Helping Military Veterans Navigate the Legal Framework of Discharge Upgrades Sometimes a discharge status upgrade can mean the difference between employment and joblessness. by Matthew E. Costello and Martin M. Ellison
Serving the Veteran Community A new public interest law firm/think tank serves the interests of veterans, and is headquartered in Orange County. by Major Dwight Stirling
VA Payments and Family Support Across the country, the VA pays portions of benefits to ex-spouses of veterans. by Mark E. Sullivan
Helping Military Veterans Navigate the Legal Framework of Discharge Upgrades by Matthew E. Costello and Martin M. Ellison
The large majority of veterans receive an “honorable” discharge when they leave the military. However, about 10% of veterans receive a less than honorable discharge. While some discharge determinations are appropriate under the circumstances, like any decision involving discretion, mistakes can be made—some of which become clear only in hindsight. For example, increased awareness of the behavioral effects of service-related injuries such as post-traumatic stress disorder (PTSD) has shown that, in some cases, conduct that previously had been viewed by the military as an unforgivable lapse in judgment or discipline was actually a symptom of debilitating mental disease. The unfortunate result is that otherwise deserving veterans become ineligible for post-service benefits from the Department of Veteran Affairs (VA) and carry the stigma of an unfavorable discharge.
Although veterans can seek to upgrade their discharge status through administrative procedures and in federal court,1 the complexities of these administrative and judicial processes, and the rules and regulations that govern them, often prevent veterans from doing so. Lawyers and other trained advocates can help veterans navigate the legal framework of discharge upgrades and receive critical services. However, many veterans cannot afford these professional services, and there simply are not enough attorneys offering these services pro bono to meet the demand. That is why we encourage attorneys—young and experienced alike—to volunteer their time to advocate for discharge upgrades on behalf of deserving, financially strapped veterans.
The Basics of Discharge Upgrades With few exceptions, discharges are classified as either administrative or punitive. Administrative discharges, in order of most to least desirable, are classified as follows: (1) Honorable Discharge; (2) General Discharge Under Honorable Conditions; and (3) Discharge Under Other Than Honorable Conditions. Punitive discharges, as the name implies, are more serious and can only be handed down as a sentence from a court-martial. In order of most to least severe, punitive discharges are classified as follows: (1) Bad Conduct Discharge; (2) Dishonorable Discharge; and (3) Dismissal (for officers only).
Veterans may be forcibly discharged due to misconduct, as well as for medical disabilities, mental ailments, or simply at the end of a term of service. Veterans receive discharge documents upon leaving the military, the most important of which is the DD-214 Form that serves as a one-page summary of the veteran’s service. The DD-214 lists the characterization of service (e.g., Honorable, General, etc.), reason for discharge (e.g., misconduct, personality disorder, etc.), and re-enlistment code (designating the circumstances under which the veteran can reenter the service). The information from the DD-214 is required in VA benefits paperwork and is usually disclosed to prospective employers. Consequently, the character of service and reason for discharge can significantly affect many aspects of a veteran’s life, including the ability to secure stable work and obtain VA medical support.
Veterans normally seek discharge upgrades to change the information that appears on their DD-214 through an appropriate Discharge Review Board (DRB).2 DRBs have jurisdiction to upgrade the character of discharge (e.g., from General to Honorable) and change the reason for discharge (e.g., from misconduct to secretarial authority). Typically, DRBs upgrade discharges only on grounds of propriety or equity. For example, a DRB may upgrade a veteran’s character of service on grounds of propriety if it finds that a military branch committed prejudicial error during the discharge process. A DRB may also award a discharge upgrade on grounds of equity based on mitigating circumstances surrounding any offenses that led to an unfavorable discharge, such as undiagnosed PTSD.
DRB applicants can apply for either a records review or a personal hearing before a DRB panel consisting of five military officers in Washington, D.C. If a veteran applies for a records review first and then is denied a discharge upgrade, he or she is entitled to apply again for a personal hearing. This essentially gives veterans two bites at the proverbial apple. Importantly, the veteran can use the decisional document explaining why the application was denied during the records review to tailor the ensuing personal hearing application to address those concerns.
