Disability Pay vs. Retirement Pay
Video Transcript: Hello everybody, this is Dustin Peterson and I am The Oklahoma City Attorney. We’ve been talking about equitable property division in divorce, and today will be no different. We’re going to touch on a brief discussion of military retirement benefits.
When a service member retires, they might be entitled to a certain amount of retirement benefits, but they might also learn that they qualify for disability pay. The analysis for them is disability pay is non-taxable, whereas retirement pay is taxable.
So naturally they’ll want to take disability pay. And because the government doesn’t like the double counting of taking both, they often require that the service member waive an equal portion of their retirement pay as to the disability benefits they are to receive.
So the question is, in divorce, what happens if a service member and his or her spouse form a decree in divorce? And in that decree, it states that the service member’s spouse will receive a portion, some percentage of the service member’s military retirement. And then in the post decree time, the service member learns of a eligibility for disability pay and naturally wants to take that.
What happens to the decree and to the amount that is owed to the divorced spouse? Can that spouse come back and say, “Hey, my benefits have been reduced because my former spouse took disability pay and reduced retirement, which hurts me.” They will not be able to do that. And the Supreme Court has made very clear that that is a federally preempted area of legislation and states are not allowed to treat as community property. A military service member’s disability pay. Retirement pay? Maybe. Disability pay, no.
So they won’t be able to do that, and that’s just one of a number of complicated issues in military retirement benefits. And if you have any questions about that, I encourage you to reach out to me, a divorce lawyer in Oklahoma, at 405-880-8222 or look me up online at oklahomacitydivorceattorney.pro.
