IN THE CASE OF: BOARD DATE: 27 January 2023 DOCKET NUMBER: AR20220003874 APPLICANT REQUESTS, through counsel: * correction of her deceased spouse's Survivor Benefit Plan (SBP) coverage from spouse to child only * a personal appearance hearing before the Board via video or telephone APPLICANT'S SUPPORTING DOCUMENT(S) CONSIDERED BY THE BOARD: * DD Form 149 (Application for Correction of Military Record under the Provisions of Title 10, U.S. Code, Section 1552) * Counsel memorandum (ABCMR [Army Board for Correction of Military Records] Appeal, (Service Member (SM)), Deceased, Annuitant 17 December 2021 with exhibits * Exhibit 1 – DD Form 1300 (Report of Casualty), 17 December 2012 * Exhibit 2 – DD Form 2656-7 (Verification for Survivor Annuity), 12 September 2012 * Exhibit 3 – State License and Certificate of Marriage, issued 16 October 2014 * Exhibit 4 – Defense Finance and Accounting Service (DFAS) Audit Worksheet, undated (two pages) * Exhibit 5 – DD Form 2656-7, 15 April 2021 * Exhibit 6 – Defense Office of Hearings and Appeals (DOHA) letter, 14 October 2021 * Exhibit 7 – U.S. Army Financial Management Command letter, 18 October 2021 * Applicant's State Birth Registration Certificate, issued 13 August 1975 * State License and Certificate for Marriage, issued 10 September 2012 * Department of State, Consular Report of Birth Abroad of a Citizen of the United States of America, 24 September 2003 * Superior Court - Order for Adult Name Change, 30 June 2015 FACTS: 1. The applicant did not file within the 3-year time frame provided in Title 10, U.S. Code, section 1552(b); however, the Army Board for Correction of Military Records (ABCMR) conducted a substantive review of this case and determined it is in the interest of justice to excuse the applicant's failure to timely file. 2. The applicant states her late husband's, the deceased SM, SBP annuity should be transferred to her biological daughter retroactively effective to the date that she remarried. After she remarried in October 2014, she contacted DFAS to transfer the annuity to her minor child. She believed that it had been done. DFAS made an error and did not provide her with an application for her minor child thus the benefits did not transfer. The DOHA granted partial relief. 3. Counsel's letter, 17 December 2021 states: On 8 August 2012, (SM) died from wounds received in battle (see exhibit 1). Shortly after his death, (Applicant now filed an application for the SBP and selected the spouse option (see exhibit 2). In October of 2014, (Applicant) remarried (see exhibit 3). The following month, (Applicant) contacted DFAS and explained that she remarried and as such, her SBP should be transferred to her minor child, daughter to SM. She was advised by DFAS over the phone to send in her marriage certificate and she did so in November of 2014. In January of 2015, (Applicant) noticed that the money she was receiving in her account for benefits had not changed. She again contacted DFAS to make sure that her benefits where being correctly allocated to her daughter. She was concerned because she did not want to receive an overpayment from DFAS. DFAS indicated that the benefits she was receiving were in her daughter's name and the account was correctly titled. In March of 2021, (Applicant's) benefits for her daughter abruptly ended and she was no longer receiving money into her account from DFAS or the Dependent Indemnity Compensation (DIC) she was receiving from the Department of Veterans Affairs (VA). She began to inquire with DFAS as to the reasoning for the benefit stoppage. In May of 2021, (Applicant) requested an audit of the SBP annuitant account and it is attached for the Board's review (see exhibit 4). The audit shows that when (Applicant) was not remarried, the SBP/DIC offset was in place, and as a result, she was receiving a reduced rate of survivor benefits, offset by the VA DIC. After she remarried, the benefits should have been transferred (sic) her daughter. This transfer would have eliminated the offset as her DIC receipt would not have offset her daughter's SBP. Therefore, the monthly benefit her daughter received should have increased and not stopped altogether. The audit shows that the amount of SBP entitlement for totaled $126,178.00, for a period of 1 October 2014 through 30 April 2021. The money (Applicant) was receiving from October 2014 until March of 2021 was actually DIC from the VA and not SBP. The audit further shows that in 2015, (Applicant's) account was closed. (Applicant) should have been given an application for SBP for her daughter when she contacted DFAS after she remarried; however, she was not provided this form, and this was not explained to her through any of her interactions with DFAS. (Applicant) filed an application on behalf of her daughter for SBP benefits in May of 2021 (see exhibit 5). However, her application was barred in accordance with the 6-year statute of limitations imposed by the Barring Act. As such, (Applicant) filed an appeal to the DOHA to request a waiver of the timeline in the Barring Act. The waiver was granted by the DOHA; however, in accordance with Title 31 U.S. Code, §3702 (e)(1) the amount of relief is limited to $25,000 by the Assistant Secretary of the Army (see exhibits 6 and 7). The ABCMR should rectify this injustice and correct the record to reflect that (Applicant's) contact with DFAS after she remarried was a constructive application for SBP benefits on behalf of her daughter, SBP benefits should be retroactively restored to her and she should continue to receive benefits as she is still in high school and plans to attend college. 