Military retirement pay is marital property, not alimony. Courts divide it under the Uniformed Services Former Spouses’ Protection Act (USFSPA), the federal statute that lets state courts treat a service member’s retired pay as a divisible asset of the marriage. That classification is not a technicality. It controls what happens to the payments if the former spouse remarries, how they are taxed, how they are enforced, and what the retiree can and cannot do to reduce them later.
Why the Property Label Changes Everything
Alimony exists to bridge a financial gap. One spouse pays the other based on need, usually for a limited time, with the amount tied to factors like the length of the marriage, earning capacity, health, and the standard of living during the marriage.
Military retired pay is different in kind. It is deferred compensation the service member earned through years of uniformed service, and it functions like any other pension. The portion built up during the marriage belongs to the marital estate, the same way a civilian pension or 401(k) would. When a court divides it, the court is distributing an asset the couple accumulated together, not ordering support.
Three practical consequences follow from that distinction.
Remarriage. A property share of military retirement pay generally continues after the former spouse remarries. Alimony in most states ends on remarriage. A Congressional Research Service report confirms that pension payments to a former spouse continue after remarriage until the retiree’s death, even though other military-linked benefits such as commissary access and medical care end at remarriage.
Taxes. Alimony and divided retirement pay are taxed under entirely different rules, which is covered in detail below.
Modification. Alimony can often be modified when circumstances change. A property division is final once the decree is entered.
What the USFSPA Actually Does
The USFSPA, codified at 10 U.S.C. ยง 1408, does two things. It authorizes state courts to treat military retired pay as divisible property in a divorce, and it creates a mechanism for the Defense Finance and Accounting Service (DFAS) to enforce court-ordered payments of property division, child support, and alimony directly from the retiree’s pay.1Office of the Law Revision Counsel. 10 USC 1408 – Payment of Retired or Retainer Pay in Compliance With Court Orders
The statute does not require courts to divide retirement pay. It removes the federal barrier that once prevented state courts from touching it. Whether and how a share gets awarded depends on the divorce law of the state where the case is filed.2Defense Finance and Accounting Service. Former Spouse Protection Act
What “Disposable Retired Pay” Means
Courts cannot divide gross retired pay. They can only divide “disposable retired pay,” which is the gross amount minus several mandatory deductions. Those deductions include amounts owed to the government for prior overpayments, forfeitures from a court-martial, and Survivor Benefit Plan premiums paid on behalf of the former spouse receiving the property award.1Office of the Law Revision Counsel. 10 USC 1408 – Payment of Retired or Retainer Pay in Compliance With Court Orders
Federal law also caps the share DFAS will pay. For property division alone, DFAS pays a maximum of 50 percent of disposable retired pay to a former spouse. When property division is combined with a separate income withholding order for child support or alimony, the combined ceiling rises to 65 percent of disposable income.3Defense Finance and Accounting Service. Frequently Asked Questions – Uniformed Services Former Spouses Protection Act
The Disability Waiver Problem
The biggest financial surprise in a military divorce involves VA disability compensation. When a veteran applies for and receives a VA disability rating, collecting the nontaxable disability payment usually requires waiving an equal amount of taxable retirement pay. Every dollar waived comes out of disposable retired pay first, which shrinks the pool available for division.4Defense Finance and Accounting Service. Maximum Payment
The Supreme Court addressed this directly in Howell v. Howell (2017), holding that state courts cannot order a veteran to reimburse or indemnify a former spouse for the reduction caused by a disability waiver. Federal law preempts any such order.5Supreme Court of the United States. Howell v. Howell, 581 US (2017)
In practice, a former spouse awarded 40 percent of a retiree’s disposable retired pay can see the monthly check drop substantially if the retiree later receives a disability rating and waives retirement pay. The former spouse has no legal claim to the disability money and no right to be made whole. Attorneys who handle military divorces often try to address this risk in the settlement agreement through other forms of compensation, but there is no guaranteed fix once the waiver takes effect.
