Double Dipping – Military Retirement Pay and VA Disability Pay

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Most people who served or are/were married to someone who served, have heard that you either draw Military Retirement Benefit or VA Disability Compensation. The basic principle behind this is that you cannot double-dip from both money pots. As such, especially in light of the fact that someone can “waive” their Military Retirement(which is taxable) and get VA Disability(not taxable) instead, to get a couple of extra dollars, most people choose the tax-free VA money as soon as it is an option.

In Arizona, this issue has turned into a major area of concern. Recently the US Supreme Court heard a case from Phoenix (our blog about it HERE) where the voluntary election of VA Disability pay reduced a former spouse’s payments from her community property share of her ex-spouses Military Retirement.

While we wait for the Supreme Court to decide what rights a former spouse has in this situation to be compensated for this “loss” of money the question remains, what can someone claim as sole and separate property when dividing Military and VA benefits in a divorce.

All of that being said, Recent policy changes at the federal level have changed the rules; A relatively new program called Concurrent Retirement and Disability Pay (CRDP) now opens the door to receiving both your full military retirement pay AND your VA Disability pay if you qualify… To make it EVEN BETTER, it is an automatic benefit. You don’t have to apply or jump through hoops, if you are eligible, you get it.


You must be eligible for retired pay to qualify for CRDP. If you were placed on disability retirement but would be eligible for military retired pay in the absence of the disability, you may be entitled to receive CRDP.

Under these rules, you may be entitled to CRDP if…

· you are a regular retiree with a VA disability rating of 50 percent or greater.

· you are a reserve retiree with 20 qualifying years of service, who has a VA disability rating of 50 percent or greater, and who has reached retirement age. (In most cases the retirement age for reservists is 60, but certain reserve retirees may be eligible before they turn 60. If you are a member of the Ready Reserve, your retirement age can be reduced below age 60 by three months for every 90 days of active service you have performed during a fiscal year.)

· you are retired under the Temporary Early Retirement Act (TERA) and have a VA disability rating of 50 percent or greater.

· you are a disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability, and you have a VA disability rating of 50 percent or greater. You might become eligible for CRDP at the time you would have become eligible for retired pay.

This benefit can really change things if you are divorced or getting divorced. This extra pay could cause a wrinkle in the property division portion of any divorce where one spouse is eligible for these benefits. The reality is that your ex-spouse and his/her attorney will probably try to take as much of these benefits as they can under current state laws. (See my blog on Community Property HERE).

If you or your ex is seeking Spousal Maintenance (Alimony) and/or Child Support this increase in income can cause further complications. While military retirement division is an issue of property rights in Arizona, Spousal Support and Child Support both consider the party’s gross monthly income, and as such, this program can cause the calculations to change significantly. This is something that in many cases can and will be looked at retroactively and someone may be entitled to arrearages and back-payments in certain scenarios.

Unfortunately, given the recency of these new entitlement terms, there’s limited understanding in the legal community, of the complex relationship between Arizona Family Law and the myriad of different military benefits that you or your ex-spouse may be eligible for. If you don’t have an attorney that understands your specific benefits, you might sign away your money or your ex’s attorney might be able to persuade the Judge to order you to pay money that you shouldn’t have to.

The attorneys at the RPM Law know how the laws treat your benefits, what you will need to pay, and how to protect your benefits. We will make sure that you keep the benefits that you have earned. Call us at (520) 740-1802, schedule a consultation, and see how dedicated we are to protecting your interests.