Military Disability and Retirement Pay and Divorce:
US Supreme Court Overturns Arizona State Court
Rudy Lopez, j.d. (Legal information only; not advice)
On May 15, 2017 the United States Supreme Court decided Howell v. Howell 581 U. S. ____ (2017) in a unanimous decision. It confirmed that 10 U. S. C. §1408 expressly excludes ‘”disposable retired pay” amounts deducted from that pay “as a result of a waiver . . . required by law in order to receive”‘ disability benefits, §1408(a)(4)(B).
In other words “where a veteran waives retirement pay to receive service-related disability benefits, federal law preempts state courts from ordering the veteran to indemnify their divorced spouse for the loss of that spouse’s portion of the veteran’s retirement pay.” (Faegre Baker Daniels).
In its holding, the U.S. Supreme Court concluded 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 retirement pay caused by the veteran’s waiver of retirement pay to receive service-related disability benefits.” Howell v. Howell 581 U. S. ____ (2017).
The divorce decree between the Howell’s had ordered John to share half of his retirement pay with Sandra, John later opted to waive part of that retirement pay (on which he pays taxes) to instead receive disability benefits (which are not taxable), thereby reducing the money that Sandra received. The justices today ruled that John cannot be required to reimburse Sandra for the $125 per month that she no longer gets as a result of his choice. (Amy Howe, Opinion analysis).
Thirteen years after [their divorce], the Department of Veterans Affairs diagnosed John with a service-connected degenerative joint disease in his shoulder. The condition rendered him 20% disabled, and therefore entitled him to disability benefits. This money is untaxed, but also must be substituted out as a proportion out of his military retirement plan. Essentially, John gave up $250 of his $1,500 a month in retirement pay so that he could receive the same amount in disability benefits. His decision cost Sandra $125 a month, so she sued him in 2013 (Task & Purpose).
Justice Breyer acknowledged that the federal statute and today’s ruling could make things harder for former military spouses like Sandra. But he suggested that, going forward, state courts can try to account for the possibility that a veteran could later waive some part of retirement pay in favor of disability benefits, or they can recalculate spousal support based on later changes in circumstances. (Amy Howe).
Full Case can be read here.
Audio: oral argument and Justice Breyer’s Opinion can be heard here.
Rudy Lopez is a volunteer for the 03XX Foundation.