If you were medically retired under Chapter 61, you were probably told your disability pay was untouchable in a divorce. For part of it, that was true. In February 2026, DoD deleted the paragraph that made it true for the rest.
The change did not arrive with a press release. It arrived as a revision to a financial management regulation, the kind of document that gets read by pay technicians and military divorce attorneys and almost nobody else. Most of the people it affects will find out from their former spouse's lawyer, or from a garnishment that comes in larger than they expected.
Here is exactly what changed, who it hits, who it misses entirely, and what still protects you.
Table of Contents
- What Actually Changed in February 2026
- Who This Hits, and Who It Misses
- Why DoD Says the Disability Factor Disappears
- A Worked Example With Real 2026 Pay
- What Is Still Protected
- The CRSC Election, and Why It Now Matters More
- What This Did Not Change
- What to Do If This Applies to You
- Frequently Asked Questions
What Actually Changed in February 2026
The document is DoD 7000.14-R, Financial Management Regulation, Volume 7B, Chapter 64, titled "Concurrent Military Retirement Pay and Department of Veterans Affairs (DVA) Disability Compensation." The February 2026 version replaced the February 2025 version, which is now archived.
Two entries in its summary of changes matter. The first is an addition at paragraph 5.2.1:
"Pursuant to the Defense Office of Hearings and Appeals decision in Claims Case Number 2016-CL-091608-3, military retired pay payable to military retirees under Title 10, Chapter 61, of United States Code that is paid concurrently with Department of Veterans Affairs disability compensation is disposable pay subject to division under the Uniformed Services Former Spouse's Protection Act, because the amount paid effectively removes the disability factor from the Chapter 61 retired pay payable."
The second is a deletion at paragraph 5.2.2, described in the change table in five words that carry a lot of weight: "Deleted text which incorrectly limited disposable income for certain members retired under Chapter 61 for disability."
Read those together and the picture is clear. DoD had language on the books that reduced how much Chapter 61 retired pay counted as divisible. DoD has now decided that language was wrong, removed it, and replaced it with the opposite rule.
The operative text now in the chapter puts it plainly. Chapter 61 disability retired pay payable under 10 U.S.C. 1414(b)(1) "is all disposable retired pay because it effectively removes the disability factor from the amount of retired pay payable limiting payment to the hypothetical longevity retired pay."
All disposable. Not part of it.
Who This Hits, and Who It Misses
This is the part most summaries get wrong, and getting it wrong in either direction causes real harm. The change is narrower than "medical retirees lose their protection," and it is also more severe for the group it does reach.
It applies to what the regulation calls a Qualified Career Disability Retiree. In plain terms, all three of these have to be true:
- You were medically retired under Title 10, Chapter 61.
- You have 20 or more years of creditable service under 10 U.S.C. 1405, or 20 or more years computed under 10 U.S.C. 12732 for Reserve and Guard service.
- You are receiving retired pay concurrently with VA disability compensation under 10 U.S.C. 1414, the benefit most people still call CRDP.
If you have less than 20 years, this change does not reach you
Paragraph 5.5.2.1 of the same chapter is explicit: disability retirees with less than 20 years of creditable service "are not eligible to receive Title 10, U.S.C., Chapter 61 Disability Retired Pay and DVA Disability Compensation concurrently." You cannot receive concurrent pay at all, so a rule about concurrent pay has nothing to attach to. Your DFAS computation still deducts the disability-based portion before dividing.
That exclusion is not a kindness. It is the concurrent receipt gap that the Major Richard Star Act exists to close, and it remains open.
There is a sharp irony here worth sitting with. Combat-wounded members medically retired short of 20 years are barred from concurrent receipt, and that bar is the very thing keeping this division rule off them. If the Star Act passes in its current form, that group gains concurrent receipt and, under this regulation as written, inherits the divisibility that comes with it. Anyone in that position who is also divorced should raise it with their attorney before treating the Star Act as pure upside.
Why DoD Says the Disability Factor Disappears
The reasoning turns on a rule that already applied to Chapter 61 retirees with 20 or more years, called the general waiver requirement.
A Chapter 61 retiree computes retired pay under whichever of two methods is more favorable: years of service (2.5% per year under the legacy High-3 system) or disability percentage (the DoD rating assigned at retirement, capped at 75%). Someone retired at 20 years with a 70% DoD rating will usually get more from the disability method.
But to draw that pay concurrently with VA compensation, they must waive disability retired pay to the extent it exceeds the hypothetical longevity retired pay: what they would have received had they retired normally on length of service alone.
