Divorce can be a complex and emotional process, but understanding how it affects your military retirement pay is crucial for your financial future. Military retirement pay for an ex-spouse can stop at the end of the divorce year in which the divorce is finalized.
In most cases, the divorce year is the year in which the divorce is finalized, not the year in which the divorce was filed. This means that if you get divorced in December, your ex-spouse's military retirement pay may continue through the following year.
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Federal Laws and Military Pension Assets
Federal laws apply to military pension assets, which can be divided during a divorce if specific requirements are met. In 1981, the Uniformed Services Former Spouse Protection Act was passed, allowing military pensions to be divided.
To qualify, you must meet one of the following requirements: you live in North Carolina, your primary residence is in North Carolina, or both spouses consent to jurisdiction. This law protects the military spouse's pension that was rightfully earned.
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The Uniformed Services Former Spouse Protection Act was amended in 2017, requiring states to only divide a portion of the military spouse's pension. This means only the amount of money a military spouse would receive on the day of their divorce is divisible, even if they earn more after the divorce.
A portion of the military spouse's pension is divisible, which includes adjustments for cost of living between the date of divorce and actual retirement. This means your military retirement pay for ex will stop at a certain amount, not the full amount you may earn in the future.
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Former Spouses' Protection and Direct Payment
The Uniformed Services Former Spouses' Protection Act (USFSPA) allows state courts to treat military retired pay as community property, but it doesn't create a federal right to any portion of the pay.
The USFSPA doesn't allow a state court to order a member to apply for retirement or specify a date of retirement. Unless court-ordered, remarriage of a former spouse won't stop the direct payment of retired pay as property.
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To qualify for direct payment, a former spouse must have been married to the member during at least 10 years of the member's service creditable for retired pay.
No more than 50 percent of a member's disposable retired pay will be sent as a direct payment, unless there are garnishments for alimony or child support, in which case up to 65 percent may be sent.
Disposable pay is generally defined as retired pay to which a member is entitled, less certain deductions, such as amounts owed to the United States for previous overpayments.
For divorces entered after 23 December 2016, the definition of disposable pay has changed, limiting it to the amount of retired pay to which the member would have been entitled on the date of the decree of divorce.
When more than one former spouse has been awarded a division of a member's retired pay, payment will be handled on a first-come, first-served basis.
Here's a summary of the key requirements for direct payment:
- Marriage to the member must have lasted at least 10 years during the member's service creditable for retired pay.
- No more than 50 percent of disposable retired pay will be sent, unless garnishments for alimony or child support apply.
- Disposable pay is defined as retired pay to which the member is entitled, less certain deductions.
- For divorces entered after 23 December 2016, the definition of disposable pay is limited to the amount of retired pay to which the member would have been entitled on the date of the decree of divorce.
Impact on Survivor Benefit Plan and Other Benefits
If a service member had elected SBP coverage for their spouse at the time of retirement, they can elect to continue that coverage for a former spouse after divorce. This election must be made within one year of the date of divorce.
A former spouse who remarries before age 55 loses SBP eligibility, but if the remarriage ends in death, divorce, or annulment, eligibility is reinstated. This is a crucial point to consider if you're planning to remarry.
The amount of SBP coverage for a former spouse will be no more than the amount of SBP coverage previously elected for the spouse. This means that if you had elected a lower level of coverage for your spouse, that's the amount that will be available to your former spouse.
If you've been ordered to elect SBP coverage for a former spouse, you must make that election within one year of the date of the divorce. Failure to do so will result in no coverage being established.
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Here are the key dates to keep in mind for SBP coverage:
- 1 year from the date of divorce: the retired service member and former spouse must request SBP coverage
- 1 year from the date of remarriage: the retired service member can request a change from former spouse to spouse coverage with the former spouse's written consent
- 90 days from the date of divorce: the former spouse must apply with DEERS for 20-20-20 status
Former spouse SBP coverage is generally irrevocable, but there are some exceptions, such as if the retired service member remarries and the former spouse gives their written consent for a change to spouse coverage.
The 10/10 Rule and Other Key Considerations
The 10/10 Rule affects only the manner of payment, not the eligibility to receive benefits. This means that even if you don't meet the 10/10 rule, you're still eligible to receive a portion of your ex-spouse's military retirement pension benefits.
The 10/10 rule is a specific guideline that determines how payments are made, not who is eligible. If you meet the 10/10 rule, the government will garnish the awarded amount from the retiree's benefit and deliver it to your ex-spouse.
The government will pay an ex-spouse directly if the couple was married for at least 10 years overlapping with at least 10 years of military service. This is a crucial factor in determining how payments are made, not who is eligible.
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The retiree is responsible for distributing the money to the ex-spouse as required by the divorce court order if the 10/10 rule is not met. This can be a complex process, so it's essential to understand the rules and regulations surrounding military retirement pay.
The 10/10 rule is a straightforward guideline that helps determine how payments are made, but it's essential to understand the nuances of military retirement pay to ensure you receive the benefits you're entitled to.
Conclusion and Next Steps
You've made it to the end of this article, and now you're probably wondering what's next. You can start by verifying your eligibility for military retirement pay by checking your DD Form 214.
The age of eligibility for military retirement pay is 60 years old, but you can retire earlier with a reduced benefit. This is known as a "Reduced Retirement Pay" option. Your years of service and final pay grade will determine the amount of your retirement benefit.
You can also start exploring your options for healthcare and other benefits through the Department of Veterans Affairs. This includes the Veterans Health Administration, which provides comprehensive healthcare services to eligible veterans.
Don't forget to review your Transition Assistance Program (TAP) counseling session notes, which can help guide your next steps. This will also give you a chance to review your military retirement pay estimate and any other benefits you may be eligible for.
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