* July 2019 VOLUME 7B, CHAPTER 29: “FORMER SPOUSE …

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Volume 7B, Chapter 29 * June 2021

VOLUME 7B, CHAPTER 29: "FORMER SPOUSE PAYMENTS FROM RETIRED PAY"

SUMMARY OF MAJOR CHANGES

Changes are identified in this table and also denoted by blue font.

Substantive revisions are denoted by an asterisk (*) symbol preceding the section, paragraph, table, or figure that includes the revision.

Unless otherwise noted, chapters referenced are contained in this volume.

Hyperlinks are denoted by bold, italic, blue, and underlined font.

The previous version dated June 2019 is archived.

PARAGRAPH All

4.2 (290402)

6.10 (290610)

6.12.3 (290612.C)

10.1.4 (291001.D)

References

EXPLANATION OF CHANGE/REVISION Updated hyperlinks, renumbered, and formatted chapter to comply with current administrative instructions. Revised by expanding on the additional documentation that may need to be provided by the former spouse for the application process. Added a note specifying the requirements for a deemed election for former spouse coverage under the Survivor Benefit Plan. Added language for when court orders vacate or does not vacate prior court orders. Added language to consider implication of retroactive awards of disability compensation or Combat-Related Special Compensation. Updated formatting to comply with administrative instructions.

PURPOSE Revision Revision

Addition Addition Addition Revision

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Financial Management Regulation Table of Contents

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VOLUME 7B, CHAPTER 29: "FORMER SPOUSE PAYMENTS FROM RETIRED PAY".... 1

1.0 GENERAL (2901)............................................................................................................. 5

1.1 Purpose (290101) ................................................................................................................ 5 1.2 Authoritative Guidance (290102) ....................................................................................... 5

2.0 DEFINITIONS (2902) ...................................................................................................... 5

2.1 Alimony (290201)............................................................................................................... 5 2.2 Child Support (290202) ...................................................................................................... 5 2.3 Court (290203).................................................................................................................... 5 2.4 Court Order (290204) ......................................................................................................... 6 2.5 Creditable Service (290205) ............................................................................................... 6 2.6 Designated Agent (290206) ................................................................................................ 6 2.7 Disposable Retired Pay (290207) ....................................................................................... 6 2.8 Entitlement (290208) ......................................................................................................... 6 2.9 Final Decree (290209) ........................................................................................................ 6 2.10 Former Spouse (290210) .................................................................................................... 6 2.11 Formula Award (290211) ................................................................................................... 7 2.12 Garnishment Order (290212).............................................................................................. 7 2.13 Hypothetical Retired Pay Award (290213) ........................................................................ 7 2.14 Member (290214) ............................................................................................................... 7 2.15 Renounced Pay (290215).................................................................................................... 8 2.16 Retired Pay (290216) .......................................................................................................... 8 2.17 Retired Pay Award (290217) .............................................................................................. 8 2.18 Standard Retired Pay Multiplier (290218).......................................................................... 8 2.19 Uniformed Services Former Spouses' Protection Act (USFSPA) (290219) ...................... 8

3.0 AWARDS THAT CAN BE COLLECTED UNDER THE USFSPA (2903) ................... 8

3.1 Child Support (290301) ...................................................................................................... 8 3.2 Child Support Arrearages (290302).................................................................................... 8 3.3 Alimony (290303)............................................................................................................... 9 3.4 Retired Pay Award (290304) .............................................................................................. 9 3.5 Property Other Than a Division of Retired Pay (290305) .................................................. 9 3.6 Child Abuse Garnishments (290306) ................................................................................. 9 3.7 Blended Retirement System (BRS) Lump Sum Awards (290307) .................................... 9

4.0 APPLICATION BY FORMER SPOUSE (2904) ........................................................... 10

4.1 Application Process (290401)........................................................................................... 10 *4.2 Additional Documentation (290402) ................................................................................ 10 4.3 Where to Send an Application for USFSPA Payments (290403) .................................... 11 4.4 When to Apply for USFSPA Payments (290404) ............................................................ 11

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4.5 Conditional Preapproval (290405).................................................................................... 11

