The Military Divorce Guide was created by Carl O. Graham, a Colorado Springs divorce lawyer and former Army JAG officer who focuses exclusively on Colorado divorce, military divorce issues, child support, grandparent rights & visitation, common law marriage, child custody, legal separation, annulment, etc. To learn more about our Colorado Springs family law firm, visit our web site at: www.carlgraham.com.
When a servicemember retires with disabilities, the Department of Veterans Affairs will pay compensation, known as VA disability, depending upon the disability rating.
The advantage to the servicemember is that VA disability payments are not taxable. Furthermore, since they are excluded from the disposable retired pay, Colorado divorce courts cannot, strictly speaking, divide the disability payments (the reality is different, however, as explained below). Also, tax-free should not be confused with invisible for any purpose - VA disability payments count as income for the purpose of calculating child support and maintenance.
VA Waiver of Military Retirement
Traditionally, federal law prohibited "concurrent receipt" of both VA Disability and military retirement, which meant a retiree had to "waive" military retirement, dollar for dollar, for VA Disability.
In 2003, Congress modified 10 U.S. Code §1414, and finally relaxed the concurrent receipt prohibition for many retirees. Starting in 2004, the VA waiver is being phased out over a 10-year period (10% per year) for retirees with at least a 50% disability rating.
What does this mean for Colorado divorce cases? It means a servicemember may be able to receive VA disability payments, which cannot be divided, plus a full retirement, which would remain divisible.
VA Disability & Colorado Military Divorces
Disabled does not mean wheelchair-bound. It is fairly common for servicemembers who appear able-bodied to retire with at least some portion of their retirement paid as disability. Colorado divorce courts, frustrated that they were prohibited from dividing VA disability, often did an "end-run" around that prohibition by awarding the civilian former spouse increased maintenance to compensate for the reduced disposable retired pay.
This previously unofficial practice is now the law of the land. In November 2004, the Colorado Court of Appeals decided a case, Marriage of Lodeski, 107 P.3d 1097 (Colo. App. 2004), which held that Colorado divorce courts shall compensate the civilian former spouse for any reduced military retirement due to the VA waiver.
What does this mean for a Colorado military divorce? From a practical perspective, the VA disability payments will be divided, but only to the extent that the VA Waiver reduces retirement. It is too soon to know how Colorado divorce courts will implement this, but the likely mechanisms are ordering maintenance as compensation, or even a higher share of the military retirement which can be divided.
This web site is an advertisement intended for informational purposes, and is not a substitute for individual legal advice from one of the many Colorado Springs law firms, Colorado Springs lawyers or Colorado Springs attorneys. Only a signed agreement with this Colorado Springs family law attorney can create a Colorado lawyer-client relationship. We assist clients in Colorado Springs / El Paso County courts, exclusively in Colorado family law (Colorado divorce, military divorce issues, child support law, grandparent visitation & rights, common law marriage, child custody law, legal separation law, annulment, alimony law, etc).
