DEFENSE FINANCE AND ACCOUNTING SERVICE 

U.S. Military Annuitant Pay 

8899 E 56th Street 

Indianapolis, IN 46249-1300 

www.dfas.mil/retiredmilitary 

November 21, 2022 

Dear, 

Why we are writing 

 We are writing to provide you with information about the upcoming third and final phase of the SBP-DIC 

Offset Phased Elimination. The third and final phase begins in 2023. 

 You will see the Phase Three change in your Survivor Benefit Plan (SBP) monthly annuity payment 

made on February 1, 2023. 

 The SBP-DIC offset will be fully eliminated as of January 1, 2023. That means you will begin to receive 

your full SBP payments with no offset (reduction) on February 1, 2023. You will also continue to receive your

full DIC payments from the VA. SSIA will no longer be paid. 

What you need to know 

 In 2020, Congress made changes to the Survivor Benefit Plan (SBP) to phase out the SBP-DIC offset, 

which is a reduction of SBP for surviving spouses who also receive Dependency and Indemnity Compensation 

(DIC) from the Department of Veterans Affairs (VA). 

 January 1, 2023 begins Phase Three of the "Phase-Out of Reduction of Survivor Benefit Plan Survivor 

Annuities by Amount of Dependency and Indemnity Compensation," as directed by the National Defense 

Authorization Act (NDAA) for Fiscal Year 2020. 

 Because of this change in the law, in 2023 surviving spouse SBP annuity payments issued by the Defense 

Finance and Accounting Service will NOT be reduced by DIC (issued by the VA). Eligible surviving spouses 

will receive the full amount of their monthly SBP annuity payment plus they will continue to receive the full 

amount of DIC from the Department of Veterans Affairs. 

 Remember, this change in the law does NOT affect your DIC payments. You will continue to receive 

your normal DIC payments from the VA. 

 The Special Survivors Indemnity Allowance (SSIA) will no longer be paid. 

 To help you understand how the 2023 changes will affect your SBP payment, we pre-estimated the 

amount on the following page. Please note this pre-estimate is based on current information (with a 8.7% 

COLA), and the actual amounts in 2023 may differ slightly from the pre-estimate. 

-more-
Estimate of the Survivor Benefit Plan monthly payments you will receive beginning February 1, 2023: 

2023 Gross SBP monthly annuity payment estimate (before taxes): $GrossSBP 

Please see the enclosed DFAS SBP-DIC Offset Elimination Quick Reference for additional information. 

What you need to do 

 Please keep this letter for your reference. You do not need to take any action at this time, unless you 

believe the information in this letter is incorrect. If you believe the information in this letter is incorrect, please 

mail or fax us an explanation. Be sure to include the date, the member’s Social Security Number and your

signature, along with a photocopy of this letter. 

Mail to: 

Defense Finance & Accounting Service 

U.S. Military Annuitant Pay 

8899 E 56th Street 

Indianapolis, IN 46249-1300 

OR, Fax to: 800-982-8459 

 Be sure to keep your account contact information current, especially your mailing address. You can do 

that online using myPay (https://mypay.dfas.mil). 

 Please read the enclosed DFAS Helpful Tips & Tools for SBP Annuitants to find out more about 

managing your SBP annuity payment. 

If you have questions 

 

 If you have questions about the 2023 changes to the SBP-DIC offset, please see the Frequently Asked 

Questions on our website: www.dfas.mil/sbpdicnews

 If you have additional questions about your annuity pay account, please call our Customer Care Center at 

800-321-1080 or 317-212-0551. 

