Q&A--DFAS, CRDP for Medical Retiree with 20 Years Active Duty, Payments to Former Spouse--Reply 3 August 2021

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RonG

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Q&A--DFAS, CRDP for Medical Retiree with 20 Years Active Duty, Payments to Former Spouse

Message submitted to DFAS thru AskDFAS

July 31, 2021

This question does not pertain to me; I am assisting other veterans. The question pertains to court order for division of retired pay with a former spouse and the retiree is a Chapter 61 disability retiree who also qualified for a Regular-20 years active duty retirement. He is qualified for CRDP since his VA rating is 50% or more. The DFAS reduces his retired pay by the amount of his VA compensation and CRDP restores the waived retired pay not to exceed the longevity portion of his retired pay. Although he received a disability retirement, his entire gross retired pay is made up of CRDP based on his active duty years earned toward a regular retirement. Question: Is the CRDP in this type case divisible with a former spouse?


August 3, 2021

Dear xxxx,

CRDP is in essence retired pay since it is the member's retired pay restored rather than being waived for the VA entitlement. CRDP is subject to the former spouse division of pay under the USFSPA. CRSC, however, is not subject to the division of pay under the USFSPA.

Please contact our Garnishment Operations Directorate for additional questions regarding a former spouse portion of pay under the USFSPA if and when the retiree is medically retired with a disability percentage by his/her Branch of Service by calling 888-332-7411, option 3, between 8am and 5pm EST and speaking with a Paralegal.
Thank you immensely for your service and for allowing us to assist you today with your Retired Pay Account. We are committed to providing quality service to our customers.

If you have any questions or require additional information, please contact a Representative at 1-888-332-7411 or 216-522-5096, options 4-2-4 and 2. Customer Service Representatives are available Monday through Friday from 8:00 a.m. to 5:00 p.m. EST.

Sincerely,

DFAS-CL

ADDENDUM, 3 AUGUST 2021

I called 888-332-7411, option 3 as suggested in the reply. During the discussion, I was told that CRDP paid under the circumstances I presented in my initial question IS NOT subject to division of retired pay with a former spouse. So...recommend anyone with similar issues should contact DFAS for the clarification.

Ron
 
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Ron I'm starting to this question come up more often when the Court order is filed with DFAS they send the former spouse a letter claiming they do not have "disposable retired pay" to be divided. The issue seems dead but then the former spouse tries to file a claim in state court hoping they will be indemnified it may be something that has to be settled in federal court again.

Not sure in your Veterans situation is DFAS paying the former spouse?
 
oddpedestrian said:
Ron I'm starting to this question come up more often when the Court order is filed with DFAS they send the former spouse a letter claiming they do not have "disposable retired pay" to be divided. The issue seems dead but then the former spouse tries to file a claim in state court hoping they will be indemnified it may be something that has to be settled in federal court again.

Not sure in your Veterans situation is DFAS paying the former spouse?
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Hi,

The veteran mentioned in my question to DFAS is within the PEB/MEB process now...he is trying to confirm what will happen with his pay.

Thank you for your comments. I have not had a similar problem (for myself), but I have read of courts ordering a certain amount of payment each month that is not under the former military spouse law. I know that is common for non-military cases, but it seems it was a path around the division that involves DFAS (i.e., military retiree).

Ron
 
Will the veteran have disposable retired pay?

Doe the veteran have dependent children?
 
Ref: "Will the veteran have disposable retired pay?"

The contact with DFAS was an attempt to get a determination if CRDP paid to a CH 61 retired pay is divisible with a former spouse. In order words, is it considered disposable income?
CRDP paid to those with regular retirements IS considered disposable income. One could look at the CH 61 retiree's CRDP as a restoration of disability retired pay EXCEPT CRDP cannot exceed the longevity (i.e. AD) portion of retired pay. CRDP does not restore waived retired pay in excess of the longevity amount.

The individual I spoke to at DFAS seemed less than confident in his answers.

I think I will follow up with a FAX within a few days.

Ron
 
The question is does the CRDP for a member that qualifies for both a regular retirement and a chapter 61 retirement get added back in to count towards disposable pay. As of right now I don't think that is how DFAS is calculating for purposes of disposable pay though in my opinion they should since its restoration of a regular retirement that would otherwise be offset by VA disability pay.
 
Provis said:
The question is does the CRDP for a member that qualifies for both a regular retirement and a chapter 61 retirement get added back in to count towards disposable pay. As of right now I don't think that is how DFAS is calculating for purposes of disposable pay though in my opinion they should since its restoration of a regular retirement that would otherwise be offset by VA disability pay.
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Here is what one law office says: "Sec. 1408, excludes all sums received under Title 10's Chapter 61 and VA disability compensation received under Title 38 from the definition of "disposable retired pay." ... Historically, and to this day, DFAS exempts CRDP received by a Chapter 61 retiree as disposable retired pay subject to division in divorce."