The Frozen Benefit Rule
For divorces finalized before the service member retires, a 2017 change to federal law restricts how the former spouse’s share is calculated. Under the frozen benefit rule, the divisible amount is based on the member’s pay grade and years of service at the time of the divorce, not at the time of actual retirement. A service member who divorces as an O-3 with 12 years of service and later retires as an O-6 with 24 years will have the former spouse’s share calculated from the O-3, 12-year figure.1Office of the Law Revision Counsel. 10 USC 1408 – Payment of Retired or Retainer Pay in Compliance With Court Orders
The frozen benefit does receive cost-of-living adjustments between the date of divorce and the date of retirement, plus any COLAs applied afterward, so the amount is not literally frozen in dollars. DFAS has confirmed that percentage-based awards automatically receive a proportionate share of COLAs, though fixed-dollar awards do not. What the former spouse loses is any share of promotions or additional years of service the retiree earns after the marriage ends.6Defense Finance and Accounting Service. NDAA 17 Court Order Requirements
Court orders frequently go wrong here. A decree that simply awards “50 percent of disposable retired pay” without reflecting the frozen benefit rule can be rejected by DFAS or applied in ways neither party expected. The order needs to specify the member’s rank, years of service, and pay base at the time of divorce.
The 10/10 Rule Is About Payment Method, Not Eligibility
A persistent misconception holds that a former spouse needs 10 years of marriage overlapping with 10 years of service to receive any share of military retirement pay. That is not what the rule says. The 10/10 requirement only governs whether DFAS will send payments directly to the former spouse. If the marriage and service overlap for at least 10 years, DFAS garnishes the retiree’s pay and routes the former spouse’s share directly. If the overlap is shorter, the court’s award is still valid; the former spouse simply has to collect from the retiree personally.3Defense Finance and Accounting Service. Frequently Asked Questions – Uniformed Services Former Spouses Protection Act
The 10/10 rule does not apply to alimony or child support enforcement. DFAS can garnish retirement pay for court-ordered alimony or child support regardless of how long the marriage lasted or how much it overlapped with military service.3Defense Finance and Accounting Service. Frequently Asked Questions – Uniformed Services Former Spouses Protection Act
How a Retirement Share Interacts with Alimony
Property and alimony are legally distinct, but the same divorce can involve both, and courts consider all available resources when deciding whether to award spousal support and how much. A former spouse already receiving a substantial share of military retirement pay has an income stream that reduces demonstrated need for alimony. A generous property division often results in reduced alimony, or no alimony at all.7Justia. Alimony and Spousal Support Law
Some states also prohibit what is sometimes called double dipping: counting the same retirement income as both a divisible asset and as income available to support a larger alimony award. The specifics vary by state, but the principle cuts both ways. It can limit alimony for the non-military spouse, and it also prevents the retiree from being squeezed twice on the same dollar.
Tax Treatment: Where the Dollar Difference Shows Up
For divorce agreements executed after December 31, 2018, alimony is neither deductible by the payer nor taxable to the recipient. The Tax Cuts and Jobs Act eliminated the prior rule that let payers deduct alimony and required recipients to report it as income.8Internal Revenue Service. Topic No. 452, Alimony and Separate Maintenance
Divided military retirement pay works differently. When DFAS makes direct payments to a former spouse under the USFSPA, it issues the former spouse a 1099-R, and the money is taxable income to the recipient. The retiree is taxed only on the portion actually kept. When the 10/10 rule is not met and the retiree pays the former spouse out of pocket, the tax reporting is more complicated, and the retiree may need to take affirmative steps to avoid being taxed on income that was forwarded.
The dollar effect is real. A former spouse receiving $1,500 per month in alimony under a post-2018 decree keeps all $1,500 tax-free. A former spouse receiving $1,500 per month as a share of retirement pay owes federal income tax on it. Over the life of the payments, that gap adds up.
Survivor Benefit Plan: Protecting the Property Share
Military retired pay stops when the retiree dies. Without additional planning, a former spouse’s share of that income disappears with it. The Survivor Benefit Plan (SBP) is the main protection against that outcome. The retiree pays a premium, and on death the designated beneficiary receives up to 55 percent of the covered retired pay for life.
A divorce decree can require the retiree to elect former-spouse SBP coverage. If the retiree does not make the election, the former spouse can submit a “deemed election” request directly to the Secretary of the relevant service branch, but the request must be submitted within one year of the court order requiring coverage.9Office of the Law Revision Counsel. 10 USC 1450 – Payment of Annuity: Beneficiaries
Missing that one-year deadline can permanently forfeit the right to SBP coverage. A former spouse loses eligibility as a spouse beneficiary automatically on the date of divorce; if former-spouse coverage is not secured in time, there is no survivor protection. SBP premiums are deducted from the retiree’s gross pay before disposable retired pay is calculated, so the cost is effectively shared between the parties. For retirees who entered service on or after March 1, 1990, the premium is 6.5 percent of the chosen base amount. Once a retiree reaches age 70 and has paid premiums for at least 30 years, the premiums stop and coverage continues.10Department of Defense. Survivor Benefit Plan Spouse Coverage