Court gives widows green light to sue

By Tom Philpott

A U.S. Court of Federal Claims judge has given a green light to three military widows to sue the government for a combined $105,000 — the accumulated value of Survivor Benefit Plan (SBP) payments that, the widows contend, have been unlawfully withheld since Dec. 16, 2003.

In a 24-page opinion denying the government’s motion to dismiss the case, Judge George W. Miller found that both the facts and the law favor the widows and counter every legal argument raised by government attorneys.

If they win their case, hundreds of surviving spouses in the same category could be in line for hefty SBP repayments too.

That category is precise: surviving spouses who remarried at 57 or older and who have had their SBP cut or wiped out by their decision to accept Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs.

The lawsuit challenges how the Department of Defense has interpreted a provision of the Veterans Benefits Act of 2003 (Public Law 108-183).

The widows argue that Congress intended for them to be among the first small group of surviving military spouses deemed eligible for “concurrent receipt” of both SBP and DIC. In other words, they were to be the first of 44,000 dual-eligible widows to be exempt from the so-called SBP-DIC offset.

Under SBP, service members nearing retirement elect to pay a monthly premium so that, in case of their death, their surviving spouse or a dependent child continues to receive up to 55 percent of their annuity.

DIC, meanwhile, is a fixed amount of monthly compensation offered to families of 1) service members who die while on active duty or 2) military retirees who die of their service-related disabilities.

If a surviving spouse drawing SBP qualifies also for tax-free DIC, the law requires that taxable SBP be reduced dollar-for-dollar by DIC. Basic DIC is now $1,067 a month with extra amounts paid for each dependent child.

It’s important to understand that, until December 2003, DIC stopped for any surviving spouse who remarried. But the Veterans Benefits Act of 2003 modified that rule. It allowed DIC to continue, or be restored, if the surviving spouse remarried at 57 or older. This provision made more than 12,000 widows eligible again for DIC if they knew to apply for it.

But advocates for military widows said the same provision did more than that. “Paragraph B” was written so that it would shield these remarried widows, when their DIC was restored, from any reduction in SBP.

That intent was confirmed by members and staff of the House Veterans Affairs Committee interviewed by Military Update back in January 2004. Rep. Henry E. Brown Jr., then chairman of the personnel subcommittee, said weeks after the law was enacted:

“We put a special paragraph in there to, basically, get (DoD) to do that. This was to get the camel’s nose under the tent, sort of like we did with concurrent receipt’’ for disabled retirees.

Judge Miller referred to Brown’s quote in his opinion rejecting the dismissal motion though he relied on legal arguments for his actual opinion.

Despite protests from affected widows, Defense pay officials and lawyers declined in 2004 to interpret the law to allow concurrent receipt.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: