Military Disability Retirement and Divorce in California

In a California divorce, a court can divide the marital share of military retired pay by court order, but it cannot divide VA disability compensation as property. Disability retirement sits between those two rules. How much of it is divisible depends on what kind of payment it is, how it was computed, and what federal law allows.

Most people facing this question are living with two hard things at once: a service-connected injury or medical retirement, and a marriage that is ending. A service member in San Diego County may be wondering whether a disability rating protects income they now depend on. A military spouse may be wondering whether years of moves, deployments and a paused career count for anything once the retirement check turns into a disability check. Both are trying to make sense of a system where federal and California law overlap, and where the names of the payments sound alike but are not.

This article walks through the four payments involved, the federal rules that govern each, how California's community property law applies to them, and how the Survivor Benefit Plan and the Servicemembers Civil Relief Act fit into the picture.

Four Payments, Four Different Rules

A military divorce involving disability can touch four separate payments, and each follows its own rules. Treating them as one "military pension" is the most common source of confusion.

• Military retired pay is the monthly pay the Department of Defense pays a retired member. Most people know it as the pay earned through a career of service (longevity retirement), but a member can also be retired for disability. The federal law that lets state courts divide it is the Uniformed Services Former Spouses' Protection Act, or USFSPA.
• VA disability compensation is a separate federal benefit paid by the Department of Veterans Affairs to compensate a veteran for a service-connected disability. It is not retired pay.
• Concurrent Retirement and Disability Pay (CRDP) is, in the words of the Defense Finance and Accounting Service (DFAS, the agency that pays military retirees), "a monthly payment to restore retired pay for those with service-connected disabilities who waive retired pay for VA disability pay."
• Combat-Related Special Compensation (CRSC) is, again in DFAS's words, "a special entitlement for combat-related disabilities."

Federal law creates and governs each of these payments. A California court dividing property in a military divorce has to apply those federal rules first. Only after federal law says what may be divided does California's community property law decide how to divide it. The firm's separate guide to CRDP and CRSC goes deeper into those two programs.

What the Uniformed Services Former Spouses' Protection Act Actually Says

The USFSPA is codified at 10 U.S.C. § 1408, titled "Payment of retired or retainer pay in compliance with court orders." It allows a state court, defined in the statute to include "any court of competent jurisdiction of any State," to treat military retired pay as property in a divorce. In San Diego County, that court is the Superior Court of California, County of San Diego.

The USFSPA does not give a former spouse anything on its own. A former spouse's share comes only from a state court order dividing the retired pay under California law. Without that order, there is nothing for DFAS to pay.

The act also sets limits on what an order can reach. DFAS explains that "an award of a percentage of a member's retired pay is automatically construed under the USFSPA as a percentage of disposable retired pay." Disposable retired pay is a federal term for the portion of retired pay left after certain amounts are taken out, and that amount is smaller than the gross figure. DFAS also notes that for divorces entered after December 23, 2016, where the order becomes final before the member retires, the divisible amount is limited to "the amount of basic pay payable to the member for the member's pay grade and years of service at the time of the court order," increased by retiree cost-of-living adjustments up to retirement.

The 10/10 rule. This rule is about how the former spouse gets paid. It does not decide whether retired pay can be divided. Federal law lets DFAS send a former spouse's court-ordered share directly only when the marriage overlapped the member's creditable service for a minimum period. When that overlap is shorter, a California court can still divide the retired pay. The difference is that payment then has to come some other way than directly from DFAS.

A former spouse asks DFAS for direct payment by submitting DD Form 2293, the DFAS Application for Former Spouse Payments from Retired Pay, along with the court order. The firm's step-by-step military retirement order guide covers the order itself in more detail.

VA Disability Compensation: Why a Court Cannot Divide It

Federal law protects VA benefits from being divided. Under 38 U.S.C. § 5301(a)(1), payments under laws the VA administers "shall not be assignable except to the extent specifically authorized by law" and "shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever."

In Mansell v. Mansell, 490 U.S. 581 (1989), the United States Supreme Court held that state courts may not divide, as community property, military retired pay that a retiree has waived in order to receive VA disability benefits. California courts are bound by that holding.

