Military and Federal Pensions in an Arizona Divorce: USFSPA, the 10/10 Rule and Survivor Benefits

By the FigureMyTax Editorial Team · How we calculate

Arizona divides military retirement earned during the marriage within federal limits and bars courts from considering veterans’ disability benefits. Federal law caps all court-ordered payments at 50 percent of disposable retired pay.

Is military retirement divided in an Arizona divorce?

Arizona divides community property acquired during the marriage equitably (A.R.S. 25-318(A)), and federal law lets a court treat disposable retired pay as property of the member alone or of the member and spouse under the law of the court’s jurisdiction, but only if the court has jurisdiction over the member through residence other than because of military assignment, domicile or consent (10 U.S.C. 1408(c)).

What about veterans’ disability pay in Arizona?

In making a disposition of property, an Arizona court shall not consider any federal disability benefits awarded to a veteran for service-connected disabilities, indemnify the spouse or former spouse for a waiver or reduction in military retired or retainer pay related to receipt of them, or award other income or property of the veteran to make up for such a waiver or reduction (25-318.01).

What is the 50% federal limit?

The total amount of disposable retired pay payable under all court orders may not exceed 50 percent of the disposable retired pay (10 U.S.C. 1408(e)(1)). Arizona’s statute has no percentage of its own, so the federal limit is the ceiling that applies; the Arizona pension division calculator shows the share against it.

What is the 10/10 rule in an Arizona divorce?

Direct payment from the military to a former spouse is not available, to the extent the order treats retired pay as property, unless the spouses were married 10 years or more during which the member performed at least 10 years of service creditable for retired pay (1408(d)(2)). The rule limits payments made by the military under section 1408; it does not by itself say a court cannot divide the pay, so an order should say how a spouse who misses the test will be paid. The calculator checks your overlap months.

How does a military order get paid?

After effective service on the Secretary concerned of a court order that specifically provides for payment of a share of disposable retired pay to a spouse or former spouse, the Secretary makes payments, subject to the section’s limits (1408(d)(1)). A general property award is not enough; the order must specify the amount or fraction.

What about federal civilian pensions?

Federal law provides that payments under the Civil Service Retirement System and the Federal Employees Retirement System are paid, in whole or in part, to another person to the extent expressly provided in the terms of a court decree of divorce, annulment or legal separation or a court order or court-approved property settlement incident to one (5 U.S.C. 8345(j); 5 U.S.C. 8467).

What does this page not cover?

Survivor benefits for a former spouse and tax treatment are separate questions governed by federal law and the plan, and we did not read the survivor-benefit rules for this page. Ask the plan or a licensed attorney. See the Arizona property division calculator for the rest of the estate.

Frequently asked questions

Official sources

• A.R.S. 25-211: community property; effect of service of a petition
• A.R.S. 25-213: separate property
• A.R.S. 25-318: disposition of property
• A.R.S. 25-318.01: military retirement benefits; disability waiver
• 10 U.S.C. 1408: military retired pay in divorce
• 26 U.S.C. 414(p): qualified domestic relations orders
• 29 U.S.C. 1056(d)(3): ERISA domestic relations orders
• 5 U.S.C. 8345(j): CSRS court orders
• 5 U.S.C. 8467: FERS court orders

This is general information, not legal advice. It is based on the cited Arizona statutes, rules and court opinions, and every case turns on its own facts. Confirm how the law applies to your situation with a licensed Arizona attorney.