Retirement Benefits Under USFSPA

The USFSPA fully governs every aspect of the division of a service person's military retired pay through a military court order. The key to application of the USPFSA in a particular case is whether personal jurisdiction under the USPFSA exists as to the service member. Thus, it is not enough to have jurisdiction in Ohio due simply to the residency in Ohio of the service member's spouse, but there must be appropriate jurisdiction as to the service member as well.

A state has jurisdiction over the service member if he or she is a legal resident of Ohio, he or she consents to the exercise by Ohio of jurisdiction over the division of his or her retirement pay, or he or she is residing in Ohio for some reason other than his or her military assignment. If none of the above conditions apply, then Ohio cannot exercise jurisdiction to divide retired pay.

The federal statutory provisions applicable to Qualified Domestic Relations Orders (QDROs) does not apply to military retirement funds and, thus, QDROs are not enforceable. However, the military does recognize "military court orders" which are separate orders, not unlike QDROs, detailing the division of the military retirement account. However, if the specific division percentage, social security number of the service person, and other relevant information is detailed in the Decree of Divorce, Dissolution, or Annulment, a separate Military Court Order is more convenient, but not really necessary.

A spouse of a military service person can obtain distribution of military retirement pay through the USFSPA so long as the former spouse meets the 10/10/10 test (ten years of marriage, ten years of service, ten years combined). 10 U.S.C. 1408. In order to obtain a portion of retired pay, there must be a state court order detailing the award as property in a final decree of divorce, dissolution, annulment, or legal separation.

Retired pay as property awards must provide for the payment of an amount expressed in dollars or as a percentage of disposable retired pay (gross retired pay less allowable deductions). An award of a percentage of a member's retired pay is automatically construed under the Act as a percentage of disposable retired pay. In fact, the court order must provide for a specific dollar amount or specific percentage, not greater than 50% of the disposable retired pay.

In addition to property division, the USFSPA also provides an avenue for enforcement of current child support and spousal support, or arrearages on such orders, regardless of whether the former spouse meets the 10/10/10 test requirements. The court order must reduce the payment of child support or spousal support to judgment as a property right of the former spouse and must set forth a specific amount expressed in dollars of the disposable retired pay (gross retired pay less deductions) of the service person which cannot exceed 65%, of the military retired pay, or 50 percent of the disposable retired pay.

Special care should be taken by soldiers and spouses alike to make sure their counsel understands how VA disability, Combat-Related Special Compensation and Concurrent Retirement and Disability Pay interact and what effect they can have on the percentage of the soldier's benefits which are received by the former spouse. Lack of an understanding of these benefits, how they work, and a spouse's entitlement in various scenarios could result in a substantial increase or decrease in the amount of benefits received by the spouse.