Final Rule: Former Spouse Payments From Retired Pay
March 6, 1985
TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
SUBJECT: Former Spouse Payments From Retired Pay
ATTACHMENT: Attached are final regulations issued by the Office of the Secretary, Department of Defense (DOD), which provide guidance on direct payments to a former spouse from the retired pay of members of the Uniformed Services in response to court-ordered alimony, child support or division of property. This regulation applies to former spouses of members who request direct payments from the Uniformed Services. Uniformed Services encompasses the Army, Navy, Air Force, Marine Corps, Coast Guard, and the commissioned corps of the Public Health Service and National Oceanic and Atmospheric Administration.
This regulation implements section 1002 of P.L. 97-252, the Uniformed Services Former Spouses' Protection Act, and section 643 of P.L. 98-525, the DOD Authorization Act for Fiscal Year 1985.
Under 10 USC 1408(c)(2), a spouse or former spouse of an individual in the uniformed services may not assign, transfer, or otherwise dispose of any right to direct payments under these regulations. Therefore, the IV-D agency may not be the recipient of payments for the former spouse from the retired pay of members of the Uniformed Services.
REGULATION REFERENCE: 32 CFR Part 63
SUPERSEDED MATERIAL: OCSE-AT-83-7, dated February 15, 1983.
INQUIRIES TO: OCSE Regional Representatives.
Office of Child Support Enforcement
DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 63
[DoD Directive 1340.16]
Former Spouse Payments From Retired Pay
AGENCY: Office of the Secretary, DoD.
ACTION: Final rule.
SUMMARY: This rule implements section 1002 of the Uniformed Services Former Spouses' Protection Act (Pub. L. 97-252) and amendments found in section 643 of the DoD Authorization Act for Fiscal Year 1985 (Pub. L. 98-525) which are codified under title 10, United States Code, section 1408 (10 U.S.C. 1408). It provides guidance on direct payments to a former spouse from the retired pay of the member in response to court ordered alimony, child support or division of property. The rule applies to former spouses of members who request direct payments from the Uniformed Services.
EFFECTIVE DATE: January 2, 1985.
ADDRESS: Office of the Deputy Assistant Secretary of Defense (Management Systems), Washington, D.C. 20301.
FOR FURTHER INFORMATION CONTACT: James T. Jasinski, telephone 202-697-0536.
SUPPLEMENTARY INFORMATION: In the Federal Register of January 28, 1983 (48 FR 4003), DoD issued a proposed rule for comments. Comments were received from 189 interested parties. The Uniformed Services considered these comments in the development of the final rule. Significant comments and changes are highlighted in the following discussion. Changes were made throughout the final rule to conform to the amendments made by Pub. L. 98-525, which eliminated the requirement that the court order specifically provide for payments from the member's disposable retired pay, except in cases of division of property. The citations given below refer to the final rule, unless otherwise noted.
Comments and Changes
Section 63.3-The definitions of alimony, court order, and final decree were challenged as inconsistent with statutory intent of 10 U.S.C. 1408. These definitions were taken directly from the statute. Where the definition was based on a specific statute, we have added the citation. Respondents are asked to review the statutes cited. Many comments urged that the alimony definition be expanded to include a division of property when the court order of State law considers a property division as "alimony". The statutory definition of alimony, found in Title IV-D of the Social Security Act (42 U.S.C. 662(c)), clearly states that alimony does not include a division of property. The definition included in this final rule conforms to the statutory definition. Many respondents took exception to the definition of a court order. They pointed out that the court order must provide for the payment of retired pay to a member's former spouse. The objections centered on the lack of prior knowledge of such a condition placed a burden on the former spouse to seek amendment of the court order. The definition in the final rule reflects the language in 10 U.S.C. 1408 (a)(2). Some comments questioned why the court order must be a final decree. They pointed out the potential variances from one jurisdiction to another with regard to what constituted a final decree. Many thought this created an unnecessary delay in payments. Again, this definition is consistent with the statutory language.
Section 63.6(a) - Several comments suggested changing
§63.6(a)(2) to state clearly that the 10-year marriage requirement applied only to a division of retired pay as property. The final rule adopted the suggestion.
