Many former military members apply for and receive disability benefits. The amount depends on the percentage of disability assigned to the former service member. Under current law, if that percentage is under 50 percent, the amount of their military retirement benefits decreases in direct proportion to the amount of disability received. Disability benefits are not taxed, so many veterans choose these benefits in lieu of taxable retirement benefits.

If a former spouse is receiving a portion of the veteran’s retirement, his or her portion ordinarily drops as well. Some courts order the service member to make up the difference. One veteran from Arizona appealed such a ruling, and the U.S. Supreme Court recently ruled in his favor. The court held that he should not be forced to make up that difference, a ruling that could have ramifications for many former spouses across the country.

The court encourages judges to consider the possibility of the service member receiving disability at some point in the future when dividing retirement benefits in a military divorce. This could change the strategy employed in many of these divorce cases. It will take time to see the full effects of this ruling, and any attorney who handles military divorces here in Kentucky or elsewhere in the country is undoubtedly watching to see what lower courts do as the lawyer continues to advocate for his or her clients.

Source: military.com, “Supreme Court Ruling May Cut Spouses’ Divorce Pension Payments“, Amy Bushatz, May 18, 2017