The regulation's own illustration, at Example 1:
- Disability retired pay based on percentage of disability: $1,000/month
- Hypothetical longevity retired pay at 20 years: $800/month
- Amount receivable concurrently with VA compensation: $800/month
- The remaining $200 stays subject to the general waiver requirement
DoD's position is that once the waiver caps payment at the $800 longevity figure, the money being paid is no longer tracking the disability rating. The disability factor has been squeezed out of it. And what is left, in DoD's reading, is ordinary retired pay with nothing left to shield.
The edge case where the waiver never applies
Example 2 in the chapter covers retirees whose hypothetical longevity pay equals or exceeds their disability-based computation. If the longevity figure is $1,500 and the disability-based figure is $900, the retiree takes $1,500 and the general waiver requirement does not apply at all. This is common for retirees with long service and a moderate DoD rating, and it is worth checking which side of that line you are on before assuming anything about your own numbers.
A Worked Example With Real 2026 Pay
The regulation's $1,000 and $800 are illustrative. Here is the same structure using an actual 2026 pay table figure, computed with the same engine that runs this site's calculator.
Take an E-7 medically retired in 2026 at 20 years with a 70% DoD disability rating, previously married 18 of those 20 years, with a decree awarding the former spouse 50% of the marital share.
| Component | Monthly | How it lands |
|---|---|---|
| True High-3 average (E-7, 20 yrs) | $5,760.90 | Basis for both computations |
| Disability method (70% rating) | $4,032.63 | The more favorable computation |
| Hypothetical longevity (20 yrs x 2.5%) | $2,880.45 | The concurrent receipt ceiling |
| Waived under the general waiver requirement | $1,152.18 | Not paid, not divisible |
| Concurrent retired pay, now fully disposable | $2,880.45 | All of it reachable by the decree |
| Former spouse share (18/20 x 50% = 45%) | $1,296.20 | Paid directly by DFAS |
| VA compensation, 70%, veteran alone | $1,808.45 | Tax-free, not divisible |
The retiree in this example keeps $1,584.25 of retired pay plus $1,808.45 of VA compensation. The VA money is the larger half of what they take home, and it is untouched. That is worth saying clearly, because the headline version of this change ("medical retirees lose their protection") reads as though everything is now on the table, and it is not.
Do not use this table to predict your own garnishment. DoD deleted the prior language rather than publishing a revised computation, so exactly how much was shielded before depends on how your pay account was set up and when. The only authoritative figure is on your DFAS Retiree Account Statement, and the only person who can tell you what your decree reaches is a military divorce attorney reading the decree itself.
Your Rank, Your Years, Your Court Order
The table above is one scenario. Put in your own rank, years of service, VA rating, and the percentage in your decree, and see the former spouse share and what is left, with the coverture fraction and frozen benefit rule handled for you. Free, about a minute.
Calculate Your Own Numbers →What Is Still Protected
Three things survive this change intact.
1. VA disability compensation itself
The money the VA pays you is not retired pay, is not disposable retired pay, and is not divisible as marital property. The Supreme Court settled this in Mansell v. Mansell, 490 U.S. 581 (1989), holding that the USFSPA does not authorize state courts to treat retired pay waived to receive VA benefits as divisible property. Nothing in the February 2026 revision touches that.
2. The amount you waive
In the example above, the $1,152.18 waived under the general waiver requirement is never paid to you, so there is nothing there for a court to divide. The rule reaches what is actually payable, not the pre-waiver computation.
3. Combat-Related Special Compensation
CRSC under 10 U.S.C. 1413a is not retired pay. It is a separate entitlement, and it is not divisible as property under the USFSPA. This is the protection that has quietly become far more valuable.
Property division and support are different questions. CRSC and VA compensation are shielded from being divided as marital property. That does not automatically put them out of reach of a child support or alimony obligation, where courts often consider total income regardless of source. If your obligation includes support, do not assume the shield covers it.
The CRSC Election, and Why It Now Matters More
A retiree can receive either CRSC under 10 U.S.C. 1413a or concurrent retired pay under 10 U.S.C. 1414, but never both. Paragraph 5.1.1 of the chapter guarantees an annual open season to switch between them, and eligible members are supposed to be notified of the opportunity.
That election has always been a comparison of gross dollars. DFAS defaults to paying whichever is larger unless you elect otherwise. After February 2026, for a divorced Chapter 61 retiree with a division order, the comparison has a second term:
- Concurrent pay under 1414 may be the larger gross figure, but it is now entirely disposable retired pay and your former spouse's percentage applies to all of it.
- CRSC under 1413a may be the smaller gross figure, but it is not divisible as property.
The smaller number can now be the bigger check. Whether it actually is depends on your rating, your combat-related determination, and the percentage in your decree, and it can flip year to year as those change. This is a conversation for your attorney and a careful look at your own statement, not a rule of thumb. But if you are a Chapter 61 retiree with 20+ years, a combat-related determination, and a division order, and you have never run that comparison, this year's open season is the time.