Section 63.6(b) - Respondents recommended that former spouses receiving voluntary allotments from retired pay be permitted to convert these allotments to payments under 10 U.S.C. 1408. Since allotments are initiated voluntarily by the member and are not subject to the other conditions of 10 U.S.C. 1408, conversion under this statute is not possible. Several questioned why an application was required. The application is necessary to affirm the former spouse's eligibility. Others questioned whether an official application form must be submitted. DD form 2293, "Request for Former Spouse Payments from Retired Pay" is available for use. The form is not required, provided all the information necessary to process an applicant's request for payments, as outlined in this final rule, is furnished by the former spouse. Some comments stated that an attorney's assistance was necessary to furnish the Uniformed Services with an acceptable application. The use of professional assistance is a personal choice. Several persons stated that the application was unnecessary since the requested information was allegedly on file with the Uniformed Services. This is not the case. An application is essential in documenting and in determining a former spouses's eligibility. One comment asked if the Uniformed Services would accept applications filed by a State child support enforcement agency, since applicants under the Aid to Families with Dependent Children program must assign all rights of support to a State agency. The Uniformed Services cannot honor such assignments given the prohibitions in 10 U.S.C. 1408(c)(2). In response to questions about the certification of a court order, §63.6(b)(1)(ii) was modified to describe clearly who has certifying authority. A number of reviewers asked what constitutes sufficient proof that a former spouse satisfied the 10-year marriage requirement. Any evidence supporting the former spouse's claim will be considered. This may include court records, military documents, a marriage certificate, birth certificates, etc. Section 63.6(b)(1) (vi) and (vii) were formerly designated §63.6(h) (10) and (11) in the proposed rule. Several persons objected to notification conditions in §63.6(b)(1)(vii) requiring the former spouse to report events that may affect continued eligibility. Such information is necessary to administer this regulation. Section 63.6(b)(3) was amended to state when effective service was completed. This has importance in establishing priorities under the first-come-first served condition in 63.6(h)(4).
Section 63.6(b)(4) has been rewritten setting forth the required actions of the designated agent when payments are due the former spouse or when the applications has a deficiency. Several persons objected to the release of information on retired pay to the former spouse. Disclosure is necessary to ensure proper payment. Applicable statutes concerning disclosure have been considered and complied with. A statement has been added under §63.6(b)(6) that U.S. Attorneys will not accept or process former spouse payments under this rule.
Section 63.6(c) - With regard to §63.6(c)(2), reviewers mentioned that certification of the court order within 90 days of the application was overburdening, unnecessary, and unfair. The procedure ensures that service is accomplished with current and effective documents. Concerning §63.6(c)(6), conflicting comments were received. Several found the subsection to be restrictive and to encourage members to forum shop. Others expressed concern that the designated agent should require a statement from the court detailing the basis of jurisdiction. The Uniformed Services have found through examination of court orders that the jurisdictional basis is rarely an issue. Many respondents found §63.6(c)(7) incomplete and inferred that the Uniformed Services' position conflicted with congressional intent and improperly treated the division of property in both pro and post-McCarty decrees (McCarty v. McCarty, 453 U.S.C. 210; 101 S.Cp. 2728 (1981)). The allegations were carefully reviewed and they could not be substantiated. The subsection has not been revised. On §63.6(c)(8), respondents pointed out that a decree may not express the former spouse's share of a member's retired pay as a dollar amount or percentage of disposable retired pay. Typically, a court decree expressed a former spouse's interest in the member's retired pay as a percentage of gross retired pay. Some comments stated that these decrees should be satisfied in the amounts expressed on their face. However, 10 U.S.C. 1408(a)(2)(C) limits payment to only those decrees " specifically" providing for payment "from the disposable retired or retainer pay of a member." Therefore, decrees expressed in terms of gross retired pay will be construed as though they had been expressed in terms of disposable retired pay. The last sentence in §63.6(c)(8) was added to indicate what action must be taken to establish the intent of the court when the computation of the amount payable is subject to interpretation.
Section 63.3(d) - Comments received on this subsection claimed that garnishment was not a viable alternative in many jurisdictions due to State law and the cost to the former spouse. The purpose of the statute and the rule is merely to provide for garnishment as an optional remedy when permitted under State law. Some reviewers suggested that the rule include a provision for payment of legal fees, court costs, and interest on outstanding or unpaid monies under this section. The Uniformed Services have concluded that 10 U.S.C. 1408(d)(5) precludes such collections.
