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Veterans Law

VA Disability Benefits, Divorce, and Child Support

September 20, 2019
VA Disability Benefits, Divorce, and Child Support

Veterans are often concerned about how much of their VA disability compensation they may lose during and after a divorce, due to property division, alimony, and child support.  Each state has its own laws governing divorce, child support, and alimony; however, there are also federal laws governing the distribution of VA benefits.  Importantly, these federal laws provide certain protections for veterans’ disability benefits.

VA Disability Benefits Are NOT Considered an Asset in a Divorce

The Uniformed Services Former Spouses’ Protection Act exempts 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.  It is important to note that this is different than the treatment of military retirement benefits, which can be a marital asset subject to division by a family court.

VA Disability Benefits and Child Support

However, VA disability benefits can count when a court calculates a veteran’s income for child support purposes.  VA disability benefits are compensation for the veteran’s impaired earning capacity and are intended to provide reasonable and adequate compensation for disabled veterans and their families.

The logic here is if the veteran wasn’t disabled, he or she would be earning an income upon which a family court would base child support.  In this case, the veteran’s disability benefits replace that income.  Therefore, most states treat VA benefits as income for the purpose of determining an appropriate amount of child support.  Since VA disability benefits are tax-free, the entire amount of compensation is considered when making this determination.

Garnishment of VA Disability Benefits for Alimony, Child Support

Garnishment is the process by which money is seized from an individual in order to satisfy a debt that is owed.  There are certain circumstances in which VA disability benefits can be garnished.  Specifically, if a veteran fails to make alimony and child support payments, the state can sometimes order their VA benefits to be garnished.  However, this garnishment typically depends on the veteran’s military retirement pay status.

Generally speaking, VA disability benefits can only be garnished if the individual who is receiving those benefits has waived military retired pay to obtain the VA compensation.  In this case, only the amount of disability compensation that was paid in place of the military retired pay can be garnished.  The remainder of the disability compensation is protected.  If a veteran has not waived his or her military retired pay, then VA benefits cannot be garnished at all.

VA will decide the amount of disability compensation that can be reasonably garnished.  This analysis will consider the following factors:

  • Whether the veteran has other sources of income
  • Any special needs the veteran has that require more income
  • The amount of income that is available to the veteran’s former spouse
  • Any special needs the veteran’s former spouse and children not in his or her custody have that require extra funds

Typically, between 20 to 50 percent of VA disability benefits can be garnished as 20 percent is considered to be an insufficient amount for a veteran’s dependents and 50 percent is considered to cause undue hardship to a veteran.  If the veteran has multiple children to support, equal payments will be provided to each child out of garnishment.  Outside of 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 he or she is married to that person
  • A former spouse was found by state court to have been guilty of conjugal infidelity (i.e. cheating)

Apportionment of VA Disability Benefits

Apportionment refers to the process by which VA assigns a certain portion of a veteran’s disability benefits to a family member.  VA will pay the eligible family member part of the veteran’s monthly compensation, thereby reducing the amount of benefits the veteran will receive.  VA disability benefits will not be garnished for alimony or child support payments until the veteran’s former spouse first elects to receive the apportioned share of it.

Family members must file for apportionment by filling out VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award, before garnishment will 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 as well as the person requesting apportionment.

If either party chooses to appeal the decision, VA will handle it the same way as an appeal for denied disability benefits and issue a Statement of the Case.  At this point, the parties have 30 days to file a substantive appeal if they continue to disagree with VA’s decision.

Why Apportionment Could Get Denied by VA

Apportionment will not be granted if it is going to cause undue financial hardship to the veteran.  Again, VA does not want to take away the veteran’s livelihood if they do not have any other income on which they can survive.

Furthermore, if a veteran’s former spouse remarried and the veteran’s child was legally adopted by their former spouse’s new partner, that child would not be eligible for apportionment.  The veteran would no longer be financially responsible for the child.  Finally, a child of a veteran would not be eligible for apportionment if they are under the age of 18, but currently in active military service.

What Happens After Someone Files for VA Apportionment?

Importantly, if an individual is looking for apportionment of VA benefits, they will have to file a claim.  That is, apportionment is not something that is going to be automatically granted.  As mentioned above, family members must fill out and submit VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award.  If the individual applying did not submit financial statements in support of their request, VA will begin the development process in which the department requests, obtains, and reviews such documentation.  Specifically, VA will often request that both the veteran and the person filing for the apportionment submit evidence, if applicable.  For example, a veteran might submit evidence showing that the apportionment would result in financial hardship for them.  Conversely, the person filing for apportionment would need to submit documentation showing that the apportionment is necessary.  Once VA has that evidence, it will issue a decision either granting or denying the apportionment, and that decision will also determine the amount of apportionment, if granted.

How to Fight Apportionment

After a decision is issued, either the veteran or the person filing for the apportionment can appeal VA’s decision if they are unhappy with the outcome.  Namely, the person filing for the apportionment can argue that the monetary amount decided on is too low to support their family.  The veteran can appeal for a hardship reduction on the grounds that the apportionment will create a financial strain.

Apportionment in Case of Incarceration

Spouses of veterans who are incarcerated may file for an apportionment of the veteran’s benefits, as well.  Oftentimes, when veterans are incarcerated, their amount of monthly disability compensation is reduced.  By filing for apportionment, the full amount of the veteran’s payments could potentially be paid to their spouse as opposed to the reduced payment amount that is going to the veteran.  Essentially, the veteran’s spouse would receive the total monthly benefit instead of the decreased percentage (typically 10 percent) that they are receiving.

Child Support, Alimony, and VA Disability

Generally speaking, alimony is a court-ordered legal obligation for one person to provide financial support to their spouse or ex-spouse after separation.  Typically, it terminates if the spouse who is receiving that financial support remarries.  Nonetheless, it is a way for one spouse to support the other and ensure that they can provide for the child(ren).  On the other hand, child support is basically an agreement that is made between the two parties, usually in a court setting with a judge.  Child support orders one spouse to pay the other spouse who is likely in primary physical custody of any minor children.  Similar to alimony, this monetary payment is intended to help support the raising of those kids and to give them some sort of financial benefit to help pay for food, clothing, transportation, etc.

Importantly, VA benefits can be taken into account when the court is looking at a veteran’s income for child support and alimony purposes.  That is, VA benefits would be counted towards a veteran’s income when calculating child support payments.  It is also important to consider the fact that VA benefits are tax-free.  Therefore, the entire amount of the veteran’s disability compensation would be considered in a family court’s determination of child support.

Oftentimes, the court systems must deal with spouses who do not pay the ordered child support or alimony.  In some cases, a spouse may not be able to pay the full amount of child support or pay on a monthly basis.  Under these circumstances, VA disability benefits may be garnished (see Rose v. Rose).