Financial issues involving the military family divorce case necessarily require an understanding of the role of the Defense Finance and Accounting Service (DFAS). Collection of child support, spousal support or property division of retired pay all involve a requirement for properly worded court orders and an understanding of the military system. This article provides information and guidance for dealing with DFAS requirements.
Extensive information regarding military pay, retirement plans, and necessary forms are available at the DFAS Website.
The enforcement of all orders relating to military pay is the responsibility of the Garnishment Directorate in the Office of the General Counsel for the DFAS.
The contact information is:
Garnishment Law Directorate-HGA
P.O. Box 998002
Cleveland, OH 44199-8002
Submission of materials to DFAS is best done via fax or online uploads through Ask DFAS. The Garnishment Directorate is currently discouraging the use of regular mail.
If an individual’s current military status is unclear, verification of current military service on a specific date can be obtained via the Servicemembers Civil Relief Act (SCRA) website.
You must open an account, but you can determine if the individual is currently serving on active duty or terminated active duty with the past 367 days or has been called up for active duty. The person’s social security number is not required, but if available may speed up the search. Unfortunately, this website is not a locater service.
If you know the specific military installation where the servicemember is stationed you may be able to ascertain the specific unit of assignment through that installation’s Locator Service, if it has one.
If you know the individual is no longer actively serving in any capacity, military service records, including medical records, are only available from the National Personnel Records Center in St. Louis, Missouri.
All of the documents you may need to properly handle your divorce case are exempt from disclosure due to the federal Privacy Act and can only be accessed by the servicemember, by a person authorized by the servicemember in writing, or upon a court issued subpoena. Unless your state imposes mandatory disclosure rules, formal discovery efforts must be made to acquire crucial pay documents from the servicemember. The last resort requires a judicially issued Subpoena based on the federal Privacy Act. Title 5, US Code § 552a(b)(11).
There are a number critically important documents that can and should be provided by the servicemember either voluntarily or pursuant to subpoena or formal discovery methods. These should be examined in every relevant case in order to prepare the relevant order..
The Leave and Earnings Statement (LES) is the monthly pay statement for active duty. It will confirm the current gross income necessary for resolving child and spousal support issues as well as most of the information needed to calculate the hypothetical future retired pay of an individual currently on active duty at the time of divorce. The LES is readily available to the servicemember via the MyPay website. Members can establish temporary guest accounts solely for access to the information.
The most important item on the LES is the RET PLAN which indicates which of retirement plans you will need to deal with for the property division of future retired pay. The first plan, labeled HIGH 3 currently applies to active and reserve duty that commenced after September 1, 1980 (commonly referred to as the legacy plan). The second plan is labeled BLENDE which indicates the servicemember either first entered active service after January 1, 2018 or opted into the newly adopted Blended Retirement System at some point in 2018. (A third option called CHOICE is longer available, but there are a few people who entered service before it was abandoned in 2017) Detailed explanation of the differences in each Plan is beyond the scope of this article, but the differences are significant in any property division discussion)
As a result of the 2017 and 2018 NDAA amendments, for any divorce obtained after December 23, 2016, the property division of future military retired pay must be calculated in terms of hypothetically assuming the date of retirement is the date of the divorce (i.e., the commonly labeled the Frozen Benefit Rule). This calculation will not be accomplished by DFAS so counsel must learn to do it or establish a relationship with someone who can.
The calculation for the date of divorce hypothetical retired pay requires reliance on two commonly misunderstood or overlooked items on the LES: the PAY DATE and the YRS SVC. These are necessary in order to use the annually published Military Pay Tables for computing the hypothetical retired pay base as of the date of divorce. The retired pay base is the average of the Servicmember’s base pay for the highest 36 months prior to the date of divorce. To compute that average, it is essential to use the applicable Pay Table for each of the 2 or 3 prior years. The Pay Tables set out the basic pay rate for the member’s pay grade at intervals of two even numbered years. The longevity interval is based on the actual PAY DATE shown on the LES.
Military Pay Tables. Pay and allowance information for active service is published annually based upon Congressional action.
Promotions to a higher pay grade can occur throughout the year and can have significant impact on increasing the high 36 average. Therefore, an important variable in calculating the retired pay base is the servicemember’s date of rank (DOR), i.e., the date promoted to the current pay grade. Other than the actual promotion orders, there are no commonly provide documents that reflect that date and DFAS cannot provide it. You will need to ask the servicemember to provide the DOR.
