Divorce, retired pay and VA benefits

Retired pay can be divided, but only the disposable part

A federal law, the Uniformed Services Former Spouses' Protection Act (USFSPA), is codified at 10 U.S.C. 1408. It says a state court may treat "disposable retired pay" as property of the member alone or as property of the member and spouse, following that state's law. It does not say the court must divide it.

The court also needs jurisdiction over the member. The statute lists three ways: residence (other than because of a military assignment), domicile in the court's territory, or consent.

The statute also says a court is not authorized to order a member to retire at a particular time.

The court divides disposable retired pay, not the gross number. The statute starts with total monthly retired pay and subtracts certain amounts. Among them:

• Amounts you must give up (waive) by law in order to receive VA disability compensation.
• For a disability retiree, the part of retired pay set by the disability percentage under chapter 61.
• Certain debts and recoupments.
• A Survivor Benefit Plan annuity you elect for a former spouse under a court order.

DoD's USFSPA page says a percentage award is treated as a percentage of disposable retired pay. It also says a law change in the 2017 defense bill altered how disposable pay is figured for some orders made final before retirement (divorces after December 23, 2016). I did not read that detail, so ask your lawyer.

The 10/10 rule is about who pays, not who gets

People call it the "10/10 rule." Under the statute, DFAS (the Defense Finance and Accounting Service) can make direct payments of a property division only if the former spouse was married to the member for 10 years or more, and that marriage overlapped at least 10 years of the member's creditable service. DoD's page says this does not apply to child support or alimony enforcement.

If you miss 10/10, a court can still award a share of retired pay. It just means DFAS will not pay it directly. The statute says the member is still liable for required payments and unpaid amounts may be enforced by other means, so ask your lawyer how.

When DFAS does pay directly, the statute caps total payments under property-division orders at 50 percent of disposable retired pay. DFAS also says that when a case includes both a USFSPA order and a child support or alimony garnishment under 42 U.S.C. 659, the limit can go up to 65 percent.

The former spouse applies to DFAS with the court order. DFAS lists a form, DD Form 2293, "Application for Former Spouse Payments from Retired Pay."

VA disability pay is not divisible like retired pay

If you waive retired pay to receive VA disability compensation, that waived amount is out of "disposable" pay. In Howell v. Howell, decided May 15, 2017, the U.S. Supreme Court held that a state court may not order a veteran to indemnify (pay back) a former spouse for the retired pay lost to that waiver. The court could not get around the rule by ordering the veteran to make up the difference.

The Court also said a family court can still take reduced pay into account when it figures spousal support, and a court dividing assets can consider the chance of a waiver. Child support and alimony can still be ordered under state law. A judge may look at your total finances, but what a judge actually does depends on your state and your case.

If you receive both retired pay and VA compensation, see CRDP and CRSC. They change how much retired pay you actually receive, so ask your lawyer how a decree written around them would work.

Former spouse SBP: watch one year

The Survivor Benefit Plan (SBP) pays a monthly annuity to a survivor after a retiree dies. After divorce, it does not follow the retired pay automatically. A decree that mentions SBP needs follow-through.

If a retiree is required by a court order or filed agreement to elect former spouse coverage and does not, the law treats the election as made when the military receives a written request from the former spouse plus the order. The statute says the request must come within one year of the date of the court order or filing involved. DFAS also says that if you are already retired, you must make a former spouse election within one year of the divorce decree.

I cover the plan itself on my SBP page.

Tell VA about the divorce

If you get VA disability compensation and have been paid at a higher rate for a spouse, report the divorce. VA says you can file a dependency claim online with a verified VA.gov account, or mail VA Form 21-686c (Application Request to Add and/or Remove Dependents). VA says you do not need to send documents to show you are divorced.

A former spouse is no longer a dependent. VA says if you do not report it and the higher payments keep coming, you will have an overpayment debt, and VA may withhold from future payments to recover it. See VA debt and overpayments.

If you remarry or add a new spouse or a child, the same dependency claim is how you ask VA to add them.

TRICARE and deployment

Health care for a former spouse. TRICARE says a former spouse can be eligible on their own under the "20-20-20 rule": the sponsor has at least 20 years of creditable service, the marriage lasted at least 20 years, and all 20 years of marriage overlap the service. A 20-20-15 version applies when only 15 years of marriage overlap the service. TRICARE says remarriage ends eligibility, even if the new marriage ends, unless the person is eligible through the new spouse. Contact DEERS right after the divorce is final.

If you are on active duty or recently were. Under the Servicemembers Civil Relief Act (50 U.S.C. 3932), if military duty materially affects your ability to appear in a civil case, including custody cases, a court must grant a stay of at least 90 days if you apply properly. The application needs a letter explaining how duty affects your ability to appear and a letter from your commander saying leave is not authorized. A stay is not a win. It only delays the case.

For a lease or interest rate relief see SCRA interest cap and lease exit.

What to ask a family-law attorney

• Have you handled military retired pay division in this state? Can you cite a case?
• Does my state court have jurisdiction over me under the residence, domicile or consent test?
• Does the marriage meet 10/10 for DFAS direct payment?
• How does the decree treat VA disability and any waiver, so it is not written in a way Howell forbids?
• Is the share a percentage of disposable pay or a fixed amount, and what happens to it if I retire later or get a higher rating?
• Does the decree address SBP for a former spouse, and who sends the request within one year?
• What happens to alimony or child support if my VA rating changes?
• If I am deployed, can we ask for a stay or an arrangement for custody?

For free or low-cost help see free legal help for veterans.

What I could not verify

• I could not open DFAS's "apply" page or the DD Form 2293 itself. I only saw the form's title and DFAS's description in search results. Get the current form and instructions from DFAS.
• I did not read the details of the 2017 defense bill change to how disposable pay is figured for some divorces. I only saw DoD say it exists.
• I did not verify the "effective service" steps for serving a court order on DFAS, or when payments start.
• I did not verify how any specific state applies Howell, or how a court may handle alimony after a rating change. That depends on your state.
• I did not check CHCBP (the temporary health plan) for former spouses.
• I gave no dollar amounts. Check current figures with DFAS and VA.