On Monday, the U.S. Supreme Court unanimously handed a victory to veterans when it decided Howell v. Howell, No. 15-1031. The case involved an Air Force veteran, who was divorced from his former wife more than 25 years ago. Anticipating the husband’s future retirement, the divorce decree awarded 50% of his retirement benefits to the wife when he retired. The husband later opted to waive part of his retirement pay to instead receive disability benefits. Doing so reduced the amount of money the wife received each month.
The wife went back to family court and got an order requiring the husband to reimburse her for the reduction in share of military retirement pay. The husband appealed the order all the way to the Supreme Court, which reversed. It held that a veteran does not have to indemnify their divorced spouse if they elect to waive retirement pay to receive service-related disability benefits.
This ruling will most affect those who were married to veterans with 50% disability ratings or less. (According to the Congressional Budget Office, that is about 55 percent of the 2 million military retirees.) Through concurrent retirement and disability pay, retirees with a 50% or higher disability rating receive both 100% military retirement pay and VA disability pay. Ex-spouses in those cases will still be compensated at the same rate, while those with veteran ex-spouses with less could see up to half of their money taken away under the Supreme Court ruling.
Cases like this wouldn’t exist if Congress removed the VA offset and allowed for full concurrent receipt of retirement and disability pay. There’s a case to be made for that, but that’s another blog post for another lawyer.
In the meantime, the question remains: How should your divorce decree account for the possibility that a non-military spouse’s share of retirement pay may be worth less than at the time of the divorce? Several possibilities exist, depending on your circumstances. If you are serving in the military or have a spouse or ex-spouse that receives military retirement benefits, consult with your legal advisor to ensure these benefits are valued appropriately and that the resulting divorce decree is fair and equitable.