You mean there’s a way to cancel my SBP due to my VA rating? Yes, there is. But whether you should exercise this option is a whole ‘nother matter.
You have an irrevocable option to cancel your SBP due to your survivor’s eligibility for the VA’s Dependency and Indemnity Compensation (DIC) survivor annuity. A service-connected VA disability rating of totally disabling (100%) for 10 continuous years, or at least 5 years at 100% if from the date of Service separation, makes a survivor eligible for DIC. Spousal concurrence is required to cancel SBP.
This option was established because a survivor’s SBP annuity is reduced dollar-for-dollar if the survivor also receives DIC—the SBP-DIC offset. Cancelling SBP because of DIC allows a survivor to receive a refund of all SBP premiums linked to the denied SBP survivor payments.
Here’s the catch before you cancel. MOAA is working diligently to have the SBP-DIC offset eliminated. We’ve made headway the last few years as survivors now receive a portion of their SBP payments that were previously denied due to DIC. Should the SBP-DIC offset be totally eliminated, canceling your SBP now due to potential DIC payments denies your beneficiary the opportunity for full SBP and DIC payments in the future. Consider all the possibilities.