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Division of Retired Pay
The division of retired pay is usually one of the most important issues in any divorce. The Uniformed Services Former Spouses Protection Act (the “USFSPA”), is federal legislation that permits each state to devise is own regulations regarding the division of military retired pay in divorce cases. Virginia’s law on division of retired pay can be found at Virginia Code §20-107.3(G)(1). This section provides that a court may divide up to 50% of the marital share of any pension, profit sharing or deferred compensation plan or retirement benefits whether vested or non vested, military, civilian, or federal. For military servicemembers this division only applies to disposable retired pay, not disability pay. Disability pay is not divisible pursuant to federal law.
The “marital share” of retirement is determined by dividing the total number of months of marriage that occurred during service or employment prior to separation by the total number of months of service or employment. This means that any service or employment that occurred prior to marriage and/or after separation is not taken into account in the division of retirement pay. To put this into practical application, let's assume a married couple with military Lieutenant and her civilian husband decided to separate and divorce. The couple has been married for 15 years. Lieutenant joined the service 5 years prior to marrying her husband. She is currently retired and receiving $2000 in gross disposable retired pay per month. The maximum amount that a court can award husband would be determined by first determining the “marital share” of Lieutenant’s retired pay:
180 months of marriage (15 years) during service prior to separation
________________________________________________________ = .75 or 75%
240 total months of service (20 years)
Thus, 75% of the Lieutenant’s gross disposable retired pay is marital and subject to division by the court. The maximum amount that a court can award her husband is 50% of the marital share or 37.5% of her gross disposable retired pay equaling approximately $750 per month (50% x 75% = 37.5% x $2000 per month). Although this example is military specific, the same formula applies to all retired pay, military, civilian or federal.
Now, let's assume that the Lieutenant has been rated at a 20% disability and consequently receives 20% of her $2000 retired pay as disability pay or Veterans Administration pay (i.e. $1600 disposable retired pay, $400 VA disability pay). The same formula applies, however her husband is now only eligible to receive 37.5% of her disposable retired pay which does not include the 20% disability pay. The calculation would be as follows: $1600 x 37.5% = $600 per month.
Quite obviously, the receipt of disability pay can seriously affect the husband’s share of the retirement. There are ways to attempt to protect yourself from a decrease in retired pay due to disability claims. In addition, as a servicemember there are pitfalls that you will want to avoid to ensure that you can retain all of your disability benefits. There are also many more issues including direct payment from DFAS, Survivor Benefit Plans, concurrent receipt of retired and disability pay that can have a serious impact on retirement benefits without careful advising and drafting. Contact our office to set up a consultation with our experienced military divorce attorney to ensure that you have the information necessary to protect yourself.
This may be considered AN ADVERTISEMENT or Advertising Material under the Rules of Professional Conduct governing lawyers in Virginia. Case results depend upon a variety of factors unique to each case. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.