4. The SM enlisted in the Regular Army on 18 August 1998. 5. The applicant provides: a. her marriage license and certificate showing she and the SM were married on 17 September 2000 and b. a Department of State, Consular Report of Birth Abroad of a Citizen of the United States of America, 24 September 2003 showing their daughter, was born in September 2003 at Landstuhl, Germany. 6. The DD Form 1300 (Report of Casualty) – Final Report, 17 December 2012, reported the death of the SM on 8 August 2012 as the result of hostilities in Afghanistan. Note: It shows this replaced Initial Report, 23 August 2012. 7. The applicant's DD Form 2656-7, 12 September 2012, verified her eligibility for an annuity under the SBP. It includes a "Spouse Statement of Desired SBP Election – Active Duty Death" document showing she placed on "X" by the statement: "Spouse. I understand that spouse SBP is offset dollar for dollar for spouse Dependency Indemnity Compensation I receive." She signed and dated this form with a counselor as witness on 12 September 2012. 8. The applicant provided her marriage license and certificate showing she married her current spouse, on 12 October 2014. She was age 39. 9. The applicant's DD Form 2656-7, 15 April 2021, verified her child's eligibility for an annuity under the SBP as the surviving child. 10. Defense Office of Hearings and Appeals (DOHA) letter (Claims Appeals Board Interlocutory Decision) letter 14 October 2021 states, in pertinent part (see attachment): a. This is in response to an Assistant Secretary of the Army (Financial Management and Comptroller) request that the Secretary of Defense waive the statute of limitations under Title 31, U.S. Code, subsection 3702 (e) (1) to allow payment of unpaid SBP benefit to the daughter of in the amount of $25,000. b. The service member was killed in the line of duty on 8 August 2012 and the widow elected to establish the SBP annuity for herself. The widow remarried on 12 October 2014 and informed DFAS of her change in martial status. DFAS did not receive a verification of survivor annuity on behalf of the daughter until April 2012. DFAS denied the SBP annuity claim. c. DFAS conducted an audit and determined the amount of SBP entitlement totaled $126,178.00 for the period 1 October 2014 through 30 April 2021. Citing the six-year statute of limitations imposed by the Barring Act to file the claim, DFAS barred payment of all monies. d. The authority of the Secretary of Defense to waive the aforesaid time limitations is exercised by the DOHA Claims Appeals Board pursuant to DoD Instruction 1340.21, paragraph E6.4 and DOHA Operating Instruction Number 71, paragraph 71. e. Pursuant to these authorities, the Claims Appeals Board waives the time limits imposed by 31 U.S.C., section 3702(b) with respect to the claim for the SBP annuity payments in the amount of $25,000.00 as set forth above. 11. U.S. Army Financial Management Command letter, 18 October 2021 informed the daughter, that the waiver to the time limitations in the Barring Act statute was approved and DFAS would release a payment. It further informed her of the right to apply for a possible change in military records to correct an error or injustice to this Board. 12. Counsel additionally provides: a. a copy of her birth registration certificate, 30 July 1975; b. a Superior Court Division Order for Adult Name Change, 30 June 2015 that changed her name because of marriage; and c. DFAS Audit Worksheet, undated (two pages) showing calculation regarding annuity pay as a result of an audit. 13. The email correspondence from a DFAS pay technician (Army Review Boards Agency Assistance), 14 November 2022, notes the SM died on 8 August 2012 while in the line of duty and does not have any retired pay records. DFAS database does contained letters from the spouse applying for SBP and then remarried prior to age 55. As a result, her annuity was suspended. The DFAS pay technician further noted the DFAS database contains the following documents: a. several internal DFAS emails regarding her SBP annuity; b. DD Form 1300 – Initial Report, 9 August 2012; c. a U.S. Army Human Resources Command letter to DFAS, (Line of Duty Determination), 10 August 2012, informing them that the SM died on 8 August 2012 as the result of hostile actions occurring in Afghanistan was "In Line of Duty"; d. a Spouse Statement of Desired SBP Election – Active Duty Death showing the applicant placed on "X" by the statement: "Spouse. I understand that spouse SBP is offset dollar for dollar for spouse Dependency Indemnity Compensation I receive." She signed and dated this form with a counselor as witness on 12 September 2012; e. DD Form 2656-7, 12 September 2019; f. a self-authored statement, 15 April 2021 informing DFAS of the SM's death, her remarriage, and her request to have her daughter to be deemed the beneficiary of the SM's SBP annuity; and g. DD Form 2656-7, 15 April 2021. 