On Monday, May 17th, 2017, The United State Supreme Court ruled on the case Howell v. Howell,(read the decision here) a case RPM Law has been following closely, and wrote about earlier (here).
The case was based on Mr. Howell and Mrs. Howell's 1991 divorce. The couple was litigating their divorce with on 1 year until Mr. Howell's retirement from the military. In the end the couple's divorce decree specified that Mrs. Howell would receive half of his military retirement pay. But in 2005, was awarded VA Disability pay that reduced his retirement by $250, which reduced Mrs. Howell's monthly portion by $125. Claiming that her personal property interest in the retirement had been wrongly reduced Mrs. Howell went back to court, where she argued that, even if Mr. Howell's retirement pay had been reduced, she should still receive half of what his retirement pay would have been without the disability benefits. The Maricopa Superior Court, Arizona State Appellate Court, and the Arizona State Supreme Court all agreed with her, but on May 15, 2017 the US Supreme Court reversed, siding with Mr. Howell.
The ruling was largely based on the Uniformed Services Former Spouses' Protection Act, a 1982 federal law governing the disposition of military retirement pay in divorces, and Mansell v. Mansell, a 1989 Supreme Court case interpreting that statute.
The Uniformed Services Former Spouses' Protection Act makes clear that state courts can divide up "disposable retired pay," which it defines as the service member's retired pay, minus any portion of that pay waived in favor of disability benefits. And in Mansell v. Mansell, the court ruled that the act does not permit state courts to treat retirement pay that has been waived to receive veterans' disability benefits as something that can be divided.
The justices agreed with Mr. Howell and his argument that his VA Disability Pay was non-divisible, even after the divorce decree was finalized. The Court explained that under federal law state courts simply lack the authority to divide up Mr. Howell's disability benefits, even if it means that Mrs. Howell winds up receiving less money than she might have originally. Further the Court clarified that the state courts can't get around the restrictions imposed by federal law by characterizing the award to Mrs. Howell as an order to Mr. Howell to "reimburse" her for the money that she no longer receives.
In his opinion Justice Breyer acknowledged that the federal statute and today's ruling could make things harder for former military spouses like Mrs. Howell. Explaining the potential implications of this ruling Justice Breyer suggested that, going forward, state courts can try to account for the possibility that a veteran could later waive some part of retirement pay in favor of disability benefits through some other community property or support offset.
An important note for retired service members and their former spouses is that this case does not impact those who are retired and receive VA Disability compensation for being rated 50% disabled or more. Because of the Concurrent Benefit program, which we wrote about here, a retired service member who is both retired and rated at 50% or more, will receive BOTH amounts in full (VA and Retirement). As such the former spouses portion of a community property award would not be reduced by electing VA Disability pay.
As always, it is of the utmost importance that if either party in a divorce is eligible for any Military or VA benefits you hire counsel that understands and knows the rules so that your rights are protected. RPM Law is consider a Subject Matter Expert in this area and is here to help you through the tough times.