Military Retirement Pay and Divorce
What follows is not legal advice. The information in the article below is current as of press time; however, laws and regulations are subject to change. Consult the laws in your local jurisdiction to determine what may apply in your specific circumstances. Always seek the advice of trained, licensed legal counsel.
Service members who get divorced face changes to their military benefits, housing allowance, and other financial aspects of military life. The divorcing dependent spouse also faces many changes, and there are many uncertainties that former military spouses face. One of the largest questions divorcing military spouses have involves money, specifically the military pension the service member earns after serving a sufficient amount of time in uniform.
A former spouse often asks, “Am I entitled to a share?” The law provides no simple answer. A former spouse has no automatic right to military retirement pay, but they may qualify to receive a portion of the service member’s retirement pay depending on circumstances.
What Federal Law Says About Divorce and Military Retirement Pay
Federal law allows state courts to consider military retirement pay a divisible asset; however, the final determination rests entirely with the state judge and the precise wording of the divorce decree.
Before 1982, military retirement pay was untouchable in a divorce. A Supreme Court ruling had classified it as the service member’s sole property. This created financial hardship for many long-term military spouses who had supported the member’s career. In response, Congress passed the Uniformed Services Former Spouses’ Protection Act (USFSPA).
This act did not create a new entitlement. It simply reversed the Supreme Court’s decision and empowered state divorce courts to treat military retirement pay as marital property, just like a house or a private 401(k). The USFSPA grants a state court the authority to act, but it does not dictate to the court what action to take. The decision to divide the pension, and how to do so, falls squarely under state law.
State Laws Matter
This means the laws of the state handling the divorce are the most powerful factor in the outcome. Each state defines marital property differently. Some are community property states where assets earned during the marriage are typically split evenly. Most are equitable distribution states, where a judge divides property in a way that they deem fair, which may not necessarily be an even split.
For a state court to even have this power, it must first have jurisdiction over the service member. A member cannot be forced into a state’s court system just because they are stationed there on military orders. They must either be a legal resident of that state or consent to the court’s jurisdiction. Without this, a court has no authority to touch the pension.
The language of the final, signed divorce decree is everything. If the decree does not contain a clause that explicitly awards a portion of the retired pay to the former spouse, then no entitlement exists. Vague wording causes problems. An order stating the spouse will receive “a reasonable amount” is unenforceable by the government. A proper order must state a specific figure, a clear percentage, or a formula.
Monetary Awards
For example, an order might award the former spouse “50% of the marital share of disposable retired pay,” and then define the marital share with a formula based on the months of marriage that overlap with the months of military service.
When a court does award a share, it can only divide what is legally known as “disposable retired pay.” This is a critical distinction. Disposable pay is not the gross amount a retiree sees on their statement. It is the gross pay minus several deductions.
The largest and most common deduction is for any money the retiree waives to receive tax-free disability pay from the Department of Veterans Affairs. Federal law shields VA disability payments from division in a divorce.
If a retiree has a 30% disability rating and waives $500 of retired pay to receive $500 in VA disability pay, that $500 is removed from the equation before the former spouse’s share is calculated. Other deductions include premiums for the Survivor Benefit Plan, which is an insurance-like annuity that can provide an income to a beneficiary after the retiree’s death.
Points of Confusion
A common point of confusion is the “10/10 Rule.” Many people mistakenly believe that this rule determines whether a former spouse can receive a share of a military retiree’s retirement pay. It does not.
The 10/10 Rule is an administrative guideline for the Defense Finance and Accounting Service (DFAS), the agency responsible for paying military retirees.
The rule states that if the marriage lasted at least 10 years, and those 10 years overlapped with at least 10 years of the member’s creditable military service, then DFAS can make direct payments to the former spouse. The court order is sent to DFAS, and they cut two separate checks each month, one to the retiree and one to the former spouse.
If the 10/10 Rule is not met, the court’s award is still valid. For example, a court can award a spouse a share of retirement pay after a nine-year marriage. In that case, DFAS will not be involved. The retiree is responsible for making the court-ordered payment directly to the former spouse on a monthly basis.
The entitlement comes from the state court’s order, not from meeting the 10/10 Rule. The rule only governs the payment method. It is essential to note that even when DFAS makes direct payments, it is legally limited to sending the former spouse no more than 50% of the member’s disposable retired pay.
According to the Defense Department, “for orders dividing retired pay as property to be enforced under the USFSPA, a member and former spouse must have been married to each other for 10 years or more during which the member performed at least 10 years of military service creditable towards retirement eligibility (the 10/10 rule).”
State Jurisdiction
According to the DoD, the state court must have had jurisdiction over the member by reason of one of the following:
1) The member’s residence in the territorial jurisdiction of the court (other than because of military assignment),
2) The member’s domicile in the territorial jurisdiction of the court, or
3) The member’s consent to the jurisdiction of the court.
4) The member indicates his or her consent to the court’s jurisdiction by taking some affirmative action in the legal proceeding.
The 10/10 rule and the jurisdictional requirement do not apply to the enforcement of child support or alimony awards under the USFSPA.
Survivor Benefit Plan Issues
Beyond retirement pay, a former spouse should consider the Survivor Benefit Plan (SBP). Retired pay stops entirely when the retiree dies. SBP is an annuity, paid for with premiums deducted from the retiree’s pay, that provides a continuing monthly payment to a chosen beneficiary after the retiree’s death. A court can order a service member to elect “former spouse coverage” as part of a divorce.
An SBP election must be made within one year of the divorce, or the option is lost forever. If the ex-spouse remarries before age 55, their SBP eligibility is suspended.
Some former spouses may be eligible to retain military benefits after divorce. The most comprehensive benefits come from the “20/20/20 Rule.” A former spouse who was married to the member for at least 20 years, while the member served at least 20 years, with at least 20 years of overlap between the two, is designated as a 20/20/20 spouse.
They retain lifetime TRICARE health coverage and can continue using the commissary and base exchange. A spouse who meets a similar “20/20/15 Rule” (with 15 years of overlap) can get one year of transitional TRICARE coverage. For all other spouses, their military ID card is turned in, and their benefits, including healthcare, end on the day the divorce is finalized.
About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
