Military Disposable Retired Pay In Former Spouse Military Retirement Division

Are you involved in a Colorado divorce or family law proceeding involving military retirement and disposable retired pay? An experienced Colorado Springs divorce attorney can guide you through the legal process and assist you in exploring your options. You have one bite at the apple in the court system so make it count.

Disposable military retirement pay is relevant in military divorce because that is what can be divided with a former spouse under the Uniformed Services Former Spouses’ Protection Act. The divisible amount is not gross retired pay, but rather disposable pay. 10 U.S.C. § 1408(a)(4), (a)(7), (c)(1). Therefore, it is important to know what pay is disposable.

Four items are deductible from gross pay to result in disposable pay:

1. Federal debt attached to retired pay such as amounts owed to the United States for prior retired-pay overpayments;
2. Forfeitures and required waivers such as retired pay forfeited by court-martial order, and retired pay waived to receive compensation including a Veteran’s Administration (VA) waiver;
3. Disability retirement amounts: for a Chapter 61 disability retiree, the amount of Chapter 61 retired pay computed using the member’s disability percentage; and
4. Survivor Benefit Plan (SBP) payments to cover the former spouse.

It should be noted that income tax withholding does not reduce disposable retired pay. 10 U.S.C. § 1408(a)(4)(A). When a former spouse receives payment directly from the Defense Finance Accounting Service of retired pay, the former spouse pays taxes on his or her portion of the payment.

A property division under the frozen benefit rule uses the retired-pay base and creditable service points as of the date of decree and excludes future increases due to longevity or promotions. 10 U.S.C. § 1408(a)(4)(B) and statutory effective-date notes. This impacts disposable pay as well because the retiree retains a higher portion of the retirement given that the former spouse’s portion is frozen at the time of the decree.

Under the frozen benefit rule instead of starting the calculation with the member’s actual monthly retired pay at retirement, the calculation is based on the frozen amount using the member’s retired-pay base and years of service at the decree date. 10 U.S.C. § 1408(a)(4), (c)(1), (d)(8).

Turning Change Into Opportunity in Colorado Springs Divorce and Child Custody

Sabra Janko is a highly knowledgeable and experienced Colorado Springs divorce attorney who can guide you through Colorado Springs divorce and military retirement matters by negotiating, mediating and litigating on your behalf. You can focus on moving to a better future instead of spending your time attempting to navigate complex legal rules and procedures.

Sabra Janko from Janko Family Law has more than 20 years of legal experience and has written “the book” on Colorado divorce and family law – “Colorado Family Law With Forms”, published by LexisNexis, which you can find here. Contact us at 719-344-5523 or complete our online scheduling request for a free 30-minute informational consultation. We also offer paid advice sessions for a more in-depth analysis of your case.