5.0 NOTIFICATION (2905) ................................................................................................. 12

5.1 Notification to Former Spouse of Approval or Disapproval (290501)............................. 12 5.2 Notification to the Member of Approval of an Application (290502) ............................. 12 5.3 Second Notice (290503) ................................................................................................... 12 5.4 Contents of Notice to Member (290504) .......................................................................... 12 5.5 How to Prevent USFSPA Payments From Starting (290505) .......................................... 13

6.0 COURT ORDERS (2906) ............................................................................................... 13

6.1 Contents of Court Order (290601).................................................................................... 13 6.2 Divorces Finalized While the Member is Still on Active Duty (290602) ........................ 13 6.3 Domestic Relations Order (DRO) (290603) ..................................................................... 14 6.4 Requirements Specific to a Retired Pay Award (290604) ................................................ 14 6.5 State Law Jurisdiction (290605) ....................................................................................... 14 6.6 Member's Consent to a Separation Agreement (290606) ................................................ 15 6.8 Hypothetical Retired Pay Awards (290608) ..................................................................... 16 6.9 Orders Issued Before June 26, 1981 That Did Not Divide Retired Pay (290609) ........... 20 6.10 Survivor Benefit Plan (SBP) Premium (290610) ............................................................. 20 6.11 Conflicting Retired Pay Awards (290611) ....................................................................... 20 6.12 Court Orders Modifying Retired Pay Awards (290612) .................................................. 21 6.13 Conditional Awards (290613) .......................................................................................... 21 6.14 Awards Based on Retired Pay Accrued During Marriage (290614) ................................ 21 6.15 Awards of a Percentage of the Marital Portion (290615) ................................................. 22 6.16 Factual Errors in Court Orders (290616) .......................................................................... 22

7.0 DISPOSABLE RETIRED PAY (2907) .......................................................................... 22

7.1 Disposable Retired Pay (290701) ..................................................................................... 22 7.3 Other Deductions Included in Court Order (290702) ....................................................... 23

8.0 DISPOSABLE RETIRED PAY UNDER THE NDAA (2908) ...................................... 23

8.1 Application of the NDAA (290801) ................................................................................. 23 8.2 NDAA FY 2017 Disposable Pay Limits (290802) ........................................................... 23 8.3 Variables Required to Calculate the NDAA FY 2017 Disposable Retired Pay (290803) 24 8.4 Clarification Order (290804) ............................................................................................ 24

9.0 STARTING PAYMENTS (2909) ................................................................................... 24

9.1 Starting Payments (290901).............................................................................................. 24 9.2 Timing of Payments (290902) .......................................................................................... 25

10.0 PAYMENT AMOUNT (2910) ....................................................................................... 25

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10.1 Limitations (291001) ........................................................................................................ 25 10.2 COLA (291002) ................................................................................................................ 25 10.3 Offset of Former Spouse's Payment for Garnishment or Other Obligation (291003) ..... 26

11.0 PRIORITY OF PAYMENTS (2911) .............................................................................. 26

11.1 Multiple Awards (291101)................................................................................................ 26 11.2 Multiple Former Spouses (291102) .................................................................................. 26 11.3 Garnishment Orders for Support and Applications under USFSPA (291103) ................. 26

12.0 STOPPING PAYMENTS (2912).................................................................................... 26

12.1 Erroneous Payment Information from Former Spouse (291201) ..................................... 26 12.2 Termination and Suspension of Retired Pay Award Payments (291202) ........................ 27 12.3 Termination of Child Support Payments under USFSPA (291203)................................. 27 12.5 Payments and Bankruptcy (291205)................................................................................. 28 12.6 Certification of Eligibility (291206) ................................................................................. 28

13.0 RETIRED PAY ARREARS OWED A DECEASED FORMER SPOUSE (2913)........ 28

13.1 Applicability (291301)...................................................................................................... 28 13.2 Documentation (291302) .................................................................................................. 28 13.3 Recoupment of Outstanding Payments (291303) ............................................................. 29 13.4 Payment of the Arrears (291304)...................................................................................... 29 13.5 Indebtedness Resulting From Overpayment to a Former Spouse (291305) ..................... 29 13.6 Claim for Arrears (291306) .............................................................................................. 29 13.7 Taxability (291307) .......................................................................................................... 29

