The Supreme Court recently heard a case concerning family law and military benefits in which there was a disagreement between divorced spouses regarding the wife’s share of the husband’s military retirement pay. John Howell spent 20 years in the U.S. Air Force, and pursuant to the divorce agreement, his ex-wife, Sandra Howell was to receive half of Howell’s military retirement pay.
However, John chose to waive a portion of his retirement pay, and receive disability benefits instead. This is a popular choice when it is possible because, as opposed to retirement pay, disability benefits are not subject to tax. But his decision also diminished by $125 the amount of funds that Sandra received as her apportionment of John’s retirement compensation. By comparison, John received both the extra funds that would have been paid to Sandra, and his disability benefits without having to pay taxes.
Sandra filed a lawsuit requesting that her payments be returned to their original amount. The courts in Arizona concurred with her, after which John requested that the U.S. Supreme Court review the decision made by the state courts.
The Uniformed Services Former Spouses’ Protection Act (USFSPA) is a federal law that was enacted in 1982, and that gives state courts the power to treat disposable retirement income as property belonging to the service member, or owned by the service member’s spouse. The income refers to the service member’s pay, less any part of that compensation waived in favor of disability benefits. Therefore, John contends that he can not be compelled to pay Sandra her portion of the retirement income that he currently receives as a disability benefit.
In support of his argument, John relied on Mansell v. Mansell, in which the court held that the USFSPA does not grant state courts the power to treat retirement pay that has been waived in favor of veterans’ disability benefits as an asset that can be split. Ultimately, the Supreme Court agreed with John.