Divorce, Military Retired Pay and Disability

When a divorce involves a Military Service Member, it may also involve a military pension called Military Retired Pay.  I am often asked if a Military Pension is divisible in divorce.  the short answer is that it is divisible but must be treated carefully based on its unique features.

 

In 1982 Congress passed the Uniformed Services Former Spouse Protection Act (USFSPA) , which allows state courts to treat disposable retired pay either as property solely of the member, or as property of the member and his spouse in accordance with the laws of the state court.  The USFSPA makes military pensions subject to property division in the same way a civilian pension would be. Until the 2017 rule changes, the USFSPA allowed state courts to split retired pay 50/50 based on the value of that military pension at the time of retirement. 

 

Generally, under Minnesota law, the Retired Pay is divided based on the number of years of marriage during which the Military Retired pay accrued.  For a simple example, if the miliary member had 22 years of creditable service and was married to his spouse for ten of those years, the portion of the Military retired pay that is divided is 10/22. Additionally, the percentage is applied to the miliary retired pay that reflects the rank of the military member at the time of the divorce.  As a result, if the military member was a first lieutenant at the time of divorce, the fraction of 10/22 would be applied to Military retired Pay at a Second Lieutenant's pay.  If the military member continues their service and becomes a Captain, they would receive the greater pay that is associated with that rank. 

If the divorced spouse was married to the service member for at least 10 years of the member’s creditable military service, the former spouse may be paid directly from DFAS. Direct payment does not happen automatically. It must be incorporated into the state court order dividing the retired pay in the divorce. If the couple was married ess than 10 years, the service member is responsible for paying his/her former spouse as directed by the state court order. 

 

While Military Retired Pay is divisible in divorce, VA disability payments are not.  This is important because unless a retired service member qualifies for concurrent pay pursuant to 10 U.S.C. § 1414(a)(1) , a service member cannot receive both disability pay and retirement pay. As a result,  service members may waive retirement pay in order to receive disability pay.  Whan a disabled service members decides to “convert” their retirement pay to disability pay, the amount of retirement pay received by the former spouse of the service member generally is reduced and a trial court enter an order prohibiting a service member from converting retirement pay to disability.

 

Since the Court cannot divide VA Disability that is converted from Military Retired pay, it is important to indicate in any stipulated divorce agreement that any spousal maintenance (alimony) stipulations are based on the division of military retired pay as stated on the decree.  That is because  a court can consider disability payments as income for purposes of child support and spousal support.   It provides the non-military spouse with a potential option should military retired pay be reduced by being converted to disability.