Charleston Chapter – MOAA
Charleston Chapter – MOAA Charleston Chapter – MOAA
                             
Charleston Chapter – MOAA


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Supreme Court rules in veteran's favor in closely watched divorce settlement case
This Story expires on: Saturday Sep. 30, 2017


The U.S. Supreme Court unanimously ruled Monday, in the case of Howell v. Howell, that a state court cannot offset the loss of a divorced spouse’s portion of a veteran's retirement benefits when that veteran waives retirement pay in favor of disability pay. The issue has been hotly debated for years.

In 1991, a court awarded Sandra Howell half of Air Force veteran John Howell’s retirement pay when the couple was divorced. However, after becoming aware in 2005 that he was eligible for disability benefits, John, who had received a 20 percent disability rating from the Department of Veterans Affairs, elected to waive $250 of his $1,500 a month in retirement pay, which is taxable, in favor of $250 monthly disability pay from the VA, which is not taxable. That reduced Sandra's monthly divorce settlement by $125, so she went back to court, arguing that she should get half of what his retirement pay would have been if he had not opted for disability pay.

The Arizona Supreme Court upheld her claim in its interpretation of the Uniformed Services Former Spouses’ Protection Act, a law that regulates how military retirement pay may be divided up after a divorce. 

The Supreme Court's ruling Monday overturned the Arizona court's decision.

Until 2003, disabled veterans had to select either their full retirement compensation from the Department of Defense or their VA disability benefit with a reduced retirement annuity. This penalty became known as the "VA offset." Many veterans choose the offset, however, because disability payments are tax free. In the 2003 and 2004 defense authorization bills, Congress waived this offset in certain cases, and veterans with career-ending combat injuries or a disability rating of 50 percent or higher were allowed to concurrently receive both types of payments.

Charleston Chapter – MOAA
Charleston Chapter – MOAA

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