Supreme Court Issues Groundbreaking Ruling On USFSPA

May 19, 2017

The Supreme Court issued a landmark ruling May 15 on military divorce law. The court's findings could have big implications for veterans and former spouses.

The case involves a controversial 1982 law, the Uniformed Services Former Spouse Protection Act (USFSPA). In the case of Howell v. Howell the Court ruled a state cannot divide military retired pay in a divorce where the former servicemember waives a portion of military retired pay in favor of VA disability compensation, even if it does so in the nature of an offset.

Delivering the opinion of the Court, Justice Stephen Breyer wrote, “Can the State subsequently increase, pro rata, the amount the divorced spouse receives each month from the veteran's retirement pay in order to indemnify the divorced spouse for the loss caused by the veteran's waiver? The question is complicated, but the answer is not. Our cases and the statute make clear that the answer to the indemnification question is 'no.' ”

USFSPA is a controversial law in the military community because it allows courts to treat military retired pay as property in the case of a divorce, but prohibits VA disability compensation from being treated as marital property. 

In the case, a family court granted the former spouse 50 percent of the servicemember's retirement pay. Years later, the retiree received a VA disability rating and waived a portion of military retired pay to receive the tax-free VA disability compensation instead. 

As a result, the servicemember's military retirement pay was reduced; the former spouse took the retiree to court to get her portion of that - in this case, $152 a month - back. 

Previously, a lower-level court in Arizona held that, even though the reduction in retired pay was the result of a VA disability, the retiree still had to pay the additional $152 per month to the former spouse. The court reasoned that the former spouse had a “vested interest” in the retired pay and had come to rely on the full amount.

In his opinion, Justice Breyer wrote, “State courts cannot 'vest' that which (under governing federal law) they lack the authority to give. … Accordingly, while the divorce decree might be said to 'vest' [the former spouse] with an immediate right to half of [the servicemember's] military retirement pay, that interest is, at most, contingent, depending for its amount on a subsequent condition: [the servicemember's] possible waiver of that pay.” 

During the oral argument, Chief Justice John Roberts also voiced skepticism of the plaintiff's request. Saying the order to pay the former spouse the reduced amount of retirement “makes a charade out of the statute,” that was clearly meant to protect VA disability pay from division in divorce proceedings. Roberts said, “That's the sort of thing that gives law a bad name.”

Prior to the Supreme Court deciding this case, various states had differing interpretations of the effect of a VA disability on the division of military retired pay. Some states, like Arizona, required military retirees to make up the difference to their former spouses, while some did not. Following this ruling, application of the USFSPA should be uniform across all states.

This case clearly illustrates the unfairness of reducing DoD retired pay for VA disability compensation. Retired pay is provided for a career of military service; VA disability compensation is given for a service-connected disability. MOAA believes a more equitable solution for all parties is to eliminate this offset entirely and allow for full concurrent receipt. Currently, only retirees with at least a 50-percent VA disability rating are entitled to receive both their full military retirement pay and VA disability compensation concurrently. Extending concurrent receipt to those with less than a 50-percent VA disability rating would prevent former spouses from receiving reduced benefits, as occurred in Howell.

To that end, Congress has introduced legislation to fix this inequity: Rep. Sanford Bishop's (R-Ga.) H.R. 333 and Sen. Heller's (R-Nev.) S. 66. Please send your elected officials a MOAA-suggested letter today.

 

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