Veterans may appeal DRB decisions in federal court pursuant to the Administrative Procedure Act. Some courts require veterans to exhaust their administrative remedies, including applying to the applicable Board for Correction of Military Records,3 before seeking judicial review of an unfavorable discharge upgrade decision.
The Benefits of Discharge Upgrades Just as the circumstances surrounding a veteran’s discharge differ from person to person, the benefits of obtaining a discharge upgrade are many and varied. One universal benefit of discharge upgrades, however, is that they carry immeasurable psychological value. Many veterans seeking discharge upgrades see their discharge status as casting a shadow over their service, and stigmatizing them as failures or bad people. Consider a veteran who returns from the Iraq War, turns to alcohol and drugs to cope with PTSD-related symptoms, and subsequently gets convicted of a DUI and tests positive for drug use. That veteran will likely be discharged with a less than honorable characterization—despite having never had any prior behavioral or disciplinary issues and despite serving honorably while enduring the physical and mental hardships of war. One can imagine, then, the blow to that veteran’s psyche when his or her DD-214 characterizes that veteran’s service as anything but honorable. Any designation that falls outside this category can cause veterans to feel isolated and unappreciated—feelings that can compound existing medical problems. Securing a discharge upgrade on behalf of a veteran can help to heal the stigma and remove the perceived cloud over the veteran’s service.
Assisting veterans through the discharge upgrade process not only carries psychological value, but can also open the door to life-changing financial and medical benefits. The VA offers numerous benefits to veterans, including medical care at veterans’ hospitals and clinics, disability benefits for physical and mental injuries sustained as a result of service, home loans, pensions, and educational benefits under programs such as the Post 9/11 GI Bill. However, many of these VA benefits are only available to veterans with military discharges under honorable or general conditions. This can be a crippling barrier to many veterans, particularly those who suffer from mental diseases that originated during their time in service and contributed to their unfavorable discharge. A discharge upgrade can provide such veterans with access to resources for treating conditions like PTSD, as well as for financial support for going back to school once they have turned their lives around. In short, a discharge upgrade can alter the course of a veteran’s entire life for the better.
Assisting a veteran to attain a discharge upgrade not only carries tremendous value for the service member, but also has immense benefit to the advocate willing to expend time and resources to help a veteran in need. The application process is generally an inexpensive and efficient way for young attorneys to practice and develop crucial lawyering skills. The nature of discharge upgrade cases often provides pro bono advocates with invaluable advocacy experience—conducting client and military personnel interviews, preparing a thorough and compelling brief in support of the veteran’s discharge application, and presenting an organized and carefully thought-out opening statement and closing argument during a personal hearing—that they otherwise might not be exposed to early in their careers. In other words, helping a veteran seek a discharge upgrade is not just about filling out forms. Rather, it is about managing often complicated and emotional cases from start to finish, developing written and oral advocacy skills, and, most importantly, lending a helping hand to many deserving veterans who otherwise cannot afford to secure legal representation.
You Can Help For all of the reasons that discharge upgrades employ and sharpen an attorney’s skill set, they are also incredibly difficult for veterans to obtain without legal assistance. For many veterans, terms like “10 U.S.C. section 1553” and “discharges may be upgraded on grounds of equity and propriety” are not a roadmap to understanding the DRB application process, but an impenetrable obstacle to obtaining desperately needed help. Attorneys, with their familiarity with legal terms and procedures, are better equipped to navigate the statutory and regulatory framework governing discharge reviews. Moreover, attorneys’ written and oral advocacy skills fill a much needed role. Veterans seeking discharge upgrades—some of whom harbor a strong resentment towards the military—typically lack the ability to craft the objective factual and legal arguments required to obtain the relief sought. The assistance of an advocate can mean the difference between success and failure.
Although attorneys are well-suited for pro bono work in this area, right now the number of veterans needing assistance far exceeds the number of attorneys who provide such services. The main reason for this disparity is a simple lack of awareness of the problem. Local organizations that help with veterans’ legal affairs, such as the Public Law Center (PLC), cannot meet the demand for discharge upgrades on their own. PLC relies on the commitment and dedication of volunteer attorneys to meet the legal needs of Orange County’s low-income veterans.
