59

A STATEMENT OF “CORPORATE HISTORY” LEADING TO THE ENACTMENT OF
THE UNIFORMED SERVICES FORMER SPOUSES PROTECTION ACT
(USFSPA)

Mr. Chairman, I am. A, (Mack) McKinney, Legislative
Counsel, Fleet Reserve Association (FRA). I appreciate the
opportunity to address the subject of a court ordered family
obligation, the Uniformed Services Former Spouses Protection Act
(USFSPA), Public Law 97-252, 10 USC 1408. Supporting this
statement are the below listed military and veterans’ organiza-
tions numbering more than 3 million members. They are:

Air Force Association Naval Reserve Association

Assn. of Military Surgeons
of the United states

Enlisted Assn. Of the National
Guard of the U.S.

Pleet Reserve Association

Jewish War Veterans of the U. Ss.

Marine Corps Reserve Officers Assn.

National Order of Battlefield

Navy League of the U.S.
The Retired Enlisted Association
‘The Retired Officers Association
United Armed Forces Association
U.S.Coast Guard Chief Petty Officers
Association
U.S. Army Warrant Officers Assn.
Veterans of Foreign Wars of the U.S.

Commissions

To understand the mechanics that moved Congress to enact the
USFSPA, one must be knowledgeable of the events leading to its
finale. The following statement was prepared by this witness who
played a major role in trying to delay the momentum driving the
force toward the enactment of what the military and veterans’
groups believed to be a one-sided proposal. Much of this
statement is supported by documents retained on file by this
witness.

MILITARY RETIRED PAY

For almost a century, prior to the enactment of USFSPA,
U. S. Courts agreed that military retired pay is neither an
annuity, a pension, nor a payment for fully retiring from the
Armed Forces of the United States. As far back as 1861, the U.S.
Supreme Court held in U.S. v. Tyler (105 U.S. 244) that officers
retired from active service were still “in the military service
of the government.” The Court took note that those on the
retired list “were in all respects still performing ‘service’.”

“It is impossible to hold that men who are by statute
declared to be a part of the army, who may wear its uniform,
whose names shall be borne upon its register, who may be
assigned by their superior officers to specified duties by

1


123

Committee for Justice and Equality
for the Military Wife

Doris Mozley 812 Botetourt Gardens
Chair Norfolk, VA 23507
(804) 622-4258

February 9, 1986

Mr. Charles R. Kubic
Domestic Policy
The White House
Washington, DC 20500

Dear Mr. Kubic:

Thank you for speaking with Mrs. Doris Benit about the
high rate of military divorce which now approaches 80%. Mrs.
Benit asked me to respond.

Americans have been subject to much media bombardment in
the last few years that goes against traditional ethical,
religious, and family values. Remember the "Me Generation,"
“Looking Out for Number One," and "Getting Yours While You Can."
This narcissistic, selfish propaganda has undercut religious
values that stress family, the worth of the individual, duty,
self-sacrifice, loyalty, faithfulness, chastity, and putting
others before oneself. These bedrock values still exist, of
course, but they, along with family values, have been undercut.

While it is true that the peripatetic lifestyle and frequent
separations are hard on military families, these obtained when
the divorce rate was very low. So, moving and separations are
in and of themselves not the critical variables.

I believe the paramount reason for the astronomical rise
in military divorce, other than the recent emphasis in our
society on instant, narcissistic self-gratification, is that
with the rise in military benefits and perquisites, military
members became more susceptible than in the past to the wiles
of campfollowers and gold-diggers because Congress
unintentionally passed laws that reward nm: bers for
Tt is just that simple. To explain: A military
member can divorce his long-term military spouse and take
everything they earned together, walk away, and give her part
in the partnership to someone else. ‘The enclosed Betty Myers’
story epitomizes what we call "The Throwaway Military Wife”

system that I believe has wrecked havoc on the military famil¥s
I believe this unjust system is responsible for that portion
of the military @ivorce rate that is higher than the national

If you remember that the only psychological princi
all theories of behavior adhere to is'that which Baye that hie
person does what is pleasurable (Freud's Pleasure Principle)

and avoids that which is punishin:
ig, then you can see why we
fay that a military member is rewarded for divorcing, while

his long-serving Pouse, thereby disenfranchised, is severely

You asked Mrs. Benit for a solution: I believe if
3 ce
passes laws that predicate public benefits only on public
service, the divorce rate will go way down,

Respectfully,

Dart pes by

Doris Mozley, Chair


25

you a little bit about what this review will encompass, Mr. Chair-
man and committee members.

The review will compare the protections and benefits and treat-
ment afforded under Federal law to military members, former
members, and former spouses, with such benefits provided to civil
service employees and former employees of the Federal Govern-
ment and their former spouses.

Additionally, this review will also consider the experiences of the
Uniformed Services in administering the law: the adequacy and ef-
fectiveness of legal assistance provided; experiences of military
members, former members, and former spouses in the application
of the law by State courts, including the interpretation of State
courts of EEplisabe Fee Federal State statutes; and all matters pre-
sented in y’s hi

I can assure you ‘that © considerable effort will be expended to seek
the views of those having interest in this issue both from inside
and outside DOD, to include DOD dey ents, that is the services
and agencies such as DFAS, the Office of Personnel Management,
the State Bar Associations, those tax-exempt organizations in-
volved in the representation of current or former military members
and spouses, and also the general public.

In fact, taking a cue from Congress I note that you're heavily in-
volved in using the Internet. Hopefully, by next month we'll have
a world wide web designed to capture individual views on this key
issue.

In reviewing some of the issues for this testimony, Mr. Chair-
man, I noted way back in 1981 when Congressman Nichols was
Chairman of the Personnel Subcommittee and they were get
ready to address this issue, he described it as a very complex an
very emotional issue. And after sitting here and listening to the
testimony this morning and reviewing the history, it hasn't
changed much. Perhaps some would say, “Well, why will the De-

partment take so long to do this?” It’s Yaot just because our sus-

pense date, so to speak, is September of 1999 as granted by the

use National Security Committee and the Senate Armed Serv-
ices Committee.

I am convinced, after spending time looking at this. I talked to
people who have been living and working in this environment for
a lot longer than I have, and two things I found impressive: one,
everybody agrees that this needs to be done. It needs to be done
earnestly and it’s going to take us time to do it to do it right.

That's the commitment we'll make. We will do this right and
then be in a better position by the end of this study to provide
what we feel will be some meaningful recommendations on where
* orepared statem tt of General Le: 1421]

e prepared statement o! er zy appears on p.

The CHAIRMAN, Thank you, General. Will some of the procedures
that you're going to use, will that inciude public hearings and testi-
mony from individuals or organizations?

neceneral Lezy. At this time, sir, the plan does not call for public

gs. I think the way the game plan is laid out is we're going
to requ uest it in writing by extensive use of this Internet system, as
I told you. But the door is still open if we need to do face-to-face.


154

alimony and child support. Consequently, a service retiree may lose all of her retired pay in
a divorce action - regardless of fault. The USFSPA provides that up to 65 percent of retired
pay may be garnished by the government. Payment, out-of-pocket, of the remaining 35
percent is legally enforceable.

3. The USFSPA does not specify that the dollar amount of an award is to be based on the
rank or pay grade of the military member at the time of divorce. As a result, many ex-
spouses have received a “windfall benefit” in the form of a USFSPA. award based on
promotion of the military member after divorce. The contention that later promotions are
built on early effort of both husband and wife is pure nonsense. Why should consideration
be given to later military promotions when no regard is given to changes in the former
spouse’s financial or employment situation? It is illogical to argue that a first spouse,
divorced when the military member was (for instance) an E-5 (Staff Sergeant), significantly
impacted the military member’s later ability to reach higher grades.

4, Besides being the only party of the married couple assuming mortal risk (unlimited
liability), a military member must serve a minimum of 20 years before being eligible to
receive retired pay. In contrast, eligibility of the member's spouse is attained instantaneously
upon marriage. There is no prohibition against multiple marriages and multiple USFSPA
awards -- documented cases exist. A former spouse may be collecting the retirement from
one or more military members while engaging in still another potentially lucrative military

marriage.

5. The USFSPA is based on the premise that the former spouse is “dumped” by the military
member. Fault is not a factor. The former spouse’s (his or her) remarriage and/or economic
situation is not a factor. Indeed, the former spouse’s own collection of his/her own
retirement pay is not even a factor. For example, a retired military member may have to give
a significant portion of her retired pay, for the rest of her natural life, to the former spouse.
But that former spouse may draw his own retirement pay, from a civilian or federal
‘occupation, keeping all of his retired pay without providing a cent to the military member.
This is simply unfair to the military member.

6. The military retiree must remain in compliance with the Uniform Code of Military Justice,
may have restrictions on civil service employment and foreign travel and may be subject
involuntary recall to active duty. The ex-spouse, who draws from the same retired pay
envelope, is not subject to any of these constraints.

7. Since military retired pay is unfairly reclassified as “property” for a USFSPA award,
payment continues for life, even if the benefitting ex-spouse remarries. So do the Survivor
Benefits Program of the DoD and SSA. Since USFSPA awards are made without regard to

4


149

DISCLOSURE OF FEDERAL GRANTS OR CONTRACTS:

‘The Air Force Sergeants Association (AFSA) does not currently receive, nor has the
Association ever received, any federal money for grants or contracts. All of the Association's

activities and services are accomplished completely free of any federal funding.

51-567 - 98 - 6


COMMITTEE ON VETERANS’ AFFAIRS

BOB STUMP, Arizona, Chairman
CHRISTOPHER H. Sure. | ew Jersey LANE EVANS, Illinois
MICHAEL BILIRAKIS, Floric JOSEPH P. KENNEDY II, Massachusetts

FLOYD SPENCE, South Carolina
¢Y EVERETT, Alabama
STEVE BUYER, Indiana
JACK QUINN, New York
SPENCER BACHUS, Alabama
CLIFF STEARNS, Florida
DAN SCHAEFER, Colorado
JERRY MORAN, Kansas
JOHN COOKSEY, Louisiana
ASA HUTCHINSON, Arkansas
J.D, HAYWORTH, Arizona
HELEN CHENOWETH, Idaho
RAY LaHOOD, Illinois
BILL REDMOND, New Mexico

BOB FILNER, California

LUIS V. GUTIERREZ, Illinois
JAMES E. CLYBURN, South Carolina
CORRINE BROWN, Florida

FRANK

COLLIN C. PETERSON, Minnesota
JULIA CARSON, Indiana
SILVESTRE REYES, Texas

VIC SNYDER, Arkansas

CIRO D. RODRIGUEZ, Texas

Cart D. COMMENATOR, Chief Counsel and Staff Director

(a)


119

‘The Federal Government actually has made the situation worse for many of these spouses.
‘The need to find immediate employment after tran 10 a new duty station is made
moore critical by the 13% active duty pay gap, housing that are 5 -7% behind
duet caps, andthe new military resrement plan tha cus the current benefit by over 25%,
‘Spouses cannot delay employment to find a position in their chosen must
accept whatever employment is immediately Pvalal oto ens meet

sates show tha Spouses of enlisted members bringin 20% of the family

although their average earnings is only year. Spouses contribute
229 ofthe family's income and average $8,408 per year.

‘The current pace of deployments and the long work hours of the servicemembers even
‘when they are home, means almost all of the needs ofthe children and the home fall on the
shoulder ofthe miltary spouse, The chikren's medical and dena appoinanens
‘ransportin activities, parent teacher conferences; and oversight and
assistance with homework all must be done by the military spouse. Arranging to meet the
plumber, the electrician, the deliveryman, again are left tothe military spouse. Yet, the
‘majority of the time they are also bringing in a pay check.

‘The military family pays at least one dollar out of every three spent for each military move
‘out of their own pockets. Depressed pay raises, out of pocket costs for housing, a tax code
that forces them to sell their home each time they move, even if the real estate market is
depressed, and the accumulted cos of each military move, mean most miliary families
er reiement with ile if any savings. they own a home its normally very highly
mortgaged. The only thing of financial value most have at retirement is military retired pay.

HOW CAN THIS NOT BE TREATED AS PROPERTY.
Who's Pension Belongs to Whom?

Despite te fact that most tar spouse are unable to es in pension plans, some few
to military spouse preference in DoD civil service jobs, has ‘able to accrue
civil service retired pay. The advent and swift proliferation of 401K plans have allowed

fered otanser employers duet militry moves, In communiy property sates the civil
service retired pay and the 401K would be divided as property. Upon remarriage

parties, ervicernembers would keep their portion of the civil service retired pay oc the
TOIIC while under legislation before Congress, the miliary spouses would love thet
portion of military retired pay.

‘THIS WOULD BE NEITHER FAIR NOR EQUITABLE.

NMFA strongly believes that military retired, should comin wb ble a teced cr
Property by state courts and as such, is not affected by the remarriage of either


68

The Court did recognize the plight of ex-spouses. It stated
that an ex-spouse’s situation may be mitigated by the right to
claim social security benefits and garnishee military retired pay
for support, but that Congress may wish for a need to provide
more protection. Congress now had carte blanche to change the
system.

SENATE ACTION

While the Supreme Court was weighing the McCarty case, the
Senate Armed Services Committee's Manpower and Personnel Subcom-
mittee was working on the introduction and consideration of a
proposal to divide military members’ retired pay with their
former spouses. In early 1981 the panel, chaired by former Iowa
Senator Roger Jepsen, offered a proposal for review, later
introduced as $.1814,

Meanwhile, others, including Representatives Schroeder and
Hance, sponsored their own bills dealing with the ex-spouse
issue. Schroeder's bill, H.R. 3039; Hance’s H.R. 1711; former
Senator Hatfield’s S$. 888; and former Senator DeConcini’s S.
1453, became subjects of a September 22, 1981 hearing before the
Jepsen panel.

At the hearing the list of witnesses was restricted to one
(1) military organization opposed to the bills while two (2)
small women's organizations representing affirmative action were

allowed to provide testimony. Erom that date. forward, until the

Only witnesses favoring the ex-spouses' proposals were invited to
testify.

Accordingly, things would not go well for the military
organizations desiring to maintain military retired pay as an
exclusive right of the service member. Comments by the chairman
and ranking member were weighted heavily in favor of changing the
retirement system so that former spouses would be able to obtain
a percentage of the military member's retired pay. DoD’s state-
ment had changed from a negative position on the Schroeder’s
proposal to a neutral one awaiting instructions from the Presi-
dent's office. Responding to a Jepsen question, the DoD spokes-
man said that “most of us” (in DoD) agree to splitting the


152

member or the former spouse, the gender reference could be, in each case, male or female.

Do family members play an important part in the success of a military member? Absolutely!
Is this familial contribution unique to military members? Absolutely not! The military
family’s lifestyle, as in all federal and civilian occupations, results from its combined efforts,
sacrifices, experiences, separations and travel opportunities. As in the case of numerous
other occupations, including that of the members of this very committee, there are unique
stresses and adjustments required by all family members. Military men and women serve
proudly around the world, often at great personal hardship, sacrifice, and mortal danger.
Their spouses, whether male or female, while facing none of the mortal risk, generally
accompany the military member when assigned to locations peaceful enough to
accommodate family members.

Regrettably, as in all segments of our society, there are times that these military marriages
fail. Whether the failure in the military marriage results from a “Dear John or Joan letter,”
or any number of other causes, it is illogical and unethical to assume that the breakup and
the penalty should be assumed to be solely the fault of either party.

To be sure, these are usually bitter situations with the desire for retribution and to harm the
other party. However, the only objections that we have heard from those opposed to any pro-
military USESPA reform have been, and continue to be, centered only on the desire of the
former spouse to continue to receive, often beyond need or merit, a mandated source of
income that Congress incorrectly opened in 1982 and has not closed since then.

Proponents of the current USFSPA would have you believe that all military members should
be cloaked under the USFSPA because military spouses are uniquely mistreated. They would
also have you believe that the demographics of the fifties (with the financially “helpless,”
non-working spouse waiting at home patiently for the male military member to return from
work) still apply. This is unmitigated nonsense. Honesty would attest that most (enlisted,
in particular) military spouses (male and female) now also work, many current and future
military retirees are women, and the fault of a marital breakup is just as often infidelity (on
either spouse’s part), financial difficulties, and other factors — very few actually related to

military duty.

For every anecdote of a military spouse being the “loser” or victim in a failed military
marriage, we can provide examples of a spouse leaving a military member for another mate,
sometimes leaving the kids behind, sometimes at great financial improvement. We state
only to emphasize that crafting, applying, and perpetuating a law based on specious claims
. the USFSPA) does not serve faimess or justice.

2.


719

“special classes” of persons who would be wrongly deprived of, or unjustly enriched with, the fruits
of a marriage.

All of the states have taken the view that marriage is, among other things, an economic partnership
in which both parties contribute toward the common good, although sometimes in different ways.
The states recognize that partnership by considering both parties to a marriage to be owners of that
property which is acquired during the marriage, including pension and retirement benefits.

Today, all 50 states have recognized military retirement benefits as property, belonging to both
parties to the extent eamed during the marriage. This is in keeping with the treatment by the states
of all other federal, state, and private retirement and pension plans. My own research has shown
that in most military marriages, the military retirement benefits are more valuable than all the other
property accumulated during the marriage. In other words, if this one asset is inequitably divided,
itis usually impossible to make a military divorce fair to both parties.

Such a division of property should be distinguished clearly from any kind of alimony award.
Different state courts have described the distinction (between property division and alimony) in
different ways, but typically they consider the division of property acquired during the marriage as
a permanent division of assets created by efforts during marriage, while alimony is discretionary,
is dependent upon the needs and abilities of the parties, and is subject to review upon changed
sumstances after divorce

In 1990, the ABA noted that it

recognizes the power of Congress to pre-empt state law in this field, but has
uniformly held the position that no pre-emption of state law should be implied by the
courts, and that Congress should be circumspect in determining that state law should
be pre-empted at all. Where federal pre-emption is determined to be necessary, the
scope of that pre-emption should be carefully defined so as to avoid wrecking havoc
upon the balance of interests involved in state court divisions of marital property.*

ABA policy has not changed on this topic since that time, and it is in light of ABA policy that the
specific proposals in H.R. 2537 are considered in this testimony.

5 See, e.g., Wolffv. Wolff, 112 Nev. 1355, 929 P.2d 916 (1996).
1990 Statement, supra fn.1, at 5.


15

the living expenses while financing my husband’s college education
and a few ill-fated business ventures.

In 1982, we had a daughter of our own which made us a family
of five. I will spare you the account of my husband’s conduct
throughout except to say that it involves sporadic employment,
extra-marital affairs, drug abuse, and jail.

My husband was always an unwilling participant of my career
changes of duty stations. I had to balance my time between a de-
mandi ‘if career and dysfunctional onal life of a domineering
husband and a controlling partner. impact my husband had on
my career was negative not positive.

it is fair to ask why I stuck with it. I suppose the answer is sim-
ply because of the children and because I couldn’t see a reasonable

‘way out.

Finally, in 1991, we started talking legal separation. This has ul-
timately resulted in a divorce finalized in December 1994. At no
time during 20 year career did the Navy tell me that there was
a law called Uniformed Services Former ses Protection Act
and explained to me how it might affect my life in my retirement.
The divorce court judge knew about it, however, and awarded m‘
husband 30 percent of my retired pay, for life. I did fet one bre:
that I will not have to start paying him until our daughter, now
living with me, either finishes high school or reaches the age of 19.
In the meantime, he has remarried and the payments he will even-
tually receive will continue for life.

Boiled down to the fundamentals, what we have here is a case
where a male military member who forfeited his right to retired
pay by unsatisfactory conduct, but is now collecting it anyway from
a female member who did qualify.

My daughter and I are now living below the poverty level in my
mother’s home. I’m attending college in order to prepare myself for
a future without a badly needed part of my retired pay.

Why can’t this law be cl so that it is fair to both parties
to a divorce. Why should someone married to a military member
be treated differently in a divorce court from other American citi-
zens. This isn’t a male, female issue. This is an issue of fairness.
It doesn’t appear that the members of Congress who voted for this
law thought about enlisted military members, and certainly not fe-
male military members. It is high time this oversight is corrected.

you.
The CHAIRMAN. Thank you.

ofnd next we have Major Armstrong of the United States Marine
rps.

STATEMENT OF NEITA ARMSTRONG

Major ARMSTRONG. Good morning. Mr. Chairman, and members
of the committee, I am Major Neita Armstro: e Korea Area
specialist for 1st FSSG, Camp Pendleton, CA. you for the
opportunity to appear here before you today. I will summarize my
Pmitten testimony and ask that it be included in the record of these

earings.

I am not here to represent the Marine Corps, but the men and
women of all uniform services. My riences span military, civil-
ian, and life as a military spouse and mother. I represent your si-


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134

EX-PARTNERS OF SERVICEMEN/WOMEN FOR EQUALITY
AUGUST 5, 1998

Further, our members write us that they have their share of retirement pay
reduced and are unable to determine “why” the reduction. The Privacy Act
prohibits DFAS from divulging the source of the reduction.

Clearly, what constitutes “service-connected disability” needs to be further
defined before any legislation can proceed. We must display a measure of
fairness to all parties concerned in this regard.


189

by the emotions and sympathies that occur in the unfortunate, sometimes turbulent, break up of
marriages, the purpose of compensation is forgotten and subverted, just as we have seen in the
court decisions discussed here. Compensation is a personal entitlement of the veteran, without
whom, there could never be any secondary entitlement to compensation by dependent family
members. Therefore, Federal law should place strict limits on access to veterans’ benefits by third
parties to ensure compensation goes mainly to support veterans disabled in the service of their
country. The law should be restrictive and precise enough to ensure that, properly applied, it
would never permit an able-bodied spouse to take and enjoy part of the veteran’s payment for the
effects of disability he or she suffers.

Moreover, with the changed roles of the genders in our modem society, there is more
equality between husbands and wives as far as opportunities to earn a living. Both spouses are
now wage earners in many families. Both pursue higher education and individual careers, Many
of the equitable reasons for awards of alimony and related public policy goals no longer exist.
These circumstances viewed along with the fact that the veteran is disabled compels restraint
‘when considering laws that may subject the veteran’s disability compensation to the claims of
others.

While alimony may still have its place in today’s society where one spouse is
disadvantaged or if there is a substantial imbalance between the resources or earning capacity of
the husband and wife, ex-spouses have not been an object of veterans’ programs. The Federal
government has no interest in an ex-spouse’s support. Congress has not authorized veterans’
entitlements to be provided to benefit ex-spouses. There are legitimate reasons to provide a
measure of ancillary benefits to a spouse who bears, along with the veteran, some of the
disadvantages and hardships related to the experience and status of a veteran. Various veterans’
benefits do that. Once the spouse is no longer a partner in the veteran’s household and no longer
a member of a veteran's family, veterans’ laws do not provide benefits for that spouse, and we
should not allow the states to award the spouse part of the benefits intended for veterans and their
dependent family members. That is not to say that ex-spouses of veterans are undeserving; it is
simply to say that Federal benefits for veterans should not be used to fill their needs. The welfare
of ex-spouses has never been a purpose for dispensing veterans” benefits. Where appropriate, the
state governments can provide for their well-being to the same extent and through the same
regular services it provides nonveterans, Veterans’ children are inherently different, however.
They are naturally entitled to be supported by the veteran, and they are the veteran’s responsibility
from a legal and moral standpoint. Disabled veterans have a responsibility to support their
dependent children. Even so, disability compensation should be the last source considered for
awards of child support, and the law should require reasonable exhaustion of alternatives before
disability compensation, in excess of the additional amounts paid to the veteran on account of
dependents, is apportioned to children through court orders and decrees. Because VA resources
can be better used for other purposes, we do not believe VA should be subject to garnishment to
‘enforce such orders, however. Awards of temporary alimony to separated spouses should only be
made through administrative apportionments. Otherwise, problems would likely arise when
temporary alimony is converted to permanent alimony upon divorce.


178

STATEMENT OF
RICK SURRATT

ASSISTANT NATIONAL LEGISLATIVE DIRECTOR

DISABLED AMERICAN VETERANS
BEFORE THE
COMMITTEE ON VETERANS’ AFFAIRS

UNITED STATES HOUSE OF REPRESENTATIVES

AUGUST 5S, 1998

Mr. Chairman and Members of the Committee:

Tam pleased to appear before you on behalf of the more than one million members of the
Disabled American Veterans (DAV) and its Women’s Auxiliary to present our views on current
law and practices regarding garnishment of veterans’ benefits for child support and other court-
ordered family obligations. We believe this is an area deserving of your attention and remedial
legislation because of the inconsistency of interpretation and application of the pertinent laws
among the states and because of the inequities that can result for our Nation’s veterans.

Conflicts between state and Federal iaw, as well as differences among the domestic
relations laws of the states, provide fertile ground for problems in the area of rights to Federal
benefits. Under our constitutional scheme, laws governing family relations are reserved to the
states. However, where national interests are involved, Congress may pass laws that affect.
individual rights in this area. Veterans’ rights are, of course, a matter of Federal law. Where
matters within Federal control overlap with matters subject to state regulation, Federal law may
take precedence over or preempt inconsistent state laws. In determining property and other rights
of the parties related to Federal benefits in divorce actions involving veterans and retired military
members, state courts must apply Federal laws. In these matters, the states have not always felt
constrained to honor or fulfil the intent of Federal law and have been inconsistent among
‘themselves in the effect they give Federal law. Perhaps because laws on family relations are
rooted in strong traditions and typically under states’ jurisdiction, the states are reluctant to
observe Federal law and dispose of cases in ways that impinge on local discretion and run against
that grain. This situation has not served veterans well, and benefits intended for them are often
diverted to third parties who made no sacrifices and contributed nothing toward the defense of the
Nation.

In domestic relations matters, veterans’ benefits can become subject to actions for
‘separate maintenance, alimony, child support, and division of marital property. Veterans are
primarily concemed with questions regarding what obligations and liabilities their benefits might
be subjected to or what rights others may have to their benefits. “Garnishment” is merely one
means, or enforcement option, by which courts can gain access to those benefits. Garnishment,
per se, as a process is not the primary concern for veterans, although it is a matter of concern for
VA because states sometimes disregard VA's immunity to garnishment orders, Absent a waiver
of sovereign immunity by Congress, the states do not have power to garish Federal agencies,
‘even where the states can properly order veterans to pay others from their benefits. Therefore,
our discussion is more broad in scope than the garnishment process and focuses on the authority


74

dividing pensions in cases where the former spouse was married
less than 10 years. Hance, using a different tactic, pleaded
that the rights under a pension bill or retirement bill "should
vest from the first day.” Schroeder was reminded by Nichols that
recent changes in the Foreign Service system and those proposed
for the CIA “restricted payments of portions of retired pay to
situations in which the marriage lasted 10 years.” Former Rep.
Don Mitchell also reminded the assembly that both Schreoder and
Whitehurst had the 10 year restriction in their original bills.
Mitchell, who at the time was the ranking minority member on the
House Armed Services compensation subcommittee, apprised his
colleagues that the service member had no vesting rights. “We
should take into account, he said, “that there is no vesting in
the military ... If you are there 20 years, you get it. If you
are there 19 years, you do not.”

* Has no history of hearings in the House, Schroeder
and other team members alluded to the fact that her amendment had
been considered in the House. “(T)here were lots of hearings on
this in the House,” she claimed. Later, she again implied that
the House “has had lots of hearings on this, on the CIA, on
Foreign Service, on civil service.” In truth, there were a
number of hearings to consider the CIA, Foreign Service and civil
service proposals, but none- absolutely none in the House on her
proposal now on the House floor. Nichols, whose panel had this
authority, alluded to Schroeder’s statements as erroneous. He
said he would rather have been able to consider this “rather
complex and far-reaching issue within the committee to insure
that the full impact of these changes could be evaluated in
detail.” He rightfully charged that Schroeder’s amendment “was
an attempt to circumvent the system.” The House Armed Services
ranking member, former Rep. William Dickinson, said the House
should go about it in the more normal way. "This really should
be the subject of extensive hearings so that all parties inter-
ested can have their day in court ... to develop the problems
that will arise from this ... and we know what we are doing.”
Nichols and Dickinson were joined by Mitchell who noted there
wasn’t sufficient testimony received. "I would hate to pass a
bill ... because we acted prematurely this year.” Former Rep.
Richard White, one time chairman of the House Armed Services
personnel subcommittee, went even further in his observation. He
said he could not be silent “when the House might produce what I
regard as defective legislation. ... Both (Schroeder’s and
Nichols’ amendments) create more loopholes than they seek to
cure.” White also reminded his colleagues that there was no

16


32

Mr. Cooksey. That’s correct. Well, my concern about national
legislation I was talking to a Federal judge recently and he was
criticizing those of us in my party for Passing too much legislation
that requires Federal judges to get involved in issues that they
think are not germane to their—looking at you know, other issues.

I think this is a very important issue. I know when I was in the
Air Force and I was a newlywed at the time—and I’m still married
to the same person for 31 years, and I did get married while I was
on active duty. So Air Force weddings maybe last longer, I don’t
know. But anyway, I was surprised that a guy that I knew that
was also in flying status, that came in, he came into Texas, in Aus-
tin from Arizona. He told me, he said he was transferred there be-
cause he said that Texas was a man’s State and it was better for
a man to get divorced in Texas than Arizona. I am from Louisiana
and we really have good laws for women. So it varies from State-
to-State and I’m sure it all changes.

I think that the message though that you would get from the
members of this committee—and in deference to them, we all had
some other meetings that I was at and some of them are at now
probably—is that we want to do what is fair to both parties. 'm
parti larly sensitive to veterans that have disabilities and prob-
lems there.

And on the other hand, as a father of three daughters all of
whom are in their 20’s, one of whom is getting married, I’m also
very sensitive to the women’s side of the issue. I really think it’s
contingent upon the parties involved to work out something that
will be fair, and civil, and equitable, and consider it to the spouse
that on their wedding day you thought was the most wonderful
person in the world. And your children which I hope you still think
are the most wonderful people in the world.

The CHAIRMAN. Thank you, Doctor.

Mr. SurraTT. Congressman, I’d like to comment on one thing you
said about the Federal judge. I think the message that everyone is
getting here is that if the legislation or the law were more clear
we might actually cut down on some litigation. This must be a law-
yer’s dream, I mean when you look at the laws and how they inter-
relate. So perhaps that wouldn’t be going against his caveat if Con-
gress were to simplify these laws and make them more equitable.

Mr. CooKSEY. He was not discussing this issue in particular. The
day I saw him he was having to write an opinion on an inmate who
was suing the judicial system and the prison system because he did
not get false teeth and he felt like he been discriminated
against, and another one that did not get into a school situation.
So those were the issues he was talking about. But Federal judges
like to think that they look at big issues. To me this is a big issue
but it still needs to be worked out in an equitable manner.

Mr. OLaNorFF. Dr. Cooksey, if I could just make a quick response.
I agree with Rick about the Federal question, that it belongs at the
State courts. But one of the examples I have with me today is an
individual who was reassigned to Hawaii and eight days after he
moved into base housing his family left and went back to Illinois.
And then he detailed of his specific problems of the State laws
of Illinois and what he couldn’t do and what he wasn’t allowed to


103

former spouse’s rationale. I received an e-mail a couple weeks ago from a Marine whose
former spouse wanted him to sign a stipulation that said he would never seck the
disability pay he’s entitled to - because it would reduce her benefit! This is the impact of
the current laws - the enabling of civilians to deny the military member entitlements even
beyond the divorce.

Right now Chapter 61 Disability Pay is protected only to the level the disability
exists at the time of retirement. Why shouldn’t the military member be protected if the
condition deteriorates instead of maintaining the level of payment to an ex-spouse who
has probably remarried? There are many other laws on the books regarding child support.
If Disability Pay is the lasvonly resource that can be garnished for child support the
courts should seriously look at the veterans overall financial status - the child support
payments are probably higher than service member can afford - and not live on the
streets.

The original legislation introduced by its sponsors required ten years of marriage
before the former spouse would be entitled to a portion of the retirement pay and would
terminate upon remarriage; however that version of the bill was not the one adopted.
Instead, an alternate version was passed that could allow former spouses to receive
benefits AFTER ONLY ONE DAY of marriage as if the military member were vested in
a pension plan. Similar laws that apply to the CIA and Foreign Service terminate
payments upon remarriage of the former spouse and do not allow for the promotion
windfall. The unique laws that apply to the military allow for the promotion windfall and
encourage multiple marriages.

Many of us feel the Uniformed Services Former Spouse's Protection Act is a
violation of our Constitutional right to equal protection and due process along with being
an unjust taking. The Supreme Court ruled that our retired pay is reduced pay for
reduced services and couldn’t be divided for good reason, but Congress overtumed that
decision during an election year for unknown reasons. Most military persons, lawyers
and members of Congress don’t understand that military retirement pay is NOT A
PENSION. It is paid at the pleasure of the Government. In order to retain entitlement to
the retired pay they must adhere to the following:


39

-2-

This morning, we are confronted with the issue of how to treat the
benefits that veterans receive while considering their obligations to their
families.

As veterans, these individuals have earned and deserve the full benefits
accrued them through their military service.

As parents and spouses, they hold obligations that all who enter into
these sacred relationships must honor.

Legally, in cases of child support and divorce, we are faced with the
complications of remembering our nation’s commitments to our
veterans, while also ensuring that we do not forget a parents’
responsibility to their children.

Sifting through the complexities of Federal and State laws governing
familial relations in cases relating to veterans is no easy task.

Conflicting interpretations of current law and poor oversight by
Congress are partially to blame for these difficulties.

However, I am pleased that we are holding this hearing so that we may
learn more about this important issue.

1 look forward to start the learning process now.

Thank you Mr. Chairman.


164

DISCLOSURE OF FEDERAL GRANTS OR CONTRACTS.

The Non Commissioned Officers Association of the USA (NCOA) does not currently
receive. nor has the Association ever received. any federal money for grants or contracts.
All of the Association's activities and services are accomplished completely free of any

federal funding.


64

In his introductory remarks, the chairman stated:

“The (military retirement) benefit system is designed to
attract and retain the quantity and quality of military
Personnel needed. To this end, it must provide equitable
compensation in conjunction with a benefit package that
provided the incentive to choose the military as a career.
Providing benefits to dependents can be justified, in part,

on the basis of comparability with the private sector.
However, extending certain benefits to former spou!
neither directly enhances career attractiveness nor addresses
a problem with regard to comparability. ... Whether the
Federal government provides assistance to former spouses of
military personnel through a military benefit program or
whether that assistance is provided through standard social
programs, that assistance is a payment from the public at
large to a specific group. It is not for services rendered
or an entitlement earned; it is a transfer payment.”

Among the witnesses at the May 28, 1980 hearing was the
Deputy Assistant Secretary of Defense for Military Personnel
Policy. He advised the subcommittee that DoD was opposed to the
Schroeder bill, H.R. 2817. His opposition was supported by four
major military organizations. Of the two (2) women’s panels,
Ex-Partners of Servicemen for Equality (EXPOSE) and Action for
Former Military Wives, only EXPOSE (with all of its 300 members
nationwide) chose to endorse the Schroeder bill.

The following major points helped to convince the
subcommittee to take no further action on H.R. 2817. Although
cited to oppose a future Senate bill (see below), they apparently
were ignored by that body’s oversight panel.

+ Military retirees are subject to the applicable
provisions of the Uniform Code of Military Justice (UCMJ).
(Spouses are not.)

+ Military retirees may be recalled to active duty.
(Spouses cannot.)

+ Military retirees do not have ‘property rights’ to
their retired pay. It is earned on a day-by-day availability to
serve if recalled. The day the retiree dies is the day his or
her retired pay terminates. Additionally, military retirees are
subject to a variety of rules and regulations that can reduce
military retired pay. (Spouses are not.)

+ Enlisted service members, including combat veterans,
can be honorably but involuntarily discharged and commissioned
officers may resign with as many as 19 years, 11 months, and 29
days without any compensation or benefits forthcoming. They have
served longer than 10 years (as in the former spouses’ proposals)

6


148

August 5.1998

Statement By
Joshua W. Krebs
Chief Master Sergeant, USAF (Ret.)

Manager, Legislative Affairs

to the
House Committee on Veterans’ Affairs

on
Veterans’ Benefits Garnishment

Air Force Sergeants Association

INTERNATIONAL HEADQUARTERS, POST OFFICE BOX 50, TEMPLE HILLS, MD 20757-0050

A participating organization in
the National Military and Veterans Alliance


APPENDIX

CHAIRMAN BOB STUMP
STATEMENT
COMMITTEE ON VETERANS’ AFFAIRS HEARING
GARNISHMENT OF VETERANS’ BENEFITS
AUGUST 5, 1998

THE COMMITTEE WILL BE IN ORDER.

WE ARE HERE TODAY TO GAIN A BETTER UNDERSTANDING OF
THE VARIOUS LAWS WHICH ALLOW VETERANS’ BENEFITS TO
BE DIVIDED OR GARNISHED FOR CHILD SUPPORT AND OTHER
COURT-ORDERED OBLIGATIONS.

IN OUR FEDERAL SYSTEM, STATES HAVE THE PRIMARY
RESPONSIBILITY TO DETERMINE SPOUSE AND CHILD SUPPORT
OBLIGATIONS.

THE FAILURE BY ONE OR BOTH PARENTS TO PROVIDE
ADEQUATE SUPPORT FOR THEIR CHILDREN WAS DEALT WITH
AT LENGTH WHEN CONGRESS REVISED OUR NATION’S
WELFARE LAWS TWO YEARS AGO.

(35)


67

Some of the above reasons were reiterated in the amici
curiae filed in the McCarty case by the seven (7) military
organizations noted above.

“he fundamental purpose of retired pay of military

interests dictates a finding that retired pay is
not a vested property right. The findings by
scattered state courts that retired pay is a vested
property right, based upon certain characteristics
of the payment, pose significant threats to the
special nature of this ‘entitlement’ and its
function in national defense.”

Once again, in the amici curiae, the associations voiced
their support for court ordered alimony and child support pay-
ments. “They are in agreement that the power of a state to
require support from any of its citizens is a parochial matter
subject only to the due process test of a rational basis for any
law.”

THE DECISION

In its opinion the Supreme Court on June 26, 1981 held that
“Federal law precludes a state court from dividing military
retired pay pursuant to state community property laws.”

“(a) There is a conflict between the terms of the
federal military retirement statutes and the community
property right asserted by appellee. The military
retirement system confers no entitlement to retired
pay upon the retired member's spouse, and does not
embody even a limited ‘community property concept.’
Rather, the language, structure, and history of the
statutes make it clear that retired pay continues

to be the personal entitlement of the retiree.”

Further, the Court explained that “the application of
community property principles to military retired pay threatens
grave harm to ‘clear and substantial’ federal interests.”
Moreover, "... such a division (of military retired pay) has the
potential to interfere with the congressional goals of having the
military retirement system serve as an inducement for enlistment
and re-enlistment and as an encouragement to orderly promotion
and a youthful military.”


190

If Congress were to agree that veterans’ benefits should be awarded to separated spouses
and dependent children exclusively through the administrative apportionment process, the DAV
suggests that § 5301(a) be amended as follows to include the words underlined: “Payments of
benefits due or to become due under any law administered by the Secretary shall not be assignable
except to the extent specifically authorized by law, and,

Jaw, such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall
be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or
under any legal or equitable process whatever for any purpose, either before or after receipt by
the beneficiary.” If Congress wishes to permit court-ordered child support awards, § 5301 could
be amended as follows: (1) add the underlined words to subsection (a) to read “Payments of
benefits due or to become due under any law administered by the Secretary shall not be assignable
Except 0 the extent specitically authoriznd by law, and, notwithstanding any other provision of
abs section, such payments made to, or on account of,
a beneBcay shall be exenpt fom taxation, shall be exempt from the claim of creditors, and shall
not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever
for any purpose, either before or after receipt by the beneficiary.”; (2) add a new subsection (b) to
provide for the terms and limits on child support awards, (3) add a new subsection (c) to provide
that VA will not be subject to garnishment orders: and (4) redesignate current subsections (b)
through (e) as subsections (d)-(). ‘This amendment would correct the § 659 problem without
encroaching on, or subjecting this change to, the jurisdiction of other congressional committees.

Finally, at a minimum, Congress should enact legislation that preempts states from treating
compensation and other veterans” benefits as property to be divided with spouses in divorce
actions. The damage this will do to the compensation program and the absolute inequities of
tolerating such outrageous actions are obvious.

The DAV sincerely appreciates this Committee's interest in this important issue and its
initiative in beginning the process for considering an appropriate remedy. We would be happy to
supplement our views here to address any legislation that might be proposed as a result of this

hearing. We hope our analysis and views are helpful, and we appreciate the opportunity to appear
before you to share our concems and present our recommendations.


Is|

WW


104

© Subject to recall in the event of a major conflict. If they do not report
- their retirement pay can be terminated.
© Subject to the UCMJ.

© Ifconvicted of a felony they lose their retired pay.

If convicted of spousal abuse they lose their retired pay.
However, the abused former spouse retains entitlement to their
portion until remarriage. Note that the civilian spouse can be
convicted of spousal abuse and STILL be entitle to a division
of the military members retirement pay

Must maintain a residence (address) in the United States

@ Must maintain U.S. citizenship

© Officers loose a portion of their retired pay if they seek a job with the
federal government - not so for the former spouse

© Many states require the payments to the former spouse at 20 years

even though military member has not yet retired

© Ifthe former spouse elects to take the Survivor Benefit Plan (SBP) -
extend payments beyond the death of the military spouse - the
premiums are paid off the top out of the veterans retired pay. The
veteran is denied SBP for his/her second family.

Former spouses do not have to adhere to any of these regulations to retain their
entitlement. Former spouses can be convicted of a felony, be serving a prison sentence
and still be entitled to receive a portion of the military member's retirement pay.

All of this makes many of us, it makes us wonder about the selection of our
careers. Are we fools for staying in the military, knowing we have a 50% chance of
divorce? Of course no reasonable person would marry if they truly believed they would
be in the half whose marriages will fail. We Americans are the most optimistic people on
earth and we enter every venture with thoughts of success - but sadly sometimes we fail.
Yet with such a high probably of divorce, why should the military member who has
actively served his or her country be singled out for special laws if a marriage fails?


167

Biography of Mark H. Olanoff, CMSgt, USAF (Ret)
Legislative Director
The Retired Enlisted Association

CMSgt Mark H. Olanoff enlisted in the U.S. Air Force on September 27, 1967 after graduating
from Darby Township High School in Glenolden, Pa. After completion of basic military training
and technical training he was assigned to Osan AB, Korea in 1968 working in the military
personnel division. Chief Olanoff served in numerous military personnel assignments at Othello
AES, Washington; RAF Bentwaters, England and Griffiss AFB, NY. He was discharged from the
USS. Air Force on July 30, 1976 and joined the New Jersey Air National Guard in Atlantic City,
‘New Jersey serving in positions of Non-Commissioned Officer in Charge (NCOIC), Customer
Assistance, NCOIC, Consolidated Base Personnel Office and Chief, Personnel Systems
Management. Chief Olanoff transferred to the Air Force Reserve at Dover AFB, Delaware on
June 19, 1986 serving as Chief, Personnel Systems Management until Feb 9, 1991. Chief Olanoff
assumed the position of Chief, Personnel Systems Management for the 436” Airlift Wing (as a
federal civil servant) from Feb 10, 1992 until May 22, 1993

On April 1, 1992, Chief Olanoff assumed the position as the Senior Enlisted Advisor to the
Commander of the 512" Airlift Wing, Dover AFB, DE. In this position, Chief Olanoff served as
the Commander's representative on all enlisted issues. During his tenure in this position, Chief
Olanoff was TDY to the Persian Gulf. He served in this position until his retirement from the Air
Force Reserve on June 10, 1996.

On April 1, 1996, Chief Olanoff assumed the position of Veterans Service Officer for the State of
Delaware assisting Veterans with Veterans Affairs (VA) claims and representing the Commission
of Veterans’ Affairs at many meetings and functions. He was appointed to the VA Veterans
Integrated Service Network (VISN) 4 Management Advisory Committee, which includes the
areas of Pennsylvania, Delaware, parts of South New Jersey and parts of West Virginia.

‘Chief Olanoff assumed his current position as Legislative Director for The Retired Enlisted
Association on December 16, 1996.

He holds an Associate in Applied Science from the Community College of the Air Force in
Human Resource Management (April 1980) and a Bachelor of Arts in Political Science from
Stockton State College, Pomona, New Jersey (May 1986).