The Retiree Account Statement (RAS) is the monthly and annual pay statement for a retired servicemember. This document will confirm the currently divisible amount of retired pay and the availability of Survivor Benefits for the nonmilitary spouse. Unless SBP benefits were elected at the time of retirement, any property division award to the former spouse will terminate on the retiree’s death. Because the retired pay has already been determined, there is no requirement to calculate the retired pay base and the coverture fraction can be readily determined without DFAS help. If the RAS shows SBP coverage for “Spouse” it must be decided whether to change the coverage for “Former Spouse” in the property negotiations. The RAS is available to the retiree at the My Pay website.
The Reserve Points Summary (RPS) is a record of service points earned by a member of a reserve component, including active-duty days. Points are summarized annual totals for each 12-month period following the date of the first entry to military service—not a calendar year (i.e., RYE—Retired Year End, called Anniversary Year in the Navy). Retired pay eligibility and amount for Reservists and National Guard require the use of creditable service points. Each of the services has its own descriptive title for the points summary, but it is accessible only by the servicemember through websites of the various Reserve human resources commands.
The Notice of Eligibility (NOE), commonly referred to as the “20 Year Letter) is a critical document when dealing a member of the Reserve or National Guard. This document confirms that the servicemember has completed the minimum required 20 “good years”) necessary for guaranteed retired pay at age 60. A “good year” is one in which the member earns at least 50 points. The NOE also triggers a 90 deadline for elections concerning the Reserve Component Survivor Benefit Plan (RCSBP) that may provide survivor annuity payments to a spouse or former spouse if the SM dies. The default if there is no election is Option C which provides survivor annuity coverage for the “spouse” if the SM dies before receiving retired pay at age 60. Affirmative action to change coverage from “spouse” to “former spouse” must be considered in a reservist divorce negotiation.
A Reservist or National Guard member may continue to accrue creditable points after receipt of the NOE until transferred to the Retired Reserve. Typically, there will be an order of transfer that the member can provide.
The retired pay base for calculating Reservist/National guard member retired pay is determined by converting points to years at one point being considered one day. For divorce before age 60, the retired pay base is computed based on the high 36 average at the date of divorce using the standard pay tables as if the member were on active duty. The coverture fraction is then based on points earned as of that date.
The DD 214 (Certificate of Release or Discharge from Active Duty) document is normally only significant for dealing with a retiree; but can be important in confirming eligibility for benefits from the Veterans Administration. The 214 confirms the date and type of retirement and the total amount of creditable service necessary for determining the coverture fraction denominator. A reservist or national guard member does not receive a DD 214.
Retirement Orders. Each service component has its own format, but all of them issue a retirement order that terminates military service and authorizes transfer to the Retired Pay Rolls. The order will establish the effective date and identify the total creditable service used to calculate retired pay.
Submission of Orders. Payments from current retired pay under the provisions of the Uniformed Services Former Spouse Protection Act (USFSPA) must be requested by the Former Spouse using DD Form 2293 (Application for Former Spouse Payments from Retired Pay), supported by the applicable court orders. This application can be used for child support, spousal support, or property division, subject to the limitation that no more than 50% of the SM’s disposable retired pay can be deducted from the SM’s account unless procedures for increasing child support up to 65% are followed. However, no property award payments can be made to a Former Spouse by DFAS unless the parties were married for 10 years coinciding with active military service. Enforcement of these non-qualifying awards must be enforced solely by state court procedures.
Both active-duty pay and retired pay are subject to involuntary collections, but only based upon valid court orders. Collection of child or spousal support is typically ordered by the activation of an Income/Wage Withholding/Assignment Order to an employer supported by a court order. More information about how to submit support orders to DFAS.
DFAS will only collect child support arrearages if specifically stated in the court’s support order.
The amount of disposable pay that can be collected for child support ranges from 50% to 65%. See site for conditions.
Some states are now requiring use of a standard Income Withholding for Support form (OMB 0970-0154) adopted by the federal Office of Management and Budget. The form is available through the federal Office of Child Support Enforcement.
Neither retirees or members of the active duty military are subject to garnishment for commercial debt; however, up to 25% their disposable pay can be attached through the military involuntary allotment process established in DoD FMR Volume 7a, Chapter 41, Section 4105 or 32 CFR Part 113. Applications for involuntary allotments can only be submitted by use of DD Form 2653 and cannot be based on a state court garnishment procedure. Two copies of the completed form and the certified court judgment are required. To find out how to attach the pay of an active-duty service member by involuntary allotment.
Chapter 13 Bankruptcy Deduction Orders submitted by a Bankruptcy trustee will be made in accordance with the normal pay cycle. Bankruptcy law authorizes DFAS to withhold up to 100% of the employee or member’s disposable earnings, as directed by the Trustee.