Section 63.6(e) - Many comments suggested that deductions be taken solely from the member's portion of retired pay after paying the former spouse a percentage of the gross retired pay. Respondents are directed to 10 U.S.C. 1408 (a)(4), (c)(1), and (d)(1), all of which indicate that deductions are to be taken into account before the former spouse's share is computed. Page 11 of Senate Report 97-502 (hereafter referred to as "the Committee report") stated "The committee agreed that some portion of a former military member's retired or retainer pay should be sheltered". Others noted that the definition of disposable retired pay applied in determining the amount payable to a former spouse could dilute the available retired pay to the point that no money was available for the former spouse. The allowed deductions were created by statute. Modification of the statute would be necessary to resolve such situations. Several persons requested an explanation of the percentage limitations applied in this subsection. Only 50% of a member's disposable retired pay may be paid by the Uniformed Service pursuant to court orders and Garnishments under 10 U.S.C. 1408. If, in addition, the members pay is garnished under 42 U.S.C. 659, then the combined total payments may not exceed 65% of disposable retired pay. There are specific limitations regarding garnishments that may be found in 45 U.S.C. 1673 and 5 CFR Part 581. Additional information is found on page 13 of the Committee report. Many former spouses questioned the treatment of income taxes under the rule. Based on guidance provided by the Internal Revenue Service (IRS), federal taxes are withheld from the member's gross retired pay based on the total amount and the withholding allowances claimed by the retiree. The amount payable to the former spouse for court ordered alimony, child support, or division of property is considered a deduction from the retired pay that does not affect the amount of tax to be withheld. There are no provisions in statute or in IRS regulations for withholding of taxes on direct payments to former spouses, since no employer-employee relationship exists. The former spouse receiving direct payment of military retired pay must report any taxable amount directly to the IRS and make estimated tax payments when appropriate. In the final rule, State taxes were added as an authorized deduction based on section 654 of Pub. L. 98-525. A member may now authorize voluntary State tax withholding from retired pay, when the Uniformed Services have entered into an agreement with the State concerned under 10 U.S.C. 1045. For further information on tax withholding, see 5 U.S.C. 5516, 5517, and 5520. The final rule has been changed to clarify that a member may request supplemental withholding under 26 U.S.C. 3402(i), when the member presents evidence supporting such withholding. The change is consistent with the statutory authority in 10 U.S.C. 1408(a)(4)(D) and Comptroller General decision B-213895. The former §63.6(e)(2)(vi) of the proposed rule is now (v). National Service Life Insurance has been deleted from the list of allowed deductions because this insurance was determined to be supplemental insurance coverage, and thereby excluded under 10 U.S.C. 1408(s)(4)(E).
Section 63.6(f)- Many suggested the substitution of "shall" for "may" in §63.6(f)(2)(vi). At the time the member is notified, the application is still under review. The designated agent may or may not authorize payment upon completion of the review. Substitution of "shall" would infer that in all cases when an application is forwarded to a member, it has been approved for payment. This is not the case. Early notification of the member allows more orderly processing and has permitted payments on approved applications to begin within 60 days of application. Some individuals questioned why a member is given an opportunity to contest a former spouse's application for payments from retired pay. Page 23 of the Committee report outlines clearly the concern that affected members have an opportunity to take legal action, if necessary, regarding a court order that a former spouse seeks to have enforced by direct payments from a Uniformed Service. The 30-day response period in this subsection has been clarified to add that it begins when notice is mailed to the member. There is no requirement under 10 U.S.C. 1408(g) that the member actually receive notice. The designated agents are only obligated to send notice to the last known address of the member. Page 23 of the Committee report supports this interpretation. Section 63.6(f)(3)(iii) of the proposed rule was deleted because filing an action to contest a court order was not a sufficient basis to suspend compliance with the court order. However, §63.6(h)(6) was added to provide that payments shall be suspended in the event either the member or the former spouse obtains a stay of execution issued by a court of competent jurisdiction. Suspended payments will be retained by the designated agent pending resolution of the contest.
Section 63.6(g)- This subsection was amended to qualify the designated agent's responsibilities. When a court order is regular on its face, the designated agent has limited responsibility to review such a court order for jurisdictional issues. The final rule makes clear that the designated agent is required to issue timely replies to interrogatories.