Chief Olanoff is a graduate of the 8" Air Force Leadership School at Barksdale AFB, LA and a
distinguished graduate of the Air National Guard NCO Academy at the Professional Military
Educational Center in Knoxville, Tennessee.

Chief Olanoff’s military awards include the Meritorious Service Medal with one oak Jeaf cluster,
the Air Force Commendation Medal with two oak leaf clusters, the Air Force Achievement Medal
with one oak leaf cluster, the Armed Forces Expeditionary Medal, the National Defense Service
Medal with one service star and the Southwest Asia Service Medal with one service star.


126

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45

amount, timing, and termination of such payments. For example, any payment paid for
the life of the retiree or the former spouse, which ever occuts first, without regard to
economic need or the remarriage of the former spouse would be presumed to be a
payment in lieu of retired pay as marital property and prohibited.

Other Ways to Divide Disability Retired Pay and Disability Compensation

PROBLEM: Initially, state courts read the USFSPA limitations regarding disposable
retired pay as limitations on the amounts payable by Service Secretaries but not as a
limitation on what could be divided. After Mansell, where the U.S. Supreme Court held
that disposable retired pay was a limitation on what could be divided, state courts have
used alimony and the following additional means to circumvent this limitation:

1. Res judicata. This concept prohibits reopening final judgments. If a member failed
to object to a division of nondivisible disability compensation at the time of the initial
judgment, an objection to court orders directing payments after the original
adjudication are dismissed because the issue regarding the division of disability
compensation is considered res judicata.

2. Agreement. if a member has agreed to provide a certain percentage of disposable
retired pay to a former spouse, any reduction in the amount of disposable retired
pay available for division is deemed to be a violation of an agreement between the
retiree and the former spouse to provide a particular sum to a former spouse.

3. Offsetting award. Some states require an equitable rather than an equal division of
marital property. In such states, nothing prohibits a court from considering disability
compensation payable only to a disabled retiree in determining a proper allocation
of marital assets among the parties.

4, Court Orders. Some state courts have issued orders directing disabled retirees to
not waive an increased amount of retired pay to receive an increased amount of
disability compensation, to preserve a former spouse's intetest in disposable retired

pay.

SOLUTIONS: Given the many differing abuses by state courts, any comprehensive
response requires a multifaceted approach to address each abuse. Consequently, the
solutions to the problem of dividing disability compensation should include the following:

I. Affirmatively Prohibit Any Division of Disability Compensation. A number of state
courts have telied on the absence in federal law of an affirmative prohibition
regarding the division of disability compensation to validate state court orders
dividing such disability compensation. The USFSPA should be amended to
affirmatively prohibit any division of disability compensation.

v

. Res judicata. Any court order enforcing an invalid division of military retired pay
should be unenforceable, without regard to whether or not there was an objection to


87

The 1990 amendments to the USFSPA were largely concerned with partition cases, and codified the
practice of honoring partition judgments relating to divorces after the USFSPA effective date (June
25, 1981), but not partition judgments relating to divorces prior to that date.

‘The question actually presented by the current proposal is whether Congress” balancing of interests
in 1990 was fundamentally flawed. Only if that is true would it now be appropriate to use federal
pre-emption to deny an even larger class of people, mainly women, access to state laws for doing
equity. In this regard, ABA policy is that Congress should not disrupt the balance of state law except
where absolutely required. It is worth recalling the words of the United States Supreme Court in
‘McCarty itself, that the federal government should defer to “the laws of the States and not to the laws
of the United States” in domestic relations matters, unless absolutely required to safeguard a critical
federal interest?

No such federal interest is apparent in this subject area. Rather, the current proposal is a pretty clear
effort by a group of “haves,” most of whom obtained their spouse’s share of valuable property by
silent omission from decrees of divorce, to make sure that their former spouses can never even ask
a judge to determine whether they have been unfairly dispossessed. It is submitted that since there
is no legitimate federal interest in allowing one group of former spouses to purloin the property of
the other group, Congress should not interfere any further in the equitable mechanisms set out in
state divorce laws.

IV. EXEMPTING DISABILITY PAY FROM CHILD SUPPORT OR ALIMONY
GARNISHMENT

Section 5 changes subjects entirely. It would alter the Social Security act to prevent the federal pay
centers from honoring child support or alimony gamishments, when the member has recharacterized
retirement benefits as disability pay. It should be rejected on public policy grounds.

The proposal now before the Committee will apparently only have an effect when there is a final,
unappealed judgment awarding child support or alimony, and the member does not comply with it,
creating arrearages, when that same member voluntarily converts a portion of garnishable military
retired pay into disability pay, and when the child or spouse owed the money tries to gamish to
satisfy the arrearages.

Present law allows such disability pay to be reached, to the same extent that the military retired pay
which was waived was reached, to satisfy that child support or alimony award.

The United States Supreme Court has made it clear that state courts can use contempt sanctions and
‘member can be imprisoned for failing to pay child support, despite his claim that payments could
only be made from his Veteran’s Administration disability award, which was exempt from

® 453 U.S. at 220, 101 S.Ct. at 2735.
-10-


8

fo garnish on that arrearage. That is the only time this would come
into place.

The danger with the legislation is that it would allow retroactive
recharacterization of retired pay as disability pay. Until Congress
is Willing to take the physical step that Congress so far has not
been willing to take, to grant disability awards in addition to, rath-
er than in lacement of, retirement benefits—I see I’m out of
time, but I’d like to finish the sentence.

The CHAIRMAN. Sure. inly.

Mr. WILLICK. Until Congress is willing to supplement the retire-
ment benefits rather than have them be replaced, it is not going
to be possible to make this nongarnishable for child support pur-
poses without directly injuring the dependants of the retirees.

This committee should note that Co: s—another branch, es-
sentially—another committee has put ‘ough legislation within
the last couple of years highly criminalizing nonpayment of child
support. Even making interstate travel to avoid ild support a
criminal activity. The Congress has decided it is a crime. If you
went ahead and passed this proposal as it was—and I’m unfamiliar
with any case where they have used this strictly for alimony, I only
know of a diversion, which is discretionary with the VA in the
event of, usually, large amounts of child support arrearages—if you
did this, you would be encouraging people to, essentially, do what
it is that you have just decided is criminal. And then you would
make it easier for those same people to end up getting it criminally
sanctioned. And I would submit that it would be illogical to con-
done or encourage or contribute to a behavior that you then wish
to punish. So, I would suggest not doing anything to make garnish-
ment more difficult—already, it’s very rare and very infrequent.

IT have a lot of other comments as to the individual pro sals. I
would refer the committee to the written testimony which I have
tried to buttress with appropriate authorities.

The CHAIRMAN. That will be included in the record.

Mr. WILLICK. Thank you.

[The prepared statement of Mr. Willick appears on p. 77.]

The CHAIRMAN. Thank you, Mr. Willick.

Are there questions? Mr. Evans?

Mr. Evans. Mr. Willick, some of the testimony we have received
for today’s hearing in advance suggest that mili retirees and
veterans are treated less favorably in divorce proce
other—any other retirees, such as civil service retirees. Can you de-
scribe any differences between the treatment of military-related
benefits and civil benefits in divorce proceedings?

Mr. WILLICK. The most obvious one is that there’s a 50 percent
limitation to military retirement benefits division, whereas with al-
most all other forms of retirement benefits up to 100 percent can.
be allocated to the spouse in the discretion of the divorce court if
it feels that it’s most appropriate. No, I would not say that that is
an appropriate summary. Military retirees are still a highly fa-
ve class. Military retirement benefits are still one of the most
difficult things to divide with the most exceptions, take backs, re-
ductions, exceptions, etcetera rather than any other form of de-
ferred compensation.

Mr. Evans. Thank you, Mr. Willick. Thank you, Mr. Chairman.



GARNISHMENT OF BENEFITS PAID TO VETER-
ANS FOR CHILD SUPPORT AND OTHER
COURT-ORDERED OBLIGATIONS

WEDNESDAY, AUGUST 5, 1998

HOUuSE OF REPRESENTATIVES,
COMMITTEE ON VETERANS’ AFFAIRS,
Washington, DC.

The committee met, Pursuant to notice, at 10:10 a.m., in room
334, Cannon House ice Building, Hon. Bob Stump (chairman of
the committee) presiding.

Present: Representatives Stump, Everett, inn, Cooksey,
Evans, Mascara, Peterson, Rodriguez, Snyder, and Reyes.

The CHAIRMAN (presiding). The meeting will please come to
order.

Both conferences are still going, but the ranking member agrees
that we should probably proceed. We have a very long agenda
today, so I think we'll go ahead and start taking our testimony.

We are here today to gain a better understanding of the various
laws which allow veterans’ benefits to be divided or garnished for
child support and other court-ordered obligations, In our Federal
system, States have the primary responsibility to determine spouse
and child support obligations.

The failure by one or both parents to provide adequate support
for their children was dealt with at length when Congress revised
our nation’s welfare laws 2 years ago. However, Congress has also
long been concerned about protecting the payments made to dis-
abled veterans from garnishment or other legal claims. The fun-
damental question before us is, under what circumstances should
the Federal Government permit the garnishment of disability bene-
fits or military retired pay in order to satisfy a veteran’s family
obligations

e’ll receive testimony today on the circumstances in which gar-
nishment is allowed and whether changes to the current law would
make it more equitable. In addition, we welcome witnesses from
the veterans’ and former military communities, who will share
their views on how military retired pay and veterans’ benefits are
handled during a divorce.

As many of you know, I introduced H.R. 2537, The Uniformed
Services Former Spouses Equity Act of 1997. This bill does not re-
peal a judge’s authority to divide military retired pay, but attempts
to provide greater equity to both parties in divorce proceedings.

¢))


150

CMSsgt (Ret.) Joshua W. Krebs

CMSzgt (Ret.) Joshua W. Krebs is the Air Force Sergeants Association Manager for
Legislative Affairs. In this capacity, he reports to the Director of Military and Government
Relations and serves as one of AFSA's representatives on legislative matters to the White
House, Congress, the Department of Defense, the Air Force, other government agencies, and
other associations. One of AFSA's registered lobbyists, he represents the interests of active
and retired enlisted members of all components of the Air Force on Capitol Hill.

During his 25-year Air Force career, Chief Krebs’ assignments included tours at Fallon Air
Force Station, Nevada; Rhein Main Air Base, Germany; Fort Belvoir, Virginia; the Forestall
Building, Washington, D.C.; Randolph Air Force Base, Texas; Bolling Air Force Base,
Washington, D.C. and the Pentagon. His duties covered a wide range of positions within the
Personnel career field. His final Air Force assignment was as Chief of the Enlisted Skills
Management Section within the Directorate of Personnel on the Air Staff where he was
responsible for enlisted retraining policy, enlistment bonus policy, reenlistment bonus policy,
special duty assignment pay policy and was a key player in formulating the force drawdown
policies of the early and mid 1990s.

Chief Krebs is a graduate of the MAC NCO Leadership School at Bolling AFB, D.C.; the
ATC NCO Academy at Lackland AFB, TX, and the USAF Senior NCO Academy at
Maxwell AFB, Gunter Annex, AL. He is also a graduate of the basic Personnel Course at
Keesler AFB, MS. His civilian education includes an associates degree in Human Resource
Management from the Community College of the Air Force.

His decorations include the Meritorious Service Medal with four oak leaf clusters, the Air
Force Commendation Medal and the National Defense Service Medal with one oak leaf
cluster.

+ e+ ARSAtE®


42

STATEMENT OF PATRICK J. KUSIAK, LEGAL CONSULTANT TO THE RETIRED
OFFICERS ASSOCIATION BEFORE THE HOUSE COMMITTEE ON VETERANS’
AFFAIRS REGARDING GARNISHMENT OF VETERANS’ BENEFITS FOR CHILD
SUPPORT AND OTHER COURT-ORDERED FAMILY OBLIGATIONS

Chairman Stump and distinguished members of the committee, | am pleased to be here
this morning to provide some observations regarding federal laws related to the
gamishment of veterans benefits for child support and other court-ordered family
obligations and the views of The Retired Officers Association on these matters. As
explained more fully in my curriculum vitae, my knowledge regarding federal laws
conceming garnishment comes from my experience while assigned to the Office of the
Secretary of Defense related to hearings on and amendments to the Uniformed
Services Former Spouses’ Protection Act (USFSPA) in 1990. Following my retirement
in 1993, at the request of The Retired Officers Association, I've conducted extensive
research into the USFSPA.

GARNISHMENT OF VETERANS’ BENEFITS FOR CHILD SUPPORT
AND OTHER FAMILY OBLIGATIONS

FEDERAL LAWS

There are two federal laws that address the gamishment of federal payments to enforce
court-ordered child support and spousal support. The Uniformed Services former
spouses’ Protection Act (USFSPA) and the Child Support Enforcement Act (CSEA).

Uniformed Services Former Spouses’ Protection Act

Provisions of the Uniformed Services Former Spouses’ Protection Act (USFSPA),
(codified, in part, at 10 U.S. C. section 1408) direct service Secretaries to make
payments of child support and spousal support in compliance with court orders from
“disposable retired pay”. Disposable retired pay excludes amounts of retired pay
waived in order to receive veteran's disability compensation. Consequently, USFSPA
provides no authority to satisfy child supporl/spousal support obligations from disability
retired pay (based on percentage of disability) or from disability compensation fram the
Department of Veterans Affairs.

38 USC 5301

In general, section 5301 of title 38, United States Code, provides that benefits under
any law administered by DVA are exempt from the claims of creditors. The Child
Support Enforcement Act (CSEA) (42 U.S.C. secs. 651 - 669b) waives this exemption
for purposes of gamishment orders for enforcement of court-ordered child support and
alimony.


161

3) Lf military retired pay is property, how then can court-ordered awards be
based on retirement pay levels atthe time of actual retirement and not the
actual date of divorce?

4) How can it be that a service member must serve 20 years to be eligible for
‘military retired pay while a spouse becomes eligible under USFSPA.
immediately upon marriage?

If the contributions of the military spouse to the overall success of the military

community and the careers of their military partners. why then is the military
retiree held responsible to pay for those contributions with their own USFSPA

retired pay property payments?

Proponents of USFSPA also ask relative questions regarding the “property” issue. For

instance:

1) If military retired is considered property under the USFSPA. why then does it
terminate upon the death of the former spouse and is not property which can
bbe passed on to surviving heirs?

2) If retired pay is property, why is an ex-military spouse required to participate
in SBP in order to continue the propery award upon death?

3) Understanding that military retired pay levels are different because they are
base on grade and years of service of the military member. why are earned
retired pay property awards to ex-spouses under USFSPA based on the service
‘members’ status or rank at the time of retirement instead of the time of
divorce?

NCOA considers the issues raised by such questions to be extremely important to the
overall validity of the UFSEPA. It seems that military retired pay is only considered
property when there is no cost to the government. If a “property” classification requires

costs to the govemment, then it (retired pay) is considered something other than property.


73

though the scales have been balanced unfairly ... I do not feel
we should unbalance them on the other side in an attempt to

remedy the situation. (We must also provide equity for the
members of the service.

During the proceedings, the following major problems or
advantages emerged:

* The military spouse will have the opportunity to
forum shop, Toward the beginning of the debate, Rep. Hance
remarked that in order for former spouses to get any type of the
retired military pay- "they have to go to court and go from
jurisdiction to jurisdiction.” Later, during floor speeches by
Reps. Nichols and Duncan Hunter, both called this fact to the
attention of the assembly. Nichols: "The gentlewoman’s amendment
would subject a military member to the jurisdiction of a court
soley because the member was residing in the State as a result of
military orders.” Duncan: “I think we do have a problem with
forum shopping under the proposal by the gentlewoman from Colo-
rado.”

* No remarriage provision, Schroeder reneged on her
previous position of denying payments to former spouses who
remarried before age 60. Previously she had introduced four (4)
bills in successive Congresses that included the denial. Her
latest, H.R. 3039, was introduced in the very same Congress now
hosting the debate. Referring to the Nichols’ amendment,
Schroeder expressed fault with its remarriage provision. “This
really concerns me because the fact that (the military spouse)
remarries or not should not have anything to do with the rights
that she had vested in her time that she was working and living
with her husband who was in the military.” | Nichols reminded
Schroeder of her earlier statements pleading for equal rights,
that the Foreign Service and CIA both had remarriage terminal
Provisions and, “A similar restriction is only fair for the
military member as vell, who, to a large extent, is similarly
situated.”

*
than 10 years of marriage to the service member. Both Schroeder
and Hance argued to retain this provision. Schroeder suggested
that although she, as a general rule, believed pensions should
not be divided after short marriages, there were always “excep-
tional cases.” She reported further that the Foreign Service Act
specified that nothing therein prevented State courts from

1S


82

il. RESTRICTION OF SPOUSAL SHARE TO A HYPOTHETICAL SHARE OF
LENGTH OF SERVICE AND RANK AT TIME OF DIVORCE

Section 3 of the bill is similar to H.R. 2300, which was considered and rejected by Congress in 1990.
The proposal would pre-empt the law of the substantial majority of states which use the “‘time rule”
to determine the spousal shares of retirement benefits, and would effectively unjustly enrich military
members at the expense of their spouses, as well-as create artificial distinctions between successive
spouses. Apparently accidentally, it would pre-empt the law of many states as to the time during
which marital property accrues, unfairly penalizing military members in those states. I believe that
the language proposed would also have some unintended consequences as to how state courts would
be most likely to react. For several legal and public policy reasons, this proposal should be rejected.

‘The near-universal consensus of the state courts is to establish the spousal share of pension assets
under the “time rule,” through which each spouse receives half of the percentage created by taking
the number of months of marriage during service as a numerator, and the total number of months
served as a denominator.

Under this formula, if the member delayed the spouse’s receipt of military retired pay by choosing
to remain in service, then the spouse obtains some compensation for that delay, in the form of a few
more dollars per month, even though the former spouse’s share is an ever-smaller percentage of the
benefit. This is sometimes called the “smaller slice of the larger pie.”

The clear majority of states have adopted the “building block” approach, which is discussed below.
At least one state, however, has embraced the analysis that would be mandated on the states under
this proposal. It can be labeled the “rank at divorce” approach, and is exemplified by the decision
of the Supreme Court of Texas in Grier v. Grier?

‘The husband was a Major when the Griers divorced, but he had already been placed on a promotion
list for Lieutenant Colonel (which rank he pinned on eight months after the divorce). The trial court
used the time rule to find a spousal percentage of the gross retirement benefits based on the
husband’s rank at retirement (Lieutenant Colonel), The court of appeals reversed, and awarded the
same percentage, but applied that percentage against the disposable retired pay that would have been
paid to a Major.

The Texas Supreme Court, starting from the precept that the benefits to be apportioned were “based
on the value of the community’s interest at the time of divorce,” held that the valuation of military
retirement benefits is to be done according to the rank “actually held by the service spouse on the
date of the divorce,” since granting the former spouse a percentage of the retired pay based on the
rank ultimately attained by the member would “impermissibly invade” the member's separate

9731 S.W.2d 931 (Tex. 1987). The case was actually a declaratory judgment action brought by
the husband in Texas eight years after the parties divorced.

—


GARNISHMENT OF BENEFITS PAID TO VETERANS
FOR CHILD SUPPORT AND OTHER COURT-
ORDERED OBLIGATIONS

HEARING

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

SECOND SESSION

AUGUST 5, 1998

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 105-46

ae

U.S. GOVERNMENT PRINTING OFFICE
51-867CC WASHINGTON : 1998

For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-057672-5



108

If awarded disability benefits, a retiree is not permitted to receive concurrent payment
of both regular retired pay and disability retired pay. The retiree must waive regular
retired pay in order to receive tax-exempt disability pay. Waiver of regular retired pay
should never be construed as an effort to circumvent an award made by a divorce court
or settlement agreement, and we take great exception to such charges. Congress has
stood by the bedrock fundamentals of VA disability retired pay, and at such time as the
VA deems a retiree disabled to any degree, this alternate source of funding should
become the sole property of the military member.

Various levels of sacrifice can be made in placing one’s life in harms way for the
protection of our individual freedoms...and to disrespect the value assigned to sacrifice
at any level less than death is unconscionable.

Under the USFSPA, attachment of VA disability retired pay is statutorily disallowed as
a means for fulfilling obligations of property awards in a divorce. Under Federal law,
these funds are authorized for a military retiree who was injured or suffers illness as a
result of their active service. Under Title 42 however, VA disability can be garnished
by a court order to pay alimony or child support. All of the compensation can be
garnished by court order up to the point where VA compensation equals a veteran's
military retired pay entitlement.

Itis interesting to note that veterans who are not receiving military retired pay, may
not have any of their disability compensation garnished. In summary, military retirees
may have some or all of the VA disability compensation garnished to enforce alimony
or child support or child obligations, but veterans who are not military retirees may
Not. (5-2a Garnishment of VA Disability Compensation).

When military retirees waive regular military retired pay, the amounts of retired pay
are decreased and accordingly, the percentage share of a marital property award is also
decreased.


182

statutory provisions and guarantees with which these bounties of the government
are surrounded and vouchsafed to those persons for whom they are intended.
‘These conclusions are further fortified by the obvious solicitude of the government
Jest these allowances be dissipated or diverted to uses other than that of
continuous maintenance and support.

Yake v. Yake, 170 Md. 555, 183 A. 555 (1936).

In the second case, a Tennessee court held that veterans’ benefits could not be awarded
for the wife’s support because such benefits are “ exempt from attachment, levy, or seizure under
any legal or equitable process in any proceeding adverse [to the veteran].” The court noted that
“[p}roperty or funds not assignable are not subject to seizure under legal process. Brewer v.
Brewer, 19 Tenn. App. 209, 84 S.W.2d 1022 (1933).

‘Other courts have not hesitated to hold to the contrary, however, using a variety of
reasoning. In an often cited case, Jn re Flanagan, 31 F Supp. 402 (D.D.C. 1940), the court held
that the divorced wife of a mentally incompetent veteran was entitled to alimony out of the
veteran’s disability compensation. The court reasoned that the law exempted veterans” benefits
from creditors, but that alimony is not a debt. The court also reasoned that the exemption was
intended to protect the family and dependents of a veteran. The district court held: “A divorced
wife is a dependent no less in the status created by the divorce decree than in that fixed by the
marriage bond.” Without citation or discussion of any legislative history or other evidence of
congressional intent, the court also held: “Congress did not intend to put such benefits beyond
the reach of a divorced wife.” Flanagan, 31 F.Supp. at 402.

A Georgia court, in Hannah v. Hannah, 191 Ga. 134, 11 $.E.2d 779 (1940),
acknowledged that the law protects veterans’ benefits before and after receipt by the veteran, but
followed the reasoning of other courts that the law bars seizure by creditors, and not wives. The
court held: “alimony is not such a debt, or claim, as was intended to be exempted by the statute.”
Hannah, 191 Ga. at 138, 11 S.E.2d at 781. The court dismissed the broad language of the statute
that provided veterans’ benefits “shall not be liable to attachment, levy, or seizure by or under any
legal or equitable process whatever.” The court said: “We do not, however, view this additional
language as extending the exemption beyond the claims of creditors and to thereby cover a claim
of the character of alimony.” Id. Citing Flanagan, the court said “[tJhough the language of the
statute is broad, . . it was held in a well-considered opinion not to exempt disability payments
from a claim of alimony.” Hannah, 191 Ga. at 139, 11 S.E.2d at 782.

‘An Iowa court also followed the reasoning that alimony is not a debt, and that the
exemption does not apply to alimony, therefore. This court also followed earlier decisions that
held Congress intended these exemptions to benefit rather than work against wives. Bagnall v.
Jowa-Des Moines Nat'l Bank & Trust Co., 238 lowa 905, 925, 29 N.W.2d 597, 608 (1947).

Massachusetts circumvented the exemption rather than expressly holding that it does not
apply to veterans’ benefits. In Cohen v, Murphey, 368 Mass. 144, 148, 330 N.E.2d 473, 475-76
(1975), the court said: “In view of our disposition we do not pass on the husband’s contentions


131

VIRGINIA KAY WARD

LEGISLATIVE AIDE

Virginia State Senator Warren E. Barry

OFFICE MANAGER

Easton Kodak Company, Washington, DC

WRITER "ARMY/NAVY/AIR FORCE TIMES"

Weekly advice column for military families

DIRECTOR, COMMUNITY SUPPORT
Advisor to community commander on quality of
life issues while a military wife living in
Germany

EDUCATION
B.A., Western Maryland College, MD

Graduate Studies, Villanova University, PA


159

allowing court-ordered garnishment of VA compensation for alimony payments.

‘Congress must stop this practice!

“Dancing in the Dark”

There can be no doubt that the major complaint made by NCOA members and others

looking for assistance and relief in conjunction with a divorce action is the mere

existence of the USFSPA. Their frustrations occur during of after entering into divorce
proceedings because they are not aware of the USFSPA or do not fully understand the
impact on their future income until itis too late, The law seems to be a well-kept secret
that keeps military members “dancing in the dark” during the course of their military
careers. Consequently, they never fully realize that the military retired pay benefit is not

entirely their own and is being eamed. many times equally, by their marital partner.

Congress Bears Full Responsibility for USFSPA
In 1982. Congress enacted USFSPA in order to override the 1981 McCarty decision of
the Supreme Court which found that ...the military retirement system confers no
‘entitlement to retired pay upon the retired member's spouse and does not involve even a
limited community property concept....moreover, the application of community property
principles to military retired pay threatens grave harm to clear and substantial federal
interests.” Regardless of this decision. Congress successfully passed the USFSPA that
gave the state divorce courts authority to treat disposable military retired pay as propenty
of both the military retiree and the spouse. However. Congress limited court ordered
direct payment to the former spouses to 50 percent of disposable retired pay.
Unfortunately many courts, military retirees and former spouses have misinterpreted this
to mean that Congress intended a 50 percent division of retired pay. Clarification of the
intent would be welcome. The playing field would then be level. Today. itis
significantly slanted in the former spouses’ favor.




191

DA DISABLED AMERICAN VETERANS
Built: Better Lives fir America’s Disabled Leterans
IRE OF FEDERAL.

‘The Disabled American Veterans (DAV) does not currently receive any money from any
federal grant or contract.

During fiscal year (FY) 1995, DAV received $55,252.56 from Court of Veterans Appeals,
appropriated funds provided to the Legal Service Corporation for services provided by DAV to

‘the Veterans Consortium Pro Bono Program. In FY 1996, DAV received $8,448.12 for services
provided to the Consortium. Since June 1996, DAV has provided its services to the Consortium

‘at no cost to the Consortium.

Novhos a Sts. SP Lene WHY HIEARQUUIRTERG # SOF ALISH AUINCE SINE # Wastsctes, D.C 20024-2410 « Pent (2021554 3501 « Fay 2021 SSE


109

To circumvent this, we find that the courts are reopening final decrees of divorce in
which a settlement agreement has been negotiated and subsequently the courts are
awarding lifetime alimony.

Additionally, the courts are waiving the traditional “remarriage” clause inserted into
alimony agreements, so that these property payments, now called alimony, do not stop
in the event the recipient spouse should marry. The state courts consider settlement
agreements to be contractual trusts, entered into voluntarily by both parties, and thus
contract laws govern alteration of these trusts. What is not realized is that divorcing
parties are strongly “encouraged” to sign an agreement rather than litigate under the
advise of legal counsel that it is “the law.”

While Congress intended that disability retired pay was income belonging solely to the
retiree, and has NEVER been thought of as deferred income, Federal Statutes allow
disability retired pay to be garnished for both child support and alimony, granting the
states the ability to creatively manipulate both federal and state laws. By renaming the
property division “alimony” the courts sidestep the intent of the Supreme Court in
Mansell v. Mansell (490 US 581) and are modifying the bonds of the settlement

agreement, creating a new form of federal entitlement through case law.

We feel it is imperative that full examination is given to all aspects surrounding this
issue.

Often, disability retired pay is the sole source of income for a disabled retiree, and as it
stands now, it may be divided with a former spouse to pay alimony, child support, and
arrears or all three. While federal law mandates that only up to 65% of the retired pay
may be garnished, the USFSPA grants any means under law to the States for fulfilling
these obligations. Under contract law, the courts can obtain what cannot be garnished
through a monetary judgment or real property. This could essentially cause a disabled
military retiree to lose up to 100% of what is intended to be old age security.


30

Thank you very much, Mr. Chairman, for allowing me and the
Retired Enlisted Association to present our views.

(The prepared statement of Mr. Olanoff, with attachment, ap-
pears on p. 166.]

The CHAIRMAN. Thank you, Mr. Olanoff.

Our next witness and final witness for the day, Mr. Rick Surratt,
the assistant national legislative director for the Disabled Veterans’
Association.

STATEMENT OF RICK SURRATT

Mr. SurraTr. Mr. Chairman, and members of the committee,
good morning. I am Rick Surratt with the Disabled American Vet-
erans.

One question we are addressing in this hearing is whether there
is a problem relating to the way courts are treating veterans’ bene-
fits when they make awards for spousal or child support. In the
DAV’s view, the answer to that question is yes, there is a problem.

First, let me say that where disability compensation is received
in lieu of military retired pay, the laws are complex. Without going
into the details, in the final analysis the veteran has no protection
against a court ordering that he or she make support payments
from the compensation he or she receives by virtue of a waiver of
military retired pay. Under some circumstances the courts can en-
force these support awards by garnishment.

Aside from that tangle of laws, no veteran who receives disability
compensation or other veterans’ benefits is protected from unwar-
ranted court awards of his or her benefits to third parties. Through
an administrative process, VA is authorized to apportion a veter-
an’s benefits to a separated spouse and dependent children not in
the | Veterans custody when warranted. And we have no complaint
wit it.

Congress also enacted provisions which we believe exempts vet-
erans benefits from awards of spousal or child support by the
courts. That provision is found in Section 5301 of Title 38 United
States code. In broad and all encompassing language, it exempts
veterans’ benefits from attachment, levy, or seizure, by or under
any legal or equitable cess whatever, either before or after re-
ceipt by the veteran. Some State courts have held that this lan-
guage means what it says: observing that its intent was to prevent

diversion of veterans’ benefits to persons other than veterans.

Other State courts conveniently created an exception to the ex-
emption for awards of spousal and child support. They have twisted
the clear language of this law in all manner of ways to avoid the
exemption it provides veterans. And unfortunately, the Supreme
Court of the United States, has now completely changed its earlier
interpretation of the law to go along with what the States are

loing.

Some of these courts have even required veterans to pay part of
their disability compensation to divorced 5] in the form of ali-
mony, although divorced spouses are entitled to no veterans’ bene-
fits under veterans’ laws. That is particularly egregious and vio-
lates the clear intent of Congress.

We don’t suggest that disabled veterans should be able to avoid
their responsibility to support their dependent children. Neither do


89

policy, based. Obviously, if Congress granted disability payments in addition to retired pay, those
benefits should be exempt from execution for most claims.

Until and unless Congress is willing to allow members to receive disability pay in addition to their
regular, longevity retired pay, however, there will be a tension between the rights of the members
and their dependents. This is because the retirement benefits, or any benefits that the member
obtains in lieu of them, will be the sole source of recognizing the contributions of both parties, and
of satisfying the public policy of assisting the retiree and his dependents, that the legislative history
has made so clear is a purpose of the retired pay.”

In the meantime, the proposal would do much more harm than good -- to members’ children and
spouses, and ultimately to those members who are jailed for behavior that Congress has agreed is
criminal. It makes no policy sense to contribute to the problems that other federal initiatives and
programs are attempting to solve, and this proposal should thus be rejected.

CONCLUSION

None of the proposals contained in H.R. 2537 would serve any cognizable, legitimate federal
interest. At best, the proposals would hurt as many people as they helped, and some of the proposals
would hurt far more people than conceivably could be helped. Virtually every aspect of the
proposals would pre-empt the marriage and divorce laws of the states, without any evidence of a
necessity of doing so in order to serve a federal interest.

In the meantime, at least one congressionally-mandated study of the effect of the USFSPA is now
underway, the results of which are to be reported to Congress in the near future. Several of the
policy choices addressed by H.R. 2537 will be the subject of that report.

On behalf of the the American Bar Association, I urge the Committee to take no action at this time
on the proposed legislation.

CoTENRMSWHATL OD,

” See, e.g., Fern v. United States, 15 Cl. Ct. $80 (1988), aff'd, 908 F.2d 955 (Fed. Cir. 1990).
“12.


84

faced such a conflict in the case of In re Benson." The trial court had used a time-rule approach,
with the wife's percentage to be applied to the sum the husband actually received, whenever he
actually retired.

The reviewing court restated the question as being the time of valuation, with the choices being the
sum the husband would have been able to receive if he had retired at divorce, or the sum payable at
retirement. The court acknowledged that the longer the husband worked after divorce, the smaller
the wife’s portion became. The court accepted the wife’s position that to “lock in” the value of the
wife’s interest to the value at divorce, while delaying payment to actual retirement, prevented the
wife from “earning reasonable return on her interest.”

Quoting at length from a law review article analyzing the mathematics of the situation, the court
found that acceptance of the husband’s argument would have allowed him to collect the entirety of
the accumulating “earnings” on the marital property accumulated by both parties. Three judges
dissented."®

Thave independently verified the mathematical effects of the various approaches taken by the state
courts. Unless Congress is willing to also mandate that the states adopt rules requiring payments to
spouses at each members’ first eligibility for retirement, regardless of the date of actual retirement,
estimate that the proposal would result in a reduction in the value of the spousal share by at least
13%. A second spouse married to a member for the last couple years of service could actually
receive more money after divorce than a first wife who assisted the member for more than half of
the military career.

The proposal is silent on the question of whether distribution of the spousal share should be
mandated at the time of the member's first eligibility for retirement.” Unfortunately, it is not

'S $45 N.W.2d 252 (lowa 1996).

' The Iowa court apparently did not even consider the possibility of having the wife's interest
begin being paid at first eligibility for employment, “freezing” it at that point and letting the husband
enjoy all accumulations after that time. Presumably, this is because that possibility was not litigated
at the trial level.

1” Several state courts have held that the interest of a former spouse in military retired pay is
realized at vesting (ie., after 20 years of creditable service), theoretically entitling the spouse to
collect a portion of what the member could get at that time irrespective of whether the member
actually retires. See Jn re Marriage of Luciano, 164 Cal. Rptr. 93 (Ct. App. 1980); In re Marriage
of Gillmore, 629 P.2d 1 (Cal. 1981); Jn re Marriage of Scott, 202 Cal. Rptr. 716 (Ct. App. 1984);
Gemma v. Gemma, 105 Nev. 458, 778 P.2d 429 (1989); Koelsch v. Koelsch, 713 P.2d 1234 (Ariz.
1986); Ruggles v. Ruggles, 860 P.2d 182 (N.M. 1993); Balderson v. Balderson, 896 P.2d 956 (Idaho
1994); Blake v. Blake, 807 P.2d 1211 (Colo. Ct. App. 1990).

7


12

same thing to the States of the United States. I do practice divorce
law and I believe that would be uniform in every State. But that’s
true with every defined benefit plan. You find that an increasing
percentage—actually, the largest asset of most marriages is now

leferred compensation of some sort, the right to receive in the fu-
ture, payments usually from an employer—there’s more private
em joyers than there are government employers—and that’s ex-
actly the way it works with every defined efit plan. You have
a right to receive in the future X payments for the rest of your life
which is exactly how the military system works. It is, essentially,
a noncontributory defined benefit plan and not really different.

I will agree with Mr. Kusiak on one point. In 1990—and I was
very sorry that no one in Congress picked up on it—the one thing
that everybody that testified agreed to, the retirees groups, the
spouses groups, the ABA, the Pentagon rep, the one thing that we

said we would like to see is the divisability of the survivorshij
benefit to mirror civil service. Because that makes sense. You
allow survivorship benefits to be apportioned in accordance with
how much was accrued during the marriage. And that testimony
form all participants was apparently simply ignored. We—nothing,
nothing was ever introduced, nothing was ever passed. And that’s
a bit of a shame because it’s led to gamesmanship on both sides
in State divorce courts.

The CHAIRMAN. Thank you, sir. If there’s no further questions?
Gentlemen, thank you very much.

And if we could call the second panel up please?

Mr. WILLICK. Thank you, Mr. Chairman.

The CHAIRMAN. All right, Mr. Ault, we'll start off with you.
Frank Ault, the Executive Director of the American Retirees Asso-
ciation. Mr. Ault?

STATEMENT OF FRANK AULT, EXECUTIVE DIRECTOR, AMER-
ICAN RETIREES ASSOCIATION; ACCOMPANIED BY COLLEEN
M. TIMPANO, HOSPITALMAN, FIRST CLASS, U.S. NAVY (RET.);
MAJ. NEITA ARMSTRONG, U.S. MARINE CORPS, AND PATRI-
CIA BRUCE, NATIONAL DIRECTOR, WOMEN IN SEARCH OF
EQUITY

STATEMENT OF FRANK AULT

Mr. AULT. Mr. Chairman, members of the committee, I am Frank
Ault, a retired Navy captain and naval aviator. I have been the Ex-
ecutive Director of the American Retirees Association for the past
9 years. The ARA was formed in California in 1984 for the exclu-
sive purpose of addressing the inequities in the Uniformed Services
Former Spouses Protect Act which here and after, Tl call
“Foospah” (FSPA) to get away from the tongue tangler. I'll summa-
rize my written statement in 5 minutes although that is far less
than what is needed to shine some light on a subject which has
generated so much heat, namely military divorce.

We certainly admire and appreciate the courage and initiative of
the Veterans’ Affairs Committee which is exemplified by the will-
ingness to hold these hearings. Congress has tiptoed around this
subject for 15 years. And right now, it’s being given even more foot
dragging time by section 643 of the Defense Authorization Bill for


54

Curriculum Vitae
Patrick John Kusiak, Esq.

Patrick J. Kusiak, an attomey admitted to the bar of California, the District of Columbia,
and the United States Supreme Court. From 1968 until January 1993, he served on
active duty in the U.S. Navy, retiring at the rank of Commander, Judge Advocate
General's Corp. His principal area of legal specialization is state and local taxation.

Although Pat Kusiak has never practiced in divorce or family law, he has significant
experience conceming the Uniformed Services Former Spouses’ Protection Act
(USFSPA). From 1986 until his retirement from active duty in 1993, he was assigned to
the Office of the Secretary of Defense. During this period, he was involved in the
testimony of the Deputy Assistant Secretary of Defense (Military Manpower and
Personnel Policy) regarding the USFSPA in a hearing before the Military Personnel
Subcommittee of the House Committee on Armed Services in 1990. He also was
involved in the development of remedial legislative measures to amend the USFSPA
that were enacted in 1990 as part of Public Law 101-510. During this period he also
made several presentations to professional associations regarding the USFSPA and
was member of a study group by the Virginia State bar Association into federal laws
regarding the division of military retired pay and survivor benefits for former spouses.

Atter his retirement from active duty in 1993, at the request of The Retired Officers
Association, Mr. Kusiak conducted substantial research into how state courts have
applied the Uniformed Services Former Spouses’ Protection Act since its enactment in
1981.

Kusiak received a juris doctorate from the School of Law of the University of San Diego,
San Diego, California, and a masters of law (taxation) from the Graduate School of
Law, University of San Diego, San Diego, California. He is also a graduate of the
Advanced Course, The Judge Advocate’s School, U.S. Army, University of Virginia,
Charlottesville, Virginia.

He is employed as tax counsel, Franchise Tax Board, Sacramento, California, and as
intermittenv/part-time consultant to the Office of the Secretary of Defense on military tax
matters. The views expressed in this statement are made in his individual capacity as a
consultant to The Retired Officers Association and should not be considered the views
of the Franchise Tax Board or the Office of the Secretary of Defense.

Patrick Kusiak resides in Placerville, California.


171

The Uniformed Services Former Spouse Protection Act has been used to make a
mockery of the Armed Forces of the United States and those who wear the uniform.
Information available on the Internet urges women to “Aim High,” the Air Force
recruiting motto, and marry a career military man so they can divorce him and be
“guaranteed a financially secure future.” Five pages of information (Attachment #1) gives
specifics of how to marry into the military, receive the benefits, get divorced and continue
to receive the financial rewards. This is a slap in the face not only of military retirees and
the Armed Forces, but also of this honorable body, the Congress of the United States. I
believe that Congress passed the USFSPA with the best of intentions, however, as this
information attests to, it has been manipulated and misconstrued to drive those who
served the nation honorable into financial ruin.

Mr. Chairman, we military retirees seek equity with our civilian counterparts.
When we joined the uniformed services, we expected to move around the world and we
were well aware of the risks involved in military service. We also expected to be treated
as equals in the Courts of the United States. Instead, former spouses of members of the
uniformed services can reopen divorce cases for more money, can continue to receive
payment even after they remarry, and can receive more money if the retiree finishes their

career at a higher rank than when the divorce took place. This is blatant discrimination

against military retirees. Civilian divorce settlements do not allow one former spouse to
reopen the claim, or change the amount received because of a promotion in the workplace.
Military retirees deserve equity

Members of the Committee, this is not a gender issue, as some will lead you to
believe. This is not about an issue that is anti-wife or anti-children. We certainly believe
that former spouses should have some form of compensation, particularly when they have
had no opportunity to develop careers of their own. We believe that parents have a
tremendous obligation to ensure that their children are cared for. The sense of honor,
duty and obligation learned in the military will, no doubt, help ensure these things, What
this issue is about is all members of the Armed Forces, male and female, officer and
enlisted, This is about a group of American citizens who are being held to a different set

of laws then everyone else. These American citizens seek equality


96

It is very unlikely that very many members of Congress who voted for the USFSPA
understood the full implications of reclassifying retired pay as ‘property’...particularly
‘property’ which cannot be sold, bartered, traded, transferred or passed to heirs.
Congress did, however, open the floodgates to describing military retired pay as a
“pension"which it is not. If it were, indeed, a pension,the military member could retire
with no further obligations to the nation and live ‘happily ever after". However,
because retired pay is an important component of the military compensation system,
the retiree receives what is more appropriately described as "reduced pay for reduced
future services’ and remains part of the manpower resources available for recall in
the event of a national need.

A frequently mentioned circumstance , during the 1982 debate on the USFSPA,
was the “plight of the military spouse” who was described as a ‘stay-at-home, tend-
to-the-kids' female who kept the family together while the ‘devil-may-care-playboy’
father roamed the world sans family responsibilities. Today over 60 percent of the
marital mates of military members are employed outside the home. Moreover as the
number of femate military members continues to grow, it is often the male member
of the marriage who ‘keeps the homefires burning’. Clearly, Congress never
‘envisaged this change in circumstances when enacting the USFSPA in 1982 because
itis obvious that the protection provided was, primarily, for the protection of a civilian
female married to a mate military member. This appreciation of the situation has
persisted, as evidenced by the history of legislation affecting divorce in the military
‘subsequent to October, 1982. While Congress has exhibited , in public, a pervasive
reluctance to reform the USFSPA, there have been enacted 23 changes to laws
affecting military divorce. 18 of these have benefited ex-spouses, | (the cure of the
retroactivity oversight) has benefited military members and 4 have impacted both
sides about equally. All but two of these changes have been effectuated by sub rosa
‘amendments to mainstream legislation, without public hearings, discussion or
debate. A 24th amendment is included in the FY 1999 Defense Authorization Bill
which will change the scoreboard to read: Ex-spouses 19; Military members 1.

Never, during the over 15 years of its existence, has any amendment to the
USFSPA been proposed which would deprive the ex-spouse of a military member of
retired pay in the event of divorce. What has been proposed is legislation which
would level the playing field so that BOTH members of any military marriage which
‘ends in divorce will be treated fairly and equitably. This is becoming increasingly


185

husband and his wife for their mutual economic benefit. In non-community property, or equitable
distribution, states, the result might be similar or even worse: a spouse might receive more than
half of the veteran’s disability compensation if the court deemed it appropriate.

A Vermont court has held that § 5301 does not preclude consideration of veterans”
disability compensation as a source of income from which to award alimony. Repash v. Repash,
528 A.2d 744, 745 (Vt. 1987). The veteran also argued that § 1408(a)(4)(B) provided protection
to his compensation. The court, in noting that the veteran’s compensation was not received by
virtue of a waiver of retired pay and in holding that this provision in USFSPA only exempts
‘compensation when it is received in lieu of retirement pay, demonstrates one absurd contradiction
that arises from the courts’ treatment of these laws. A veteran who receives VA disability
compensation without a waiver of retired pay has no protection while a veteran, merely because
he or she receives the same compensation through a waiver of retired pay, is protected (or was
protected before the most recent amendment to CSEA), at least from actions awarding support
under USFSPA.

