Dividing Veterans' Disposable Retired Pay
Howell v. Howell, ____ US ____, No. 15-1031 (Supreme Court, May 15, 2017) gives the family law practitioner, and the litigants, guidance as to future cases involving military retirement and the impact of potential elections on disability pay.
Uniformed Services Former Spouses Protection ActThe Uniformed Services Former Spouses' Protection Act allows States to treat veterans' "disposable retired pay" as community property that is divisible upon divorce, but allows certain exemptions, including amounts deducted from that pay as a result of a waiver, required by law to receive disability benefits.
Impact of HowellIn Howell, the divorce Decree awarded the Wife, Sandra, 50% of the Husband's future Air Force Retirement pay. Wife began to receive payments when the Husband, John, retired year following entry of the Decree. Approximately 13 years later, the Department of Veterans Affairs found that John was partially disabled due to an (earlier) service related injury. For John to receive disability pay, he had to give up an equivalent amount of retirement pay, per 38 U.S.C. Section 5305. By making the election, John gave up about $250 of his retirement pay, which also reduced his ex-wife Sandra's 50% share award. Sandra petitioned the Arizona family court to enforce the Decree, and restore the original value of her award. The Trial Court held that the original decree of divorce had given Sandra a vested interest in the pre-waiver amount of John's retirement pay, and ordered the Husband to ensure that Sandra would receive the full amount without regard to the disability waiver. The Arizona Supreme Court affirmed on appeal, holding that Federal law did not pre-empt the family court's order. The U.S. Supreme Court held that "a state court may not order a veteran to indemnify a divorced spouse for the loss in the divorced spouse's portion of the veteran's waiver of retirement pay to receive service related disability benefits."