What is Dependency and Indemnity Compensation (DIC)?
Dependency and Indemnity Compensation (DIC) is a tax free monetary benefit payable to a surviving spouse, child, or parent of a service member whose death was attributable to active duty, service-connected disability or VA medical treatment.
Dependency and Indemnity Compensation (D1C) is paid to surviving spouses and dependent children when the service member dies while on active duty; or, when death occurs after military service AND if a service-connected disability either directly caused or contributed substantially and materially to the death of the veteran. DIC can also be granted if the veteran dies from medical treatment received through the DVA medical system or from Vocational Rehabilitation training. DIC for spouses and dependent children is not means tested. The recipient of DIC can have any amount of income or assets. It is really a life insurance benefit.
DIC Granted Automatically
DIC will be granted automatically when the veteran has been rated 100% service-connected for 10 or more years at the time of death and dies from non-service-connected causes other than willful misconduct. DIC is also payable when the veteran was rated 100% service-connected for at least 5 years immediately after discharge. With this rule, there is no need to prove service connection death.
Flat Rate DIC Payments
For veterans dying after January 1, 1993, a flat rate of D1C is payable. Prior to this date, DIC was paid based on the military rank of the veteran. Under the flat rate plan, an additional allowance is payable for those veterans rated totally disabled due to service connected condition(s) for 8 or more years at the time of their death with the surviving spouse having been married to the veteran for 8 or more years immediately preceding the death. Surviving spouses can also qualify for Housebound or Aid & Attendance allowances under 38 CFR§ 3.351.
Remarriage of a Surviving Spouse
If a surviving spouse remarries, DIC is terminated. However, if the subsequent marriage is dissolved by death, divorce, annulment, or voided, the now single spouse is eligible to reapply for DIC benefits.
On December 16, 2003, the President signed the Veterans Benefits Act of 2003. This Act amended Title 38 of the United States Code in several ways. Previously, 38 U.S.C. § 103(d) prohibited a surviving spouse who remarries from receiving DIC and also from receiving related housing and education benefits during the length of the remarriage. The Act now allows a surviving spouse who remarries on or after his or her 57th birthday to remain eligible for DIC, home loan, and education benefits.
The surviving spouse must have been married to the veteran for at least one year prior to the death of the veteran or for any length of time if a child was born of the marriage, or was born to them before the marriage. The spouse must also have been married to the veteran when the veteran died. An exception is 38 CFR § 3.54 (c)(1), which covers marriages within fifteen years of leaving military service on or after January 1, 1957.
Concurrent Receipt of SBP and DIC
SBP is the survivor annuity provided under military retirement if the veteran receiving military retirement died. If the surviving spouse is awarded DIC by VA based on the death of the same member who provided the SBP coverage, the Department of Defense reduces the spouse's SBP annuity by the amount of the DIC award.
- If the DIC payment offsets the entire SBP annuity, no annuity is paid and the SBP premiums for spouse coverage paid by the member are refunded to the surviving spouse.
- If the DIC payment is less than the SBP annuity, the spouse is paid an SBP annuity equal to the difference between the full annuity and the DIC. A refund of SBP premiums is made based on the difference between the costs actually incurred and the costs that would have been incurred in order to provide the annuity payable after the DIC reduction.
For example if the SBP is $2500, and DIC is $1,340, the surviving spouse would get $1,340 DIC and $1,160 SBP.
Special Survivor Indemnity Allowance (SSIA)
Since October 2008, surviving spouses whose Survivor Benefit Plan (SBP) payments have been offset (partially or totally) as a result of receiving Dependency and Indemnity Compensation (DIC), including surviving spouses of members who died while serving on active duty, are eligible for the SSIA. Monthly payments are taxable and are $310 a month for October 2016 - September 2017. SSIA benefits will terminate after September 30, 2017 unless extended by Congress which it appears will happen.
Examples (using 2015 rates):
Example 1 - In the following example, the base amount selected for SBP coverage is $2,500 which would provide an annuity of $1,375/mo (55 percent of the base amount) and the 2014-2015 SSIA rate. It assumes that a claim for DIC was filed by the surviving spouse within one year after the member's death and DIC was approved by the VA.
SBP entitlement - $1,375
Minus DIC entitlement - $1,254
Net SBP payable - $121
SSIA payable (FY2015) - $200
Total payable after DIC - $321
Note: The total of SBP and DIC is still equal to what SBP would have paid alone ($121 + $1,254 = $1,375); however, the DIC portion of the payment is not taxable as income. The spouse received a refund of SBP premiums deducted from retired pay except the cost that would have been paid to provide an SBP benefit of $121, unless the member died on active duty.
