Former spouse payments generally fall under the purview of the Uniformed Services Former Spouses’ Protection Act. The USFSPA, passed in 1981, covers two key factors. First, it authorizes (but does not require) state courts to divide military retired pay as a marital asset or as community property in a divorce proceeding. Secondly, it provides a mechanism for a former spouse to enforce retired pay as a property award by direct payments from the service member’s retired pay.
The biggest question regarding divorce and retirement concerns whether the former spouse will be receiving a portion of a Soldier’s retired pay.
There is no law or regulation that states a former spouse is entitled or authorized a portion of retired pay. Any portion of retired pay allowed to the former spouse is determined by the overall divorce agreement. That being said, judges in most jurisdictions allow 2.5 percent of retired pay per year of marriage.
Court orders enforceable under the USFSPA include final decrees of divorce, dissolution, annulment, legal separation and court-ordered property settlements incident to such decrees. The pertinent court order must provide for the payment of child support, alimony or retired pay as property to a former spouse.
It is critically important to have the court order written in such a manner that the Defense Finance and Accounting Service can calculate the former spouse’s portion of retired pay. One would assume that all attorneys know how to do this correctly. Unfortunately, this is not always the case.
DFAS has an excellent website with a specific page related to this subject at www.dfas.mil/garnishment.html. It is vital to ensure the attorneys write the divorce decree or court order correctly, otherwise DFAS may return the request without action. In these situations, claimants may have to go back to court and pay associated costs again.
“Retired pay” is also a misnomer. Former spouses, if awarded, receive a portion of “disposable” retired pay. Disposable retired pay is a member’s gross retired pay without authorized deductions. The authorized deductions vary based on the date of the parties’ divorce, but the current principal deductions include retired pay waived to receive VA disability compensation, disability retired pay and Survivor Benefit Plan premiums where the former spouse is elected as the beneficiary. This means that retired pay reduced by VA compensation equals a reduced amount of former spouse compensation.
Additionally, the National Defense Authorization Act of 2017 amended the definition of disposable pay in the USFSPA.
For divorces entered after Dec. 23, 2016 – in a case where the order becomes final prior to the member’s retirement – the military member’s disposable income is limited to “the amount of basic pay payable to the member for the member’s pay grade and years of service at the time of the court order,” and increased by the cost-of-living amounts granted to military retirees from the time of the divorce to the date the member retires. This is applicable only to divorces after Dec. 23, 2016.
You don’t know what you don’t know until you know it. This is especially true of this subject. Spend some time and effort and do the required due diligence to ensure you know what to expect.
Theodore Faulkner is the chief of the Personnel Processing Branch/Retirement Services Office that is located in Fort Campbell’s Soldier Support Center, 2702 Michigan Ave.