14. In correction with the processing of this case, an advisory opinion was obtained on 23 November 2022 from the Department of the Army Office of the Deputy of Chief of Staff, G-1, Director, Army Retirement Services who opined: a. Title 10, United States Code, section 1448(d)(1)(b), directs a surviving spouse annuity for a surviving spouse of a member who dies in the line of duty while on active duty. b. Title 10 United States Code Section 1448(d)(2)(a) directs dependent child(ren) annuity in the case where a surviving spouse dies, or otherwise becomes ineligible. c. Title 10 United States Code, Section 1447 defines a dependent child as a person who: (1) is unmarried; (2) is under 18 years of age, at least 18, but under 22 years of age and pursuing a full-time course of study or training in a high school, trade school, technical or vocational institute, junior college, college, university or comparable recognized educational institution or incapable of self-support because of a mental or physical incapacity existing before the person's eighteenth birthday or incurred on or after that birthday, but before the person's twenty-second birthday, while pursuing such a full-time course of study of training; and (3) is the child of a person to whom the Plan applies, including an adopted and a stepchild, foster child or recognized natural child who lived with that person in a regular parent-child relationship. d. Title 10 United States Code Section 1450(b)(2) terminates the spouse annuity upon death or remarriage before age 55. Paragraph 10c of DoDI [Department of Defense Instruction] 1332.42 [SBP] states that if there are eligible dependent children, the annuity shall be equally divided among them. e. DoD FMR [Financial Management Regulation] Volume 7B, Chapter 46, July 2011 did not prescribe a method to file a claim. A change to the June 2022 version states the following: Payment of an SBP or RC-SBP annuity is not automatic. Before any claim for an annuity can be considered, it is necessary for the claimant to submit a claim in writing. The claim must minimally contain a signature and an address. Before the annuity can be paid, the claimant must submit a DD Form 2656-7, "Verification for Survivor Annuity." The information of that form allows DFAS to verify information necessary to start annuity payments. f. According to the supporting documents included in the application, the applicant and surviving spouse of remarried at the age of 39 on October 12, 2014. This made her ineligible for the spouse SBP annuity. Their dependent child, was 11 years old and was an eligible child entitled to receive the child annuity when her mother remarried. g. According to the Claims Appeals Board Interlocutory Decision by the Department of Defense, Defense Office of Hearings and Appeals (DOHA): (1) The applicant and surviving spouse remarried on October 12, 2014, and informed the Defense Finance and Accounting Service (DFAS) of her change in marital status; (2) An annuity claim for the child annuity for dependent child, was not received by DFAS until April 2021; and (3) The Claims Appeals Board waived the time limits imposed by 31 U.S.C. [United States Code] Section 3702(b) with respect to the claim for the SBP annuity payments in the amount of $25,000.00. h. According to the Annuity Pay System [DFAS]: (1) The spouse annuity for was suspended in July 2015; (2) has a debt for an overpayment of the spouse SBP annuity from October 1, 2014 - June 30, 2015; and (3) There is a pending debt waiver request. i. After careful review, and in the interest of fairness, I support the applicant's request for the dependent child to receive the child SBP annuity until she becomes ineligible. 15. The applicant, through counsel, was provided a copy of this advisory opinion on or about 30 November 2022 for review and an opportunity to comment and/or submit a rebuttal. She, through her counsel, in a 14 December 2022 memorandum, concurred with the advisory opinion and noted the following comments: I further renew our assertion that the effective date of the SBP annuity is October 12, 2014, the date that remarried. _ notified DFAS in November of 2014 after the remarriage and requested the SBP benefits be transferred to her daughter at that time. This act should be construed as application for the annuity. DFAS erred when it failed to transfer those benefits. At the very least, when annuity was closed in 2015, DFAS should have discovered the error, contacted the family and opened annuity. The SBP amount should have been higher because SBP would not have been offset by DIC. As such, should be retroactively reimbursed for her survivor benefits. While Mrs. sought and was granted Interlocutory Relief by the DOHA for her daughter, up to the amount they are authorized, $25,000, the total amount of SBP annuity owed retroactive to October 12, 2014 far exceeds this amount. BOARD DISCUSSION: 1. After reviewing the application, all supporting documents, and the evidence found within the military record, the Board found relief is warranted. The Board found the available evidence sufficient to consider this case fully and fairly without a personal appearance by the applicant. 