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San Antonio, TX Family Law and Military Divorce Blog

Saturday, December 10, 2016

Military Divorce and Former Spouse Retired Pay: Situations Where DFAS Might Be Unable to Make Full Payment

When facing military divorce, there are two scenarios where the Defense Finance and Accounting Service (DFAS) might be unable to make full payment to a former spouse.  The first scenario is where the Servicemember's retired pay is subject to garnishment for more than one former spouse's retired pay entitlement.  The second scenario is where the Servicemember's military retired pay is subject to garnishment for both former spouse retired pay and child support.

In the first scenario, with multiple former spouses entitled to retired pay, the most that DFAS can garnish is 50% of the Servicemember's retired pay.  Garnishment orders are processed by DFAS on a first come, first served basis until the cap is reached.  For example, let's say the Servicemember's has former spouse A, from his or her first marriage, who received 25% of the Servicemember's disposable retired pay in the divorce decree.  Sadly, Servicemember's second marriage ended in divorce too, with former spouse B having received 30% of Servicemember's disposable retired pay in the decree.  Together, the two former spouses' entitlements total 55% of Servicemember's disposable retired pay -- 5% beyond the cap.  Assuming former spouse A's entitlement was processed first by DFAS, the most DFAS could pay former spouse B would be 25%, not the 30% ordered in the decree.  The Servicemember would still owe the remaining 5% to former spouse B, but DFAS cannot and will not pay it.  The Uniformed Services Former Spouse Protection Act (USFSPA), at 10 U.S.C. Section 1408, limits garnishment of one or more former spouse retired pay awards to a maximum of 50% of disposable retired pay.

In the second scenario, let's say former spouse A, in the divorce, received a former spouse retired pay award equal to 40% of Servicemember's disposable retired pay.  Here, however, there were two minor children and the decree awarded former spouse A child support of $1,500 per month from Servicemember.  For purposes of this scenario, let's say the $1,500 per month equaled 30% of Servicemember's disposable retired pay.  Together, the former spouse retired pay and child support obligations total 70% of Servicemember's retired pay.  Here, the USFSPA limits garnishment to 65% of a Servicemember's disposable retired pay in cases where one obligation is for former spouse retired pay and the other is for child support.  Again, the Servicemember still would owe former spouse A the remainder; it's just that the USFSPA caps the amount that DFAS can garnish.

In cases where my client faced the second scenario, I mitigated the effect of the cap by directing the child support income withholding order against another income source, such as Servicemember's paycheck from his or her post-retirement employment.  After all, the only place that former spouse retired pay can come from is the Servicemember's disposable retired pay.  A child support obligation, in contrast, can be satisfied by any source of income that can be garnished.

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 firms also provides Wills and Estates and Probate services.


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