What is the difference between military retirement pay and military disability pay?
Retirement pay is subject to distribution as marital property; disability benefits are not.
Let’s say a military spouse receives a major portion of his retirement pay as disability pay since he had to retire from the military as disabled. In a divorce, he says his former spouse cannot get at his disability pay, and that only his retirement pay is available for distribution.
Disability pay is not considered disposable pay that may be split with an ex-spouse, even under a court order. Courts cannot order a division of disability pay as property.
While disability pay is not considered disposable and cannot be divided, a civilian spouse may still be able to receive more spousal support.
Of course, if the money is not there, itís not there. No court can order the military to increase a spouse’s retirement pay just for the purposes of increasing spousal support.
If most of a former spouse’s pay is disability pay and there is little or nothing else to use as compensation, his former spouse probably won’t get her "fair share" of the marital property. It may not be fair, but it is the way it is.
Since disability pay is off limits, a court may correct the property distribution by awarding the wife more real or personal property in lieu of the portion of the retirement pay. For example, she might receive the marital home outright, or she may receive a larger proportion of any stocks, bonds, or certificates of deposit they owned as a couple. The court could order her ex-husband to be solely responsible for marital debts, as a way of compensating her for missed retirement pay.