U.S. Military (Ret.): Retirees should know ins and outs of USFSPA - Military Retirement - Navy Times

U.S. Military (Ret.): Retirees should know ins and outs of USFSPA

Now and then, I get an e-mail from a disabled veteran asking if disability pay is considered marital property that can be divided in divorce proceedings.

The short answer is no. Under federal law, tax-free disability is not marital property.

But as many retirees know, and as many new retirees quickly come to learn, regular military retirement pay is subject to division as marital property under the Uniformed Services Former Spouse Protection Act of 1982.

The USFSPA was intended to provide financial protection for certain former spouses of military retirees whose marriages ended in divorce.

When it was proposed, the legislation was strongly opposed by the executive branch, Civil Service Commission, the then-General Accounting Office, and most military associations and veterans organizations.

The opposition was based on a 1981 U.S. Supreme Court decision that said military retirement pay is “the personal entitlement of the retiree,” and applying community property principles to retirement pay “threatens grave harm to … federal interests.”

Several attempts have been made to revise the law. In 1998, Congress asked the Defense Department to study the issues and provide recommended changes.

Defense officials maintained an essentially neutral position and seemed to counterbalance recommended changes benefiting service members with similar changes to benefit former spouses. In the end, nothing changed.

Veterans groups maintain that the USFSPA is unlawful because military retirement pay is not a traditional pension, but rather “retainer pay” since military retirees remain subject to recall to federal service.

The courts have not seen it that way. In 2006, several veterans organizations and individuals filed suit in federal court to challenge the law, but lost.

The workings of the law are complex and explaining them would take a lot more space than I have here. But it’s in the interest of retirees, and soon-to-be retirees, to be aware of the law and its implications.

The USFSPA Liberation Support Group continues to press Congress on this issue, and its website, www.ulsg.org, has quite a bit of background on the law.

The Defense Finance and Accounting Service website also has information, including a fact sheet and a “frequently asked questions” link.

———

Retired Command Master Chief Alex Keenan served 28 years in the Coast Guard. E-mail him at retired@atpco.com.