Retirement under Title 10 United States Code Chapter 61 occurs when a Servicemember’s military department (e.g. Department of the Army, Department of the Navy, etc.) finds the Servicemember unfit for further duty due to a disability. The Uniformed Services Former Spouse Protection Act (USFSPA), codified at 10 U.S.C. Sec. 1408, excludes all sums received under Title 10’s Chapter 61 and VA disability compensation received under Title 38 from the definition of “disposable retired pay.”
For decades, the Defense Finance and Accounting Service (DFAS), which is the Secretary of Defense’s Pay Agent, sent Former Spouses who applied for court-ordered Former Spouse retirement pay letters informing them that the Chapter 61 Servicemember had no disposable retired pay. Therefore, the former spouse’s court-ordered share was equal to zero. Recall, the USFSPA grants State Courts only the power to treat disposable retired pay as marital property — nothing else.
Servicemembers retired under Chapter 61 with VA disability ratings of 50% or greater are eligible to receive, and do receive, Concurrent Retirement and Disability Pay or CRDP. CRDP replaces some or all of the Servicemember’s retired pay waived in order to receive VA disability compensation under the VA’s Title 38. A twist with CRDP is a Chapter 61 retiree may only receive the amount of CRDP they would have qualified for had the Servicemember retired for longevity. Historically, and to this day, DFAS exempts CRDP received by a Chapter 61 retiree as disposable retired pay subject to division in divorce.
So, the current status is CRDP is divisible in all cases where the Servicemember retired for longevity but in is not divisible in any Chapter 61 disability retirement. That posture is under challenge. A case is pending decision in the Defense Office of Hearings and Appeals (DOHA) on whether CRDP received in a Chapter 61 retirement is divisible in divorce. No decision has been made yet. Right now, DFAS is sending Former Spouse’s who apply for court-ordered Former Spouse retired pay letters informing that DFAS cannot process the application now since this question about CRDP is pending in DOHA.
Should DOHA decide that CRDP is divisible in a Chapter 61 retirement/divorce, the decision would have a monumental impact for Former Spouses who have been denied anything due to a Chapter 61 retirement. There is no forecast as to when DOHA will decide. If DOHA decides that CRDP in a Chapter 61 divorce is divisible as marital property, whether DOHA’s decision would have any retroactive effect is unknown. Stay tuned.
Author Jim Cramp is a retired active duty colonel and the founder and principal attorney at the Cramp Law Firm, PLLC. The firm provides a spectrum of family law-related services to clients in the greater San Antonio region, across the United States and throughout the world. The firm specializes in Federal Civil Service and Military Divorce matters.