BOARD DATE: 31 January 2017 DOCKET NUMBER: AR20160012778 BOARD VOTE: ____X_____ ___X____ ____X____ GRANT FULL RELIEF ________ ________ ________ GRANT PARTIAL RELIEF ________ ________ ________ GRANT FORMAL HEARING ________ ________ ________ DENY APPLICATION 2 Enclosures 1. Board Determination/Recommendation 2. Evidence and Consideration BOARD DATE: 31 January 2017 DOCKET NUMBER: AR20160012778 BOARD DETERMINATION/RECOMMENDATION: The Board determined the evidence presented is sufficient to warrant a recommendation for relief. As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by showing the FSM made a written request to change his SBP election to spouse only coverage on 23 August 2013 and the request was accepted and processed by the appropriate office in a timely manner. _____________X____________ CHAIRPERSON I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case. BOARD DATE: 31 January 2017 DOCKET NUMBER: AR20160012778 THE BOARD CONSIDERED THE FOLLOWING EVIDENCE: 1. Application for correction of military records (with supporting documents provided, if any). 2. Military Personnel Records and advisory opinions (if any). THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE: 1. The applicant, the widow of a deceased former service member (FSM), requests correction of her late husband's records to show she is entitled to Survivor Benefit Plan (SBP) benefits. 2. The applicant states: a. The Defense Finance and Accounting Service (DFAS) received her late husband's DD Form 2656-6 (SBP Election Change Certificate) on 23 August 2011 with a copy of their marriage license. Presently, DFAS states only the marriage license was received on that date. b. In August 2011, her late husband completed the DD Form 2656-6 with the assistance of an official at the Office of the Staff Judge Advocate at Fort Jackson. c. During the next 5 years until the time of his death, DFAS continued to withhold SBP premiums from his retired pay, giving the FSM no reason to believe his DD Form 2656-6 had not been properly received by DFAS. d. It was the FSM's intent to add his wife as the SBP beneficiary. 3. The applicant provides: * fax cover sheet, dated 23 August 2011 (this document is not available for review) * FSM's DD Form 214 (Certificate of Release or Discharge from Active Duty) * letter from the FSM's former spouse to DFAS, dated 3 May 1999 * marriage license * former spouse's death certificate * DD Form 2656-6, dated 23 August 2011 * FSM's death certificate * certificate of appointment, dated 20 April 2015 * undated letter from DFAS to a Member of Congress * letter from DFAS to a Member of Congress, dated 21 March 2016 * letter from a Member of Congress to the Army Review Boards Agency, dated 16 September 2016 CONSIDERATION OF EVIDENCE: 1. Having prior active service, the FSM entered active duty on 4 June 1968. On an unknown date, he married S____. 2. DFAS records show he and S____ divorced on 18 May 1998. 3. He retired from the Regular Army on 31 March 1999 in the rank of colonel. 4. DFAS records show the FSM elected former spouse coverage for S____ at retirement. On 3 May 1999, S____ made a deemed election for SBP. 5. The FSM married the applicant on 30 April 2005. 6. DFAS records show former spouse coverage was effective until the death of S____ on 26 June 2011. At that time, the FSM's SBP account was suspended and reflected no beneficiary. 7. The applicant provided a DD Form 2656-6, dated 23 August 2011, showing: * the FSM had no SBP coverage * he requested a change in coverage based on his remarriage * he elected to resume the existing level of coverage for his new spouse 8. The FSM died on 4 January 2015. 9. A letter from DFAS to a Member of Congress, dated 21 March 2016, states: a. DFAS records indicate the FSM elected former spouse coverage for S____ at retirement with his date of divorce showing as 18 May 1998. The former spouse coverage was effective until the death of S____ on 26 June 2011. His SBP account then reflected no beneficiary. b. On 24 August 2011, DFAS received the FSM's certificate of marriage to the applicant, with a marriage date of 30 April 2005. However, there was no correspondence or SBP election change certificate from the FSM advising them to add the applicant to his SBP account. DFAS cannot make any changes to a retiree's SBP account without a DD Form 2656-6 or instructions in writing from the retiree. However, due to technician error, the applicant was added as a spouse beneficiary and the FSM paid SBP spouse premiums until his death on 4 January 2015. DFAS erroneously established an SBP annuity account for the applicant on 10 February 2015 with her SBP annuity in the amount of $4,026 per month. Her SBP account was suspended on 4 September 2015. c. On 9 March 2016, DFAS received the FSM's DD Form 2626-5 from the applicant; however, they cannot accept it as a valid form since it was not sent in by the FSM before his death. Upon review of the FSM's retired pay account, the applicant is not entitled to an SBP annuity since the FSM did not request adding her to his SBP account. d. On 17 April 2015, DFAS received notification from the Department of Veterans Affairs (VA) showing the