2. The Board concurred with the conclusion of the advisory official that the evidence supports relief in this case. The Board determined the record should be corrected to show the applicant submitted a timely request to initiate payment of the SBP annuity to her daughter. As a result of this correction the applicant’s daughter should be paid the SBP annuity retroactive to 12 October 2014, the date the applicant remarried. BOARD VOTE: Mbr 1 Mbr 2 Mbr 3 :X :X :X GRANT FULL RELIEF : : : GRANT PARTIAL RELIEF : : : GRANT FORMAL HEARING : : : DENY APPLICATION 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 applicant submitted a timely request to initiate payment of the SBP annuity to her daughter. As a result of this correction the applicant’s daughter should be paid the SBP annuity retroactive to 12 October 2014, the date the applicant remarried, less any portion of the annuity already received through other means. 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. REFERENCES: 1. Title 10, U.S. Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice. This provision of law also allows the ABCMR to excuse an applicant's failure to timely file within the 3-year statute of limitations if the ABCMR determines it would be in the interest of justice to do so. 2. Army Regulation 15-185 (Army Board for Correction of Military Records) prescribes the policies and procedures for correction of military records by the Secretary of the Army acting through the ABCMR. The ABCMR will decide cases on the evidence of record; it is not an investigative body. The ABCMR begins its consideration of each case with the presumption of administrative regularity. The applicant has the burden of proving an error or injustice by a preponderance of evidence. The ABCMR may, in its discretion, hold a hearing (sometimes referred to as an evidentiary hearing or an administrative hearing) or request additional evidence or opinions. Applicants do not have a right to a hearing before the ABCMR. The Director or the ABCMR may grant a formal hearing whenever justice requires. 3. Title 31, U.S. Code, section 3702, is the 6-year barring statute for payment of claims by the Government. In essence, if an individual brings a claim against the Government for monetary relief, the barring statute states the Government is only obligated to pay the individual 6 years in arrears from the date of approval of the claim. Attacks to the barring statute have resulted in litigation in the U.S. Court of Federal Claims. In the case of Pride versus the United States, the court held that the Boards for Correction of Military Records (BCMR) is not bound by the barring act. The BCMR decision creates a new entitlement to payment and the 6-year statute begins again. Payment is automatic and not discretionary when a BCMR decision creates an entitlement. 4. Title 10, U.S. Code, section 1447, defines "dependent child" as a person who is: (1) unmarried and (2) under 18 years of age, or at least 18 but under 22 years of age and pursuing a full-time course of study in a high school, college, or comparable recognized educational institution, or is incapable of self-support because of a mental or physical incapacity existing before the person's 18th birthday or incurred on or after the 18th birthday but before the 22nd birthday while pursuing a full time course of study or training; and (3) the child of a person to whom the plan applies, including an adopted child, a step or foster child, or a recognized natural child who lived with that person in a regular parent-child relationship. 5. Title 10, U.S. Code, section 1448(d)(2)(b), states that in the case of a member who dies on or after the date of enactment of the National Defense Authorization Act for Fiscal Year 2004, 24 November 2003, and for whom there is a surviving spouse eligible for an annuity under paragraph (1), the Secretary may pay an annuity to the member's dependent children, if applicable, instead of paying an annuity to the surviving spouse if the Secretary concerned, in consultation with the surviving spouse, determines it appropriate to provide an annuity for the dependent children instead of an annuity for the surviving spouse. 6. Title 10 U.S. Code, section 1450(b)(2) states the termination of spouse annuity upon death or remarriage before age 55. An annuity for a surviving spouse or former spouse shall be paid to the surviving spouse or former spouse while the surviving spouse or former spouse is living or, if the surviving spouse or former spouse remarries before reaching age 55, until the surviving spouse or former spouse remarries. 