Survivor Benefits: SBP and DIC, Explained
Updated July 2026
Two different programs protect a military family if the service member or retiree dies: the Survivor Benefit Plan (SBP) from the DoD, and Dependency and Indemnity Compensation (DIC) from the VA. Recent law made them far more valuable together.
The Survivor Benefit Plan (SBP)
SBP is an annuity that lets a military retiree pass on a portion of their retired pay to a surviving spouse (or child) after they die. You elect it at retirement, choosing a "base amount," and pay a monthly premium. The survivor then receives up to 55% of that base amount as a lifetime, inflation-adjusted monthly payment. Because retired pay stops when the retiree dies, SBP is often the main way to keep income flowing to a spouse.
Dependency and Indemnity Compensation (DIC)
DIC is a separate, tax-free monthly payment from the VA to eligible survivors when a service member dies on active duty or a veteran dies from a service-connected condition (or was rated totally disabled for a required period). It is a flat VA benefit, not tied to retired pay.
The "widows tax" is gone (2023)
For years, a surviving spouse who received DIC had their SBP payment reduced dollar-for-dollar — the so-called SBP-DIC offset or "widows tax." Congress phased this out, and as of January 1, 2023, the offset is fully eliminated. Eligible survivors can now receive their full SBP and full DIC at the same time. Also see the Special Survivor Indemnity Allowance (SSIA) on our benefits pages.
Guard & Reserve: RCSBP
Guard and Reserve members have their own version, the Reserve Component Survivor Benefit Plan (RCSBP). Because reservists typically do not start drawing retired pay until age 60, RCSBP lets you elect survivor coverage when you hit 20 good years — protecting your family during the "gray area" before your pension begins. The election window is short and the default can lock you in, so review it as soon as you receive your 20-year (notice of eligibility) letter.
Who should think about this
If you are approaching retirement, the SBP election is one of the most important decisions you will make — it is generally irrevocable and protects your spouse for life. Because DIC no longer offsets SBP, declining SBP because of expected DIC (old advice) usually no longer makes sense. Weigh it carefully and confirm the current premiums and rules with DFAS and the VA.
Frequently asked questions
What is the difference between SBP and DIC?
SBP is a DoD annuity a retiree elects to leave part of their retired pay to a survivor, paid for with premiums. DIC is a separate tax-free VA payment to survivors when death is service-connected or occurs on active duty. They come from different agencies and can now be received together.
Was the SBP-DIC offset (widows tax) eliminated?
Yes. The SBP-DIC offset was phased out and fully eliminated on January 1, 2023. Surviving spouses can now receive their full Survivor Benefit Plan annuity and full DIC at the same time, with no reduction.
How much does SBP pay a survivor?
SBP pays a survivor up to 55% of the elected base amount of the retiree's retired pay, as a lifetime monthly annuity that is adjusted for inflation. The retiree pays a monthly premium for the coverage.
Is DIC taxable?
No. Dependency and Indemnity Compensation is a tax-free monthly benefit paid by the VA to eligible survivors.
Related benefits
- Survivors Benefit Plan (SBP)
- Dependency and Indemnity Compensation (DIC)
- Special Survivor Indemnity Allowance (SSIA)
- Survivors Pension