Tuesday, January 10, 2023
Director of Acquisitions & Staff Reporter (2022-2023)
Although divorce is not exclusive to any single group of people in the United States, veterans are 60% more likely than civilians to divorce.¹ On top of this, approximately 1.5 million veterans call Texas home.² Considering the large population of veterans in our state and the higher rate of divorce within this population, it is important to understand how service-connected benefits and retirement pensions may and may not be divided between spouses who file for divorce in Texas.
As with most issues in the realm of family law, divorce is governed by state laws and is finalized by state courts.³ Despite this, military benefits, such as disability payments and retirement pensions, are governed by federal law. Here, we will examine what federal law says about what state courts can and cannot do with the division of military benefits, including retirement payments, in a divorce.
In divorces concerning retired servicemembers and disability payments from the Department of Veterans Affairs (VA) concerning service-connected disabilities, the governing federal laws include Chapter 61 of the United States Code and the Uniformed Services Former Spouses Protection Act (USFSPA).
Chapter 61, Medical Retirement, and VA Benefits
Simply, Chapter 61 governs medical retirements for both permanent and temporary disabilities resulting from service.⁴ Oftentimes, “Chapter 61” and medical retirement are used when discussing servicemember disability, causing confusion for people attempting to navigate through the laws and regulations. Understand that these terms mean the same thing—a servicemember separated from active duty service on the grounds of a medical disability that is either permanent or temporary falls under Chapter 61 because it is a medical retirement.⁵ Federal law explains that servicemembers who are medically retired with a 30% or higher disability rating and servicemembers who are on the Temporary Disabled Retirement List may be entitled to retirement pay.⁶
Pensions received for retirement, including medical retirement, may be divisible upon divorce if a court determines such payment amounts are community property.⁷ Benefits received through a disability rating from the VA, however, cannot be treated as community property and is considered the separate property of the retiree.⁸ If you receive concurrent benefits (meaning both military retirement pay and VA disability benefits), this distinction is important to keep in mind when considering what can and cannot be divided during divorce.
The payments received for disability from the VA are not taxed by the federal government.⁹ Military disability retirement pay may be taxed depending on whether you are part of the Survivor’s Benefits Plan.¹⁰ Payments from the VA are separate from the retirement payment a servicemember receives under Chapter 61 or from retirement due to age or length of service.
As stated above, disability payments from the VA are not subject to division by a court in a divorce.¹¹ This means that a divorce court cannot identify your disability payments as community property and include it in the division between divorcing spouses. Though, in cases where the court determines amounts of alimony and/or child support, federal law does permit the court to use the amount of VA benefits received monthly in determining income to calculate payment amounts to children and former spouses.¹²
“Regular” Retirement: Non-Medical Retirement Based on Age or Length of Service
The Uniform Services Former Spouses Protection Act (USFSPA), enacted in 1982, governs pensions paid to retired servicemembers and how a court may use the pension amounts in a civil case.¹³ Servicemembers are eligible for military retirement pay if the servicemember served for twenty years or more on active duty.¹⁴
Under the USFSPA, a court may treat retirement pay as community property in a divorce between a retired servicemember and their spouse.¹⁵ This means that a court could categorize a servicemember’s retirement pay as property subject to division between the divorcing spouses, although the court does not have to.¹⁶ The possible apportionment of a servicemember’s retirement pay to a former spouse may be based on what is known as the 10/10 Rule, found within the USFSPA.¹⁷ The 10/10 Rule states that, for a spouse to receive payment directly from the Defense Finance Accounting Service (DFAS) after a divorce, the spouse and the servicemember must have been married for ten years or more, and the servicemember served for ten years or more while married.¹⁸
Another possible apportionment many individuals familiar with the military and military dependents have heard of is the 20/20/20 Rule. The 20/20/20 Rule allows a former spouse of a retired servicemember to retain TriCare medical insurance and access to base commissaries and exchanges if: (1) the former spouse and servicemember were married for twenty years or more; (2) the servicemember served for twenty years and is eligible for retired pay; and (3) the former spouse and servicemember were married for at least twenty years of the servicemember’s service.¹⁹ For spouses whose marriage to the servicemember spanned fifteen to nineteen years of the service, they are entitled to TriCare medical insurance for one year.²⁰
Active Duty Protections in a Divorce: The Servicemember’s Civil Relief Act
Divorces may happen before retirement or separation from the military. Under the Servicemember’s Civil Relief Act (SCRA), active duty members of the armed forces are protected from default judgments and may request a stay of proceedings in civil cases.²¹ A defendant who is serving in the military must have a court-appointed attorney and is entitled to a stay of default judgments for a minimum of 90 days.²² If the servicemember’s duty prevents their ability to appear in court, the court may also issue a stay of proceedings.²³ This means that the court cannot continue the proceedings without the defendant servicemember present until the period defined has ended.
Things to Remember
Divorce can be complicated by its nature, and the presence of military benefits or active duty service of one or both of the spouses adds additional challenges. If you are involved in a divorce and you are retired, disabled, or actively serving, keep these main points in mind:
Retirement payments may be considered community property, and a portion of those payments may be awarded to a former spouse.
Disability payments are not divisible in a divorce. Disability payments may be used in the calculation of income for determining child support and alimony amounts.
Active duty servicemembers are protected under the SCRA from default judgments and may stay civil proceedings, including divorces.
¹ Carson Frame, The VA is Teaching Intimacy Skills to Veterans to Try to Save their Marriages, The American Homefront Project (Dec. 9, 2019), https://americanhomefront.wunc.org/2019-12-09/the-va-is-teaching-intimacy-skills-to-veterans-to-try-to-save-their-marriages. ² Veteran Population: Texas, U.S. Department of Veterans Affairs (Sept. 7, 2022). https://www.va.gov/vetdata/veteran_population.asp. ³ This means that a state court, such as a Dallas District Court, will sign a Final Decree of Divorce, a document that states you and your spouse are no longer married. ⁴ 10 U.S.C. §§1201, 1202 ⁵ 10 U.S.C. §1201. ⁶ 10 U.S.C. §§1201(b)(3); 1202. ⁷ 10 U.S.C. §1408. ⁸ Id. ⁹ Federal Taxes on Veterans’ Disability or Military Retirement Pensions, U.S. Army (Jan. 2, 2022) https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Federal-Taxes-on-Veterans-Disability-or-Military-Retirement-Pensions?serv=122. ¹⁰ Id. ¹¹ 10 U.S.C. §1408. ¹² 10 U.S.C. §5301. ¹³ 10 U.S.C. §1408. ¹⁴ Federal Taxes on Veterans’ Disability or Military Retirement Pensions. ¹⁵ 10 U.S.C. §1408(c)(1). ¹⁶ Id. ¹⁷ The Uniformed Services Former Spouses Protection Act, Defense Finance and Accounting Service (Mar. 19, 2019), https://www.dfas.mil/Garnishment/usfspa/legal/. ¹⁸ Id. ¹⁹ Rights and Benefits of Divorced Spouses in the Military, Military OneSource (Mar. 26, 2020), https://www.militaryonesource.mil/family-relationships/relationships/relationship-challenges-and-divorce/rights-and-benefits-of-divorced-spouses-in-the-military/. ²⁰ Id. ²¹ 50 U.S.C. §§3931, 3932. A “default judgment” is when a court decides a matter in favor of the other party because you did not appear at the hearing. ²² 50 U.S.C. §3931(b)(2); (d). ²³ 50 U.S.C. §3932(b).