7. DoDI 1332.42, 30 December 2020 establishes policy, assigns responsibilities, and provides procedures for administration of the SBP Program; Reserve Component (RC) SBP (RC-SBP) Program; Special Survivor Indemnity Allowance (SSIA); and the SBP Advisory Group. a. Section 10 (Annuities), paragraph 10.1 (Annuities Payable to Survivors of Members who die In the Line of Duty) states the Secretary concerned will pay an immediate annuity of the survivors of a member who dies in the line of duty while serving on active duty on or after September 10, 2001. b. Section 10, paragraph 10.1(f) states in the event a spouse or former spouse annuitant remarries before age 55: (1) If there are eligible dependent children, the annuity will be divided equally among the eligible dependent children. (2) If there are no eligible dependent children, the annuity is suspended. However, the annuity may resume if the remarriage is terminated by death, annulment, or divorce. The effective day for either the suspension or resumption of the annuity is the first day of the month in which the event occurs. 8. Public Law 116-92, section 622 (Phase-out of Reduction of SBP Survivor Annuities by Amount of DIC), 20 December 2019, states the Secretary of the Military Department concerned shall restore annuity eligibility to any eligible surviving spouse who, in consultation with the Secretary, previously elected to transfer payment of such annuity to a surviving child or children under the provisions of Title 10, U.S. Code, section 1448(d)(2)(b), as in effect on the day before the effective date 1 January 2023. Such eligibility shall be restored whether or not payment to such child or children subsequently was terminated due to loss of dependent status or death. For the purposes of this subsection, an eligible spouse includes a spouse who was previously eligible for payment of such annuity and is not remarried, or remarried after having attained age 55, or whose second or subsequent marriage has been terminated by death, divorce, or annulment. 9. The Defense Finance and Accounting Service website: www.dfas.mil/retiredmilitary/ survivors/Understanding-SBP-DIC-SSIA/ provides guidance relating to SBP for Spouses and DIC Benefits from the Department of Veterans Affairs (VA). a. The DIC is a monetary benefit offered by the VA to survivors of SMs and retirees whose death results from a service-related injury or disease. (1) Spouse SBP annuitants, except for those who remarry after age 55 (or in other specific circumstances), cannot receive full SBP and DIC at the same time before 2023. Beginning in 2021, there are significant changes to the offset of SBP and DIC. (2) Please note: DIC payments made directly to children, or to a guardian on behalf of children, do not affect SBP child annuity payments. (3) In 2022 when DFAS is informed by the VA that a spouse annuitant is receiving DIC, the law requires that DFAS deduct one-third of the amount of DIC received from the amount of SBP payable and pay the remaining amount of the SBP to the annuitant. This is called the SBP/DIC offset. The reduction of the SBP/DIC offset from the full amount of DIC to one-third of DIC is effective 1 January 2022. (4) For example, in 2022, if an annuitant receives a monthly SBP annuity of $1,200 from DFAS and receives a monthly DIC award of $1,500 from the VA, DFAS will deduct one-third of the amount of DIC ($500) from the $1,200 SBP and pay the remaining $700 to the annuitant. The annuitant will continue receive the full amount of DIC from the VA (in this example $1,500). (5) On 1 January 2023, the offset will be completely eliminated. Eligible surviving spouses will receive their full SBP payments and their full DIC payments. (6) Please note the change in the law does not affect DIC payments, it only affects SBP payments when the surviving spouse is also receiving DIC. Please see the DFAS SBP/DIC news webpage for details and Frequently Asked Questions. (7) When a spouse is eligible to receive SBP and DIC, and those payments are subject to the SBP/DIC offset, the spouse will also receive the SSIA. b. The SSIA is a benefit for surviving spouses who receive an SBP annuity that is offset by a DIC payment from the VA. (1) In 2022, SSIA will be paid at up to $346 per month. Eligible survivors will continue to receive the SSIA, up to the maximum amount per month, or up to the gross amount of SBP (if the gross amount of SBP is less than the maximum amount) until 31 December 2022. SSIA will not be paid in 2023. (2) SSIA is not used to repay past-due SBP premiums. If the spouse annuitant is entitled to SSIA, DFAS will pay the SSIA, even when there are past-due premiums. (3) DIC payments to children do not affect SBP child annuitant payments, so child annuitants are not eligible to receive SSIA. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20220003874 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1