While each state has its own laws governing divorce, child support, and alimony, there are federal laws which provide certain protections for a veteran’s disability benefits.
VA Disability Benefits Are NOT Considered an Asset in a Divorce
The Uniformed Services Former Spouses’ Protection Act exempts Department of Veterans Affairs (VA) disability benefits from being divided during a divorce. In other words, VA disability compensation is not an asset that a judge can divide as marital or community property.
Importantly, this is different than the treatment of military retirement benefits, which can be subject to division by a family court.
Child Support, Alimony, and VA Disability
Alimony is a court-ordered legal obligation for one person to provide financial support to their spouse or former spouse after separation. Typically, alimony terminates if the spouse receiving the financial support remarries.
Child support is an agreement made between two parties – usually in a court setting with a judge – where one parent pays the parent who has primary custody of any minor children. Child support is intended to help support the raising of the children, such as paying for their food, clothing, transportation, etc.
When a court calculates a veteran’s income for child support and alimony purposes, VA disability benefits are factored in. Since VA compensation is tax-free, the entire grant of benefits is considered when determining child support payments.
Garnishment of VA Benefits for Alimony and Child Support
When money is seized from an individual to satisfy a debt, this is known as garnishment. If a veteran fails to pay alimony or child support, the state can sometimes order their VA benefits to be garnished.
Generally, a veteran’s disability benefits can only be garnished if they waived military retirement pay to obtain VA benefits. In this situation, only the amount of disability compensation paid in place of the military retirement pay can be garnished, and the remainder is protected. If a veteran has not waived their military retired pay, then VA benefits cannot be garnished at all.
VA determines the amount of compensation that can be reasonably garnished based on a few factors:
- Whether the veteran has other sources of income
- Any special needs the veteran has that require more income
- The amount of income available to the veteran’s former spouse
- Any special needs the veteran’s former spouse and children (not in the veteran’s custody) have that require extra funds
Typically, between 20 to 50 percent of VA disability benefits can be garnished. If the veteran has multiple children to support, equal payments are provided to each child out of garnishment. In addition to the military retired pay status criteria, garnishment is not permitted when:
- Garnishment would cause undue financial hardship
- A veteran’s former spouse or child has not filed for apportionment (see below)
- A veteran’s former spouse is living with another person and acting like they are married to that person
- State court found the former spouse guilty of conjugal infidelity (i.e., cheating)
Apportionment of VA Disability Benefits
When VA assigns a certain portion of a veteran’s disability benefits to a family member, this is called apportionment. Family members must file for apportionment by filling out and submitting VA Form 21-0788 – Information Regarding Apportionment of Beneficiary’s Award – before garnishment can be considered.
When VA receives a claim for apportionment of a veteran’s benefits, it must gather evidence to decide whether to award the claim. Then, when a decision is made, VA must notify the veteran and the person requesting apportionment.
If either party chooses to appeal the decision, VA will issue a Statement of the Case. At this point, both parties have 30 days to file a substantive appeal if they disagree with VA’s decision.
Why VA May Deny Apportionment
There are several situations in which VA may deny apportionment, including:
- If it causes the veteran undue financial hardship (i.e., VA will not take away a veteran’s livelihood if they have no other income to survive on);
- If the veteran’s child is legally adopted by the former spouse’s new partner (i.e., the veteran is no longer financially responsible for the child); or
- If the veteran’s child is currently in active military service.
What Happens After Filing for VA Apportionment
After filing VA Form 21-0788, if the family member does not submit financial statements in support of their claim, VA will begin the development process. Here, VA requests, obtains, and reviews supporting documentation.
VA often requests that both the veteran and the person filing for apportionment submit evidence, if applicable. For example, a veteran may submit evidence indicating that apportionment would result in financial hardship for them. Conversely, the family member filing must provide documentation showing that apportionment is financially necessary.
Once VA has the evidence it needs, it will issue a decision either granting or denying the apportionment. If granted, the decision will also include the amount of apportionment awarded to the family member.
How to Challenge an Apportionment Decision
After VA issues a decision, either the veteran or the family member filing for apportionment can appeal the decision. For example, the person requesting apportionment can argue that the monthly amount is too low to support their family. The veteran can also appeal for a hardship reduction on the grounds that the apportionment will create financial strain.
Apportionment and Incarceration
Often, when veterans are incarcerated, their monthly disability compensation is reduced. If a spouse files for apportionment, they could potentially receive the full amount of the veteran’s payments as opposed to a reduced payment amount going to the incarcerated veteran.
Robert is a Founding Partner of Chisholm Chisholm & Kilpatrick LTD. His practice focuses on representing disabled veterans before the US Court of Appeals for Veterans Claims, where he has served as appellant’s lead counsel in over 7,500 cases, and the Department of Veterans Affairs. Robert has been representing disabled veterans since 1990. www.cck-law.com