The world of Department of Veterans’ Affairs (“VA”) benefits is complex, and no less so when it comes to dividing those benefits with a divorced spouse. A recent Supreme Court decision, Howell v. Howell, created new rules for states to follow when deciding how to divide retirement pay which has been reduced by a veteran’s disability waiver. This blog provides an easy guide to how the Court’s decision will affect you.
U.S. Supreme Court; Source
Military Retirement Pay and Disability Waiver
With the exception of veterans who have a disability rating of 50% or higher, veterans who are eligible for, and plan to claim, both disability benefits and retirement pay through the VA are required to waive a portion of their retirement pay equal to the amount of disability benefits to which they are entitled. Disability waiver is appealing to many veterans because retirement pay is taxable while disability benefits are not.
Waiver becomes complicated when it is utilized by a divorced veteran because, while most VA disability benefits can be split in a divorce, disability benefits cannot. That means when a veteran uses a disability waiver to reduce retirement benefits, the divorced spouse ends up receiving a smaller amount of retirement pay.
Supreme Court Limits States’ Options for Helping Divorced Spouses
The Uniformed Services Former Spouses’ Protection Act, which gives broad authority for the division of military benefits, leaves the specifics of exactly how to divide VA retirement pay to each state. That means that, until recently, a state could choose to reimburse a divorced spouse for retirement pay lost when a veteran utilized a disability waiver.
However, Howell v. Howell, decided on May 15, 2017, took issue with the current scheme and held that states are no longer allowed to reimburse the divorced spouse for retirement pay lost due to a veteran’s disability waiver.
Appeal Your Benefits Decision
Although this decision may seem like bad news for the families of retired veterans who are divorced, there is a way to ensure that everyone gets the benefits they are entitled to: by earning a disability rating of 50% or more or winning Total Disability Individual Unemployability (“TDIU”) benefits. Once a veteran earns this status, they are exempt from the waiver requirement and can receive both disability benefits and retirement pay without affecting the amount of retirement pay allotted to the divorced spouse.
Therefore, if you are a veteran seeking disability benefits, we encourage you to apply right away. If you receive a denial or a rating of 40% or lower, we may be able to help you appeal. With decades of combined experience successfully appealing VA decisions, we are confident that we can get you the benefits you are entitled to. Send us a note here or give us a call at (877) 629-1712 today.
