.F.2.e.

g. Handling Cases With No Potential Entitlement to SBP

If there is no potential entitlement to SBP, the VSR should enter No SBP payable in the REMARKS field of the DIC award.

Note: If there is are any questions as to whether or not SBP is payable, contact the applicable RPC as described in M21-1, Part IV, Subpart iii, 3.F.2.

2. A Surviving Spouse’s Benefit and Potential Offset

Introduction This topic contains information on a surviving spouse’s benefit and potentialoffset, including

VA and RPC policies concerning payment of DIC and SBP replying to RPC inquiries regarding SBP actions taken at the time of the RPC inquiry coordinating the payment of DIC with DFAS fax template for requesting information from DFAS, and ZIP File DFAS Requests through Safe Access File Exchange (SAFE) Urgent PTIVA Requests Sending Sensitive Documents Through SAFE Receiving Sensitive Documents Through SAFE, and coordinating the payment of DIC with USCG.

Change Date June 8, 2017December 22, 2017

a. VA and RPC Policies Concerning Payment of DIC and SBP

VA has no regulation preventing a surviving spouse from receiving DIC based on the death of one Veteran (A) while also receiving SBP based on the death of another Veteran (B).

RPCs do prohibit a surviving spouse from receiving DIC based on the death of Veteran (A) while also receiving SBP based on the death of Veteran (B).

VA will honor an RPC’s prohibition if the RPC submits a request for DIC offset for Veteran (A) that is signed by the surviving spouse.

Note: Per Sharp et al. v. the United States, Fed Circ (August 26, 2009), there is no bar to full concurrent payment of the SBP and DIC, without offset of either benefit, when a surviving spouse is entitled to DIC by virtue of having remarried after age 57.

References: For more information on payment of DIC when remarriage occurs after 57, see 38 CFR 3.55(a)(10),

and full concurrent payment of SBP and DIC when remarriage occurs after age

57, see 38 U.S.C. 1311(e).

b. Replying to RPC Inquiries Regarding SBP

RPCs submit requests to VA regarding a surviving spouse’s DIC payments.

When replying to RPC inquiries, furnish the

basic DIC rate per 38 CFR 3.5, and award effective date (for example, the first day of the month of the

Veteran’s death).

Notes: The “basic DIC rate” means the rate payable to the surviving spouse as if there were no children

(total dependency code 10) based on the Veteran’s pay grade or the rate specified under 38 U.S.C. 1311(a)(1), as applicable, excluding any allowance for Aid and Attendance (A&A), and

includes the additional allowance payable under 38 U.S.C. 1311(a)(2) to the surviving spouse of a Veteran who was- rated as totally disabled for at least eight continuous years, and- married to the surviving spouse for the same period of time.

Important: In an apportionment case, if the amount paid to the surviving spouse is less

than the basic DIC, consider the lesser amount to be “basic DIC” for the purposes of this section.

Do not consider the Veteran’s rate for the month of death as the DIC rate for reporting purposes.

Reference: For more information on the DIC rate payable, see M21-1, Part IV, Subpart iii, 1.A.2.

c. Actions Taken at the Time of the RPC Inquiry

If at the time of the RPC inquiry, a DIC claim is pending, wait to respond until after the claim is complete.

If at the time of the RPC inquiry, DIC has not been filed or has been denied, upload the form to the electronic folder (eFolder).

d. Coordinating the Payment of DIC With DFAS

Before paying full DIC to a surviving spouse with potential eligibility for SBP benefits based on service in the Army, Navy, Air Force, and Marine Corps, contact DFAS to determine

whether the surviving spouse is receiving SBP benefits, and (if so) whether payment of DIC will create an overpayment.

Many pension management center (PMC) employees have access to DFAS’s Annuity Pay Subsystem (APS). PMC employees also have access to Veterans Information Solution (VIS), which is a web-based application that provides a consolidated view of eligibility and benefits data from the Veterans Benefits Administration (VBA) and Department of Defense (DoD). This system often contains the information required to make the determinations

referenced above without making direct contact with DFAS. When it does not, or when access to APS or VIS does not exist, either the finance activity or a Veterans Service RepresentativePMC (VSR) must fax send a request to DFAS through SAFEat 1-800-982-8459, using the template shown in M21-1, Part IV, Subpart iii, 3.F.2.e.

If a request is faxed sent to DFAS, claims processors may pay DIC as of the date last paid and continue the claim at authorization until a response is received. After a response is provided by DFAS, finalize the DIC award appropriately.

If DFAS does not respond within ten workdays, follow up by telephone at 1-800-321-1080.

Exception: Do not postpone payment of full DIC benefits for a response from DFAS if: a review of VIS shows that SBP payments have been received for 12

months or less, and the current SBP effective date is 10 years or more from the date of the

Veteran’s death.

