Garnishment Of Va Disability Benefits
Garnishment refers to the action of seizing funds from an individual to satisfy a debt, often by taking the money immediately through your source of income. In some instances, and mostly because a veteran has failed to pay alimony or child support, money can be garnished from his or her VA disability compensation. Usually, disability pay can only be garnished if the veteran has waived military retired pay, or a portion of their pension, to receive compensation for a disability. Only the percentage of compensation apportioned to disability pay will be considered for garnishment, and the percentage garnished usually ranges between 20-50%.
Garnishment can only happen once the ex-spouse has filed for apportionment, and it may be denied for a number of reasons, such as undue financial hardship on the veteran, or proven infidelity or living as a married partner to another individual.
Va Disability And Child Support In Colorado
Colorado’s definition of income for purposes of calculating child support and maintenance is expansive: Gross income’ means income from any source and includes, but is not limited to, followed by a long laundry list of items which covers basically everything, including non-taxable payments such as trust income and gifts. C.R.S. 14-10-114 and C.R.S. 14-10-115 .
Perhaps more useful, VA disability payments are not on the very, very short list of payments excluded from the definition of income in either statute.
In a 1990 case, neither party disputed that the VA disability benefits counted as income to the spouse. Accordingly, and without any analysis, the Colorado Court of Appeals concluded that disability benefits are expressly included as gross income under Colorado law. Fain, at 1087.
The Colorado Court of Appeals was a bit more explicit in 1991, rejecting a husbands argument that counting VA disability payments as income to calculate alimony was effectively an impermissible division of the disability payments in violation of federal law:
Finally, in 2020, the Colorado Court of Appeals gave this issue a full analysis, and held that under Colorado law, Veterans Administration disability payments are properly included as income for purposes of child support and maintenance: “we conclude that veteran’s disability benefits fall within the broad definition of gross income.”M.E.R.-L., ¶ 21.
Pay Attention To The Deadline
There are deadlines for your spouse to receive these benefits. Your spouse should apply for these benefits as soon as possible after your passing. They have until a year after your death to apply. If they apply within a year, benefits are paid retroactively from the date of the veterans death.
That being said, if your spouse doesnt apply within a year, its unlikely your spouse is eligible for any missed compensation. Instead, the start date is whenever the VA grants the application.
» MORE:
Read Also: Do You Pay Income Tax On Disability Social Security
Apportionment In Case Of Incarceration
Spouses of veterans who are incarcerated may file for an apportionment of the veterans benefits, as well. Oftentimes, when veterans are incarcerated, their amount of monthly disability compensation is reduced. By filing for apportionment, the full amount of the veterans payments could potentially be paid to their spouse as opposed to the reduced payment amount that is going to the veteran. Essentially, the veterans spouse would receive the total monthly benefit instead of the decreased percentage that they are receiving.
Apportionment Of Va Benefits
Apportionment is a process by which the VA assigns a certain portion of a veterans benefits to a family member. Basically, the VA will pay the eligible family member part of the veteran’s monthly cash benefit directly, thus reducing the amount of benefits the veteran will receive.
In no case will be benefits be garnished for alimony until the former spouse first elects to receive the “apportioned” share of the veteran’s benefits. Similarly, claims for each child’s right to an apportioned share must be filed before child support garnishment can occur. The family member must apply for apportionment by filing VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award, before a garnishment for spousal or child support will be considered.
You May Like: Can You Get Child Support From Someone On Disability
Va Disability Pay And Divorce
Qualifying service members who develop a disability or who make a current medical condition worse as a direct result of their service will be entitled to a portion of VA disability benefits, also known as VA disability compensation. The level of disability pay available depends on the service members disability rating, per the VAs evaluation measures and standards.
In order to receive VA disability pay, a service member must waive a certain portion of their military retirement benefits.
Typically, any military retirement pay waived will be deducted from the amount awarded to the non-military spouse as part of a divorce decree.
Overview Of Military Disability Pay
Under the USFSPA, military disability pay is excluded from the definition of disposable retired pay, and therefore, disability pay is not subject to the same rules of division in divorce. So when a service member waives retired pay in exchange for disability pay, former military spouses may lose out on hundreds or thousands of dollars they might otherwise have received in the division of disposable retired pay.
There are two different types of military disability pay, both of which are excluded from the USFSPA definition of disposable retired pay: military disability retired pay, and VA disability compensation.
Recommended Reading: Ptsd Is What Type Of Disorder
Section Iv Veteran Reporting Divorce From Former Spouse
Veterans must fill out this section to report a divorce and remove a former spouse from their disability benefits. Completing this section of the form and submitting it to VA as quickly as possible following a divorce, or legal separation, is extremely important. Failure to notify VA of this change in the status of dependents can result in an overpayment.
How Divorce Affects Va Benefits
Most monetary VA benefits, such as disability compensation and veterans pensions, simply remain with the eligible veteran following a divorce because payment is based entirely on their qualifying military service. A spouses VA health care benefits through the Civilian Health and Medical Program of the Department of Veterans Affairs also terminate upon the dissolution of the marriage to the eligible veteran. As a rule, only current or surviving spouses and dependents factor into VA benefits decisions.
