OFFE NEWS

August 31, 2022

UNITED STATES CODE TITLE 42 CONGRESSIONAL EXEMPTIONS
[Veterans’ Disability Compensation]

Analysis by Simon Alvarado, MSW
Retired United States Army

It has become obvious that state civil courts, attorneys and the Department of Veterans Affairs (DVA) have joined forces in enforcing 42 United States Code TITLE IV—Grants to States for Aid and Services to Needy Families with Children and for Child–Welfare Services PART D—Consent By The United States To Income Withholding, Garnishment, And Similar Proceedings For Enforcement Of Child Support And Alimony Obligations. The interesting part is that disabled veterans in receipt of disability compensation have been excluded from what is “money subject to process” since 1975. When Congress clarified the legislative language, thus avoiding confusion with § 659 that exempted disabled veterans who had not retired or were in receipt of retiree or retainer pay from any branch of uniformed services. This congressional statutory protection clause¹ on veterans’ disability compensation remains unambiguous.

Insofar as States consider a discretionary (not remunerated for employment) source as income³ for the calculation of child and spousal support. Contrary to 42 United States Code Part D § 659, it exempts a disabled veteran who has never received military retirement or retainer pay⁴ or a Veteran pension⁵ 5. The veterans’ service-connected disability compensation has always been determined by a governmental (VA) medical rating process that determines levels of impairment or injuries that may have resulted in loss of earning capacity. Under 38 United States Code, dependents are never part of the rating process, thus have no bearing on a rating outcome.

I. INTRODUCTION

By all applicable federal authorities, veterans’ disability compensation is not remuneration income for employment, nontaxable income (as some might want to believe), or disposable income. State civil courts are prohibited from garnishing veterans’ disability compensation unless certain conditions exist, e.g., Title 5 CFR that pertains to government civil service employees. Military service members (Enlisted/NCOs) of the Armed Forces and veterans are not employees of the Veterans Administration or any other federal employer.

The federal law is the most definitive argument when defining who is an employee of the government or civil service. Section 2101 of Title 5 (1) The “Civil Service" consists of all appointed positions in the executive, judicial, and legislative branches of the government of the United States, except positions in the uniformed services.

Under section 2105 of Title 5, an "employee" means an officer and an individual who is appointed in the civil service by one of the following acting in an official capacity: a member of a uniformed service on active duty. Voluntary enlisted military service members are considered Enlisted or Non-commissioned Officers (NCO), thus not appointed.

II. United States Health and Human Services

The mission of the U.S. Department of Health and Human Services (USHHS) is to enhance the health and well-being of all Americans by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine and public health:

42 U.S. Code sec. 659 (h)(1)(A)(V) - by the Secretary of Veterans Affairs as compensation for a service-connected disability paid by the Secretary to a former member of the Armed Forces who receives retired or retainer pay if the former member has waived a portion of the retired or retainer pay to receive such compensation.

III. CONGRESSIONAL EXCEPTION

In 1975, Congress, to avoid confusion, made an exception that coincides with a non-wavering authority in 42 United States Code § 659 on “moneys subject to process” for child support and alimony. It is also noted that nowhere in Title 38 does it make any provisions for child support or alimony. A simple reason: disability compensation benefits belong wholly to the veteran. The rating process is reliant on only one simple factor: were injuries claimed service-connected? Families are not considered in the rating process. Any additional compensation benefits for family members are considered after a rating has been established, and if the rating is 30% or higher, at which point the veteran may apply for additional dependency compensation for dependents. 

IV. CONSEQUENCES OF ADDITIONAL DEPENDENCY COMPENSATION

Divorce resulting from military service has been epidemic and shows no sign of improving. In recent years, multiple deployments have put a big strain not only on families but also on service members who return with severe physical injuries and trauma-related conditions. For veterans with service-connected compensation ratings, dependents are eligible for additional benefits. While there may be a positive financial advantage, there may be some risks involved in losing more than what a veteran receives during the marriage. Health care may be a determining factor for those rated at the maximal rating during the marriage.

