Army Sgt. Maj. Keith Witt had been a soldier for 29 years when illness forced him to retire in 1993. The Department of Veterans Affairs rated him fully disabled with multiple sclerosis and later with cancer presumed to have been caused by exposure to the defoliant Agent Orange in Vietnam.

Witt had signed up for the military Survivor Benefit Plan for his wife, Kay. His retired pay was reduced by 6.5 percent a month for SBP premiums.

By 1997, Keith’s conditions had worsened to a point that Kay retired early from her federal civilian career to be his full-time caregiver. She estimates the decision reduced her pension by about half.

When Keith died in 2001, Kay became eligible for an SBP annuity equal to 55 percent of Keith’s retired pay. Because Keith had died of service-connected illnesses, she also was eligible for Dependency and Indemnity Compensation from the VA.

Here, however, is the catch. To accept DIC, which pays a basic benefit now of $1,067 a month, the law requires an equal cut in SBP. Premiums paid on the portion of SBP that disappears are returned to the widow.

This so-called SBP-DIC offset affects 59,000 military survivors and simply isn’t fair, Witt and other widows recently told the Veterans’ Disability Benefits Commission. The two payments have distinct purposes, they said.

DIC, which is tax-free, compensates for a service-connected death and the resulting economic loss. SBP is like life insurance. Kay qualified for SBP only because her husband bought it for her with monthly premiums.

“It would be illegal if a civilian company did that — refunded your premiums, without interest, and said, ‘You know, we’ve changed our minds. We don’t want to pay this,’” she told me.

The Veterans’ Disability Benefits Commission is examining all facets of the veterans’ disability system. A final report is due in October. But the commission could decide what it will recommend regarding the SBP-DIC offset within a month or two.

Witt and several other widows appeared briefly before the commission to describe how the offset has affected them. A more detailed argument for ending it was presented by Edith G. Smith, a longtime advocate for military widows. Smith spoke on behalf of Gold Star Wives of America, which represents all survivors of servicemembers who die on active duty or from service-connected disabilities in retirement.

The commission staff presented three options for handling the SBP-DIC offset issue:

nEndorse the offset and continued partial refunds of SBP benefits.

nRecommend eliminating the offset for all recipients, including survivors of members who die in service.

nRecommend eliminating the offset only for survivors of retirees who paid SBP premiums before their death. Under this option, the offset would continue to affect SBP payments for deaths in service.

Smith, widow of a retired Marine officer who died in 1998 after many years disabled by a severe heart ailment, said Gold Star Wives strongly supports the second option and strongly opposes the others.

“To change nothing is unconscionable,” Smith said. “And to eliminate the SBP-DIC offset for all survivors where the disabled retiree paid SBP premiums but not for survivors of in-service deaths, because no SBP premiums were paid, is not a fair and equitable solution.”

To comment, write Military Update, P.O. Box 231111, Centreville, VA 20120-1111, e-mail or visit

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