Supreme Court to hear dispute on pension payments in Arizona divorce

The Supreme Court will consider Monday whether a veteran who gave up some of his pension in order to get disability payments has to reimburse the ex-wife who was supposed to get half his military pension as part of their divorce settlement. (Photo by Nathan O’Neal/Cronkite News)

WASHINGTON – When John and Sandra Howell divorced in 1991, they decided Mrs. Howell would get half of her ex-husband’s Air Force pension.

That lasted until 2005, when Mr. Howell gave up a cut of his retirement to qualify for disability pay, costing Mrs. Howell a significant portion of her monthly income in the process and leading her to sue.

The Arizona Supreme Court ultimately sided with Mrs. Howell, ruling in 2015 that she had a right to half of his total benefits, pension and disability, angering some veterans groups, who said his disability should be his alone.

The U.S. Supreme Court on Monday will be asked to consider who is right, and whether state or federal law should determine the answer in the future.

Attorneys for the Howells declined to comment on the upcoming arguments, but veterans groups that filed a friend of the court brief in the case said it’s important for the high court to settle the argument between states, several of which have split on the issue. That uncertainty leaves veterans in the lurch, they said.

“When state courts disregard this authority, they take from disabled veterans the benefits which are specifically purposed to supplement the veteran’s inability to achieve equally gainful employment in society after he or she has served this country,” said John Muckelbauer, assistant quartermaster general of the Veterans of Foreign Wars.

He said “military disability and retirement benefits have been a staple of the veteran’s rewards for service to his or her country since this nation was established.”

Former spouses have been able to lay claim to half of a veteran’s pension since 1982, when Congress passed the Uniformed Services Former Spouses Protection Act. But the Supreme Court said in a 1989 case, Mansell v. Mansell, that disability benefits were not up for grabs under that law.

But in the Mansell case, the veteran had forfeited some of his pension prior to his divorce in order to get disability. For the Howells, that trade came well after the divorce was final.

Mr. Howell filed for disability pay for degenerative joint disease in his shoulder that was a result of his time in the military. In order to claim his disability, Mr. Howell had to waive 20 percent of his pension, or about $250 a month, according to court documents.

That cost Mrs. Howell $125 a month, money that she depends on to live, according to court filings. She saw the change as a breach of their original agreement and went to court in 2013, arguing that she was entitled to half of her ex-husband’s total pension, “notwithstanding any waiver on his part.”

Every court in Arizona agreed with her, right up to the state Supreme Court, which said that because Mr. Howell’s disability pay agreement came after the divorce agreement had been made, he has to reimburse his ex-wife for the money the waiver cost her.

Arizona is one of five states, along with Maine, Tennessee, Massachusetts and Rhode Island, that have decided ex-spouses can claim a share of a veteran’s disability. Five other states – Vermont, Mississippi, Alabama, Alaska and Nebraska – have ruled the opposite.

Carson Tucker, an attorney who wrote the friend of the court brief for the VFW and a group called Operation Firing for Effect, said a veteran’s disability pay should be protected. That money is needed to support disabled veterans who cannot work, he said.

“There have been millions of veterans coming back from serving overseas in recent years, and around 70 percent of them can’t go back to work,” Tucker said. “Retirement pay helps with that, but with disability pay, they get to keep more.”

He said the ruling in Mansell is clear, that the former spouse protection act only gives state courts the power to divide retirement pay after a divorce, not disability pay.

“In Mansell, they decided that there can’t be an exception,” Tucker said. “Regardless of the amount of retirement or disability pay, the ex-spouse still only gets half of the retirement pay.”

Mrs. Howell’s attorneys said in court filings that Mr. Howell can still keep all of his disability pay – but he has to make up for her loss somehow. Her filing said that compensation does not have to come “from any particular source of funds,” adding that, “as John admits, indemnification orders can be satisfied out of the veteran’s ‘general assets.'”

Muckelbauer and Tucker said they hope the Supreme Court can settle the question for all states.

“I hope this sets and settles the standard and makes the determination of what that standard is,” Muckelbauer said. “The VFW has previously testified on the need to clarify the law on government VA compensation and spousal support. This case may provide that needed clarity.”