of paragraph (1) of this subsection in the same man-
ner as to subsection (c)(6)(A) of such section 1408, 
as added by subsection (a). 
(3) COURT
ORDER
DEFINED.—In this sub-
section, the term ‘‘court order’’ has the meaning 
given that term in section 1408(a)(2) of title 10, 
United States Code. 
SEC. 4. AWARD OF RETIRED PAY TO BE BASED ON RETIR-
EE’S LENGTH OF SERVICE AND PAY GRADE 
AT TIME OF DIVORCE. 
Section 1408(c) of title 10, United States Code, is 
amended by adding after paragraph (6), as added by sec-
tion 3(a), the following new paragraph: 
‘‘(7) In the case of a member as to whom a final de-
cree of divorce, dissolution, annulment, or legal separation 
is issued on or after the date of the enactment of the Uni-
formed Services Divorce Equity Act of 2003 and before 
the date when the member begins to receive retired pay, 
the disposable retired pay of the member 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 to the spouse or former 
spouse 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 cumu-
lative percentage of increases in retired pay between the 
date of the final decree and the effective date of the mem-
ber’s retirement.’’. 
SEC. 5. PROHIBITION ON COURT ORDERING PAYMENTS BE-
FORE RETIREMENT BASED ON IMPUTATION 
OF RETIRED PAY. 
Section 1408(c)(3) of title 10, United States Code, 
is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(3)’’; and 
(2) by adding at the end the following: 
‘‘(B) After the date of the enactment of the Uni-
formed Services Divorce Equity Act of 2003, a court may 
not order a member to make payments to a spouse or 
former spouse before the date of the member’s retirement 
based upon an imputation of a property interest in future 
retired pay.’’. 
SEC. 6. LIMITATION ON TIME FOR SEEKING DIVISION OF 
RETIRED PAY. 
(a) IN GENERAL.—Section 1408(c)(4) of title 10, 
United States Code, is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(4)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) In order to be eligible to receive payments from 
the disposable retired pay of a member in the manner de-
scribed in paragraph (1), the member’s spouse or former 
spouse must obtain a court order for the treatment of the 
disposable retired pay of the member as property of the 
member and the member’s spouse not later than two years 
after the date of a final decree of divorce, dissolution, an-
nulment, or legal separation, including a court ordered, 
ratified, or approved property settlement incident to such 
a decree.’’. 
(b) PROSPECTIVE APPLICATION.—The amendment 
made by subsection (a) shall apply with respect to final 
decrees of divorce, dissolution, annulment, or legal separa-
tion issued on or after the date of the enactment of this 
Act. 
(c) IMPLEMENTATION.—With respect to payments to 
a spouse or former spouse from a member’s disposable re-
tired pay pursuant to a final decree of divorce, dissolution, 
annulment, or legal separation issued before the date of 
the enactment of this Act, if more than two years have 
elapsed between the date of the final decree of divorce, 
dissolution, annulment, or legal separation and the 
issuance of a court order for the apportionment of the dis-
posable retired pay of a member, a court may not order 
that payments of retired pay to a former spouse be made 
retroactive to the date of the final decree of divorce, dis-
solution, annulment, or legal separation.
SEC. 7. TERMINATION OF LIABILITY FOR PAYMENTS TO 
FORMER SPOUSES. 
Subsection 1408(d)(4)(A) of title 10, United States 
Code, as redesignated by section 3(b)(1), is amended by 
inserting ‘‘and liability therefor’’ after ‘‘section’’. 
SEC. 8. PROHIBITION ON APPORTIONMENT OF DISABILITY 
PAY. 
(a) IN GENERAL.—Subsection 1408(e)(4) 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 by a member pursuant to legal processes under 
section 459 of the Social Security Act (42 U.S.C. 659) 
for the purpose of alimony payments to a former spouse, 
amounts that—
‘‘(i) are deducted from the retired pay of such 
member as a result of a waiver of retired pay re-
quired by law in order to receive disability com-
pensation under title 38; or
‘‘(ii) in the case of a member entitled to retired 
pay under chapter 61 of this title, are equal to the 
amount of retired pay of the member under that 
chapter computed using the percentage of the mem-
ber’s disability on the date when the member was re-
tired (or the date on which the member’s name was 
placed on the temporary disability list).’’. 
(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)(V), by striking all 
that follows ‘‘Armed Forces’’ and inserting a semi-
colon; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(3) LIMITATIONS
WITH
RESPECT
TO
COM-
PENSATION PAID TO VETERANS FOR SERVICE-CON-
NECTED DISABILITIES.—Notwithstanding any other 
provision of this subsection—
‘‘(A) compensation described in paragraph 
(1)(A)(ii)(V) shall not be subject to withholding 
pursuant to this section—
‘‘(i) for payment of alimony; or 
‘‘(ii) for payment of child support if 
the individual is fewer than 60 days in ar-
rears in payment of the support; and 
‘‘(B) not more than 50 percent of any pay-
ment of compensation described in paragraph 
(1)(A)(ii)(V) may be withheld pursuant to this 
section.’’.
(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. 
SEC. 9. TECHNICAL CORRECTIONS. 
(a) GENDER-NEUTRAL REFERENCES.—Section 1408 
of title 10, United States Code, is amended as follows: 
(1) Subsection (c)(1) is amended by striking 
‘‘the member and his spouse’’ and inserting ‘‘the 
member and the member’s spouse’’. 
(2) Subsection (c)(4)(A) is amended by striking 
‘‘his’’ each place it appears and inserting ‘‘the mem-
ber’s’’. 
(3) Subsection (d)(5) is amended by striking 
‘‘the member and his spouse’’ and inserting ‘‘the 
member and the member’s spouse’’. 
(4) Subsection (g) is amended by striking ‘‘his’’ 
and inserting ‘‘the member’s’’. 
(b) DATE OF ENACTMENT REFERENCE.—Subsection 
(d)(6) of such section is amended by striking ‘‘on or after