Shortly thereafter the Supreme Court, in Rose v. Rose, 481 U.S. 619 (1987), held that (1)
VA authority to apportion disability compensation was not intended to vest VA with exclusive
authority over awards of compensation for child support, (2) that § 5301 does not preempt state
courts’ jurisdiction over compensation and does not protect veterans’ disability compensation
from seizure to pay court-ordered support, and (3) that the provision in CSEA, 42 U.S.C.
§ 659{a), that exempted veterans’ benefits only exempted them from garnishment, not court
orders for support. Regarding the effect of § 5301, the Court in Rose essentially rewrote the law
to suit the outcome it thought desirable. In his dissent, Justice White observed: “the order that
‘appellant pay over a portion of his veterans’ disability benefits on pain of contempt constitutes a
“seizure” of benefits. The plain language of § 3101(a) prohibits any seizure of veterans’ benefits,
but the Court ignores that prohibition and creates an exception out of whole cloth.” Rose, 481
US. at 645, Inan earlier decision, the Supreme Court reached the opposite conclusion about the
identical language. Wissner v. Wissner, 338 U.S. 655, 659-60 (1950). In Wissner, the court held
that a judgment which ordered the diversion of future veterans’ benefits to another as soon as
they were paid constituted a seizure contrary to the same provisions now in § $301. Id.
Similarly, in Ridgway v. Ridgway, 454 U.S. 46, 60-61(1981), the Supreme Court again rejected
arguments that the intent of the “anti-attachment statute” (in that case another VA statute with
the same language as § 5301) was only to protect veterans’ benefits from creditors. The court,
citing the language of statute, said of that argument: “This contention, however, fails to give
effect to the unqualified sweep of the federal statute.” The Court said that, in addition to
exempting benefits from the claims of creditors, the statute “prohibits, in the broadest terms, any
‘attachment, levy, or seizure by or under any legal or equitable process whatever,’ whether
accomplished ‘either before or after receipt by the beneficiary.’” Ridgway, 454 U.S. at 61
(emphasis added). The Court further explained that the anti-attachment provision ensures the
benefits actually reach the beneficiary by preempting all state law that stands in its way and
protecting the benefits from legal process of any state. The Court said: “It prevents the vagaries
of state law from disrupting the national scheme, and guarantees a national uniformity that
enhances the effectiveness of congressional policy.” Id. The Court went on to acknowledge that
these provisions might allow a veteran to avoid his or her obligation to support dependents, but


170

failed to recognize the fact that VA disability compensation is not retirement pay.
Disability compensation is not where payments to court-ordered obligations should be
paid from. Now, military retirees who are disabled, and the more severely disabled the
worse this situation becomes, are forced to surrender up to all of their retirement pay and
a portion of their disability pension. This in despite of the fact that the USFSPA is
supposed to protect disability pay from being garnished and that the United States
‘Supreme Court reinforced this fact in its ruling in Mansel vs. Mansel in May, 1989.
However, state courts continue to ignore this federal law by garnishing VA compensation
under Title 42 which is in conflict with Title 10 of the United States Code.

This is just one of many examples of how uniformed service retirees are
discriminated against by the Uniformed Services Former Spouse Protection Act. This
legislation, in its attempt to protect ex-spouses, has destroyed the lives of tens of
thousands of retirees. TREA constantly receives phone calls from retirees, and their
current spouse, who are suffering under this legislation. At this time, I would like to
briefly share examples of retirees who have been abused by the system they have sworn to
protect. I have hard from an Air Force Chief Master Sergeant (Ret.) whose alcoholic
former spouse nearly cost him an Air Force career by getting the then-Active Duty Chief
an Unfavorable Information File (UIF). Any current or former member of the Armed
Forces knows how devastating a UIF can be. This retired Chief manage to overcome this
difficulty, only to retiree at a higher rank and have the ex-spouse reopen the divorce and
seek more money. Or an Army E-8, divorced in 1989 after 18 years of marriage. Only to
see his wife marry a man 9 months older than his own son. A man who had been
convicted of breaking into the retirees house and was in prison when the ex-spouse
married him. Now, a percentage of his retirement goes to support his ex-wife and her new
husband. Finally, I have received a call from retirees whose former spouse proceeded to
remarry several other retirees only to divorce them all and receive a percentage of their
retirement pay. What are we to tell these individuals who gave their careers to their
nation? Where is the justice in legislation which punishes members of the Armed Forces
for being just that? Mr. Chairman, these are just three examples of the hundreds we

receive on a yearly basis.


x)

mark up on the amendments and no opportunity for the Hous.
pass a separate type of program.

to

*
Rep. Whitehurst assured members of the House that, "The service
member is protected by several clauses in this legislation.” He
noted that one limited the amount of the award of retired pay to
50 percent of disposable retired or retainer pay,

that the amount could go as high as 65 percent, Another would
forbid the courts from ordering a service member to retire in
order to effectuate payments from the member’s retired Pay, vet

her active duty pay. (see P- 2). A third clause stipulated that
the former spouse could not transfer, dispose of by will or
inheritance, or sell her portion of retired pay, although it is
doubtful that this clause was a protective measure for service
members. At other times during the debate other clauses were
briefly addressed. One deterred the courts from ordering service
members to enroll in a survivor benefit plan for their former
spouses; however, they could voluntarily do so if they chose.
Another came to light when Rep. Sam Hall, Jr., a Texan, inquired
if there was a provision in the Schroeder amendment allowing the
courts to reopen previously concluded final judgments? Schroeder
replied in the negative but she did not inform Hall that there
was no provision in the proposal to stop the courts from doing
just that if so inclined.

OTHER PROBLEM AREAS

A number of questionable clauses in the Schroeder amendment,
also incorporated in the Nichols’ proposal, spelled trouble for
service members. An attempt by military organizations to have
the House and Senate conferees rescind, amend or correct a number
of these was not successful. Most important, perhaps, was the
lack of enforcement in protecting the service members’ rights
once the court order is received by the members’ Service Secre-
tary. Upon receipt, if the order appears “valid on its face,”
neither the Secretary nor any other Federal agency is required to
validate jurisdiction.

The most depressing news came in response to a query to the
Solicitor General of the United States. He said that the only
enforcement of any violation of the USFSPA by a State court would


36

HOWEVER, CONGRESS HAS ALSO LONG BEEN CONCERNED
ABOUT PROTECTING PAYMENTS MADE TO DISABLED VETERANS
FROM GARNISHMENT OR OTHER LEGAL CLAIMS.

THE FUNDAMENTAL QUESTION BEFORE US IS: “UNDER WHAT
CIRCUMSTANCES SHOULD THE FEDERAL GOVERNMENT PERMIT
THE GARNISHMENT OF DISABILITY BENEFITS OR MILITARY
RETIRED PAY IN ORDER TO SATISFY A VETERAN’S FAMILY
OBLIGATIONS?”

WE WILL RECEIVE TESTIMONY TODAY ON THE CIRCUMSTANCES
IN WHICH GARNISHMENT IS ALLOWED AND WHETHER CHANGES
TO THE CURRENT LAW WOULD MAKE IT MORE EQUITABLE.

IN ADDITION, WE WELCOME WITNESSES FROM THE VETERANS’
AND FORMER MILITARY COMMUNITIES, WHO WILL SHARE THEIR
VIEWS ON HOW MILITARY RETIRED PAY AND VETERAN’S
BENEFITS ARE HANDLED DURING A DIVORCE.

AS MANY OF YOU KNOW, | HAVE INTRODUCED H.R. 2537, THE
UNIFORMED SERVICES FORMER SPousES Equity ACT OF
1997.

THIS BILL DOES NOT REPEAL A JUDGE’S AUTHORITY TO DIVIDE
MILITARY RETIRED PAY, BUT ATTEMPTS TO PROVIDE GREATER
EQUITY FOR BOTH PARTIES IN DIVORCE PROCEEDINGS.


181

provision that exempts such benefits “either before or after receipt by the beneficiary,” rejected
the creditor’s position that the benefits lose their exemption after deposited in a bank account.

The Supreme Court held that legislation of this type should be liberally construed to protect funds
granted by Congress for the maintenance and support of veterans. Porter, 370 U.S. at 162.

Citing Porter, the court, in American Training Services, Inc. v. Veterans Administration, 434
F.Supp. 988, 995 (D.N.J. 1977), said: “The monies which are paid are preserved by statute for the
sole use of the veteran.” Because the courts have no authority to order garnishment of veterans’
benefits, several have not accorded veterans the same respect in divorce actions and in that
application have not honored the principle that the benefits retain their exempt status after receipt
and are not subject to seizure through any legal or equitable process, Several courts have ordered
veterans to pay alimony and support from their veterans’ benefits, while a few have held that

§ 5301 (or its forerunners, 38 U.S.C. § 454, 38 U.S.C § 454a, and 38 U.S.C. § 3101) exempts
veterans’ benefits from support orders.

Two of the earlier decisions on this issue upheld the protection of veterans’ benefits. The
first, a Maryland case, articulates well the intent of the exemption. In this case, the court denied
enforcement of the veteran’s agreement to pay 30% of his compensation to a women whose
marriage to him was annulled. The Court said:

‘The manifest intention of Congress in incorporating this provision in this act
‘was to guard those unfortunates who had been disabled in the service of their
country from imposition of others or the depletion of their maintenance and
support by their own improvidence, and to assure to them a certain subsistence. In
the broad terms of the statute above quoted, it was manifestly intended to
accomplish this definite purpose. The statute should be construed broadly in favor
of disabled soldiers in order that the purpose and intent of the act might be
fulfilled.

The very purpose of the act of Congress imposing a prohibition on assignments
of the compensation awarded to disabled soldiers justifies a broad construction
when necessary to satisfy the spirit of the act and to accomplish its laudable
designs, For the purpose of this case “assignment” should be defined as, “allotting
‘or apportionment to a particular person or use or for a particular time” of title,or
interest in property... .

The obvious purpose of these provisions is to afford continuous support and
maintenance of those who have suffered because of their military service. The
very terms employed, such as pensions, compensation, insurance, maintenance, and
support allowances paid, as in this case, and in most instances by installments
‘extending over a period of time and through guardians or trustees, show the object
and purpose to be that above stated, This conclusion is further supported by those


48

The only way under current law to have a former spouse pay for the cost of SBP is to
revise the amount of disposable retired pay payable to the former spouse as marital
property (expressed as an amount certain or as a percentage of disposable retired
pay) to reflect a reduction. One way to shift the economic burden of SBP to a former
spouse would be reduce the amount of disposable retired pay payable to the former
spouse as marital property. In the example above, this would require reducing the
former spouse's share of disposable retired pay from 25 percent to 19.78 percent
(19.78% of disposable retired pay is equal to 25% of gross retired pay reduced by SBP
costs --- an amount equal to 6.5% of gross retired pay). This approach complicates the
calculation of spousal interests in retired pay and confuses participants.

SOLUTION: A simpler approach would be to amend the USFSPA to permit the
Secretaries of the military departments to comply with court orders directing a former
spouse to pay the cost of participation in the SBP.

Multiple SBP Benefit

PROBLEM: Current federal law permits a former spouse who receives as little as 10
percent of disposable retired pay as martial property to receive 100 percent of the SBP
benefit. in addition, current law does not permit a retired member who has been
divorced and remarried to provide any SBP benefit to the retiree’s current spouse if
SBP is in effect for the retiree’s former spouse. Under the federal laws that provide
survivor benefits for other federal employees, a retiree may provide multiple survivor
annuities.

SOLUTION: Amend federal law related to SBP to permit multiple survivor annuities.
USFSPA FORCES INEQUITABLE DIVISIONS OF RETIRED PAY

The USFSPA requires court orders that divide retired pay as property to “specifically
[provide] for the payment of an amount, expressed in dollars or as a percentage of
disposable retired pay, from the disposable retired pay of a member to the spouse or
former spouse of that member.”* This requirement encourages courts to issue court
orders that are inequitable.

Regular increases in military retired pay to reflect increases in the cost of living are
common knowledge. Therefore, any award of retired pay as marital property that
provides for the payment of a specific dollar amount invites regular revisions to
accommodate increases in retired pay based on inflation. To avoid this, courts issue
orders that express a division of retired pay as marital property as a percentage of
disposable retired pay.

PROBLEM: in circumstances where a member was married at the time of retirement,
the percentage approach is not obviously inequitable. {f, however, a member is
divorced while on active duty and retires several years and promotions later, a division

> 1OU.S.C. §1408(a)(2XC).


117

‘In 1991 Congress redefined disposable pay and no longer allowed taxes to be subtracted

‘when reaching the total amount of dis pay. The same law also

Toure Bom opening vores decrees ir tae 6, 1981. The law further made the

fetpactive an all payments o former spose based on such cases ceased 3

November of 1993. I's noteworthy tat the change in definition of disposal retired pay

WAS NOT MADE RETROACTIVE. Hence, former ‘spouses whose divorce was effective

before February 4,199, sl ae subject to reeiving a tedaced amount based onthe prior

definition of disposable retired pay.

NMFA believes that as presently written the Former Spouse Protection Act provides
reasonable safeguards for both the servicemember and the former /e are aware of
‘ctions by sate cours that circumvent the intent of PSPA and we dso would suggest
‘certain modifications to the law, were it to be addressed by the Congress. We also are
ware of current legislation which, if it became law, would significantly change FSPA.

We address these areas below.

;: FSPA specifically precludes amounts received as disability pay from being
enced tes dpe. Some state cours have cucumvented the
Iaw’s intent by awarding a larg disposable retired pay. However, that
higher amount may not be pad by DEAS, but must be collected by te former spouse using
‘other means. NMFA is aware of cases, referred to above, where servicemembers are
‘deemed physically fit for duty until the day of retirement and subsequently are awarded
high disability awards.

NMFA again restates our opinion that providing concurrent receipt of both longevity retired
ay and disability pay isthe only correct solution to the problem.

20.20-15 Marriages: The majority of martiages that have lasted for 20 or more years, but
‘with only 15 of those years concurrent with military service, are the marriage of enlisted
members. Since the disposable retired pay of these members is usually much less than that
of officers, the income for the former spouse is also extremely low.

NMEA has long believed that allowing these former spouses Commissary and Exchange
privileges would allow them to stretch their small income for necessities.

‘Definition of Disposable Retired Pay: The SPA regarding the definition of
disposable retired pay made in 1991 by PL ‘3 S10 ‘was not made retroactive, yet the
provision regarding division of property for pre-1981 divorces was made retroactive.

NMFA believes it only fair to make the new definition of disposable retired pay retroactive
With the new level of payments to former spouses made prospective.

‘Survivor Benefit Plan: Last year’s Defense Authorization Act allowed members who have
Survivor Benefit Plan (SBP) coverage for a former spouse to transfer that coverage 0 &
‘current spouse iffwhen the former spouse dies. However, the member is precluded from
transferring SBP coverage to 2 former spouse if the current spouse dies.

NMFA believes, that at the member's request, SBP coverage should be able to be
transferred to a former Spouse ifiwhen the member's current spouse dies, and ifthe former
‘Spouse was at one time the SBP beneficiary.

> 4


53

CONCLUSION/SUMMARY

Federal law (USFSPA and CSEA) should be amended to restore a balanced even-
handed approach in divorces involving members of the armed forces and veterans and
to correct serious inequities and other difficulties. Remedies recommended include:

1

2.
3.

ad

OND

Amend CSEA to prevent the use of alimony as a means to divide disability
compensation by prohibiting “payments in lieu of retired pay as marital property.”
Amend USFSPA to affirmatively prohibit the division of disability compensation,
Amend USFSPA to diminish the use of other means used by state courts to
divide disability compensation.

‘Amend federal law to invalidate and make unenforceable any state court order
that prohibits a veteran from waiving retired pay to receive disability
compensation.

‘Amend USFSPA to extinguish the interest of a former spouse in disposable
retired pay upon remarriage.

Amend USFSPA to permit a former spouse to pay SBP premiums.

‘Amend SBP to authorize multiple SBP beneficiaries.

Amend USFSPA to prevent windfall benefit by providing a basis for a division of
retired pay based on rank and service at the time of divorce rather than rank and
service at the time of retirement.

Amend USFSPA to invalidate any court order that improperly divided retired pay
retroactively and make it unenforceable.

‘Amend USFSPA to limit the amount of disposable retired pay that may be
treated as marital property to 50 percent of the amount of retired pay attributable
to military service while married,

Amend USFSPA to prohibit any court order requiring a member on active duty to
make payments to a former spouse that are payments in lieu of payments of
retired pay as marital property.

Thank you for this opportunity to present these observations and the views of The
Retired Officers Association on this important matter.


138

PRESS ENTER “POR PREVLOUS "Kates

* DISABILITY COMPENSATION 02/24/98
RATES EFFECTIVE 12/97

108 ...$ 95

PLUS 1 FA ADD SCHOOL
2 A$ 182 WITH SPOUSE CHILD CHILD CAILD
UNDER 18 = UNDER 18 AGE 18-25

306... 279 $ 313 $ 337 $18 $ 5¢
408 ..6$ 399 $ 444 $4 $ 24 $72
508 ...$ 569 $ 626 $ 666 $30 $ 90
608 ...$ 717 $ 785 $ 834 $ 36 $ 108
TH 6.8 905 $ 984 $ 1041 $ 42 $ 126
308 $1049 $1140 $ 1205 $ 48 $ 144
$06 ..6$ 1181 $ 1283 $ 1356 $ 54 $ 162

1008...$ 1964 $ 2078 $ 2159 $ 60 $ 180


49

of retired pay expressed as a percentage of disposable retired pay when the
percentage is only based on years of marriage while on active duty is clearly
inequitable. It is also incompatible with notions of community property whereby the
community's interest in marital property ends when the community ends. Increases in
retired pay as a result of service or promotions after divorce are generally considered
the separate property of the member.

The USFSPA provides no mechanism to assist courts in establishing an administrable
formula to determine each party's interest in disposable retired pay if a member is.
divorced while on active duty. Instead, the law requires payments that are easily
administered by the military departments. Members, former spouses, and courts are
not provided any information or assistance in calculating an equitable division of retired
pay. It's not surprising that courts, relying on little more than some sense of justice,
issue orders dividing retired pay on the basis of years of marriage during which the
member performed service creditable for purposes of entitlement to retired pay.

SOLUTION: Amend the USFSPA to establish a procedure and, if appropriate, a
formula to permit a state court to equitably divide retired pay on the basis of rank and
years of service at the time of divorce rather than rank and years of service at the time
of retirement.

CIRCUMVENTING FEDERAL INVALIDATION OF
CERTAIN RETROACTIVE DIVISIONS OF RETIRED PAY

When legistation that would become the USFSPA was under consideration by the
Congress, one of the principal concems was retroactive application of the decision of
the U.S. Supreme Court in McCarty v. McCarty. In general, decisions of courts are
based on current law. Not surprisingly, the decision of the U.S. Supreme Court in
McCarty invalidating a division of military retired pay by a state divorce court raised
serious questions regarding the validity of existing decrees that had divided military
retired pay. Retroactive application of McCarty to invalidate existing divisions of retired
pay could disrupt everyone's expectations. To prevent retroactive application of
McCarty to invalidate existing decrees, the USFSPA used an effective date of the day
before the date of the decision of the U.S, Supreme Court. However, the congress
intended no retroactive application of the USFSPA to divide retired pay in cases that
had not taken action to divide retired pay.

Unfortunately, the language of the original enactment did not prevent state courts from
reopening long settled divorce decrees to divide previously undivided military retired
pay and that is precisely what many former spouses began to do. In many jurisdictions,
courts that granted a divorce decree retain jurisdiction to render decisions in connection
with the divorce. Although such jurisdiction is normally to ensure continuing supervision
of matters related to child and spousal support, divisions of marital assets may
sometimes be considered. In other states, an unadjudicated matter related to the
ownership of property by two or more parties can be the subject of litigation


18

Mr. Chairman and Members of the Committee:

Thank you for allowing me to present this testimony on behalf of the American Bar Association
(“ABA”). I am Marshal S. Willick, an attomey from Nevada; I co-chair the Congressional Relations
Committee of the Family Law Section of the ABA, and serve on our Legislative Task Force. I
appear today as the designee of Jerome J. Shestack, President of the ABA.

As set out in the background section immediately following, this area has been of interest to the
ABA for some years. Two formal resolutions were adopted by the ABA House of Delegates, the
policy setting body of the Association, in 1979 and 1982.

Thave personally worked in the area of military retirement benefits in divorce since shortly after the
USFSPA was enacted, and chaired the committee of experts assigned by the ABA to report to the
House Subcommittee on Military Personnel and Compensation in April, 1990." Since then, I have
handled hundreds of military divorce cases (working for both members and spouses), have written
and lectured widely in this field, and recently completed a textbook on the subject.?

My goal here, consistent with existing ABA resolutions, is to recommend that military retirement
benefits be treated by courts in everyday litigation in a manner that is consistent with the property
distribution laws of the states, which are designed to achieve equity in marital dissolutions.

In 1979, the American Bar Association adopted a policy resolution recommending the enactment
of federal legislation requiring the Secretaries of the Armed Forces to recognize state court decrees
of divorce dividing retired or retainer pay. The 1982 resolution, in the wake of McCarty? urged
Congress to enact legislation making ail deferred compensation derived from federal employment
subject to state property and divorce laws, except where specifically exempted by explicit federal
legislation.

Since then, the ABA has consistently supported the position of allowing state divorce law to apply
to military members and their spouses, as it does to everyone else, with the goal of avoiding any

' Proposed Amendments to the Uniformed Services Former Spouses Protection Act, 1990:
Hearings on H.R. 3776, H.R. 2277, H.R. 2300, and H.R. 572 Before the Subcomm. on Military
Personnel and Compensation of the House Comm. on Armed Services, \01st Cong., 2nd Sess. (1990)
(Statement of Marshal S. Willick, Chairman of Subcommittee on Federal and Military Pension
Legislation, Committee on Federal Legislation and Procedures, Section of Family Law, on Behalf
of the American Bar Association, April 4, 1990).

? See A LAWYER'S GUIDE TO MILITARY RETIREMENT AND BENEFITS IN DIVORCE (ABA 1998).
3 McCarty v. McCarty, 453 U.S. 210, 101 S. Ct. 2728 (1981).

* See 1993-1994 ABA Policy and Procedures Handbook at 202 (ABA 1993), noting 1979 and
1982 resolutions approved by the House of Delegates of the ABA.


88

execution.” In several contexts, it is now established that the federal courts will not intervene to
prevent the states from using their contempt powers to fine or imprison members who refuse to
comply with state court judgments for payments of retired pay, even where there is no federal
mechanism by which the spouse can directly obtain payment of those funds.

Thus, the policy choice suggested in the current proposal is that Congress might wish to make it
‘more difficult for a child not receiving child support to garnish arrearages. There are many
circumstances in which the federal law as it now exists can lead to a party having a right but lacking
a remedy. The question is whether Congress should create another such situation in those cases
in which a member converts military retired pay into a disability award.

Experienced domestic practitioners are well aware of the limitations of civil contempt as a remedy
in interstate cases. The expense and difficulty of domesticating a state court judgment in whatever
jurisdiction a member can be found is often very substantial, and the people called upon to do so are
usually the poorest and least able to afford private counsel, thus increasing the number of Title IV-D
applications made through district attorney offices throughout the country.

During the past five years or so, Congress has taken many steps to make it easier to collect child
support -- requiring the states to create job registries, making federal employees subject to wage
assignments, and even criminalizing interstate travel intended to frustrate the collection of child
support. In this context, it is difficult to see the policy objective to be served by making valid and
enforceable child support orders harder to actually collect from members claiming disability pay.
Certainly, it cannot be the intention of Congress to delay support payments to children, force poor
people to consume scarce public resources to hunt down those members, and then have those
members jailed until they “voluntarily” pay the sums owed. Yet that is exactly the effect this

proposal would have.

Essentially, the problem addressed in the current proposal is an artifact of congressional
unwillingness to change the laws requiring waiver of military retired pay in order for a member to
receive disability pay. Press accounts have indicated that this unwillingness may be fiscally, not

% Rose v. Rose, 481 U.S. 619, 107 S. Ct. 2029, 95 L. Ed. 2d 599 (1987).

5 The federal courts have been consistently resistant to becoming involved in divorce matters
under the guise of peril to some federally-protected interest. See, e.g, Silva v. Silva, 680 F. Supp.
1479 (D. Colo. 1988) (upholding dismissal of action by member seeking to strike down unappealed
state court division of disability retired pay); Fern v. United States, 15 Cl. Ct. 580 (1988), affd, 908
F.2d 955 (Fed. Cir. 1990).

% The most obvious example is the “ten year” cases, where the marriage and service have
overlapped by a bit less than ten years, and the state court awards the spouse a percentage of the
retired pay as property.

alle


43

Child Support Enforcement Act

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L.
104-193) consolidated and streamlined the legal authorities to collect support from
federal employees including members of the uniformed services and veterans. It also
broadened the definition of income subject to gamishment to include, among other

things, retirement and pension pay including disabili if the veteran aived a
ortion of retirement ive disabil and veteran's benefits.
Conflict?

Ithas been suggested that the 1996 amendment to the federal gamishment rules
conflicts with prohibitions contained in the USFSPA. We don't agree. While the
USFSPA may very well operate to prohibit a division of military retired pay waived to
receive disability compensation from DVA (and consequently, disability compensation),
the absence of authority for the Service Secretaries to make payments of amounts
waived to receive compensation from DVA does not conflict with provisions of law that
specifically authorize DVA to make payments of disability compensation (including
disability compensation received in lieu of military retired pay) in compliance with court-
ordered child support or alimony.

CHILD SUPPORT

Parents have a legal and moral obligation to support their children. The Retired
Officers Association strongly endorses efforts to facilitate the collection of child support
from federal payments paid to retired members of the uniformed services as well as
members on active duty. All forms of compensation for military service including
disability retired pay and disability compensation from the Department of Veterans
Aftairs should be subject to gamishment for child support.

SPOUSAL SUPPORT/ALIMONY

The Retired Officers Association feels that legislation authorizing gamishment of
disability compensation for court-ordered spousal support or alimony may not have
been subjected to significant scrutiny and evaluation. As explained more fully below,
some state courts have used alimony to circumvent prohibitions regarding the division

‘ As amended, 42 USC sec. 659 specifically includes as moneys subject to garnishment, “periodic
payment or other payments . .. by the Secretary of Veterans Affairs as compensation for a service-
connected disability paid by the Secretary to a former member of the Armed forces who is in receipt of
retired pay or retainer pay if the former member has waived a portion of the retired or retainer pay in order
to receive such compensation.” [Emphasis added] The term “former member’ appears to be an
unintended limitation. “Former member” refers to an individual who is not currently a member of the
armed forces in any capacity. All retired members of the regular components of the Armed Forces remain
members of the Armed Forces after retirement from active duty, albeit in a retired capacity. A former
member is a term that referred to members of the Reserve components of the Armed Forces, who, after
completing sufficient years of creditable service (normally 20 years), including service as a member of the
Reserves and reaching age 60, became entitled to retired pay without regard to status as a member of the
Armed Forces.


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113

Military Faraily
Avenue, Suite 308
‘ns reat zine

(003) .NMPA
FAX (03) 75-4857

Statement of

JOYCE WESSEL RAEZER
Senior Issues Specialist

The National Military Family Association

Before the

COMMITTEE ON VETERANS’ AFFAIRS
of the

UNITED STATES HOUSE OF REPRESENTATIVES

10:00 a.m.

Angust 5, 1998


PERSONAL:

SOB OBJECTIVE:

EXPERIENCE:

EDUCATION:

PRIMARY ASSETSt

WORK EXPERIENCE
POST 1984

122

Ca 1984

Doris Neill Mozley

2912 Duke of York Drive
Chesapeake, Virginia 23321
(804) 484-5653

To work as a financial adviser and planner,
including research and sales, in a stock
brokerage firm,

Six month training program in a stock
brokerage firm,

Fourteen years of study and successful
management of personal investment program.

Three years as a full time lobbyist on
the national level.

Former Secretary to the Dean of Engineering,
University of Alabama, as a college student.

Former stewardess with Pan American World
Airlines.

Former elementary education teacher.
Docent, Chrysler Museum.

Political campaigning with emphasis on
publicity and media coverage.

AB Degree in Political Science,
University of Alabama.

Master of Arts Degree in European
History, Old Dominion University.

Ph.D. course requirements completed in
Constitutional Development, The College
of William and Mary.

Energy, drive, organizational skills,
enthusiasm and creativity. Ability to
persuade in both spoken and written form.
Poise and persuasion in public forums
including radio and television.

Ability to learn quickly and take directions.
I am inner-directed, highly motivated, and
need little supervision.

STOCKBROKER-FINANCIAL
PLANNER DEAN WITTER REYNOLDS,
ANDERSON AND STRUDWICK, AND
AT PRESENT AS AN INDEPENDENT
CONTRACTOR WITH INVESTORS
SECURITY COMPANY


127

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151

STATEMENT

Mr. Chairman and members of this committee, we were pleased to receive your request to
participate in these proceedings to take a close look at “the gamishment of benefits paid to
veterans for child support and other court-ordered family obligations.” In particular, today
I want to highlight a law that is decidedly detrimental to military veterans, the Uniformed
Services Former Spouse Protection Act (USFSPA), Public Law 97-252, 10 USC 1408. The
Air Force Sergeants Association represents the enlisted (active and retired) men and women
of all components of the United States Air Force and their family members and is 2
participant in the National Military and Veterans Alliance. We ask that this hearing focus
on honesty and faimess for those veterans who put their lives on the line for this nation and
their families.

‘This hearing provides a rare, courageous opportunity to fairly examine a situation that has
been cloaked in emotion, built upon a clear misrepresentation of the military lifestyle, and
generally avoided by Congress for over 15 years -- all at the expense of military veterans.
Indeed, rather than faimess or justice for all parties involved, the USFSPA focuses only on
promoting the enrichment of former military spouses and their lawyers because of the
automatic “without risk or need” nature and lifetime duration of the award. We would hope
that as a result of this hearing the process to redress significant inequities targeted uniquely
against military veterans may begin.

Each case of family dissolution, whether military or civilian, should be handled in the courts
on a case-by-case basis, and faimess should be the goal, unfettered by federal law dictating
interfering encumbrances. The retired pay or veterans disability compensation -- both earned
at personal mortal risk -- should not be part of a formula of automatic asset division.
Although VA and DoD disability compensation are “technically” off limits, settlements are
often crafted in the guise of alimony so as to negate the disability “income.” Alimony and
child support should be based on the need for those forms of monetary assistance with
termination of the same in accordance with the same rules imposed on all other U.S. citizens.

‘The USFSPA needs to be reformed. Indeed, this association asks that this committee resolve
to support ensuring the same statutes and “equal protections under the law" that are
applied to all other federal employees are also afforded to military members. Morality
would dictate such resolve. At a minimum, (1) any provision of a veteran’s military retired
pay to a former spouse should be terminated when the former spouse (he or she) remarries.
‘Also, (2) any separated monies should be based on the military member's rank at the time of
the termination of the marriage -- not years later when the military member retires

‘During this statement, | ask that you keep in mind that when we refer to either the military

ole


155

fault, merit, need or respective financial circumstance, this hardly qualified as equal justice
under the law.

8. Divorced military veterans are the only U.S. citizens who have their retired pay classified
in accordance with the federal government's intentions for it: “property” if for a marital
award, and “income” if for taxation by the IRS. How can this Congress allow this situation
to exist, uniquely focused against those who serve?

9. The USFSPA award process is “no fault” and rewards only the non-military spouse.
While the military member can be made to forfeit retired pay by court martial or other legal
action, the USFSPA payment to an ex-spouse continues for life, even if he or she is convicted
of some felony.

10. Many of our members are emphatic in stating their beliefs that the USFSPA is quite
obviously targeted against male military members. Ironically, with the changed
demographics of our military forces since this law began, many female military members are
now beginning to suffer under the yoke of the USFSPA.

11. Most military members impacted by the USFSPA have been “blind sided” because the
uniformed services have assiduously avoided briefing their personnel on the law. Nor is
information on the USFSPA being disseminated during retirees’ seminars conducted by the
military services. The services obviously want to keep this quiet because of its potential
impact (now being increasingly seen) toward dissuading a military member from pursuing
a military career with no fair, protected retirement in sight.

Other Ramifications of the USFSPA

Mr. Chairman, divorcing military couples do have available to them, in state courts, all the
remedies available to any other US citizens. What is different, however, is the USFSPA’s
concept of “lifetime-of-the-military-retiree” spousal support. An obligation to provide
“alimony” usually terminates at the end of some “rehabilitation” period, or upon the
remarriage of the recipient. The continuation of payments beyond remarriage of former
spouses overrides any aspect of fairness or financial need.

The financial situation caused by the USFSPA is unfair and particularly onerous for retired
noncommissioned military members. Usually, former spouses attain financial security by
virtue of their own income, the income of their new partner, or a combination of two
incomes. By contrast, many military members whose retired pay has been divided must
support second families. Keep in mind that the military veteran, if retired, is generally
reentering the job market in middle age and leaving the military with generally non-

5.


CONTENTS

OPENING STATEMENTS

Hon, Bob Stump “
repared 81

Hon. Luis V. Gutierrez
Hon. Michael F. Doyle
Hon. Frank Mascara ..

WITNESSES

Armstrong, Maj. Neita, U.S. Marine Corps
Prepared. statement of Major Armstron,
Alt, Bran, Executive Director, American étirees Association

pared statement of Mr. Ault
Bruce, Patricia, National Director, Women in Search of Equity for Military
and Divorce ..
Kebey Son statement of Ms. Bruce
joshua W., Chief Master Sergeant, USAF, Ret., Manager, Legislative
‘Air Force Sergeants Associatio
a statement of Mr. Krebs ...
Kusiak, Patrick J., Legal Consultant to The Retired Officers Association
Prepared statement of Mr. Kusiak
Lexy, Lt. Gen. Norman G., Deputy Assistant Secretary of Defense, Military
Personnel Policy, Department of
Prepared statement of General Lezy
McKinney, C.A. “Mack”, Legislative Counsel, Fleet Reserve Association
Prepared statement of . McKinney .
Mozley, Doris, Chair, Committee for Justice and Equality for the Military

Prepared statement of Ms. Moziey, with attachments,
Olaneff, "Mark H., Legislative Director, The Retired Enlisted Association
Prepared statement of Mr. Olanoff with attachment,

Ouellette, Sergeant Major Michael F., Director of Legislative Afiairs, NCOA
Prepared statement of Mr. Ouellette

Raezer, Joyce, Senior Issues Specialist, National Military Family Association
Prepared statement of Ms. Raezer soscensonnssensen eosonagnennee

Surratt, Rick, Assistant National Te Legislative Director, Disabled Ameri
feterans ..
Prepared statement of Mr. Surratt

Thompson, John, Acting General Counsel, Department of Veterans’ Affairs .
Prepared statement of Mr. Thom

Fimpane, Colleen M., Hospitalman, First Class, U.S. Navy (ret.)
Virginia Kay, Board Member, Ex-Partners of Servicemen/women for

We Ral
statement of Ms. Ward
Willick, Rirwahe! S., Attorney, American 1 jar Association
Prepared statement of Mr. Willick ...
MATERIAL SUBMITTED FOR THE RECORD

Attachment. Rates on disability compensation ..

[r19)



145

November 16, 1986, that portion of the member’s retired pay computed using the percentage of
the member's disability on the date when the member was retired is treated as a deduction to
arrive at the amount of disposable retired pay subject to division.

A spouse of former spouse may also submit an application under the USFSPA for court-
ordered child support or alimony. This seldom used authority provides an alternative to a
gamishment order or wage withholding order issued by the court or state child support
enforcement agency. Currently, however, approximately 80 percent of our wage withholding
orders are submitted by state child support enforcement agencies.

When DFAS was established, garnishment orders continued to be processed at each of
the five DFAS centers and at military installations world-wide. Divisions of retired pay were
processed at four of the five centers. In 1993, DFAS consolidated the garnishment and USFSPA
function into a single location, the DFAS-Cleveland Center. DFAS believed that consolidation
would produce a number of significant benefits: it would concentrate subject matter expertise
into a single location, centralize responsibilities for the development and implementation of
consistent policies and legal interpretations, and reduce costs, Consolidation, which included the
transfer of all active files, began in January 1994 and ended in October 1995. Meanwhile, in
April 1995, the Office of General Counsel, DFAS, began a business process reengineering (BPR)
study of its Gamishment Operations Directorate. In November 1995, the Director, DFAS,
approved the recommendations that resulted from the (BPR) study. Those recommendations
included technological improvements, such as a Payroll Locator File System (PLFS), an
Integrated Gamishment System (IGS), and an Imaging system.

The PLFS provides quick and easy access to information as to whether an individual for
whom we have received a gamishment order or USFSPA application is currently paid by the
Department of Defense. It also provides the location of the correct payroll office. It is designed
to interface with the IGS. The IGS is an integrated system, which automates the processing of
‘garnishment orders and applications under the USFSPA. It incorporates a form of artificial
intelligence which assists the attomey and paralegal in properly and consistently conducting the
legal review of the orders and applications. The IGS is designed to interface with the payroll
systems such that when review of the case is completed and the case is accepted, information

concerning the amount of the deduction is automatically sent to the payroll system. Currently


106

Curriculum Vitae

Major Neita A. Armstrong enlisted in the Marine Corps Reserve in 1977. While a
Reservists, she held many varied civilian positions including work at the National
Endowment for the Arts and at Information Spectrum Inc. as a Senior Logistician -
working on the Royal Saudi Naval Forces Marine Force foreign military sale case. Her
B.S. degree is in Management Logistics and she has earned the title of Certified
Professional Logistician (C.P.L.). She is currently the Korea Area Plans Officer for the
1“ Force Service Support Group, Camp Pendleton CA. She is a wife and mother.

Major Armstrong is appearing before the Committee today as a private citizen.


66

than a million service members; officers and enlisted, active
duty, reserve and guard, and retired. Seven (7) of the organiza-
tions joined in an amicus curiae brief on behalf of the appellant
McCarty. The Fleet Reserve Association (FRA), The Retired
Officers Association (TROA), Reserve Officers Association (ROA),
Marine Corps League (MCL), Non Commissioned Officers Association
(NCOA), Air Force Sergeants Association (AFSA) and National
Association for Uniformed Services (NAUS) requested that the U.
8. Supreme Court rule in favor of protecting military retired pay
from State community property laws.

Filing a brief in support of Mrs. McCarty were; Action for
Former Military Wives, Ex-Partners of Servicemen for Equality,
National Military Wives Association, Association of American
Foreign Service Women, National Organization for Women Legal
Defense and Education Fund, some California women’s groups
(estimated to be less than 10,000 members), and eight (8) members
of Congress. The eight were: U. S. Representatives Pat
Schroeder, John Burton, Millicent Fenwick, Margaret Heckler,
Barbara Mikulski, John Seiberling, Olympia Snowe, and Howard
Wolpe.

In spite of the anxiety, the military organizations believed
that the Supreme Court and Congress would prevail in favor of
military retirees for the following reasons:

+ Foreign Service and Civil Service retirement sys-
tems, unlike that of the military, were contributory. Each had a
vasted program, the military did not.

+ Neither of the two Federal systems had mandatory
recall-to-active employment as did the military retiree.

+ Neither of the two Federal systems had a program of
contributing to social security and, therefore, had no former
spouses’ benefit to offer. The military, however, did have such
a program.

+ Neither of the two Federal systems required their
retired members to suffer a loss of retired pay, as is the case
for military retirees, for violating one of their regulations
without judicial process, or for being employed by a person
furnishing naval supplies or war materials to the United States,
or engaging in selling, contracting or negotiating to sell
certain supplies to Federal entities listed in 37 USC, 801

+ Neither of the two Federal systems required their
retired members to follow a lifetime of regulations as is the
case of military retirees.



52

for court in these cases to issue an order providing for an equitable division of retired
pay.

SOLUTION: The USFSPA should be amended to limit the amount of retired pay that
may be treated as marital property to the disposable retired pay considered earned
during marriage. The amount should be based on the rank or pay grade and years of
service at the time of divorce.

PAYMENTS OF RETIRED PAY FROM MEMBERS ON ACTIVE DUTY

PROBLEM: The USFSPA expressly does not authorize any court to order a member of
the uniformed services to apply for retirement or to retire at a particular time in order to
effectuate any payment under section 1408 of title 10, United States Code.® However,
state courts have not felt constrained to require a member who continues on active duty
to make payments to a former spouse in an amount equal to what the former spouse
would have received if the member had retired when first eligible to do so, Courts have
rejected member arguments that such orders are indirect orders to retire in violation of
the USFSPA.

SOLUTION: The USFSPA should be amended to prohibit court orders requiring a
member to make payments to a former spouse that are payments in lieu of retired pay
as marital property of a member on active duty, without regard to the eligibility of the
member to retire.

LIMITATIONS ON PAYMENTS OF RETIRED PAY

When the USFSPA was enacted, there was substantial concem that federal limitations
‘on payments of retired pay should not be construed to limit a member's obligation to
comply with court orders directing payments of alimony or child support. Consequently
provisions were included to prevent members from avoiding obligations to pay alimony
or child support.”

PROBLEM: Although the USFSPA contains provisions that make it clear the USFSPA
does not permit a member to avoid obligations to make payments of alimony or child
support, state courts have used these provisions to interpret the USFSPA to permit
payments of retired pay as marital property that are prohibited.

SOLUTION: The USFSPA should be amended to clarify that although a member's
obligation to make payments of alimony or child support are unaffected by the
USFSPA, payments of retired pay as marital property (or payments in lieu of such
payments) are subject to the limitations of the USFSPA.

£ 10 USC. $1408(¢y3).
7 1OUSC. §1408(€)(6).


LADIES...

HOW do you make Uncle Sam
secure your future...?

you ask... HOW can I make the poster
slogan to come true...?”

's EASY.

Marry, then Divorce

a career Military service member!

No requirement to enlist (civitian spouses do not take oath of service).
No deployments or combat threat danger (if war; you are removed to a safe area).
Secure housing available at most military installations (overseas and CONUS).
Pick the member with the correct job title and you could travel the world with him.
Education and employment opportunities are made available to military wives.
Medical & dental benefits available (overseas for command sponsored spouses).
Excellent child care facilities should you become pregnant.

Annual Cost of Living Allowance (COLA) increases.

Some Specific:

‘You may avail yourself of all these benefits and retire when you are ready with a generous government
allowance for life-—-merely by divorcing your military mate. You may even continue to enjoy medical
care and shopping privileges on military bases if you have been married long enough at the time of
divorce. During your divorce, the government will treat you as faultless, There is no penalty for adultery,
neglect, mental abuse, or any other misconduct on your part. No-Fault divorce states (such as California)
and the USFSPA (Uniform Services Former Spouses Protection Act) have seen to it that you come first.
Social Security benefits to which you are entitled will be unaffected. Nor will you be prevented from
receiving child support and alimony. Best of all, payments will not stop if you remarry.

Although your military spouse must serve for a least 20 years before he (see fine print below) is eligible
for retirement pay you can divorce him, and then come back when he retires and collect your chunk from
his retirement pension!! That's correct ladies. .. take a LONG sabbatical (visit mommy or go to college)


101

receive anything and have MY contributions as a Marine recognized. The truth is that my
responsibilities as a Marine far outweigh and involve greater hardship to me in service to
my country than do the inconveniences | ever experienced as a wife. I find it
disheartening that Congress views my current worth and right to entitlements more highly
based on status as a wife than as a Marine. I am not vested in a retirement program - if 1
resign tomorrow I will receive NOTHING for my years of service.

How can an hour in the commissary be of equal or greater value than an hour in
combat, or training for combat “I” am held to a higher standard? “I” am SWORN to
‘support, protect and defend the Constitution of the United States - WITH MY LIFE “I”
must maintain my weight and body fat within strict standards and pass a rigorous
physical fitness test twice a year. I am poked, prodded and told that if I don’t get certain
shots I will face disciplinary action. In the past year I personally have taken 5 random
screening tests for drugs. I am subject to the Uniform Code of Military Justice which
includes UNIQUE regulations for the military under which I could be confined, given
only bread and water for three days and discharged under other than honorable
conditions. Nine of the violations are punishable by death of which there are no
comparable civilian laws. 1 am told what to wear, how to wear it, what “I” can eat, when
“[” can drink, when I can smoke and I can have my liberty secured. I am told where to
live, when to turn the lights out at night and what time to get up in the moming, I'm told
how to act, who I can be friends with, who I can make love to and who I can marry - and
if I violate these regulations I can be incarcerated. If “I” am passed over for promotion
twice - I'm “separated.” These things are necessary for good order and discipline in the
military. They apply to “ME” - not my spouse.