applicant was retroactively awarded Dependency and Indemnity Compensation (DIC) with an effective date of 1 December 2014. In June 2015, DFAS placed the DIC award onto the applicant's SBP annuity account. Her DIC was in the amount of $1,254.19 per month. e. Public Law 92-425, enacted 21 September 1972, prohibits an annuitant from receiving the full amount of both an SBP annuity and DIC payable by the VA. An annuitant is entitled to either the amount of SBP that exceeds the DIC payable, or the DIC only if it is greater than the SBP. At this time, the law has not been changed to allow an annuitant to receive the full amount of SBP and DIC concurrently. The DIC is a non-taxable payment. The applicant's DIC entitlement was in the amount of $1,254.19 and was less than her SBP annuity of $4,026.00; therefore, her SBP annuity had been offset by the DIC, leaving an adjusted monthly SBP annuity of $2,771.81. f. Section 644 of the National Defense Authorization Act for Fiscal Year 2008 provides a Special Survivor Indemnity Allowance (SSIA). Under this legislation, annuitants entitled to a monthly SBP annuity and DIC from the VA will receive SSIA. The applicant's entitlement to SSIA began on 1 February 2015 in the amount of $200.00 per month. This entitlement was also suspended effective September 2015. g. Due to termination of the applicant's SBP annuity, she now has a debt in the amount of $27,908.63 for the period 5 January through 31 August 2015. She also has a second debt in the amount of $2,515.45 (partial SBP cost refund of $6,132.21, less DIC overpayment of $5,016.76, plus SSIA payments of $1,400.00) for overpayment of the SBP cost refund from 1 June 2011 through 31 December 2014, and SSIA payments she received for the period 1 February through 31 August 2015. The applicant's SBP annuity was established in error and since she was entitled to DIC, she received a partial SBP cost refund in the amount of $6,132.21. Now that she is no longer entitled to an SBP annuity, she must return the SBP cost refund in the amount of $6,132.21. As a result of revocation of her SBP annuity, she is entitled to a full SBP cost refund for the SBP premiums the FSM paid for spouse coverage from the 1-year anniversary of his marriage to the applicant until the date of his death. h. On 22 September 2015, DFAS received the applicant's waiver/remission of indebtedness application for her SBP annuity debt; however, the incorrect amount was on the form. The application should reflect the full amount of the debt, which is $27,908.63. On 28 September 2015, DFAS received the applicant's second application for the debt amount of $1,400.00 for the SSIA payments. Regrettably, this amount is also incorrect. This application should reflect the amount of $2,515.45. i. DFAS received the applicant's completed Claim for Unpaid Compensation of Deceased Member of the Uniformed Services on 22 April 2015. The Arrears of Pay (AOP) is a one-time payment and includes the unpaid compensation owed to the retiree at the time of the retiree's death. The applicant is the beneficiary of the one-time AOP payment. On 1 June 2015, a payment in the amount of $850.42 was issued to the applicant. This payment represents the FSM's military retired pay for the period 1-4 January 2015. The applicant received a second payment in the amount of $19,304.50 (SBP cost refund of $19,241.05, plus gross pay of $975.87, less allotment of $62.00, less AOP already paid of $850.42 (incorrect amount) for SBP premiums paid for the period 1 July 2011 through 4 January 2015. REFERENCES: Public Law 92-425, enacted 21 September 1972, established the SBP. The SBP provided that military members on active duty could elect to have their retired pay reduced to provide for an annuity after death to surviving dependents. DISCUSSION: 1. The FSM retired in 1999 and DFAS records show he elected former spouse SBP coverage. His former spouse died on 26 June 2011 and his SBP coverage was suspended. 2. The applicant requests correction of her late husband's records to show she is entitled to SBP benefits because he provided a DD Form 2656-6 and a copy of their marriage license to DFAS in August 2011 following the death of his former spouse. 3. Although DFAS contends they did not receive the FSM's DD Form 2656-6 in August 2011 and the form is invalid because it was not sent by the FSM before his death, they also concede error. A DFAS technician added the applicant as the spouse beneficiary. The FSM had no reason to believe there was a problem with his DD Form 2656-6 because DFAS began deducting spouse premiums and did so until his death on 4 January 2015. 4. It appears it is was the FSM's intention to provide the SBP annuity to the applicant. Therefore, it would be equitable to correct his records to show he requested SBP coverage for his spouse in a timely manner. //NOTHING FOLLOWS// ABCMR Record of Proceedings AR20150000953 Enclosure 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS ABCMR Record of Proceedings (cont) AR20160012778 2 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 1 ABCMR Record of Proceedings (cont) AR20160012778 5 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 2