I would rather have a definitive answer from DFAS. As mentioned, I will send a fax to their legal team in "garnishments."

Thanks for your comments...I was hoping you and chaplaincharlie would chime in.

Ron
 
Reference: FindLaw's Supreme Court of Alaska case and opinions. <—-LINK

Supreme Court of Alaska.

Pamela Lea GUERRERO, Appellant, v. Juan Jose GUERRERO, Appellee.​

​

No. S–15340.​

Decided: September 18, 2015​


[selected text]

4. The superior court's retirement benefits rulings

The master's report explained that Juan's retirement “is completely classified as disability pay. Disability pay is not [divisible] by the court as it is not a marital asset.” And the superior court explained that “ecause of [Juan's] disability, the government classifies all of his retirement as disability pay, leaving zero disposable retirement pay for a state court to distribute in a divorce.”

Pamela asserts that the superior court is incorrect because “based on Juan's own pay statement, it appears that at least a portion of Juan's pay was divisible and that Pamela would be receiving some of these funds if the trial court had issued a qualifying order.” Pamela specifically argues that Juan received CRDP42 and that “CRDP is divisible upon divorce.”

But CRDP does not change the nature of Juan's Chapter 61 retirement benefit. Juan's benefits come from two sources—Chapter 61 disability retirement and VA disability payments. Neither source is divisible upon divorce. USFSPA excludes from disposable retired pay all Chapter 61 retirement benefits “equal to the amount of retired pay ․ computed using the percentage of the member's disability.”43 And as we held in Clauson v. Clauson, state courts have no power to equitably divide VA disability benefits.44 VA disability benefits are not retired pay and do not fall within USFSPA's definition of disposable retired pay.45


V. CONCLUSION

We AFFIRM the superior court's decision not to divide Juan's military disability retirement pay and not to issue a QMRO. We AFFIRM the superior court's decision to force the sale of the marital home. Because exceptional circumstances justify reopening the marital property agreement, we REVERSE the superior court's Rule 60(b)(6) decision and REMAND for an equitable marital property distribution; and we VACATE the attorney's fees awards.
 
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RonG said:
Reference: FindLaw's Supreme Court of Alaska case and opinions. <—-LINK

Supreme Court of Alaska.

Pamela Lea GUERRERO, Appellant, v. Juan Jose GUERRERO, Appellee.​

​

No. S–15340.​

Decided: September 18, 2015​


[selected text]

4. The superior court's retirement benefits rulings

The master's report explained that Juan's retirement “is completely classified as disability pay. Disability pay is not [divisible] by the court as it is not a marital asset.” And the superior court explained that “ecause of [Juan's] disability, the government classifies all of his retirement as disability pay, leaving zero disposable retirement pay for a state court to distribute in a divorce.”

Pamela asserts that the superior court is incorrect because “based on Juan's own pay statement, it appears that at least a portion of Juan's pay was divisible and that Pamela would be receiving some of these funds if the trial court had issued a qualifying order.” Pamela specifically argues that Juan received CRDP42 and that “CRDP is divisible upon divorce.”

But CRDP does not change the nature of Juan's Chapter 61 retirement benefit. Juan's benefits come from two sources—Chapter 61 disability retirement and VA disability payments. Neither source is divisible upon divorce. USFSPA excludes from disposable retired pay all Chapter 61 retirement benefits “equal to the amount of retired pay ․ computed using the percentage of the member's disability.”43 And as we held in Clauson v. Clauson, state courts have no power to equitably divide VA disability benefits.44 VA disability benefits are not retired pay and do not fall within USFSPA's definition of disposable retired pay.45


V. CONCLUSION

We AFFIRM the superior court's decision not to divide Juan's military disability retirement pay and not to issue a QMRO. We AFFIRM the superior court's decision to force the sale of the marital home. Because exceptional circumstances justify reopening the marital property agreement, we REVERSE the superior court's Rule 60(b)(6) decision and REMAND for an equitable marital property distribution; and we VACATE the attorney's fees awards.
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I guess if your gonna be divorced and you don't want to fork up any of your military retirement then its good to be a Chapter 61 Retiree LOL. Nice find! I have no dog in this fight but it does seem to me unfair that a medical retirement completely replaces a regular one. This leaves a spouse with nothing who MAY have sacrificed a lot throughout a marriage to support the Service Member.
 
I have no dog either but you have a point. On the other hand my 2nd wife declined any of my retired pay…personal reasons which might have included I got sole custody of our 12 year old.

I would still like to see DFAS say the same (in writing) about CRDP for CH 61.

Ron
 
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