Section 63.6(h)- On §63.6(h)(3), many comments stated that payments should terminate only with the death of the member or the former spouse. Congress intended former spouse payments to operate under the applicable State law. When a former spouse is no longer entitled to alimony under State law, direct payments to satisfy court ordered alimony will terminate. The final rule affirms this. Section 63.6(h)(7) was expanded to explain procedures when the member is on active duty at the time the former spouse applies for direct payment. The application, if approved for payment, will be retained indefinitely and will be satisfied at such time that the member becomes entitled to retired pay. Several comments took exception to the requirement of §63.6(h)(10) that payments be prospective, because this prevented collection of arrearages. Support for prospective payments is found on page 18 of the Committee report. This does not prevent amendment of the operative court order to increase the monthly amount payable in consideration of the fact that the member is in arrears. The courts are the proper place to address this issue.
Section 63.6(i)- Several respondents had questions about administrative appeal procedures when the former spouse or member disagrees with the determination of the designated agent. A new §63.6(i) was added incorporating such procedures. Disputed issues will be resolved within the designated agent structure.
Executive Order 12291
DoD has determined that this rule is not a major rule for the purpose of E.O. 12291, because it is not likely to have an annual effect on the economy of $100 million or more, and therefore does not require a regulatory impact analysis.
Paperwork Reduction Act
This rule imposes information requirements that have been approved by the Office of Management and Budget (OMB). OMB Control Numbers 0704-0160 and 0704-0182.
Regulatory Flexibility Act of 1980
I certify that this rule shall be exempt from the requirements under 5 U.S.C. 601-612. In addition, the rule does not have a significant economic effect on small entities as defined in the Regulatory Flexibility Act.
List of Subjects in 32 CFR Part 63
Alimony, Child support, Retirement, Uniformed Services, Payments to former spouses, Military retired pay.
Accordingly, 32 CFR, Chapter 1, is amended by adding a new Part 63, reading as follows:
PART 63-FORMER SPOUSE PAYMENTS FROM RETIRED PAY
63.2 Applicability and scope.
Authority: 10 U.S.C. 1408.
Under 10 U.S.C. 1408, this part establishes policy and authorizes direct payments to a former spouse of a member from retired pay in response to court-ordered alimony-child support, or division of property.
§63.2 Applicability and scope.
(a) This part applies to the Office of the Secretary of Defense, the Military Departments, the Coast Guard (under agreement with the Department of Transportation), the Public Health Service (PHS) (under agreement with the Department of Health and Human Services); and the National Oceanic and Atmospheric Administration (NOAA) (under agreement with the Department of Commerce). The term "Uniformed Services," as used herein, refers to the Army, Navy, Air Force, Marine Corps, Coast Guard, commissioned corps of the PHS, and the commissioned corps of the NOAA.
(b) This part covers members retired from the active and reserve components of the Uniformed Services who are subject to court orders awarding alimony child support, or division of property.
(a) Alimony. Periodic payments for the support and maintenance of a spouse or former spouse in accordance with State law under 42 U.S.C. 662(c). It includes, but is not limited to, spousal support, separate maintenance, and maintenance. Alimony does not include any payment for the division of property.
(b) Annuitant. A person receiving a monthly payment under a survivor benefit plan related to retired pay.
(c) Child Support. Periodic payments for the support and maintenance of a child or children, subject to and in accordance with State law under 42 U.S.C. 662(b). It includes, but is not limited to, payments to provide for health care, education, recreation, and clothing or to meet other specific needs of such a child or children.
(d) Court. Any court of competent jurisdiction of any State, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands and any court of the United States as defined in 28 U.S.C. 451 having competent jurisdiction; or any court of competent jurisdiction of a foreign country with which the United States has an agreement requiring the United States to honor any court order of such country.
(e) Court Order. As defined under 10 U.S.C. 1408(a)(2), a final decree of divorce, dissolution, annulment, or legal separation issued by a court, or a court ordered, ratified, or approved property settlement incident to such a decree. It includes a final decree modifying the terms of a previously issued decree of divorce, dissolution, annulment, or legal separation, or a court ordered, ratified, or approved property settlement incident to such previously issued decree. The court order must provide for the payment to a member's former spouse of alimony, child support, or a division of property. In the case of a division of property, the court order must specify that the payment is to be made from the member's disposable retired pay.