Our full CRDP vs CRSC guide walks through the eligibility rules and the trade-offs in detail.
What This Did Not Change
The mechanics of how a former spouse actually gets paid are untouched. If you have read our USFSPA guide, none of this is new:
- The 50% cap on direct payment. DFAS will not pay a former spouse more than 50% of disposable retired pay as a property division. Support and arrearages can push the total garnishment to 65%, but property division alone stops at 50%.
- The 10/10 rule. Direct payment from DFAS still requires 10 years of marriage overlapping 10 years of creditable service. Below that the court can still divide the pension, but the retiree pays the former spouse directly rather than DFAS doing it.
- The coverture fraction. Most decrees award a percentage of the marital share, not of the whole pension. The math is unchanged; only the pool it applies to got larger.
- The frozen benefit rule. For divorces final after December 23, 2016, the divisible amount is generally fixed using rank and years of service at the time of divorce.
- Howell v. Howell, 581 U.S. 214 (2017). A state court still may not order you to reimburse a former spouse for a reduction caused by a later VA waiver, even where the decree contains an indemnification clause.
What to Do If This Applies to You
- Confirm which category you are in. Chapter 61 with 20+ years and drawing concurrent pay means this reaches you. Chapter 61 under 20 years means it does not, at least for now.
- Pull your current Retiree Account Statement. Log in to myPay and read the actual deduction lines. Your RAS is the only authoritative record of what is being withheld and on what base.
- Read your decree for how the award is phrased. A fixed dollar amount behaves very differently from a percentage of disposable retired pay when the disposable figure moves. Percentage awards absorb this change automatically. Fixed-dollar awards may not.
- Run the CRSC comparison before the next open season if you have a combat-related determination. Compare after-division take-home, not gross.
- Talk to a military divorce attorney, not a general family practitioner. The USFSPA, the general waiver requirement, and this regulation interact in ways that a lawyer who does not handle military pensions regularly will not spot. The ABA Legal Assistance for Military Personnel committee is one place to start looking.
- Check whether your installation legal office can help. Retirees generally retain access to legal assistance. They cannot represent you in a divorce, but they can read a regulation with you and tell you whether you need a specialist.
Frequently Asked Questions
Does this apply retroactively to a divorce finalized years ago?
The regulation governs how DFAS computes disposable retired pay going forward, not what your decree says. If your award is written as a percentage of disposable retired pay, the amount your former spouse receives can change when the disposable figure changes, without anyone going back to court. If it is a fixed dollar amount, it generally does not move on its own. Which one you have is a question about your decree's exact wording, so have an attorney read it.
Will DFAS notify me if my garnishment changes?
Changes show up on your Retiree Account Statement, but do not count on a separate letter explaining the reason. This is the practical argument for reading your RAS line by line rather than glancing at the net figure.
I have 20+ years and a Chapter 61 retirement but no VA compensation. Am I affected?
No. The rule applies to retired pay paid concurrently with VA disability compensation under 10 U.S.C. 1414. Without VA compensation there is no concurrent payment, so there is nothing for the new language to operate on.
Does this change my taxes?
No. Paragraph 5.4.2 of the chapter confirms that a Qualified Career Disability Retiree receiving Chapter 61 retired pay concurrently is still receiving Chapter 61 retired pay for tax purposes, subject to the rules in 10 U.S.C. 1403 and 26 U.S.C. 104. Whether your retired pay is taxable is a separate question from whether it is divisible, and it did not move. State treatment varies by state.
Is the Major Richard Star Act still worth supporting if it creates this exposure?
For most people in the affected group, yes. Concurrent receipt for combat-injured retirees below 20 years is money that does not exist today, and gaining it while sharing a portion under an existing decree still leaves most recipients better off. But the interaction is real and it is not being discussed, so if you are medically retired under 20 years with a division order, it deserves a specific conversation rather than an assumption. Our Star Act guide tracks where the bill stands.
One email when a rule like this one changes
Regulation revisions rarely make the news. Get the 2027 COLA the day it is announced in October, plus pay table and VA rate updates when they land. Monthly at most.
No spam. Unsubscribe anytime.
Related Articles
- Military Divorce and Retirement Pay: The USFSPA Guide for 2026
- CRDP vs CRSC 2026: Which One Pays You More
- Major Richard Star Act 2026: Status and Financial Impact
- VA Disability Rating Changes and Your Retirement Pay
This article is for educational purposes and is not legal advice. It describes a federal pay regulation, not the law of your state, and property division in divorce is decided under state law by a court reading your specific decree. Verify your own figures against your DFAS Retiree Account Statement and consult a military divorce attorney about your situation.