Example 2 - In the following example, the base amount selected for SBP coverage is $1,500 which would provide an annuity of $825 (55 percent of the base amount) and the 2009-2010 SSIA rate. It assumes that a claim for DIC was filed by the surviving spouse within one year after the member's death and DIC was approved by the VA.
SBP entitlement - $825
Minus DIC entitlement - $1,254
Net SBP payable - $0
SSIA payable (FY2010) - $200
Total payable after DIC - $200
Note: The DIC entitlement is greater than the SBP payment. In this case, all spouse costs deducted from retired pay for SBP would be refunded to the surviving spouse, unless the member died on active duty.
Offsets to DIC
DIC will not be paid if the survivor receives an award for damages due to the veteran’s death of any of the following:
- judicial or administrative proceeding
- administrative award,
- tort award,
- compromise, or
- Radiation Exposure Compensation Act (RECA) settlement payment.
Any such awards will be deducted from DIC or demanded back for overpayment. Attorney’s fees, court costs, and other expenses incident to the civil claim are not deductible from the total amount awarded or accepted.
Other Benefits Available with a DIC Claim
A DIC claim is also a claim for Survivors Pension and accrued benefits. The same form – VA Form 21-534EZ – is used to apply for any of the three benefits. The applicant must designate on the form which benefit or benefits are being applied for. VA will consider all of them if appropriate to the situation. If VA considers all three applications for an award, either VA or the beneficiary can determine which award would be the best. An individual can receive only one of these three benefits at a time.
We will discuss in another section the other death benefit from VA form 21-534EZ which is accrued benefits. We already discussed Survivors Pension in the section on Pension.
A surviving spouse receiving DIC is also eligible for The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). This program provides reimbursement for most medical expenses for the surviving spouse through VA health care for the following.
- mental health
- prescription medication
- skilled nursing care, and
- durable medical equipment
Dependency and Indemnity Compensation (DIC) for 2020
Basic Monthly Rate = $1,340.04, with 1 Child $1,672.14, with 2 Children $2,004.14, etc.
Allowances: with A&A $1,672.14, with Housebound $1,495.67, with 8 Yrs Continuous Disabled $1,624.71
1. Add $284.57 for veteran's death, if veteran was in receipt of or entitled to receive Compensation for a service-connected disability rated totally disabling (including a rating based on individual unemployability) for a continuous period of at least 8 years immediately preceding death AND the surviving spouse was married to the veteran for those same 8 years. (38 U.S.C. 1311(a)(2))
2. Add the following allowance for each dependent child under age 18: Effective 12/1/14 $332.00 per child (38 U.S.C. 1311(b))
3. If the surviving spouse is entitled to Aid and Attendance, add $332.00. (38 U.S.C. 1311(c))
4. If the surviving spouse is entitled to Housebound, add $155.53 (38 U.S.C. 1311(d))
5. If the surviving spouse has one or more children under the age 18 on the award, add the 2-year transitional benefit of $296.00 effective, December 1, 2014 (38 U.S.C. 1311(f))
Please refer to the table of contents in the top right column of this page for more topics on Benefits for Survivors of Veterans.
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TABLE OF CONTENTS
How to Apply for VA Benefits for Veterans and Their Survivors
This 2023 Edition provides detailed instructions on how to submit claims for benefits through the Department of Veterans Affairs new intake center and uses the successful "Fully Developed Claim Process" for faster and better decisions. View the Book...
- About Accreditation & Fees
- Accreditation Study Materials
- CLE to Maintain VA Accreditation
- Correcting Your Military Discharge
- Find Home Care / Assisted Living
- Find Hospice Care
- Find Medical Alert
- Help finding a LTC Facility
- Help with Care Management
- Help with Elder Law
- Help with Estate Planning
- Help with Disputes / Mediation
- Help with Financial Planning
- Help with Medicaid Planning
- Help with Tax Planning
- Informal Claims / Effective Dates
- Service Connected Disabilities
- State VA Nursing Homes
- VA Aid and Attendance Benefit
- VA Burial Benefits
- VA Healthcare System
- VA Help - Surviving Spouse
- VA Home Renovation Grants
- VA Long Term Care Benefits
- VA Pays Family for Eldercare
- VA Regional Offices
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