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Defense Finance and Accounting Service Providing payment services for the U.S. Department of Defense

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#### **Make the Payment of Your Final Paycheck Easier for Your Loved Ones**

After you pass away, a one-time payment of your final paycheck is made to a beneficiary. This is called your Arrears of Pay (AOP). In most cases, the Arrears of Pay will be only the pro-rated amount of your final month’s retirement pay. This is because your entitlement to retirement pay ends on the date of your death. When your death is reported, DFAS will reclaim your final month's pay and audit your account. The amount of the payment owed to you will then be computed (based on the number of days in the month you were alive) and paid to your AOP beneficiary, along with any other money owed to you at the time of your death. To receive this payment, your AOP beneficiary will need to send us a claim form. When we receive word of your death, this claim form will be sent in a condolence package to the AOP beneficiary you designated for your account. **The importance of designating your AOP beneficiary**It’s very important that you designate a beneficiary or beneficiaries in your retired pay account for your Arrears of Pay, and that you keep that information current.  Unless otherwise noted, your AOP beneficiary will also be the person we contact for assistance in closing your account, so it is important to designate a person you trust to handle your affairs.  Failing to designate an AOP beneficiary and keep their contact information current could cause stress and financial hardship for your survivors during an already difficult time, because the final payment could be delayed. When no beneficiary is named, the payment is made to the highest person in what is known as the "Order of Precedence." The Order of Precedence is the federally mandated order of inheritance that applies to legacies without a designated beneficiary. It can take many months to locate your survivors, identify who comes highest in the Order of Precedence, and then make the payment.  That's why having a current, correct and complete beneficiary designation on file is important to prevent delays or errors in your arrears payment.  We also suggest you limit the number of your AOP beneficiaries to avoid delays in payment. Remember that the AOP payment is usually less than one month’s pay, and this amount will be divided among all of your designated beneficiaries.  Keep in mind that designating a sole beneficiary in your will does not automatically make that person your AOP beneficiary.  Also, the AOP designation does not entitle the person named as a beneficiary(s) to a Survivor Benefit Plan (SBP) annuity. A separate SBP election must be made to cover the desired individual for SBP purposes. **Telling your loved ones what to expect** In the difficult days after your passing, your loved ones will need to notify a long list of people and agencies.  We try to make the process a bit easier by offering an online notification of death form on our website. Your loved ones can access the online notification form from several different links at the Retired Military & Annuitants area of our website at: www.dfas.mil/retiredmiitary Your loved one can also call our Customer Care Center at 800-321-1080.  When your loved one has notified us, they will receive a condolence package in the mail that will include information and the form to claim Arrears of Pay (SF 1174), as well as the information and form to apply for the Survivor Benefit Plan annuity (if you elected to provide it). This package should arrive in the mail within 30 days after we are notified.  It’s important for your loved ones to know that they will also need to provide a copy of the certificate of death with these forms.  **New tools to make claiming Arrears of Pay easier** We know that taking care of the paperwork after someone passes away is difficult. We want to make the process as easy as possible. That’s why we have a new set of tools to make filling out and submitting the SF 1174 (for claiming Arrears of Pay when a retiree passes away) quicker and easier.  The tools include: **Direct deposit for Arrears of Pay payments** We can now deposit an Arrears of Pay (AOP) payment directly to an eligible claimant’s bank account instead of mailing a check. Direct deposit can reduce the time it takes to receive the payment. To have an AOP payment direct deposited to their bank account, the claimant needs to send a completed Direct Deposit Authorization (DFAS-CL Form 1059) with their SF 1174. This form is available for download from the webpage: www.dfas.mil/retireeaop **Our SF 1174 PDF Form Wizard makes filling out the form easier** For spouses or children of a deceased retiree, the SF 1174 Form Wizard will help them fill out the SF 1174 Arrears of Pay form. The form wizard will a series of questions and fill in the answers in the appropriate areas of the form. When they have finished answering the questions, they can click a button to generate a ready-to-print PDF with the answers. We also have a How-To Checklist and How-To Video available to assist claimants in filling out the SF 1174 form. **Online upload option to submit the SF 1174 and documents on our website** Claimants can submit the completed and signed SF 1174 and required documentation through AskDFAS on the DFAS.mil website, which is also accessible on a mobile browser.The tools and more information are be available on the Forms page on our website: www.dfas.mil/retiredmilitary/formsand on the “How to Claim a Retiree’s Arrears of Pay Using the SF 1174” webpage, which has specific instructions and links to frequently asked questions: www.dfas.mil/retireeaop  

Page last updated on June 17, 2020

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