Division of Military Disposable Retired Pay in Divorce Proceedings

In military divorces, there are often unique issues that must be considered, such as the division of military disposable retired pay. Under the federal Uniformed Services Former Spouse Protection Act (commonly referred to as “USFSPA”), Missouri courts are empowered to divide a service member's military disposable retired pay in divorce in the same manner as marital property. However, it’s important to understand that there are specific requirements associated with dividing these benefits when a couple parts ways, and they are not automatically available in every military divorce.

Key Takeaways

• Military disposable retired pay is treated as marital property and can be divided in a Missouri divorce.
• A court can award any percentage of military disposable retired in divorce pay up to 100%. However, the DFAS will only pay a spouse directly up to 50%.
• A court can award military disposable retired pay in divorce even if the “10/10” rule is not met. In such cases, the DFAS would not make direct payments and the servicemember would be responsible for forwarding payments to the former spouse.

What is Military Disposable Retired Pay?

Military disposable retired pay is monthly retirement payment for military members, minus certain deductions. Specifically, disposable retired pay is the reduced amount of the pension earned after mandatory deductions are taken out, including federal taxes, VA disability waivers, court martial forfeitures, and Survivor Benefit Plan premiums. This pay is treated as marital property in divorce, similar to a civilian pension. Benefits are paid to a servicemember monthly through the Defense Finance and Accounting Service (DFAS).

When Can Disposable Retired Pay Be Awarded in Divorce?

Military disposable retired pay can be distributed as marital property in divorce upon agreement between the spouses or a court order awarding these benefits. A spouse must have served 10 years of creditable service during a 10-year marriage for a former spouse to receive payments from DFAS. This is referred to as the “10/10” rule, meaning the marriage must have overlapped with at least 10 years of military service for the former spouse to receive these benefits through the DFAS.

If the “10/10” rule is not met, a court can still award a portion of military disposable retired pay in divorce as marital property. However, DFAS will not make direct payments in these cases. The servicemember would be required to forward the spouse’s share each month, in accordance with the court order.

Notably, in all cases where a servicemember is on active duty at the time of divorce, their rights under the Soldiers and Sailors Civil Relief Act must be adhered to. This federal law protects servicemembers on active duty from default judgments during divorce. It also ensures they receive proper notice to respond to any court actions in order to prevent an unfair division of property and automatic loss of disposable retired pay.

How Much Disposable Retired Pay Can a Spouse Be Awarded in Divorce?

A court can award any percentage of the military disposable retired pay in divorce, all the way up to the full amount. However, only awards of 50% or less can be enforced by the Defense Finance and Accounting Service. In other words, if an application is properly made, the DFAS will withhold and pay directly to the former spouse their award of the disposable retired pay up to 50%. This ensures that the former spouse will receive the portion of the pay that was awarded to them. Anything in excess of half would be the servicemember’s responsibility to pay to the former spouse.

Under Missouri law, a division of property must be expressed as either a percentage or a fixed amount. However, it’s essential to be aware that cost of living increases are only paid out for awards that are expressed as a percentage. Formulas may also be used to divide property, but the court order must include all the elements of the formula in order for it to be valid. Importantly, if the service member is a reservist, the court order must include the "points" that the service member earned during the marriage.

Since disposable retired pay is a federal government entitlement and not a pension plan, the rules of the Employee Retirement Income Security Act (ERISA) do not apply in divorce, and a Qualified Relations Domestic Order is not required for division. Instead, a Military Retirement Pay Order is used to divide these benefits.

When Do Disposable Retired Pay Payments Begin?

Payments under the USFSPA begin within 90 days of the member's entry on the retirement rolls. However, reservists are not eligible to begin receiving the retired pay until they reach the age of 60. Payments continue until the death of either party or remarriage of the former spouse. If the servicemember passes away before the former spouse, the former spouse may then be entitled to income from the Survivor Benefit Plan.

Contact an Experienced Missouri Military Divorce Attorney

If you or your spouse is a servicemember and you are considering parting ways, it’s crucial to have a skillful divorce attorney by your side who understands the nuances of military disposable retired pay in divorce. Divorce and family law attorney Mark A. Wortman is dedicated to providing trusted representation to servicemembers and military spouses facing divorce or family law matters in the greater Kansas City, Missouri area. Schedule a confidential consultation to learn how attorney Mark A. Wortman can help by contacting Mark online or calling (816) 523-6100.