14.0 ADMINISTRATIVE APPEAL PROCESS (2914)......................................................... 29

14.1 Either Party Disagrees (291401)....................................................................................... 29 14.2 Party Requesting Reconsideration Disagrees (291402).................................................... 30 14.3 Additional Information (291403)...................................................................................... 30

15.0 LIABILITY (2915) ......................................................................................................... 30

15.1 Payments Made In Accordance With the USFSPA (291501) .......................................... 30 15.2 Designated Agent Liability (291502) ............................................................................... 30

Figure 29-1. Military Retired Pay Division Order (divorces, dissolutions, annulments, or legal separations that occur on or before December 23, 2016) ................................................. 31

Figure 29-2. Military Retired Pay Division Order (divorces, dissolutions, annulments, or legal separations that occur after December 23, 2016).............................................................. 33

*REFERENCES ........................................................................................................................ 36

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FORMER SPOUSE PAYMENTS FROM RETIRED PAY

1.0 GENERAL (2901)

1.1 Purpose (290101)

This chapter explains how a former spouse can apply for direct payments from a military member's military retired pay and how the former spouse's payments will be administered.

1.2 Authoritative Guidance (290102)

The pay policies and requirements established by DoD in this chapter are derived primarily from, and prepared in accordance with the United States Code (U.S.C.), including Titles 10, 15, 28, 31, 38, 42 and 50. Due to the subject matter in this chapter, the list of authoritative sources is extensive. The specific statutes, regulations, and other applicable guidance that govern each individual section are listed in a reference section at the end of the chapter.

2.0 DEFINITIONS (2902)

2.1 Alimony (290201)

Alimony is a legal obligation where a member is ordered to pay an amount for the support and maintenance of a spouse or former spouse. This definition includes attorney's fees, interest, and court costs. Alimony does not include child support, property settlement, equitable distribution of property, or any other division of property.

2.2 Child Support (290202)

Child support is a legal obligation where a member is ordered to pay an amount for the support and maintenance of a child. This definition includes costs for health care, arrearages, attorney's fees, interest, penalties, and other related relief.

2.3 Court (290203)

Court means any court of competent jurisdiction of any state (in the United States), the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands and any court of the United States, as defined in 28 U.S.C. ? 451. Court also includes a court of a foreign country with which the United States has an agreement requiring the United States to honor any court order of such country.

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2.4 Court Order (290204)

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Court order means a final decree of divorce, dissolution, annulment, or legal separation issued by a court, or a property settlement incorporated into such an order. Court order also includes orders issued incident to a divorce, such as an order dividing military retired pay or a domestic relations order (DRO) that divides military retired pay. NOTE: A DRO is not required, but will be accepted. A court order also includes a support order as defined in section 453 of the Social Security Act (42 U.S.C. ? 653(p)).

2.5 Creditable Service (290205)

Creditable service means years and full months of military service creditable for the purpose of computing a member's retired pay entitlement if the member is on active duty or the Reserve retirement points creditable if the member is a Reserve component member. See 10 U.S.C. ?? 1405 and 12733, Chapter 1, and Chapter 3.

2.6 Designated Agent (290206)

Designated agent is the agent authorized to review applications for direct payments made. See paragraph 4.0 for specific designations.

2.7 Disposable Retired Pay (290207)

Disposable retired pay is defined in paragraphs 7.1 and 8.2.

2.8 Entitlement (290208)

Entitlement is the legal right of a military member to receive military retired pay. The term refers to members who actually receive retired pay rather than those who qualify by completing the required years of service.

2.9 Final Decree (290209)

A final decree is an order from which no appeal may be taken or from which no appeal has been taken within the time allowed for taking such appeals under the laws applicable to such appeals, or a decree from which timely appeal has been taken and such appeal has been finally decided under the laws applicable to such appeals.

2.10 Former Spouse (290210)

Former spouse is the former husband or wife, or if the parties are legally separated, the current husband or wife, of a military member.

