PHASE-OUT OF REDUCTION OF SURVIVOR BENEFIT PLAN SURVIVOR ANNUITIES BY AMOUNT OF DEPENDENCY AND INDEMNITY COMPENSATION.

SEC. 622. PHASE-OUT OF REDUCTION OF SURVIVOR BENEFIT PLAN SURVIVOR ANNUITIES BY AMOUNT OF DEPENDENCY AND INDEMNITY COMPENSATION. (a) Phase-out.—Subchapter II of chapter 73 of title 10, United States Code, is amended as follows: (1) In general.—In section 1450(c)(1)— (A) by striking “that the annuity otherwise payable under this section would exceed that compensation.” and inserting “calculated as follows:”; and (B) by adding at the end the following: “(A) During the period beginning on January 1, 2020, and ending on December 31, 2020, the amount that the annuity otherwise payable under this section would exceed such dependency and indemnity compensation. “(B) During the period beginning on January 1, 2021, and ending on December 31, 2021, the amount that the annuity otherwise payable under this section would exceed two-thirds of such dependency and indemnity compensation. “(C) During the period beginning on January 1, 2022, and ending on December 31, 2022, the amount that the annuity otherwise payable under this section would exceed one-third of such dependency and indemnity compensation. “(D) On and after January 1, 2023, the full amount of the annuity under this section.” . (2) Conforming amendment.—In section 1451(c)(2), by inserting “a portion (calculated under section 1450(c) of this title) of” before “the amount”. (b) [10 U.S.C. 1450 note] Prohibition on Retroactive Benefits.—No benefits may be paid to any person for any period before the effective date provided under subsection (f) by reason of the amendments made by subsection (a). (c) [10 U.S.C. 1450 note] Prohibition on Recoupment of Certain Amounts Previously Refunded to SBP Recipients.—A surviving spouse who is or has been in receipt of an annuity under the Survivor Benefit Plan under subchapter II of chapter 73 of title 10, United States Code, that is in effect before the effective date provided under subsection (f) and that is adjusted by reason of the amendments made by subsection (a) and who has received a refund of retired pay under section 1450(e) of title 10, United States Code, shall not be required to repay such refund to the United States. (d) Repeal of Authority for Optional Annuity for Dependent Children.—Section 1448(d)(2) of such title is amended— (1) by striking “Dependent children.—” and all that follows through “In the case of a member described in paragraph (1),” and inserting “Dependent children.—In the case of a member described in paragraph (1),”; and (2) by striking subparagraph (B). (e) [10 U.S.C. 1448 note] Restoration of Eligibility for Previously Eligible Spouses.—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 section 1448(d)(2)(B) of title 10, United States Code, as in effect on the day before the effective date provided under subsection (f). 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. (f) [10 U.S.C. 1448 note] Effective Date.—This section and the amendments made by this section shall take effect on the first day of the first month that begins after the date of the enactment of this Act, except subsections (d) and (e) of this section and the amendments made thereby shall take effect on January 1, 2023.