Litigation

Although a state court is not authorized to treat military pay waived to receive veterans' disability benefits as marital property subject to equitable distribution, a state court may order a party to pay a sum equivalent to the portion of the military pay received as veterans benefits as long as the veterans' disability payments are not ordered to serve as the source of those payments. Poziombke v. Poziombke, Record No. 0050-05-1, Court of Appeals of Virginia, Feb. 14, 2006.

The parties were divorced in 1995. At that time, the husband was on active military duty and was receiving neither military retirement nor disability payments. The divorce decree provided that the wife was entitled to about 28% of the husband's 'disposable retirement/retainer' benefit when received. The final decree was entered without exception or objection. The husband retired in June 1998 and paid the wife the benefit as stated in the decree. Thereafter, in October 1998, the husband began to receive a Veterans' Administration disability benefit, which reduced the amount of his 'disposable retirement/retainer' benefit in an amount equal to the disability benefit. As a result, the wife only re-ceived 28% of the reduced retirement benefit. She then sought 28% of the husband's disability benefits. In 2005, the court held that the 1995 divorce decree was final and ordered the husband to pay to the wife all sums to which she would have been entitled had he not taken disability payments. However, the court did not order that the source of the funds be from the veterans' disability payments. The husband appealed, and the appellate court affirmed. It held that a state court is not authorized to treat military pay waived to receive veterans' disability benefits as marital property subject to equitable distribution. However, a state court may order a party to pay a sum equivalent to the portion of the military pay received as veterans' benefits as long as the veterans' disability payments are not ordered to serve as the source of those payments.