In a landmark case, the Supreme Court determined that the spouses of military retirees who suffer from service-related disabilities may end up with a reduced share of the individual’s pension. When a military member elects to receive disability pay from the Veteran’s Association, it offsets what he or she owes to his or her spouse, and ends up gaining the military member a higher income in exchange.
The case that made waves for military couples started in 1991 with a typical divorce. The couple’s divorce stated that the man’s wife would receive half of his military retirement pay. In 2005, the man’s ex-wife went back to court because he gave up $250 in retirement benefits to get that much back in tax-free disability benefits. As a result, the woman received less than she had before. She took the case all the way to the Arizona Supreme Court with her ex, and both that court and previous courts agreed that the man should have to pay her more to make up for the loss he accepted.
In May, the U.S. Supreme Court overturned that ruling. The Supreme Court stated that since retirement benefits could change and were contingent on different factors, the state courts could not guarantee a specific amount, in this case 50 percent, to an ex-spouse.
There are some concerns with this change, since it could mean that ex-military members will opt into benefits to reduce how much their ex-spouses get from their retirement benefits. In short, there could be dire repercussions for ex-spouses of military members relying on what they were once promised in court.
Source: Ameriforce, “Recent Supreme Court Decision Affects Military Divorce Settlements,” Andrea Downing Peck, Sep. 02, 2017