This article is by no means an exhaustive overview of the discharge upgrade process. We encourage all attorneys interested in helping veterans in Orange County to consult other supplemental guides and resources to become familiar with the legal framework for discharge upgrades and reach out to PLC or any other organization that helps veterans seek discharge upgrades. Without pro bono service, countless veterans deserving of discharge upgrades will go without the advocacy and legal representation they urgently need.
ENDNOTES
Matthew E. Costello and Martin M. Ellison are Associates in the Irvine office of Haynes and Boone, LLP, practicing in the areas of Business Litigation and Labor and Employment Litigation. Matthew can be reached at matthew.costello@haynesboone.com. Martin can be reached at martin.ellison@haynesboone.com.
Serving the Veteran Community by Major Dwight Stirling
The Rand Corporation’s groundbreaking monograph, The Invisible Wounds of War, outlined the distressing, often internal damage sustained by combat veterans of Afghanistan and Iraq as they reintegrated into civilian society after their deployments. The 2008 report shocked many in the mental health, policy, and legal sectors, documenting the extent to which post-traumatic stress disorder, traumatic brain injury, and other often unseen war wounds haunted veterans upon their return. Central to the researchers’ findings was the paucity of services available to treat veterans’ unique types of injuries, including legal services. Legal services targeting veteran-specific needs are pertinent to removing barriers to healthcare, education, housing, and employment.
While progress has been made, many of the problems set forth in the report are just as pressing now as they were then, if not more so, as the armed forces’ mission in Afghanistan ends after thirteen long years. One of the largest concentrations of military veterans in the nation is located in Southern California, with 750,000 veterans residing in the counties of Orange, Los Angeles, San Diego, as well as Riverside. Providing professional services and advocacy to the veteran population in the local community will require a sustained effort for years to come.
In order to increase capacity within the legal field, Antoinette Balta and I recently founded the Veterans Legal Institute (VLI), a combined public law firm and think tank headquartered in Orange County. VLI’s objective is two-fold—assist low-income veterans with legal issues and advocate for better protections for veterans and service members at the policy level. Ms. Balta brings to VLI many years of experience as a former staff attorney at the Public Law Center and was one of the developing attorneys of its Operation Veterans Re-Entry Project. She is also a JAG officer in the California State Military Reserve, holding the rank of Captain. As a former active duty JAG officer with the California National Guard and a former clinical professor in military law at Chapman University’s Dale E. Fowler School of Law, I am likewise familiar with the legal needs of the military and veteran communities, gained through years of service as an attorney and military officer.
Legal Services Division VLI’s Legal Services Division is decidedly veteran-centric. A veteran leaving military service quickly learns that the Department of Defense does not have a corner on the market of complex bureaucracies. The Department of Veterans Affairs is a similarly large and complicated bureaucracy that can be challenging to navigate. Filing claims for service-related injuries and resolving lingering legal issues related to military service can be particularly difficult for veterans. Accordingly, two of the VLI’s focal points in its Legal Services Division are disability/pension claims and discharge upgrades—VA-specific practice areas representing the largest need among veterans. These legal needs are often the most overlooked at various legal aids throughout the country.
The process of filing a disability claim with the VA to establish a service-connected injury is often a winding road. Prosecuting the claim can involve an initial claims officer, a Decision Review Officer, the Board of Veterans Appeals, and lastly the Court of Appeals for Veterans Claims. It can be practically impossible for a veteran to navigate the disability claims process by himself, especially if his injury is indirect, unusual, or involves mental illness. Mental diagnosis from third-party doctors may be required to provide an alternative opinion to the VA’s conclusion. Attorney assistance is vital both substantively and procedurally. While challenging, successful prosecution of a service-connected claim can result in monthly payments of over $3,000, depending on the percentage rating of disability and family status, a life-changing outcome for a former service member struggling to deal with the often-invisible wounds of war.
VLI’s second main practice area is discharge upgrades. At the conclusion of military service, a service member is assigned a “characterization of service,” essentially a grade reflecting the command’s evaluation of how well a service member performed. While most characterizations of service are positive, being either honorable or general (under honorable conditions), some service members are given negative characterizations, such as other than honorable, bad-conduct, or dishonorable. Negative characterizations can have long-term ramifications for a veteran as she transitions to civilian life, limiting or preventing the receipt of medical care or educational benefits available from the VA. Further, the stigma connected to a less than honorable discharge, especially for a veteran who deployed for multiple combat tours, can be mentally debilitating.
