Divorce in the Trenches: Military Divorce
Part 1 of 3: Addressing some of the complexities involved in a military divorce and division of assets.
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Divorces in which one or both spouses are, or were, in the military present many obstacles that are often overlooked by divorce practitioners. The intent of this article is to address just a few of the most common issues frequently encountered in military divorces. In a world filled with acronyms and an overlap of federal and state laws, military divorces can be significantly different than what is encountered in most "civilian" cases and the potential minefields often seem endless.
(For a more general overview, see Differences Between Military and Civilian Divorce).
The Basics of Military Pay & Benefits
When representing a client in a military divorce, one must know what benefits the military spouse is receiving and how these benefits might change following a divorce. Much of this information is available from the service member’s Leave and Earnings Statement (LES) -- the equivalent of a military pay stub. The LES reflects not only earnings and deductions, but also such information as the service member’s grade (rank) and years in service.
The LES will list the service member’s base pay and any incentive or special pay (examples include hazardous duty incentive pay, aviation career incentive pay, or variable special pay for medical/dental officers), as well as non-taxable benefits such as the basic allowance for subsistence (BAS) and basic allowance for housing (BAH). BAS is a set figure for food expenses (2012 rates are $348.44 per month for enlisted military members and $239.96 per month for officers). The amount of the BAH varies by location and whether the service member has any dependents. The website for the Defense Travel Management Office of the Department of Defense includes links to the 2012 BAH allowances by zip code, rank, and dependent status, as well as a useful BAH calculator. BAH “with dependents” is the same regardless of the number of dependents, so a military service member will receive the same BAH allowance with just a spouse and as with a spouse and multiple children. BAH is generally not received if the military member and his or her dependent(s) live in military housing (such housing is provided at no cost to the family).
A military member who pays child support will receive BAH at the "with dependents" rate, whether or not his or her minor child(ren) resides with that service member, unless “(A) the member is assigned to a housing facility under the jurisdiction of a uniformed service; or (B) the member is assigned to sea duty, and elects not to occupy assigned quarters for unaccompanied personnel; or unless the member is in a pay grade above E–3.” However, even a military member who is not authorized to receive full BAH at the “with dependents” rate under the foregoing provisions, can receive a differential BAH payment, the difference between BAH with dependents and BAH without dependents, provided the service member is paying child support. As the differential BAH is capped at the amount of child support, practitioners should calculate this figure and plan accordingly to maximize the benefit the child(ren) will receive in cases where the child support might otherwise be less than the BAH differential.
BAS and BAH are cash benefits and, accordingly, should be included both on any Financial Affidavit and in “gross income” for the purposes of calculating child support.4 If a military member receives in-kind benefits instead, such as living in rent-free military housing in lieu of BAH, the cash benefit might no longer fall within the definition of “gross income” under RSA 458-C:2, IV, but could instead be used to justify an upward deviation from the guideline child support amount pursuant to RSA 458-C:5.
Please note that there may be other benefits that the service member may be receiving. This article examines the most common, but any additional benefits being received should be researched, considered, and applied when applicable.
Military Retirement Benefits
In most instances, once a military member has completed 20 years of active duty service, he or she is entitled to military retirement benefits. The details of the timelines for the different military branches can be found in Title 10 of the United States Code. If the service member is active duty, these benefits can start immediately upon separation from the service after the required 20 years have been completed. These 20 years do not have to be earned consecutively and, accordingly, the possibility of becoming eligible for such benefits after the marriage ends should be considered even if the military spouse is not currently serving in the military. A copy of the military member’s DD Form 214, entitled “Certificate of Release or Discharge from Active Duty” and received by active duty military members when they separate from service, can also be very helpful as it will list the total years, months, and days of active duty service, as well as the dates of entry and separation.
A similar system applies for retirement from a reserve component of the military or the National Guard, but the requirements are generally 20 qualifying years of service. A qualifying year of service is most often defined as a year within which at least 50 retirement points are earned. Once the 20 qualifying years are obtained, the military member is eligible to start receiving retirement benefits at age 60. For National Guard members, their Current Annual Statement provides a summary of the points earned towards retirement, broken out by year, making calculating the marital portion to be divided in a divorce fairly straight forward. For reservists, the ARPC Form 249-2-E, entitled “Chronological Statement of Retirement Points,” provides a similar summary of the military member’s retirement points.
There are a variety of formulas which apply to calculate military retirement depending on factors such as when the service member first joined active duty service and whether the service member chose to receive a Career Status Bonus. The website for the Office of the Secretary of Defense provides calculators that allow retirement benefits to be calculated based on a variety of different scenarios. If the service member is already receiving retirement benefits, the member’s Retiree Account Statement (RAS) will show the retired pay and benefits received. The statements can now be obtained by the military service member on-line from the military myPay website.
Like many pensions, military retirement benefits end at death unless the service member elects a Uniformed Services Survivor Benefit Plan (SBP). A SBP election allows the surviving spouse (or former spouse) to continue to receive benefits, through an annuity, after the service member’s death. A SBP election can be changed, but only under limited circumstance, such as divorce. A divorce decree should specify whether the SBP will be continued. If the former spouse is going to continue as a SBP beneficiary, a DD Form 2656-1, entitled “SBP Election Statement for Former Spouse,” must be filed within one year of the divorce with the Retired Pay Office of the Defendant Finance and Accounting Service. The SBP election is generally independent of the division of the military retirement itself, although the reduced benefits due to the SBP allowance could be considered in the equitable allocation of the retirement benefit.