Military Divorce Series: Military Disability in Divorce

Military Disability in Divorce is the third installment of a 4 part series on the changes you need to know to stay up to date on the laws affecting military divorce, including military disability programs and related compensation. This information was presented by Janice Boback at the National Business Institute Continuing Legal Education for Professionals in July 2018.

Military Disability Programs for Military Retirees

Recent Laws Affecting Monetary Disability Benefits

A. Concurrent Retirement and Disability Pay (CRDP)

  • Regular retiree with a VA disability rating of 50 percent or greater.
  • Reserve retiree with 20 qualifying years of service, who has a VA disability rating of 50 percent or greater and has reached retirement age.
  • Retired under Temporary Early Retirement Act (TERA) and have a VA disability rating of 50 percent or greater.
  • Disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability, and you have a VA disability rating of 50 percent or greater. You may become eligible for CRDP when you would have become eligible for retired pay.

The retired pay for retirees with 50%-90% VA-rated disability is restored by the Concurrent Retirement and Disability Payments on a graduated schedule. Veterans with a 100% disabled rating by VA can claim full CRDP without necessarily having to be phased in.

B. Combat Related Special Compensation (CRSC)

  • Combat-related disabilities include:
  • Armed Conflict
  • Agent Orange
  • Hazardous Duty
  • Radiation Exposure
  • An Instrumentality of War
  • Gulf War
  • Simulated War
  • Mustard Gas or Lewisite

This military disability compensation is non-taxable, and retirees must apply to their Branch of Service to receive it. Combat-Related Special Compensation is paid by the Department of Defense under Title 10, U.S. Code.
To be eligible for CRSC:

  • be entitled to or receiving military retired pay
  • Have a disability rating of at least 10% by the Department of Veteran’s Affairs
  • Waiver of VA pay from retired pay
  • File an application with your branch of service

For a condition to qualify under CRSC, it does not have to be a DoD Disability, but it does have to qualify as a VA Disability. Even though the DoD is the one that gives CRSC, remember that the DoD amount was decreased by the conditions rated by the VA. As long as the VA rates the condition, the DoD shouldn’t decrease their amount because of that condition.

In addition to monthly CRSC payments, the Defense Finance and Accounting Services (DFAS) will audit the veteran’s account (research pay information from both DFAS and VA) and determine if they are eligible for a retroactive payment. If any money is due from DFAS, it will be received within 30–60 days of receipt of the first CRSC monthly payment. If a retroactive payment from the VA is also due, the audit will be forwarded to the VA who would be responsible for paying any money due from them. Retroactive payments may go back as far as June 1, 2003, and military disability retirees with less than 20 years of service will be automatically limited to a retroactive date of January 1, 2008.

C. Veterans Affairs (VA) Disability Compensation

D. Howell v. Howell and the Disposition of Military Retirement Pay in Divorce

  • Divorce Judgment Provided: John $750 + Sandra $750 = Total $1500
  • After Waiver: John $875 + Sandra $625 = Total $1500

Sandra went back to court to obtain an order that John had to compensate her for the loss of the $125 each month and the State Court agreed with her. John appealed and the U.S. Supreme Court unanimously reversed the State Court in May 2017.

The Court relied on Uniformed Services Former Spouses’ Protection Act (USFSPA), a 1982 federal law governing the disposition of military retirement pay in divorces, and the 1989 Supreme Court case [Mansell v Mansell, 490 US 581 (1989)] which interpreted the USFSPA.

In the Mansell case, Major Mansell and his wife, Gaye, were married for 23 years and were divorced in 1979 with each party receiving 50% of the military retirement pay. Major Mansell received both Air Force retirement pay and disability benefits. Major Mansell asked the California Court to modify his divorce judgment so that he did not have to share his disability benefits and the California Court denied his request. The U.S. Supreme Court reversed that judgment and held that the USFSPA exempted that portion of the retirement pay that a service member waived in order to receive disability benefits from the amount that is divisible in a divorce.

The USFSPA makes it clear that the state courts can divide up “disposable retired pay,” which is defined as the service member’s retired pay, minus any portion of that pay waived in favor of disability benefits. Therefore, USFSPA does not permit state courts to treat retirement pay that has been waived to receive veterans’ disability benefits as something that can be divided.

Through concurrent retirement and disability pay, retirees with a 50% or higher disability rating receive both 100% military retirement pay and VA disability pay. Ex-spouses in those cases will still be compensated at the same rate, while those with veteran ex-spouses with less could see up to half of their award taken away under the Supreme Court ruling.

Justice Stephen Bryer mentioned that the federal statute may make life difficult for former military spouses like Sandra. However, the Supreme Court does not have the jurisdiction to determine what is owed to a former spouse, that power lies with the state. He added that the lower courts could try to account for the possibility that a veteran may later waive a part of his or her retirement pay for disability benefits or recalculate spousal support based on later changes in circumstances.

Military divorce can be complicated especially when military disability pay is involved. If you have questions about military divorce or the unique aspects of military disability in a divorce, Anderson & Boback can help. Contact us today and let our military divorce expertise guide you through this complicated time.

THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/military-divorce/military-disability-in-divorce/

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