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Chapter 12: Surviving Spouse Benefits

How a surviving spouse can use the VA Home Loan Benefit… and other surviving spouse benefits.

The United States Department of Veteran Affairs offers a variety of benefits to spouses, children, and parents of a service member who has died in active duty, or from an illness or injury sustained during active duty. The following is an overview on surviving spouse and dependent benefits.

VA Home Loans

The VA helps eligible surviving spouses finance the purchase of homes and to refinance their current homes, through the VA home loan guaranty benefit. The VA Loan Guaranty helps protect lenders from loss if the borrower is unable to repay the loan. The VA home loan benefit can be used to purchase or build a new home, purchase a condo, repair and improve a current home, refinance an existing loan, purchase a manufactured home, and install energy efficient systems such as solar, heating or cooling systems.
Current law now includes surviving spouses in the eligibility guidelines for a VA home loan, and the Veteran did not need to die in a service-related manner for the spouse to be eligible. This change in the law now includes a surviving spouse of a Veteran who was totally disabled and who was eligible for compensation prior to death, for any cause. In general, VA home loan eligibility for surviving spouses now includes the following:
  • If the Veteran died in service or from a service-related disability.
  • If the Veteran was a prisoner of war (POW) or missing in action (MIA) for at least 90 days.
  • If the Veteran was rated “continuously and totally” disabled and was eligible to receive disability compensation at the time of death. Or if the Veteran was disabled for ten years prior to death, or five years from date of discharge.
  • If the surviving spouse has not remarried.
For surviving spouses, eligibility is based upon a good credit rating, sufficient income, a valid COE and required occupancy. Home loans are provided through private lenders and mortgage companies, but the VA guarantees a portion of the loan allowing the lender to extend more favorable terms in the process. The surviving spouse can expect the following benefits from a VA home loan:
  • No VA funding fee.
  • As little as zero down on purchase loans up to $417,000 (more in some areas).
  • Up to 100% refinancing of assessed value.
  • No monthly mortgage insurance premiums.
  • Low interest rates.
  • No penalty for early pay off or balance reduction.
  • VA Streamline refinancing, even if ineligible for full VA home loan benefits.

Dependency and Indemnity Compensation

The Dependency and Indemnity Compensation (DIC) benefit is a tax free monetary benefit available monthly to the surviving spouse, children and parents of a service member who died in active duty or from an injury or illness sustained during active duty or during training for duty. Eligibility requirements must be met in order to receive DIC.

For the surviving spouse to be eligible, the couple should have been married and cohabiting together for at least one year or had a child together. A surviving spouse may also be eligible for DIC if the Veteran died in a way that was not related to his or her service, but had been receiving VA disability compensation for at least ten years preceding death. In addition, if the Veteran was receiving VA disability compensation for a minimum of five years after release from active duty, the surviving spouse may also be eligible for DIC. Finally, the surviving spouse must not currently be remarried; however, once reaching the age of fifty seven, they can remarry and continue to receive DIC.
The children of the deceased Veteran are also eligible to receive DIC as a monthly, surviving child benefit. The children must be unmarried. Those who are under the age of eighteen, and those between the ages of eighteen and twenty three and also attending school, are eligible for DIC. Children who were severely disabled under the age of eighteen, and who remain disabled as an adult, might also be entitled to survivor benefits under DIC.

Parents of the deceased Veteran may also be eligible for DIC if they were financially dependent on the service member. Biological, adoptive and foster parents are included in this category. The parents must also have an income below the minimum level established by law in order to receive monthly DIC.

Survivors Pension

The Survivors Pension is also known as the death pension. The Survivors Pension is a tax-free monetary benefit for the surviving spouse or surviving children of a deceased service member who served during a time of war. The surviving spouse must have an income below the level established by law and not be remarried. The surviving children must be unmarried. For the surviving spouse and the surviving children to receive the Survivors Pension, the deceased Veteran must have served at least 90 days of active service, with at least one day of war time service, and discharged under conditions other than dishonorable. After 1980, the deceased Veteran must have served at least twenty four months of active duty, with at least one day during a war time period, and discharged under conditions other than dishonorable. Children of the deceased Veteran can receive the Survivors Pension if they are under the age of eighteen, or between the ages of 18-23 if they are attending school. In addition, Children who were severely disabled under the age of eighteen, and who remain permanently disabled and incapable of self-support as an adult, are also eligible.

Dependents’ Educational Assistance Program (DEA)

The Dependents’ Educational Assistance (DEA) Program and the Marine Gunnery Sergeant John David Fry Scholarship are the two main GI Bill programs that offer educational assistance to survivors and dependents of Veterans.

DEA programs are available to surviving dependents of Veterans who died while on active duty or due to a service-related injury or illness. Surviving dependents of Veterans who are permanently disabled as a result of service-related injury or illness are also eligible. DEA programs provide education assistance and training opportunities paid directly to the student in the form of a monthly monetary benefit. The Fry Scholarship provides post 9-11 benefits to the children and surviving spouses of service members who died during active duty after September 10, 2001. The Fry Scholarship provides tuition and fee payments paid directly to the school that the dependent or surviving spouse is attending. Dependents may be eligible for more than one of these programs, but in most cases, will need to choose between the DEA program or the Fry Scholarship during the application process. The chart below compares the DEA program and the Fry Scholarship.

Benefit

DEA

Fry Scholarship

Payment
$1021 paid monthly directly to the student
Full in-state tuition at a public institution. Up to $21,085 at a private institution.
Books and supplies stipend up to $1000 paid directly to student for each term.
Monthly housing allowance paid directly to student.
Duration
For surviving spouses, benefit can be used up to 20 years following death of service member.
For surviving dependents, up to 15 years following death of service member.
Maximum # of months benefit can be used
45 months
36 months
DIC concurrent eligibility
Yes
Yes
Programs covered
  • College, Business, Technical, or Vocational Programs
  • Certification Tests
  • Apprenticeship/On-the-Job Training
  • Tutorial Assistance
  • Work-study
  • College, Business, Technical, or Vocational Programs
  • Certification Tests
  • Apprenticeship/On-the-Job Training
  • Vocational flight training
  • Tutorial Assistance
  • Work-study

CHAMPVA

The Civilian Health and Medical Program is a health care program administered by the Department of Veteran Affairs. With this program, the VA shares in the costs of health care services and supplies to eligible enrollees. CHAMPVA should not be confused with TriCare (formerly known as CHAMPUS) which is a managed health care program administered through the Department of Defense for active duty and retired service members and their spouses, families and survivors. To be eligible for CHAMPVA, you cannot be eligible for TriCare. CHAMPVA enrolls the spouse, surviving spouse who has not remarried, and children of a Veteran who is permanently and totally disabled or who has died from a service related disability.

In general, CHAMPVA benefits include most health care services that are medically and psychologically necessary. Prescription benefits are cost-free via Meds by Mail or with a 25% cost-share via OptumRx, a retail pharmacy network available nationwide.

Burial Benefits

Burial benefits are available for spouses, surviving spouses, and children of Veterans, even if they predecease the Veteran. Benefits include burial in a national cemetery with the Veteran, perpetual care of the gravesite, and inscription on the Veteran’s headstone, all at no cost to the family. Another way the VA helps with the financial strain and need to honor military members is by providing various burial benefits to families of service members and Veterans.

For assistance in using the VA home loan benefit as a surviving spouse, let So Cal VA Homes help. Call us at (949) 268-7742.

Call a Sr. VA Home Loan Technician today!

(949) 268-7742

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