DoD disability rating and its effect on SBP

Sindar27

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I was recently received the results of my MEB from the TDRL office. They are recommending a decrease in one of my rated conditions, which would take me from 80% DoD, down to 60% DoD. I had 21 years AD TIS and received 100% VA when I was placed on the TDRL, so the Office of Airmen Council attorney expressed surprise when I told him I wanted to fight the decrease. Most people think I’m talking about CRDP when I ask this question, but I’m not. I know I can’t receive the full DoD disability rating and VA pay at the same time.

I can see where he’s coming from, as I always assumed it was only the under 20 TIS group that needed to stay at/above 30% that would fight a DoD decrease to keep their benefits.
I told the attorney that I wanted to fight the decrease, because I’m under the impression that my DoD rating has a direct effect on the Survivor Benefit Plan my spouse will get when I die.

Spoke to the base SBP manager and he told me that he’d never heard of that before. He told me to call DFAS and find out what is wrong. I told him that since my retirement, my SBP has been withdrawn from my pay at a rate consistent with my 80% DoD disability retirement. My SBP has been withdrawn at $233, which is 6.5% of my DoD retirement, not 6.5% of my TIS retirement, which would be $167.

My numbers:
36-month pay - $4784
75% pay - $3588
53.75% TIS pay - $2571
VA pay - $3437


Here’s what it really comes down to...if I maintain my 80% DoD rating with its $3588 base pay, I continue paying $233 a month for SBP and my spouse gets $1973 a month as a return. If my military retirement pay was reduced to my 21 yr TIS rate of 53.75%, then my spouse would only get $1414.

I'm 8 years older than my spouse and the women in her family live a long time. It’s possible she lives 30 years longer than me. An extra $560 a month is huge.

So, What do you think? Should my Survivor Benefit Plan (SBP) Annuity Base Amount and monthly payments be based off my DoD disability percentage, or is this all a mess up by DFAS, like the base SBP manager thinks?
 
Last edited:

RonG

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DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 45 * December 2018
VOLUME 7B, CHAPTER 45: “SURVIVOR BENEFIT PLAN (SBP) PREMIUMS”
--->LINK to computation of SBP and associated info


4502 PREMIUM 450201. Premium Coverage

4503 BASIC SPOUSE/FORMER SPOUSE PREMIUM CALCULATION 450301. Initial Premium Calculation

450303. Premium Calculation On or After March 1, 1990

450304. Threshold-Amount Increase

450305. Child Coverage Charge

4504 COMPUTATION OF PREMIUMS

etc.

Regards,
Ron
 

oddpedestrian

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Personally I always say SBP is a rip off if you are 100% for at least ten years she will draw DIC if you still worried you could easily take a very good term or whole life rate for much cheaper than 233 a month.
 

Sindar27

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DFAS finally wrote me back. If you're a medical retiree, your SBP is based on your DoD disability percentage, not your Time-in-Service. If I choose not to fight my PEB results, my DoD rating will decrease from 80% to 60%, which means the military retirement gross pay on my RAS will be reduced from $3588 down to $2870. That reduction will decrease the SBP payout to my spouse from $1973 down to $1578. If my spouse were to outlive me by 30 years, that would be a reduction of $142,200.

I'm limited to CDRP pay, since Title 10 USC 1414(b)(1) prevents me from collecting the 75% DoD disability retirement, but that law isn't applicable to money my spouse will get from SBP.

As to oddpedestrian's comment, I applied for term life policies with USAA and AAFMAA. AAFMAA wouldn't insure me and USAA wanted $270 a month for a $500,000 30 year term policy. So, I felt like SBP is probably the best way to go, in case I get hit by a bus between now and when my spouse is eligible for DIC. Even then, she's be allowed to collect SBP and DIC if she remarried after 57.
 

RonG

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Comments.

Although a DoD disability rating could be 80%, or 90%, or 100%; the maximum percentage payable for retirement pay is 75% in accordance with current law.

The ceiling for SBP computations is likely the same.

A comment about, "If you're a medical retiree, your SBP is based on your DoD disability percentage, not your Time-in-Service. " Yes, in most instances, but retired pay if using the longevity multiplier is more than the DoD disability multiplier...it will be used.

CRDP for disability retirees with 20 years AD and a VA rating of 50% or more.
--The disability retired pay is reduced dollar for dollar in the amount of VA compensation.
--The longevity portion of disability retirement is
a. active duty years or active duty equivalent x 2.5% = longevity multiplier
b. high three average base pay x longevity multiplier = longevity portion of retired pay
c. The combination of residual retired pay (see "reduced" above) and CRDP cannot exceed the longevity portion of retired pay (see item b).

How this impacts SBP is described in
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 45 * December 2018
VOLUME 7B, CHAPTER 45: “SURVIVOR BENEFIT PLAN (SBP) PREMIUMS”
--->LINK to computation of SBP and associated info


Ron
 

oddpedestrian

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I'm assuming you miss your VGLI timeline? Very poor job many exiting service programs who didn't talk about this at all I don't anyone other than myself that signed up for it in time.
 
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