In military divorce cases, Virginia courts are allowed by the federal Uniformed Services Former Spouses Protection Act (“USFSPA”) to award the servicemember’s former spouse a portion of the member’s “disposable retired pay.” The USFSPA excludes from the definition of disposable retired pay any disability pay the member receives. A member may receive one of two different types of disability pay, both of which are excluded from the USFSPA definition of disposable retired pay: (1) military disability retired pay and (2) VA disability compensation. For examples of how each type of disability pay can reduce disposable retired pay, visit our Military Disability Pay Examples page.
The exclusion of disability pay from disposable retired pay means that the former spouse may lose out on hundreds or thousands of dollars per month that he or she might otherwise have received in a division of the member’s retired pay. This can be avoided with proper planning by the former spouse and her attorney, who could seek to limit the danger to the spouse in one of two ways.
First, the spouse could negotiate a Property Settlement Agreement (PSA) with the member, with a provision that, in the event the member’s receipt of disability pay results in a reduction of the spouse’s share of retired pay, the member will make a payment to the member each month in the amount required to “make up” to the retired pay lost.
Such a PSA is enforceable under Virginia law, pursuant to a 1992 ruling of the Virginia Court of Appeals. In the case of Owen v. Owen, 14 Va. App. 623, 628, 419 S.E.2d 267, ___ (1992), the Court of Appeals held that a member and his former spouse
“…may use a property settlement agreement to guarantee a certain level of income by providing for alternative payments to compensate for a reduction in payment level based on a reduction in retirement benefits…. Such an arrangement does not offend the federal prohibition against a direct assignment of military disability pay by property settlement agreement.”
Second, in cases where the member refuses to enter into a PSA containing such a provision, the spouse and her attorney can simply ask the divorce court to retain jurisdiction to order the member to pay spousal support to the spouse. Then, at such time as the member receives disability pay that reduces the spouse’s share of retired pay, the spouse can ask the court to “make up the difference” by ordering the member to pay spousal support equal to the amount of retired pay she had lost.
Having a knowledgeable military divorce lawyer on your side is critical in this area, whether you are the member or the spouse. The military divorce attorneys at Livesay & Myers represent clients in Fredericksburg, Woodbridge, Fairfax, Stafford and Manassas, Virginia. Contact us and set up a consultation with a military divorce lawyer today.
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