Military Retirement Pay and Divorce: The Good, The Bad, and The Truth

The Uniformed Service Former Spouses’ Protection Act of 1982 (USFSPA) was designed to treat veterans’ “disposable retirement pay” as marital property contingent upon a divorce and by a court order. This is not as easy as it may sound, as there are certain qualifying factors that must be accounted for. Earlier this year, the United States Supreme Court overturned a ruling from a lower court regarding retirement pay in Howell v. Howell.

In this particular case, Mr. Howell, U.S Air Force enlistee, was to receive retirement pay upon exiting the military. He and his wife divorced in 1991, and Ms. Howell was awarded 50% of his retirement pay.  Mr. Howell retired in 1992 and both parties began to receive compensation the following year.  However, in 2005 the Department of Veteran Affairs awarded Mr. Howell disability pay due to a service-connected disability.

In order for Mr. Howell to receive this benefit, he had to sign a waiver that would allow the Department of Finance and Administration (DFAS) to deduct $255 from his monthly retirement pay in order to avoid “double dipping.” See Mansell v. Mansell, 490 U.S. 581. Signing the waiver was advantageous for Mr. Howell as retirement pay is taxable, and disability pay is nontaxable.  However, this mandatory deduction also meant that Ms. Howell’s retirement pay would reduce.

As a result, Ms. Howell petitioned the Court not only to enforce the Decree of Divorce, but also for all arrearages equaling reductions in her share of retirement pay. The family court ruled that the decree of divorce gave Ms. Howell a vested interest in the pre-waiver amount of Mr. Howell’s retirement pay. Ms. Howell was also awarded arrearages and Mr. Howell was held responsible for ensuring that Ms. Howell would receive 50% of his retirement with no regard to his disability benefit.

Mr. Howell appealed; and the Arizona Court of Appeals affirmed the decision of the lower Court.  However, certiorari was granted allowing this decision to be reviewed by the United States Supreme Court.

It was held that a State Court may not order Mr. Howell to indemnify (compensate for loss or harm) Ms. Howell for the loss in her portion of Mr. Howell’s retirement pay caused by the waiver of retirement pay to receive service-related disability benefits. Simplified meaning: the Court of Appeals’ decision was reversed.

Federal law pre-empts the States from treating waived military retirement pay as divisible community property.  Under USFSPA, when family courts consider the value of a veterans retirement pay to award spousal support, they also have the option to take into account that the veteran may at some point waive a portion of it.

For more information on this impact to military retirement pay and to read the entire decision of this case, you may view: Howell v. Howell, 137 S. Ct. 1400 (2017)

If you decide to petition the court regarding a divorce that includes military marital property, it would be beneficial to seek legal counsel from an experienced Arkansas family law attorney who will be able to assist you.

Tripcony, May & Associates provides services in child custody, visitation, divorce, grandparent rights, and other family law matters throughout the State of Arkansas.  They currently have two locations in Little Rock and Hot Springs, Arkansas. Please contact one of their offices for a free consultation at (501) 296-9999, between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday.

[avatar user=”lceasar” size=”thumbnail” align=”left” link=”file” /] About the Author:   LaTrenia A. Ceasar, MSLS, Freelance Writer, has been an employee at Tripcony, May & Associates since 2015.