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2.11 Formula Award (290211)

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A formula award computes a former spouse's property interest in a military member's retired pay based on the relationship of the length of the parties' marriage during the member's creditable service (numerator) to the member's total service that is creditable toward retirement (denominator). A formula award is stated as a marital fraction in which the numerator and denominator are multiplied by a given percentage.

2.11.1. For members qualifying for an active duty (i.e., regular service) retirement, the numerator is the number of months the parties were married while the member was performing creditable military service and the denominator is the number of months of the member's total creditable military service. The elements must be expressed in terms of whole months. The former spouse's award is usually calculated by multiplying the marital fraction by one-half or 50 percent, or any other given percentage amount. See paragraph 6.7 for acceptable active duty formula award language.

2.11.2. For members qualifying for a Reserve (i.e., non-regular service) retirement, the numerator is the number of Reserve retirement points earned during the parties' marriage, and the denominator is the member's total number of Reserve retirement points. The elements must be expressed in terms of Reserve retirement points. The former spouse's award is usually calculated by multiplying the marital fraction by one-half or 50 percent, or any other given percentage amount. See subparagraph 6.7.2 for acceptable Reserve formula award language.

2.12 Garnishment Order (290212)

A garnishment order is an order directing the designated agent to issue payments from a member's pay to satisfy a legal obligation for child support, alimony, or division of property other than a division of military retired pay, or a monetary judgment rendered against a member for the physical, sexual, or emotional abuse of a child. See Public Law (PL) 115-91, section 534.

2.13 Hypothetical Retired Pay Award (290213)

Hypothetical retired pay award is an award based on a percentage of retired pay that is calculated using variables provided in a court order that are different from the member's actual retirement variables (i.e., hypothetically what would the member's retired pay be if the member retired on this date). The retired pay calculated using the court ordered variables is called the member's hypothetical retired pay. A hypothetical award typically attempts to define the property interest in the retired pay as if the member had retired at the time the court divided the member's military retired pay based upon the member's rank, or high-3 amount, and years of service accrued to that point in time. Thus, the former spouse does not benefit from the member's pay increases due to promotions or increased service time after the divorce.

2.14 Member (290214)

A member is an individual who is on active duty, one who is a reservist, or one who is retired from military service.

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2.15 Renounced Pay (290215)

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Renounced pay is military retired pay to which a member is entitled, but which the member has waived receipt.

2.16 Retired Pay (290216)

Retired pay is the statutory entitlement due a member based on conditions of the retirement law, pay grade or high-3 pay amount, years of service, and the date of retirement. Retired pay includes "retainer pay."

2.17 Retired Pay Award (290217)

Retired pay award is a portion of a member's disposable military retired pay awarded to a former spouse or current spouse by a court of competent jurisdiction as a property division.

2.18 Standard Retired Pay Multiplier (290218)

The standard retired pay multiplier used to compute retired pay for members with a Date of Initial Entry into Military Service (DIEMS) prior to January 1, 2018 who have not elected to participate in the Blended Retirement System (BRS) is 2.5 percent times the member's years of creditable service. See Chapter 3. The retired pay or retainer pay multiplier for a member with a DIEMS on or after January 1, 2018, or a member with a DIEMS before January 1, 2018, who elected to enroll in the BRS, is 2 percent times the years of creditable service. See Chapter 3.

2.19 Uniformed Services Former Spouses' Protection Act (USFSPA) (290219)

PL 97-252, enacted on September 8, 1982, states that the section of Title 10 addressing former spouse protection may be cited as the "USFSPA." Therefore, USFSPA is used throughout and refers to the provisions of 10 U.S.C. ? 1408.

3.0 AWARDS THAT CAN BE COLLECTED UNDER THE USFSPA (2903)

3.1 Child Support (290301)

A former spouse can collect child support if there is a court order that awards child support, and the former spouse and military member have ever been married to each other.

3.2 Child Support Arrearages (290302)

To collect child support arrearages, a former spouse must submit a recent court order that lists the total arrearages. The order cannot be older than two years from the date the designated agent receives it.

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