It may be a coincidence, but the VA’s standards of apportionments look very similar to state guidelines in determining Court child support orders. 38 CFR Section 3.451⁹ – Special Apportionments in part: the amount apportioned should generally be consistent with the total number of dependents involved. Ordinarily, apportionment of more than 50 percent of the veteran's benefits would constitute undue hardship on him or her, while apportionment of less than 20 percent of his or her benefits would not provide a reasonable amount for any apportionee. 

These percentages reflect similar ones for state-mandated guidelines. The VA considers no less than 20%, which may not be reasonable, yet the amount paid to a veteran only represents 3.6% (100% rated) after a divorce, in additional compensation. So, how can this not be considered child support? It looks like this additional dependency compensation is more of a scam, since more is taken than given after a divorce. The 3.6% is considered reasonable to support one child during the marriage, but not reasonable after a divorce, actually a reduction. This is only if a veteran chooses additional dependency benefits. It would make sense that benefits cannot be apportioned if the veteran has not chosen any additional dependent benefits.

The Department of Veterans Affairs has been complicit in turning its back on disabled veterans by claiming that veterans are employees of the VA, thus garnishing disability compensation under 5 CFR § 581.103 - Moneys that are subject to garnishment, even though the federal laws are clear on who is an employee. 
It is noted that U.S. Code 38 § 5301 prohibits any garnishment, attachments, seizures, or levy, unless the veteran is indebted to the federal government for any overpayments or otherwise; apportionments are based on financial needs for veterans’ families, but only if the veteran is receiving additional dependency benefits.
 

V. IN CONCLUSION

• In the analysis of whether states are allowed to use veterans’ disability compensation as income for support, the supremacy clause must be adhered to. States are prohibited from legislating policies, mandates, or any authorities that undermine the sanctity of the rule of constitutional (Congressional) law.
• Based on the analyses of federal laws on “what is and what is not” subject to process, State civil courts do not have subject matter jurisdiction over disabled veterans' federal compensation benefits. Such jurisdiction falls within the purview of the Secretary of the Veterans Administration. 
• A long-standing (1975) rule remains steadfast in the congressional exception under 42 U.S. Code Title IV Part D, unless a disabled veteran who has not retired from the military Armed Forces is not to be treated as a military retiree who has waived retired or retainer pay for veterans disability compensation, which is subject to garnishments, but only disposable pay (Title 10 §1408). 
• Military Armed Forces and veterans do not share the same status as “employees” of the federal government. Disabled veterans are not employees of the VA or any other federal agency, unless they have waived part or all of their retiree or retainer pay for veterans’ disability compensation.
• Apportionments are not designed to seize compensation for child support or any support unless the veteran accepts additional dependency benefits, and only if financial needs can be determined; otherwise, an apportionment cannot be granted as long as the veteran is providing¹⁰ for his children.
• 42 U.S. Code Title IV Part D exempts non-retired military service members from State Courts when using disability compensation as “money subject to process” for child support or alimony orders. 
• The Department of Veterans Affairs Office of General Counsel is indiscriminately labeling disabled veterans "employees," contrary to federal statutes, to collude with States Child Support Enforcement efforts through apportionments.

 

¹ 42 United States Code sec. 659

2 38 Title U.S. Code Veterans’ Benefits

³(8) For purposes of subsection (a) and this subsection, the term “income” means any periodic form of payment due to an individual, regardless of source, including wages, salaries, commissions, bonuses, workers’ compensation, disability, payments pursuant to a pension or retirement program, and interest.

⁴ Title 10 United States Code Armed Services

⁵ 38 U.S. Code Chapter 15 – Pension for non-service-connected disability or death for service

⁶ 38 United States Code Chapter 11 Compensation for service-connected disability or death

⁷ 38 U.S. Code sec. 1114 - Rates of wartime disability compensation

⁸ 38 United States Code sec. 1115

⁹ 38 CFR 3.451

¹⁰ 38 CFR 3.450 (c)