My best friends are military spouses. Many of them have given up military
careers themselves to stay at home and raise their children. I do not want to give you the
false impression that 1 do not appreciate their daily challenges - some of them are the
“salt of the earth.” Marriages between TWO loving supportive people withstand the test
of time and the challenges of being married to a military person. They are not the people
I'm talking about - these Jaws will never affect them. Yet while there are many good and
supportive spouses - there are also those who commit adultery, succumb to drug abuse


26

The CHAIRMAN. I know there’s been some criticism about the
September 30, 1999 time for this to be submitted to the Congress.
But, as you mentioned, I hope it’s done right. Better be a little late
and do it right.

General LEzy. Yes, sir.

The CHAIRMAN. It is a very complicated subject, even very con-
troversial as I observed this morning.

Mr. Thompson, does the administration support the existing law
which generally prohibits garnishment of VA benefits for child sup-
port? 8 the adminis stration support existing law?

Mr. THOMPSON. The administration has not recommended any
changes in existing law. We're not advocating any changes.

The C |. I would take that to mean then that they would
support the prohibition against the garnishment of benefits for
child support.

Mr. THOMPSON. We have not advocated a change. We're satisfied
with current law.

The CHAIRMAN. Thanks. Are there questions from members for
any one on the panel?

ell, gentlemen, thank you very much. We appreciate you taking
the time to testify today. We may submit some questions to you
later on for the record. Thank you.

Our next panel, panel 5, if they would come up, please, moving
right along, the last panel for the day.

Gentlemen, thank you, and your entire statements will be made
a part of the record.

Fire it to testify, Mr. Krebs, manager of legislative affairs in the
Air Force Sergeants Association. Mr. Krebs.

STATEMENTS OF JOSHUA W. KREBS, CHIEF MASTER SER-
GEANT, USAF, RET., MANAGER, LEGISLATIVE AFFAIRS, AIR
FORCE SERGEANTS ASSOCIATION; SERGEANT MAJOR MI-
CHAEL F. OUELLETTE, DIRECTOR OF LEGISLATIVE AFFAIRS,
NCOA; MARK H. OLANOFF, LEGISLATIVE DIRECTOR, THE RE-
TIRED ENLISTED ASSOCIATION, AND RICK SURRATT, AS-
SISTANT NATIONAL LEGISLATIVE DIRECTOR, DISABLED
AMERICAN VETERANS

STATEMENT OF JOSHUA KREBS

Mr. Kress. Mr. Chairman and members of the committee, we
were pleased to receive your request to participate in these pro-
ceedings. The Air Force Sergeants Association which represents the
enlisted, active and retired, men and women of all components of
the United States Air Force and their family members.

This hearing provides a rare, ous opportunity to fairly ex-
amine a situation that’s been cloaked in emotion, built upon a clear
misrepresentation of the military lifestyle, and generally avoided
by Co. ss for over 15 years, all at the expense of military retir-
ees. Indeed, rather than fairness or justice for all parties involved,
the Uniformed Services Former Spouses Protection Act focuses only
on promoting the enrichment of former military Spouses because of
the automatic, without risk or need nature and lifetime duration
of the award. We would hope that as a result of this hearing, the


22

same is true with military pension sharing. If a military member
knows for sure he will have to divide with the wife who helped him
earn it, there will be a reduction in the incidence of military di-
vorce which society so desperately needs.

In summary, I believe it is in society's interest to protect the
military wife who serves, with a 2 presumption to entitlement as the
American Bar Association and the AARP recommend, thereby re-
ducing the rate of divorce as well as the necessity for collecting ali-
mony and child support. I also believe there will be fewer family
breakups if military members know for sure that they will have to
share the major asset of a long military marriage with the wives
who helped them earn it, the military pension.

And as I said, I've been working in this area 18 years. I’ve writ-
ten an awful lot of stuff. It was hard, and I’ve had a lot of it pub-
lished in military papers because objective was to try to influ-
ence military members as well as Congress. I understand that ev-
erybody on Capitol Hill reads these papers. I had not even read one
when I was a military wife, so I started and we've had some suc-
cess and I’ve enclosed a lot of articles from papers. Of course, I
don’t have the time to go in and you don’t have the patience here
anyway, but to show you what experts think of what is going on
in our country today. The disintegration of family, the neglect of
children, the abused. All this deriving from divorce. What we need
to do is enact laws that will tend to diminish. It seems so simple.

[The prepared statement of Ms. Mozley, with attachments, ap-
pears on p. 120.]

The CHAIRMAN. Thank you, Mrs. Mozley.

Our next witness, Ms. Virginia Ward, board member of the Ex-
Partners of Servicemen/women for Equality.

STATEMENT OF VIRGINIA WARD

Ms. WarD. Good morning, Mr. Chairman, committee members,
and ladies and gentlemen. I am Kay Ward, a member of the Board
of Ex-Partners of Servicemen and Women for Equality, otherwise
known as EX-POSE. I am also a former military spouse of a 30
year marriage.

With regard to this hearing, it is our understanding that the con-
cern is Primarily that of garnishment of benefits paid to veterans
for child support and other court ordered family obligations. We are
not totally clear just what is in question here. However, what is
clear to us is feedback that we get from former spouses that many
aspects of military divorce are not equitable.

fudging from correspondence we have received from our mem-
bers, it is our opinion that an investigation is in order concerning
just exactly what is defined as a service-connected disability by the
eterans’ Affairs. We have women writing to us telling us that
their former husbands appear to be in very good health, they're
working full-time, and yet, they are receiving percentages of
their retirement income from the VA. Our members tell us that
their former spouses will threaten them by saying they will get
part of their retirement as disability in order to deprive them of
what they have been awarded in a court order.

Situations such as this are not only unfair to former spouses, but

they make light of countless legitimate sacrifices made by so many


105

Perhaps it is time that those of us with marketable skills to think about protecting
our futures. Why should we have to worry about being left at the poverty level by our ex-
spouses when we are elderly? Why do we have to pay to support THEIR new spouses
too? What about OUR current spouses? Good marriages last through the hard times but
rocky marriages, under the current law, are encouraged to dissolve with a permanent
economic advantage given to our spouses. Ladies and gentlemen, for those in the
military who have been left by their spouses for others the Uniform Services Former
Spouse Protection Act does not allow the wound to heal. It is a painful monthly reminder
of how they have been betrayed. There is no such thing as a FINAL divorce in the
military.

Someone asked if I was a victim myself. Absolutely - I’m a victim every time I
see the anguish in a Marine’s face. The emotional drain divorce takes on them and the
helpless frustration with this one-sided legislation. As a Marine I am constantly
reminded the sacrifices made at Inchon, the Chosun Reservoir and other battles
throughout the Corps’ history. Traditions and regulations made in the 18° century are
still viable today. Please don’t let the Uniformed Services Former Spouse’s Protection
act, as written today, be the legacy of our generation for hundreds of years to come. I
challenge you to right this wrong and pass legislation that is fair for both sides

Thank you.


162

‘The USFSPA's Potential Impact on Recruiting/Retention

In view of the fact the military services are reporting significant shortfalls in recruiting
and retention targets, NCOA suggests the very existence of the USFSPA could greatly
contribute to future military manning shortfalls. This Association would not even want to
speculate that an enlisted member of the armed forces with career aspirations would

make a decision to end his military career because of the USFSPA; however, when the
overall benefits of continued service are scrutinized, there is a strong possibility that the
thought of possibly having to share a military retired pay benefit with an ex-spouse in a

potential divorce action, could add to a decision to terminate service. After all, when:

0. military members are currently serving under three (3) entirely different

retirement systems. all with significantly reduced retired pay levels:

°

military pay is currently ¢.simated to be 13.5 percent below civilian sector

ay;

military members understand that congressional efforts to improve military
life through the increase of monthly allowances. is money that will not taken

imo retirement;

out-of-pocket costs are being levied on military retirees to obtain medical and
dental care:

0 the stability or existence of the commissary benetic is questionable.
‘There has to be some consideration given to the fact that their future retired pay benefit,
could be lost in a possible divorce action through a division of property determination,
coupled with additional alimony and child support payments. could very well erase any
advantage of career service and leave the military retiree with insufficient funds to even

purchase his retirement benefits.


165

BIOGRAPHY
OF
MICHAEL F. OUELLETTE
DIRECTOR OF LEGISLATIVE AFFAIRS

Mr. Michael F. Ouellette currently serves as Director of Legislative Affairs. Non
Commissioned Officers Association of the United States of America (NCOA). He is a
registered Congressional Lobbyist whose responsibilities include a wide range of military
personnel and survivor benetits to veterans’ legislative issues. He formerly served as Co-
Chairman of The Military Coalition from January 1, 1993 until February 22, 1996. He
currently serves as the NCOA representative to the National Military and Veterans
Alliance.

A retired Sergeant Major. Mr. Ouellette joined the NCOA National Capital Office in
1991 following twenty-six years of military service with the United States Army. His
final assignment was as the Sergeant Major to the Adjutant General of the Army. US
Total Army Personnel Command (PERSCOM). Alexandria. Virginia. and covered the
period 1988 through 1991.

Ouellette's period of service included numerous tours of duty within the United States
and overseas tours in the Republic of Vietnam, Japan and Germany. His military
decorations included the Legion of Merit. the Meritorious Service Medal (with 3 Oak
Leaf Clusters), the Army Commendation Medal (with 3 Oak Leaf Clusters), and the
Ammy Achievement Medal (with 2 Oak Leaf Clusters), He is a graduate of the US Army
Sergeants Major Academy (Class #25) and holds an Associates Degree in Applied
Science and General Management from El Paso Community College, El Paso. Texas.

He is a former President of the Potomac Chapter, AG Corps Regimental Association and
the PERSCOM Sergeants Major Association. He currently maintains membership status
in the NCOA Museum Association, Veterans of Foreign Wars. the Knights of Columbus.
the Exchange Club, American Legion, the 4th Infantry Division Association, and AUSA.

51-567 - 98 - 7


169

Mr. Chairman and honorable members of the Committee, I am Mark Olanoff,
Legislative Director of The Retired Enlisted Association (TREA). My biography is
attached. On behalf of the 100,000 members and auxiliary of TREA, National President
Dave Pahl and National Auxiliary President Ethel Hale, I appreciate having the
opportunity to come before you and address an issue that is vitally important to a
particular class of veterans, military retirees.

Military retirees, those who have spent the better part of their lives in service to
their nation, often have a percentage of their retirement pay waived in order to receive
disability compensation from the Department of Veterans Affairs. A retiree is forced to
make this decision because the law states that a military retiree cannot receive 100% of
their retired pay and disability compensation. Their retirement pay must be reduced based
on the percentage of the disability. It is important to remember that the payment received
from the Department of Veterans Affairs is not retired pay, but compensation for a
disability sustained in service to our country. Unfortunately, there are those who would
like to strip this service-connected compensation from retirees.

Marriages ending in divorce has become a common occurrence in our society,
including the military community. Nearly 50% of all marriages end in a divorce. I would
dare say that the percentage within the military community is the same if not higher. The
stress put on families by the long hours, constant moving and stressful jobs no doubt
‘wares on the individuals in a marriage. In order to protect the spouses of members of the
‘Armed Forces, Congress, in 1982, passed the Uniformed Services Former Spouse
Protection Act, Public Law 97-252; 10 USC 1408. This in despite of the fact that the
‘Supreme Court ruled in the 1981 McCarty decision that “...the military retirement system.
confers no entitlement to retired pay upon the retired member’s spouse and does not
involve even a limited community property concept. .. moreover, the application of
community property principles in military retired pay threatens grave harm to clear and
substantial federal interests.” Unfortunately, the legislation which Congress assumed
would help many has only damaged the lives of retirees, particularly those receiving
disability. The USFSPA gives judges issuing the divorce decree the right to award up to

50% of a retirees pay to a former spouse as part of the settlement. However, judges have




115

important to pick a tough divorce state for you to seek residency in)! If your marriage time was even one
day under 10 years you would have to get him to send you the check. He would not do it!! (After your
surprise return you can bet he is not happy to see you one bit). Because you were smart and stayed for
that magic 10 years DFAS will send you your check directly and there is nothing he can do about it!
Unlike the civilian divorce world in which you can get child support and alimony . . with the military you
get a pension TOO!

Fourth: Save money, you will need at least $1500 for a divorce lawyer. You should be able to
accomplish this by salting away ‘extra! money or skimming money from bank accounts, Obtain as large a
life insurance policy on your mate as possible without arising suspicion.

Fifth: Be sure to retire/or seek residency in a no-fault divorce state. This should be no problem as most
states in America are now no-fault divorce. You may determine which states are ‘no-fault’ by contacting
your local divorce attorney in the yellow pages of any telephone book. This can be a bit of a problem and
50 it would be wise to know the cantankerous and contrary state divorce court trends/iaws. If you stay
until he retires then of course you can help influence him on where you would like to settle down (Ha
Ha). Ifyou divorce before he retires you will have to know the state he retires in and how hard the state
you are in will fight for you (it's a lawyer thing, Good lawyer...more money!). Do NOT go to
ALABAMA, You may end up with only egg on your face! At present Alabama likes the military veteran
and not the spouse

Sixth: Secure and Retain a good divorce Attomey. This is most important so'shop around’ as they will
have to fight for you in court--you will win, but the better the attorney, the better your monthly
retirement amount. Cost to you, minimum of $1500 but could go as high as $5000. This is still nothing to
be concerned about as you will be receiving a monthly check for the rest of your life and, if you have
planned properly, skimming and saving $5000 from your service members pay while you are still
married should not be a problem for you! In your declaration for divorce you need say only two words
‘irreconcilable differences’, But, you may also have some fun here as you will not be held accountable to
prove anything you say. So... Attack! Make up stories. Lie! Remember this is family law not civil law so
the divorce declaration will not be held as an important legally binding document as to whether you lied
‘or not! Your motive for divorce is not important to the No-Fault divorce court judge. If you lawyer is.
crafty (most are) he can manipulate the court session so that your case will be seen by a female judge!
‘Aaaah yes, how sweet the screwing will be!! But act business-like in court try not to smile or laugh
because divorce is treated as a business in no-fault divorce states --- and business means money and
money is serious! No-Fault divorce is a mechanical operation not a human situation!

Seventh: Execute your plan. Move out, and surprise your mate with officially served divorce papers
(Christmas and birthdays are the days of choice) and let your lawyer and the courts take over. Because
‘your soon to be ex is getting on in age (mid to late forties) be sure to have life insurance policies up to
date and premiums paid in full just in case your former service member and marriage partner stresses out
and dies of a heart attack

* ** * Congratulations * ** *

you are now free and wealthy!
Contact your local senator or congressional representative and tell them...



115

GARNISHMENT OF MILITARY PAY/RETIRED PAY FOR FAMILY
OBLIGATIONS

ACTIVEDUTY PAY
Child Support

Garnishment of active duty military pay for family obligations is most frequently done to
Provide child suppor forthe servicemembers child (children). Curent reproity among
‘states and the different service regulations regarding child support, normally easure that
‘court orders of child support are honored no matter where the servicemember is

Each of the services have strong statements regarding servicemembers’ responsibility to
provide financially for their families. However, non military parents without court orders
often find making the system work for them exceedingly difficult. When non military
Parents dont lve near a military installation, and donot know the servicemembers

military location, they may find it almost impossible to obtain child support. When the
servicemembers stationed overseas, the non military parent, without a cour order, is left
to depend on the good offices of the services and Commanding Officers.

Generally, if no court arder or written agreement exists, the services require
servicemembers o provide the difference between their Basic Allowance for Housing
(BAH) at the with dependents rate and BAH without dependents rate for child support.
However, if servicemembers remarry, their entitlement to the BAH at the with dependents
rate is no longer de pendent on providing gcd supporto the children of a previous

tvage, but on ther new fail, In is case, obtaling child support can be ever more
difficult. Children who have previously been acknowledged by servicemembers as their
financial responsibility may be put at risk.

NMFA strongly believes that servicemembers have, at a minimum, financial responsibility

‘their children. Each service should make it perfectly clear to all milicary legal offices
‘and Commanding Officers, that they have a responsibility to assist the non milizary parent
in obtaining child support. Non military parents should be strongly encouraged to obtain
court ordered child support or written agreements that will be honored by Defense Finance
‘and Accounting Service (DFAS).

Alimony

‘Active duty pay is also garnished to provide alimony in the case of divorce. NMFA is
aware of some cases where an amount equal tothe per cent of retired pay that can
eventually be awarded as part of a property settlement, is granted as alimony. NMFA is

‘unaware of any cases where that sum has actually been treated as property, since in actual
fact it comes from current pay or wages.

Since awarding alimony is a purview of state courts, it seems to NMFA that the only action
that could be taken by the Federal Government is to further protect the amount of pay that
can be garnished by such courts. Such action would affect child support and garnishments
for other just debts.


194

Mr. Chairman, on behalf of the Jewish War Veterans of the U.S.A. (JWV), our organization
appreciates that you have made the time to hold this hearing. The entire issue of the Former Spouse
Protection Act (FSPA) is of interest to our organization because it impacts on the morale of our
active duty forces. JWV maintains a very strong interest in national security and any issue which
may affect the morale and welfare of our active duty personnel is of vital importance to this
organization,

JWV filly supports the prompt and regular payment of child support. Military retirees, like all
parents in the civilian community, have both a moral and a legal obligation to provide child support.

‘However, Mr. Chairman, the FSPA has been and is an extremely controversial piece of legislation
as to alimony without there being an evaluation of due process in the granting of the same. Since
the first hearings nearly two decades ago, this legislation has contributed to confusion in the courts
at all levels. There is extensive anecdotal evidence showing that state courts are using judgements
which conflict with the legislation, and that the Military Services are caught in between.

Mr Chairman, thank you very much for holding this hearing. As a member of the Military Coalition,
IWV urges prompt future hearings on the issue of the FSPA. JWV believes the FSPA legislation
needs to reevaluated, reconsidered and revised to reflect today realities and to clarify the many
misunderstandings existing in this legislation.

Required Funding Statement:

‘The Jewish War Veterans of the U.S.A. is a non-profit veterans membership organization, as
described in section 501(c)(4) of the Internal Revenue Service Code. JWV is registered with the
Secretary of the Senate and the Clerk of the House of Representatives in compliance with the
Lobbying Disclosure Act of 1995.

Neither the Jewish War Veterans of the U.S.A. nor Colonel Herb Rosenbleeth, U.S.A. (Ret), has

received any Federal grant or contract relative to the subject matter of this testimony, or any other
subject matter, during the current or two previous fiscal years.

10)

51-567 (200)


136

EX-POSE
[Ge Partners Of Military Servicemen(women) for Equality) ]

entail returning to state courts for clarification, since it would be
extremely difficult, if not impossible, for recipients to verify that the

3. Court jurisdiction would be limited to those areas where the
member has a residence, is legally domiciled or where the member
has consented to the court’s jurisdiction. All former spouses must
request division of retired pay within two years of the final divorce
decree.

Insofar as we are concerned, the only real change here is in the second
Portion of this proposal. There are many, many spouses who have
Poorly written property settlement agreements. These persons were
oftentimes unaware at the time of their divorces that they had a
“presumption” to a portion of their ex-spouses’ retired pay; in the
trauma of divorce proceedings they have signed away this presumption
which could make the difference between a respectable life style and
poverty. This proposed legislation would forever deny them the justice
to address these inequities. Moreover, in the case of some divorces -
“bifurcated” is the term used - the divorce decree is often final years
before the property settlement agreement.

4. Disability compensation would be more explicitly restricted insofar
as the former spouse may in no way share in the member’s
service-connected disability payments,

It is our position this is an oversimplification of a very complex issue.
What we are requesting is honoring property settlements which bave
been freely entered into.

ae ane cuommiton is necessary here. ‘When retired pay is
granted by the state court it is granted on “disposable income.” That is

to say that “VA Service-Connected Disability Payments” are deducted
from the retired pay PRIOR to the division of such retired pay
between the former spouse and the member. Therefore, let us
suppose that the amount of the retired pay is $2,000 and the former
Spouse is awarded 50% of that retired pay; let us further suppose that
after the divorce decree is finalized and he has retired the service
member contacts the VA and is awarded 30% VA Disability (which is,
of course, tax free). The calculation is now as follows:

$2,000 - (30% VA Disability, or $279**) x 50% = $861

Therefore, instead of the original amount awarded ($1,000), the former
spouse now receives $861.00 and the member now receives only $721
of his former retirement pay from Defense Finance Center PLUS
$279 (tax free) from the VA.



177

‘Mea: you too can bave the same secure future as the government is not allowed to discriminate; however, itis «bit trickier as the
‘sysiea is setup to beaefit the female. Contact your local divorce attorney in the yellow pages of any telephone book. Be sure they
iknow the USFSPA and your rights to the same treatmeat asthe Ladies.

Tam 223 year USAF veteran with a 16 year marriage and 9 year old handicapped daughter and
a forced no-fault divorce. . . [have the
‘des tom Nov 15,1996 hme of he ARA mews, page 4 by Ded Brame


58

Biography of
C. A. (MACK) MCKINNEY

c. A. (Mack) McKinney is the Legislative Counsel for the Fleet
Reserve Association (FRA) and the voluntary Administrator for The
Military Coalition.

McKinney, who served in WWII, Korea and Vietnam, retired from the
United states Marine Corps in 1971 as a Sergeant Major of Marines.
Two days after his retirement he arrived on Capitol Hill representing
the Marine Corps League (1971-80) and the Non Commissioned Officers
Association (1971-1992). He was instrumental in urging Congress to
enact or amend a number of laws beneficial to the well being of
military personne] and veterans.

In his nearly 27 years working with Congress, the White House and
the appropriate Federal agencies on behalf of enlisted service members
and veterans, he assisted in the founding of the Exchange Club of
Capitol Hill, serving as its president in 1990-91, and the Capital
Hill Marines, as its senior vice commandant. In 1988 he was elected
president of the Texas Breakfast Club and is a member of the Texas
State Society. He also served as a Marine Corps League Detachment
Commandant (Alamo Detachment, San Antonio, TX), Department Commandant,
State of Texas, and National Adjutant-Paymaster and National Legisla-
tive Officer for that organization’s national headquarters.

McKinney, in addition to the above, is a lifetime member of the
Veterans of Foreign Wars, the Disabled American Veterans, First and
Third Marine Divisions Associations, Marine Corps Aviation Associa-
tion, Marine Corps Law Enforcement Foundation, Marine Corps Historical
Foundation, Marine Corps Association, and a member of The American
Legion. He was a charter member of and the second president elected
to head the Combined National Veterans Association.

McKinney, for a number of years, was a member of the Veterans
Administration Committee on Cemeteries and Memorials. He also is the
cofounder of The Military Coalition in 1985 and has served as its co~
chairman, coordinator and administrator. He has been married to the
former Rosemarie Swinford of Lansing, MI, for 45 years (as of August
8, 1998), has three children, six grandchildren and one great grand-
son.

CERTIFICATION OF NON-RECEIPT OF FEDERAL FUNDS

Pursuant to the requirements of House Rule XI, The Military
Coalition, Inc. and the Fleet Reserve Association have not
received any federal grant or contract during the current fiscal
year or either of the two previous fiscal years.


M2

While this is a very emotional and complex issue, Congress has a distinct opportunity
to correct the inequities that face our military in divorce by aligning the division of
military retired pay in divorce with those of other federal plans. Many of the issues of
concern to military members and former spouses could be resolved with this
realignment.

Realignment would eradicate the problems surrounding remarriage, statutory
entitlement, statute of limitations, duration of marriage requirements, jurisdictional
issues, and violation of the military member's protections under the Soldier and Sailor's
Civil Relief Act. The discriminatory divergence between civilian federal and military
laws as they pertain to divorce could be expunged, enabling all military members and
former spouses to know that their divorces will be treated in an equal manner with
their civilian federal counterparts. The discrimination rampant from one military
divorce to another, due to the capricious laws of the fifty states will be erased. And
equal justice under the law will prevail.

On behalf of our military members, active duty, reserve, retired and National Guard,
we thank you for your consideration of this much-needed oversight.


16

have to be by an appeal to a higher court. The onus would be on
the military retiree to pursue litigation.

THE END: YET ANOTHER BEGINNING

In spite of the warnings by Nichols and others opposed to
the Schroeder amendment, the election year momentum made it
impossible to have it recommitted to the Committee for further
consideration. Nichols, who had no choice but to introduce an
amendment to Schroeder's, argued that his was the better choice
of the two. However, as Rep. White advised his colleagues, both
Schroeder's and Nichols’ amendments “created more loopholes than
they seek to cure.” | Consequently, the Nichols’ proposal
prevailed by voice vote, but the remarriage provision and a few
others fell by the wayside when House and Senate conferees met to
sculpt the final language of the FY 1983 National Defense Autho-
rization Bill.

-end-


28

plies that all military retirees are so irresponsible, untrustworthy,
and even deadbeat, that a law had to be passed to instruct State
courts to treat them differently in divorce actions in order to en-
sure they meet their responsibilities and resulting settlements.

Mr. Chairman, nothing could be further from the truth since the
very foundation of military service centers around the requirement
to meet both professional and personal responsibility. Failure to do
so in both cases results in termination of service.

Based on the wide range of discussion delivered this morning, it
does not appear that FSPA can be tweaked in order to meet expec-
tations on both sides of the issue, and not violate the basic provi-
sions of the law.

Although NCOA has indicated support for total repeal of the Act,
perhaps the best course of action this committee could endorse
would be to amend the Act, specifying that income levels of VA dis-
ability and military retirement pay would be used to determine ali-
mony and child support towards, on the part of the military retir-
ees—awards on the part of the military retiree. Such action would
appear to level the playing field for all future military retirees and
provide an opportunity for current retirees involved in FSPA settle-
ments, to return to court if they so desire, to revalidate the alimony
requirements of their divorce decrees. NCOA believes such action
to be a fair solution to the property issue of FSPA.

In closing, Mr. Chairman, if something is not done to correct the
inequity of FSPA in its current form, military retirees can be in-
sured of only one thing: that the future spouse or spouses of ex-
military spouses will forever and ever speak very highly of them.
Thank you.
[The repared statement of Mr. Ouellette appears on p. 157.]

The CHAIRMAN. Thank you.

Mark Olanoff, Legislative Director for the Retired Enlisted Asso-
ciation.

STATEMENT OF MARK OLANOFF

Mr. OLANOF¥F. Good morning, Mr. Chairman and members of the
committee. Thank ‘you very much for allowing the Retired Enlisted
Association to speak.

Mr. Chairman, I’m not going to read my statement—obviously
you have it. But I am going to give you a couple of observations

ased on what I’ve heard already today.

Tm not a lawyer but I think I understand the concept of Federal-
ism, and based on what I’ve heard from all the testimony in here
this morning, I don’t think it could be more clear that the message
that you should get from this hearing is we cannot have 50 ways
of doing this. And that’s why it is a Federal question, and I com-
mend you for your leadership for introducing H.R. 2537.

Thave received many phone calls and also many e-mails from our
members and other military retirees, that talks about what their
specific problem is. The gist of most of the correspondence and
phone calls that I’ve received is although the—we do not come here
to say that people who owe child support should not pay the
money. Obviously, we agree with that. However, it appears based
on the way States courts are interpreting some of these statutes,
that VA disability is being used to pay some of these awards.


94

*The USFSPA award process is ‘no fault’ and rewards even miscreant
‘spouses. The military member can be divested of retired pay by court martial or other
legal action. On the other hand, USFSPA payments to an ex-spouse continue for life,
‘even if he or she is convicted of some felony. There is at least one known case of an
imprisoned ex-spouse whose USFSPA payments are being retained by a prison
warden, pending her ultimate release.

*Payments of retired pay may be made to the abused ex-spouse of a
military member who has been denied retired pay. But unlike the lifetime entitlement
of other ex-spouses, the USFSPA mandates that payments to an abused @x-spouse
terminate if he/she remarries. Is this equal justice under law?

*The USFSPA does not include a statute of limitations on the amount of
time allowed an @x-spouse to petition for USFSPA payments. Consequently, many
retired military members have had to wait ,indefinitely, for the "USFSPA shoe to
drop’.

* Although the USFSPA is considered to apply to both male and female
military members, the only pronoun appearing in the law is "his" which appears at
least five times. This might constitute a legal loophole for female military members.
More significant, however, is what is connoted about the intent of the legislation. It
appears that the USFSPA‘s sponsors were focused on bringing male military
members to heel. Moreover, apparent that little consideration was given to the
demographic differences between the officer and enlisted communities of the
uniformed services as they relate to the USFSPA. Officers are more likely to have the
financial resiliency needed to survive the loss of a portion of their retired pay.

*The USFSPA purports to protect military disability pay, whether DoD or
VA, by specifically excluding it from the definition of disposable retired pay that can
be shared with an ex-spouse. This protection was reinforced by the U.S. Supreme
Court decision in Mansel v Mansel in May, 1989. However, state courts are

circumventing it in three ways:

1) By ignoring federal law.

2) By avoiding the award of retired/disability pay as property’ and
awarding it as alimony without regard for source, even if the member is 100 percent
disabled .

3) By garnishing it under the Social Security Act, Title 42, which is in
conflict with Title 10 on this issue.


9

The CHAIRMAN. Are there other questions, gentlemen? Doctor?

Mr. SNYDER. Mr. Willick, I know we—because of the time con-
straints of the committee, we don’t necessarily give you a lot of
time. But you had a point that you had skipped over and I have
a few minutes here, if you'd like to proceed with any other com-
ments you want to make.

Mr. WILLICK. Well, I think it had to do with the other—the other
individual proposals. Unfortunately, it comes down to a matter of
mathematical proof and it’s very convoluted and difficult to present
orally. But on the limitation to length of service and rank at time
of divorce, jyhat you're doing there 1s what's often called, ihe small-
er slice of the larger pie. if you do what this proposal s .
what you do is doa double reduction. You freeze the Spousal eharc
as to percentage in terms of total dollars and then you defer its
payment over time. Since people always have a finite life time, the
net effect, according to my own research, is to reduce the effective
spousal share of that which was actually earned during the mar-
riage by about 13 percent.

0 the effect of the proposal would be to ¢= some of the
spouse’s property into the member’s property. Tess le-
cide to force the States to do so, but there would be a lot of fallout
from that. For example, I'll give you a few logical problems with
it. If you had two uses, one of which was married to the mem-
ber for exactly the first half of the career and the second of whom

was married to the member for the second half of the ca-
reer, those two spouses would get widely different awards under
the existing pro

al.

Whereas, Ender the law of most States today, the way it would
work is they would be treated the same. They would say, get 25
percent of the net milit retirement benefits received at the end
of service. If this proposal went through, one of them would get a
piece of a hypothetical retirement from 10 years earlier based on
COLA’s that accrued for a rank that nobody’s had for that amount
of time, even though the final rank achieved is as dependent on the
first 10 years as on the last 10 years since you can’t get to the end
without going through the whole process.

So there are some logical problems with it although it’s facially
appealing. And I would just urge you to go back to the references.

ere have been law review articles which have gone over the
math. And it just doesn’t make logical sense if you take the thing
apart to do that.

There would be some unintended side effects with the proposal
as written. For instance, a lot of property would be taken from
military members in a number of States that I don’t think anybody
has really paid attention to. And that’s because the State courts di-
vide property, they terminate the accrual of marital property at dif-
ferent times.

Currently, this proposal requires reference to the final decree of
divorce, But some States, for example, California, terminate the de-
velopment of community property at final separation. Now, the di-
vorce itself in that State can take 2 years. So the effect of this pro-

al would be to turn 2 more years of erty over to a spouse
y preempting State law that otherwise would have terminated the
spousal interest and give it to that spouse. Now, I’m not sure the


71

AMERICAN BAR ASSOCIATION

GOVERNMENTAL AFFAIRS OFFICE + 740 FIFTEENTH STREET, NW + WASHINGTON, DC 20005-1022 * (202) 662-1760

STATEMENT OF
MARSHAL S. WILLICK
‘ON BEHALF OF
‘THE AMERICAN BAR ASSOCIATION
BEFORE THE
COMMITTEE ON VETERANS’ AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
CONCERNING
‘THE UNIFORMED SERVICES FORMER SPOUSES PROTECTION ACT

AUGUST 5, 1998


83

property. The court found, however, that the sum against which the spousal percentage was to be
applied was gross retired pay, rather than disposable pay.!° One justice, concurring and dissenting,
would have held the applicable rank to be that of Lieutenant Colonel, noting the husband’s
placement on the promotion list occurred during the marriage, and reasoning that valuation as of the
date of divorce should include rank for which qualification was met but not yet formalized, and that
the majority opinion exalted form over substance.

The decisions of several states seem to simply presume that the rank at retirement is the appropriate
measure, and contain little analysis of why this is so.'' Other courts have attempted to be more
analytical, focusing first on the nature of the asset being divided, and then on how to accomplish an
equitable division of that asset. The decisions of these courts can be labeled the “building block”
cases.

One example is Fondi v. Fondi, in which the Nevada Supreme Court found that a “wait and see”
approach is mandated in pension cases, through which the community has an interest in the pension
ultimately received, not just the pension as it exists on the date of divorce. That court has since
emphasized that the “wait and see” approach is defined as ensuring that the spousal share of the
pension is based on value of the pension ultimately received by the worker, rather than a portion
of the pension that would have been received if the worker retired on the date of divorce."*

Some courts have explained what they are doing as adhering to the “qualitative” view of spousal
contributions to retirement accrual."* In other words, while a pension may be based on the “highest
salary eared,” and the highest earning years are usually the last years of employment, all of the
years of work leading up to retirement are considered equally necessary to attain that status. Two
consecutive spouses, during the first and last halves of a twenty-year military career, would be
treated equally under the qualitative approach, but very differently under the proposal in section
three of the bill.

Perhaps the clearest expositions of the reasoning behind the two approaches are found in those cases
in which a reviewing court splits as to which interpretation is most correct. The lowa Supreme Court

"© This case was pre-Mansell, and this conclusion was based on Texas law.
" See, e.g., Casas v. Thompson, 720 P.2d 921 (Cal. 1986), cert. denied, 479 U.S. 1012 (1987).

2 106 Nev. 856, 802 P.2d 1264 (1990) (retirement under state public employees retirement
system).

» Sertic v. Sertic, 111 Nev. 1192, 901 P.2d 148 (1995) (CSRS retirement).
Stouffer v. Stouffer, 10 Haw. App. 267, 867 P.2d 226 (1994).
6


5

And, for the record, I’m personally not opposed to dividing the ac-
cumulated assets of the parties in a divorce. In this respect, I
would be willing to share whatever my spouse and I had in the
way of property, but not my military retired pay. However, if I vol-
untarily provide my former spouse with payments from. my milit
retired pay, it would be my own doing, not as a result of the Fed-
eral Government giving the State courts access to that pay simply
because some States refuse to amend their own laws to effect the
proper collection of court-ordered obligations.

laving said this, there’s an old adage used quite often to de-
scribe making of a law and sausage. If you like one, don’t
watch it being made. Never has this been more descriptive than
when applied to the USFSPA. Here is a law that was molded from
a mix of com icity, subterfuge, embellishment, subtleties, inequi-
ties, and -truths. A witch’s brew to be sure. And my purpose
today, is to ide the committee with a history leading to the en-
actment of USFSPA.

It began some years before the enactment where stories of mis-
treated divorcees of Federal employees and jnilitary personnel were
printed in the Congressional rd and fed to local newspapers
and other publications. Throughout the text, the word pension was
used over and over again to describe military retired pay as well
as Federal retirement benefit. By placing both under one descrip-
tive term, pensions, it soon led uninformed persons, including
members of Congress and civilian military officials to believe that
military retired pay was a payment for services rendered and not
what it really is, reduced pay for reduced services.

As time moved on, a group from the Texas congressional delega-
tion of that period gave its attention to the effort by a former con-
gresswoman, Pat Schroeder, and others to produce a law that auto-
matically required the Federal Government to make payments to
divorced spouses of Federal employees and military personnel. It
would be a way to circumvent changing the Texas Constitution in
order to authorize the garnishment of Federal pay for court-ordered
alimony, child support, and even divisions of p: rty.

Hearings were conducted by the House Armed Services Commit-
tee to address former Congresswoman Schroeder’s proposals and
related bills. Pleas were heard from both sides. The opposition, at
that time, consisted of the Department of Defense a number
of major military organizations. No action was taken in the House.

Suddenly, the issue became a hot topic on the Senate side. The
Supreme Court decision on the McCarty case moved the Senate
Armed Services Committee to act quickly. Was it because the com-
mittee had a new chairman, a Texan? What caused the Depart-
ment of Defense to change its mind? Was it the influence of a new
SASC chairman? I leave the answers to you after you read my pre-
pared statement, Mr. Chairman.

I was and I am deeply involved in this issue, from the time
former Congresswoman Schroeder introduced her first proposal
through the enactment of the USFSPA and, subsequently, dealing
with the financial suffering of many military retirees who fell vic-
tim to the worst law ever passed by Congress adversely effecting
veterans of our uniformed services. As former Congressman Rich-
ard White warned during the debate on the amendment,


lll

This fact is emphatically demonstrated throughout the enactment and application of
federal law governing civilian federal retirement plans and their former spouse
protections sections.

The present treatment of military retired pay is inconsistent with treatment afforded
federal civilian retirees under Central Intelligence Agency (CIA) and Foreign Service
laws. The laws governing how military retired pay is treated in divorce are not even
remotely comparable to those federal civilian plans, and should, at the very least, be
consistent with Foreign Service and the Central Intelligence Agency, whose duty
assignments have been likened by Congress to be very similar. By altering the scheme
under which military retired pay is divided in divorce, bringing military retired pay in
line with CIA and Foreign Service, the problems inherent within the broad decision
making abilities of the states will be eliminated.

There is simply no reason why we should treat men and women who serve honorably
in our Uniformed Services any less favorably than men and women who serve in the
Foreign Service or CIA.

During the floor debate of the USFSPA in 1982, congressman Bill Nichols stated:

“The recent change in the Foreign Service Personnel System and the changes
proposed in the CIA personnel system currently in conference, have been used to argue
the need for change in the military (system).

Both of these systems restrict payments of portions of retired pay to situations
in which the marriage lasted 10 years, during which time the member was an employee
of the system.

In addition, payments of retired pay to former spouses terminate upon remarriage of a
former spouse...

A similar restriction is only fair for the military member as well, who, to a large
extent is similarly situated”.

This statement was true then and it is true now!


81

“significant differences between the two classes” of retirement benefits and beneficiaries.*
Discussing the relevant factors, the Court concluded: “For purposes of 4 U.S.C. § 111, military
retirement benefits are to be considered deferred pay for past services.”

It is worth remembering here that the military retirement compensation package is widely used by
recruiters as an incentive to enlist, much the way any company’s retirement system and other “perks”
are used in recruitment of desired personnel. The retirement benefits should be considered to be
what they are touted as upon enlistment -- an additional payment for active duty service, over and
above the regular pay received, to be made after retirement, as incentive for both parties to a
military marriage to endure the rigors of the military lifestyle, with its frequent change-of-station
moves, necessary limitations on development of a career for the spouse, and other drawbacks.

In other words, as o the property rights and legitimate expectations of the parties, there is no reason
not to treat military retirement benefits like all other retirement and pension rights accrued during
marriage. And because there is usually so little other property acquired in a military marriage, the
quality of life that each party can reasonably expect to have after divorce is directly dependent upon
the certainty of receipt of his or her share of that asset.

From a constitutional perspective, there is some doubt whether it would be permissible to
retroactively recharacterize property awards as a species of alimony, on due process and impairment
of contracts grounds. The proposal would be less constitutionally objectionable if it was restricted
to future remarriages, but the fundamental faimess question would remain. Additionally, passage
of this proposal would have a chilling effect upon remarriage by former spouses, and thus would
interfere with the public policy of many states, which encourage marriage.

In summary, this proposal would directly contravene established ABA policy. It would pre-empt
state law on a very large scale, and would treat military members and their spouses differently than
all other persons in similar positions. It would unsettle well-established property rights for a large
number of people, and lead to substantial litigation, without any corresponding improvement in
achieving equitable distribution of property. No apparent federal policy would be served by such
a pre-emption of state law. The proposal should be rejected.

* Davis v. Michigan Dept. of Treasury, supra, 489 U.S. at 816, as quoted in Barker v. Kansas,
supra, 503 U.S. at 598. The Court observed that military retirement benefits are treated as deferred
compensation for purposes of determining deductibility of individual retirement account (IRA)
contributions. /d. at 604.

4


188

the validity of such awards. Under § 1408, disposable military retired pay (does not include
amounts waived and received as VA compensation) is subject to marital property division in
community property and equitable distribution states and alimony and child support orders.
However, under § 659, for enforcement of child support and alimony awards, state courts can
garnish Armed Forces retired pay accounts for retired pay and presumably garish VA for the
compensation the retiree receives in lieu of retired pay as long as the veteran still receives some
amount of retired pay in addition to the compensation. It could be argued that, although § 659
consents to garnishment, it does so only in theory because a valid underlying court order is still
required, and, inasmuch as § 659 only consents to garnishment, it cannot remove the preemption
in § 1408, which still precludes making support awards from compensation received in lieu of
retired pay. Even in the unlikely event one were to successfully argue that § 659 is nothing more
than a garnishment statute and cannot operate as an implied repeal to negate the Federal
preemption in § 1408, he or she would still confront Rose, however. For child support, Rose left
no exemption for compensation under any circumstances, although Rose does not authorize
garnishment,

Consequently, neither compensation nor retired pay enjoy any real protections from
unwarranted state actions or state actions that disregard the purposes of disability compensation
and retired pay. Because these are Federal benefits created to further Federal goals, the Federal
Government should exercise some reasonable control over them to ensure they are not misused
for the state’s self-serving purposes and diverted to uses never imagined or intended. Borrowing
from the Supreme Court’s reasoning in Ridgway, Congress should enact legislation that “prevents
the vagaries of state law from disrupting the national scheme, and guarantees a national uniformity
that enhances the effectiveness of congressional policy.” Given the liberties state courts, and the
Supreme Court, have taken with the plain language of existing law, the new legislation and the
legislative history would have to leave absolutely no doubt about its import and intent and leave
no room for courts to reasonably misconstrue its provisions. Such legislation is also needed to
give those who serve our country some degree of justice and assurance that their earned benefits
will be protected from improper court-ordered seizure or attachment. It might be expecting too
much to anticipate that a more ironclad law would reduce litigation and save veterans and the
state and Federal governments expenditures for litigation, but that is also a worthy goal. Should
Congress agree tha epilation is needed, we believe there are several factors and principles

deserving

Although the DAV has a current resolution that supports legislation to amend the law to
make the administrative apportionment process the exclusive means by which veterans’ benefits
can be awarded for dependents, we certainly advocate protections for veterans in any law that
‘would permit courts to make such awards, if Congress takes that course. It is in that vein that we
make the following observations and recommendations.

We should never lose sight of the fact that itis the veteran who, in addition to strictly a
Joss in earning power, suffers the pain, limitations in the routine activities of daily life, and the
other socal and lifestyle constraints th result from disability. ‘The needs and well-being of the
veteran should always be the primary, foremost, and overriding concem when considering claims
‘against a veteran's disability compensation. The moment we let that objectivity become obscured


107

TESTIMONY OF PATRICLA BRUCE

NATIONAL DIRECTOR
WISE
Women in Search of Equity for Military in Divorce

Presented before the
HOUSE VETERANS’ AFFAIRS COMMITTEE
5 AUGUST 1998

Mr. Chairman, and members of the Committee, I am Patricia Bruce, National Director
of WISE, a nonprofit all volunteer association advocating equity for military members
in divorce,

On behalf of myself, Board of Directors and members of WISE, we thank you for the
opportunity to present to you our views and comments regarding various issues that
affect the members of the Uniformed Services.

The lack of clarity of the Uniformed Services Former Spouses’ Protection Act (USFSPA)
causes a great deal of misinterpretation by the state courts. This ill-defined law places
military members and their former spouses in a situation where there is no consistency
among military divorces. There is no consistency from a state-by-state/court-to-court
standpoint, or from divorce to divorce. The divorces of fifty military members, with
the exact same marital conditions, but whom are each stationed in a different state, will
culminate in fifty different divorce scenarios. This treatment of military members, by
reason of their transient employment, is discrimination.