(f) Creditable Service. Service counted towards the establishment of any entitlement for retired pay. See paragraphs 10102 through 10108 of DoD 1340.12-M, 42 U.S.C. 212 for the PHS, and 33 U.S.C. 864 and 10 U.S.C. 6323 for NOAA.
(g) Designated Agent. A representative of a Uniformed Service who will receive and process court orders under this part.
(h) Division of Property. Any transfer of property or its value by an individual to his or her former spouse in compliance with any community property settlement, equitable distribution of property, or other distribution of property between spouses or former spouses.
(i) Entitlement. The legal right of a member to receive retired pay.
(j) Final Decree. As defined under 10 U.S.C. 1408(a)(3), a decree from which no appeal may be taken or from which no appeal has been taken within the time allowed for taking such appeals under the laws applicable to such appeals or a decree from which timely appeal has been taken and such appeal has been finally decided under the laws applicable to such appeals.
(k) Former Spouse. The former husband or former wife, or the husband or wife, of a member.
(l) Garnishment. The legal procedure through which payment is made from an individual's pay that is due or payable to another party in order to satisfy a legal obligation to provide child support, to make alimony payments, or both, under 5 CFR Part 581 and 42 U.S.C. 659 or to enforce a division of property other than a division of retired pay as property under 10 U.S.C. 1408(d)(5).
(m) Member. A person originally appointed or enlisted in, or conscripted into, a Uniformed Service who has retired from the regular or reserve component of the Uniformed Service concerned.
(n) Renounced Pay. Retired pay to which a member has an entitlement, but for which receipt of payment has been waived by the member.
(o) Retired Pay. The gross entitlement due a member based on conditions of the retirement law, pay grade, years of service for basic pay, years of service for percentage multiplier, if applicable, and date of retirement (transfer to the Fleet Reserve or Fleet Marine Corps Reserve); also known as retainer pay. It does not include benefits paid to a member retired for disability under 10 U.S.C. Chapter 61.
It is the policy of the Uniformed Services to honor a former spouse's request for direct payment from a given member's retired pay in enforcement of a court order that provides for a alimony, child support, or division of property, when the terms, conditions, and requirements in this part are satisfied.
(a) The Assistant Secretary of Defense (Comptroller) shall establish policy and procedures, provide guidance, coordinate changes with the Uniformed Services, and monitor the implementation of this part within the Department of Defense.
(b) The Secretaries of the Military Departments and Heads of the other Uniformed Services shall implement this part.
(a) Eligibility of Former Spouse. (1) A former spouse of a member is eligible to receive direct payment from the retired pay of that member only pursuant to a court order that satisfies the requirements and conditions specified in this part. In the case of a division of property, the court order must specifically provide that payment is to be made from disposable retired pay.
(2) For establishing eligibility for direct payment under a court order that provides for a division of retired pay as property, a former spouse must have been married to the member for 10 years or more, during which the member performed 10 years or more of creditable service. There is no 10-year marriage requirement for payment of child support, alimony, or both.
(b) Application By Former Spouse. (1) A former spouse shall deliver to the designated agent of the member's Uniformed Service a signed DD Form 2293, Request for Former Spouse Payments from Retired Pay, or a signed statement that includes:
(i) Notice to make direct payment to the former spouse from the member's retired pay.
(ii) A copy of the court order and other accompanying documents certified by an official of the issuing court that provides for payment of child support, alimony, or division of property.
(iii) A statement that the court order has not been amended, superseded, or set aside.
(iv) Sufficient identifying information about the member to enable processing of the application. The identification should give the member's full name, social security number, and Uniformed Service.
(v) The full name, address, and social security number of the former spouse.
(vi) Before payment, the former spouse shall agree personally that any future overpayments are recoverable and subject to involuntary collection from the former spouse or his or her estate.
(vii) As a condition precedent to payment, the former spouse shall agree personally to notify the designated agent promptly if the operative court order upon which payment is based is vacated, modified, or set aside. This shall include notice of the former spouse's remarriage if all or a part of the payment is for alimony or notice of a change in eligibility for child support payments under circumstances of the death, emancipation, adoption, or attainment of majority of a child whose support is provided through direct payment to a former spouse from retired pay.