Important: Claims processors must still send the PTIVA to DFAS notifying them that DIC has been paid in full.

Notes: It is acceptable to send multiple requests to DFAS in a single fax, as long as a separate

template is prepared and included for each request, andrequest information from DFAS by telephone, using the number provided above, but only when an expeditious response is required.

Document any telephone contact with DFAS on VA Form 27-0820, Report of General Information.

The Manila Regional Office (RO) contacts DFAS by teletype rather than by telephone.

SBP is not paid to the surviving spouse through DFAS for Veterans of the USCG, PHS or NOAA. For SBP payments for Veterans of the USCG, PHS or NOAA, see M21-1, Part IV, Subpart iii, 3.F.2.f.

References: For more information about VIS, see M21-1, Part III, Subpart v, 5.C.2, and vaww.vistau.med.va.gov/vistau/VIS/default.htm .

e. Fax Template for Requesting Information from DFAS

Use the template below (PTIVA Case Form) when faxing sending a request to DFAS for information about the payment of SBP benefits to a surviving spouse. All fields in the VETERAN INFORMATION, SPOUSE INFORMATION, VA POINT OF CONTACT FOR OVERPAYMENT INFORMATION and DIC INFORMATION must be completed.

Note: The following fields have drop down boxes. Users must select the appropriate option provided in the drop down menu for each box:

BRANCH OF SERVICE VARO BASED ON VA HIGHEST GRADE HELD (YES/NO) VA HIGHEST GRADE HELD (PLEASE TYPE) INITIAL BASIC SPOUSAL RATE INITIAL BASIC SPOUSAL RATE PTIVA ATTEMPT NUMBER, and DIC RETRO PAYMENT DISPOSITION.

Important: When providing the VA Point of Contact Information, users must provide the appropriate area code for the phone number and fax number fields.

f. ZIP File DFAS Requests through SAFE

Each PMC will batch their PTIVA requests together in a ZIP file and transfer them via SAFE once a week. No individual requests are permitted. ZIP files will be transferred according to the following schedule:

PMC Transfer dayPhiladelphia

Monday

Milwaukee WednesdaySt. Paul Friday

Each ZIP file name will follow a standard naming convention: Station Number PTIVA YYYYMMDD

Example: 310 PTIVA 20171030.

Within the ZIP file the PTIVA/PTIVAPs:

Must be separate, individual PDFs, and Must follow the below naming convention: Document type

(PTIVA/PTIVAP) Member/Veteran SSN

Example: PTIVA 123456789, PTIVAP 123456789

Note: The PMCs will coordinate this function using the primary PTIVA coordinator, and the back-up coordinators when the primary coordinator is unavailable.

References: For more information on

sending documents through SAFE, see M21-1, Part IV, Subpart iii, 3.F.2.g. receiving documents through SAFE, see M21-1, Part IV, Subpart iii, 3.F.2.h.

g. Urgent PTIVA Requests

Urgent PTIVA requests will be handled using the existing POCs between the PMCs and DFAS and do not have to follow the identified schedule.

If the PTIVA request has already been sent to DFAS, then the PMC POC should either call the DFAS POC or send the DFAS POC an email through SAFE identifying the urgent PTIVA and when it was sent. Re-sending the PTIVA should not be necessary unless requested by DFAS.

If the PTIVA has not been sent to DFAS and is an urgent request, the PMC shall send the PTIVA through SAFE directly to the DFAS POC. The PMC should annotate that the PTIVA is an urgent request.

Use the table below for sending sensitive documents through SAFE.

h. Sending Sensitive Documents Through SAFE

Step Action1 Access the SAFE web site.

Step Action2 On the SAFE home page, select the NON-CAC USERS option.

3 On the next page, complete all of the fields under the section titled PERSONAL INFORMATION.

4 In the DESCRIPTION OF FILE(S) field under the section titled FILE INFORMATION, enter the ZIP file name and the number of PTIVA requests within the file.

Important: Do not enter any personally identifiable information in this field.

5 Click on the BROWSE button.

6 Locate and select the ZIP file to be sent through SAFE.

7 Check the box titled PRIVACY ACT DATA.

8 Enter the recipient’s e-mail address, dfas.cleveland-oh.jfb.mbx.r-a-pay-rso-mailbox@mail.mil, in the field provided for this information under the section titled RECIPIENT INFORMATION.

Click on the ADD button.

9 Enter the number of PTIVA request included in the ZIP file in the DESCRIPTION OF FILES field.

10 Select the following under the section titled E-MAIL SETTING: FOUO Encrypt e-mail message when possible, and Notify me when files are downloaded.

11 Select the UPLOAD button.

12 Check e-mail inbox for an e-mail that requests verification of the sender’s e-mail address.

Reply to the request.