There are several areas of concern with regard to the Uniformed Services Former
Spouses’ Protection Act, one of which is the manner in which states are dividing
military disability in divorces.

Weare reliably informed that the Department of Veteran's Affairs does not take lightly
the determination of disability for any member of the Armed Forces. Application for
disability is scrutinized very carefully and the military veteran or retiree must undergo
strict physical examinations to determine their eligibility.

1 WE


92

even a limited community property concept.....moreover, the application of
‘community property principles to military retired pay threatens grave harm to clear
‘and substantial federal interests.” Notwithstanding this warning, Congress not only
inserted the federal government into a process (viz. divorce) historically reserved for
the states, but flagrantly subverted the court's decision by backdating the legislation
to one day before McCarty. Some constitutional lawyers might call this “ex post facto
law" which is prohibited.

Because it is poorly crafted, the USFSPA's inequities may be attributed--in about
equal measure—to what it says as well as to what it doesn't say. This results in the
following inequities:

* The USFSPA is a ‘permissive’ iaw in that it states that "a court MAY
treat disposable retired pay either as property solely of the member or of the member
and his spouse.” However, an overwhelming majority of courts has treated ‘may’ as
‘shall’. The USFSPA limits the amount of retired pay which can be awarded as
property to 50 percent, but it does not preclude the contemporaneous award of
alimony and child support. Consequently, a service retiree may lose all of his or her
retired pay in a divorce action. The USFSPA provides that up to 65 percent of retired
pay may be garnished by the government. Payment , out-of-pocket, of the remaining
35 percent is legally enforceable.

* Since the USFSPA was imposed without warning and was not
grandfathered, the lifestyles and plans of most already-divorced military members
were totally derailed. In cases where divorce was being considered, the USFSPA
Provided an incentive to terminate the marriage.

* Although the conference report on the USFSPA stated that Congress
did not want the law to be applied retroactively, this was not specified in the
legislative action. Consequently, thousands of pre-1982 divorces were reopened and
awards of retired pay, including arrearages, were made. The result was bankruptcy
for many retired military members. This was not fixed until the law was amended in
1990. Even then, however, payments to ex-spouses involved had to be continued for
two more years: until November, 1992. No restitution was made and even those who
had been forced into bankruptcy did not receive so much as an apology. Let me add
that this is the ONLY change to the law made since 1982 which has benefited military
retirees—and that to resolve a problem which shouldn't have occurred in the first
place.


180

Under long-standing law, veterans’ benefits are supposed to be exempt from the claims of
third parties. Laws dating back to at least 1924 provide that veterans’ benefits are exempt from
taxation and the claims of creditors. “[C]ompensation, insurance, and maintenance and support
allowance payable under Titles II, III, and IV, respectively, shall not be assignable; shall not be
subject to the claims of creditors of any person to whom an award is made under Titles II, HI, or
TV; and shall be exempt from all taxation.” World War Veterans’ Act, 1924, Pub. L. No. 68-242,
§ 22, 43 Stat. 607, 613. That provision was replaced and broadened: “Payments of benefits due
or to become due shall not be assignable, and such payments made to, or on account of, a
beneficiary under any of the laws relating to veterans shall be exempt from taxation, shall be
exempt from the claims of creditors, and shall not be liable to attachment, levy, or seizure by or
under any legal or equitable process whatever, either before or after receipt by the beneficiary.”
Act of Aug. 12, 1935, Pub. L. No. 74-262, § 3, 49 Stat. 607, 609 (codified at 38 U.S.C. § 454a).
Although there have been several amendments relating to other matters, this language pertaining
to the exempt status of veterans’ benefits remains essentially the same today. The current
iteration of this statute, codified at 38 U.S.C. § 5301, provides: “Payments of benefits due or to
become due under any law administered by the Secretary shall not be assignable except to the
‘extent specifically authorized by law, and such payments made to, or on account of, a beneficiary
shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable
to attachment, levy, or seizure by or under any legal or equitable process whatever, either before
or after receipt by the beneficiary.”

This law provides three separate exemptions: (1) “from taxation”; (2) “from the claim[s]
of creditors”, and (3) from “attachment, levy, or seizure by or under any legal or equitable
process whatever.” (Emphasis added.) These exemptions apply to benefits “due or to become
due,” “under any law administered by the Secretary,” and “either before or after receipt by the

iary.” Inarguably, this language is clear and emphatic so as not to be misunderstood, and
intends a broad exemption and protection against diversion of veterans’ benefits to persons other
than the veterans entitled. However, by their own judicially created exceptions for purposes of
support payments and alimony, the courts have undermined and subverted the protection
Congress granted veterans. These strained, convoluted, and inconsistent pronouncements by the
courts make it apparent the courts changed the law to meet their own notions of what the public
policy should be.

When creditors have sought to seize veterans’ benefits, the courts have generally enforced
the provision that exempts such benefits both before and after receipt. For example, in Culp v.
Webster, 25 Cal. App. 2d 759, 762, 70 P.2d 273, 275 (1937), the court said:

Finally, the words “either before or after receipt by the beneficiary” put an end to
all arguments, such as have been made under similar exemption statutes, on the
question whether the exemption continues to cover money paid to the veteran after
he has received it. Plainly, it does, under the statute, so long at least as the money
is retained by the veteran or held for him by some depositary.

In Porter v. Aetna Casualty and Surety Co., 370 U.S. 159, 161-62 (1962), a case involving an
action against a veteran by a creditor, the Supreme Court of the United States, citing the


183

that benefits are exempt from support claims under 38 U.S.C. § 3101. . .. Whatever the effect of
any exemption, we think it does not prevent consideration of Federal benefits in determining the
amount of support to be ordered.” Of course, if the amount of support requires that the veteran
pay part or all of it from his compensation, the exemption has necessarily been breached, and this
court’s pretending otherwise is blatantly disingenuous. Incidentally, veterans’ benefits do not lose
their exemptions merely because they are commingled with other funds. E.g., Wilson v. May, 169
Miss. 281, 152 So, 878, (1934); Appanoose County v. Henke, 207 Iowa 835, 223 N.W. 876
(1929).

Because military retired pay is deemed to be property which is divisible between the
parties in a divorce action and because veterans sometimes waive military retired pay to receive
VA disability compensation in lieu of the retired pay, the courts have addressed the § 5301
exemption in the context of property divisions. In Texas, a community property state (in
community property states, the property acquired by either spouse during the marriage is the
property of both spouses and is generally divided equally between them in a divorce), the courts
have held the exemption in § 5301 applies against division of marital property in a divorce action.
In Ex Parte Johnson, 591 S.W.2d 453 (Tex. 1979), the veteran was in receipt of VA disability
‘compensation in lieu of military disability retired pay he had waived to receive the greater VA
amount. The court held that, under the preemption doctrine, the Supremacy Clause of the United
States Constitution preempted the state court’s order dividing the veteran’s compensation with
his divorced wife. The court held that the award of 50% of the veteran’s future compensation
“amounts to a seizure” and “conflicts with the clear intent of Congress that these benefits be
solely for the use of the disabled veteran.” Johnson, 591 S.W.2d at 456. The Court held that
veterans’ benefits could not be treated as “property.”

Ina similar case, Arrambide v. Arrambide, 601 S.W.2d 197 (Tex. Civ. App. El Paso
1980), a former wife sought partition of the veteran’s military retirement benefits. The veteran
claimed to have waived his retired pay to receive VA benefits and relied on the exemption in then
§ 3101. The court held that to the extent the lower court had awarded disability benefits to the
spouse, it erred because Federal law prohibited such award.

In Ex Parte Burson, 615 S.W.2d 192 (Tex. 1981), the veteran had, after the court
awarded part of his military retired pay to his former spouse as a property division, waived his
retired pay to receive VA compensation. The court held that the divorce decree could not
prohibit the veteran from making the election to receive exempt disability compensation as
permitted by Federal law and that Federal law preempted the courts from requiring the veteran to
satisfy the award to the spouse out of his compensation. The court said that “Federal preemption
of veterans benefits for disability does not leave room for their defeat, either by implication or
indirection.”

A New Mexico court, in Miller v. Miller, 96 N.M. 497, 498, 632 P.2d 732, 733 (1981),
followed Texas law (because the retired pay was earned in Texas) that veterans” benefits received
in lieu of the retired pay through a waiver are not divisible or assignable as community property.
However, the Miller court, without addressing the exemption in § 5301, held that alimony could
properly be awarded, even though the source of funds for its payment was disability


60

detail as other officers are, who are subject to the rules
and articles of war, and may be tried, not by a jury, as
othes citizens are, but by a military court-martial, for
any breach of those rules, and who may finally be dismissed
on such trial from the service in disgrace, are still not
in military service.”

Other Courts upheld the earlier decision. In Lemly v.
United States (109 Ct.Cl. 760,763 (1948)) the Court stated:
“Retirement pay ... is a continuation of active duty.” Nearly 20
years later on March 16, 1976, the U.S. District Court, Northern
District of California, supported the judgment that military
retired pay is “reduced pay for reduced but continuing service.”
In October 1978 the U.S. Court of Appeals for the Ninth Circuit
arrived at the same result as in the Lemly case: “Retirement pay

.. is a continuation of active duty.”

Additionally, the Internal Revenue Service (IRS), through
the Federal Government’s issue of W-2P Forms, identified military
retired pay as separate from ‘pensions and annuities.’ And the
Subchapter on Forfeiture of Annuities and Retired Pay, USC 5,
8311, defined military retired pay separately from federal
employees’ annuities. Even the Encyclopaedia Britannica of the
time noted that military retired pay was different from ‘public
employee pensions,’ “... they (military retired pay measures)
continued a certain portion of pay.”

THE BEGINNING

For some years prior to 1977, a few States, then numbering
no more than 8, had developed community property laws. Some
treated military retired pay as divisable upon granting divorces
involving military personnel. In 1977, two noncommunity property
States, Michigan and New Jersey, adopted the concept. Colorado,
however, had ruled in 1975 that military retired pay was not
subject to a division because it was not the result of a
‘contributory plan.’

The Montana Supreme Court also took the position that
military retired pay, like a private pension, could be considered
vested property and was divisible under State law. Oregon’s
Court of Appeals ruled that the retired pay of a Foreign Service
Officer could be assigned to his former spouse while he was still
employed. Payments would begin after retirement.


56

TROA’s Testimony is supported by the following organizations:

Air Force Association
Army Aviation Association of America

Association of Military Surgeons of the United States

Commissioned Officers Association of the US Public Health Service, Inc.
CWO & WO Association US Coast Guard

Enlisted Association of the National Guard of the US

Fleet Reserve Association

Jewish War Veterans of the USA.

Marine Corps Reserve Officers Association

National Guard Association of the US

National Order of Battlefield Commissions

Naval Enlisted Reserve Association

Navy League of the US

Reserve Officers Association

The Military Chaplains Association of the USA

‘The Retired Enlisted Association

‘The Retired Officers Association

United Armed Forces Association

USCG Chief Petty Officers Association

US Army Warrant Officers Association

Veterans of Foreign Wars


18

of Federal law governing Federal retirement plans, and their
former spouse protection sections.

The present treatment of military retired pay is inconsistent with
treatment afforded Federal civilian retirees under central intel-
ligence agencies and foreign service retirement laws. The law gov-
erning how military retired pay is treated in divorce is not even re-
motely comparable to those Federal civilian plans, and should at
the very least, be consistent with foreign service and CIA, whose
duty assignments have been likened by Congress to be very simi-
lar. By altering the scheme under which military retired pay is di-
vided in divorce by bringing military retired pay in line with CIA
and foreign service, the problems inherent within the broad deci-
sion-making authorities of the States would be eliminated.

While this is a very emotional and complex issue, Congress has
a distinct opportunity to correct the inequities that face our mili-
tary in divorce by aligning the division of military retired pay and
divorce awards with that of other Federal plans. Many of the issues
of concern to military members and former spouses could be re-
solved by this realignment. Realignment would eradicate the prob-
lem surrounding remarriage, statutory entitlement, statute of limi-
tations, duration of marriage requirements, jurisdictional issues,
and violations of the military member’s protection under the Sol-
dier and Sailors’ Civil Relief Act.

The discriminatory divergence between civilian Federal and mili-
tary laws as they pertain to divorce could be expunged, enabling
all military members and former spouses to know that their di-
vorces are treated in an equal manner with their civilian Federal
counterparts. The discrimination rampant from one military di-
vorce to another due to the capricious laws of the 50 States will be
erased, and equal justice under the law will prevail.

There is simply no reason why we should treat men and women
who serve honorably in our uniformed services, any less favorably
than men and women who serve in the foreign service or CIA. On
behalf of our military members, active duty, reserve, retired, and
national guard, we thank you for your consideration of this much-
needed oversight. Thank you.

{The prepared statement of Ms. Bruce appears on p. 107.]

The CHAIRMAN. Thank you, Mrs. Bruce.

Are there questions? ‘Any questions?

Thank you very much for your testimony. You made it very clear
that there needs to be some changes made and we may ask you to
respond to some written questions if you would for the record, later
on.

Mr. AULT, We'd be pleased to, Mr. Chairman.

The CHAIRMAN. Thank you sir. Thank you. If we could have
panel three come up.

I will remind you that your entire statements will be included in
the record. Our first witness is Joyce Raezer, senior issues special-
ist at the National Military Family Association. You may proceed.


al

treatment comparable to the treatment of remarried former spouses of Foreign Service
and Central Intelligence Agency retirees.

SURVIVOR BENEFIT PLAN INEQUITIES

Retired members of the armed forces entitled to retired pay are eligible to participate in
the Survivor Benefit Plan (SBP). Surviving spouses under age 62 receive 55 percent of
gross retired pay (or some lesser selected amount) and survivors 62 or older receive a
survivor annuity equal to 35 percent of gross retired pay (or some lesser selected
amount). The retired pay of participants in the SBP is reduced by 6.5 percent of gross
retired pay (or some lesser selected amount). The election to participate in SBP is
made at the time of retirement. A former spouse is eligible to receive benefits under the
SBP. There are several inequities and inappropriate limitations regarding SBP for
former spouses.

Payment of SBP Premium

‘The USFSPA defines disposable retired pay as gross retired pay less amounts
deducted because of an election to provide an annuity to a spouse or former spouse to
whom a payment of disposable retired pay is being made.” The effect of this definition
is that the economic burden of SBP premiums is on the recipients of disposable retired
pay in the same proportion as these recipients receive disposable retired pay as marital
property. If a former spouse receives 25 percent of disposable retired pay as the
former spouse's share of disposable retired pay as marital property and a retired
member receives 75 percent of disposable retired pay as the retiree's share of
disposable retired pay as marital property, the retiree is paying 75 percent of the
economic burden of SBP and the former spouse is paying 25 percent of the burden.
Yet the former spouse receives all of the benefit of SBP participation.

In recognition of these economics many state courts direct a former spouse to pay the
entire cost for providing a SBP benefit to the former spouse. in fact, the Defense
Finance and Accounting Service has reported that nearly fifty percent of all divorce
decrees require the former spouse to pay for the costs of an SBP annuity for the former
spouse.

PROBLEM: The USFSPA does not permit compliance with court orders directing a
reduction in amounts paid to a former spouse to pay for SBP. This is because the only
amount of retired pay that may be divided as marital property --- disposable retired pay
~-- already reflects reductions in retired pay for participation in SBP. Since disposable
retired pay already reflects reductions for SBP before any division of retired pay as
marital property, the economic burden of SBP is paid by the retiree and the former
spouse in the same proportions as their respective shares of retired pay as marital
property.

? 10 U.S.C. §1408(a)(3)(D).


51

An increase in the amount of disposable retired pay payable under a divorce
decree from 18 percent to 40 percent to offset a reduction in disposable retired
pay resulting from an increase in disability compensation was not considered to
be improper because the increased amount did not exceed the 50 percent limit
under the USFSPA.

SOLUTION: The USFSPA should be amended to limit the amount of retired pay that
may be treated as marital property to 50 percent of the amount of retired pay
considered eamed during a marriage and to prohibit payments that are considered
payments in lieu of disposable retired pay.

WINDFALL --- DIVISION OF MILITARY RETIRED PAY BASED ON RANK AND.
YEARS OF SERVICE AT RETIREMENT RATHER THAN RANK AND YEARS OF
SERVICE AT DIVORCE

Aithough principles of community property and equitable property terminate a marital
interest in property at the time the marriage is terminated, the application of this
principle to a division of military retired pay as marital property is far from certain. An
equal division of disposable retired pay (unreduced as a result of disability or other
circumstances) should only occur in circumstances where the marriage has continued
for the entire period of service on active duty creditable for retired pay purposes.

PROBLEM: The problem arises whenever the period of service is greater than the
length of the marriage. Assuming the rank at divorce is also the rank at retirement, a
division of retired pay on the basis of years of marriage while performing service
creditable for retired pay purposes should produce a division of retired pay where the
member receives a percentage of retired pay greater than 50 percent and the former
spouse receives a percentage of retired pay less than 50 percent --- an unequal division
~-- yet many courts award a 50-50 split in these circumstances.

Divorce while on active duty may occur at a rank other than the rank at which the
member ultimately retires. In many cases, courts provide a formula approach that
merely looks to years of marriage while performing creditable service, without
consideration of the disparity in rank or pay grade between the time of divorce and
retirement. This is particularly inappropriate in cases where continuing military service
was a factor leading to the divorce. Unfortunately a number of state courts have
concluded that federal law does not preclude a division of disposable retired pay that
could result in the division of post-divorce increases in retired pay, even though such
increases in retired pay would be considered separate property in most circumstances.

In addition, as explained above under “Deficiencies in the Uniformed Services Former
‘Spouses’ Protection Act,” supra, the USFSPA requires court orders dividing disposable
retired pay as marital property to be expressed as specific dollar amounts or as a
percentage of disposable retired pay. These requirements make it extremely difficult


80

L TERMINATION OF SPOUSAL INTERESTS UPON REMARRIAGE

Section 2 of the bill is substantively identical to H.R. 572, which was considered and rejected by
Congress in 1990, The proposal would undo awards of military retirement benefits as property to
spouses who have remarried or who remarry in the future. For a number of legal, public policy, and
constitutional reasons, this proposal should be rejected.

‘The proposal would essentially eliminate the status of military retirement benefits as property, which
would pre-empt the law of every state in the Union. At present, in all states, property divided in a
divorce decree remains in the possession of the person to whom it is awarded, irrespective of that
person’s future behavior or status. I am aware of no state that permits a “penalty” of removing
Property from one party and giving it to the other in the event of remarriage, by common law or
statutory law.

Essentially, this proposal would convert all awards of military retirement benefits as property into
alimony awards, by subjecting them to the same termination events, This is not a good idea, because
the basis of allocating property rights upon divorce is different from the analysis of whether, how
much, and for how long alimony should be awarded from one spouse to another.

State law conceming property distributions would be greatly impaired if the essential nature of such
a valuable federal benefit was recharacterized as proposed. It would make the treatment of military
retired pay —- and military personnel ~ very different under state law from the treatment of all other
persons, including other federal employees. The primary effect of this proposal would be to increase
the number of former military spouses who received no share of the most valuable property right
created during their marriages. This would wreck havoc upon the balancing of interests involved
in state court divisions of marital property throughout the country, and would increase the difficulty
and uncertainty of litigation everywhere.

The 1979 and 1982 resolutions of the American Bar Association clearly stand for the proposition
that all deferred compensation derived from federal employment should be subject to state property
and divorce law. This proposal would create a result directly contrary to that ABA policy.

The question, looked at another way, is whether there is anything so critical and unique about
military retirement benefits that would justify over-ruling the property distribution schemes of all
fifty states. In considering that question, it is worth noting that the United States Supreme Court --
with the approval and urging of the various organizations of military members and retirees -- has
concluded that military retired pay is deferred compensation, so that it cannot be taxed by the states
any differently than other federal or state retirement benefits.’ The Court found that there were no

7 See Barker v. Kansas, 503 U.S. 594, 112 S. Ct. 1619 (1992). Previously, the Court had ruled
that a state could not tax federal Civil Service retirees if it did not also tax recipients of state
retirement benefits. See Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 109 S. Ct. 1500 (1989).

3.


142

Statement by Lieutenant General Normand G. Lezy
Deputy Assistant Secretary of Defense
(Military Personnel Policy)

Mr. Chairman and members of the Committee, thank you for the opportunity to appear
before you to discuss garnishment of benefits paid to veterans for child support and other court-
ordered family obligations. I am accompanied by Mr. Rodney Winn, Assistant General Counsel,
Garnishment Operations, of the Defense Finance and Accounting Service.

The Department of Defense has long been an advocate of encouraging parental child
support and is committed to ensuring that child support obligations are met. For more than
twenty years the Department of Defense has been required to gamish the pay of retired military
members to enforce child support. President Clinton’s Executive Order 12953 of February 27,
1995, called on all Federal agencies to become “model employers” in the area of child support
enforcement. This was reinforced with the passage of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996. The Department of Defense supports and complies
with the recent improvements in the law on enforcement of parental child support.

Title 42 of the United States Code, Section 659 provides that the Department of Defense
upon receipt of a court order shall garnish retired pay for alimony and child support, Similarly,
title 10 of the United States Code, Section 1408 requires the Department of Defense to make

payments from a member's disposable retired pay based on a division of property if it is

specifically provided for in a qualifying civilian court order. It is the Department’s policy to fully
comply with these statutory requirements, The Defense Firiance Accounting Service is
responsible for implementing these provisions. The Defense Finance Accounting Service has
consolidated its operations and reengineered its processes with new technology. As a result they
are able to process cases more accurately and expeditiously without backlog and delay. The
Defense Finance Accounting Service witness will be addressing these matters.

‘The Department of Defense considers any legislation that would revise the rules relating
to court-ordered apportionment of the retired pay of members of the Armed Forces to former
spouses to be inappropriate at this time. Congress has mandated, in section 643 of the National

Defense Authorization Act for Fiscal Year 1998, Public Law 105-85, November 18, 1997, that


135

EX-POSE

7

(Ex-Partners Of Military Servicemen(women) for Equality)

We wish to express our opposition to the proposed legislation introduced by
Rep, Bob Stunp(R-AZ) relative to reform of the Uniform Services Former
Spouses Protection Act. The key provisions of the proposed legislation -
HLR, #2537 - are as follows:

Retiree payments to a former spouse would cease upon the
remarriage of the former spouse - regardless of age. After a
period of 180 days, this provision would be retroactively enforced
even to those former spouses now receiving retired pay.

Such a provision would strike at the very spirit of the Former Spouse
Protection Act. Retiree payments were awarded by state courts as
property. The rationale used was that the retiree payments were
jointly earned during the period of the marriage. Other properties
jointly earned during a marriage, i.e., real estate, stock investments,
etc., are never forfeited upon remarriage.

Insofar as the retroactive aspect of this proposal, this would deprive
many military spouses of moneys which they and their current spouses
are depending upon; moneys which were presented as life-long awards.

Further, the role of the military spouse is trivialized by this proposal.
The requirements imposed by the military upon spouses (frequent
moves, long periods of separation, etc.) are such that spouses are
usually unable to establish careers and thus ensure self-support in the
event their marriages fail.

Divisible retired pay would be calculated differently. It would
be based upon the pay grade and length of service at the time of
divorce, as opposed to the current method of calculation which is
based upon pay grade and length of service at date of retirement.
Adjustments would be made for COLA.

Again, after 180 days, this proposal is to be retroactive.

This proposed change has the potential for gravely impacting the
financial security of former spouses. It is patently unjust to award a
particular amount of money and to decide at a later date that the
money would be allocated differently.

Additionally, the method of calculation would be a very important part
of any proposed legislation. House Bill #2537 is unclear on how the
calculation is to be made.

In order to make this proposal retroactive, the Defense Finance Center
would have to recompute all amounts being paid. Such a move could



13

Fiscal Year 1998 which directs the DOD to study the subject and
report not later than 30 September 1999. This means that there

be no legislative action in 1999. Since 2000 is an election year,
the earliest we could expect anything from Co ss under the
course now set is 2001, and that’s much too long. We hope that one
of the outputs of these hearings will be things which will it
the DOD to expedite its report. We further hope that members of
Congress will look at the urgency of the problem here and move be-
fore 2001 to do something about it.

Because it is Poorly crafted, the FSPA’s inequities may be attrib-
uted, in about equal measure, to what it says as well as to what
it doesn’t say. I could go into a recitation of its many inequities but
they are cited in my written testimony. I do, however, want to dis-
cuss a consequence of the law which results in its most egregious
abuse.

The root of the Broblems military members are having with
FSPA originates with the classification of military retired pay as
a “pension,” which it, provably, is not. If you have any questions
about that and you need corroboration, you can check with the U.S.
Supreme Court, the General Accounting Office, the Department of
Defense, the Internal Revenue Service, and any bankruptcy court.

When the word “pension” is mentioned, the minds of the Amer-
ican Bar Association and it’s host of domestic relations lawyers
shift, immediately, to thoughts of “equitable distribution,” which is
a matter to be addressed separately from any consideration of ali-
mony or similar forms of spousal support. Note that the FSPA does
not classify military retired pay either as property or a pension. It
says merely that it may be treated as property in a divorce action.

if I were pensioned by Westinghouse, I wouldn’t have to remain
subject to involuntary recall to work at the whim of the company.
I wouldn’t have to continue to comply with the bylaws of Westing-
house. If I went to work with General Electric, Westinghouse
wouldn’t have voice in the determination of my salary. And if I
cominitted a crime, Westinghouse probably would not terminate my
pension. Contrast that with the conditions under which a military
member receives retired pay and, above all, ask if the Westing-
house pension ceases to exist at my death. Mr. Willick, military
“pensions” are different.

Then picture—a situation where after my pension was divided
through an equitable distribution, that portion allocated to me is
further tapp as a source of alimony and child support up to and,
sometimes beyond, 100 percent of my share. That’s what’s happen-
ing to military retired pay, but not to a Westinghouse pension.

if we recognize military retired pay for what it has always been
and still is, reduced pay for reduced current services and an inte-
gral part of the military compensation system, then the word “pen-
sion” has no validity and the abuses which it has engende: 0
away: leaving, incidentally, a still quite lucrative business, in &
vorce court, for ABA mem!

Congress created this mess and Congress should clean it up. It
can do this by restoring fairness and equity to the military divorce
process while still protecting the interests of ex-spouses, Mr. Chair-
man, your sponsorship of H.R. 2537 was a courageous and consid-
erate step in the right direction and we're grateful for it. We both


187

EX-POSE

(Ex-Partners Of Military Servicemen(women) for Equality)

]

More and more state courts are reviewing these cases and are

concluding this is a method of not living up to a prior obligation and
are insisting the member pay the difference to a former spouse. We
feel this proposal in House Bill #2537 is an attempt to prohibit such

‘** The percentage of VA Disability is established with no regard to
the amount of a member’s retired pay. It reflects the percentage
of disability, as opposed to a percentage of retirement, i.e., the
VA Disability for a sergeant is the same VA Disability for a
general. As you can imagine, given the above indicated
circumstances, the impact upon the former spouse of an NCO is
far greater than that of the spouse of a career officer.



55

FUNDING STATEMENT

The Retired Officers Association (TROA) is a non-profit veterans membership
organization, as described in section 501 (c)(19) of the Intemal Revenue Code of 1986.
TROA is registered with the Secretary of the Senate and the Clerk of the House of
Representatives in compliance with the Lobbying Disclosure Act of 1995.

The Retired Officers Association or Patrick J. Kusiak has not received any Federal
grant or contract relative to the subject matter of this testimony during the current or two
previous fiscal years.


2

We are all aware of inconsistent and apparently unfair decisions
made by the States’ courts systems affecting a veteran’s obligation
for alimony and other chil support payments. But uninformed
judges or mistaken decisions should not be the basis for legislation.

I appreciate the time which so many of our witnesses spent in
assembling information for Congress’ use as it deliberates on this
important topic.

would now yield to Mr. Evans, the ranking member, for any
statement he would like to make.

{The prepared statement of Chairman Stump appears on p. 35.)

Mr. Evans. Thank you, Mr. Chairman. I also look forward to the
testimony to be presented today. I welcome the witnesses who will
be testifying this morning and I appreciate the contributions each
of you will make to today’s hearing.

ause of the length and number of witnesses Mr. Chairman,

Tl fc an opening statement.
The CHAIRMAN. you, Mr. Evans. I would remind those
members present and those witnesses, because of the da t ,

we will have to strictly adhere to the 5-minute rule. If you could
limit your testimony to 5 minutes, your entire statement will be
made part of the record.

If the first panel would come up? Mr. Kusiak, and Mr. McKinney,
and Mr. Willick. Gentlemen, thank you for taking the time to be
here today. We have no particular order but Mr. Kusiak, I have
you listed first. So if you would care to start—let me remind those
that are not familiar that a little green light will go on for your
testimony. When that orange light comes on, you have about 1
minute to summarize the rest of your statement. If you would
please, sir?

STATEMENTS OF PATRICK J. KUSIAK, LEGAL CONSULTANT TO
THE RETIRED OFFICERS ASSOCIATION; C.A. “MACK” MCKIN-
NEY, LEGISLATIVE COUNSEL, FLEET RESERVE ASSOCIA-
TION, AND MARSHAL S. WILLICK, ATTORNEY, AMERICAN
BAR ASSOCIATION

STATEMENT OF PATRICK J. KUSIAK

Mr. Kusiak. Yes, sir. Thank you very much.

The CHAIRMAN. You may commence any time you see fit.

Mr. KusiAk. Thank you, Mr. Chairman and distinguished mem-
bers of this committee.

The CHAIRMAN. If you could pull the mic just a little closer,
please sir?

Mr. Kusiak. Yes, sir. Before I begin, I’d like to indicate that
other associations have joined The Retired Officers Association in
my testimony here today and I'd like to submit that list for the
record.

The CHAIRMAN. Certainly, without objection.

(See p. 56.)
Mr. Rustax. I’m pleased to be here this morning to provide some
observations Tegardin ig Federal laws related to garnishment of vet-
erans’ benefits for child support and court-ordered family obliga-
tions and the views of The Retired Officers Association on these
matters. I’m going to try to limit my comments to 5 minutes as you


174

and then return when he retires and surprise him with an introduction to the USFSPA and your lawyer!

If, however, you are married for a 10-year period that coincides with your spouse's military service, you
are entitled to receive your chunk of his retirement pay directly from the government pay offices. You
won't have to deal directly with an embittered former spouse to get your money (the Defense Finance and
Accounting Service-DFAS and Congress will consider your ‘service’ more important than that of your
former military service member and mate) In addition, the payments to vou will be based on the rank

fo retires the div (divorce at lower rank,
0 1o college, and eolect later when the former spouse retires ata higher rank). This ensures your future
as it boosts the ‘share’ to you based on any promotions your former mate receives following your divorce.
But, It gets even better... .You may also marry and divorce more than one military member (not at the
same time, ladies don't be greedy now) and collect a share of retirement from each of them, thereby
building a substantial nest egg for your golden years. Those of you who are crafty and sharp may even
require in the divorce proceedings that the military member maintain life insurance policies (see Important
Details, Item 7, below).

Yes ladies, Marry a military member today, get divorced, and then marry the one you really,
aaaah...love,..another military member (even repeating the whole procedure if you want) or a ci
(and settle down) it makes no difference to Uncle Sam!

Important "How to do it" Details .. .
First: Planning is most important

Second: Build a trusting relationship with your service member. He will not suspect a thing as he will be
busy with his military career, Be sure you stay married to your mate for at least 10 years!

Third: It is very important that you build a trusting relationship in order to support your mate and his
career. Be exuberantly happy about military life because you must entice him to go for 20 years! Career
status is obtained upon the second enlistment, the 6th to 8th year of service. After he is almost half way
to retirement and signed his enlistment contract obligating him on the 6th or 8th year to another 4 year
term it would be doubtful that he would get out once you've divorced him. You will receive a portion of
his retirement pension based upon this formula: (time in years your marriage coincides with his
enlistment) X (his pension dollar amount/rank when he retires. NOT at the time of divorce) X (0.5) take
that total and divide it by the number of years he spent in the military. For example: He is 2 years in the
service (half way through his first hitch and an E-3 pay grade) when you get married. You support his
career. When his first hitch is up he enlists for the second. On the 8th year you support him so well that
he signs up for the third enlistment obligating him to 12 years (and most likely at least 20 years. He won't
through the past 12 away!), On the 12th year you watch your 10 years of service time and marriage come
up. You get him to frst reealist gain obigating him to"16 years and then surprise him with divorce
papers. You leave and go to college (or mommy) having 0
service and marriage. He is devastated but stays in, he fas to, plus it is the only thing he has that i
stable now. On his 16th year, realizing he has only 4 years to go for retirement, he stays in, He retires
with 20 years service as an E-8 (about $1400/month). You come back (with your lawyer of course) and
surprise him (after being gone for 8 years) with a lesson in the USFSPA (he will not know anything about
it because the military does not tell their career service people about it). This is what you will get: (10 yr.)
X ($1400) X (0.5) divided by (20) equals $350.00. You will receive at least this amount per month (for
YOU) for the rest of your life (the judge may award you more based on child care and alimony too--it is


163

Recommendations

Based on all of the concems presented. NCOA offers the tollowing recommendations to
this committee for consideration:
0 Direct that VA disability compensation be fenced trom any USFSPA property

settlement awards.

Although it questions the classification of military retired pay as property in
divorce actions. NCOA recommends that USFSPA awards be terminated upon.
remarriage just as SBP annuities are terminated upon remarriage prior to age

33,

Establish a 10-vear marriage requirement to be even eligible under the

USFSPA.

Eliminate the “windfall” advantages of the current USFSPA by direc .ng that
all property awards under the act be based at the grade and income of the

military member at the time of divorce and not the time of retirement.

°

But most important of all. make it possible for every military retiree to be
treated the same all every other American in a divorce court and resolving all
the related questions and problems associated with the USFSPA by simply
repealing the wet. The playing field on which military divorces are played on
must be leveled in the interest of fairness.

‘Thank You


72

cannot go after anybody’s salary or anybody’s pension or anything
else.”

Early in the debate, Schroader advised her audience that the
amendment “simply returns to the State courts the authority to
treat military retired pay as it does other public and private
pensions.” The opposition should have caught this and countered
with, ‘the States never had the authority to divide military
retired pay from the beginning.’ (See pp 8-9)

Subtleties also were employed by the Schroeder-Hance-
Whitehurst team and its supporters. Some are quoted below
(Underlines supplied) :

+ “I am very saddened that we cannot — give military
spouses at least equal rights with Foreign Service and the CIA-
but to not do anything would be a tragedy and really put (mili-
tary spouses) in the worst of all possible positions.”

+ “I think we should give military wives at least equal
xights with Foreign Service spouses and CIA spouses.”

+ “I am very saddened that we cannot give military

spouses at least equal rights with the Foreign Service and the
cra.”

The key words in each of the above statements were, ‘at
least equal rights with Foreign Service and CIA spouses,’ but
apparently equity never played a part in the Schroeder-Hance-
Whitehurst amendment. Despite assurance that her amendment was,
‘absolutely (the) bare minimum,” was not “breaking new ground,”
nor does it “put former military spouses in a more advantaged
position ...,” the statements made throughout the debate by
Schroeder and company veiled the real intent of the amendment to
authorize enhanced benefits for military spouses. At least Rep.
William Ford was honest enough to acknowledge this when he
boasted, "I think (the Schroeder amendment) is far superior, for
example, to what we ended up doing with the Foreign Service
officers.”

Nichols warned the assembly that there were “uncertainties,
ambiguities and potential problems” in the Schroeder amendment
and that he had “some very significant reservations” concerning
its implications. Rep. Don Mitchell cautioned: “Equity, I feel,
is the theme ... not just equity for divorced spouses. Even

14


27

process to address significant inequities targeted uniquely against
military veterans may begin.

The previous el members have covered the inequities of the
current law and to save time, we'll not recover that ground. The
Air Force Sergeants Association supports the reforms to the Uni-
formed Services Former Spouse Protection Act proposed in House
Resolution 2537, and believes that these changes are long overdue.
The financial situation caused by the FSPA is unfair and particu-
larly onerous for retired non-commissioned military members. Usu-
ally, former spouses obtain financial security by virtue of their own
income, the income of their new partners, or a combination of two
incomes.

By contrast, many mili members who's retired pay has been
divided must support second families. Keep in mind that the mili-

veteran, if retired, is generally reentering the job market in
middle age, many with untransferable skills.

Mr. Chairman, we ask use your considerable influence to
ch the law to one of fairness to all parties concerned. Thank
you for your time.

(The Rrepared statement of Mr. Krebs appears on p. 148.]

The CHAIRMAN. Thank you, Mr. Krebs.

Our next witness is Mr. Ouellette, director of legislative affairs,
the Non-Commissioned Officers Association. Welcome.

STATEMENT OF MICHAEL QUELLETTE

Mr. OUELLETTE. Good morning, Mr. Chairman. On behalf of the
160,000 members of the Non-Commissioned Officers Association of
the United States of America, I would like to thank you for the op-
portunity to present testimony before your committee.

NCOA president and CEO, Roger W. Putnam, asked me to ex-
tend his appreciation to you for bringing this issue of the FSPA to
the table for open discussion.

Mr. an, instead of reading, for a while here let me talk
to you just briefly. Mr. Krebs hit it right on, that we are very con-
cerned about FSPA from the enlisted side of the house. They’re the
ones on the low end of the pay scale. You know, if you're splitting
$3,000 a month in retirement pay, that’s a whole lot different than
when you split $1,000 in retirement pay as opposed to an officer
retiree’s pay. You then must understand that people serving today
are working under entirely different retirement systems that were
in effect at the time FSPA was passed. Consequently, they’re serv-
ing for a reduced benefit that if the Former Protection Act provi-
sions are applied, are going to further reduce what the individual
has in life.

And we're extremely concerned about that and then at the same
time you're seeing the changes in the benefits structure where mili-
tary retirees are being asked to Pay for more of their benefits in
terms of health care, in terms of dental care, in terms of all the
other items. So, an enlisted retiree caught up in the FSPA or in
a divorce, many times is just left destitute and even if they are able
to continue with their life, they find themselves even unable to pro-
tect their family.

Mr. Chairman, as a military retiree, I am personally offended
that the FSPA even exists simply because of its implications. It im-


10

MARK UP, AND INTRODUCTION OF AMENDMENTS

The Jepsen panel approved its version of the former spouses
protection act, 8. 1814, and quickly scheduled it for a mark up
by the full SASC. The opposing military associations reacted by
contacting Senator John Warner seeking his intervention. At the
mark up he moved to have the proposal recommitted to the Jepsen
panel for further consideration. He reasoned that since only one
military organization had the opportunity to voice its objec~
tions, it was only fair to allow the others to have the same
opportunity as did the many groups favoring the bill.

Jepsen and Exon objected and Tower sided with them. How-
ever, before announcing his decision to rule against the Warner
motion, Tower went so far as to state that he was a member of one
of the opposing enlisted military organizations and had heard
their testimony. This came as a surprise to that organization’s
representative who was present for the mark up. He (as well as
the other military organization representatives present) was
astounded when Jepsen boasted that the Subcommittee had four
hearings and they (the military organizations) had a chance to
testify. Exon, the Subcommittee’s ranking minority, echoed
Jepsen. He, too, claimed that everyone had a chance to be heard.

On July 14, 1982, the Senate Armed Services Committee
referred the bill, S. 1814, to the full Senate for consideration.
The very next day, Thursday, July 15, 1982, Rep. Schroeder,

introduced the
Senate version as an amendment to the FY 1983 Defense
Authorization Bill. Twelve (12) days later, July 27, 1962, just
Prior to adjourning for the day, and without a hearing on the new
Proposal, the amendment came to the House floor for consider-
ation. However, debate was suspended until the following morn-
ing.

After Schroeder introduced her amendment on July 15, con-
cerned military organization representatives met the following
week with Rep. Nichols, then chairing the HASC subcommittee
having oversight on the issue. The purpose was to determine a
method to sidetrack the proposal. However, Nichols advised the
group it is an election year and momentum was such that there is
no chance to slow it down. Instead, he placed an offer on the
table to consider amendments to the Schroeder proposal. A number
of suggestions were made, but only a few were accepted. Without
the organizations’ knowledge he incorporated these into an

12


146

IGS interfaces only with the Defense Civilian Payroll System and the Non Appropriated Payroll
System. It will soon interface with the Active Duty and Retired pay systems.

Use of optical imaging has just commenced. The imaging system was installed in June
1998. It, too, is designed to facilitate processing of cases by eliminating the need to maintain and
access the estimated 285,000 paper files currently maintained by the Gamishment Operations
Directorate. Instead, the paralegal, attorney or customer service representative can pull all the
necessary information up on a screen on demand.

‘These technological improvements, plus the use of multi-disciplined teams and increased
performance standards, have had a dramatic effect on the amount of time it takes to process court
orders, while at the same time reducing the number of personnel required to do so. The
Garnishment Operations Directorate currently receives approximately 1 1,000 court orders per
month, approximately 60 percent of which are child support and alimony cases. This translates

into approximately 133,235 payments per month for a total of $51,000,794 broken out as

follows:
GARNISHMENTS
Monthly Statistics
‘Number of Payments* _| Dollars Issued

Military Retirees
- Former Spouse* 45,669 $26,866,431
- Alimony 3,621 1,780,626
- Child Support 1,859 566,539
~Active Duty Army 16,347 $5,115,906
(Alimony & Child Support)
-Active Duty Navy 14,165 $5,141,235
(Alimony & Child Support)
Active Duty Air Force 9,086 $ 3,062,912
(Alimony & Child Support)
-Active Duty Marine Corps 4,330 $ 1,478,566
(Alimony & Child Support)
- Civilian

Child Support 34,197 $ 6,738,509

Alimony 3,961 $ 250,070
TOTALS 133,235 $51,000,794

"*Number of payments does not correspond to the number of members and employees with child support, alimony,
and former spouse obligations. In some cases, an employee or member may have more than one obligation, and in
the case of civilian employees, the payments and dollar amounts above represent a monthly number, whereas the
payments are actually made on a bi-weekly basis.



63

e. Applies to military personnel retiring after
enactment.

f. If divorce occurs while member is on active duty,
the ex-spouse could later claim a portion of retired pay for time
married.

Schroeder went on to introduce successive proposals in the
96" and 97" Congresses. All were similar in content and all
terminated payments to ex-spouses on remarriage before age 60.
In all three bills she used the term ‘pension’ in describing
military retired pay. Two (2) examples are quoted below.

~this bill recognizes that both spouses contribute to
the service menber’s ability to earn a wage and receive
a pension.”

“he major policy question before us is whether pension
plans should continue to emphasize benefits for retired
workers solely?”

Schroeder's quest to have Congress amend Federal statutes so
that military retired pay would no longer belong exclusively to
the service member set off a number of related proposals.

In addition to the Hance bill, H.R. 3677, former Senators
DeConcini and McGovern and U.S. Representative Joseph Fisher (VA)
sponsored legislation that would provide either financial or
administrative support to ex-spouses of service members.

Fisher’s bill required the Department of Defense (DoD) to notify
the military retiree that his or her retired pay would be divided
by a court order, etc., but the retiree would have no recourse to
halt the payments. On the other hand, civil service personnel
were granted an additional 30 days to initiate legal action to
challenge the validity of the order.

Meanwhile, earlier actions by the Executive Branch, the
Civil Service Commission and the General Accounting Office (GAO),
opposed the Schroeder legislative proposals awaiting consider-
ation by Congress.

THE 1980-81 HEARINGS

On May 28, 1980, the late U. S. Representative Bill Nichols,
Chairman, House Armed Services Committee’s Subcommittee on
Military Compensation, conducted a hearing to consider
Schroeder’s bill, H.R. 2817, and the Hance and Fisher proposals.


20

riage of either party. Although most military spouses are unable to
vest in pension plans, some few, thanks to military spouse pref-
erence in DOD civil service jobs, have been able to accrue civil
service retired pay. The proliferation of 401(k) plans has allowed
some spouses to take at least their own deposits in the plans with
them when they are forced to transfer employers due to a military

move.

In community Property States, the civil service retired pay, and
the 401(k), would be divided as property. Upon remarriage of both
parties, servicemembers would "ep their portion of the spouse’s
civil service retired pay or 401(k). Under the legislation before Con-
gress, however, former spouses would lose their portion of military
retired pay. This would be neither fair nor equitable.

