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In Ex Parte Burson, 615 S.W.2d 192 (Tex. 1981), the veteran had, after the court awarded part of his military retired pay to his former spouse as a property division, waived his retired pay to receive VA compensation. The court held that the divorce decree could not prohibit the veteran from making the election to receive exempt disability compensation as permitted by Federal law and that Federal law preempted the courts from requiring the veteran to satisfy the award to the spouse out of his compensation. The court said that "Federal preemption of veterans benefits for disability does not leave room for their defeat, either by implication or indirection."

A New Mexico court, in Miller v. Miller, 96 N.M. 497, 498, 632 P.2d 732, 733 (1981), followed Texas law (because the retired pay was earned in Texas) that veterans' benefits received in lieu of the retired pay through a waiver are not divisible or assignable as community property. However, the Miller court, without addressing the exemption in § 5301, held that alimony could properly be awarded, even though the source of funds for its payment was disability compensation. Miller, 96 N.M. at 499, 632 P.2d at 734. The court held that such award of alimony was authorized by the Child Support Enforcement Act, codified at 42 U.S.C. §§ 659-662.

A California court held in Costo v. Costo, 156 Cal. Rptr. 85, 156 Cal. App. 3d 781 (1984) that VA benefits are exempt from division as community property. In addition to citing § 5301 (then § 3101) for the proposition that veterans' benefits are exempt, the court relied on a provision in USFSPA, codified at 10 U.S.C. §1408(a)(4)(B), which excludes from "disposable retired pay" subject to division as marital property amounts waived to receive VA compensation. The court held that "a state court may not treat the portion of appellant's military retirement waived in order to receive veterans' benefits as community property subject to division."

A Pennsylvania court, in Parker v. Parker, 335 Pa. Super. 348, 351-52, 484 A.2d 168, 169-70 (1984), held that the exemption in § 5301 (then § 3101) does not apply against a wife seeking alimony pendente lite (temporary alimony pending divorce and a possible award of permanent alimony) because the wife is not a creditor and the claim for alimony is not a debt. The Court said: "Suffice it to say, 38 USCA § 3101(a) does not preclude consideration of these benefits by the court as a source of income coincident to appellant's ability to pay and upon which an award of alimony pendente lite may, in the particular circumstances of the case, be based." Id.

The veteran had also argued that a provision in CSEA (since amended) barred awarding alimony from his veterans' benefits. The provision he relied on excluded VA compensation from monies that were subject to alimony payments. The court held that while it may be true that this provision excluded veterans' compensation from the waiver of sovereign immunity that consents to garnishment of Federal agencies, "nothing here persuades us that these benefits cannot be considered in determining the amount of the award." Id. at 353-54, 484 A.2d at 170-71.

Louisiana has held, despite § 5301 which provides an exemption for veterans' benefits, and despite the USFSPA provision, 10 U.S.C. 1408(a)(4)(B), that excludes from property division and alimony amounts of retired pay waived to receive disability compensation, that veterans' compensation received in lieu of military retired pay is property for purposes of division of marital assets under Louisiana's community property laws. Campbell v. Campbell, 474 So.2d 1339 (1985). This goes far beyond what other courts have held, because they have recognized that spouses and others have no property interest in veterans' benefits. If other states were to take this holding seriously and follow it, the result could be that veterans' disability compensation would routinely go in the pockets of ex-spouses rather than disabled veterans. Unlike spousal support, fault of the parties or financial need are not factors in the division of marital property. It would make no difference if the marriage terminated because of the spouse's adultery or willful abandonment of the disabled veteran. In community property states, a veteran's former spouse might automatically receive 50% of the veteran's future compensation for the remainder of the veteran's or spouse's life. It would not matter that the veteran's sole source of income is disability compensation, nor that the spouse is fully employed, is much better off financially, and has no need for a half of the veteran's disability compensation. The spouse would continue to receive half of the veteran's compensation even after remarriage. The community property concept is not founded on the common law principle that there is a moral obligation to support a spouse and dependent children, but rather on the business relationship that exists between the husband and his wife for their mutual economic benefit. In non-community property, or equitable distribution, states, the result might be similar or even worse: a spouse might receive more than half of the veteran's disability compensation if the court deemed it appropriate.

A Vermont court has held that § 5301 does not preclude consideration of veterans' disability compensation as a source of income from which to award alimony. Repash v. Repash, 528 A.2d 744, 745 (Vt. 1987). The veteran also argued that § 1408(a)(4)(B) provided protection to his compensation. The court, in noting that the veteran's compensation was not received by virtue of a waiver of retired pay and in holding that this provision in USFSPA only exempts compensation when it is received in lieu of retirement pay, demonstrates one absurd contradiction that arises from the courts' treatment of these laws. A veteran who receives VA disability compensation without a waiver of retired pay has no protection while a veteran, merely because he or she receives the same compensation through a waiver of retired pay, is protected (or was protected before the most recent amendment to CSEA), at least from actions awarding support under USFSPA.

Shortly thereafter the Supreme Court, in Rose v. Rose, 481 U.S. 619 (1987), held that (1) VA authority to apportion disability compensation was not intended to vest VA with exclusive authority over awards of compensation for child support, (2) that § 5301 does not preempt state courts' jurisdiction over compensation and does not protect veterans' disability compensation from seizure to pay court-ordered support, and (3) that the provision in CSEA, 42 U.S.C. § 659(a), that exempted veterans' benefits only exempted them from garnishment, not court orders for support. Regarding the effect of § 5301, the Court in Rose essentially rewrote the law to suit the outcome it thought desirable. In his dissent, Justice White observed: "the order that appellant pay over a portion of his veterans' disability benefits on pain of contempt constitutes a "seizure" of benefits. The plain language of § 3101(a) prohibits any seizure of veterans' benefits, but the Court ignores that prohibition and creates an exception out of whole cloth." Rose, 481 U.S. at 645. In an earlier decision, the Supreme Court reached the opposite conclusion about the identical language. Wissner v. Wissner, 338 U.S. 655, 659-60 (1950). In Wissner, the court held that a judgment which ordered the diversion of future veterans' benefits to another as soon as they were paid constituted a seizure contrary to the same provisions now in § 5301. Id. Similarly, in Ridgway v. Ridgway, 454 U.S. 46, 60-61(1981), the Supreme Court again rejected arguments that the intent of the "anti-attachment statute" (in that case another VA statute with the same language as § 5301) was only to protect veterans' benefits from creditors. The court, citing the language of statute, said of that


Here are a few more. The one I referred to was actually for the state of Missouri, but I beleive there are enough federal cases that have been found in favor of the Veteran to weigh on behalf of the Vet.