After a Military Divorce, What Happens to Retirement Pay?
While divorce rates in the U.S. are steadily declining, the number of couples who ultimately part ways remains significant. The American Psychological Association reports that roughly 40% to 50% of American marriages end in divorce.
Military couples who separate face unique issues when it comes to dividing assets, including retirement pay. Those facing divorce should know that, under the Uniformed Services Former Spouses’ Protection Act of 1981, a service member’s ex-partner may be eligible to receive a portion of a military pension as part of a divorce court’s division of marital property.
When Does a Divorcing Spouse Become Eligible for Retirement Benefits?
The courts follow the “10/10” rule when determining eligibility for a former spouse to receive retirement payments. According to this rule, the military member must have completed at least 10 years of service creditable to retirement, and the marriage must have lasted for at least 10 of those years.
Is an Eligible Nonmilitary Spouse Automatically Entitled to Retirement Pay?
A former military spouse who meets the 10/10 rule does not automatically receive a portion of retirement pay. The USFSPA gives state courts the authority to award part of a military pension to the non-serving spouse as part of a divorce order. The court will determine the amount of the award based on state divorce laws.
What Proportion of Retirement Pay Might the Court Award?
When the court divides retirement benefits as marital property under the USFSPA, it must do so in the form of either a fixed monthly payment or a percentage amount of the serving spouse’s disposable retired pay.
The maximum proportion that a former spouse can receive is 50% of disposable retirement pay. If the court awards alimony or child support, up to 65% of disposable earnings may be eligible for garnishment. If the court awards a percentage payment, that percentage may increase according to cost-of-living adjustments granted between the date of the divorce and the date of the service member’s retirement.