Mili spouses give up a great deal of control over their own
lives to the Federal Government when they m: servicemembers.
They're told when to move, where to move, and how many of their
possessions they can take with them. The current pace of deploy-
ments and the long work hours of servicemembers, even when they
are home—we call this the “they only sleep here syndrome”—
means that almost all the needs of the children and the home fall
on the shoulders of the military spouse. They drive the carpool,
handle trips to the doctor and dentist, wait for the plumber, super-
vise homework, often while holding down a job of their own.

The number of military spouses in the work force today mirrors
that of their civilian peers, but little attempt is made to ensure a
spouse’s career progression when a military family is ordered to
move. With a 13 percent active duty pay gap and housing allow-
ances that are 5 to 7 percent behind actual costs due to caps,
spouses don’t have the luxury of delaying employment in a new lo-
cation until they find a position in their chosen field. They must
accept whatever employment is immediately available just to make
ends meet, just to help the servicemember support the family.

Most military families enter retirement with little, if any, sav-
ings. If they own a home it’s normally very highly mortgaged. The
only thing of financial value most have at retirement is military re-
tired pay. How can this not be treated as property? Thank you very
mu

{The repared statement of Ms. Raezer appears on p. 113.]
The CHAIRMAN. Thank you, Ms. Raezer.
Ms. Doris Mozley, Committee for Justice and Equality for the
Military Wife.
STATEMENT OF DORIS MOZLEY

Ms. Mozzzy. Thank you, Mr. Stump. I thank the Committee on
Veterans’ Affairs and the Honorable Bob Stump for inviting me to
speak here today before this distinguished panel.

By way of introduction, I’m Doris Mozley, a 20-year Navy wife,
divorced from retired Captain Paul David Mozley, Medical Corps,
U.S. Navy Retired, after a 30 year marriage. I have been actively
seeking to improve the legal security for military wives since 1980,
when I wrote to each member of the Supreme Court, urging it to
rule in the McCarty case that military pensions be categorized as
community property, and to mandate a rata split at divorce.
I'm still waiting for a reply. I've been working since that time, now


37

WE ARE ALL AWARE OF INCONSISTENT AND APPARENTLY
UNFAIR DECISIONS MADE BY THE STATE COURTS SYSTEM
AFFECTING A VETERANS’ OBLIGATION FOR ALIMONY AND
CHILD SUPPORT PAYMENTS.

BUT UNINFORMED JUDGES OR MISTAKEN DECISIONS SHOULD
NOT BE THE BASIS FOR LEGISLATION.

WE NEED TO DEVELOP A CONSENSUS THAT THE LAW IS NOT
FAIRLY SERVING AMERICA’S INTERESTS.

| APPRECIATE THE TIME WHICH SO MANY OF OUR WITNESSES
HAVE SPENT IN ASSEMBLING INFORMATION FOR CONGRESS’
USE AS IT DELIBERATES ON THIS IMPORTANT TOPIC.


157

Non Commissioned Officers Association of the United States of America

225.N. Washington Street - Alexandria, Virginia 22314 - Telephone (703) 549-0311

STATEMENT OF
SERGEANT MAJOR MICHAEL F. OUELLETTE, USA,
(RET)
DIRECTOR OF LEGISLATIVE AFFAIRS
BEFORE THE
COMMITTEE ON VETERANS’ AFFAIRS
ON
GARNISHMENT OF VA AND MILITARY RETIREMENT

BENEFITS

U.S. HOUSE OF REPRESENTATIVES

SECOND SESSION, 105TM CONGRESS

AUGUST 5, 1998

Chartered by the United States Congress


57

THE MILITARY COALITION

STATEMENT OF

C. A. (MACK) MCKINNEY
Retired Sergeant Major of Marines
Legislative Counsel

FLEET RESERVE ASSOCIATION (FRA)

in behalf of
15 Member Organizations of

THE MILITARY COALITION

before the

COMMITTEE ON VETERANS’ AFFAIRS
U. S. HOUSE OF REPRESENTATIVES

Second Session, 105" Congress

on the

UNIFORMED SERVICES
FORMER SPOUSES PROTECTION ACT
(USFSPA)

August 5, 1998


23

of our service men and women. They are an affront to the decisions
made by judges at the State level.

One of the reasons service-connected disability payments are so
very attractive to former service men is that they are tax-free. An-
other reason is that disability is deducted before it is paid to a
former spouse from what the State court had concluded to be prop-
erty. His disability status reduces her court-awarded property

share.

Our members have also informed us that very often their share
of retirement pay will be reduced because of changing disability
status, and they are unable to determine why this luction has
occurred. They cannot obtain any information about this reduction
because the ivacy, Act prohibits DFAS from divulging the source
of the reduction. Clearly, what constitutes service-connected dis-
ability needs to be further defined before any legislation can
ceed. EX-POSE believes that the Department of Veterans Afiairs
should be fair to all persons involved in these difficult family mat-
ert ared state f Ms. Ward 131]

e prep: ment of Ms. appears on p. 181,

The CHAIRMAN. Thank you, Mrs. Ward.

Are there questions of any members at this time? If not, we
thank each one of you for taking the time to be here today and for
your testimony. Thank you.

If we could now have the fourth panel to come forward please.

First witness on this panel, Mr. John Thompson, Acting General
Counsel, Department of Veterans Affairs. Mr. Thompson.

STATEMENTS OF JOHN THOMPSON, ACTING GENERAL COUN-
SEL, DEPARTMENT OF VETERANS AFFAIRS; LT. GEN. NOR-
MAN G. LEZY, DEPUTY ASSISTANT SECRETARY OF DEFENSE,
MILITARY PERSONNEL POLICY, DEPARTMENT OF DEFENSE

STATEMENT OF JOHN THOMPSON

Mr. THomPpsoN. Good morning Mr. Chairman, and members.
With me this morning is Bob ite, who’s an Assistant Director
of the Compensation Pension Service, Department of Veterans

fairs.

There have been discussions this morning of Federal statutes
which generally prohibit the garnishment of VA benefits to satisfy
debts owed to private individuals. The sole exception, as has been
mentioned this morning, is that the VA disability com ation re-
ceived in lieu of milit retired pay can be garnished in order to
satisfy court ordered child support or alimony obligations. In these
cases, only that portion of the disability compensation representing
waived retired pay is subject to garnishment.

Our payment systems don’t permit us to say how many garnish-
ments are being honored by VA at any one time. However, we con-
ducted a survey in 1992, indicating that only 93 garnishment or-
ders had been processed by the Department during the preceding

year.
It’s also been mentioned that VA benefits, including even com-
pensation received in lieu of retired pay, are also from
court-ordered divisions of property upon veterans’ divorces. How-
ever, the United States Supreme Court has ruled that State courts


144

obligations against an individual, the agency is required to establish deductions from the
individual's pay, not to exceed the statutory limit, in satisfaction of that obligation. The
maximum amount that may be deducted is governed by section 1673(b)(2)(A) and (B) of title 15
of the United States Code, and ranges between 50 and 65 percent depending on whether there are
arrearages or other support obligations. Deductions are to commence within 30 days of the
agency's receipt of the notice or legal process. The agency is not required, however, to vary its
normal pay schedule to respond to the notice or legal process.

Divisions of retired pay as property are processed in accordance with section 1408 of title
10 of the United States Code, the Uniformed Services Former Spouses’ Protection Act
(USFSPA). The USFSPA authorizes state courts to treat military retired pay as property solely of
a military member or as property of the military member and the military member’s spouse in
accordance with the law of the jurisdiction of the court. This authority applies only to decrees of
divorce, dissolution, legal separations or annulments issued on or after June 25, 1981, unless a
court, prior to that date, reserved jurisdiction to treat the retired pay as property of the member
and the member's spouse or former spouse, Payments to the spouse or former spouse are
initiated based on an application and copy of the applicable court order submitted by the spouse
or former spouse and are made from the “disposable retired pay” of the member. Disposable
retired pay is the total monthly retired pay to which a member is entitled, minus certain
authorized deductions, which differ depending on whether the decree of divorce, dissolution,
annulment, or legal separation was issued before or after February 3, 1991. Not more than 50
percent of the member's disposable pay may be payable to spouses or former spouses under the
USFSPA. If the member has already retired, payments to the spouse or former spouse are to
commence within 90 days after the date of effective service of the application. If the member has
not retired, payments are to begin not later than 90 days after the date on which the member first
becomes entitled to receive retired pay. Again, the agency is not required to vary normal pay and
disbursement cycles for retired or retainer pay to comply with a court order.

For divorces, dissolutions, annulments or legal separations effective on or before
November 14, 1986, a spouse or former spouse was not entitled to have his or her award
enforced under the USFSPA if that member retired for disability under chapter 61 of title 10 of

the United States Code. For divorces, dissolutions, annulments and legal separations issued after


TESTIMONY OF FRANK W. AULT
Captain, U.S. Navy (RET.)

EXECUTIVE DIRECTOR
AMERICAN RETIREES ASSOCIATION

before the

HOUSE VETERANS' AFFAIRS COMMITTEE
5 AUGUST, 1998


172

It is on this basis that TREA would like to express its support for House
Resolution 2537, the Uniformed Services Former Spouse Equity Act of 1997, introduced
by Chairman Stump. This legislation would protect both the service member and their
former spouse. Former spouses would still be entitled to up to 50% of retired pay, in
addition to whatever child support and other amounts the Courts deem necessary.
However, payments to the former spouse would cease upon remarriage, VA disability
compensation would be adequately protected and divorce decrees would be final. As
military retirees, we do not believe we are asking for something outrageous, just
something already practiced outside of the military.

Mr. Chairman and members of the Committee, thank you for granting The Retired
Enlisted Association the opportunity to address you today on this most important issue to

military retirees.


44

of disability compensation as a marital asset. Consequently, strengthened and
streamlined federal authority regarding the enforcement of child support obligations
should not have been extended to the enforcement of spousal support obligations
without careful study and, we feel, meaningful modifications.

Using Spousal Support/Alimony to Divide Disability

Since the enactment of the USFSPA, state courts have interpreted and applied the
USFSPA in countless numbers of cases. In many cases, state courts have applied the
limitations of the federal law evenhandedly, consistent with the letter and intent of the
law. However, there have been a substantial number of cases where state courts have
been unwilling or unable to apply the limitations and protections of the USFSPA in a
manner consistent with letter and or intent of the law.

No federal law, including the USFSPA, provides any authority to treat any amount of
disability retired pay based on some measure of disability and disability compensation
from the Department of Veterans’ Affairs as a martial asset. Divorce courts of several
states have had great difficulty reconciling this limitation of federal law regarding
entitlements to disability retired pay and disability compensation and their state laws
regarding the division of deferred compensation as marital property.

PROBLEM: Initially, state courts read the USFSPA limitations regarding disposable
retired pay as limitations on the amounts payable by Service Secretaries but not as a
limitation on what could be divided. After Mansell, where the U.S. Supreme Court held
that disposable retired pay was a limitation on what could be divided, state courts have
used alimony/spousal support awards to circumvent this limitation.

Traditionally, alimony, also known as separate maintenance or spousal support, is a
payment of support from one spouse to a former spouse for a temporary period. The
purpose of alimony was to provide support. It was based on need and the financial
circumstances of the parties. In virtually all circumstances, alimony ended if the
receiving spouse remarried or no longer needed support. In addition, alimony could be
the subject of gamishment and other procedures compelling payment whereas
payments regarding marital property were not collectible through garnishment and other
compulsory processes. To overcome obstacles regarding the division of disability
compensation, some state courts issue orders requiring payments of permanent
alimony in an amount equal to the amount of retired pay that would be payable if the
retiree had not received disability compensation. Payments are required even if the
recipient former spouse remarries. Because the payments are identified as alimony,
they are not considered to violate federal law.

SOLUTION: Alimony has been used to circumvent (by “supportifying’) an otherwise
invalid division of disability compensation. To prohibit such actions, the USFSPA and
the CSEA should be amended to invalidate any obligation to make any court-ordered
payment of alimony that is considered “a payment in lieu of a payment of retired pay as
marital property”. The definition of such invalidated payments would look to the


85

possible to fully and fairly evaluate the impact of the proposal that has been made without examining
that question as well. At this time, then, it is probably best to just say that the proposal as written
would probably have the unintended consequence of causing a number of states to reach the
conclusion that division of retirement benefits at first eligibility was required, rather than elective,
as a matter of equity.

Finally, the structure of the proposal as written would have the probably unintended effect of
transferring some additional property to spouses at the expense of members, in some states. In
Nevada, community property accrues through the date of final decree, as is set out in the proposal.
In California, however, community property stops accruing as of the date of final separation, and in
Arizona, property stops accruing as of the filing of a divorce complaint. The proposal as worded
would force those states to accrue the military retirement benefits as property through the final
decree, even if state law would have otherwise stopped that accrual months or years earlier.

Again, treating this one asset differently, as a matter of federal pre-emption, may distort the ability
of state divorce courts to achieve equity between spouses. This proposal does not appear to
implicate any federal interest that would warrant interference with the domestic relations laws of the
states,

Ill. RESTRICTION OF RETIRED PAY DIVISION TO ACTIONS WITHIN TWO
YEARS OF DIVORCE

Section 4 would pre-empt the law of the substantial number of states (all community property states,
and an unknown number of equitable division states) which allow either party to a divorce to return
to court after divorce, upon discovery that substantial marital property was not adjudicated in the
divorce and remains in the hands of the other party. It could also completely pre-empt the
procedural law of states, such as Louisiana, that issue the divorce decree prior to the property
division,"* In any event, the proposal does not appear to be necessary, given existing state law. For
several legal and public policy reasons, this proposal should be rejected.

Many states have provided the remedy of partition of omitted assets since long before the military
retirement benefits issues arose, and merely treat those assets like any other.'? Presently, every state
has a statute of limitations. Generally, when applied to pension cases, the statute begins to run from
each payment. Thus, even if 20 years goes by, the maximum exposure of a retiree in an action for

1 Some states enter the “final divorce decree” prior to the property division. As written, the
proposal could prevent those states from ever dividing military retirement benefits, if either side
could simply stall the division for two years.

'® See, e.g., Bank v. Wolff, 66 Nev. 51, 202 P.2d 878 (1949); Henn v. Henn, 605 P.2d 10 (Cal.
1980).

-8-


176
"Thanks!"

EEE
Examples of Success...

There are between 60,000 to 84,000 veterans (DFAS statistic) presently affected and financially
ruined. They are unheard from, lost, unable to defend their position, and confused by the
bback-stabbing they have received from their Country, and Congress (just like when the Vietnam
war was going on and this country turned its back on their military... you remember?)
Congressional apathy is good for the divorcing spouse!

‘+ The "Horror Stories" at the web site of the American Retirees Association (ARA) can attest to
your assured success.

Calitornia Divorce Paye: A male who got the shaft! He solicits for money ($1.00) but you have just
screwed one guy (your mate), Don't give him a thing! Screw him too!' That-ta girl!

Other examples are difficult to obtain because this “military-veteran-pension-extortion’ is a
subculture of sorts and information is not readily available. Searching the Internet at various
‘divorce’ web sites and contacting other female ‘friends’ can help

Your best source of information is your local divorce attorney (near any military base) and their
expertise and guidance in dealing with and manipulating the USFSPA. They will help provide you
with an assured future, After all, that's how they make their living!

Visit the Divorce Institute for an Internet instant and easy divorce. No-Fault divorce is in! Marriage
is out! Don't be a fool and trust someone who has spent 20 plus years in the military. Screw-em
now!

* See present on-going military divorce situations at The FLA Military Divorce Bulletin Board. This
will be a very helpful site for you as you can post questions to some of your concerns and not have
to give up your name. Find out about the state he retired to before hand. You could not do better
than to be privy to this valuable source of on-going No-Fault Military Divorce experience.

Warning...

‘+ True Christians will have difficulty in dealing with the above process because though itis true it is
also well...un-Christian! So you may have to deal with your conscience (and God) but you really
ccan get over this as time will cause your past conniving motives to fade and tweaking your attitude
with a new group of FRIENDS and attitudes such as "fend for vourselt” will numb your conscience
and allow you to enjoy yourself. Hold your head up high. look right into that mirror.. and tell
yourself..*T'm a good gir!”..God will forgive me!?

This opportunity does not apply to those married to and/or divorced from CIA, Foreign Service,
and Federal Civil Service employees. It also does not apply to any other civilian employment. It is
unique to the military services only!

Fine print


62

with more than 20 years of active service but less than 30) as a
‘pension.’ The late U.S. Representative Les Aspin used the term
‘pension’ during his attacks on the military retirement system.
Even such military-oriented publications as the

and Navy Times used the word. It wasn’t too long before some
uninformed service members began to refer to their military
retired pay as a pension.

It is of little wonder that the media adopted the misnomer
and used it in such articles to describe military retired pay.
Newspapers had a field day with former U. S. Representative
Patricia Schroeder’s quotes on the plights of ex-spouses not in
receipt of any part of their ex-husbands’ retired civil service
or military ‘pensions.’. William Raspberry of The Washington
Post was one of the first to pick up the Schroeder banner after
she introduced legislation in early 1977 to authorize splitting
retired ‘pensions’ between federal employees and their former
spouses.

THE PROPOSALS

In introducing her first bill, seeking the division of civil
service retirees’ annuities, Schroeder hailed the fact that at
least former spouses of military personnel would be eligible to
receive social security benefits from their military sponsors’
contributions to that program. However, this did nothing later
to dissuade her from going after the retired pay of military
members. She provided ‘heart-rending’ stories for publication in
the Congressional Record of former spouses left without financial
or other support.

Schroeder's initial proposal to divide military retired pay
specified that:

a. Marriage must last for 10 years while the military
member is serving the 20 years to be entitled to retired pay.

b. Division to be prorated on years of service not to
exceed 50 percent of the retired pay. For example, being married
for 20 years while the member was ‘earning’ the entitlement gave
the former spouse a 50 percent share.

c. Member must provide survivor benefits for ex-spouse
unless the latter declines.

d. Payment to ex-spouse terminates upon remarriage
prior to age 60. (Applicable also in her Federal retirees
proposals.)


86

recovery of the spousal share that has been incorrectly paid to the retiree is the period of limitation,
usually six years or less. Some states have gone further, holding that spousal delay beyond the
period allowed by state law bars the action entirely.”

It should be noted, of course, that partition is only granted if the state court makes a finding that one
party is wrongfully keeping money that rightly belonged to the other. So the question is whether
Congress should use the power of federal pre-emption to ensure that one of two parties to a divorce
is permitted to keep property that rightfully belongs to the other.

My review of newsletters from various interest groups indicates that Congress may be substantially
misinformed about the scope of the perceived “problem.” Even in those states in which partition is
allowed, the party against whom an action is brought has the ability to defend based on any equitable
ground that should prevent recovery, such as waiver, estoppel, and laches.” Anecdotal accounts
indicate that “prospective-only” partition is common, if not the norm in these cases. Even when
retroactive partition is not appropriate, it is difficult to conceive of any set of facts that would make
it equitable for one spouse to continue receiving the other spouse's rightful share of the property in
the future, but that is exactly what the current proposal would allow.

In other words, regardless of “horror stories,” partition of omitted assets is a mechanism for
remedying inequity, not a cause of inequity, and it would be inappropriate for Congress, in the
absence of any legitimate federal policy, to cause inequitable property divisions across the country
based on an inaccurate perception of what is really going on in the state courts.

Itis worth remembering that Congress weighed the various policy alternatives in this area just a few
years ago, and came to the conclusion that the states should be allowed to use their own laws as to
all divorces issued after McCarty, while the courts were closed to spouses left with no share of the
retirement benefits prior to McCarty. The House Committee Report stated that the amendments
were an attempt to make a public policy judgment “consistent with the balancing of state and federal
interests that has been the hallmark of this law since its inception.”

See Grieshaber v. Grieshaber, 793 S.W.2d 161 (Mo. Ct. App. 1990) (where wife failed to file
Petition to divide pension for 14 years, despite knowing of its existence, and husband died in the
interim, laches barred the spousal claim to partition the omitted military retirement benefits).

1 See, e.g., Casas v. Thompson, 720 P.2d 921 (Cal. 1986), cert. denied, 479 US. 1012 (1987).
Under California law, the court reasoned that equitable considerations included “general
considerations” as well as specific equitable defenses, in “tailoring” the amount and form of an
award of pre-petition arrearages. The court found Max’s sole support of the children over the years
sufficient consideration, and denied to Virginia any pre-petition arrearages. 720 P.2d at 934-35.

2 See 10 U.S.C. § 1408(c)(1).


121

2

I may be overly pessimistic about our future as a country, but I wonder if the coming
generations of American young men will be willing to sacrifice themselves in a war as the noble
young men of past generations when so many children today do not have fathers around to help
teach them virtuous living and a duty to sacrifice for a higher good. To use an analogy, studies
have shown that one of the mast important variables in the reduction of crime is the certainty of
punishment, not the severity of penalties. I believe the same is true with militry pension sharing--
if'a military member knows for sure he will have to divide with the wife who helped him earn

it, there will be a reduction in the incidence of military divorce which society so desperately
needs.

In summary, I believe itis in society's interest to protect the military wife who serves with
presumption to entitlement as the American Bar Association and the AARP recommend thereby
reducing the rate of divorce as well as the necessity of collecting alimony and child support. I
also believe there will be fewer family breakups if military members know for sure that they will
have to share the major asset of a long military marriage with the wives who helped them earn it,
the military pension,

1 would be pleased to answer your questions
Jai m 4
Doris N, Mozley, Ex-military spouse




124

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31

we believe the Federal Government should let the State courts take
veterans’ benefits without some constraints. The Federal Govern-
ment should exercise some control over the taking of veterans’ ben-
efits to ensure that any awards to third parties are warranted and
proper, to guarantee that veterans’ disability compensation pay-
ments will not be diverted to others for whom they were never in-
tended, or who need them less than the disabled veteran.

For example, we don’t believe a disabled veteran should be re-
quired to pay part of his or her disability compensation to an able-
bodied ex-spouse as alimony. We don’t believe a spouse should be
able to abandon a veteran because service-connected disability ren-
ders that unfortunate veteran mentally ill, and then have the court
award i large portion of the disability compensation to that spouse
upon divorce.

The Federal Government should also exercise control over the
taking of veterans’ benefits to ensure uniformity among the States.
With the States now interpreting the law to suit their own notions
of what should be, there is no uniformity. There are Federal safe-
guards to protect veterans and their benefits from predatory prac-
tices in dealings with third parties such as educational institutions,
and lending institutions in home sales. Congress should do the
same for divorce actions.

Veterans are no less vulnerable to unjust loss of their benefits in
divorce actions than in the purchase of a home, for example. The
States have shown little desire to protect veterans, and clearly
demonstrated that they have little appreciation for the primary

yurpose of veterans’ benefits.

T’ve covered that in the DAV’s recommendation for changing the
law in my written statement so I won’t go into any more detail
here. We urge the committee to consider our suggestion and we ap-
preciate your interest in this issue.

That concludes my statement, Mr. Chairman and I'll be happy to
anew any questions. Mr. § 78

e prepared statement of , Surratt appears on p. 178.

The Gra RMAN, Thank you, Mr. Surratt.

The gentleman from Louisiana, Dr. Cooksey.

Mr. CooksEY. Question, thank you Mr. Chairman. Incidentally,
I would Point out that you have a very brave Chairman, as is obvi-
ous by the absence of a lot of my colleagues. I think they would
rather face the Vietcong or Saddam Hussein than the two ps
that are on opposing sides of this issue today. So—I’m ex-Air Force,
he’s ex-Navy. They deserve some credit. :

I question, if this is a Federal law, would these issues be heard
before adjudicated and a Federal court?

Mr. SurRatt. Not usually. I’m not a lawyer but unless it’s a Fed-
eral question between——

Mr. CooKsEy. Where will it be sir? I’m asking. I don’t know the
answer.

The CHAIRMAN. I beg your pardon?

Mr. CooKsEy. What is the answer to that?

Mr. Surratt. There’s the diversity of citizenship, it would be in
some cases but generally it’s the State court that hears domestic
relations matter.


156

transferrable skills.

Itis unlikely that very many members of Congress who voted for the USFSPA understood
the full implications of reclassifying retired pay as “property,” particularly property which
cannot be sold, bartered, traded, transferred or passed to heirs. Congress did, however, open
the floodgates in describing military retired pay as a “pension,” which itis not. Indeed, if it
were a pension, the military member could retire with no further obligation to the nation.
However, because the retiree remains part of the manpower resource available for recall in
the event of a national need, what she/he receives is more accurately described as “reduced
pay for reduced future service.”

Recruitment and retention are emerging as major problems for the military services. One of
the influential factors is the perception of military members that they cannot count on
Congress to honor commitments which they perceive as having been made. While not the
most important of these, the impact of the USFSPA on military careers is one of them.
‘Simply put, it is time to stop this blatant unfairness targeted solely against military veterans.
Itis time to reform the Uniformed Services Former Spouse Protection Act. Itis time to treat
military members and veterans with the gratitude that they deserve. There was a time when
this nation treated military service as a noble calling. However, the USFSPA, as currently
implemented, is just another way of negatively targeting those who serve. Indeed, nowadays
all too many gestures on the part or this nation discourage military service, and most certainly
discourage a full career to retirement.

‘Mr. Chairman and committee members, thank you for your patience and your attention. We
ask that you do whatever you can to protect the military veteran’s full receipt and protection
(without judicial slight-of-hand) of disability compensation. Work to stop USFSPA
retirement payments upon the remarriage of the spouse; and support the proration of any
USFSPA award to the military member’s grade at the time of the dissolution of the marriage
-- and not at the grade in effect at the time of the military member's retirement, often several

years later.

Mr. Chairman, thank you for this opportunity to discuss an important, often avoided
situation. We ask you to use your considerable influence to change the law to one of fairness
to all parties concemed. As always, this association is ready to support you on matters of
mutual concern.



179

or ability of the states to order veterans to pay spouses, ex-spouses, or dependents from their
veterans’ benefits.

‘Also complicating the issue is the interaction and confusion between four legal avenues
that give veterans’ dependents and former spouses access or claims to veterans’ benefits: (1) VA
can in its discretion administratively award an apportionment from a veteran’s benefits to a
separated spouse or a dependent under 38 U.S.C. § 5307; (2) state courts order veterans to pay,
or award, part of their benefits to dependents and ex-spouses under state laws governing support
and maintenance, and property division; (3).state courts, under authority of the Uniformed
Services Former Spouses’ Protection Act (USFSPA or “the Protection Act”), award part of
veterans’ military retired pay to ex-spouses in divorce actions; and (4) state courts may
apparently, under a specific waiver of sovereign immunity in the Child Support Enforcement Act
(CSEA or “the Enforcement Act”), garnish veterans’ benefits to satisfy obligations for child
support or alimony.

‘The administrative apportionment process appears to be working reasonably well.
Veterans or persons seeking apportionments may contest adverse decisions on appeal to the
Board of Veterans’ of Appeals and the courts that have appellate jurisdiction over VA decisions.
VA has no authority to apportion a veteran’s benefits to a former spouse. Under § 5307,
apportionment can be made to “spouses,” which 38 U.S.C. § 101(31) defines as a person who is
“a wife or husband.” Of course, a dependent child’s apportionment may be paid to a former
spouse as the custodial parent. VA will apportion a veteran’s benefits when the veteran “is not
reasonably discharging his or her responsibility for the spouse’s or children’s support.” 38 C.F.R.
§ 3.450(a)(1)(ii), (c). VA does not apportion a veteran’s benefits where “the total benefit payable
to the disabled person does not permit payment of a reasonable amount to any apportionee.” 38
CER. § 3.458. A veteran’s benefits will not be apportioned where the spouse has been found
guilty of conjugal infidelity, § 3.458(b), or held himself or herself out to be the spouse of another
person, § 3.458(c). In determining whether and to what extent to apportion a veteran's benefits,
VA gives consideration to whether the apportionment would cause a hardship for the veteran, to
the amount of benefits the veteran receives, the veteran’s resources in relation to the resources of
those on whose behalf apportionment is sought, and the special needs of the veteran or
dependents. Ordinarily, VA will not apportion more than half of a veteran’s benefit because that
would constitute an undue hardship on the veteran, and VA will not apportion less than 20% of
the veteran’s benefits because that would not provide a reasonable amount for the apportionee.
38 CFR. §3.451.

The greatest area of concern is actions by state courts in ordering support payments from
VA disability compensation. There is a strong belief, supported by the holdings of some courts,
that such court awards are contrary to Federal statute and congressional intent. Nonetheless,
opposition to these actions have been frustrated by a decision of the Supreme Court that held
veterans” benefits are not exempt from court-ordered support awards, and recent amendments to
the CSEA add more cause for concern. This is one area where Congress should enact legislation
to override judicial interpretation and leave no doubt about the exempt status of veterans’
benefits.


7

tween the spouses in proportion to the extent they were earned
during the marriage since both parties to the marriage contribute
to the marriage, although sometimes in different ways. Sometimes
one person stays home, one person goes to work, whatever. But
that’s the deal that the people make.

The ABA policy is that the treatment by the State courts of mili-
tary retirement benefits should not be impeded by congressional
preemption of State law, so that the State divorce court judges are
allowed to treat military members the same way they treat all
other civilians and Federal employees and State employees.

ing to the individual proposals, termination of spousal inter-
est upon remarriage, I'll quibble with Mr. Kusiak. Now, these as-
sets are assets and no assets anywhere in the United States are
retroactively terminated in the event of remarriage. It doesn’t hap-
pen for any other asset of any kind anywhere in the United States.
It would, without question, cause a great deal of dispossession of
individuals and unsettle established property rights to allow for
termination of retirement benefits division upon remarriage. It
would also make military members be treated differently than ev-
erybody else in the United States which would provide a marvelous
opportunity for creating inequity and confusion all throughout the
tates. State law would be impaired. It would be problematic. That
proposal is directly contrary to existing ABA policy and I strongly
urge that you reject.

I would note that just a few years ago in Barker v. Kansas, the
U.S. Supreme Court, at the urging of the same groups that are
here today telling you that military retirement benefits are not to
be treated as deferred compensation, ruled that military retirement
benefits are deferred compensation. And the reason the military
groups wanted that ruling from the United Supreme Court a few
years ago is that meant they couldn’t be taxed differently that
State employees. So you will find that their characterization of the
benefits, and that goes for the partisans on both sides, tends to be
in direct reaction to where they think their interests are at stake.
The ABA, of course, doesn’t have a partisan stance.

As opposed to my work in the courts, where I try to represent
my client and get the best deal I can in that case, my role here
today is to try to establish what the law should be. And the ABA
has long stood for the position that it should be fair and equitable
to allow States to do the things that they do for spouses to a
marriage,

Turning to—just in summary on the first proposal and I see that
I don’t have much time. So I tell you what, I’m going to skip that
proposal. I’m going to go straight to garnishment.

is committee ought to be aware that is a much smaller ques-
tion, I think, than the committee may be aware. The number of
people affected is, apparently from the research I’ve been able to
do, about less than 100 a year. The total number of cases may be
some thousands although I don’t have a good count. The only time
that the garnishment provisions would come into effect is in the
case where a military member was ordered to pay child support,
did not pay child support, a State court later entered an arrearage
award, and then, usually, the custodial parent of that child tried


139

Statement of John Thompson
Acting General Counsel
Department of Veterans Affairs
Before the House Committee on Veterans’ Affairs
August 5, 1998

Mr. Chairman, and Members of the Committee, | am pleased to be here
this morning to discuss the issue of garnishment of VA benefits for child support
and other court-ordered family obligations.

Federal statutes generally prohibit the garnishment of VA benefits to
‘satisfy debts owed to private individuals. The sole exception is that VA disability
compensation received in lieu of waived military retired pay can be garnished in
order to satisfy court-ordered child support and alimony obligations. In such
cases, only a portion of a VA compensation award representing the amount of
retired pay which has been waived can be garnished. Although ! cannot tell you
today in how many cases we are implementing a garnishment order, a VA survey
in 1992 indicated only 93 garnishment orders were received during the preceding
year.

VA benefits, including even disability compensation received in lieu of
retired pay, are also protected by Federal law from court-ordered divisions of
property upon veterans’ divorces. However, the U.S. Supreme Court ruled in
Rose v. Rose, 481 U.S. 619 (1987), that state courts are not precluded from
setting child support obligations at such levels that veterans would necessarily
have to use some of their disability compensation to meet them.

Garnishment cases are handled by VA regional offices as a coordinated
effort involving the Office of Regional Counsel, the Adjudication Division and the
Finance Division in accordance with the following procedures:

(1) Any court gamishment order received at a VA regional office involving

a veteran who receives VA compensation in lieu of military retired pay

must be promptly delivered to the Finance Officer who is responsible for

establishing the initial withholding of benefits for a potential garnishment.


147

Most significant is the fact that DFAS is able to process and handle a caseload of this
magnitude with virtually no backlog and at a reduced cost. Currently, 99.9% of our cases are
processed within the statutory timeframes discussed above and at less cost to the taxpayer than
prior to consolidation and the BPR implementation.

We believe it is important to constantly strive to improve our ways of doing things. In
that vein, we are currently working with the Baltimore social services (child support) agency
through their agent, Lockheed Martin, to develop the capability for the electronic transmission of
the wage withholding orders for child support and alimony. We expect to begin receiving our
first electronic orders in October of this year. We then plan to expand the aumber of
jurisdictions from which we will receive electronic transmission of orders to include other states
and localities for which Lockheed Martin serves as the child support collection or payment
agency and other states and localities that have their own capability to transmit documents
electronically. We also intend to test and implement electronic transmission of payments for
child support and alimony through electronic funds transfer. We believe electronic transmission
of garnishment orders and payments will greatly enhance our ability to process child support and

alimony payments in the most efficient manner possible.


153

This association receives many phone calls from still-active military members whose former
spouse and new mate prosper, yet anxiously await the retirement of the military member fo
begin collecting part of the hard-earned military member's retired pay for the rest of the
natural life of the military retiree.

‘The USFSPA is unnecessary, uncalled for, and unfair. It uniquely targets the military. In
effect, it imposes “punishment” on the military married member simply because she or he
served in the military profession. There can be no other reason since this act is not imposed
on any other segment of our society. For example, whereas the retired pay laws applicable
to divorces in the Foreign Service or the Central Intelligence Agency provide for the
termination of spousal payments upon remarriage after a certain age, the same does not
apply to military divorces: the dollars keep on flowing.

Section 643 of the FY 1998 Defense Authorization Bill reflected Congress’ growing
awareness that there is a problem here when it directed a Department of Defense study of the
ramifications of the USFSPA and the inequities it thrusts on military members that are not
experienced by others. However, it gave DoD until September 1999 to report back. Phone
calls to DoD to apply the already voluminous data and to expedite its report indicate that
DoD plans to use at least the full time period to begin and complete its report.

USFSPA “Highlights” Unfair to Military Veterans

1. The USFSPA purports to protect disability pay, whether DoD or VA, by specifically
excluding it from the definition of disposable retired pay that can be shared with an ex-
spouse. This protection was reenforced by the U.S. Supreme Court in Manse! v. Mansel in
May 1989. However, state courts are circumventing this in three ways: (1) by ignoring
federal law, (2) by avoiding the award of retired/disability pay as “property” and awarding
it as alimony without regard to the source, even if the member is 100 percent disabled, and
(3) by gamishing it under the Social Security Act, Title 42, which is in conflict with Title 10
on this issue.

Note: There are some USFSPA proponents whose objective is the elimination of the
protection of disability pay. This means that even if long-awaited legislation were enacted
providing for the concurrent receipt of retired and disability pay, disabled military retirees
would find themselves in protracted court battles for an ex-spouse’s share of both.

2. While, the USFSPA states that “a court MAY treat disposable retired pay either as
property solely of the member or of the member and his spouse,” an overwhelming majority
of courts have treated “may” as “shall.” The USFSPA limits the amount of retired pay which
can be awarded as property to 50 percent, but it does not preclude the additive award of

3.


46

the invalid division. On the other hand, a proper division of disposable retired pay
should be enforceable without further litigation. The USFSPA should be amended
to establish certain categories of clearly invalid divisions of disposable retired pay
that are void ab initio and unenforceable by any subsequent court order,
notwithstanding res judicata. Among the categories of invalid divisions of retired pay
is any division of disability compensation.

3. Agreement. The USFSPA should be amended to provide that an agreement of a
member to divide disability compensation is void ab initio and cannot provide the
basis to order any member to make payments of disability compensation as marital
property.

4. Offsetting award. The USFSPA should be amended to specifically prohibit a state
court from considering disability compensation when determining the equitable
division of marital assets. Disability compensation should not be considered an
asset of the disabled member. It may, however, be considered in determining the
respective income of each of the marital partners.

5. Court orders. No court order should be able to prohibit a disabled retiree from
applying for or from waiving retired pay in order to receive disability compensation.
The USFSPA should be amended to prohibit and make unenforceable any court
order prohibiting a disabled retiree from taking any action authorized by federal law
related to disability compensation.

OTHER INEQUITIES
PAYMENTS AFTER REMARRIAGE

PROBLEM: One of the most troubling aspects of the USFSPA is that remarriage of a
former spouse has no effect on the right of a former spouse to receive disposable
retired pay as a result of a court order that divided disposable retired pay as marital
property. One rationale for permitting retired pay to be treated as marital property was
to provide a mechanism to provide for the support of a former spouse of a retired
member of the uniformed services in those few states that did not authorize alimony.

Remarriage extinguishes the obligation for a person to support a former spouse.
Remarriage prior to a certain age also extinguishes entitlement to many federal
benefits, including Social Security widow's benefit, Survivor Benefit Plan (SBP)
payments, and survivor benefits from the Department of Veterans Affairs. Remarriage
also extinguishes entitlement to payments of pension benefits for former spouses for
certain federal employees.

SOLUTION: Amend the USFSPA to terminate the interest of a former spouse in
disposable retired pay as martial property if a former spouse remarries. This would
provide remarried former spouses of retired members of the uniformed services with


6

it creates more loopholes than it cures, and so it has. It deserves
to be repealed, Mr. Chairman or, at least amended to make it equi-
table for both sides.

Thank you very much. I stand ready for any questions.

[The brepared statement of Mr. McKinney appears on p. 57.]

The CHAIRMAN. Thank you, Mr. McKinney.
Mr. Willick from the American Bar Association.

STATEMENT OF MARSHAL S. WILLICK

Mr. WILLICK. Thank you. Mr. Chairman, members of the commit-
tee, thank you for allowing me to present testimony on behalf of
the American Bar Association today. My name is Marshal Willick.
Tm an attorney from Las Vegas, Nevada. I chair—I co-chair the
Congressional lations Committee of the Family Law section of

Le

I have been working in this area for quite a bit of time. Since
shortly after the USFSPA became law, I chaired the committee of
rts made up of former JAG officers and civilian attorneys that
did the comprehensive report to Congress in 1990. Since then, I’ve
handled several hundreds of these cases personally, working for
both sides. I have consulted on some thousands of them. I have lec-
tured and written widely in the field and have completed a text
book on this subject.

My goal, consistent with existing ABA policy, is to recommend
that military retirement benefits be treated by courts in the real
world of everyday litigation in the State courts in a manner con-
sistent with the property distribution laws of those States which,
of course, are designed by those State legislatures to achieve equity
in Property distributions in divorce cases.

ere are two formal statements of policy by the ABA. One was
in 1979, urging that all forms of deferred compensation be allowed
to be subject to State dissolution laws, and the other one in 1982,
in the wake of McCarty, and that was a formal policy, again,
strongly urging specifically that military retirement be made divis-
ible as would any other asset so that military members are treated
like civilian employees of the Federal Government, employees of
State governments, and private citizens all throughout the United

ates.

My own research in this field has made it quite clear that, espe-
cially in military cases, the military retirement benefits are, far
and away, the most valuable asset of most military marriages. So
that if you do not fairly divide that asset between the two parties,
it is impossible to ever achieve an equitable distribution because
there is no possibility of compensating the spouse for the benefits
be accorded to the military member. Simply, wouldn’t be possible.

Td like to turn to the individual proposals after I make a couple
of quick comments about national law. And that is a little tricky.
We have 50 little kingdoms out there and they all do their own
thing. So it is difficult to summarize without somebody being able
to find a technicality that the could quibble with. But, generally,
all 50 States have recognized today that military retirement bene-
fits are roperty, properly divisible between the spouses to a mar-
riage. 50 States have recognized that retirement benefits, gen-
erally, are valuable property rights that should be accorded be-


40

STATEMENT OF THE HONORABLE MIKE DOYLE (PA-18)
Committee on Veterans’ Affairs
Hearing on the Garnishment of Veterans’ Benefits

August §, 1998

I want to thank Chairman Stump for providing this opportunity to discuss the garnishment of
veterans’ benefits for court-ordered family obligations in relation to the Uniform Services
Former Spouses Protection Act (USFSPA). I also want to welcome the distinguished group of
panelists who have been assembled to discuss this important matter.

Without question, living up to one’s responsibilities, whether they be the payment of alimony
or child support, should be encouraged. ‘The determination of the scope of these
responsibilities should be arrived at through a fair and equitable process. While the intent of
enacting the Uniform Services Spouses Protection Act was to ensure fairness in regard to child
support and spousal support, the implementation of this Act has caused a measure of inequality
for a number of male and female retired veterans.

Ihave personally heard from many of my constituents regarding the adverse effect the Uniform
Services Former Spouses Protection Act has had on their lives. Their concerns center around
the treatment of military retirement pay as property during divorce proceedings. By extension,
they do not view the right of an ex-spouse to continue to receive a share of their retired pay
after their former spouse has remarried, or the fact that there is no limitation on when a former
spouse can seek a division of retirement pay, as being either fair or equitable.

It is my hope that the insight brought forth today, in conjunction with the report that is
scheduled to be completed by the Department of Defense, will contribute to the formulation of
viable adjustments that could be made to the Uniform Services Former Spouses Protection Act
that would address the concerns of veterans without creating disadvantages for their former
spouses.



120

Committee for Justice and Equality for the Military Wife

812 Botetourt Gardens
Noxfoli, Virginia 23507
(757) 622-4258

Statement

Before the Committee on
‘Veterans’ Affairs

Committee on Armed Services
United States
House of Representatives

| thank the Committee on Veterans’ Affairs and The Honorable Bob Stump for inviting

me to speak today before this distinguished panel. By way of introduction, I am Doris Mozley, a
twenty. year Navy wife, divorced from retired Captain Paul David Mozley, MC, USN Retired,
after a 30 year marriage. I have been actively seeking to improve the legal security for military
wives since 1980 when I wrote to each member of the Supreme Court urging it to rule in the
‘McCarty case that military pensions be categorized as community property and to mandate a pro-
rata split at divorce . (am still waiting for a reply ). I have been working since that time, now 18
years, in an effort to make it safer to serve our country as a military wife. Our Committee has
hhad some success, but more should be done by Congress to insure that all divorcing military wives
be treated fairly and similarly in domestic matters pertaining to military divorce, no matter what
state the divorce is in. Unfortunately, this is not the case today because often, what a wife
receives of her earned pension- share depends on her ability to raise money to hire competent

legal counsel, having the will to act to protect herself, the vagaries of state law, and, all too
Caen nes of donee rans judge, ‘A good example is the case of Linda Feild, (story
attached) a faithful wife of 24 years whose husband, according to court record, left her for
another relationship. Even though court testimony proved that he went on out-of-town trips with
his new friend, whom he characterized at the trial as his “business partner,” and spent many
nights at her house, Judge Allen Crow, domestic relations judge of Calhoun County Alabama,
ruled that such bebavior on the husband’s part, did not “rise to the level of proof of adultery.”
Linda received no part of the military pension she had helped to earn. Linda now works in the
Ft. McClellan Commissary stacking groceries for little more than minimun wage, has no benefits
from her job , and is facing the prospect of living on a meager SS check after she is no longer
able to work. Her former husband, by contrast, is enjoying all oftheir jointly earned pension as
‘well as his new relationship. To those who say that military wives already have “enough”
protection, this case occured 12 years after the passage of The Former Spouses Protection Act,
and was heard by a divorced judge who had publicly stated that he “didn’t believe in pension
sharing,” (Also see attached article from the June issue of Equitable Distribution Journal, for a
‘200d example of a lawryer’s gross incompetence vis-a-vis military divorce) . I could give the
Committee many more examples from past years but I do not believe that anyone believes in the
“Throw-Away-Military Wife” system which the above two examples epitomize.