Many times, a veteran is assigned a negative characterization of service that does not accurately reflect his/her performance. Consider the heartbreaking case of Amber, a female veteran who was the victim of military sexual trauma during her tenure on active duty. In Amber’s case, she was sexually assaulted by her company commander during Advanced Individual Training in the Army. A twenty-year-old private first class at the time of the incident, her assailant was a thirty-five-year-old captain. Scared to report the incident for fear of retaliation and exclusion from her tight-knit unit due to the captain’s senior status, Amber attempted to deal with the psychological fallout from the assault on her own. Over time, she withdrew from her friends, lost interest in her job, and turned to prescription drugs to cope with the pain. This in turn caused her to come up hot on a unit urinalysis test and be separated from the Army with a discharge characterization of other than honorable.
If Amber’s other than honorable characterization is not upgraded after leaving military service, she may be excluded from critical VA benefits, including health care and the Post-9/11 G.I. Bill, an educational assistance program that pays for four years of college. Cases involving unreported military sexual trauma are unfortunately common, with a 2012 study by the Pentagon finding that approximately 26,000 military members were assaulted in that year alone. Most of the instances of sexual trauma identified in the study were unreported.
Attorney assistance is critical in the discharge upgrade process as evidence of sexual assault will need to be developed and presented for the first time in the upgrade paperwork because veterans’ military records are usually devoid of any mention of such assault. Working on sexual trauma cases requires sensitivity, compassion, and finesse, as the client is forced to relive painful experiences and discuss events that the veteran would rather forget. But the benefit to a veteran such as Amber receiving benefits such as the Post-9/11 G.I. Bill can be truly transformative and bring closure to a painful open wound. This is just one illustration of how VLI assists those who need a discharge upgrade. There are many cases where veterans who deployed on multiple combat tours return home with an “other than honorable” characterization due to trauma-induced behavior. VLI advocates for those veterans with their right to an appeal, aware of the fact that veterans who attend a hearing with an attorney are five times more likely to prevail.
Public Policy Division In addition to its Legal Services Division, the VLI also contains a Public Policy Division consisting of a think tank dedicated to education, research, and policy advocacy. There is a pressing need for a California-based research and policy institute focused on military and veterans issues. The California Military Department has seen its last three commanding generals removed from their positions for misconduct or ineffective leadership, with the 21,000-member agency still reeling from a $100 million recruiter/theft-related scandal that devastated its senior leadership and resulted in criminal prosecutions of many service members. Moreover, the federal Department of Veterans Affairs’ failure to care for veterans’ healthcare has been widely reported in the media, leading to the recent resignation of former Secretary Shinseki. Further, glaring examples of inequitable treatment exist, including that California National Guardsmen are falling through the Post-9/11 G.I. Bill “doughnut” at an alarming rate, denied eligibility for the top-shelf educational program that is available to their federal reservist brethren.
Senior-level mismanagement in the military and veterans sectors is a symptom of the fact that the vast majority of elected officials and civilian attorneys have little or no understanding of military and/or veteran-related issues. Those charged with promulgating rules, providing oversight, and giving legal guidance simply lack the knowledge and background to be effective regulators, a by-product of an all-volunteer military that tends to draw heaviest from the lower end of the economic ladder. Without military service experience, the result is that civilian leaders having the constitutional responsibility of making rules for the military and overseeing veterans’ care are forced to take the word of the military establishment—unable to independently query, confirm, and verify—which often results in uneducated or misinformed decision and policy making.
The VLI will help close the “knowledge gap” by producing scholarship that sheds light on veteran-related issues. It will also conduct community workshops to explain the key issues facing veterans and military members. MCLE programs for attorneys will be a vital part of the VLI’s educational component, with courses covering legal issues within the California Military Department, veterans’ law, and the constitutional underpinnings of the United States Armed Forces establishment.
