Military Disability Offset

Under federal law, state courts cannot divide Veterans Affairs (VA) disability benefits or require a veteran to compensate their former spouse if the veteran has chosen to waive retirement pay in favor of disability benefits. This means that even after a divorce judgment, the former spouse's entitlement to these benefits can decrease without any state legal recourse.

A veteran who receives $2,000 a month in retirement pay decides to waive that amount to receive $2,500 in VA disability benefits after a divorce. The divorce decree initially awarded the former spouse $1,000 of the retirement pay, but since the veteran waived it for disability benefits, the former spouse cannot claim any part of the VA benefits, resulting in a loss of expected income.

VA benefits are off-limits for state courts when disability waives retirement pay.

Exams may present scenarios where students mistakenly believe state courts can adjust VA benefits post-judgment, leading to incorrect conclusions about the division of assets.

Questions often involve fact patterns where a veteran's choice between retirement pay and disability benefits impacts the division of property, testing knowledge of federal preemption over state law.