Sincerely, 

Retired and Annuitant Pay 

Enclosures: DFAS SBP-DIC Offset Elimination Quick Reference, DFAS Helpful Tips & Tools for SBP 

Annuitants

[ANNNAME – Page 2]
The SBP-DIC Offset Phased Elimination 

2023 Changes 

Public ‐ Sep2022 

SBP-DIC Offset Phased Elimination News

www.dfas.mil/sbpdicnews

SBP 2023 Optional Child Annuity reversion

www.dfas.mil/sbp2023childoptrev

DFAS Facebook

www.facebook.com/DFASOfficial

Manage your SBP annuity

www.dfas.mil/managesbp

School certifications

www.dfas.mil/schoolcerts

myPay

https://mypay.dfas.mil

Helpful DFAS Webpages for Annuitants 

-See Page 2 for 2022 ChangesPhase Three - 2023

*Please see our SBP-DIC News webpage for FAQs: www.dfas.mil/sbpdicnews* 

 In the third and final phase (2023), the SBP-DIC offset will be fully eliminated. That 

means you will begin to receive your full SBP gross benefit payment with no offset 

(reduction). The first payday for Phase Three is February 1, 2023. You will also continue 

to receive your full DIC payments from the VA. SSIA will not be paid after the 

January 3, 2023 payday. 

Monthly Payments Starting in Phase Three:

Example

If DIC benefit (paid in full by the VA) equals = $1437.66 

And SBP gross benefit (paid by DoD/DFAS) equals = $940 

Monthly Payments Based on Above Example: 

Monthly payments beginning February 1, 2023 (first payday of Phase Three): 

$1437.66 DIC from VA + $940 Gross SBP from DFAS 

DIC benefit (paid in full by the VA) = $1437.66 

SBP gross benefit (paid in full by DoD/ DFAS) = $940 (before taxes) 

(No SSIA is paid after January 3, 2023) 

Page 1 

Note: Dec 2022 SBP payments 

will be made on Jan 3, 2023. 

Jan 2023 payments will be made 

on Feb 1, 2023. 
The SBP-DIC Offset Phased Elimination 

2022 Changes 

Public ‐ Sep2022 -See Page 1 for 2023 ChangesPhase Two - 2022

*Please see our SBP-DIC News webpage for FAQs: www.dfas.mil/sbpdicnews*

In Phase Two (2022) of the offset phased elimination, your SBP gross benefit is 

reduced by an amount that is equal to one-third of your DIC benefit. This does NOT affect 

your DIC payment, which is paid by the VA. The first payday for Phase Two was 

February 1, 2022 and the last payday for Phase Two is January 3, 2023. 

Monthly Payments During Phase Two: 

 

Example

If DIC benefit (paid in full by the VA) equals = $1437.66 

And SBP gross benefit (paid by DoD/DFAS) equals = $940 

Offset to SBP (DIC benefit amount divided by 3) equals = $479.22 

SBP net payment after offset (reduction) of $479.22 equals = $460.78 

Monthly Payments Based on Above Example: 

Monthly payments beginning February 1, 2022 (first payday of Phase Two): 

$1437.66 DIC from VA + $460.78 Net SBP from DFAS + $346 *SSIA from DFAS

DIC benefit (paid in full by the VA) = $1437.66 

SBP net payment (paid by DoD/ DFAS) = $460.78 (before taxes)

*SSIA payment (paid by DoD/ DFAS) = $346 

(*SSIA paid ONLY when SBP gross is reduced due to offset; up to maximum of $346 in 2022) 

Please note: a small number of spouse annuitants (approximately 12%) will NOT see an increase 

in their SBP net payment in 2022. This is because one-third of their DIC benefit (the offset) is more 

than their SBP gross benefit. This group of spouse annuitants WILL receive their full SBP gross benefit 

beginning February 1, 2023 (see page 1).

DIC = Dependency and Indemnity Compensation paid by the Department of Veterans Affairs (VA) 

SBP = Department of Defense (DoD) Survivor Benefit Plan 

SSIA = DoD Special Survivor Indemnity Allowance 

DFAS = Defense Finance and Accounting Service; the DoD agency that processes Survivor Benefit Plan (SBP) 

and SSIA payments 

Page 2 

Note: Dec 2022 SBP payments 

will be made on Jan 3, 2023. 

Jan 2023 payments will be made 

on Feb 1, 2023. 
DFAS HELPFUL TIPS & TOOLS 

FOR SBP SPOUSE ANNUITANTS

Manage Your SBP Annuity 

 Find out what you need to know to manage 

your SBP annuity payments on our “Manage 

Your SBP Annuity” webpage. 