Increased Emphasis on Pro Bono Service It is an historic time to enter the pro bono space in Orange County. The California State Bar Association is developing a rule requiring law students and new lawyers to perform fifty hours of voluntary legal service. Further, four local law schools—UCI, Western State, Whittier, and Chapman—have redoubled their commitment to skills training, an emphasis perforce resulting in higher instances of public law activity. The creation of a combined public law firm and think tank focused on the legal needs of the veteran community provides an important platform for current and future lawyers to protect the rights and interests of the warriors who protected us all at home and abroad. It also provides a forum for students, practitioners, and academics to produce scholarship on military and veteran issues.
Ms. Balta and I share a passion for the veteran community. The bread and butter of Ms. Balta’s work at the Public Law Center as a former staff attorney related to battling chronic homelessness amongst the veteran community, much of which came through administering free legal clinics around the county. As an original member of the Orange County Veterans and Military Families Collaborative, she has developed deep relationships with the various stakeholders in the local veteran services community.
My military service flowed directly from the events of September 11, 2001, joining the Army National Guard in December of that year and taking a leave of absence from my civilian practice to attend basic combat training in Fort Jackson, South Carolina. I eventually closed my civilian practice to accept an active duty position with the California National Guard, a rare opportunity to serve as General Counsel of the Joint Forces Training Base in Los Alamitos. Leaving active duty to co-found VLI is a natural next step.
Serving the brave one percent of our population who have served us is a mission that the entire Orange County legal community can rally behind. VLI hopes that many of our colleagues will join our efforts and donate time to perform pro bono legal work for former service members in need. As we commemorate Veterans Day, let us keep squarely in mind that, for some, the cost of defending freedom is especially high, exacting a price that is often invisible and frequently lasts a lifetime.
Major Dwight Stirling, Esq., M.Ed., is co-founder of the Veterans Legal Institute. He is also a reserve JAG Officer in the California National Guard, holding the rank of Major. To volunteer legal services or make a donation to the Veterans Legal Institute, please contact Dwight Stirling at dstirling@vetslegal.com.
VA Payments and Family Support by Mark E. Sullivan
There is a lot of confusion about VA disability compensation payments. The questions and responses below will help to clear the muddy waters.
Are VA benefits subject to levy, seizure, or attachment? In general, the answer is no. Under 38 U.S.C. § 5301(a)(1), benefits paid by the Department of Veterans Affairs (VA) are not subject to levy, seizure, or attachment. “However,” adds Steve Shewmaker, a Georgia lawyer who is also an Army Reserve JAG lieutenant colonel, “the general rule is that they are available for consideration by the court in deciding matters of family support. ‘Levy, seizure, or attachment’ refers to collection of debts; courts interpreting this have consistently stated that this does not mean the duty of support for a family.”1
Do the cases on “family support” include alimony as an exception to 38 U.S.C. § 5301(a)(1)? Yes—alimony (also known as spousal support or maintenance) is one of the exceptions. A useful example can be found in a 1994 Iowa case involving an appeal from an alimony decision. The husband’s main source of income was VA disabilities checks of $1,548 per month, based on a disability rating of 100%. In re Marriage of Anderson, 522 N.W.2d 99, 101-02 (Iowa Ct. App. 1994). The Iowa Court of Appeals recognized this “family support exception” to 38 U.S.C. § 5301(a)(1):
The issue raised by the appellant has been answered by the United States Supreme Court in the case of Rose v. Rose, 481 U.S. 619 (1987). The Rose case involved nonpayment of child support as opposed to nonpayment of alimony. However, both are viewed as familial support by the United States Supreme Court in Rose. Rose, 481 U.S. at 631-32. The Rose case involved a disabled veteran whose sole means of support was his VA checks. The state court held him in contempt for failure to pay child support. The U.S. Supreme Court held a state court has jurisdiction to hold a disabled veteran in contempt for failing to pay child support, even if the veteran’s only means of satisfying his obligation is to use veteran’s benefits received as compensation for a service connected disability. Rose, 481 U.S. at 619. The Court held: Neither the Veteran’s Benefits provisions of Title 38 nor the garnishment provisions of the Child Support Enforcement Act of Title 42 indicate unequivocally that a veteran’s disability benefits are provided solely for that veteran’s support. We hold, therefore, that as enacted these federal statues were not in conflict with and thus did not preempt § 36-820 (the Tennessee child support statute). Nor did the Circuit Court’s efforts to enforce its order of child support by holding appellant in contempt transgress the congressional intent behind the federal statutes. Rose, 481 U.S. at 636.