‘The question arises as to how these two cases, and other similar ones, relate to collecting
alimony and child support. The answer is that divorce is much more likely to occur if a military
‘member thinks there is a chance he can “beat the system,” thereby making it unnecessary to
collect child support and alimony. As the attached article shows, nearly one-fourth of all children
in this country now grow up without fathers. This disintegration of the American family is a
danger to the very foundations of our society and should be discouraged by every public means,


19

STATEMENTS OF JOYCE RAEZER, SENIOR ISSUES SPECIALIST,
NATIONAL MILITARY FAMILY ASSOCIATION; DORIS MOZLEY,
CHAIR, COMMITTEE FOR JUSTICE AND EQUALITY FOR THE
MILITARY WIFE, AND VIRGINIA KAY WARD, BOARD MEMBER,
EX-PARTNERS OF SERVICEMEN/WOMEN FOR EQUALITY

STATEMENT OF JOYCE RAEZER

Ms. RAEZER. Thank you, Mr. Chairman. The National Military
Family Association appreciates this opportunity to speak on the
issue of garnishment of military and retired pay for family obliga-
tions.

Garnishment of active duty mili pay for family obligations is
most frequently done to provide child support. ‘A strongly be-
lieves that servicemembers have at a minimum, financial respon-
sibility for their children. Each of the services have strong state-
ments about servicemembers’ responsibility to provide for their
families. However, non-military parents without court orders often
find it difficult to make the system work for them. Each service
needs to make it clear to all military legal offices and commanding
officers that they have a responsibility to assist the non-military
parent in obtaining child support. Non-military its should be

strongly enco to obtain court ordered child su , or writ-
ten agreements that will be honored by the Defense Financing and
Accounting Service.

We believe that the services must take the responsibility for
counseling the non-military parent on the ramifications of not hav-
ing @ court order for child support before a servicemember retires.

ive duty and retired pay are also garnished to provide ali-
ony in cases of divorce. Since awarding alimony is a purview of
the State courts, it seems to NMFA that the only action that could
be taken by the Federal Government is to protect further the
amount of active duty pay that can be garnished by such courts.
Such action might affect child support and garnishment for other
just debts.
j In most cases of divorce that occur after a member retires, the
amount of alimony awarded is based on the income of the
servicemember from post retirement civilian employment. NMFA is
aware of cases where alimony has been awarded on an almost per-
manent basis to circumvent the prohibition on dividing any part of
disability pay as property. However, as alimony, it stops if and
when the former spouse remarries.

NMFA is aware that some retired servicemembers and some
former spouses have concerns about the equity of certain provisions
of the Spouse Protection Act, or the application by State courts of
some provisions. We believe that, as presently written, FSPA pro-
vides reasonable safeguards for both the servicemember and the
former spouse. Because of the actions by some State courts to cir-
cumvent the intent of FSPA, we suggest in our written statement
cortain modifications to the law were it to be addressed by the

‘ongress.

We are also aware that the carrent legislation would, if it be-
came law, significantly change FSPA. ‘A strongly believes that
military retired pay should continue to be able to be treated as
property by State courts, and as such not be affected by the remar-


14

know, however, that H.R. 2537 will go nowhere in the 105th Con-
gress and we also know why it won't.

While Congress has exhibited in public—I emphasize “in pub:
lic’—a pervasive reluctance to reform the FSPA, there have been
enacted, since 1982, 23 changes to laws affecting military divorce.
All of these, except two, have been effectuated by sub rosa amend-
ments to mainstream legislation without public hearings or debate.
Eighteen of these have benefited ex-spouses, one has benefited

ilitary members, (and that merely to correct a congressional over-
sight where the intent expressed in the conference report wasn’t
codified,) and four of them were about equal. I've been told that if
the FSPA is ever amended, however, there will have to be a quid

ro quo, meaning something for both sides. Mr. Chairman, there’s
en a hell of a lot of “quid;” it’s time for some “quo.” Military
members aren’t looking for a win in divorce court, sir, we'll settle
for a tie. The score is, at present, ex-spouses 18, military members,
1.

{The prepared statement of Mr. Aul 90.]
e prep: ment o! a it appears on p. 90.
The GATRMAN. Thank you. Thank you, Mr. Ault.

Ms. Timpano.

STATEMENT OF COLLEEN M. TIMPANO

Ms. TIMPANO. Mr. Chairman——

The CHAIRMAN. Ms. Colleen Timpano, USN Retired.

Ms. TIMPANO. Mr. Chairman and members of the committee, my
name is Colleen Timpano. I am a retired Hospital Corpsman First
Class, USN, Navy. Thank you for the opportuni to appear here
today to invite your attention to the problems of military women
who get divorced.

As the number of women in uniform continues to grow, so will
the problem. I will summarize my written testimony which I ask
to be included in the record of these hearings.

Most of the problems to which I allude can be attributed to the
Uniform Services Former Spouse Protection Act which, I believe,
was 8 Poorly conceived and its sponsors, apparently, narrowly fo-
cused on civilian females married to male military members. They
evidently ignored the fact that enlisted female military members
would be impacted by this law also. As a result, they are like me,
who have completed honorable careers in the service of their coun-
try, suffered trauma of divorce and found that they would not get
all of their retired pay that they expected to receive. This is
cause of the law which permits a divorce court judge to require
them to share it with an ex-husband who, in many cases, doesn’t
need it or use it to provide the icing on the wedding cake of his
next marriage. Worst, that ex-husband will continue to receive pay-
ments for life regardless of his marital history or of possible crimi-
nal conduct.

My personal experience is that 5 years after enlisting into the
Navy, I married a male shipmate who had two children from a pre-
vious marriage and, as it turned out, a drug abuse problem for
which the Navy gave him a general discharge after 7 years of serv-
ice. This made me the principal wage earner of my family. Using
my Navy pay and the income of some moonlighting jobs, I also pai


3

suggested, Mr. Chairman. Simply because there’s a lot of issues
here, I’m going to try and just sort of highlight the points of my
statement which has been submitted for the record.

The CHAIRMAN. Thank you, sir.

Mr. Kusiak. Generally, with regard to garnishment, there’s no
question that the Retired Officers Association and others support
any efforts to strengthen and streamline procedures to collect child
support. There’s a legal and moral obligation for every parent to
support his or her children and efforts to ensure that support is
provided are—are endorsed.

We suggest, however, that in the context of spousal support—and
when I say, “spousal support,” I mean alimony, alimony unrelated
to child support—alimony has been an opportunity or has been
used by a number of State courts to indirectly do what we believe
Federal law prohibits them from doing; in particular, dividing dis-
ability by providing for payment that is akin to a divi: of retired
pay but, in fact, is characterized as alimony. Utilizing those
strengthened enforcement mechanisms to collect that kind of ali-
mony is probably not what the Congress intended. Consequently,
we would suggest that current law should be modified to eliminate
the mechanism of alimony as a scheme to—or mechanism to divide
what cannot be divided as marital property.

There are other concerns regarding division of disability. State
courts are really having a—some State courts have a difficult time
grappling with the concept of disability as something different than
normal retirement and, consequently, there’s been a number of de-
vices, mechanisms, or legal concepts that State courts use that, in
effect, divide disability.

Disability compensation—when I say, “disability,” I’m not talking
about disability retired pay that is based on years of service. I’m
talking about disability retired ‘Pe that is based on a percentage
of disability or disability from the Veterans’ Administration, clear
disability compensation that, in virtually all circumstances, is
never divided as a marital asset. These devices include things such
as alimony, a concept known as res judicata, which essentially
says, if we divide it, you didn’t object before, it’s too bad; it’s too
late to object after the fact. There are other mechanisms as well
where a member is perceived to have agreed to divide disability.
All these kinds of devices and techniques should be eliminated to
prevent the division of disability.

There are some structural deficiencies, we think,in the Former
Spouse Protection Act that I’d like to bring to your attention. One
in particular is the continuation of a spouse’s interest in retired
pay after remarriage. Fundamentally, retired pay is really not like
any other kind of property. It’s not like a house. It’s not like a car
or a piece of land. It is a Federal entitlement that has unique as-
pects to it that don’t exist in other context. Consequently, it really
is not property, and a spouse’s interest in retired pay should be no
greater than the member's interest. One way to highlight that is
to simply say that a continuation of a division of retired pay as
marital property should end if the spouse remarries.

Another concern addresses the issue of Survivor Benefit Plan.
Essentially, survivor benefit premiums are deducted from retired
pay before it can be divided. This effectively makes the economic



132

EX-PARTNERS OF SERVICEMEN/WOMEN FOR EQUALITY
‘AUGUST 5, 1998
Good morning, ladies and gentlemen. Permit me to introduce myself. 1 am
Kay Ward, a Board member of EX-Partners Of Servicemen/women for
Equality (EX-POSE). On behalf of myself and the rest of our organization,
let me say that we very pleased to have this opportunity to address the House
Veterans Affairs Committee.

With regard to this hearing, it is our understanding the concern is primarily
that of “garnishment of benefits paid to veterans for child support and other
court-ordered family obligations.” We are puzzled by just what is in question
here. Particularly in light of the Supreme Court’s ruling in the Rose Case
that child support may be deducted from “service-connected disability”
payments. Further, on August 29, 1991, The Office of the General Counsel
tuled - under 42 U.S.C. 662(i)(2) - ruled that both child support and alimony
may be gamished from VA benefits.

Is the intent to discontinue child support for the children of veterans? Surely
you cannot deny moneys ordered to support children! Disability does not
preclude parental obligation. What would such a move do to the parent-child
relationship? Remember, children in these instances have already suffered
the trauma of their parents’ divorce.
Is it then to discontinue court-approved payment of alimony to a veteran’s
former spouse? Alimony is awarded, “....to provide one spouse with
sufficient income to obtain the necessities of life.” Sometimes this award is
made in a “rehabilitative” manner, that is payment is to be made until such
time as one spouse is capable of securing her/his own income. On other
occasions, particularly in the case of long-term marriages, alimony is ordered
indefinitely. Such decisions are made on a case-by-case basis; they are made
by judges at the state level; and are made at the conclusion of long and often
arduous hearings. Judges certainly are aware of the fact they are requesting
moneys to be deducted from disability payments - the point being that
having a disability does not release the ex-serviceperson from his/her marital
obligations. Remember also that all alimony ceases upon remarriage.


110

Other issues of utmost importance are those of Survivor Benefit Plans (SBP) and the
need for a statute of limitations governing the reopening of final decrees of divorce.
Under federal civilian retirement plans, a provision is included allowing federal
civilians access to more than one Survivor Benefit Plan. The state courts recognize SBP
as a future stream of income protecting the divorced spouse in the event of the death of
the retiree. Under the federal civilian system federal retirees have access to more than
one SBP, for the purpose of protecting a subsequent spouse. The military retirement
systems gives no such protections to the military member and spouse and subsequent
spouse.

Many first marriages of military members end in divorce well before 20 years. Should
the military member remarry, this “second” marriage could, and often does, survive
much longer than the first marriage, but the subsequent spouse is not afforded the
same protective mechanisms for old age security as spouses in the civilian federal

sector. Consideration by Congress to alleviate this problem is of utmost importance.

With regard to statute of limitation:
may be reopened to divide retired pay as property... the civilian federal plans, again,
are statutorily clear... the Uniformed Services Former Spouses’ Protection Act does not

time period by which final decrees of divorce

grant such protections. The courts are currently reopening final decrees, sometimes up
to 10 or 15 years after the divorce, and awarding a share of retired pay as property, to
include retroactive payments, to long divorced former spouses, This leads to post
divorce litigation and legal expenses as well as virtually ensuring financial ruin for the
retiree who has not planned on such an event.

While Congress has no control or jurisdiction over HOW the State Courts divide
military retired pay, Congress DOES have control over the use of Federal compensation
and benefits as well as administrative mechanisms in the disbursal of Federal
compensations and benefits related to such law.


69

(retiree’s) check. From this hearing until the enactment of the
USFSPA DoD’s position remained ambiguous.

Representative Schroeder also appeared before the Jepsen
panel. She endorsed Hance’s H.R. 1711 or DeConcini’s S. 1453 “if
the Subcommittee finds that stronger language is necessary to
override the Supreme Court’s McCarty decision.” She then spoke
of her proposal, once again voicing support for terminating
retired pay division if the former spouse remarried before age
60.

The military organizations continued to seek support for
their position. They hoped for a chance to present their case
before the Subcommittee; however, that hope faded as stronger
support materialized favoring the Jepsen proposal. Even the
military hierarchy appeared to be abandoning its opposition to
the former spouses proposal. In one example, the four uniformed
manpower chiefs failed to give a clear indicator as to their
Service’s position.

The organizations then visited a number of offices of House
and Senate members of the Texas delegation urging Texas to change
its laws to permit garnishment for alimony and child support
payments in lieu of using Federal statutes to provide compensa-
tion to former spouses. The attempt was futile. Except for a
small minority, the delegation proved to be four square in favor
of changing Federal law to circumvent their state’s failure
to provide protective measures for former spouses.

The Texas interest in the Hance-Schroeder-Jepsen initiative
became more apparent following the Supreme Court decision of June
26, 1981. In a July 13, 1981 Air Force Times edition, Tom
Philpott reported that a source told him that "... most of the
hue and cry (over Mccarty) is coming from Texas, where there is
no alimony and a wife who doesn’t receive a property distribution
doesn’t receive anything.”

As a result, the Texas congressional delegation was playing
a major role in having changes made to the military retirement
system (see page 3). Conversations with Rep. Hance verified the
delegation‘ s commitment to revising Federal law ‘because it is
easier than trying to amend the Texas constitution.’


24

are not precluded from setting child support obligations at such
levels that veterans would necessarily have to use some of their VA
compensation in order to honor those obligations.

Garnishments are handled at VA regional offices across the coun-
try in a coordinated effort involving our legal counsel, our adjudica-
tion staff, and finance staffs. We are not aware of any systemic
problems in the processing of those orders.

To complete picture, the unavailability of garnishment in
most cases with respect to VA benefits, is relieved somewhat by the
availability of administrative apportionment. VA regulations are
designed to ensure that there is an equitable division of veterans’
benefits where VA beneficiaries are failing to meet their obligations
to support their spouses or children. Our apportionment decisions
are based on a balancing of needs of the veteran and the apportion-
ment claimant. Income and expenses for both parties are carefully
weighed and VA attempts to balance their respective needs. There
are currently nearly 23,000 cases in which running awards of VA
benefits of all kinds are being a jioned to spouses for children.

Mr. Chairman, that concludes VA’s prepared remarks.

[The prepared statement of Mr. Thompson appears on p. 139.]

The CHAIRMAN. Thank you, Mr. Thompson.

Next, we have Lieutenant General Norm Lezy, United States Air
Force—Deputy Assistant Secretary for Military Personnel Policy in
the Department of Defense. General Lezy.

STATEMENT OF LT. GEN. NORMAND LEZY

General Lezy. Thank you, Mr. Chairman, and members of the
committee. Thank you for the opportunity to appear before you this
morning to discuss garnishment of benefits paid to veterans for
child Support and other court-ordered fi obligations. This
morning I am accompanied by Mr. Rodney Winn, who is the Assist-
ant General Counsel, Garnishment Operations from the Defense
Finance and Accounting Service.

The Department of Defense has long been an advocate of encour-
aging parental child support and is committed to ensuring that
child support obligations are met. For more than 20 fears the De-
partment of Defense has been required to garnish the pay of re-
tired military members to enforce child support and comply with
the support of recent improvements in the laws and enforcement
of tal child support.

itle 42 of the U.S. Code, Section 659 provides that the Depart-
ment of Defense, upon receipt of a court order, shall garnish retired
pay for alimony and child Support: Similarly, Title 10 of the U.S.

‘ode, section 1408 requires Department to make payments
from a member's disposable retired pay based on a divisional prop-
erty if it is specifically provided for in a qualifying civilian court
order. It is the Department’s policy to fully comply with these stat-
utory requirements. The Defense Pinan ce Accounting Service is re-
sponsible for implementing these provisions.

The Department of Defense has begun a comprehensive review
of the Uniformed Services Former Spouse’s Protection Act as man-
dated in the National Defense Authorization Act for 1998. The Sec-

of Defense is required to report to Congress on the results
of this review not later than September 30, 1999. Let me just tell


143

the Secretary of Defense carry out 2 comprehensive review of the Uniformed Services Former
‘Spouses’ Protection Act and report to Congress by September 30, 1999.

‘The review will compare the protections, benefits and treatment afforded under Federal
law to military members, former members, former spouses, with such benefits provided to civil
service employees and former employees of the Federal government and their former spouses.
The review will also consider the experiences of the Uniformed Services in administering the
law, and the adequacy and effectiveness of legal assistance. In addition, the review will look at
the experience of military members, former members and former spouses in the application of
the law by State courts, including the interpretation by State courts of applicable Federal and
State statutes. Pending the completion of the review, it would be inappropriate to comment on
the substance of H.R. 2537.

Thank you very much for the opportunity to appear before you to discuss this important
matter. The following information details the garnishment actions as implemented within the
Department of Defense by our responsible agency, the Defense Finance and Accounting Service
(DFAS). DFAS was established in January 1991 as the DoD executive agency for finance and
accounting requirements, systems, and functions. DFAS consolidated and capitalized finance
and accounting services which were previously performed by each of the military departments
and defense agencies. DFAS now operates five major finance and accounting centers at
Cleveland, Ohio; Columbus, Ohio; Denver, Colorado; Indianapolis, Indiana; and Kansas City,
Missouri.

Among the functions previously performed by the military departments and defense
agencies and transferred to DFAS in January 1991 was the processing of gamishment orders for
child support and alimony and divisions of military retired pay. The Office of General Counsel,
DFAS, is responsible for this function.

Garnishments for child support and alimony are processed in accordance with section 659
of title 42 of the United States Code. This statute waives sovereign immunity to subject Federal
civilian employees and military members, including retired members, to gamishment of their pay
in accordance with state law to enforce the legal obligation of the employee or military member
to provide child support or alimony. Pursuant to section 659, if an agency of the Federal
Government receives a valid court order, notice to withhold or other process to enforce support


10

drafters of the proposal had that idea in mind, but that would be

one of the unintended effects of the legislation as drafted. So I’m

not sure it’s been completely thought through because you would

be handing out various inequities to various people in various
tates.

The restriction of retired pay to actions within 2 years of divorce
is a—in my personal opinion, a spectacularly bad idea. Again, as
a matter of State law preemption. And that’s because I believe
that—I haven’t read all this written testimony yet, but I think that
Congress is being largely misinformed about the scope of a non-
existent problem.

Partition actions exist in the States to remedy inequities. They
aren't devices for creating inequities. The only way anybody can
parti ion an omitted asset is by persuading a State court judge that

arty A is in possession of property that has actually belonged to
Party B. All 50 States have statutes of limitations. No State is al-
lowed to go back beyond those limitation periods. And many States
consider that the action itself can’t be brought if you beyond
that limitation period. But again, that’s a matter of State law.

Even though States that allow partitioning—and California is
usually the bogey man when this is brought up in Congress—even
the most famous case on subject which is Casas v. Thompson, re-
stricted the spouse’s ability to partition the omitted military retire-
ment to Prospected payments. In other Fronds, the court said to Mr

mpson, Mr. Thompson, you've go' ercen' e prope:
that was supposed to have been divided all this time between you
and the wife, so from now on she gets her half. That was not an
unfair result. And there’s no reason for Congress to use the power
of preemption to stop the States from remedying inequity when
they see it because that would be effect of this proposal.

T should note that Congress weighed the policy alternatives just
6 years ago. And if you look at the House report, it made a point
of saying that they were attempting to consistent with balancing
the State and Federal interests that have been the hallmark of this
law since its inception. And what Congress did was decide that all
those spouses that didn’t get a piece of the military retirement ben-
efits before McCarty, before 1981, were out. They no longer had ac-
cess to the State court to ask a judge whether they have been
wrongfully dispossessed. They can’t get in at all. But for all the
people that were divorced since McCarty, and since USFAPA’s ef-
fective date, those people can at least ask a judge whether or not
they have been wron; dispossessed, get a State court decision,
and those State courts divisions, if indeed they're made, are en-
forceable through the military pay centers.

Unless this panel willing to tell the Congress of 6 years ago that
weighed the equities wrong and made a bad call, there isn’t a rea-
son to go back and divest a larger group of future former spouses
from being able to have access to the courts. It would require a
finding that Congress did it wrong the last time, and I’m not sure
that’s—I’m not sure that’s correct.

That really was the other three topics I wanted to address. And
I thank you for allowing me to make those points.

The CHAIRMAN. Mr. Kusiak, your name was mentioned once, did
you have any response or anything to what Mr. Willick had to say.


141

estranged spouses and/or children not in their custody, upon application, where
necessary to provide for their support. VA regulations, at 38 C.F.R. §§ 3.450 -
3.461, essentially are designed to ensure an equitable division of benefits where
a VA beneficiary is failing to meet his or her support obligations.

Apportionment decisions are based on a balancing of needs between the
veteran and the apportionment claimant. Income and expenses for both parties
are carefully evaluated, and VA attempts to balance their respective needs.
There are currently 22,808 cases in which an award of a veteran or surviving
‘spouse is being apportioned by VA.

Mr. Chairman, that concludes my testimony.


184

compensation. Miller, 96 N.M. at 499, 632 P.2d at 734. The court held that such award of
alimony was authorized by the Child Support Enforcement Act, codified at 42 U.S.C. §§ 659-
662.

A California court held in Casto v. Casto, 156 Cal. Rptr. 85, 156 Cal. App. 3d 781 (1984)
that VA benefits are exempt from division as community property. In addition to citing § 5301
(then § 3101) for the proposition that veterans’ benefits are exempt, the court relied on a
provision in USFSPA, codified at 10 U.S.C. §1408(a\(4)(B), which excludes from “disposable
retired pay” subject to division as marital property amounts waived to receive VA compensation.
‘The court held that “a state court may not treat the portion of appellant’s military retirement
waived in order to receive veterans’ benefits as community property subject to division.”

A Pennsylvania court, in Parker v. Parker, 335 Pa. Super. 348, 351-52, 484 A.2d 168,
169-70 (1984), held that the exemption in § $301 (then § 3101) does not apply against a wife
seeking alimony pendente lite (temporary alimony pending divorce and a possible award of
permanent alimony) because the wife is not a creditor and the claim for alimony is not a debt. The
Court said: “Suffice it to say, 38 USCA § 3101(a) does not preclude consideration of these
benefits by the court as a source of income coincident to appellant’s ability to pay and upon which
an award of alimony pendente lite may, in the particular circumstances of the case, be based.” Id.
‘The veteran had also argued that a provision in CSEA (since amended) barred awarding alimony
from his veterans’ benefits. The provision he relied on excluded VA compensation from monies
that were subject to alimony payments. The court held that while it may be true that this
provision excluded veterans’ compensation from the waiver of sovereign immunity that consents
to garnishment of Federal agencies, “nothing here persuades us that these benefits cannot be
considered in determining the amount of the award.” Id. at 353-54, 484 A.2d at 170-71.

Louisiana has held, despite § 5301 which provides an exemption for veterans’ benefits,
and despite the USFSPA provision, 10 U.S.C. 1408(a)(4)(B), that excludes from property
vision and alimony amount of reied pay waived o receive dsl compensation, tht

veterans’ compensation received in lieu of military retired pay is property for purposes of division
of marital assets under Louisiana’s community property laws. Campbell v. Campbell, 474 So.24
1339 (1985). This goes far beyond what other courts have held, because they have recognized
‘that spouses and others have no property interest in veterans’ benefits. If other states were to
take this holding seriously and follow it, the result could be that veterans’ disability compensation
would routinely go in the pockets of ex-spouses rather than disabled veterans, Unlike spousal
support, fault of the parties or financial need are not factors in the division of marital property. It
would make no difference if the marriage terminated because of the spouse’s adultery or willful
abandonment of the disabled veteran. In community property states, a veteran’s former spouse
might automatically receive 50% of the veteran’s future compensation for the remainder of the
veteran's or spouse’s life. It would not matter that the veteran’s sole source of income is
disability compensation, nor that the spouse is fully employed, is much better off financially, and
has no need for a haif of the veteran’s disability compensation. The spouse would continue to
receive half of the veteran's compensation even after remarriage. The.community property
concept is not founded on the common law principle that there is a moral obligation to support a
‘spouse and dependent children, but rather on the business relationship that exists between the


29

And I think one of the problems as you are aware of, because you
have advocated this change, Mr. Chairman, is the issue of concur-
rent receipt of retired pay and VA disability which is now prohib-
ited. So the military retiree has to make a choice when they receive
this disability, that they have to give up a portion of their retired
pay. So it really isn’t a great advantageous income benefit when
they have to make that choice. And I would just kind of say that
we hope that in the future Congress that we can have some reform
on concurrent receipt legislation.

But I do want to give you one example that I received from one
of our members, was the fact that—and as I said, I’m not a lawyer
and I’m not here to say what’s right and what’s wrong. I’m just
here to report what I’ve been told and what I see.

One of our individual members, besides the division of property,
the former spouse was awarded the house and the VA was respon-
sible for the mortgage of that house. And the individual reports to
me that after seven months of him not living there, this former
spouse stopped paying on his VA mortgage. So of course, he didn’t
know this until the VA went after him. So now not only is he pay-
ing for whatever the court has added, now he has to apply for
bankruptcy because he doesn’t have the money to pay for the mort-
gage payments.

So that’s one of the examples that I have to tell you, Mr. Chair-
man. Again, I’d like to thank you for introducing H.R. 2537. I’d also
to like thank Representatives Stearns, Peterson, and Doyle of this
committee who have also co-sponsored that legislation. And I would
also urge other members of this committee to look at this legisla-
tion and support the Chairman. This is a bipartisan bill. This is
not a political bill at all.

The other thing that I'd like to bring to your attention, Mr.
Chairman and the committee, is that this is also an equity issue.
We've heard some discussions before of VA disability versus retire-
ment—and I’m sure my next witness here who is from the DAV
will probably have something to say about this—but if this issue
was just clearly a non-retired veteran who was drawing a disabil-
ity, this question would not even be discussed because it’s not
property. oo. .

So there are some inequities and as I stated earlier, from the
witnesses that we've heard about whether you're in civil service or
whether you're military or within certain segments of civil service,
the law is not really being applied the same. And as I stated, that’s
why I think there needs to be a Federal answer to this question
80 every State does this the same way to be fair.

The last thing I have to say to you, Mr. Chairman and the Com-
mittee is—there was a mention of the Internet site, and I attach
this with my statement and I think this really makes a mockery
of this entire problem. But someone has actually built an Internet
site which I’ve attached, that has the motto, “Ladies aim high.”
And basically what this is, Mr. Chairman, and members of the
committee, this is a step-by-step description of how you get married
and figure out the ways to divorce a military member and make
money. And I think this is really terrible. This is really a mockery
of what this is all about. It’s already in my statement.


166

The Retired Enlisted Association

LEGISLATIVE AFFAIRS OFFICE
909 N. Washington St, Suite 301
Alexandria, Virginia 22314-1555
Telephone 703-684-1981 Fax 548-4876 1-800-554-TREA
website: htpu/www.trea.org e-mail: readc @erols.com

TESTIMONY OF

MARK H. OLANOFF, CMSgt, USAF (Ret)
LEGISLATIVE DIRECTOR

THE RETIRED ENLISTED ASSOCIATION

before the
HOUSE VETERANS AFFAIRS COMMITTEE

5 AUGUST 1998

*~ * UNITED WE STAND * *


186

said that it was within the province of Congress to determine public policy of that nature. Id. In
Rose, the Court departed from the principle that such public policy is within the power of the
Congress. Reviewing the Rose decision, another Federal court observed that the Supreme Court
recognized an exception to the broad prohibition in § 5301, contrary to its plain language, to
farther what was viewed by the Supreme Court to be proper public policy. This was justified by
the argument that, in so doing, the Court was being Congress’ helper by carrying out the real
purpose Congress had in mind, as if Congress did not understand what it was doing when it
crafted the language it enacted into law. Lewis v. Grinker, 965 F.2d 1206, 1215 (2d Cir. 1992).

It is important to remember that Rase involved child support and did not hold that VA.
compensation is subject to alimony awards. Although VA law gives divorced spouses no right to
veterans’ benefits, state courts have continued to consider compensation in computing awards of
alimony.

The courts also have taken liberties with the Protection Act, and the law itself invites
abuse. Congress enacted the Uniformed Services Former Spouses’ Protection Act, Pub. L. No.
97-252, 96 Stat. 730 (1982) as a rider in the fiscal year 1993 Defense Authorization Act in
reaction to the Supreme Court’s decision in McCarty v. McCarty, 453 U.S. 210 (1981), The
‘MeCarty decision held that the current Federal law preempted the application of state community
property law to military retirement pay. The Court acknowledged that, “[hlistorically, military
retired pay has been a personal entitlement payable to the retired member himself as long as he
lives.” USFPA authorized state courts to treat retired pay as property for purposes of division of
marital assets and as pay for purposes of support payments. As noted already, Congress
exempted VA disability compensation from the calculation of disposable retired pay subject to
property division and awards of support. For convenience, this embodies a contradiction in that
military retired pay is considered both property and pay. Pay and property are accorded different
treatment in domestic relations laws. The retired pay is taxed as income but treated as property
for purposes of division of marital assets. Entitlement to alimony generally ends upon remarriage
of the spouse who receives it, but payments of retired pay to a spouse as a property division
continue after remarriage. Under USFSPA, up to 65% of the retired member’s pay may be
awarded for property division and support in combination. The law ignores the factors that
typically govern support awards, such as fault grounds for divorce, merit, and relative financial
needs of the parties. In a book primarily on USFSPA by Frank W. Ault and Marsha L. Thole,
Divorce and the Military, the authors provide several examples of undeserving, perhaps
designing, spouses being unjustly enriched under USFSPA. The first such example, said to be the
facts in an actual case, exemplifies the type of abuse that can result:

You were taken prisoner of war and sent to a North Vietnam POW camp from the
‘fall of 1967 until repatriation in 1973—seven years. You were released and
‘returned home only to be served with divorce papers. Then picture being told by
@ court that it has found that the “date of separation” from your spouse was April
1, 1970, and she did not have to repay any of your pay and allowances that she
spent after the date of separation, that she was entitled to your accrued leave pay,
monies paid to you under the War Crimes Act for inhumane treatment, and she
‘was entitled to your remaining pay, even though California law stated that


98

Curriculum Vitae
Frank W. Ault
Executive Director
American Retirees Association

Frank W. Ault is a retired Navy Captain and Naval Aviator.
He is a veteran of World War II, Korea and Vietnam. He commanded
the attack aircraft carrier CORAL SEA during the hostilities in
Vietnam and was the Chief of Staff to the Flag Officer
commanding a Carrier Battle Group in the flagship ENTERPRISE, a
nuclear aircraft carrier, during the Vietnam conflict and during
the capture of the PUEBLO by North Korea in 1968. His analysis
of the Navy's air combat experience in Vietnam in 1968 resulted
in the “Ault Report" which is credited for major improvements in
the Navy's air combat kill ratio in that war. One of the
products of the Ault Report was the Navy Fighter Weapons School,
featured in the popular movie, "Top Gun".

Since 1989, Captain Ault has been the Executive Director of
the American Retirees Association (ARA) , a non-profit
organization, founded in California in 1984, for the exclusive
purpose of addressing the inequities of the Uniformed Services
Former Spouses Protection Act. Captain Ault is the co-author of
the book, “Divorce and the Military", written for the purpose of
providing information on the military divorce process to both
partners of any military marriage ending in divorce. "Divorce
and the Military" is widely recognized and accepted as an
authoritative reference for divorcing military couples and their
legal counsel. A sequel, "Divorce and the Military II', will be
available about 1 September, 1998.

The ARA is recognized, within the national community of
veterans organizations, as the leader of their coordinated
effort to reform the Uniformed Service Former Spouses Protection
Act.

The operations and administration of the ARA are funded
exclusively by the dues and contributions of its members and by
sales of its book.


140

(2) The Regional Counsel then prepares a brief memorandum to the
Adjudication Officer explaining the legal basis for any further action to be
taken and, if the garnishment is to be effected, specifying the dollar
amount to be paid.

(3) The Adjudication Officer notifies the Finance Officer that the veteran
is receiving disability compensation as a result of waiving military
fetirement pay, the amount of such payments and whether the veteran is
receiving additional benefits based on the dependency of the person to
whom the garnishment is to be paid.

(4) Once the Regional Counsel approves the garnishment, the
Adjudication Officer makes any adjustment that may be required to the
withholding from the veteran's award initially established by the Finance

Officer.
The Finance Officer is responsible for paying and notifying the veteran if

the garnishment orders a specific amount to be paid (delinquent payments) with
no recurring payments. However, if the garnishment orders a specific amount to
cover delinquent payments in addition to recurring payments and if the veteran is
receiving additional benefits on the basis of dependency of the person to whom
the garnishment is to be paid, the Finance Officer is responsible for payment of
the delinquent amount and the Adjudication Officer takes action to award
recurring payments. If the recurring payments are to be made to someone who
is not a dependent (for example, an ex-spouse), then the Finance Officer is
responsible for issuing payments.

In the event of any change in the amount of compensation or military
retired pay, the Adjudication Officer is responsible for reviewing the claims folder
to determine if action may be necessary to adjust the garnishment. In that event,
the case is handled in the same way as for an original garnishment.

Although garnishment of VA benefits is largely precluded, the need for it in
order to force veterans to meet their support obligations is greatly reduced by the
availability of “apportionment.” Under authority of 38 U.S.C. §5307, the

Secretary has promulgated rules for apportioning awards to the beneficiaries’


91

‘Mr. Chairman and members of the Committee, | am Frank W. Ault, a retired
Navy Captain and Naval Aviator. For the past nine years | have been the Executive
Director of the American Retirees Association (ARA), formed in California in 1984 for
the exclusive purpose of addressing the inequities in the Uniformed Services Former
Spouses Protection Act (USFSPA); Public Law 97-262; 10 USC 1408. The
membership of the ARA includes members of all the uniformed services: reguiar
reserve and retired, male and female. The ARA was originally named ' USA’, for
“United Slaves of America’, meaning that military members were being indentured to
their former spouses for life. They still are, but the organization subsequently
adopted a less extremist sounding name and is now a member, in good standing, in
the National Military/Veterans Alliance. The ARA is recognized , throughout the
national community of veterans organizations, as the national leader of the effort to
reform the USFSPA.

We admire and appreciate the initiative and courage of the Veterans’ Affairs
Committee: demonstrated by its willingness to shine some light on the problems of
military veterans who are divorced. Congress has tip-toed around this subject for
‘over fifteen years and, right now, is buying even more time through Section 643 of
the FY 1998 Defense Authorization Bill which directs the DoD to review the subject
‘and report to Congress not later than Saptember, 1999. Since that will be too late for
tegislative action in 1999—and since 2000 is an election year--the stage is set to
avoid action until 2001, at the earliest. We hope that one of the products of these
hearings will be information which will permit the DoD to expedite its report. We
hope, also, that members of Congress will read the report of these hearings and
recognize the need to level the playing field in an area where there are already tens
of thousands of military members whose lives in retirement have been seriously
degraded--and their numbers are growing at the rate of about 600 per month.

We are grateful for the opportunity to discuss with you the history of a well-
intentioned law gone astray and what we recommend be done to provide, to military
members, the equal justice under law guaranteed them by the Constitution. That
right is indisputable. However, the treatment of military members in divorce court, as
mandated by the USFSPA, differs significantly from that accorded, by law, to other

federal employees and the civilian population at large.

In 1982 Congress , by enacting the USFSPA, overrode the 1981 McCarty decision
of the U.S. Supreme Court which found that ...the military retirement system confers
‘no entitlement to retired pay upon the retired member's spouse and does not invoive


193

Mr. Chairman, on behalf of the Jewish War Veterans of the U.S.A. (JWV), our organization
appreciates that you have made the time to hold this hearing. The entire issue of the Former Spouse
Protection Act (FSPA) is of interest to our organization because it impacts on the morale of our
active duty forces. JWV maintains a very strong interest in national security and any issue which
may affect the morale and welfare of our active duty personnel is of vital importance to this
organization.

JWV fully supports the prompt and regular payment of child support. Military retirees, like all
parents in the civilian community, have both a moral and a legal obligation to provide child support.

However, Mr. Chairman, the FSPA has been and is an extremely controversial piece of legislation
as to alimony without there being an evaluation of due process in the granting of the same. Since
the first hearings nearly two decades ago, this legislation has contributed to confusion in the courts
atall levels. There is extensive anecdotal evidence showing that state courts are using judgements
which conflict with the legislation, and that the Military Services are caught in between.

‘Mr Chairman, thank you very much for holding this hearing. As a member of the Military Coalition,
IWV urges prompt future hearings on the issue of the FSPA. JWV believes the FSPA legislation
needs to reevaluated, reconsidered and revised to reflect today realities and to clarify the many
misunderstandings existing in this legislation.

Required Funding Statement:

The Jewish War Veterans of the U.S.A. is a non-profit veterans membership organization, as
described in section 501(c)(4) of the Internal Revenue Service Code. JWV is registered with the
Secretary of the Senate and the Clerk of the House of Representatives in compliance with the
Lobbying Disclosure Act of 1995.

Neither the Jewish War Veterans of the U.S.A. nor Colonel Herb Rosenbleeth, U.S.A. (Ret), has
received any Federal grant or contract relative to the subject matter of this testimony, or any other
subject matter, during the current or two previous fiscal years.


11

Mr. Kus1ak. A couple, if I may, sir. Thank you very much for giv-
ing me the opportunity

Mr. Willick said that mili are favored retirees in the divorce
case in comparison to other Federal employees. In the context of re-
tirees in the Central Intelligence Agency and the Foreign Service,
unless a court order provides otherwise, payments to a former
spouse terminate upon remarriage. In addition, under the Federal
civil service system, military retirees—rather civilian retirees can
split up the survivor benefit among a number of different bene-

iciaries. In_ the military, you can’t. Those are two examples of
things that I think have been mentioned in the context in milit
that are not available to them that are available to some other Fed-
eral civilians.

In addition, the retroactivity discussion that Mr. Willick made is
absolutely correct. In 1990, the Congress made a specific enactment
to invalidate court orders that had divided retired pay improperly
by retroactively reopening, through a partition action, in cases that
had been long settled when this marital asset was discovered be-
cause of the enactment of McCarty in many cases or, at least, per-
ceived to be found then even though it was ignored in the earlier
divorce decree.

Courts have had difficulty, in some circumstances, in applying
that limitation that Congress enacted in 1990. By Suggesting that
even though the divorce decree did not pertain to—or did not retain
jurisdiction to divide retired pay under the laws of that State,
every court has jurisdiction for dividing retired pay, in effect, in-
validating the prohibition that Congress enacted in 1990.

So, I think the context within which the ressions are made
would be helped by that addition. Thank you for the opportunity.

The CHAIRMAN. Are there other questions? Yes, Dr. Snyder. Any
other qpestions?

Mr. Kusiak, let me ask you a question. Suppose Congress were
to change the law so that retired pay could be divided as a marital
asset but not as property? State courts would then be able to take
into account such factors as the financial condition of both parties
and could make a case-by-case determination on whether payment
should cease upon remarriage. Since retired pay is really a function
of Federal statutory entitlement and has no characteristics of prop-
erty, would this be more fair than the current law?

Mr. Kustak. Mr. Chairman, if—having it identified as a marital
asset but not property may be more a facial distinction than a legal
one. I don’t practice divorce law as I’ve said in my statement, but
I think a marital asset could easily be characterized with the label
property under a State law. And the problem with characterizing
it as property is that because it’s considered 1 property, a number of
States, because of the laws of their own jurisdiction, have difficulty
ignoring their own State law. And the one that comes to mind im-
mediately is this notion that disability is somehow an add-on to re-
tirement as opposed to an alternative. It’s because of property that
they say a spouse can’t be deprived of this interest.

e CHAIRMAN. Mr. Willick, you touched on this but if you’d care
to add to your statement? Is that—are you satisfied?

Mr. WILLICK. Actually, Mr. Chairman, if you used the title, mari-
tal asset, you classify—an asset is property. Those words mean the


oT

important as the numbers of women in uniform continues to grow. Those whose
objective is to protect women must , increasingly, look into the ranks for them.

Recruitment and retention are emerging as major problems for the military
services. One of the influential factors is the perception of military members that they
cannot count on Congress to honor commitments which they perceive as having been
made. While not the most important of these, the impact of the USFSPA on the
military retirement system is one of them. It 1S possible to restore fairness and equity
to the military divorce process without unduly disenfranchising EITHER side.

Information developed during these hearings should be used to expedite the
review of the USFSPA mandated by Section 643 of the FY 1998 Defense
Authorization Bill, At the same time,Congress should look at H.R. 2637, introduced in
the 105th Congress by Chairman Stump, and resurrect it~or an expanded version
thereof--in the 106th Congress. Then those committees in Congress concerned with
the welfare of military personnel should get down to the serious business of restoring
fairness and equity of the military divorce process. There is no logical reason for
delaying this to 2001 or beyond. The terms of reference extant at the time of the
enactment of the USFSPA are no longer valid. Moreover, the list of those impacted
by the USFSPA now includes a growing roster of military women. if the USFSPA is to
be fair, then it must be fair to both sexes: military and civilian.

For their part, military members aren't looking for a win in divorce court--just a tie.

by


187

earnings and accumulations after the date of separation were separate property.
This was on top of the fact that she openly had affairs during the time you spent
in the North Vietnam prison. The court also awarded her your home, your car,
and 42.7 percent of your military retired pay, and you were ordered to pay child
support and spousal support (despite her remarriage to one of the attorneys who
represented her in the divorce). And, despite your four children all telling the
court they wanted to live with you, you received custody of only the two older
children.

The Supreme Court has acted to uphold exemptions for VA disability compensation in
USFSPA. In Mansell v. Mansell, 490 U.S. 581, 594-95 (1989), the Supreme Court held that the
Protection Act did not “grant state courts the power to treat as property divisible upon divorce
military retirement pay that has been waived to receive veterans’ disability benefits.” The effect of
this decision is placed in question in light of subsequent amendments to CSEA, however.

CSEA operates to waive sovereign immunity of the Federal Government to permit state
courts to garnish Federal agencies to enforce child support and alimony obligations. To the
extent it consents to garnishment, it necessarily also contemplates such underlying awards by the
state courts and presupposes no Federal preemption against such awards. Under 42 U.S.C.

§ 659, Government agencies, the Armed Forces, Federally owned corporations, and the Postal
Service may withhold monies of individuals, representing “remuneration for employment,” in
compliance with court orders of the states. Section 659(h)(1)(A)(ii)(V) includes as remuneration
for employment periodic benefit payments “by the Secretary of Veterans Affairs as compensation
for a service-connected disability paid to a former member of the Armed Forces who is in receipt
of retired or retainer pay if the former member has waived a portion of the retired or retainer pay
in order to receive such compensation.” (Emphasis added.) Under § 659(h)(1)(B)(iii), “periodic
benefits under title 38, United States Code, except as provided in subparagraph (A)(ii(V)” are
not subject to CSEA. The child support that may be withheld includes such other things as
attomey’s fees. § 659(1)(2). “Alimony” for purposes of the act includes support to divorced
spouses and attorneys’ fees. § 659(i)(3).

CSEA appears to do the exact opposite of USFSPA, § 1408(a)(4), as it pertains to
spousal or child support payments, Where § 1408(a)(4) exempts the amount of retired pay
waived to receive VA compensation, § 659(h)(1)(A)(i)(V) appears to subject the very same to
garnishment. As with § 1408(a)(4), § 659(h)(1)(A)(ii)(4) does not, by its language have any
application to compensation when the veteran has not waived retired pay to receive it. Neither do
these statutes, by their language, appear to apply to compensation when all retired pay has been
waived and the veteran receives only VA compensation.

Thus, the net effect of 38 U.S.C. § 5301, as construed in Rose, together with 10 U.S.C.
§ 1408, according to its plain language, and 42 U.S.C. § 659, according to its plain language,
appears to be as follows. Under Rose, any disability compensation, whether received by a veteran
who did or did not retire from the military, is subject to state court child support orders,
notwithstanding § 5301. Although several state courts also order veterans to pay, from their
compensation, alimony to separated and divorced spouses, the Supreme Court has not affirmed

10


102

and alcoholism and batter their children AND the military member. Many are destructive
not only to the family but to the military member's career also. The civilian spouse can
do things for which we would be court-martialed and still be guaranteed payments after
divorce. Support ends the day of the divorce, and often long before that. Support is what
GOOD marriages are about.

