The National Defense Authorization Act  (NDAA, P.L. 116-92) allows surviving spouses of military troops who died during active-duty service or retirees who died from a service-connected cause to keep all compensation from the government. Prior to the new law, surviving spouses who received a Dependency and Indemnity Compensation (DIC) paid a dollar-for-dollar offset from their Military Survivor Benefit Plan (SBP).

For many survivors, the offset completely eliminated their SBP payments and threatened their financial security.  Experts say that the average offset of the “Widow’s Tax” is about $925 per month.

So what does this mean?  Can a widow receive DIC and SBP?

According to the NDAA no changes will take place in calendar year 2020. In 2021, one-third of the SBP will be restored. In 2022, two-thirds will be restored. On January 1, 2023, the SBP will be completely restored and surviving spouses will receive their SBP and DIC payments in full.

Benefits will not be retroactive.