Neither the Veteran’s Benefits provisions of Title 38 nor the garnishment provisions of the Child Support Enforcement Act of Title 42 indicate unequivocally that a veteran’s disability benefits are provided solely for that veteran’s support. We hold, therefore, that as enacted these federal statues were not in conflict with and thus did not preempt § 36-820 (the Tennessee child support statute). Nor did the Circuit Court’s efforts to enforce its order of child support by holding appellant in contempt transgress the congressional intent behind the federal statutes.
Are there cases in other states that also say this? Yes. In a 1984 Louisiana Court of Appeal case, the trial court found that the husband, Mr. Collins, had virtually no source of income other than his VA benefits. The husband argued that VA benefits are exempt from awards of temporary alimony (“alimony pendente lite”) under the anti-attachment wording in Title 38. The court of appeal stated that “Mr. Collins was obliged to, and did, support Mrs. Collins out of his veterans’ benefits during the time they lived together. His obligation to support her out of whatever income and assets are available to him continues until their marriage is dissolved by divorce.” Collins v. Collins, 458 So.2d 1008, 1010 (La. Ct. App. 1984).
The court also noted that “an award of alimony pendente lite is not an ‘attachment, levy, or seizure’ as contemplated in 38 U.S.C.A. § 3101(a).” [the previous number for this section of Title 38]. Id. Furthermore, the court concluded that:
The provisions of 38 U.S.C.A. § 3101(a) do not apply to awards of alimony pendente lite. The duty to pay alimony pendente lite does not arise as the result of the judicial process. An award of alimony pendente lite is the legal enforcement of a marital duty rather than a process for the collection of a debt. If no other income is available for the purpose, Mr. Collins must use his Veterans’ benefits for the support of Mrs. Collins when she “has not a sufficient income for maintenance pending suit.” La.C.C. Art. 148. The trial judge erred in discontinuing the previous award of alimony pendente lite.
In a 1990 Maryland case, the Court of Special Appeals said that “neither [the McCarty nor the Mansell case] purported even to suggest that . . . disability benefits actually received by a veteran cannot be counted as income to the veteran for purposes of determining his or her ability to pay alimony.” Riley v. Riley, 82 Md. App. 400, 409 (1990). The court went on to provide that:
[T]he law generally is that such benefits may be considered as a resource for purposes of setting the amount of alimony and that doing so does not constitute an affront to the federal anti-attachment and anti-alienation provisions, such as 38 U.S.C. § 3101 and 42 U.S.C. § 662(f)(2) protecting those benefits from the claims of creditors . . . . We find those cases persuasive and therefore hold that the VA disability benefits received by Dr. Riley may be considered as a resource for purposes of determining his ability to pay alimony. Accordingly, we reject his legal challenge to the order denying his motion to terminate or reduce alimony.
Similarly, the Vermont Supreme Court stated in a 1987 case:
38 U.S.C. § 3101(a) protects recipients of disability benefits from the claims of creditors and provides security to the recipient’s family and dependents . . . section 3101(a) does not apply in the present case, however, since a wife seeking spousal maintenance is not a “creditor” under the statute. Veterans’ disability benefits may be considered for alimony or spousal maintenance payments. . . . Further, the instant proceeding is not litigation in which the wife seeks to attach, levy, or seize plaintiff’s veteran benefits . . . While 38 U.S.C. § 3101(a) would preclude an assignment or apportionment of plaintiff’s veteran disability benefits, it does not preclude consideration of disability benefits by a trial court as a source of income upon which an award of alimony may be based.
Does that mean that veterans’ benefits can also be divided at divorce in “property division”? No. The law is clear on that. The Uniformed Services Former Spouses’ Protection Act clearly says that VA disability compensation payments under Title 38 of the U.S. Code are not subject to property division upon divorce. The same is true to a large extent with military disability retirement payments under Title 10, Chapter 61 of the U.S. Code.
Has the U.S. Supreme Court considered the issue of division of veterans’ benefits during divorce? Yes; the Supreme Court decided this issue in Mansell v. Mansell, 490 U.S. 581 (1989). The Mansell case involved a California court decree that divided a military retiree’s disability benefits as part of the property settlement, not as alimony or spousal support. Id. In the Mansell decision, the Court held that federal law does not permit state courts to divide or partition disability benefits as community or marital property upon divorce. This opinion also prohibits the treatment of a waiver of military retired pay (to obtain VA payments) as marital or community property. Id.
