SEC. 3. AWARD OF RETIRED PAY TO BE BASED ON RETIR-
EE’S LENGTH OF SERVICE AND PAY GRADE
AT TIME OF DIVORCE.
(a) IN GENERAL.—Section 1408(c) of title 10,
United States Code, as amended by section 2, is further
amended by adding at the end the following new para-
graph:
‘‘(6) In the case of a member as to whom a final de-
cree of divorce, dissolution, annulment, or legal separation
is issued before the date on which the member begins to
receive retired pay, the disposable retired pay of the mem-
ber that a court may treat in the manner described in
paragraph (1) shall be computed based on the pay grade,
and the length of service of the member while married,
that are creditable toward entitlement to basic pay and
to retired pay as of the date of the final decree. Amounts
so calculated shall be increased by the cumulative percent-
age of increases in retired pay between the date of the
final decree and the effective date of the member’s retire-
ment.’’.
(b) IMPLEMENTATION.—With respect to payments to
a former spouse from a member’s disposable retired pay
pursuant to court orders issued before the date of the en-
actment of this Act, the Secretary shall—
(1) within 90 days of such date, recompute the
amounts of those payments in accordance with para-
graph (5) of section 1408(c) of title 10, United
States Code, as added by subsection (a); and
(2) within 180 days of such date, adjust the
amount of disposable retired pay payable to that
former spouse accordingly.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to court orders
issued on or after June 25, 1981.
SEC. 4. LIMITATION ON TIME FOR SEEKING DIVISION OF
RETIRED PAY.
(a) IN GENERAL.—Subsection (c)(4) of section 1408
of title 10, United States Code, is amended to read as
follows:
‘‘(4) A court may not after the date of the enactment
of the Uniformed Services Former Spouses Equity Act of
2001 treat the disposable retired pay of a member in the
manner described in paragraph (1) unless—
‘‘(A) the court has jurisdiction over the member
by reason of (i) the member’s residence, other than
because of military assignment, in the territorial ju-
risdiction of the court, (ii) the member’s domicile in
the territorial jurisdiction of the court, or (iii) the
member’s consent to the jurisdiction of the court;
and
‘‘(B) the member’s spouse or former spouse ob-
tains a court order for apportionment of the retired
pay of the member not later than (i) two years after
the date of final decree of divorce, dissolution, an-
nulment, or legal separation, including a court or-
dered, ratified, or approved property settlement inci-
dent to such a decree, or (ii) the end of the six-
month period beginning on the date of the enact-
ment of the Uniformed Services Former Spouses
Equity Act of 2001, whichever is later.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to final decrees of
divorce, dissolution, annulment, or legal separation issued
on or after June 25, 1981.
SEC. 5. LIMITATION ON APPORTIONMENT OF DISABILITY
PAY WHEN RETIRED PAY HAS BEEN WAIVED.
(a) IN GENERAL.—Subsection (e)(4) of section 1408
of title 10, United States Code, is amended by adding at
the end the following new subparagraph:
‘‘(C) Notwithstanding any other provision of law, a
court may not treat as part of the disposable retired pay
of a member under this section or as part of amounts to
be paid pursuant to legal processes under section 459 of
the Social Security Act (42 U.S.C. 659) amounts which
are deducted from the retired pay of such member as a
result of a waiver of retired pay required by law in order
to receive compensation under title 38.’’.
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Sec-
tion 459(h) of the Social Security Act (42 U.S.C. 659(h))
is amended—
(1) in paragraph (1)(A)(ii)—
(A) by inserting ‘‘or’’ at the end of sub-
clause (III);
(B) by striking ‘‘or’’ at the end of sub-
clause (IV); and
(C) by striking subclause (V); and
(2) in paragraph (2)—
(A) by redesignating subparagraphs (E)
and (F) as subparagraphs (F) and (G), respec-
tively; and
(B) by inserting after subparagraph (D)
the following new subparagraph:
‘‘(E) are paid by the Secretary of Veterans
Affairs as compensation for a service-connected
disability under title 38, United States Code,
when military retired pay has been waived in
order to receive such compensation;’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to court orders and
legal processes issued on or after June 25, 1981. In the
case of a court order or legal process issued before the
date of the enactment of this Act, such amendments shall
apply only with respect to retired pay payable for months
beginning on or after the date of the enactment of this
Act.
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