(2) If the court order is for a division of retired pay as property and it does not state that the former spouse satisfied the eligibility criteria found in §63.6 (a)(2), of this Part, the former spouse shall furnish sufficient evidence for the designated agent to verify that the requirement was met.
(3) The notification of the designated agent shall be accomplished by certified or registered mail, return receipt requested, or by personal service. Effective service is not accomplished until a complete application providing all information required by this part is received in the office of the designated agent, who shall note the date and time of receipt on the notification document.
(4) Not later than 90 days after effective service, the designated agent shall respond to the former spouse as follows: (i) If the court order will be honored, the former spouse shall be informed of the date that payments tentatively begin; the amount of each payment; the amount of gross retired pay, total deductions, and retired pay (except in case full payment of a court-ordered fixed amount will be made); and other relevant information if applicable: or (ii) If the court order will not be honored, the designated agent shall explain in writing to the former spouse why the court order was not honored.
(5) The designated agent for each Uniformed Service is:
(i) Army: Commander, Army Finance and Accounting Center, Attn: FINCL-G, Indianapolis, IN 46249, (317) 542-2155.
(ii) Navy: Director, Navy Family Allowance Activity, Anthony J. Celebrezze Federal Building, Cleveland, OH 44199, (216) 522-5301.
(iii) Air Force: Commander, Air Force Accounting and Finance Center, ATTN: JA, Denver, CO 80279, (303) 370-7524.
(iv) Marine Corps: Commanding Officer, Marine Corps Finance Center (Code AA), Kansas City, MO 64197, (816) 926-7103.
(v) Coast Guard: Commandant (G-LGL), General Law Division, United States Coast Guard Headquarters, 2100 2nd Street SW., Washington, D.C. 20593, (202) 426-1553.
(vi) Public Health Service: Office of General Counsel, Department of Health and Human Services, Room 722A, Humphrey Building, 200 Independence Avenue SW., Washington, D.C. 20201, (202)245-7741.
(vii) National Oceanic and Atmospheric Administration: Director, Navy Family Allowance Activity, Anthony J. Celebrezze Federal Building, Cleveland, OH 44199, (216) 522-5301.
(6) U.S. Attorneys are not designated agents authorized to receive court orders or garnishments under this part.
(c) Review of Court Orders. (1) The court order must be regular on its face, meaning that it is issued by a court of competent jurisdiction in accordance with the laws of the jurisdiction.
(2) The court order must be legal form and must include nothing on its face that provides reasonable notice that it is issued without authority of law. It is required that the court order be authenticated or certified within 90 days immediately preceding its service on the designated agent.
(3) The court order must be a final decree.
(4) If the court order was issued while the member was on active duty and the member was not represented in court, the court order or other court documents must certify that the rights of the member under the "Soldiers' and Sailors' Civil Relief Act of 1940" (50 U.S.C. Appendix 501-591) were complied with.
(5) Sufficient information must be contained in the court order to identify the member.
(6) For court orders that provide for the division of retired pay as property, the following conditions apply;
(i) The court must have jurisdiction over the member by reason of (A) the member's residence, other than because of military assignment in the territorial jurisdiction of the court; (B) the member's domicile in the territorial jurisdiction of the court; or (C) the member's consent to the jurisdiction of the court.
(ii) The treatment of retired pay as property solely of the member or as property of the member and the former spouse of that member must be in accordance with the law of the jurisdiction of such court.
(iii) The court order or other accompanying documents served with the court order must show the former spouse was married to the member 10 years or more, during which the member performed at least 10 years of creditable service.
(7) Court orders awarding a division of retired pay as property that were issued before June 26, 1981, shall be honored if they otherwise satisfy the requirements and conditions specified this part. A modification on or after June 26, 1981, of a court order that originally awarded a division of retired pay as property before June 26, 1981, may be honored for subsequent court-ordered changes made for clarification, such as the interpretation of a computation formula in the original court order. For court orders issued before June 26, 1981, subsequent amendments after that date to provide for a division of retired pay as property are unenforceable under this part. If the court order awarding a division of retired pay as property is issued on or after June 26, 1981, subsequent modifications of that court order shall be honored if they otherwise satisfy the requirements and conditions specified in this part.