How are courts handling support cases with VA disability elections before and after the divorce? Alexander R. Rhoads, an Iowa family law practitioner, states that Congress has never passed a law stating that veterans’ benefits may not be considered with respect to spousal support. Nor has the U.S. Supreme Court ever held that VA benefits cannot be considered in this manner. He also provided some additional notes on how courts usually address this issue:
So far, you have only mentioned cases about alimony. What about child support? Child support may also be awarded based on disability payments to either parent being considered as income. Laura Wish Morgan notes the following cases to support this rule in her treatise:
Loving v. Sterling, 680 A.2d 1030 (D.C. 1996) (federal law does not prohibit treating child support obligor’s veterans administration disability benefits as income under support guidelines); In re Paternity of C.L.H., 689 N.E.2d 456 (Ind. Ct. App. 1997) (full amount of veteran’s disability benefit was income under guidelines); In re Marriage of Lee, 486 N.W.2d 302 (Iowa 1991) (veterans’ disability benefits, Social Security benefits, retirement benefits, and workers’ compensation benefits are includable in income); In re Marriage of Benson, 495 N.W.2d 777 (Iowa Ct. App. 1992) (veterans’ disability, Social Security disability, workers’ compensation, retirement income, are all to be considered income for support); Riley v. Riley, 82 Md. App. 400 (1990) (military disability is income); In re Marriage of Strong, 8 P.3d 763 (Mont. 2000); Fox v. Fox, 592 N.W.2d 541 (N.D. 1999); Dye v. White, 976 P.2d 1086 (Okla. Ct. App. 1999); Wingard v. Wingard, 11 D. & C. 4th 343 (Pa. Ct. Com. Pl.), aff’d, (1987); Weberg v. Weberg, 158 Wis. 2d 540 (Ct. App. 1990) (military disability pension is income).
How do the courts explain the rule that allows VA benefits to be used in setting family support? The Montana Supreme Court explained the law as follows in In re Marriage of Strong, 300 Mont. 33 (2000):
Should the court’s new property distribution appear inadequate to provide for [the wife’s] “reasonable needs” post-dissolution, then the district court may consider awarding Brandy spousal maintenance under § 40-4-203, MCA, in lieu of or in addition to what marital property the court may legally apportion to her. Even though Justin’s VA disability benefits are his sole current source of income and, thus, would necessarily be used to satisfy his maintenance obligations, such action is permitted under the logic of the U.S. Supreme Court’s decision in Rose v. Rose, 481 U.S. 619 (1987). In Rose, the Tennessee trial court held the veteran spouse in contempt for failing to pay ordered child support. The veteran challenged that action on appeal, arguing that it was impermissible since his income was composed almost entirely of disability benefits received from the VA. See Rose, 481 U.S. at 622 (noting that the veteran also received nominal monthly disability income from the Social Security Administration). After reviewing the legislative history applicable to what is now 38 U.S.C. § 5301(a) (formerly 38 U.S.C. § 3101(a)), the Court held that VA disability benefits were never intended to be exclusively for the subsistence of the beneficiary. Rather, Congress intended such benefits: to support not only the veteran, but the veteran’s family as well. Recognizing an exception to the application of [§ 5301(a)’s] prohibition against attachment, levy, or seizure in this context would further, not undermine, the federal purpose in providing these benefits. Rose, 481 U.S. at 634. The Court thus held that the “[n]either the Veterans’ Benefits provisions of Title 38 nor the garnishment provisions of the Child Enforcement Act of Title 42” preempt the authority of state courts to enforce a child support order against a veteran, even where the veteran’s income is composed of VA disability benefits that would necessarily be used to pay child support. See Rose, 481 U.S. at 636. Under the logic of Rose, since “Congress clearly intended veterans’ disability benefits to be used, in part, for the support of veterans’ dependents,” Rose, 481 U.S. at 631, “a state court is clearly free to consider post-[dissolution] disability income and order a disabled veteran to pay spousal support even where disability benefits will be used to make such payments.” Clauson, 831 P.2d at 1263 n.9. In addition to Alaska, several other jurisdictions have concluded that federal law does not prohibit considering veterans’ disability pay as a source of income in awarding spousal maintenance. [Citations omitted.]
to support not only the veteran, but the veteran’s family as well. Recognizing an exception to the application of [§ 5301(a)’s] prohibition against attachment, levy, or seizure in this context would further, not undermine, the federal purpose in providing these benefits.
