How Is Military Retirement Pay Divided During a Divorce?

TL;DR:

Military retirement pay can be divided during a Utah divorce, but it is not automatically split between spouses. State courts decide how marital retirement benefits are divided, while federal rules determine how payments can be processed and what benefits are eligible for division. Factors such as the length of the marriage, overlapping military service, retirement status, and the divorce order can all affect the outcome.

Military retirement benefits can represent one of the most valuable assets involved in a military divorce. In fiscal year 2024 alone, the Department of Defense Military Retirement Fund paid approximately $72.2 billion in benefits to military retirees and survivors.

When a service member divorces, however, determining what happens to those benefits involves both state and federal law. Utah property division rules determine how marital property is divided, while federal law establishes which portions of military retired pay may be divided and how a former spouse may receive payments.

Understanding military retirement pay division is especially important because several commonly misunderstood rules, including the 10/10 rule and the 50% direct-payment limit, do not determine whether a former spouse has a right to retirement benefits in the first place.

In this article, we’ll cover:

• How military retirement pay may be divided during a Utah divorce
• How the Uniformed Services Former Spouses’ Protection Act affects military pension division
• When a former spouse may receive direct payment of retirement benefits
• How disability benefits, the Survivor Benefit Plan, and other factors may affect the final division
• How a military divorce lawyer can help

How Does Military Retirement Pay Division Work in Utah?

Military retirement pay earned during a marriage may be treated as marital property during a Utah divorce. The portion earned outside the marriage may be treated separately, making the timing of the marriage and the service member’s military service important to the calculation.

Federal law also plays a major role. The Uniformed Services Former Spouses’ Protection Act (USFSPA) allows state courts to treat qualifying disposable military retired pay as property belonging to the service member, the spouse, or both. The law does not automatically entitle a former spouse to half of a military pension.

Instead, the divorce decree or other court order determines how the marital portion will be allocated. The length of the marriage, years of overlapping military service, type of retirement, and terms of the court order may all affect military retirement pay division.

Key Takeaway: A former spouse’s share of military retirement pay depends on the portion earned during the marriage, not simply the total years a service member spent in the military. The divorce order must define how the marital portion will be divided.

How the Uniformed Services Former Spouses Protection Act Applies

The Uniformed Services Former Spouses’ Protection Act (USFSPA) provides the federal framework for dividing military retired pay during divorce. It allows state courts to treat qualifying military retired pay as marital property and provides a way to enforce a former spouse’s award through the Department of Defense.

The USFSPA does not automatically give a former spouse part of a service member’s pension. The former spouse must receive an award through a divorce decree or other qualifying court order.

Common Misunderstanding: The USFSPA does not automatically give a former spouse a percentage of military retirement benefits. It creates a legal framework that allows state courts to divide qualifying retirement pay when a divorce order awards a share.

What Counts as Disposable Military Retired Pay?

Federal law generally limits military pension division under the USFSPA to disposable retired pay. This is the service member’s gross retired pay minus certain authorized deductions, which may include amounts waived to receive VA disability compensation.

The distinction matters because a court award involving retirement benefits is not necessarily calculated from the service member’s full gross retired pay.

Does the USFSPA Apply to Active Duty and Reserve Retirement?

The USFSPA applies to qualifying retirement benefits from members of the uniformed services, including cases involving active duty and Reserve retirement. The calculation may differ based on the type of service, years of creditable service, retirement points, and whether the service member has already retired when the divorce becomes final.

Marital vs. Separate Property in Military Pension Division

Military retirement benefits are not necessarily divided based on the service member’s entire military career. In Utah, retirement benefits accumulated during the marriage are generally subject to equitable division, while benefits earned outside the marriage may be treated differently.

Important Detail: Military pension division often depends on timing. Benefits earned before marriage or after divorce may be treated differently from retirement benefits accumulated while the couple was married.

The Marital Portion of a Military Pension

The marital portion generally reflects the retirement benefits earned while the parties were married. If a service member served for years before getting married or continued serving after the divorce, those periods may affect how much of the pension is considered part of the marital estate.

Utah courts divide marital property equitably, meaning fairly rather than necessarily equally. As a result, military pension division does not automatically mean that a former spouse receives half of the service member’s entire pension.

When Retirement Benefits May Be Separate Property

Retirement benefits attributable to military service outside the marriage may be treated as separate property rather than marital property. Determining the marital portion may require looking at the marriage dates, years of creditable service, retirement points for Reserve members, and the terms of the divorce decree.

The calculation becomes particularly important when a military member is still on active duty at the time of divorce because the member may continue earning retirement benefits for years after the marriage ends.

