Federal government benefits can be divided at divorce

Federal government benefits – such as from Social Security or the military – have their own rules, and those rules usually trump state law. So sometimes it’s unclear whether a state divorce court can divide up a federal payment.

However, in several recent cases, it was determined that federal payments could be split at divorce.

  • A military retiree’s health insurance benefits can be split at divorce, the Alaska Supreme Court decided.

That’s because of a federal law called the Uniformed Services Former Spouse Protection Act. Under that law, military retirement pay can be either individual property or marital property, depending on a state’s own divorce laws. And though laws differ between states, in Alaska such benefits are considered marital property.

  • Veterans’ disability benefits can be taken into account in deciding how much alimony a veteran’s ex-wife is entitled to, the South Dakota Supreme Court recently ruled.

A federal law prohibits the seizure or taxation of VA disability benefits. But the court said the benefits could be considered in deciding a proper amount of alimony, because that’s different from seizing them to pay a debt or imposing a tax on them.

  • A woman receiving Social Security disability benefits might have to pay some of the money as child support, says the Kentucky Supreme Court.

In that case, an unmarried father was awarded custody. The mother, whose mental illness made her unable to work or manage her own affairs, fell behind in her support obligations. But the court said the fact that she was receiving federal disability benefits didn’t excuse her from paying what she could toward caring for her child.