What about apportionment by the Department of Veterans Affairs? Isn’t that administrative remedy the method that must be used to decide the amount of family support that a veteran must pay and the means to transfer money to the child or children? No. This issue was covered in the Rose decision. The Supreme Court found no basis for the contention that Congress intended this to be the exclusive means of setting family support or enforcing it, and stated that the VA regulations bear this out:
Nowhere do the regulations specify that only the Administrator may define the child support obligation of a disabled veteran in the first instance. To the contrary, appellant, joined by the United States as amicus curiae, concedes that a state court may consider disability benefits as part of the veteran’s income in setting the amount of child support to be paid.
The Court stated that:
The statute simply provides that disability benefits “may . . . be apportioned as may be prescribed by the Administrator.” 38 U. S. C. § 3107(a)(2). The regulations broadly authorize apportionment if “the veteran is not reasonably discharging his or her responsibility for the . . . children’s support.” 38 CFR § 3.450(a)(1)(ii) (1986).
The Supreme Court went on to say:
In none of these provisions is there an express indication that the Administrator possesses exclusive authority to order payment of disability benefits as child support. Nor is it clear that Congress envisioned the Administrator making independent child support determinations in conflict with existing state-court orders. The statute gives no hint that exercise of the Administrator’s discretion may have this effect.
Can a court garnish the benefits of a veteran for child support or alimony? Generally speaking, the answer is no. However, Congress enacted an exception in the case of a military retiree who has waived pension payments (in whole or in part) to receive VA benefits. See 42 U.S.C. § 662(f)(2). In U.S. v. Murray, the Georgia Court of Appeals reviewed a case brought by the ex-wife of a veteran who sought to garnish the veteran’s VA disability compensation for alimony. The Court held that VA disability payments are subject to garnishment for alimony to the extent that they replace “waived retired pay.” U.S. v. Murray, 158 Ga. App. 781 (1981).
Does the tax-free status of VA disability compensation mean that it cannot be considered in determining support? “No,” says Jim Higdon, a retired Navy Reserve captain who practices in Texas. “There is no exemption for payments which are tax-free. They are counted as all other sources of money (except for means-tested benefits) in computing the income of the individual who is to pay support, even though they are not subject to income tax. Other military payments, which are tax-free but are generally counted in determining support, are the basic allowance for housing (BAH) and the basic allowance for subsistence (BAS). Pay and allowances in general are exempt from taxation when the servicemember is in a combat zone, yet they are also subject to consideration in calculating alimony and child support. Since such payments are tax-free, the entire amount should be considered.”
Are VA benefits exempted from consideration as “income” in setting child support because they are “means-tested payments”? “Since they are not means-tested payments in the first place,” responds John Camp, a family lawyer and retired Air Force Staff Judge Advocate from Warner Robins, Georgia, “the answer is ‘no.’” Camp continues, “Means-tested refers to payments which depend on a person’s having little or no money. The individual is ‘tested’ as to his means of support; if it falls below a certain level, then benefits are paid. While that is true for VA pensions, it does not apply to VA disability compensation. For the latter, the wealth or poverty of the recipient doesn’t matter, nor does one’s previous rank. If John Smith has a service-connected disability and then applies for VA disability compensation, the Department of Veterans Affairs will make the payments without regard to whether he is rich and was formerly an admiral, or whether he is poor and used to be a corporal. The monthly amount doesn’t vary due to these factors.”
ENDNOTE
Mark E. Sullivan is a retired Army Reserve JAG colonel. He practices family law in Raleigh, North Carolina and is the author of The Military Divorce Handbook (Am. Bar Assn., 2d Ed. 2011), and many Internet resources on military family law issues. He works with attorneys nationwide as a consultant on military divorce issues and to draft military pension division orders. Mark can be reached at mark.sullivan@ncfamilylaw.com.