The 10/10 Rule and Direct Payment to a Former Spouse

The 10/10 rule determines whether a former spouse may receive a court-ordered share of military retired pay directly through the Defense Finance and Accounting Service (DFAS). It does not determine whether the former spouse is entitled to a portion of the retirement benefits.

To qualify for direct payment under the USFSPA:

• The marriage must have lasted at least 10 years.
• At least 10 years of the marriage must overlap with military service creditable toward retirement.

A former spouse who does not meet the 10/10 rule may still receive an award of military retirement pay through a divorce decree or property settlement. The difference is that DFAS generally cannot enforce that property award through direct payments. Instead, payment must be handled through the retired service member or another method established by the court.

The 10/10 requirement also applies specifically to retired pay divided as property. It does not apply to DFAS enforcement of qualifying child support or alimony orders under the USFSPA.

Before You Decide: The 10/10 rule affects how payments are received, not whether a former spouse can receive a portion of military retirement benefits. A court may still award retirement benefits even when DFAS direct payment requirements are not met.

Dividing Military Retired Pay: Percentage, Formula, or Fixed Dollar Amount?

A court order dividing military retired pay must clearly state the former spouse’s award. Depending on the circumstances, the award may be expressed as a fixed dollar amount, a percentage of disposable retired pay, or, when applicable, a formula or hypothetical retired pay award.

Fixed Percentage of Retired Pay

A court order may award the former spouse a fixed percentage of the member’s disposable retired pay. Percentage awards generally adjust along with the service member’s cost-of-living adjustments (COLAs), which means the amount received may change over time.

Fixed Dollar Amount

A fixed dollar award provides the former spouse with a specific monthly amount rather than a percentage. Unlike percentage awards, DFAS does not apply COLAs to fixed dollar amount awards.

Formula or Hypothetical Award

When the service member has not yet retired, the order may use an acceptable formula or hypothetical award. These methods account for factors such as the length of the marriage during creditable military service and the service member’s retirement information.

The divorce decree must provide enough information for the Defense Finance and Accounting Service to calculate the former spouse’s award. Vague language, such as awarding a percentage of the “marital portion” without providing the necessary calculation details, may require the court to clarify the order before DFAS can make payments.

How the Frozen Benefit Rule Affects Military Pension Division

When a service member is still serving at the time of divorce, federal law limits how future military retirement benefits are valued for property division. This approach is commonly known as the Frozen Benefit Rule.

Under changes made by the National Defense Authorization Act of 2017 and revised in 2018, the divisible retirement benefit is generally based on the service member’s retired pay base and creditable service as of the date of the divorce, dissolution, annulment, or legal separation. Cost-of-living adjustments between the divorce and retirement may then be applied.

What This Means For You: The timing of the divorce can affect how military retirement benefits are calculated. When a service member has not retired yet, the divorce order may need specific information to calculate the former spouse’s future share.

Active Duty Retirement

For an active duty service member who entered military service on or after September 8, 1980, the court order generally needs to provide the member’s high-3 amount and years of creditable service at the time of divorce. Different requirements apply to members who entered service before that date.

Reserve and Guard Retirement

Reserve and Guard retirement calculations rely on retirement points rather than only years of service. Depending on when the member entered military service, the court order may need to identify the member’s pay grade or high-3 amount along with creditable Reserve retirement points as of the divorce.

These requirements make precise language especially important when dividing military retired pay before the service member retires. If required information is missing, the Defense Finance and Accounting Service may require clarification before it can process the former spouse’s award.

How VA Disability Compensation Can Affect Retirement Pay

Military retirement pay and VA disability compensation are treated differently during divorce. Under federal law, amounts of retired pay waived to receive VA disability compensation are generally excluded from the service member’s disposable retired pay available for property division through the USFSPA.

Key Insight: Military retirement pay and VA disability compensation are separate benefits with different legal treatment during divorce. A retirement award should clearly identify which benefits are being divided to avoid confusion.

The VA Waiver Can Reduce Disposable Retired Pay

Some military retirees waive a portion of their gross retired pay to receive tax-free VA disability compensation. When that occurs, the waiver may reduce the amount of disposable retired pay used to calculate a former spouse’s percentage award.

This distinction means the amount a former spouse receives may differ from a percentage calculated using the military retiree’s gross retired pay.

Disability Retirement May Also Affect the Calculation

Federal law also excludes certain amounts attributable to disability retirement under Chapter 61 from disposable retired pay. The rules may become especially complex when a retired service member receives military retirement, VA disability compensation, Concurrent Retirement and Disability Pay (CRDP), or Combat-Related Special Compensation (CRSC).

