Explanation of Divorced Military Spouse Benefits

Explanation of Divorced Military Spouse Benefits

By Carl O. Graham

military spouse, former spouse

Military Spouse Benefits After Divorce

What military divorce entitlements does a former spouse receive? Upon divorce, a former military spouse may be eligible to retain some benefits, pay more for others, and loses some entirely. The Military Divorce Guide discusses each of those benefits in detail in separate articles, but for the sake of clarity, this article summarizes all of the possible benefits in one place.

Impact of Legal Separation on Entitlement to Military Benefits

Note that some states, such as Colorado, offer legal separation as an alternative to a divorce. The Department of Defense generally treats a legally-separated military spouse as married for purposes of entitlement to benefits. Per the joint regulation, Identification Cards For Members Of The Uniformed Services, Their Eligible Family Members, And Other Eligible Personnel, published under AFI 36-3036, Table 8.3 on p.122, a person remains a spouse until “A final divorce, dissolution, annulment, or death occurs. Exception: Do not terminate a spouse when an interlocutory divorce or legal separation occurs.” Moreover, para. 3.2 defines a former spouse as one who has gone through a divorce, dissolution, or annulment - no mention of legal separation.

In other words, a legally-separated spouse keeps the ID card, and access to all benefits the same as a married spouse, except that the issues of military retirement and SBP are determined at the time the decree of legal separation is entered.

Moreover, while the legally-separated spouse will not continue to accrue retirement benefits after the decree enters, the period of legal separation does count as marriage for purposes of former spouse medical and other  20/20/20 and 20/20/15 benefits discussed below.

Military Retirement After Divorce

The military offers its members a defined benefit pension, under which a member who serves at least 20 years will receive at retirement a monthly payment based upon the member’s years of service, basic pay, and a retirement multiplier.

The multiplier has traditionally been 2.5% x years of service (so retiring at 20 years would result in 50% of the high-three basic pay), and that is still true for “legacy” retirement plans. However, for new members, as well as existing members who selected the blended retirement, the multiplier is now 2% x years of service, as there is also an enhanced Thrift Savings Plan available.

With a value in the hundreds of thousands of dollars(at the low end, over a million for senior officers), the military retirement is often the most valuable asset the spouses have accumulated during their marriage. It is a marital asset, subject to division at the time of the divorce or legal separation regardless of the length of the marriage - even if only a year or two! Note two caveats:

  1. The payments will not commence until the service member actually retires from the military and receives retirement.
  2. If the spouses have at least 10 years of marriage overlapping the military service, DFAS will pay the former spouse’s share directly to the former spouse. The retirement is still an asset that can be divided with fewer than 10 years of overlap, but in such cases the retiree will be required to send payment each month.

For a complete discussion of issues and formula for dividing a military retirement, see the Military Retirement section of the Military Divorce Guide.

Moreover, as the military retirement benefits end upon the death of the retiree, see the Survivor Benefit Plan article for details on how to ensure continued payments should the member die before the former spouse.

Thrift Savings Plan (TSP)

The military has long offered a Thrift Savings Plan, which is a “defined contribution” plan, similar to an employer-sponsored 401(k) plan. With the new Blended Retirement System, the TSP now receives matching funds from the military, and partially replaces some of the value of the traditional military pension described above.

The TSP is a divisible asset in a divorce or legal separation, and the former spouse can rollover his/her share into a qualifying account, such as a Rollover IRA. For complete details, see the Understanding Military Retirement Pay article in the Military Divorce Guide.

VA Disability Payments

A member’s disability payments from the Veterans Administration are not a divisible asset, even if the member had to give up some retirement in order to receive VA disability (the “VA waiver”).

However, in Colorado the payments do count as income to the veteran for the purposes of calculating alimony and child support.

See the article VA Disability in a Divorce for the full details on what happens with VA disability payments.

And to the extent there is a VA waiver against the retirement in effect, the VA disability payments may be garnished to pay child or spousal support. See the Garnishment of Military Pay & Retirement article for more details.

