How is Military Retirement Pay Calculated During Divorce?

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In military divorce, the Uniform Services Former Spouse’s Protection Act (USFSPA) recognizes the right of state courts to distribute military retired pay to a spouse or ex-spouse and provides a method of enforcing these orders through the Department of Defense.

According to the USFSPA, the division of military pay is not mandatory during divorce. This is a common mistake made by divorcing couples. There is the belief by some that the USFSPA states the military member must pay their spouse or ex-spouse a portion of their military retirement, but this is a fundamental misunderstanding of the act.

It is up to the judge in the divorce to determine whether the military member's spouse receives a portion of their retirement. The decision comes in legal solutions known as a divorce decree, dissolution, annulment, or legal separation. 

State Law Varies

State laws can differ when it comes to the division of military retirement pay but the USFSPA gives each state the right to treat military retirement as “marital property.” State courts are tasked with making an “equitable distribution” of the military member’s retired pay, but that does not automatically mean an equivalent distribution or a 50-50 split. Each state applies particular factors to each individual case and division of marital property such as military retirement is based on those factors. It is imperative that you hire an attorney who is experienced in military divorce in your state. 

Division of Military Retired Pay After Retirement

The portion of the retired pay that is considered “marital property" can be defined as a fraction. The numerator is the total number of months or years the parties were married during the service member’s creditable military service; this is divided by the total number of months or years of the member’s creditable military service.

For example, let's assume that a service member has served in the military for four years before marrying their spouse. Let's also assume that they then served another 16 years before retiring, while still married. After retirement, the couple separates and divorces. In this case, 16 of the service member’s 20 years on active duty occurred during the marriage and before separation and divorce. That means the numerator of the marital share fraction would be 16 and the denominator would be 20.

16 divided by 20 = 80%

The marital share of the service member’s disposable retired pay would be 80%. If the court chooses to award the member’s spouse 50% of the marital share, the spouse will receive 40% of the service member’s disposable retired pay.

50% of (multiplied by) 80% = 40%

Division of Military Retired Pay Before Retirement

Determining the exact marital share of military retirement is not possible if the service member is not yet retired. The denominator is unknown in this situation because we will not know how many years the service member will serve until retirement takes place. In this type of divorce, courts can award a percentage of the service member’s retired pay by using another formula. In this example, the service member was in the service for two years before marrying. The marriage lasted another 18 years and then ends in divorce. At the time of the divorce, the service member is still on active duty. At the time of the divorce, we can not calculate the spouse’s percentage of military retirement because the denominator or years of service is still growing. The numerator can be determined though by the length of the marriage. In this case, the numerator is 18 years or 216 months. To award the spouse 50% of the military retired pay the court order would read as follows:

"The spouse shall receive 50% of the marital share of the service member’s disposable retired pay. The marital share is a fraction, the numerator is 216 months of marriage during the service member’s creditable military service, divided by the total number of months of the member’s creditable military service."

Once the service member retires, the Department of Finance would fill in the unknown denominator which would be the total number of months the service member accumulated before retirement.

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