The current laws provide a “windfall” to the former spouses by increasing their
benefits when the military member is promoted after the divorce. With all we endure -
with all the hard work WE do to get promoted, how can you credit the former spouse for
the military member's success? | know of a colonel, married for 5 years and divorced
early in his career. 20 years later the former spouse came back to claim her share of his
retirement pay - not at the rank he held at divorce - but laying claim to every promotion
he received during the next 20 years. Was this first wife responsible for these
promotions? Its free money — she won the lottery because she married and diyorced
successful man. Yet, if spouses are to receive credit for promotions - what about his
current wife - doesn’t she get any credit?

I know of another former Marine whose ex-wife is receiving 24% of his retired
pay - as a major - even though he divorced 14 years ago as a lieutenant. He served two
years of his 25 years career in Viet Nam. He quit his good paying civilian job in 1974
and reentered the Marine Corps in an attempt to save his marriage - find a different
environment - after he caught her in bed with a co-worker. Later she divorced him
anyway, because she was tired of moving around with the military. She has been re-
married now 10 years. Last year she sued him for a portion of his retired pay but waited
nearly two years beyond his discharge date to do so. Last month she sued for the
arrearage in payments she deliberately overlooked before. The wound of his divorce has
been opened again and again.

And what about the military member who is injured in the line of duty? In
combat? Should the former spouse benefit from the disability? The former spouses think
so. Will the former spouse suffer because of the injury? If so, should they receive the
same windfall they do with promotions? It doesn’t matter when it happens in the military

career, before or after the divorce, the ex-spouse wants the benefit! I don’t understand the


192

Curriculum Vitae

Sor
Rick SuRRATT

Office Address
807 Maine Avenue, S.W.
‘Washington, DC 20024
(202) 554 3501

Biographical Data

Birth Date; May 22, 1949
Place of Birth: Carroll County, Virginia

Military Service

US. Army
Enlisted June 1966 and honorably discharged April 1969.

Education

‘AA Liberal Arts
Paralegal Certificate

Relevant Experience

Assistant National Legislative Director, Disabled American Veterans (DAV), January
1996 to present.

Associate National Legislative Director, DAV, March 1994 to January 1996.

Judicial Appeals Representative before the United States Court of Veterans Appeals,
DAY, September 1989 to March 1994.

‘National Appeals Officer before the Board of Veterans’ Appeals, DAV, June 1989 to
September 1989.

National Service Officer, DAV, September 1976 to June 1989.
‘Other Information
Principal author of DAV’s portion of Independent Budget


118

‘Promotions Eamed After Retirement: When a servicemember continues to serve on active
‘duty several years after a divorce and eams promotions, many consider it unfair for the
final property setlement at retirement to reflect the increased amount related to the
promotions.

NMFA believes a valid argument can be made that sacrifices made by the spouse in the
‘years of a marriage helped ‘ensure the servicemember's continued success @fer the
ze. However, we do nov oppose a change nthe law which would create @ property
Setlemint based ot he member rank atthe tne of dvorce ating as propria,
Tongevity raises and cost of living adjustments are included at the time of property division.

We do.nat support however, making such a change to present awards. Such a change
should only be effective prospectively.

‘Affeasof Remaiage: Since FSPA allows sate cours to award pat of disposable retired
pay as property, neither the remarriage of the former spouse or the servicemember affect
the award. Some argue that it would be fairer to teat military divorces in the same manner
&3 Foreign Service Spouses who do lose their award iftey remarry.

former spouses have an ENTITLEMENT to a ‘of their spouse's retired pay. They
‘may also go to court and receive up to 100% of their spouse's retired pay. Such a change in
law, if applied to those already divorced would certainly benefit the servicemember.
However, tote corey serving or inretirement ang sil marie) might not lok
favorably on a change that would create an automatic entitlement rather than at least having
archanoe ro sate thelr case n Cou, The automatic entfement ithe same formula tha is
most often used by state cours to divide disposable military retired pay:

‘Years of mariage
Years of service X 50%

Current legislation before Congress would simply stop the payment of retired pay to the
former spouse if she/he remasries,

Military spouses give up a great dea! of the control of their own lives to the Federal
when they marry servicemembers. They are told when to move, where to
move, how many household goods they can take with them, and litle attempt is made to
censure their own career progression with each move. The number of military spouses in
the work force today mirrors that of their civilian peers. Approximately two-thirds of
military spouses are in the work force. However, their unemployment rate is over twice
that oftheir civilian peers, climbing to double that amount if they are married to
inpay grades E-1 through E-4. DoD stdles also show tar sposes ae chronically
‘They are forced to accept positions that are i
ducaton oak evel. Besnuse of heitaced moby rary spouses
‘opportunities to advance in their chosen profession. Ata 1995 Department of Defense
‘conference on spousal employment one spouse spoke of her “career development” through
her husband's 25 years of military service. In those years she had been: a
teacher a HeadStart teacher, a subsite teacher, an optician, a senior cizen social
program developer, a geriatric counselor and a financial counselor. Many professional
uses face an array of varying state laws and requirements for licensure that may
take from 6 months to two years at a new duty station. Most are never vested in a pension
plan, since Federal law requires five years of employment before mandating vesting.

4 oo



65

yet are entitled to nothing from the Armed Forces for their
sacrifices and hardships endured while serving their Nation.
(Why, then, should spouses with less than 20 years be considered
above the service rendered by these men and women, many of them
combat veterans?)

+ Public Law 95-617 (1975) authorized garnishment of
active and retired military pay to satisfy state-court ordered
alimony and child support payments. (Later amended so that
alimony would not include transfer of property as a result of
divisions of property between spouses or former spouses.)

Ait _is-verthy te—note thatthe major military organizations,
sanishment of military retired pay for court-ordered alimony or
ghild_support payments.)

Chairman Nichols conducted a second hearing in November 1981
to hear from Reps. Schroeder (H.R. 3039), Whitehurst, Vic Fazio
and Hance. Supporting them were three (3) women’s groups with
two (2) military associations providing the opposition. Nichols
noted that the issue is ‘complex and emotional’... thought must
be given to the role to be played by the Federal versus the state
government in divorce cases and “the rights and well-being of the
military member as well as the former spouse.”

MCCARTY v. MCCARTY

In the Fall of 1980 the Supreme Court agreed to hear the
appeal of a retired military officer who had been ordered by a
California Court to split nearly half of his retired pay with a
former spouse. He argued, among other points, that he was not
subject to the jurisdiction of the California Court and was
exempt from that State’s community property law. Further, he
claimed that the State was violating the Federal supremacy clause
by interfering with Congress’ authority to provide a retirement
system for the Armed Forces.

McCarty also mentioned the split between the States on
treatment of military retired pay in divorce cases. (See pp 2
and 3 above.) And the fact that it encouraged forum shopping for
a divorce by military spouses.

Meanwhile, the passage of the Foreign Service Act of 1980
brought a feeling of anxiety to the military community, in
particular the major military organizations representing more


7

umbrella amendment to the Schroeder amendment. Nichols intro-
duced his amendment on July 27, 1982.

THE FLOOR DEBATE

The debate on the now Schroeder-Hance-Whitehurst amendment
began the following day, July 28, 1982. The three, all
attorneys-at-law, had a supporting cast of some nine (9) member
attorneys to speak in favor of the amendment. It was not sur-
prising then to learn that the only supporting document intro-
duced during the debate by Schroeder, et al, was a letter from
the American Bar Association (ABA).

The number of attorneys was so overwhelming that Rep.
Nichols, leading one of the two opposing sides, admitted that he
was “in a rather uncomfortable situation ... beset on both sides
from people who are learned in the law.” And the learned
appeared to take full advantage of the task at hand. They
embellished many of their remarks in swaying the jury of peers to
vote for the cause. For example:

“(The McCarty decision) has materially and adversely
affected the practice of family law.’

“state courts are holding up action on divorce cases
until Congress resolves the conflict.”

Further embellishment came through the use of the word
‘pension.’ Referenced any number of times to describe or allude
to military retired pay, it left those who were not knowledgable
a vision of a payment for past services rather than what it
really is, reduced pay for reduced services.

The Texas delegation, as anticipated, continued its role in
the proceedings. In addition to Rep. Hance, Texas Congressmen
Sam Hall, Jr., Martin Frost, Abraham Kazen and Jake Pickle
offered their suppotive views on the Schroeder-Hance-Whitehurst
amendment. Ignoring the Federal law authorizing garnishment of
military pay and retired pay, Frost and Kazen pled their case.
Frost: "The amendment is definitely needed for the courts in the
State of Texas. ... The State courts in Texas already consider
such pay in divorce settlements; however, there is no garnishment
or enforcement provision to insure the due award to a former
spouse on the basis of a qualified court order.” Kazen: "...
the great State of Texas does not have a garnishment lav.

We


16

lent constituency. Jumping the chain of command is frowned upon,
and it is difficult for us to determine when it’s okay to voice our
opinion. Our freedom of speech is limited. We cannot campaign or
make political statements in uniform. So rather than face the
sibility of overstepping our bounds, we take the hand we're dealt
“What any y hen tasked with a difficult or d

at mili person when t: with a di or dangerous
job would say, I can’t, or I won’t, or complain. We're used to livii
with less and tolerating more. If the military had not maintain
this type of discipline, neither of us would be here today. We trust
you to make the right decisions; to look out for our welfare as we
look out for our country’s. For every letter you receive from a mili-

member there are tens of thousands who would like to write.

e daily transition from the military mind set to the domestic
is often difficult. On duty, we are great at mission focus; this can
be carried to the point of excluding anything personal. We work to
the point of exhaustion, sleep for a few hours and start again. Our
work ethic is often perceived as abandonment by the civilian
spouse, which leads to other problems and often divorce.

Some have tried to convince Congress and the American public
that this is a male-female issue. It is not. There are women in the
military too and our promotions are based on how well we do our
jobs, not our marital status. Yet the States have been allowed to
interpret the Uniformed Services Former Spouse Protection Act, so
that my contributions as a military’s wife are more valuable than
my contributions as a Marine officer. According to the law, I am
vested in 12 years worth of my husband’s retired Bey, since he is
eligible for retirement. Yet, I am vested in nothing based upon my
own 17 year military career. I must serve 20 years to receive any-

The truth is, that ‘my responsibilities as a Marine involved great-
er hardship to me in service to my country, than to the inconven-
iences I ever experienced as a wife. I find it disheartening that
Congress views my worth and right to entitlement, more ighly
based upon my status as a wife than as a Marine. How can an hour
in the commissary be equal to an hour in combat?

I am held to a higher standard. I am sworn to protect, defend
the Constitution of the United States with my life. I must maintain
strict physical standards. I am subject to the uniform code of mili-
tary justice. I am told what to wear; how to wear it; what I can
eat; when I can drink; and I can have my liberty secured. I am told
where to live; how to act; whom I can be friends with; whom I can
make love to; and who I can marry. And if I violate these regula-
tions, I can ‘be incarcerated. These thi are necessary for the
good order and discipline of the military. They apply to me, not my
spouse.

My best friends are military spouses. I do not want to minimize
their daily challenges. Some of them are the salt of the earth. Mar-
riage between two loving, supportive people withstand the test of
time and the challenges of military life. They are not the people I’m
talking about. These laws will never affect them. Yet, while there
are many d and supportive spouses, there are also those who
are not. The civilian spouse can do things for which I would be
court martialled, and still be guaranteed payments after divorce.


160

Greater USFSPA Impact on Enlisted People

Although the application of the USPSPA greatly affects all military retiees involved in
divorce actions. the financial impact is greater on the enlisted member simply because of
the differing levels of actual retirement pay on which the court-ordered divisions are
made. Division of a percentage of E6 retired pay along with additional alimony and child
support requirements, virtually leaves that retired £6 financially destitute in many cases.
Also, many divorce decrees require the military retiree to pay monthly Survivor Benefit

‘of the SBP

Plan (SBP) premiums with the former spouse named as the beneficiary
annuity. This leaves the enlisted military retiree with little to no amount of his earned
retirement benefit and no alternative to provide a new family with any protection in the

event of death.

‘The USFSPA is Inequitable for All

Since the USFSPA defines disposable retired pay as property under law. it creates
additional issues the Congress will have to come to grips with now and in the future.
These concerns will be raised by those on both sides of the USFSPA issue. The concerns
‘center largely around the fact that under the USFSPA military retired pay is treated as
property and the fact that legal determinations stipulate that the right to property cannot
be terminated by remarriage or change in status of the former spouse. Military members

‘caught-up in divorce proceedings ask the following questions:

1) IfUSFSPA property awards cannot be terminated upon remarriage, why then
are they terminated upon my death and why shoutd a retiree then be required
10 participate in SBP to maintain the property income for a former spouse in
the event of death?

2) If military retired pay is considered property in divorce cases, how then can it

be taxed as income by the Internal Revenue Service (IRS)?


99

Testimony of Major Neita Armstrong, USMC
Before the
House of Representatives
Committee on Veterans’ Affairs

5 August 1998

Mr. Chairman and members of the committee, I am Major Neita Armstrong,
United States Marine Corps. I am assigned as the Korea Area Plans Officer for the 1*
Force Service Support Group, Camp Pendleton, CA. Thank you for the opportunity to
appear before you today. I am what the military calls a “mustang” - a commissioned
officer that began military life as a private. My career has been divided between active
duty and reserve status. I spent 6 years as a Reservist during which I had a civilian career
and became a wife and mother before being recalled to active duty during Desert
Thunder/Desert Storm. As a result, my experience spans both military and civilian as
well as life as a military spouse.

I represent your silent constituency. By our very nature we do what we're told,
don’t question authority and certainly don’t write Congress on any issue. We have to be
that way. What military person when tasked with a difficult or dangerous job would
respond with “I can’t” or “I won't “ or complain to their seniors? We're used to living
with less and tolerating more. If the military had not maintained this type of discipline
throughout this country’s history neither of us would be here today. We trust YOU, our
elected representatives, to make the Right decisions - to look out for OUR welfare as we
look out for our country’s freedom. Jumping the chain of command is frowned upon in
the military and it is difficult for us who wear the uniform to determine when it is OK to
voice an opinion. Our freedom of speech is limited. We cannot campaign or make
political statements in uniform and we cannot make disparaging comments about our
President. So rather than face the possibility of overstepping our bounds, or to be singled
out as a rabble rouser, we just take the hand we’re dealt and say nothing. This perception

is not applicable in my case since - my seniors are very supportive of my being here;


21

18 years, in an effort to make it safer to serve our country as a
military wife.

Our committee has had some success but more should be done
by Congress to ensure that all divorcing military wives are treated
fairly and similarly—it’s very important—in domestic matters per-
taining to military divorce, no matter what State the divorce is in.
Unfortunately, this is not the case today because often what a wife
receives of her earned pension share depends on her ability to raise
money to hire competent legal counsel, having the will to act to
protect herself—and many don’t—the vagaries of State law, and all
too often, biases of domestic relations judges.

A good example is that of Linda Field, story attached, a faithful
wife of 24 years whose husband, according to court record, left her
for another relationship. Even though court testimony proved that
he went on out of town trips with his new friend whom he charac-
terized at the trial as his business partner, and spent many nights
at her house, Judge Allen Crow, domestic relations judge of Cal-
houn County, Alabama, ruled that such behavior on the husband’s
part did not rise to the level of proof of adultery. Well, it makes
a big difference in Alabama.

Linda received no part of the military pension she had helped to
earn. Linda now works in the Ft. McClellan Commissary stacking
groceries for a little more than minimum wage, has no benefits

mm her job, and is facing the prospect of living on a meager social
security benefit of a check after she is no longer able to work. Her
former husband, by contrast, is enjoying all of their jointly earned
pension as well was his new relationship. To those who say that
military wives already have “enough protection,” this case occurred
12 pours after the passage of the Former Spouses Protection Act,
and was heard by a divorce judge who publicly stated that he “did
not believe in pension sharing.” Also, see attached, an article from
the “Equitable Distribution Journal” for a good example of a law-
yer’s gross incompetence from past years.

I could give the committee more examples—I know plenty of
them, as I said, I’ve been working in this area for 18 years—but
I do not believe that anyone believes in the throwaway military
wife system which these two examples epitomize. The question
arise as to how these two cases and other similar ones, relate to
collecting alimony and child support. The answer is that divorce is
much more likely to occur if a military member thinks there is a
chance he can beat the system, thereby making it unnecessary to
collect child support and alimony.

As the attached article shows, nearly one-fourth of all children
in this country now grow up without fathers. The disintegration of
the American family is a danger to the very foundations of our soci-
ety and should be discouraged by every public means.

may be overly pessimistic about the future of our country, but
I wonder if the coming generations of American young men will be
willing to sacrifice themselves in a war as the noble young men of
past generations, when so many children today do not have fathers
around to help teach them virtuous living and a duty to sacrifice
for the higher ground. To use an analogy, studies have shown that
one of the most important variables in the reduction of crime is the
certainty of punishment, not the severity of penalties. I believe the


50

characterized as an action to partition property. Former spouses used both techniques
to divide retired pay retroactively.

Congress never intended for the enactment of the USFSPA to provide an opportunity to
reopen long settled divorce decrees and divide military retired pay if the original divorce
decree did not treat (or retain jurisdiction to treat) military retired pay as martial
property. To make federal limitations unambiguous, in 1990 the USFSPA was
amended to deprive any court of jurisdiction to treat disposable retired pay as martial
property if the final divorce decree was issued before June 25, 1981, and did not treat
(or reserve jurisdiction to treat) disposable retired pay as marital property." The
amendment was explicitly made effective with respect to judgments issued before, on
or after the date of enactment of the amendment (November 5, 1990). In the case of
judgments issued before November 5, 1990, the amendment would not relieve any
obligation to make a payment that is required to be made before the end of a two-year
period following November 5, 1990.°

PROBLEM: State courts have avoided this prohibition by holding that all courts of the
state are deemed to reserve jurisdiction to treat disposable retired pay as marital
property or by holding that the legal concept of res judicata prevented the reopening
and invalidation of final decree that retroactively dividing military retired pay,
notwithstanding federal law invalidating such retroactive divisions.

SOLUTION: Any court order enforcing an invalid retroactive division of military retired
pay should be unenforceable. The USFSPA should be amended to declare invalid
retroactive divisions of disposable retired pay as void and unenforceable by any
subsequent court order, res judicata notwithstanding. Invalid retroactive divisions of
retired pay could also be included in the categories of invalid division of retired pay,
discussed under Res judicata, related to the division of disability compensation, supra.

UNEQUAL DIVISION --- FORMER SPOUSE'S SHARE GREATER THAN HALF
OF MARITAL SHARE OF DISPOSABLE RETIRED PAY

In 1990 the USFSPA was amended to limit the amount of disposable retired pay
divisible as marital property to 50 percent of disposable retired pay. !n particular, the
USFSPA currently provides that ‘the total amount of disposable retired pay . . . payable
under all court orders [treating retired pay as marital property] may not exceed 50
percent of disposable retired pay.” An equal division of marital property should be
expected to provide an equal amount of the marital share of disposable retired pay to
both spouses.

PROBLEM: State courts routinely award more than fifty percent of the marital share of
disposable retired pay to a former spouse to offset the effect of other limitations or
reductions in disposable retired pay. For example:

+ 10 USC, §1408(€)(1), as amended by PLL. 101-510, §555(a), 104 Stat. 1569 (1990).
* Section 555(c), P-L. 101-510, 104 Stat.1569, 1570 (1990).


95

One of the ex-spouse objectives is the elimination of the protection of
disability pay. This means that even if long-awaited legislation were enacted,
Providing for the concurrent receipt of retired and disability pay, disabled military
retirees would find themselves in protracted court battles for an ex-spouse share of
both.

‘*Most military members impacted by the USFSPA have been 'blind-
sided’ because the uniformed services have assiduously avoided briefing their
personnel on the law. Nor is information on the USFSPA being disseminated during
retirees seminars being conducted by the military services.

A compendium of "horror stories’ could be presented, exemplifying the numerous
inequities cited above, but most of them are apparent--even without documentary.
proof that they exist. Divorcing military couples have available to them, in state
courts, all the remedies available to any other U.S. citizens. What is different ,
however, is the USFSPA's treatment of spousal support which is a distinct departure
from customary notions of spousal support in domestic relations law. An obligation to
Provide ‘alimony’ usually terminates at the end of some ‘rehabilitation’ period , or
upon the remarriage of the recipient. This has been standard legal doctrine since the
founding of the country, based on the rationale that, in a marriage, there is a transfer
of spousal support responsibility to the new spouse. The continuation of payments
beyond remarriage of former spouses overrides any aspect of financial need.

Usually,spouses attain financial security by virtue of the income of their new
partner, or a combination of two incomes. By contrast, many military members whose
retired pay has been divided support second families. This means that the military
member is severely handicapped in his/her efforts to get on with the rest of their lives
by payments to an ex-spouse who no longer needs them.

The military member is further hamstrung by the requirement to give his/her ex-
spouse first call on the DoD's Survivor Benefit Plan (SBP) which provides an annuity
to the ex-spouse in the event of the death of the member. This seriously restricts the
‘amount of insurance coverage he/she can provide for a second family. Commercial
insurance coverage, reasonably priced at the commencement of a military career, is
unacceptably expensive at retirement ages. From the viewpoint of the military
member, the concurrent loss of SBP may be every bit as egregious as the "payments
for life" provisions of the USFSPA.


83

do. And that’s the reason why this is a Federal question and the
issue needs to be one solution.

You know, we're not—I don’t think any of us are here to advocate
that it needs to be the military retirees’ favor. Both sides need to
have proper Protection. But I think based on what I’ve heard today
and what I from my membership, is that we have 50 states
and ev ing is not done the same way and certain people are
protected and others are not.

Mr. CooKsey. T see some ladies in the back nodding their head
in agreement. Is there then agreement from people from both sides
of this issue that we do need one set of rules, one law?

Mr. OLANoFF. And enforced the same way.

Mr. CooKSEy. Right. Okay. That answers my question. I'll send
a mest to my friend, this Federal judge to——

The CHAIRMAN, Earlier today, one of the witnesses stated there
would not be an action on this bill today and he is absolutely cor-
rect, because of the pending DOD study, the lack of any action on
the part of the Senate. And certainly we have less than 20 days,
leglative days left in this session.

jut let me assure you, if I am fortunate enough to return to the
106th Congress and to serve in this position, we will address this
problem at our earliest Ressible time. Mr. Ouellette.
ene . eee D bri ath ee wwe ably all meee

col to bri i up. We, probably us collec-
tively, knew that was not probably going to be any action
taken this year. The strong point is, I think from NCOA and many
other BTOUPS, and I think some of the other witnesses said it, no-

ly told us.

People are serving today, and if anything what this hearing is
going to do, with the resulting and the education portion of this,
is probably being able to d for the members that FSPA does
exist and what are the implications, how does it work, what is the
im on their lives? They need to know that.

are many, many of my members out there that are serving
on active duty that are happily married that could care less about
the Former Protection Act.-In fact, they probably think it’s
a good idea until they get caught up in a divorce action and then
the ball really starts rolling and they really get upset about it
when they find out the full details.

But I know NCOA compliments you for talking a strong stand
and at least being able to rise to the occasion an try to do some-
thing about the situation that is just absolutely devastating to en-
listed. Thank you.

The CHAIRMAN. Thank you, sir. If there are no further questions.
Let me thank all the witnesses that appeared today. We you
for taking the time to be with us, and for your statements.

If there are no other questions, the meeting stands adjourned.

[Where at 11:57 a.m., the subcommittee adjourned subject
to the call of the Chair]


168

DI E OF FEDERAL Ss

The Retired Enlisted Association does not currently receive, has not received during the
current fiscal year or either of the two previous years any federal money for grants or
contracts. All of the Association’s activities and services are accomplished completely
free of any federal funding


133

EX-PARTNERS OF SERVICEMEN/WOMEN FOR EQUALITY
AUGUST 5, 1998

At this time, we would like to submit that - judging from correspondence we
have received from our members - it is our opinion an investigation is in order
concerning just exactly what is defined as a “service-connected disability” by
the Veterans Affairs. We have women writing to us that their former
husbands appear to be in very good health, are working full time, and are
receiving large percentages of their retirement income from the VA. We
have women write to us that their former spouses, in an effort not to
relinquish control over them, will “threaten” them by saying they will get
part of their retirement as “disability” to deprive them of what they have been
awarded in a court order. Situations such as this are not only unfair to former
spouses, they make light of countless legitimate sacrifices made by so many
of our servicemen and women. Additionally, they are an affront to the
decisions made by judges at the state level.

One of the reasons “service-connected disability” payments are so very
attractive to former servicemen is, of course, they are “tax free.” Another
reason is that they are deducted from what the state courts have concluded to
be “Property” - i.e., retirement pay - before it is paid to a former spouse. For
example:

Let us assume retirement pay to be $2,400 per month; of

this amount, a former spouse is awarded 1/3, or $800. Let

us further assume that the serviceman is granted a “service-

connected disability” of, perhaps, 40% - this amounts to $399.

The ex-serviceperson’s disability payment is paid by the VA

in the amount of $399 and DFAS reduces his payment by

that amount. So, instead of receiving the $1,600 from

DFAS (or 2/3 of $2,400) he now receives $399 (tax free)

from the VA and $1,201 from DFAS. His spouse, however,

now receives her property share as 1/3 of $2,001 (which

is $2,400 less $399), or $634 - not the aforementioned $800.

In other words, HIS disability reduces HER court-awarded

Property share.


17

The current law provides for a windfall to the former spouses. I
know of a colonel married five years and divorced early in his ca-
reer. After he retired, his ex-wife sued for her share of his retired
pay, not at the rank he held at divorce, but laying claim to every
promotion he received during the 20 years since they separated.
With all we endure, with all the hard: ips we do to get promoted,
how can you credit a former spouse for the military member’s suc-
cess? The Supreme Court ruled that our retired pay is a reduced
pay for reduced services and couldn’t be divided for good reason.
Most military members, the American Bar Association, and Con-
gress, don’t understand that military retirement pay is not a pen-
sion. It is paid at the pleasure of the Government and can be
terminated.

Someone asked if I am a victim myself. Absolutely. I’m a victim
every time I see the anguish in a Marine’s face. The emotional
drain divorce takes on them and the helpless frustration with this
one-sided legislation. For them divorce is never final. I challenge
you to right the wrong and pass legislation that is there for both
sides. Thank you.

[The prepared statement of Major Armstrong appears on p. 99.]

The CHAIRMAN. Thank you, Major.

Our last witness on this panel, Mrs. Patricia Bruce, national di-
rector, Women in Search of Equity.

STATEMENT OF PATRICIA BRUCE

Ms. Bruce. I thank you for the opportunity to present to you our
views and comments regarding various issues that affect our mili-
tary members.

The lack of clarity of the Uniformed Services Former Spouses’
Protection Act, causes a great deal of misinterpretation by State
courts. This ill-defined law places military members and their
former spouses in a situation where there is no consistency among
military divorces. Issues of utmost importance are the treatment of
disability pay, survivor benefit plans, remarriage, and the need for
a statute of limitations.

Under Federal civilian systems, Federal retirees have access to
more than one survivor benefit plan in order to provide financial
security for a second spouse upon the death of a retiree. The second
spouse of a military retiree is not afforded the same protections for
old age security as spouses in the civilian Federal sector, even
though the second spouse may have been married to the retiree
longer than the first.

Civilian Federal plans are statutorily clear in providing a statute
of limitations for dividing retired pay. Not so for military retirees.
Because of this, State courts are currently reopening final decrees,
sometimes up to 10 or 15 years after the divorce, to award a share
of retired pay and property to long-divorced former spouses, to in-
clude retroactive payments.

While Congress has no control or jurisdiction over how the State
courts divide retired pay, Congress does have control over the use
of Federal compensation, as well as administrative mechanisms in
the disbursal of Federal compensation and benefits. This fact is em-
phatically demonstrated throughout the enactment and application


61

California went further. In Luciana v. Luciana its Court of
Appeals decided that the former spouse did not have to wait until
the service member retired to begin receipt of the latter’s
military retired pay. However, the court noted that if she began
payments at that time it would “constitute an irrevocable elec-
tion to give up possibly higher future payments that might accrue
because of longevity increases, more years of service and mili-
tary pay raises.” (Randall Shoemaker, The Retired Scene, Navy
Times, Oct. 20, 1980.)

In another California case, Tom Philpott, reporting for the
Navy Times, March 16, 1981, discovered that a state court had
awarded a former spouse damages because her former military
spouse refused to retire so she could get a portion of his
retired pay.

In an article by Bruce Covill, Army, Navy, Air Force Times,
April 14, 1977, he noted that one of the community property
states, Texas, had recorded a state court judge’s ruling in 1960
that military retired pay constituted property and could be
divided between husband and wife in a divorce action.

Texas, in the minds of its congressional delegation had one
insurmountable problem, it wasn’t able to enforce payment due to
a quirk in its constitutional law. The State had no alimony or
garnishment statute. Although Texas may have wished for the
Federal government to collect and pay its court orders involving
the division of military retired pay as community property, the
Comptroller General of the United States, in decision B-190985,
gave service secretaries legal basis for refusing to follow Texas
community property attachments to military retired pay.

Texas’ predicament led former U. S. Representative Kent
Hance (TX) to introduce H.R. 3677 in early 1980 authorizing the
Service Secretaries to pay ‘another person’ part of a service
member’s retired pay as a result of a court decree, etc., or ‘any
court-approved property settlement.’ Hance reintroduced his
proposal in 1981 as H.R. 1711. Eleven (11) of his cosposors were
Texans. (More on the Texas situation, pp 10-11.)

ESTABLISHING A PRECEDENT
Despite protests to the contrary, the civilian community,

including Members of Congress, referred to military retired pay
(also ‘retainer pay’ payable to Navy and Marine Corps personnel

51-567 - 98 - 3


130

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114

ary Association (NMFA) is the only national organization whose.
ly and whose to influence the : of
yeti ines tose amily acme eae serve the
Founded in 1903 ase ary Wives Asoo dom NMEA np S08) ily
‘a sa
ieee tion. NMFA_ family members

volunteer

duty, reserve ts and retired. ohne seven forma scrioes “Army, Navy, Air

Force, Marine Corps, ¢ Corps, Coast Guard, Public Health Service andthe Nacional Oceanic and
istration.

“A Representatives in military communities worldwide provide a direct link between
famille and NMEA saff inthe nation’s capita. Re Repreveuatves a te “eyes and cars” of

NME,
NMEA has been the recipient ofthe following of te following awards:
Defense Commissary Agency Award for Outstanding Support as Customer Advocates (1993)
Department of the Army Commander Award for Pu (1988)
Assocation ofthe United Sates Army ‘Citation for pions! ‘Service in Support of National
fense
sma Sious members of NMEA’s staf have alo recived personal award for heir support of
tary familie
INMPA'S website is located at: tip/wwrw.amfa.org

JOYCE WESSEL RAEZER
Senior Issues Specialist

Joyce started her volunteer work at the National Military Family Association, working with
the Government Relations Department, in September 1995 and ‘Education S|
1906, ta February 1998, loyce was compeuively selected forte paid position of Senior Lsues
‘Specialist for the Association. As Senior Issues Specialist, Joyce monitors issues relevant to the
atte a he mle fe Unfomed ees ut een he Asano rs
ad mcings of other organizations, Member of Congres and thei staffs and members of the

She continues to serve as stake!

Bete Laas iy CDE Chest epee nn eB DeDEA
jtaffing Task Force, the ACDE st group Anniversary Plannin;
‘Commitee. In June 1997, she: se Bod RMA sr the First Arnal Sepporgag the Mary

lege, Gettysburg,
Pennsyivanta sels MEA sn agony fom the Univer of Vi TATE spouse of 15 years
and mother of two children, she has inedin Washington DEG EG un) Vga Reet rt
California. She is a former teacher and has been an active vol arent for cight years.
Sheen este ote For enor (RY) Comunity School Boar of Bastion in 1098 and
served until August 1995. She currently serves as PTA President for her son’s school in Fairfax

‘County, Virginia.


116

RETIRED PAY
Child Support

Once a servicemember retires, it is almost imperative that a court order (or a writen
ageetent accepiable to DFAS) eis forthe provision of child suppor. When such an
onder exists andi filed with DFAS the payment of child suppor stally proceed in an
orderly fashion. If a court order has not been obtained before retires,
and the servicemember chooses to reside outside of the United States, obtaining a court
order that is recognized by DFAS is next to impossible. In addition, the total amount of
retired pay subject to gamishment is 65% of that pay. If prior orders exist for award of
Property, child support alimony, et. he sum of wich totals 65% of retired pay, a
subsequent court order can not

NMEA strongly believes thatthe services havea responsibil o counsel the now miltary
‘parent on the ramifications of not having a court order for child support before
‘servicemember retires .

‘Alimony

Alimony can be and is awarded in cases of divorce that occur after a member has retired.
In most cases the amount of the award is based on the income of the servicemember from
‘post retirement civilian employment. NMFA is aware of cases when alimony has been
awarded onan almost permanent bass to circumvent ce prohibition on dividing any part of
sabi pay a8 propery. However as alimony i stops if and when the former spouse

NMEA is aware that cases can be cited whee the permanent award f alimony in leu of
axarding disability ay as propery appears to be afr tothe servicemeber. 0

other hand, we certainly can cite cases where a servi cpparen ely enough
W Service aful carer on ctv ty, and yet upon wetonent estes @

Giabiliy award. Some of these servicemembers go onto crate cilian careers In
these cases, amarding of permanent alimony in leu of providing a property senlement
seems only fair. NMFA believes the best way to settle this problemis to provide
‘concurrent receipt of both longevity retired pay and disability pay.

Retired Pay Awarded in Property Setlements

In 1981 Congress passed the Former Spouse Protection Act (FSPA)which allowed state
Courts to eat disposable military retired pay as property of the member or: of the
member and spouse for the purpose of property settlements when a final decree of divorce,
Aissolution,annelment or legal separation is issued by the cour, FSPA also precluded an
award of more than 50% of retired pay, and limited payments from DPAS direedy othe
‘spouse to those who had been married to the servicemember for at last 10 years during the
‘member's active service. In addition, all protections of the Soldiers and Sailors Civil Relief
Act apply to court actions regarding servicemembers.

In 1986 cours were given the option of mandating coverage under the Survivor Benefit
Plan for former spouses.


4
burden of SBP paid by the owners of the retirement after it’s been

divided. As an example, if a member gets 75 percent of disposable
retired pay and a spouse gets 25 percent, the member pays 75 per-
cent of SBP and the spouse pays 25 percent. It’s not uncommon for
State courts around the country to require the former spouse to
pay the full amount of SBP. Yet, when those court orders are sent
to the finance centers they really can’t comply because the law
doesn’t authorize them to do so.

Secondly, Federal law for Federal civilians permits multiple
beneficiaries of SB—well, not SBP, but a survivor annuity. Under
the military survivor benefits system, there’s only one SBP bene-
ficiary and you can’t have multiple beneficiaries. We think that
should be changed.

Fundamentally, the more structural problem is one related to
how a division of retired pay as marital property must be stated.
The Federal law says that disability retired—rather, retired pay
that’s divided as marital roperty must be stated as an amount
certain or a percentage. That’s fine if someone continues to serve
throughout their entire career and gets divorced after that career
has ended. But if the marriage ends during the course of a career,
it becomes really problematic to decide what that percentage
should be. If it’s a percentage based simply on years, that percent-
age is not going to be accurate enough because it’s going to some-
how give the former spouse a benefit of subsequently accrued bene-
fits. That should be changed. In addition, the amount of retired pay
that’s divided should be limited to amount that’s earned during
marriage.

Finally, there should be an invalidation of any court order that
orders a member on active duty to make a payment that’s akin to
dividing retired pay.

Finally, I think, clearly, we believe the Federal law needs to be
modified to effect a remedy to some of these inequities.

Thank you for the opportunity to address these questions and I'd
be pleased to answer any questions.

[The Rrepared statement of Mr. Kusiak appears on p. 42.)

The CHAIRMAN. Thanks, sir. Since I failed to properly introduce
you, Mr. Kusiak represents—he’s legal counsel for the Retired Offi-
cers Association.

Next we have Mr. McKinney, who is legislative counsel for the
Fleet Reserve Association in behalf of the 15 member organizations
of the Military Coalition. Mr. McKinney?

STATEMENT OF C.A. “MACK” MCKINNEY

Mr. McKinney. Thank you, Mr. Chairman and distinguished
members of the committee. I appreciate this opportunity to discuss
the Uniformed Services Former Spouses Protection Act. In doing
so, it is a privilege to represent the member organizations in the
Military Coalition that are listed on the epening. page of my pre-
pared statement. I might add that the Marine orps League had
joined that group. If you will so submit for the record.

To begin, allow me to assure the committee that my prepared
statement is not in opposition to the garnishment of retired pay for
child support. In that case, military retirement bey is not consid-
ered property to be divided at the whim of some State court.


93

* The USFSPA does not specify that the dollar amount of an award is to
be based on the rank/rate or pay grade of the military member at the time of divorce.
As a result, many ex-spouses have received a “windfall benefit” in the form of a
USFSPA award based on promotions of the military member after divorce. The ex-
spouse community's contention that later promotions are built on early effort of both
husband and wife is pure nonsense. Many spouses have little or nothing to do with
their military mate's career. Even in cases where they do, it is foolish to argue that a
first spouse, divorced when the military member was (for instance) a Major, gave
him/her such a head start that the momentum carried all the way to the rank of Major
General. There is ample evidence that, quite the contrary, the stigma of divorce and
the acrimony of the proceedings frequently clutter the path to future promotions. It is
ridiculous to extol the virtues of career support: provided off-site, in absentia.

*A military member must serve a minimum of 20 years before being
eligible to receive retired pay. Eligibility of the member's spouse is attained
instantaneously upon marriage. There is no prohibition against multiple marriages
and multiple USFSPA awards. The current (known) ‘champion’ USFSPA exploiter is
‘on her fourth marriage to a military member and is receiving USFSPA payments from
the first three.

* The military retiree must remain in compliance with the Uniform Code
of Military Justice, may have restrictions on civil service employment and foreign
travel, and may be subject to involuntary recall to active duty. The ex-spouse, who
draws from the same retired pay envelope, is not subject to any of these constraints.

*Since military retired pay is reclassified as "property" for a USFSPA
award, payments continue for life, even if the benefiting ex-spouse remarries. This is
the single greatest inequity of the law. The retired pay laws applicable to divorces in
the Foreign Service and CIA provide for the termination of spousal payments upon
remarriage after a certain age. So do the survivor benefits programs of the
Department of Defense and Social Security Administration. Since USFSPA awards
are made without regard to fault, merit, need or respective financial circumstances,
this hardly qualifies as equal justice under law.

“Divorced military veterans are the only U.S. citizens who have their
retired pay classified in accordance with the federal government's intentions for it:
“property” if for a marital award and "Income if for taxation by the IRS. How can it be
both?

51-567 - 98 - 4


38

Statement by Rep. Luis V. Gutierrez
Committee on Veterans’ Affairs
August 5, 1998

Thank you Mr. Chairman.

As human beings, we wear many hats and take on many roles
throughout our lives.

At once we are individuals and members of communities.

And we are defined differently in each of our relations with a variety of
people and institutions.

The Internal Revenue Service (IRS) sees us as taxpayers, businesses see
us as consumers, doctors see patients and pro atheletes see fans.

In our communities, we are neighbors, residents, homeowners or renters
and citizens all at the same time.

Today, we are dealing with an issue in which two of the definitions that
people hold for others sometimes are questioned as to which is more
important under the law.

I am sure that all of us would qualify the brave men and women who
served and defended our national interests in wars this century as
veterans and heros.

This they most certainly are.

But again this is not all they are. Like all of us, veterans wear other
hats and bear other titles.

Veterans are fathers or mothers to their children, husbands and wives to
each other and friends and companions to many of us here today.


158

Mr. Chairman. the Non Commissioned Officers Association of the USA (NCOA)
appaeciates the opportunity to present testimony before this committee on the
{garnishment of benefits paid to veterans for child suppomt and other court-ordered family
obligations. The Association's comments and recommendations represent the views and
concems of its noncommissioned and petty officer membership. Hopefully, this
committee will consider the comments and recommendations to be of value and

assistance.

NCOA is most appreciative tor this committee's etforts to bring issue of garnishment and
the problems encountered by military veterans who are divorced to light. These issues
are ones that have been ignored for years and consequently the problems faced by
military retirees have been entirely misunderstood. This hearing provides an excellent
forum to discuss. analyze and critique the wide-ranging impact of garnishment actions
and court ordered divisions of VA disability compensation and military retired pay as a

result of divorce action,

NCOA fundamentally belices that all retirees must be held accountable in terms of
court-ordered alimony and child support obligations. Theretore. the current provisions of
law that permit the garnishment of VA disability compensation and military retirement
for only those reasons are considered to be fair and just in the eyes of this Association.
NCOA. however, strongly opposes the expansion of the Uniformed Services Former
Spouses Protection Act (USFSPA). Public Law 97-252, 10 U.S.C. 1408. into the area of
VA disability compensation. It has become common practice by some state divorce
couris to bypass the Mansel decision and meet USFSPA awards of military retired pay as
property settlements in military divorce actions by considering them to be alimony.

‘There is considerable debate over a former military spouse's entitlement to a portion of a
military members retired pay: however. former spouses should not receive any portion of
the member's adjudicated award of any level of VA disability compensation, The

USFSPA allows former spouses to raid additional protected VA disability income by


125

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51-567 - 98 - 5


100

however you would be surprised at how many individual service members raise the issue
of reprisal when they learned that I was coming here today to exercise my right as a
citizen. For every letter you receive from a military member - there are tens of thousands
who would like to write.

The daily transition from the military mindset to the domestic is often difficult for

us, On duty, we are great at mission focus; this can be carried to the point of excluding

anything personal, for months. I often laugh when someone asks if my husband is a
Marine..... Who else would put up with a woman Marine? We can understand the
mindset. Civilians, for the most part, do not. We work to the point of exhaustion - sleep
for a few hours and start again. Civilian employers love to hire us after we get out of the
military... the Fortune Five-Hundred prefers us. But our work ethic is often perceived as
abandonment by the civilian spouse, which leads to other problems and often divorce.
Often you hear: “BUT - the military member is off having fun while the spouse
stays home with the kids!” I’ve seen both sides and I can tell you this is not true.
Deployments are nothing more than long periods of sacrifice and hardship. We would
much rather be at home with our families. A couple of months ago there were five of us
arguing over who would have to make an unexpected trip. Somehow I doubt that the
LOSER’S wife and family really believed him when he came home and announced that

he had to go to Hawaii for four days! But it is true - none of us wanted to go. When you

have a loving family, a home and good friends - it hurts to be gone.
An extremely vocal group of former wives has tried to convince Congress and the
American public that this is a male/female issue. It is not. I am here to remind you that
there are women in the armed forces too. The military has made great strides in recent
years in the areas of equal rights and opportunities for women; and in many areas the
military has been in the forefront. Our promotions are based on how well we do our jobs
and lead our people, not on our marital status. Yet this law says my contributions as a
military wife are more valuable than my contributions as a military officer. According to
the states interpretation of the Uniformed Services Former Spouse's Protection Act, I am
vested in 12 years worth of my husband’s retired pay since he is retirement eligible - yet I

am vested in nothing based on my own 17 year military career. 1 must serve 20 years to


41

Opening Remarks for Rep. Mascara at Veterans Committee hearing on August 5, 1998

Thank you Mr. Chairman for calling this hearing. | would also like to thank the panelists
for testifying at this hearing today.

The issue that will be discussed today is a very complex one with no easy solutions.
What is a fair and equitable way to divide the proceeds of a veteran's retirement and/or
disability payments?

| think everyone understands that relationships change over a period of time. Divorces
are on the increase in the United States and especially in the military. Here the
demands of military service often lead to the breakup of many marriages.

The reason we are here today is not to make any sudden discoveries, judgements or to
punish anyone for the choices they make. Hopefully this hearing will shed some light
‘on how the Congress can help solve some of the problems associated with the division
of property in a divorce action.

The lives of veterans, their spouses and their children are affected daily. We must deal
with these issues as soon as possible and assure equity to all those who are involved.

1 look forward to hearing from the panels and the distinguished guests here today.