(8) In the case of a division of property, the court order must provide specifically for payment of a fixed amount expressed in U.S. dollars or payment as a percentage or fraction of disposable retired pay. Court orders specifying a percentage or fraction of retired pay shall be construed as a percentage or fraction of disposable retired pay. A court order that provides for a division of retired pay by means of a formula wherein the elements of the formula are not specifically set forth or readily apparent on the face of the court order will not be honored unless clarified by the court.
(d) Garnishment Orders. (1) If a court order provides for the division of property other than retired pay in addition to an amount of disposable retired pay to be paid to the member's former spouse, the former spouse may garnish that member's retired pay in order to enforce the division of property. The limitations of 15 U.S.C. 1673(a) and the limitations of §63.6(e) of this Part apply in determining the amount payable to a former spouse.
(2) The designated agents authorized to receive service of process of garnishment orders under this part shall be those listed in §63.6(b)(5) of this Part.
(3) Garnishment orders under this part for enforcement of a division of property other than retired pay shall be processed in accordance with 5 CFR Part 581 to the extent that the procedures are consistent with this part.
(e) Limitations. (1) Upon proper service, a member's retired pay may be paid directly to a former spouse in the amount necessary to comply with the court order, provided the total amount paid does not exceed:
(i) 50 percent of the disposable retired pay for all court orders and garnishment actions paid under this part.
(ii) 65 percent of the disposable retired pay for all court orders and garnishments paid under this part and garnishments under 42 U.S.C. 659.
(2) Disposable retired pay is the gross pay entitlement, including renounced pay, less authorized reductions. Disposable retired pay does not include the retired pay of a member retired for disability under 10 U.S.C Chapter 61 or annuitant payments under 10 U.S.C. Chapter 73. The authorized deductions are:
(i) Amounts owed to the United States.
(ii) Fines and forfeitures ordered by a court-martial.
(iii) Amounts waived in order to receive compensation under title 5 or 38 of United States Code.
(iv) Federal employment and income taxes withheld to the extent that the amount deducted is consistent with the member's tax liability, including amounts for supplemental withholding under 26 U.S.C. 3402(i), when the member presents evidence to the satisfaction of the designated agent that supports such withholding. State employment taxes and income taxes when the member makes a voluntary request for such withholding from retired pay and the Uniformed Services have entered into an agreement with the State concerned for withholding from retired pay.
(v) Premiums paid as a result of election under 10 U.S.C. Chapter 73 to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired pay is being made pursuant to a court order under this part.
(vi) Other amounts required by law to be deducted.
(f) Notification of Member. (1) As soon as possible, but not later than 30 calendar days after effective service of a court order or garnishment action under this part, the designated agent shall send written notice to the affected member at his or her last known address.
(2) This notice shall include:
(i) A copy of the court order and accompanying documentation.
(ii) An explanation of the limitations placed on the direct payment to a former spouse from a member's retired pay.
(iii) A request that the member submit notification to the designated agent if the court order has been amended, superseded, or set aside. The member is obligated to provide an authenticated or certified copy of the operative court documents when there are conflicting court orders.
(iv) The amount or percentage that will be deducted if the member fails to respond to the notification as prescribed by this part.
(v) The effective date that direct payments to the former spouse tentatively will begin.
(vi) Notice that the member's failure to respond within 30 days from the date that the notice is mailed may result in the payment of retired pay as provided in the notification.
(vii) That if the member submits information in response to this notification, the member thereby consents to the disclosure of such information to the former spouse or the former spouse's agent.
(3) If the member responds to the notification, the designated agent shall consider the response and will not honor the court order whenever it is shown that the court order is defective, or the court order is modified, superseded, or set aside.
(g) Designated Agent Liability. (1) The United States and any officer or employee of the United States will not be liable with respect to any payment made from retired pay to any member or former spouse pursuant to a court order that is regular on its face if such payment is made in accordance with this Part.
(2) An officer or employee of the United States, who under this part has the duty to respond to interrogatories, will not be subject under any law to any disciplinary action or civil or criminal liability or penalty for, or because of, any disclosure of information made by him or her in carrying out any of the duties that directly or indirectly pertain to answering such interrogatories.
(3) If a court order on its face appears to conform to the laws of the jurisdiction from which it was issued, the designated agent will not be required to ascertain whether the court has obtained personal jurisdiction over the member.
(4) Whenever a designated agent is effectively served with interrogatories concerning implementation of this part, the designated agent shall respond to such interrogatories within 30 calendar days of receipt or within such longer period as may be prescribed by applicable State law.
