Uniformed Services Former Spouses' Protection Act
Numerous financial issues arise when a service member decides to get a divorce. The Uniformed Services Former Spouse Protection Act (USFSPA) addresses the military spouse's continuing eligibility for commissary, exchange and health care benefits as well as eligibility for a portion of the service member's military retired pay. It also provides mechanisms to enforce (i.e., collect) amounts awarded from a service member pursuant to a divorce decree.
A. MILITARY RETIRED PAY
The USFSPA does not automatically give a former spouse any rights to the service member's retired pay. Rather, the law permits a state court to treat disposable military retired pay as “marital property” and therefore divide it in a divorce action in such a way that it is paid to the former spouse directly by the DFAS. Disposable retired pay is defined as gross retired pay less authorized deductions.
For court orders dividing retired pay as property to be enforced under the USFSPA, a service member and former spouse must have been married to each other for 10 years or more during which the member performed at least 10 years of military service creditable towards retirement eligibility (the so-called “10/10 Rule”).
The USFSPA also provides a method for enforcing child support and alimony orders. The 10/10 Rule does not apply to enforcement of child support or alimony awards under the USFSPA.
The maximum that can be paid to a former spouse under the USFSPA is 50 percent of a service member's disposable retired pay. In cases where there are payments due under both the USFSPA and under a garnishment for child support or alimony, the total amount payable cannot exceed 65 percent of the member's disposable earnings.
B. SURVIVOR BENEFITS PLAN BENEFICIARY
Under the USFSPA, a former spouse, like a current spouse, can be designated as a Survivor Benefit Plan (SBP) beneficiary. If divorce occurs after retirement and the service member had initially elected to participate when retiring, the divorce terminates the initial beneficiary designation in favor of the "spouse." However, coverage may be continued in favor of a "former spouse" either voluntarily, to honor an agreement between the parties, or to comply with a court order. The former spouse however, must elect "former spouse coverage" from the appropriate military finance center within one year of the date of the final divorce decree.
C. COMMISSARY, EXCHANGE, AND HEALTH BENEFITS
The USFSPA also permits former spouses to continue receiving commissary, exchange, and health care benefits after a divorce in certain cases. In order to qualify for continued benefits a former spouse must show that the service member served at least 20 years of creditable service, that the marriage lasted at least 20 years, and that the period of the marriage overlapped the period of service by at least 20 years. A former spouse who meets these requirements is known as a 20/20/20 former spouse and is entitled to full commissary, exchange and health care benefits. These benefits include TRICARE and inpatient and out-patient care at a military treatment facility. Former spouses who do not meet these requirements lose their commissary and exchange privileges once the divorce is final.
In cases where the service member served 20 years of creditable service, the marriage lasted 20 years, but the period of the marriage overlapped the period of service by only 15 years, the former spouse is entitled to full military medical benefits only for a transitional period of one year following the divorce. After this year of coverage, the spouse may purchase a DOD-negotiated conversion health policy.
Former spouses who are neither 20/20/20 nor 20/20/15 former spouses are not entitled to any military health benefits after a divorce. But they are eligible for the DOD Continued Health Care Benefit Program, a premium-based temporary health care program for 36 months of coverage until alternative coverage can be obtained so long as they enroll within 60 days of losing full military health care benefits.