In an Arizona divorce, military retirement pay earned during the marriage is community property, and the court will typically divide the marital share equally between the spouses. The federal Uniformed Services Former Spouses’ Protection Act (USFSPA) is what gives Arizona courts authority to touch military retired pay at all, and it also sets the rules for how a divorce decree must be written, how payments reach the former spouse, and what can shrink or extinguish the award later. Getting the details right is the difference between a benefit that actually arrives each month and one that exists only on paper.
How Arizona Treats Military Retired Pay
Arizona is a community property state. Almost everything either spouse acquires during the marriage belongs equally to both.1Arizona Legislature. Arizona Code Title 25 – Section 25-211 Military retired pay earned while married falls into that category. Pay accrued before the marriage, or after one spouse served a dissolution petition, remains the service member’s separate property.
When the court divides the community’s share, Arizona law calls for an equitable split, which in practice usually means a 50/50 division of that share.2Arizona Legislature. Arizona Code Title 25 – Section 25-318 Disposition of Property The USFSPA recognizes state-court authority to make that division and provides the mechanism to enforce it through the Department of Defense.3Defense Finance and Accounting Service. Legal Overview of the Uniformed Services Former Spouses Protection Act One important point: the USFSPA doesn’t automatically award anything. The divorce decree must specifically grant the former spouse a share, and the only amount available to divide is “disposable retired pay,” which is gross retired pay minus certain federal deductions, including any amount waived to receive VA disability benefits and Survivor Benefit Plan premiums.4Office of the Law Revision Counsel. 10 USC 1408 Payment of Retired or Retainer Pay in Compliance With Court Orders
Calculating the Marital Share
Courts isolate the community portion of a military pension with a fraction. The numerator is the number of months the couple was married while the service member served. The denominator is the member’s total months of creditable military service. That result is the percentage of the pension owned by the community.
An example makes it concrete. A couple is married for 15 years (180 months), and the service member serves a total of 20 years (240 months). The marital fraction is 180/240, or 75%. The court splits that 75% equally, so the former spouse receives 37.5% of the monthly retirement payment.
The decree has to state the award as either a fixed dollar amount or a percentage of disposable retired pay. Vague language causes the Defense Finance and Accounting Service (DFAS) to reject or misinterpret the order.5Defense Finance and Accounting Service. How to Apply
The Frozen Benefit Rule for Active-Duty Divorces
If the service member is still on active duty when the divorce becomes final, a federal rule changes the math. Under the National Defense Authorization Act for Fiscal Year 2017, the divisible amount is pegged to the member’s rank and years of service as of the divorce date, not the eventual retirement date.4Office of the Law Revision Counsel. 10 USC 1408 Payment of Retired or Retainer Pay in Compliance With Court Orders
That has real consequences. If a service member divorces as a Captain with eight years of service and later retires as a Colonel with 24 years, the divisible figure is still the Captain-at-eight-years amount. The only upward adjustment allowed between divorce and retirement is for cost-of-living increases.4Office of the Law Revision Counsel. 10 USC 1408 Payment of Retired or Retainer Pay in Compliance With Court Orders The rule does not apply when the service member has already retired by the time of the divorce. In that situation, the actual retired pay is the base for the marital-fraction calculation.
Blended Retirement System Lump Sums
Service members who entered on or after January 1, 2018 participate in the Blended Retirement System, which still includes a pension but lets the retiree elect a lump sum equal to 25% or 50% of pension payments in exchange for reduced monthly checks until Social Security age. If the retiree takes a lump-sum option, the former spouse’s monthly share drops during the reduced-payment period. The decree should address that possibility directly so there’s no surprise years later.
What the Divorce Decree Has To Say
A decree that awards military retirement has to be drafted with DFAS’s requirements in mind, or payments won’t start. At minimum, the order must:
- Make clear the division applies to disposable retired pay, not gross retired pay. A generic award of a “percentage of military retirement” can be rejected.
- State the former spouse’s share as a fixed dollar amount or a percentage of disposable retired pay.3Defense Finance and Accounting Service. Legal Overview of the Uniformed Services Former Spouses Protection Act
- If the service member is still serving, include the member’s rank and years of creditable service as of the divorce date so DFAS can apply the frozen benefit rule.6Defense Finance and Accounting Service. NDAA-17 Court Order Requirements
Ambiguous orders or formulas DFAS can’t apply get sent back, which delays payments and sometimes requires a return trip to court for a clarifying order. Many Arizona family law attorneys start from DFAS’s model language to avoid that.
Getting Paid Directly by DFAS: The 10/10 Rule
A court order is one thing. Receiving the money directly from DFAS each month is another. Direct payment requires meeting the “10/10 rule”: the couple must have been married at least 10 years, and during that same period, the service member must have completed at least 10 years of creditable service.7Defense Finance and Accounting Service. Former Spouses Protection Act FAQs4Office of the Law Revision Counsel. 10 USC 1408 Payment of Retired or Retainer Pay in Compliance With Court Orders
The 10/10 rule only controls payment logistics. It does not decide whether the former spouse is entitled to a share. An Arizona court can award retirement pay after a five-year marriage, but the retiree has to send that payment personally each month. DFAS won’t act as middleman. That is where enforcement problems tend to surface, since collecting from an uncooperative ex is harder than receiving a government deposit.