Note: The sender will receive notification via e-mail when the recipient downloads the document(s). If the sender does not receive notification within seven days of sending the files, the sender should contact the DFAS POC requesting a status.

i. Receiving Sensitive Documents Through SAFE

SAFE sends notification via e-mail to the intended recipient of sensitive documents when a sender uploads the documents into SAFE. The e-mail contains a hyperlink and a password for accessing the documents.

Note: Recipients may not

forward the e-mail to anyone else, or

use the password more than once.

The table below explains how recipients may retrieve documents from SAFE.

Step Action1 Click on the hyperlink in the e-mail.

2 Copy the password from the email and paste it into the PASSWORD field on the PACKAGE DOWNLOAD page.

3 Save a document by

right-clicking on the document selecting the SAVE TARGET AS option, and selecting the desired location for saving the document.

fj. Coordinating the Payment of DIC With USCG

SBP is not paid to the surviving spouse through DFAS for Veterans of the USCG, PHS or NOAA. Therefore, the SBP information cannot be found in VIS or APS. Before paying DIC to a surviving spouse based on the Veteran’s service in the USCG, PHS, or NOAA, claims processors must contact the USCG to obtain the following information:

whether the surviving spouse is receiving SBP benefits, and (if so) whether payment of DIC will create an overpayment.

The contact numbers for USCG are 1-800-772-8724 for telephone, and 1-785-339-3770 for fax.

Notes: Document any telephone contact with USCG on VA Form 27-0820. The Manila RO contacts USCG by teletype rather than by telephone.

3. RPCs’ Handling of SBP Payments

Introduction This topic contains information on RPCs’ handling of SBP payments, including

the initial action taken by RPCs action taken when no claims folder exists, and how the PMC of jurisdiction is determined.

Change Date July 12, 2015

a. Initial Action Taken by RPCs

RPCs

begin payment, regardless of whether or not DIC is payable, if a surviving spouse is entitled to SBP, and

sends notification to the PMC of jurisdiction that provides information as to when SBP payments begin.

Note: RPCs are not required to send VA a signed authorization from the surviving spouse to offset DIC based on SBP payments. By signing the application for SBP, the surviving spouse authorizes VA to offset DIC based on SBP payments.

b. Action Taken When No Claims Folder Exists

If notification is received from the RPC and BIRLS shows that no claims folder exists

establish an eFolder, and include sufficient information to alert the next person who reviews the

folder of a potential DIC-SBP payment overlap should DIC be awarded to the annuitant at a later date.

c. How the PMC of Jurisdiction Is Determined

The PMC of jurisdiction is

indicated by the RPC’s records, and determined, if not of record, based on- beneficiary residence, or- the address to which the payments are provided.

4. Award Action for Claims Involving SBP

Introduction This topic contains information on award action for claims involving SBP, including

a note about Veterans Benefits Management System (VBMS) award processing

considering a DIC claim not timely filed the action to take to complete an SBP offset, and providing notice to a claimant.

Change Date June 21, 2016

a. Note About VBMS Award Processing

Use the Veterans Benefits Management System (VBMS) to process awards for DIC.

Reference: For more information on processing awards in VBMS, see the VBMS-Awards User Guide.

b. Considering a DIC Claim Not Timely Filed

Deductions for an SBP overpayment can be made only from the effective date of the DIC award, instead of the effective date of SBP payments, if

a DIC claim is not filed within one year from the date of death of a Veteran, and

the claimant is receiving SBP.

Reference: For more information on completing an SBP offset, see M21-1, Part IV, Subpart iii, 3.F.4.c.

c. Action to Take to Complete an SBP Offset

The table below describes the actions to take to complete an SBP offset.

Stage Who Is Responsible Description

1 VSRClaims Processor Generates DIC award, and forwards to authorizer for review.

2 Authorizer Reviews award for accuracy, and forwards the RPC payment information

to the finance activity to request that they create a debt (offset) to recoup the SBP overpayment.

3 Finance Creates a debt in the amount requested, and

notifies Authorizer of completion.4 Authorizer Reviews corporate to verify that the debt

was created, and authorizes the award.

Note: If the pay grade is required to generate the DIC award, but not known, the VSR should check APS and VIS to see if the pay grade is available. If the pay grade is unavailable, contact the Retired Pay Coordinator. The Retired Pay Coordinator must telephone DFAS to obtain the correct pay grade.

d. Providing Notice to Claimant

In all DIC awards involving a SBP deduction, prepare a locally-generated award letter per 38 CFR 3.103(e) that fully advises the claimant

of the award, and that the award is subject to offset for concurrent payments of the SBP

annuity.

In original or reopened DIC awards involving SBP benefits, enclose VA Form 21-8765, Service-Connected Death Award Attachment, with the locally generated award letter.