Military Benefits for Former Spouses: Legislation and Policy Issues

In 1981, the Supreme Court ruled that the former spouse of a military member or retiree could not be awarded any share of that membersretirees retired pay as a part of a divorce property settlement in a community property state. In response, Congress enacted the Uniformed Services Former Spouses Protection Act USFSPA in 1982. Under the USFSPA, state courts can treat disposable military retired pay as divisible property in divorce cases. However, state laws may vary on these concepts. The USFSPA makes no assumption of such a division nor does it presume how much of a division should be made. In addition to possible receipt of retired pay, certain former spouses would remain eligible to receive certain military benefits or privileges. The USFSPA has since been modified on a number of occasions. Confusion exists over the distinction of disposable versus total retired pay. The usage of the term disposable retired pay may have implications in terms of taxes withheld and taxes paid. In addition, recent changes in other laws that affect the concurrent receipt of military retired pay and veteran disability pay may affect the amount of retired pay a former spouse receives. In other situations, later career and financial decisions made by military retirees may affect the availability of their retired pay. For example, military retirees who take federal civilian jobs and then retire from those jobs can waive their military retired pay and credit their military time to their civilian careers. In so doing, they eliminate their military retired pay, and thereby any share that might have been awarded to the former spouse.