How are disability payments to a military veteran handled in a divorce proceeding?

How are disability payments to a military veteran handled in a divorce proceeding?

The federal Uniformed Services Former Spouses Protection Act (the “USFSPA”) permits divorce courts to award ex-spouses of service members part of “disposable retired pay” (the retired pay available (after necessary deductions) based on salary and years of service). How that’s divided is decided by an agreement between the parties or by the judge.

  • Under the USFSPA, military disability pay is not “disposable retired pay” and is not subject to division in divorce.
  • If a service member waives retired pay in order to get disability pay, an ex-spouse can lose out on hundreds or thousands of dollars which they might have received.

There are two kinds of military disability pay and both are excluded from the USFSPA definition of disposable retired pay:

  1. Military Disability Retired Pay: This is for those are disabled such that they can’t perform their military duties.
  2. VA Disability Compensation: This type of compensation from the Department of Veteran’s Affairs (VA) covers injuries or disabilities that occurred while on active duty, or which were made worse by active service, including service related (not necessarily combat related) mental or physical injuries.

To get these VA benefits, a service member must waive a certain amount of retired pay. If this is done, the amount waived is subtracted from the amount available to the former spouse.

Spouses can have some protections or take steps to get the maximum payments:

  1. If there is a separation or property agreement, it should include a provision stating if the service member waives any retired pay for disability pay, the service member would make a monthly payment to the non-military spouse in an amount that makes up for the lost retired pay.
  2. If there is no such agreement and the divorce issues are being litigated, the judge can be asked to retain jurisdiction to order the military member to pay spousal support in the future, or to modify an existing alimony order based on any change in the parties’ circumstances. If retired pay is reduced because of disability pay, the non-military ex-spouse could request the judge to order the military member to pay spousal support (or increase it) to make up for the retired pay that’s been lost.

 

Posted in: Divorce, Family Law, Military Divorce