Even when 10/10 is satisfied, DFAS cannot pay a former spouse more than 50% of disposable retired pay.8Defense Finance and Accounting Service. Maximum Payable If child support or alimony garnishments are also in play, the combined total can’t exceed 65% of disposable earnings.4Office of the Law Revision Counsel. 10 USC 1408 Payment of Retired or Retainer Pay in Compliance With Court Orders
To start direct payments, the former spouse submits DD Form 2293 to DFAS along with a certified copy of the divorce decree. The clerk’s certification must be dated within 90 days of the day DFAS receives the application.9Department of Defense. DD Form 2293 Application for Former Spouse Payments From Retired Pay
How VA Disability Can Shrink the Award
This is the hardest part of a military divorce for former spouses, and Arizona law offers no workaround. When a veteran receives a VA disability rating, they can waive part of their taxable retired pay to collect an equivalent amount of tax-free VA disability compensation. The waived amount is subtracted from disposable retired pay before the former spouse’s share is calculated. The former spouse’s check drops dollar-for-dollar with the waiver.
Two U.S. Supreme Court decisions built this wall. In 1989, the Court held that federal law prevents state courts from treating VA disability benefits as marital property. In Howell v. Howell (2017), the Court closed what some states had treated as a workaround, ruling that an order requiring the retiree to indemnify or reimburse the former spouse for the lost retired pay is also preempted by federal law.10Supreme Court of the United States. Howell v. Howell
Arizona once allowed exactly the kind of indemnification orders Howell struck down. After the ruling, Arizona enacted A.R.S. ยง 25-318.01, which prohibits courts from considering VA disability benefits in property division, ordering indemnification for any disability-related waiver or reduction of retired pay, or awarding other property to compensate for the loss. The statute leaves no room for creative drafting.
CRDP and CRSC Work Differently
Not all disability-related pay cuts into the former spouse’s share. Concurrent Retirement and Disability Pay (CRDP) lets certain retirees with a VA disability rating of 50% or higher receive full retired pay and full VA disability without an offset. Because CRDP effectively restores what would otherwise be waived, the restored amount counts as disposable retired pay and remains divisible. A former spouse whose payments dropped from a prior waiver may see them come back, in whole or in part, if the retiree later qualifies for CRDP.
Combat-Related Special Compensation (CRSC) works the other way. CRSC is a separate payment for combat-connected disabilities, and federal law treats it as something other than retired pay.11Office of the Law Revision Counsel. 10 USC 1413a Combat-Related Special Compensation Because it is not retired pay, it cannot be divided. If a retiree elects CRSC instead of CRDP, the former spouse’s share of disposable retired pay can shrink or disappear, and no court order can recapture it.
Protecting Payments After the Retiree Dies
A former spouse’s share of retired pay ends the moment the retiree dies. The Survivor Benefit Plan (SBP) is the only mechanism that continues an income stream to the former spouse beyond the retiree’s lifetime, in the form of an annuity to a designated beneficiary.
If the decree orders SBP coverage, the service member is supposed to elect “former spouse coverage” with DFAS. If the member doesn’t, the former spouse can file a “deemed election” by submitting DD Form 2656-10 directly to DFAS.12Department of Defense. DD Form 2656-10 Survivor Benefit Plan Former Spouse Request for Deemed Election The deadline is one year from the date of the divorce. Miss it, and SBP eligibility is permanently lost. No court order can revive it.13Defense Finance and Accounting Service. Supplemental Instructions for DD Form 2656-10
Remarriage interacts with SBP in a way that catches people off guard. A former spouse who remarries before age 55 loses SBP coverage. If that later marriage ends through divorce or death, eligibility comes back. A former spouse who remarries at or after age 55 keeps SBP coverage either way.14Soldier for Life. Former Spouses
What Remarriage Does and Doesn’t Change
The share of retired pay itself generally survives remarriage. Unless the decree specifically says otherwise, DFAS keeps sending direct payments to a former spouse who remarries.14Soldier for Life. Former Spouses This surprises many service members who assume a new marriage ends the obligation, but a retirement division is a property award, not alimony, and property awards don’t terminate on remarriage unless the order says they do.
Health coverage, commissary access, and SBP work differently, and a former spouse thinking about remarrying should understand which pieces continue and which fall away before making the decision.
The Thrift Savings Plan Is a Separate Asset
Military retired pay isn’t the only retirement asset in play. Service members also build balances in the Thrift Savings Plan (TSP), which functions like a 401(k) and, for Blended Retirement System participants, receives government matching contributions up to 5% of basic pay. TSP balances earned during the marriage are community property in Arizona.
Dividing a TSP account requires a Retirement Benefits Court Order (RBCO). The private-sector QDRO rules that work for most employer plans don’t apply here, and submitting a QDRO to the TSP accomplishes nothing.15Thrift Savings Plan. Divorce, Annulment, and Legal Separation The RBCO must expressly name the “Thrift Savings Plan,” use terms appropriate to a defined contribution plan (referencing an account balance rather than a benefit formula), and state the award as a dollar amount or a percentage of the account.16eCFR. 5 CFR Part 1653 Court Orders and Legal Processes Once the TSP receives a valid RBCO, it freezes the participant’s account against new loans and withdrawals until the award is paid out or the order is resolved; contributions and investment changes can still continue.
Health Care and Base Access After the Divorce
A former spouse may keep TRICARE, commissary, and exchange privileges after the divorce, but only if the marriage and the military service overlapped for a long time. Two federal rules control eligibility.
Under the 20/20/20 rule, a former spouse keeps full benefits indefinitely when the marriage lasted at least 20 years, the service member completed at least 20 creditable years, and at least 20 years of each overlapped.17Military OneSource. Rights and Benefits of Divorced Spouses in the Military Remarriage ends these benefits, though all except medical care can be reinstated if the later marriage ends.
Under the 20/20/15 rule, when the overlap is at least 15 years but less than 20 (with the same 20-year marriage and 20-year service minimums), the former spouse gets one year of transitional TRICARE from the date of divorce.17Military OneSource. Rights and Benefits of Divorced Spouses in the Military After that, self-pay coverage through the Continued Health Care Benefit Program is available for up to 36 months. Shorter marriages produce no continuing TRICARE eligibility at all.