 It’s very important that you keep your 

contact information up to date so we can reach 

you with important news and documents. 

Find out more:

https://www.dfas.mil/managesbp

Eligibility Verification 

 SBP annuitants need to verify their continued 

eligibility regularly to receive SBP annuity 

payments. There are several types of 

verification. 

 See the verification requirements on the 

“Manage Your SBP Annuity,” webpage where 

you can also download the SBP Annuitant 

Eligibility Verification Requirements Fact Sheet: 

https://www.dfas.mil/managesbp

Tax Statements

 

Survivor Benefit Plan (SBP) payments are 

federal taxable income. State and local taxes 

vary. 

We have easy, convenient options to get a 

copy of your 1099-R tax document without 

having to call to speak to someone. 

 

 Your 1099-R is available much earlier and 

more securely in myPay than those sent to 

customers who choose delivery by mail. If 

you're not using myPay, now is the time to get 

started. 

 Even if you are not a myPay user, you can 

get a copy of your 1099-R sent to your 

mailing address on record or to a one-time, 

temporary mailing address by submitting your 

request online through askDFAS. 

Find out more:

https://www.dfas.mil/managesbp

Using myPay to Manage Your 

Payment Account 

 Once you begin receiving SBP annuity 

pay through DFAS, you can use myPay. 

 myPay provides online access to your 

Annuitant Account Statement, and lets you 

update your contact information or your federal 

tax withholding, submit your annual certification 

(COE), or download your tax documents. 

 If you’ve never used myPay, you can 

request an initial password on the myPay 

homepage using the “Forgot or Need a 

Password” link. The password will be mailed

to the address you have on file with DFAS and 

you will receive it in about 10 business days. 

Once you receive your password in the mail, 

you can return to the myPay homepage and log 

in with your social security number and the 

password you received in the mail to create 

your myPay profile. 

 myPay is available using the internet from 

your computer or your mobile device browser 

at: https://mypay.dfas.mil

Annuitant Account Statements

 The Annuitant Account Statement (AAS) is 

available through myPay. For those annuitants 

who have a hardcopy mail request in their 

account, it is mailed when changes are made to 

the account that affect net pay. Use it to verify 

payment, tax information, and to keep informed 

about your account. 

 Nov2022
DFAS Helpful Tips & Tools for SBP Spouse Annuitants – Page 2 

Status Notifications 

We are rolling out the use of status 

notifications to keep you in the loop as forms 

or documents you submit move through the 

annuity pay processing cycles. Right now, only 

a few documents have status notifications 

available, but we are adding more each 

month. 

 

 Status notifications are a three-step 

process that will update you when DFAS 

receives forms or documents for processing by 

mail or fax (or in some specific cases, through 

askDFAS). 

 You will receive separate status 

notifications when your form or document is: 

 

1. Received and queued in the DFAS work 

system 

2. Assigned to be worked 

3. Completed - Either a notification the 

processing is complete or a notification that 

DFAS is sending a request for additional 

information. 

 Status notifications will give you peace of 

mind that we received your form or request. 

They will also provide you with the timeframe 

when we completed your request or notify you 

if additional information is required. 

 To receive status notifications for mail and 

fax submissions, please ensure your email 

address is available and updated in myPay. 

Most notifications are sent via SmartDoc 

email, which require a valid email address in 

myPay. 

Quick Reference Webpages for 

Annuitants

Manage an SBP annuity: 

https://www.dfas.mil/managesbp 

Annuitant forms: 

https://www.dfas.mil/raforms 

askDFAS: 

https://www.dfas.mil/askdfas 

Retiree/Annuitant Customer Service: 

https://www.dfas.mil/raservice 

DFAS Facebook: 

https://www.facebook.com/DFASOfficial 

Look for our new twice-yearly 

DFAS Survivor SBP Newsletter at: 

https://www.dfas.mil/survivornews