RECORD OF PROCEEDINGS AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS IN THE MATTER OF: DOCKET NUMBER: BC-2012-04817 COUNSEL: NONE HEARING DESIRED: NO ________________________________________________________________ APPLICANT REQUESTS THAT: His daughter be removed as a beneficiary of his Survivor Benefit Plan (SBP). ________________________________________________________________ APPLICANT CONTENDS THAT: His daughter requires constant supervision for her disability and now receives financial support from federal and state funds. He has learned that should she receive funds from his SBP, she would no longer qualify for these resources, leaving her without the care she needs. He was not informed of the negative benefit designating her as a beneficiary would have on the entitlements his disabled daughter would be otherwise qualified. The applicant's complete submission is at Exhibit A. ________________________________________________________________ STATEMENT OF FACTS: Data extracted from the Air Force advisory shows the applicant retired on 31 July 1975. The remaining relevant facts pertaining to this application are contained in the letter prepared by the appropriate office of primary responsibility, which is attached at Exhibit B. ________________________________________________________________ AIR FORCE EVALUATION: AFPC/DPFFF recommends approval. The applicant who was married and had a dependent child, elected spouse and child coverage based on a reduced level of retired pay prior to his retirement. Title 10 USC Section 1447 (11) states that an eligible child is a person who is incapable of self-support because of a mental or physical incapacity that existed before their 18th birthday. If a member elects child coverage in conjunction with an election for the spouse, or elects child only coverage, the SBP annuity may be paid to the disabled child’s conservator or trustee, but cannot be paid to a special needs trust. In addition, various income tests used by the Social Security Administration and other federal and state agencies to determine eligibility benefits for disabled children do not exempt SBP payments. The applicant contends he was not fully briefed that SBP for a disabled child would be subject to integration with other benefits has some merit. This complex situation is not common and there is no evidence the matter was routinely reflected on material used by SBP counselors or provided to retiring members until after 2000. The integration and possible negative impact caused by SBP annuity payments for children who are entitled to other federal and state disability benefits have been discussed by the Office of the Assistant Secretary of Defense Joint board. The Services’ representative supports legislative changes that would eliminate the integration, or exempt SBP payments from any means test. However, there has not yet been a change that would provide such relief. The complete DPFFF evaluation is at Exhibit B. ________________________________________________________________ APPLICANT'S REVIEW OF AIR FORCE EVALUATION: A copy of the Air Force evaluation was forwarded to the applicant on 14 December 2012, for review and comment within 30 days (Exhibit C). As of this date, this office has received no response. ________________________________________________________________ THE BOARD CONCLUDES THAT: 1. The applicant has exhausted all remedies provided by existing law or regulations. 2. The application was timely filed. 3. Sufficient relevant evidence has been presented to demonstrate the existence of an injustice. After a thorough review of the evidence, we believe corrective action is warranted. The record clearly indicates the applicant was not counseled regarding the effect of listing his daughter as a beneficiary of his SPB annuity. Additionally, AFPC/DPFFF has also confirmed this was a systemic problem as members who retired prior to 2000 were not routinely counseled on the negative impact caused by SBP annuity payments for disabled children who are entitled to other federal and state disability benefits. Based on the aforementioned, the Board recommends the applicant’s records be corrected as indicated below. THE BOARD DETERMINES THAT: The pertinent military records of the Department of the Air Force relating to APPLICANT, be corrected to show that on 1 August 1975, he elected spouse only coverage, rather than spouse and child coverage, under the Survivor Benefit Plan (SBP) based on the previous reduced level of retired pay. ________________________________________________________________ The following members of the Board considered AFBCMR Docket Number BC-2012-04817 in Executive Session on 17 June 2013, under the provisions of AFI 36-2603: Panel Chair Member Member All members voted to correct the record, as recommended. The following documentary evidence was considered: Exhibit A. DD Form 149, dated 8 Oct 12. Exhibit B. Letter, AFPC/DPFFF, dated 28 Nov 12. Exhibit C. Letter, SAF/MRBR, dated 14 Dec 12.