VA Survivor Benefit Plans and Special Needs Trusts

The VA’s Survivor Benefit Plan Program

The Survivor Benefit Plan (SBP) available through the Department of Veterans Affairs (VA) provides eligible beneficiaries with a monthly annuity payment for the lifetime of the beneficiary. The amount of the benefit is a percentage of the veteran’s retirement benefit. Election to participate in an SBP is generally made at the time of retirement, although some situations allow a retiree to add coverage after retirement.

Enrollment in an SBP plan is not automatic. In most cases, costs to participate are deducted from the retiree’s monthly pay and are based on the amount of coverage a retiree elects. Upon enrollment, the veteran will pay premiums for SBP coverage. In addition, retirees can leave the annuity payments only to eligible beneficiaries.

The most common election made by a retiree is for only his or her spouse to be covered based on full retirement pay. Retirees can also elect to cover his/her spouse and children. With this option, all children are covered in equal shares. An eligible dependent child under the plan must be:

  • The retiree’s legal child
  • Under the age of 18
  • If older than 18, enrolled in an accredited college or university. Children enrolled in higher education are eligible until they reach age 22 or leave school.
  • Unmarried

A retiree’s incapacitated or disabled children are eligible. An incapacitated or disabled child is defined as a child who is incapable of self-support because of a physical or mental disability which existed before the 18th birthday or which was incurred before age 22 while child was pursuing a full-time course of study.

Additional eligible beneficiaries include a former spouse, only the retiree’s children, a brother or sister, or a child who is beyond eligibility for child coverage.

Making SBP Benefits Payable to a Special Needs Trust

Amendments to the Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 (FY15 NDAA), Public Law 113-291, amended Title 10, U.S. Code, Sections 1448, 1450, and 1455 gave military members and retirees the option to direct payment of a SBP annuity benefit for a dependent child to a Special Needs Trust (SNT). A SNT is a legal instrument specifically designed for the benefit of a person with a disability. In many cases, directing SBP benefit payments to a SNT may preserve the beneficiary’s eligibility for other federal or state benefits based upon financial need, such as Section 8 Housing, Supplemental Security Income (SSI) and/or Medicaid.

To be eligible to elect the option to cover the SNT under SBP, the retiree must have previously elected Spouse and Child or Child Only coverage for a disabled child under the SBP. The retiree also must have established a SNT, and the trust must be certified by the drafting attorney.

If he or she is alive and had previously elected Spouse and Child or Child Only coverage under the SBP, the retiree may make the designation to direct payment on the behalf of a beneficiary to a SNT at any time. After the death of the retiree, any surviving parent, grandparent or court appointed legal guardian may make the designation on the behalf of a beneficiary.

It is important that retiree’s examine their child’s needs and how any additional income may impact them with and without a trust. There are attorneys who specialize in this area and are qualified in assisting you to explore your options.

Additional information may be found at visit, an official Department of Defense website.

For further information about VA Survivor Benefit Plans and Special Needs Trusts, see the attached paper prepared by Karen McIntyre, Manager, Veterans Information Services, Inc., 643 Springharbor Dr., Woodstock, GA 30188, Toll Free: 1-866-869-2777, Local: 770-591-0260, Fax: 1-866-512-9013, : VA Survivor Benefit Plans and Special Needs Trusts

For additional information concerning special needs trusts and disability planning, visit:
For additional information concerning VA compensation and pension benefits, visit:

UPDATED ON JANUARY 19, 2017: As stated above, the National Defense Authorization Act for fiscal 2015 allows retired military people to assign the Survivor Benefit Plan (monthly pension for dependents, which may apply to kids with special needs) to a special needs trust.   This is for those who are retiring and those who are already retired.  Those who are already retired can do a one-time change!  This means the monthly income goes directly to the SNT.

Here is the big news.   There is a special phone number for people wanting to do this:  1-877-353-6807.