Until 2014, for example, a dollar for dollar trade off existed between retired pay and disability pay. A service member or military veteran could agree to a division of retired pay in his or her divorce, but later decide to trade retired pay for VA disability pay. VA disability pay is not subject to division in a divorce, so suddenly the former spouse could be surprised by a dramatic reduction in her or his payments from DFAS. Congress fixed this in 2005 by allowing concurrent receipt of disability pay and retired pay ("CDRP"), so that the former spouse's military retirement benefits are not reduced by a disability pay election after divorce.
But not so fast. The law only applies to certain classes of military retirement recipients. The general rule is that the service member retiree must have at least 20 years of creditable service and a VA disability rating of at least 50%. If the service member retiree doesn't meet these criteria, this seemingly past minefield is still there, and pre-CDRP protective strategies used by the non-service member spouse during divorce will still be in play.
And there's more. Congress has also provided Combat-Related Special Compensation ("CRSC") for service members with at least a 10% disability directly related to the award of a Purple Heart, or to combat, operations, or hazardous duty. By statute it is not military pension pay, and it is not divisible as property. Neither is it compatible with CDRP, which stops upon receipt of CRSC, although any past-paid CDRP has to be given back.
This means that an eligible service member retiree can once again forestall what would otherwise be an award to an ex-spouse of a share of military pension earned during marriage. The state courts are split on whether pre-CDRP protective strategies for dealing with a disability pay election will be effective in dealing with CDRP.
Military Divorce lawyer Stanley D. Prowse is a California Certified Family Law Specialist. We specialize in handling the difficulties military veterans and military families encounter when facing a divorce.