For example, DFAS states that CRSC is not subject to property division under the USFSPA, while CRDP is a restoration of retired pay. Changes involving these benefits may therefore affect the amount of retirement pay available for a former spouse’s award.

Because disability benefits and military retired pay are governed by different federal rules, divorce orders should clearly distinguish between the benefits involved when addressing military retirement pay division.

Survivor Benefit Plan (SBP) Coverage After Divorce

Dividing military retired pay does not automatically provide a former spouse with payments for life. Payments made under the USFSPA generally stop when either the military retiree or former spouse dies. The Survivor Benefit Plan (SBP) is a separate benefit that may provide an annuity to an eligible beneficiary after the retiree’s death.

Planning Tip: Dividing retirement benefits does not automatically protect a former spouse after the retiree’s death. Addressing Survivor Benefit Plan coverage separately can help clarify what happens after retirement payments end.

Former Spouse Coverage Under the Survivor Benefit Plan

Divorce generally ends existing spouse SBP coverage unless steps are taken to establish former spouse coverage. Depending on the divorce agreement and court order, the service member may elect former spouse coverage or the former spouse may request a “deemed election” when the member has been ordered to provide that coverage.

Timing matters. A former spouse seeking a deemed election must submit the request to the Defense Finance and Accounting Service within one year of the court order requiring former spouse SBP coverage. DFAS requires the applicable court order, divorce decree, and DD Form 2656-10.

Because military pension division and survivor benefits address different financial risks, both should be considered when negotiating a divorce involving military retirement benefits.

How the Defense Finance and Accounting Service Handles Payments

A former spouse who qualifies for direct payment does not begin receiving a share of military retired pay automatically. The former spouse must apply through the Defense Finance and Accounting Service (DFAS) and provide documentation establishing the award.

Requirements to Receive Direct Payment

To apply for payments under the USFSPA, a former spouse generally submits:

• A completed DD Form 2293, Application for Former Spouse Payments from Retired Pay
• A certified copy of the applicable divorce decree or other court order
• A marriage certificate if the marriage date does not appear in the court order
• Additional documentation needed to establish eligibility, when applicable

For military retirement pay division as property, the former spouse must also satisfy the 10/10 rule for DFAS to make direct payments. Once DFAS receives a complete qualifying application, payments generally must begin within 90 days if the military member is already eligible to receive retired pay.

What the Divorce Decree Must Include

The court order must clearly state the former spouse’s award in a form DFAS can calculate. An award may be expressed as a fixed dollar amount or percentage of disposable retired pay. When the parties divorce before the member retires, an acceptable formula or hypothetical retired pay award may also be used.

Language simply awarding a percentage of the “marital portion” may not provide the Defense Finance and Accounting Service with enough information to calculate payments. Careful drafting of the divorce decree is therefore an important part of dividing military retired pay.

How Much Military Retirement Pay Can a Former Spouse Receive?

There is no automatic percentage of military retirement pay that a former spouse receives after divorce. The amount depends on the court order and the portion of the retirement benefits subject to division.

The 50% Direct Payment Limit

Under the USFSPA, the Defense Finance and Accounting Service generally limits direct property-division payments to 50% of the service member’s disposable retired pay. This is a payment limit, not a rule requiring state courts to award a former spouse half of the military pension.

DFAS pays the amount established in the court order up to the applicable federal limit. For example, if the former spouse’s award equals 30% of disposable retired pay, DFAS does not increase that award to 50%.

Child Support and Alimony May Affect the Limit

Different rules apply when military retired pay is also subject to garnishment for child support or alimony. When payments under the USFSPA and qualifying garnishment orders apply together, the total amount paid may reach up to 65% of the member’s disposable earnings.

Understanding the difference between a former spouse’s court-ordered award and DFAS payment limits is an important part of military retirement pay division.

Bottom Line: Military retirement division involves more than calculating a percentage of a pension. The final result depends on the divorce order, federal requirements, the marital portion of benefits, and whether the necessary documents allow payments to be processed correctly.

Talk to a Utah Military Divorce Lawyer About Retirement Pay

Military retirement benefits can be one of the most significant assets involved in a military divorce. Federal rules governing disposable retired pay, direct payments, disability benefits, and survivor coverage add another layer of complexity to Utah’s property division process.

Henriksen Law helps service members and military spouses understand how retirement benefits may be treated during divorce. An attorney can review the service member’s military history, determine what portion of the pension may be subject to division, and help prepare a court order that addresses the parties’ rights and complies with applicable federal requirements.

If military retirement benefits are part of your divorce, learn more about military retirement pay division and speak with Henriksen Law about your options. Contact us now!