(h) Payments. (1) Subject to a member's eligibility for retired pay, effective service of a court order, and the limitations and requirements of this part, the Uniformed Service concerned shall begin payments to the former spouse not later than 90 days after the date of effective service.
(2) Payments shall conform with the normal pay and disbursement cycle for retired pay. Payments may be expressed as fixed in amount or as a percentage or fraction of disposable retired pay. With regard to payments based on a percentage or fraction of disposable retired pay, the amount will change in direct proportion and at the effective date of future cost-of-living adjustments that are authorized, unless the court order directs otherwise.
(3) Payments terminate on the date of the death of the member, death of the former spouse, or as stated in the applicable court order, whichever occurs first. Payments shall be terminated or shall be reduced upon the occurrence of a condition that requires termination or reduction under applicable State law.
(4) When several court orders are served with regard to a member's retired pay, payment shall be satisfied on a first-come, first-served basis within the amount limitations prescribed in
§63.6(e) of this Part.
(5) If conflicting court orders are served on the designated agent that direct that different amounts be paid during a month to the same former spouse from a given member's retired pay, the designated agent shall authorize payment on the court order directing payment of the least amount. The difference in amounts on conflicting court orders shall be retained by the designated agent pending resolution by the court that has jurisdiction or by agreement of the parties. The amount retained shall be paid as provided in a subsequent court order or agreement. The total of all payments plus all moneys retained under this paragraph shall be within the limitation prescribed in §63.6(e) of this Part.
(6) The designated agent shall comply with a stay of execution issued by a court of competent jurisdiction and shall suspend payment of disputed amounts pending resolution of the issue.
(7) When service is made and the identified member is found not to be currently entitled to payments the designated agent shall advise the former spouse that no payments are due from or payable by the Uniformed Service to the named individual. If the member is on active duty when service is accomplished, the designated agent shall retain the application until the member's retirement. In such case, payments to the former spouse, if otherwise proper, shall begin not later than 90 days from the date the member first becomes entitled to receive retired pay. If the member becomes entitled to receive retired pay more than 90 days after first being notified under §63.6(f) of this Part, the notification procedures prescribed by that section shall be repeated by the designated agent.
(8) In moneys are only temporarily exhausted or otherwise unavailable, the former spouse shall be fully advised of the reason or reasons why and for how long the moneys will be unavailable. Service shall be retained by the designated agent and payments to the former spouse, if otherwise proper, shall begin not later than 90 days from the date the member becomes entitled to receive retired pay. It the member becomes entitled to receive retired pay more than 90 days after first being notified under §63.6(f) of this Part, the notification procedures prescribed by that section shall be repeated by the designated agent.
(9) The order of precedence for disbursement of retired pay when the gross amount is not sufficient to permit all authorized deductions and collections shall follow Volume I, Part 3, Section 7040, "Order of Payment," in the Treasury Fiscal Requirements Manual for Guidance of Departments and Agencies. Court-ordered payments to a former spouse from retired pay shall be enforced over voluntary deductions and allotments.
(10) Payments made shall be prospective in terms of the amount stated in the court order. Arrearages will not be considered in determining the amount payable from retired pay.
(11) No right, title, or interest that can be sold, assigned, transferred, or otherwise disposed of, including by inheritance, is created under this part.
(12) At the request of the designated agent, the former spouse may be required to provide a certification of eligibility that attests in writing to the former spouse's continued eligibility and that includes a notice of change in status or circumstances that affect eligibility. After notice to the former spouse, payments to the former spouse may be suspended or terminated, when the former spouse fails to comply, or refuses to comply, with the certification requirement.
(i) Reconsideration. A former spouse or member may request that the designated agent reconsider the designated agent's determination in response to service of an application for payments under this part or the member's answer to the designated agent with respect to notice of such service. For reconsideration, the request must express the issues the former spouse or the member believes were incorrectly resolved by the designated agent. The designated agent shall respond to the request for reconsideration, giving an explanation of the determination reached.
(Approved by the Office of Management and Budget under OMB Contract Numbers 0704-0160 and 0704-0182)
Linda M. Lawson,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
[Fr Doc. 85-1468 Filed 1-17-85; 8:45 am] BILLING CODE 3810-01-M