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Supreme Court rules disability pay cannot be offset

A new Supreme Court ruling has many service members and their families interested. A hotly debated issue has finally been settled in the case, and according to Military Times, Howell v. Howell has settled the matter: if a veteran chooses disability pay and waived retirement benefits, state courts cannot try to recoup the loss of benefits for a divorcing spouse. The case is based on an older law, changed in 2003, that required vets to choose between their full retirement pay, which was taxed, or “offset” part of this pay with disability pay, which is not taxed.

Although the case was originally brought in 1991 by a retired veteran who chose to offset some of his retirement pay for disability pay. His ex-wife believed that she should receive half of the disability pay, and the Arizona Supreme Court ruled in her favor. This new ruling overturns the lower court.

As Task and Purpose explains, veterans who begin to receive disability benefits from their past service cannot be forced by state courts to pay their ex-spouses for a loss in retirement income that accompanied the benefits. This ruling shows that service disability pay should not be considered a joint asset by state courts. This could affect ex-spouses of veterans who are considered disabled at 50% or less, because some states were considering the disability pay as community property when determining spousal support payments. Since former spouses could see half of their support payments go away in cases like these, Justice Stephen Breyer suggested that lower courts try to take this possibility into account while determining spousal support payments for military divorces going forward.

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