Big Changes to Military Retirement Calculation
A New Rule Aims to Make Military Pension Division More Fair to Service Members.
Divorcing Servicemembers and their spouses should take note of the new rules regarding military pensions. The Uniformed Services Former Spouse’s Protection Act gives courts the authority to award a portion of a member’s military retired pay to the former spouse as marital property in a divorce proceeding. When awarding a former spouse a portion of the military pension, a court can award a fixed dollar amount or award a percentage of disposable retired pay. When the service member is still on active duty, the former spouse’s award is expressed by an acceptable formula (typically the Coverture Fraction).
Prior to 2017, the Former Spouse’s award was automatically determined as a percentage of the member’s final disposable retired pay. This meant that the former spouse would get the benefit of any increases in pay the service member earned through post-divorce promotions or years of service. Many service members and their advocates cried foul. In civilian divorces, a spouse is rarely entitled to such post divorce increase income, why should service members be penalized.
The solution came in the National Defense Authorization Act of 2017 (NDAA). The 2017 NDAA changed the definition of disposable pay. For Divorces entered after December 23, 2016, the active military member’s disposable income for purposes of divorce is limited to “the amount of basic pay, payable to the member for the member’s pay grade and years of service at the time of the court order.” This means that former spouse’s will no longer receive a windfall if the service is promoted after the divorce. No longer is a service member penalized for being successful.
If you are a service member or a former spouse, it is important that your attorney understand the changes to the military retirement. An incorrectly drafted court order, could result in overpayment or a denial of processing by DFAS (Defense Finance and Accounting Service).
With our office located just outside of the Fort Lee Army Post, we have extensive experience representing clients in military divorce and custody cases. To talk to a military divorce attorney, please give us a call 804-668—5327. We offer discounts to service members and their families.