The waiver is where this becomes concrete. DFAS explains that "the law requires that a military retiree waive a portion of their gross DoD retired pay, dollar for dollar, by the amount of their Department of Veterans Affairs (VA) disability compensation pay; this is known as the VA waiver (or VA offset)." When the waiver happens, the retired pay that remains, and that can be divided, gets smaller. The former spouse's share is figured on the reduced disposable retired pay, not on the amount before the waiver.

For a former spouse, this can feel like the ground moving after the divorce is final. For a veteran, it can feel like the court is reaching for compensation meant for an injury. Both reactions make sense, and federal law is the reason the rules work the way they do. A waiver shrinks the divisible pool, but it does not end the court's role. A California court still divides the community estate as a whole. Whether and how VA disability compensation counts as income for spousal or child support is a separate question from property division, discussed further in the firm's article on VA disability pay.

Chapter 61 Disability Retirement: The Special Case

Chapter 61 of Title 10 is the part of federal law that covers retiring a member for physical disability. Under 10 U.S.C. § 1201(a), when the Secretary concerned determines that a member "is unfit to perform the duties of the member's office, grade, rank, or rating because of physical disability," the Secretary may retire the member "with retired pay computed under section 1401 of this title," if certain further findings are made. Those findings include, among others, that "based upon accepted medical principles, the disability is of a permanent nature and stable." A parallel section, 10 U.S.C. § 1204, covers members on shorter active duty or on inactive-duty training.

People search for "Chapter 61 retirement and divorce" because a Chapter 61 check looks like retired pay but rests on disability. That mixed nature is the source of the difficulty. Under 10 U.S.C. § 1401(b), a person entitled to retired pay under more than one formula "is entitled to be paid under the applicable formula that is most favorable to him." The result can blend what the member earned through years of service with what the disability adds.

DFAS describes how this plays out for a disability retiree with more than 20 years of creditable service. Such a retiree "must still waive retired pay in order to receive VA Disability Compensation," and the waiver amount is "the amount that the military disability retired pay exceeds the amount of military retired pay to which the member would have been entitled to receive if the member had hypothetically been retired under another law (such as the law that permits voluntarily retirement based on longevity/years of service)."

Courts in different places have treated the longevity portion and the disability portion of Chapter 61 pay differently. In California, the starting point is the USFSPA's definition of disposable retired pay, which controls what a court may divide. A member retired under Chapter 61 before reaching a full career presents a different question than a career retiree who also receives VA disability compensation, because there may be little or no longevity-based amount to compare against. The calculation depends on the member's service history, the retirement computation and the timing of the divorce. No single formula fits every case.

CRDP and CRSC in a California Divorce

Congress created CRDP and CRSC to let eligible retirees recover some or all of the retired pay waived for VA disability compensation. DFAS describes them as "two programs that were created by Congress to allow eligible military retirees to recover some or all of the retired pay that retirees waive for VA disability pay."

CRDP. The governing section, 10 U.S.C. § 1414, is titled for members "eligible for veterans' disability compensation for disabilities rated 50 percent or higher." DFAS states that eligibility includes a service-connected disability "rated by the Secretary of Veterans Affairs as not less than 50 percent disabling." DFAS also notes that a retiree does not need to apply. If eligible, DFAS processes CRDP once it is notified of the VA compensation.

CRSC. Under 10 U.S.C. § 1413a(e), a "combat-related disability" is one compensable by the VA that is "attributable to an injury for which the member was awarded the Purple Heart" or was incurred under Defense Department criteria in circumstances including "as a direct result of armed conflict" and "while engaged in hazardous service." DFAS states that a retiree "must apply to your Branch of Service to receive CRSC pay," and that a retiree "can only receive either CRDP or CRSC, not both."

Because CRDP restores retired pay, a former spouse may reasonably ask whether a post-divorce CRDP award changes their share. Because CRSC is a different entitlement, the same retiree's choice between the two can affect what a former spouse receives directly from DFAS. These questions are actively argued, and the answer depends on the payment, the wording of the decree and when the election was made.

How California's Community Property Rules Apply

Under Family Code section 760, "all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property," except as otherwise provided by statute. For a military family stationed in San Diego County, domicile, meaning a person's legal home rather than simply where orders sent them, can matter as much as the station itself.