Military Medical Benefits After Divorce

Health care is a hot issue, and after the military retirement itself, Tricare and 20/20/20 benefits are the most important available.

Military medical benefits are not a divisible asset - a former spouse who meets the statutory requirements has the right to receive Tricare, regardless of what the court orders at the time of divorce. And the opposite is also true - if the federal government determines that the former spouse is not entitled to such benefits, nothing a state court orders can change that.

Continued Health Care Benefit Program. After divorce, the former spouse is entitled to the Continued Health Care Benefit Program (CHCBP), which is the Tricare version of “COBRA” for three years. And as long as the spouse remains unmarried and was also awarded a share of the military retirement or SBP, the former spouse may remain on CHCBP for life. However, CHCBP is not cheap - in 2019 the program costs $1453/quarter for an individual, or $484/mo - it may well be cheaper to buy a health policy on the ACA  health care exchange.

20/20/20 Benefits. This is the real deal - if the parties were married for at least 20 years, the military member served 20 years, and there were at least 20 years of overlap, an unremarried former spouse is a “20/20/20” spouse, entitled to Tricare health just as if the parties were still married - i.e. it’s cheap!

20/20/15 Benefits. If there were at least 20 years of marriage and 20 years of service at the time of divorce, but only 15 years of overlap, the former spouse is entitled to 1 year of transitional medical (i.e. Tricare) benefits only.

For complete details of the health care benefits available to a former spouse after divorce, see the Military Health Benefits for Divorced Spouses article.

Post-9/11 GI Bill & Former Spouses

The Post-9/11 GI Bill is an extremely valuable military benefit - between the payment of tuition, the monthly housing allowance, and the book stipend, in 2019 it is worth about $160,000 over the period of a 4-year college degree.

And the benefit is not just for the member - the member may transfer it to his/her spouse or children, providing that certain eligibility requirements are met. Divorce does not terminate one’s status as a GI Bill beneficiary, so as long as the member agrees, the former spouse may continue to receive GI Bill benefits.

Despite its clear value, the Post-9/11 GI Bill is not a divisible asset in a divorce. Federal law prohibits state courts from dividing the GI Bill as part of a divorce. So while the member may agree to allow the former spouse to continue to use benefits, he/she may not be required to do so.

However, the GI Bill benefits partially count as income for the purposes of calculating maintenance & child support - the monthly stipend (value about $1500 or so, depending upon the zip code of the college) are income, but the tuition assistance and book stipend are not income.

For a complete discussion of this issue, see the Post-9/11 GI Bill Benefits in a Divorce article.

Military Family Housing After Divorce

Family members may only live in military housing while the couple is married. Upon divorce, a family in housing will have 30 days to depart. See the Military Base Housing in a Divorce article for details.

BAH for Divorced Spouses

Each of the branches of the armed forces has a requirement that the military member pay a separated spouse a monthly amount to live on, pending pending civilian court order to the contrary. In the Army, for example, the amount due is the equivalent of BAH-II, or the national BAH rate before it is adjusted for specific duty stations. See the Family Support section of the Military Divorce Guide for details for each of the branches.

However, the BAH payments cease upon divorce, or court order to the contrary. At that time, whatever the domestic relations judge has ordered for spousal and child support, if anything, is owing. While BAH counts as income to the military member, the spouse is not entitled to BAH, just whatever the court has ordered.

Children ID Cards after Divorce

Normally, dependent children under 10 are not issued ID cards, however there is an exception in case of divorce. Per the joint regulation AFI 36-3036, para. 4-3, children of any age who do not live with the sponsor are issued an ID card - simply apply using DD Form 1172-2.

A non-military parent with a child who is a military ID cardholder can therefore access military installations.

Do You Need a Military Divorce Lawyer in Colorado Springs?

The family law attorneys at Graham.Law have years of experience helping clients navigate the Colorado family law system. We know military divorce issues inside and out, from the alphabet soup of allowances that comprise military pay to nuances of dividing military retirement. For more information about our El Paso County military divorce law firm, click on:

Colorado family law is all we do. Period.

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Carl O. Graham