The United States Department of Veterans’ Affairs (VA) offers certain benefits to spouses, minor children and other legal dependents, family caregivers, and survivors of veterans who have passed away. Examples of family benefits include health insurance, life insurance, and educational benefits.
Every military family is unique, and some veterans are now divorced from the person they were legally married to while serving in the military. Veterans and their former spouses often have questions about eligibility for VA benefits in this situation.
This guide will help veterans and their spouses understand what to expect. Please note that legal separation does not change any entitlement to spousal benefits. That only occurs once the divorce becomes final.
Does the VA Reduce a Veteran’s Compensation After Divorce?
VA disability benefits do not count as an asset during divorce proceedings under federal law. What that means for veterans and former spouses is that a divorce lawyer or family court judge cannot automatically divide the disability income between the former husband and wife.
However, both parties should understand that laws regarding the division of VA disability income can vary by state. Attorneys representing each party should determine how state law impacts the division of all assets in the divorce and provide that information to their clients.
A few situations exist when either the federal or state government can garnish a portion of VA disability benefits. The most common reason for a garnishment is when the veteran falls behind or fails to make any payments towards child support or alimony. The amount the VA can legally withhold from disability payments and redistribute to another party ranges from 20 to 50 percent according to the veteran’s number of legal dependents.
The reason the VA allows garnishments from disability pay is that its mission is to support both veterans and their families. Federal or state governments cannot garnish VA disability payments for past due taxes, nor can creditors request a garnishment of the disability compensation to satisfy past due accounts.
No party can file for garnishment of VA disability compensation unless the veteran signed a full or partial waiver to not receive regular military retirement pay in exchange for VA disability pay. Only the portion of compensation the veteran receives as replacement for retirement pay is subject to garnishment for non-payment of child support or alimony.
However, the following restrictions apply in cases of VA disability compensation garnishment used to pay alimony:
- Garnishment of the veteran’s disability payments would cause an undue financial hardship.
- The former spouse committed adultery while married to the veteran and a state court confirmed this fact.
- The former spouse lives with a new partner, whether legally married to that person or not.
- Former spouses cannot receive alimony from disability income unless they file for apportionment and meet legal qualifications to initiate a garnishment.
Unlike the division of marital assets in a divorce that does not include VA disability income, the family court can use this income for the purpose of determining child support payments. This is true even if VA disability compensation is the only source of income the veteran receives each month.
The term apportionment describes the process of the VA withholding a portion of the veteran’s disability compensation and directing it to a spouse, dependent child, or dependent parent. When divorce enters the picture, former spouses can apply to the VA for apportionment if they are able to prove a legitimate financial hardship. The qualifications, application process, and distribution of apportioned funds varies according to state laws.
Here are the criteria for family members of veterans applying for apportionment:
- The family member does not reside in the same household as the veteran.
- The family member has the ability to provide documented evidence of financial need.
- The claimant can prove that the veteran has failed to provide financial support for dependent family members.
- The veteran is in jail or prison and unable to make direct payments to the family member.
- The veteran meets the legal definition of incapacitation and does not have a guardian or fiduciary. Long-term hospitalization is an example of veteran incapacitation.
Spouses, former spouses, dependent children, or dependent parents need not meet all criteria as some only describe reasons for requesting apportionment in the first place.
The VA considers the veteran’s income and living expenses when approving or denying a request for apportionment. An approved request cannot place an undue financial hardship on the veteran even if the family member meets the criteria to file for apportionment.
What Benefits Can Divorced Spouses Receive?
The ex-spouse of a military veteran may be eligible for some or all of the benefits described below.
Health Benefits: Former spouses maintain eligibility for VA health insurance and other benefits if they meet the 20/20/20 rule.
They must have been married to the military veteran for at least 20 years, the veteran must have at least 20 years of military service, and the military service and marriage must have overlapped by at least 20 years. Additionally, the former spouse cannot have remarried or have access to an employer-sponsored health insurance plan.
The former spouse may receive only one year of TRICARE coverage if the marriage and the veteran’s military service overlapped by only 15 years.
The Department of Defense Continued Healthcare Benefit is available to ex-spouses who do not meet either the 20/20/20 or 20/20/15 rules. They may apply for coverage within 60 days after losing eligibility to receive health insurance through the veteran and retain it for up to three years.
Former spouses who choose this option will pay a monthly premium for healthcare coverage based on their income.
Here are additional benefits they may receive:
- Military Identification: Former spouses who meet the 20/20/20 rule can retain their military identification for whatever purpose they see fit.
- Military Retired Pay: Family court judges may legally divide military retirement pay during divorce proceedings because the court considers it marital property. However, this does not mean that the former spouse automatically receives 50 percent of the veteran’s military retired pay. The judge will divide the marital asset according to state law instead.
- Post Exchange and Commissary Benefits: This benefit entitles veterans and certain family members to receive discount goods and tax-free shopping with participating merchants. Former spouses can retain this benefit if they meet the 20/20/20 rule.
- Survivor Benefit Plan: Divorced spouses who select former spouse coverage through a military finance center within one year of the date the divorce finalized can become a beneficiary on the veteran’s survivor benefit plan. The beneficiary designation terminates if the former spouse remarries before age 55 unless that marriage also ends in divorce or the new spouse passes away.
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