SBP Former Spouse Coverage

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Military divorce. Getty Images
Military divorce. Getty Images

The Survivor Benefits Plan (SBP) allows selection of coverage for former spouses. Costs and benefits under this option are identical to those for spouse coverage. This web page highlights key aspects of former spouse coverage.

When former spouse coverage is elected, the current spouse must be informed. Only one SBP election may be made. If there is more than one former spouse, the member must specify which one will be covered.

Procedures

When electing the former spouse option, a member must give the finance center a written statement signed by both the member and the former spouse. It must state:

  1. Whether the election is made in order to comply with a court order; or,
  2. Whether the election is made to comply with a voluntary written agreement related to a divorce action, and if so, whether that voluntary agreement is part of a court order for divorce, dissolution, or annulment.

Benefit Payments

Benefits paid under this option are identical to those for spouse coverage except the annuity for a former spouse.

SBP Costs (Premiums)

Premiums for former-spouse coverage are calculated identically to premiums for spouse coverage (see our SBP Spouse Costs and Benefits page). 

Inflation Protection

Like your retirement pay the SBP annuity is protected from inflation. Each year when retired pay gets a Cost-of-Living Adjustment for inflation, or 'COLA', so does the base amount, and as a result, so do premiums and annuity payments. Meaning that your premiums and annuity payments will increase with the COLA. These increases are determined by the previous year's Consumer Price Index and averages approximately 2%.

Tax Savings

Monthly SBP costs are not included in your taxable Federal income. The true cost for SBP is thus less than the amount deducted from retired pay because less Federal tax will be paid. This also applies to most state income taxes. SBP payments to survivors are taxable, but spouses usually receive benefits when their total income is less and the extra tax exemption for being over age 65 is applicable. The surviving spouse's tax rate should be lower and a long-run significant tax savings should result.

Former Spouse Remarriage

Your surviving former spouse may remarry after age 55 and continue to receive SBP payments for life. If remarried before age 55, SBP payments will stop, but may be resumed if the marriage later ends due to death, divorce or annulment.

Former Spouse Death

If your former spouse dies and you have remarried, or remarry at a later date, your new spouse can be eligible for SBP coverage. You must request a transfer of coverage from DFAS within one year of the death or remarriage.

Children

Former spouse and children coverage may also be elected. The children covered are the eligible children from the marriage of the member to the covered former spouse. The children will only receive SBP payments if the former spouse dies or remarries before age 55. Eligible children will divide 55 percent of the covered retired pay in equal shares.

Special Note: Public Law provides that a participant is considered "paid-up" after completing 30 years (360 payments) in the Plan. This applies to a specific category of beneficiary (i.e., spouse), at a specific base amount (i.e., full retired pay).

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