Veterans sometimes come to us contemplating a divorce or in the midst of a divorce proceeding and have questions regarding how their VA disability compensation will be treated in the process. A federal law, the Uniformed Services Former Spouses’ Protection Act, specifically exempts VA disability payments from being divided in a divorce or treated as marital or community property. However, a veteran’s disability payment can, and probably will, be considered when a family court contemplates an award of alimony to the veteran’s spouse – even when the veteran must use the money he receives from his VA disability payment to pay the alimony.
This fact comes as a shock to many vets who believe that their disability payments are untouchable in a divorce because they are not considered taxable income. State courts have almost universally held that veterans’ benefits may be considered income for purposes of determining whether alimony should be awarded. This even includes tax-free benefits such as housing and subsistence allowances. Courts have even ordered an increase in alimony paid where the vet obtained benefits after the divorce.
This makes sense when you consider that spousal support is determined through a completely different analysis that the division of community property. Spousal support or alimony is based on a percentage of “gross income,” which is generally defined as the total amount of income received each month from any source. Obviously, the basis for spousal support or alimony is much wider than community property.
Another related question we receive from veterans is “Can my service-connected disability payments be garnished or seized for alimony that I owe?” The simple answer is no. Under 38 U.S.C. § 5301, disability benefits paid by the VA are not subject to levy, seizure, or attachment.
One word of warning, however. There is a situation in which your VA disability payment can be garnished for failure to pay alimony, and it is not uncommon. Your VA disability payments can be garnished if you waived part of your military retired pay in order to receive VA disability benefits. In other words, if you waived part of your taxable military retirement to receive nontaxable disability compensation, your disability benefits can be garnished to meet alimony obligations. Only the amount of the disability compensation you were paid in place of retirement pay can be garnished. The remainder of your disability compensation is protected from garnishment.
But, even the foregoing rule has exceptions. Your VA benefits cannot be garnished to satisfy alimony support obligations when:
- garnishment would cause you undue financial hardship,
- your former spouse has not filed for “apportionment” (explained in more detail below),
- your former spouse is living with another person and “holding her or himself out as the spouse of that person,” or
- your former spouse was found by state court to have been guilty of infidelity.
Apportionment is the process by which the VA assigns a certain portion of a veterans benefits to a family member. Through this process, the VA will directly pay the eligible family member part of the veteran’s benefit(s).
Although, as discussed above, VA payments can be garnished under certain circumstances, in no way can VA benefits be garnished for alimony until the former spouse first elects to receive the “apportioned” share of the veteran’s benefits.
The former spouse must apply for apportionment by filing VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award, before a garnishment for spousal support will be considered. The Regional Office will consider the facts and circumstances of the case and issue a decision.
Veterans have the right to appeal an apportionment decision before it becomes effective, but if it is clear that the money is owed and the veteran has no other extenuating circumstances, the apportionment will be expeditiously enforced.
Other Issues to Consider
A problem can also arise when a veteran elects to receive VA disability payments in lieu of retirement payments. A former spouse who has been receiving a share of the veteran’s retirement pay as a result of the division of property in a divorce settlement may suddenly find their monthly payment reduced if the veteran waives the retirement pay to accept the disability benefit. However, many states require that the veteran must reimburse the former spouse when the veteran takes VA disability benefits and this decreases the share of the benefit which the former spouse received. Waiving retirement pay and accepting disability benefits does not change the amount owed the former spouse.
Finally, please remember that issues involving divorce and spousal support are governed by state law. Therefore, you should consult an attorney licensed in your state for specific information and advice regarding spousal support obligations and divorce. The information provided here is general in nature, and, as with most legal concepts, there are exceptions to almost every rule. An attorney can advise you of the rules and exceptions as they apply to the specific facts of your case.