Family Code section 2550 directs the court to "divide the community estate of the parties equally," except on written agreement, oral stipulation in open court, or as otherwise provided. The court can make that division in the judgment or later, if it expressly reserves jurisdiction to do so.

To find the community share of military retired pay, California courts commonly use a time rule, also called a coverture fraction. The top number is the creditable service during the marriage. The bottom number is total creditable service. The resulting fraction is the community portion, and each spouse is generally entitled to half of it. The firm's overview of military retirement division and its retirement division estimator explain those mechanics further.

Timing matters too. Under Family Code section 2552(a), the court values the assets and liabilities "as near as practicable to the time of trial." Under section 2552(b), on 30 days' notice by the moving party, the court may for good cause value some or all of them at a date after separation and before trial.

The order itself has to meet federal requirements before DFAS will honor it. DFAS states that "a Qualified Domestic Relations Order is not required to divide retired pay as long as the former spouse's award is set forth in the pertinent court order." The civilian-style QDRO is not the vehicle. The order is often called a military pension division order. DFAS also notes that when the parties divorce while the member is still on active duty, "the former spouse's award may be expressed by an acceptable formula or hypothetical retired pay award." Whatever form it takes, the award has to be stated so DFAS can calculate it.

The Survivor Benefit Plan and What Happens at the Member's Death

Retired pay stops when the retiree dies. The Survivor Benefit Plan, which 10 U.S.C. § 1447(1) defines as "the Survivor Benefit Plan established by this subchapter," is how a monthly annuity can continue to a beneficiary afterward.

Under 10 U.S.C. § 1450(a), the annuity is paid "effective as of the first day after the death" of the covered person, or on another day the person provides for under that section. The beneficiaries listed include "the eligible surviving spouse or the eligible former spouse," and, in some circumstances, surviving or dependent children in equal shares.

The size of the annuity is figured from a "base amount," and 10 U.S.C. § 1447(6) defines that term differently for different kinds of annuity. The definition that applies depends on which kind is involved.

A California divorce judgment can require the service member to elect former spouse coverage. Federal law imposes a deadline for that election to be effective, and missing it can leave a former spouse without coverage the judgment intended. When a required election is not made, a former spouse may have a separate path to seek it, though the details depend on federal procedure. For a former military spouse, survivor coverage is often the piece that feels most uncertain long after the case closes. The firm's article on military spouse benefits after divorce discusses SBP alongside other post-divorce benefits.

Servicemembers Civil Relief Act Protections During Divorce Proceedings

The Servicemembers Civil Relief Act, the name given in 50 U.S.C. § 3901, protects members of the military when civil cases, including divorce and child custody cases, move forward while they serve.

Stay of proceedings. Under 50 U.S.C. § 3932, when a servicemember who is in military service, or within 90 days after leaving it, has received notice of the case, the court "may on its own motion and shall, upon application by the servicemember, stay the action for a period of not less than 90 days," if the conditions are met. The application must include, among other things, a communication "stating the manner in which current military duty requirements materially affect the servicemember's ability to appear and stating a date when the servicemember will be available to appear." A stay is a pause. It postpones the case, it does not end it.

Default judgments. Under 50 U.S.C. § 3931, when a defendant does not appear, the court, before entering judgment, must require the plaintiff to file an affidavit stating whether the defendant is in military service, or that the plaintiff cannot determine it. If it appears the defendant is in military service, "the court may not enter a judgment until after the court appoints an attorney to represent the defendant."

These protections give a service member a fair chance to take part. They do not make a divorce go away, and a spouse in San Diego County whose case pauses during a deployment is still in an active case.

If You'd Like to Talk Through How Disability Retirement Affects Your Case

Disability retirement is where a military divorce stops fitting the usual patterns. The outcome turns on details such as how the retirement was computed, when any VA waiver began, whether CRDP or CRSC entered the picture, and what an existing judgment actually says. A consultation is a place to raise those questions. The firm practises California family law only, so questions about a VA claim itself belong elsewhere.

To talk with the firm about disability retirement in a divorce, call Military Family Law Advocates at 888-771-0460 for a confidential consultation.