Don’t Miss: Is Asthma A Disability Under Ada
Consideration Of Va Income
Even if your VA benefits can’t be garnished because you didn’t waive any military pay or because of any of the above reasons, in most states your VA income can still be considered by the judge in deciding your support obligations. If your VA disability benefits are a significant part of your total income, you may end up using your benefit income to meet child support or alimony obligations.
For legal help in protecting your VA disability benefits or establishing a fair amount of support, contact a VA disability lawyer.
How Is Alimony Different From Child Support For Veterans
Alimony is a court-ordered monthly cash payment paid to an ex-spouse.
These payments are put into place to make up for any shortfall in splitting communal assets in a marriage.
Alimony is based on the premise that both members of the marriage are responsible for supporting one another.
Alimony is governed by the state and local laws the divorce is tried in.
Factors that are considered when determining the level in which a spouse must be compensated include the health of spouses over the course of the marriage, any financial burdens the spouse took on over the course of the marriage for the betterment of their partner, and how much responsibility spouses took on in maintaining the household.
In contrast, child support payments are made by the non-custodial parent for the narrow purpose of supporting a service members children. These payments, unlike alimony, and can only be applied to child-related expenses like medical bills, clothing, and food.
Whereas alimony can be spent on whatever the spouse deems appropriate.
These payments are also governed by the state and local jurisdiction the divorce is tried in, but these payments are typically determined by comparing the overall cost of a childs expenses and the ex-spouses income.
Also Check: Does Having Adhd Qualify As A Disability
Is There A Difference Between Retirement And Disability And How It Relates To Child Support
Yes, and it is important to understand the distinction between retirement and disability payments.
Rank will be a consideration for retirement, but not for disability payments.
Retirement benefits are a pension that a service member earned through years of service and are subject to income tax.
Disability is a cash settlement paid to veterans because of a diminished capacity to work as a result of service and is non-taxable.
Since 1941, retired members of the military were ineligible to receive both retirement and disability payments, or double-dip.
These payments must be offset. For example, if a veteran may receive $2,000 in retirement benefits, and a disability payment of $600, the amount of disability is subtracted from the eligible retirement pay. The veteran receives $2,000 but the tax burden $1400. This also lowers the disposable amount of retirement income.
After 2014, National Defense Authorization Acts are known as Combat-Related Special Compensation and Concurrent Retirement and Disability Program authorized increased payments without an offset for specific veterans.
CRDP was applied to individuals with 20 years of qualifying military service with any service-connected disability with a rating at least 50% or greater by the VA.
In those cases, divorced spouses who had a fixed amount awarded in a divorce decree were not eligible for more based on increases to retirement pay under CRDP.
S To Make Sure Your Spouse Receives Your Va Disability Benefits
How do you ensure your spouse receives your benefits after you pass on? Its important to talk to your partner about these benefits and what to expect from this process. These benefits might play a role in what you choose to include in your will, so start this process early. Preparation is always key.
Recommended Reading: Can You Be Fired While On Short Term Disability
Military Disability Retirement Pay And Divorce
Some service members will be eligible to receive military disability retirement benefits if they have such a level of disability to the extent that they can no longer perform their duties. If they meet the creditable service criteria and other criteria, they will be placed on the disability retired list and may begin to draw military disability retirement pay.
This military disability retirement pay is ineligible for property division during a divorce settlement.
Va Benefits & Disability Income
We must tread cautiously in defining our terms. Veterans Affairs benefits, such as disability income, are, according to the American Bar Association, not subject to levy, seizure or attachment. Your go-to legalese on this is United States Code Title 38 Part IV Chapter 53, casually known by readers of these things as 38 U.S.C. §5301, which prevents your disability income from being taken by creditors. Your ex-wife is not a creditor. And your disability benefit is income. So she can be awarded a chunk of your VA benefits in spousal support.
Also Check: What Income Counts Against Social Security
Garnishment Of Va Benefits For Alimony And Child Support
When money is seized from an individual to satisfy a debt, this is known as garnishment. If a veteran fails to pay alimony or child support, the state can sometimes order their VA benefits to be garnished.
Generally, a veterans disability benefits can only be garnished if they waived military retirement pay to obtain VA benefits. In this situation, only the amount of disability compensation paid in place of the military retirement pay can be garnished, and the remainder is protected. If a veteran has not waived their military retired pay, then VA benefits cannot be garnished at all.
VA determines the amount of compensation that can be reasonably garnished based on a few factors:
- Whether the veteran has other sources of income
- Any special needs the veteran has that require more income
- The amount of income available to the veterans former spouse
- Any special needs the veterans former spouse and children have that require extra funds
Typically, between 20 to 50 percent of VA disability benefits can be garnished. If the veteran has multiple children to support, equal payments are provided to each child out of garnishment. In addition to the military retired pay status criteria, garnishment is not permitted when:
How To Fight Apportionment
After a decision is issued, either the veteran or the person filing for the apportionment can appeal VAs decision if they are unhappy with the outcome. Namely, the person filing for the apportionment can argue that the monetary amount decided on is too low to support their family. The veteran can appeal for a hardship reduction on the grounds that the apportionment will create a financial strain.
