SUDOKU
Understanding VA Disability and Military Retirement
Historically, if a retired service member also received VA disability payment, the member’s retirement pay was reduced dollar for dollar by the amount of the disability pay.
The disability pay is not taxable, and it is the service member’s separate property.
This arrangement puts a hardship on the former spouse. For example, assume the former spouse was awarded 50% of the service member’s $1,000 per month retirement. As a result, they would receive $500 per month. What happens if the service member receives a 50% disability rating? The service member will begin receiving $500 directly from the VA and $500 from retirement. The former spouse will receive none of the VA disability because it is the service member’s separate property. The former spouse will continue to receive 50% of the retirement. But now the retirement is only $500. So, the former spouse’s monthly portion will shrink from $500 to $400. Congress passed a law that allows concurrent receipt of military retirement and VA disability if the service member’s disability rating is 50% or higher. In other words, there is no offset. The service member receives all of the military retirement and all of the VA disability payments.
Be Inspired
The good news for former spouses is that their award of military retirement is not reduced if the service member receives VA disability as long as the disability rating is 50% or higher.
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