Recommended Reading: What Eye Problems Qualify For Disability
Looking To Increase Your Va Disability Benefits
According to our data, 8/10 of you reading this message right now are stuck, frustrated, and underrated by the VAwhich means you could be missing out on thousands of dollars of tax-free compensation and benefits each month for you and your family
Are you finally ready to get the VA disability rating and compensation YOU deserve?
Good news! Thats why we exist. Since 2016, weve helped 10,000+ veterans just like you INCREASE their VA disability rating by an average of 30%.
If accepted into our ELITE membership program, youll get FREE up-front access and permission to use $13,119 worth of proprietary VA claim resources, including access to our network of independent medical professionals for medical examinations, disability evaluations, and credible Medical Nexus Letters, which could help you get a HIGHER VA rating in LESS time.
Deserve a HIGHER VA Rating?
Learn more about how VA Claims Insider can help you get the rating you DESERVE!Speak with a VA Disability expert and start for FREE!
Both Spouses May Be Able To Continue Access To Trident Insurance
Another VERY important benefit that veterans and their families rely on is their access to free or discounted healthcare under the Trident or Tricare health insurance plans. Maintaining access to affordable health insurance is absolutely critical for a lot of families, especially in cases where the ex-spouse is unable to return to the workforce and still heavily relies on these benefits for themselves or the children.
Fortunately, both spouses can maintain their access to healthcare if:
The military spouse served at least 20 years in the military
Spouses were married for 20 years during the period of military service
An employer isnt providing private health insurance
The spouse does not remarry.
In addition, the military also provides continued access to the post-exchange and base supermarket to spouses who were married for 20 years or more of service.
There are a lot of different elements when it comes to VA disability benefits it goes without saying that this can add some challenges when handling your divorce. Its always a good idea to check with an experienced VA disability lawyer when a military spouse is involved in a divorce. Make sure that the compensation the veteran is receiving is exactly what they are entitled to.
Read Also: How Does Maternity Disability Work In California
Ive Heard That State Laws Do Not Take Precedence Over Federal Law That Means That My Va Benefits Are Immune From Any Consideration Or Garnishment In Domestic Court Right
While part of the statement is correct that state laws are subordinate to federal laws the rest of the statement could be called urban legend. Its just not so. In general, all sources of income must be considered by the court in determining support, whether the income is taxable or tax-free, whether the source is wages, rents, royalties, VA benefits, military retired pay, Combat-Related Special Compensation, Social Security Disability payments or even an inheritance from your Uncle Louie! And the provisions of Title 38 make it clear that Congress intended that VA benefits may be considered as a source of income for support purposes. Not only are there graduated benefit schedules, based on how many dependents a veteran has, but there is an apportionment procedure to use when a veteran is not discharging his or her responsibility for support. The apportionment procedures are found at 38 U.S.C. § 5307.
Servicemembers Group Life Insurance And Divorce
Servicemembers Group Life Insurance, or SGLI, is life insurance coverage available to individuals who meet certain criteria, such as being an active-duty member of the Army, Navy, Air Force, Marines, or Coast Guard. Qualifying service members are automatically enrolled through their service branch, and the monthly premium is automatically taken out of base pay.
The maximum coverage is $400,000. Covered individuals are free to reduce their coverage or eliminate it altogether. They are also able to change beneficiaries at will. Under state law, an ex-spouse named as a beneficiary of most life insurance policies is treated as if they had died before the insured in other words, they do not receive the proceeds of the policy. However, SGLI is treated differently from other life insurance policies, a fact service members should note.
If a service member marries and designates their spouse as beneficiary under SGLI, that spouse will remain the beneficiary until the beneficiary is changed. That means if the couple subsequently divorces and the service member remarries, the new spouse will not receive the life insurance benefit if the service member dies UNLESS the service member changes the beneficiary designation using form SGLV 8286.
If you are divorcing, you need not wait until your divorce is final to change your beneficiary. You can change your beneficiary to a child, sibling, parent, or anyone you choose.
Also Check: How Does Workers Compensation Affect Social Security Disability Benefits
Application For Va Disability Benefits
VA disability payments are not automatic – as with everything else in the military, there is a process, and this one requires that the retiree affirmatively apply for disability payments. 38 U.S. Code § 5101. The specific form used is the VA Form 21-526, Veteran’s Application for Compensation and/or Pension. While disability applications often come contemporaneous with separation from the military, as long as the condition was service-connected, there is no deadline to apply. So when addressing VA disability and divorce issues, do not assume there will be no future VA benefits simply because the veteran is not currently receiving them.
A VA disability election is revocable, per DOD Financial Management Regulation, Volume 7B, Section 120205. Presumably a veteran would have little incentive to do this, unless to facilitate receipt of Combat-Related Special Compensation . Revoking a VA disability election requires filling out the same VA Form 21-526.