By Jack Elliott Jr./The Associated Press
JACKSON — The Mississippi Supreme Court has ruled any military retirement pay that a veteran converts into disability benefits is exempt from alimony.
The Mississippi court reversed a decision in a Lamar County divorce case, citing a U.S. Supreme Court ruling in 1989 that federal law does not permit state court divorce decrees to divide the disability benefits. The Mississippi court said federal law pre-empts state law.
According to court records, a portion of the financial settlement that Tonya Mallard received in the property settlement agreement in her divorce was 40 percent of James Mallard’s “disposable military retirement pay” for 10 years.
Following the divorce, court documents show Mallard elected to adopt a 60 percent disability rating as part of his retirement pay. He did not provide any of the disability benefits to his ex-wife.
Tonya Mallard sued, alleging that action denied her the 40 percent of this retirement benefits — about $21,000. A Lamer County judge agreed with her and ordered James Mallard to pay her 40 percent of the disability benefits.
Presiding Justice George C. Carlson Jr., writing this past week for the Mississippi court, said the issue had been addressed differently by courts in other states with no clear consensus.
“Whatever the equities may be, state law is pre-empted by federal law, and thus, state courts are precluded from ordering distribution of military disability benefits contrary to federal law,” Carlson wrote.
In the 1989 case cited by the Mississippi court, the U.S. Supreme Court found in a California case that federal law divided only a veteran’s “disposable” retirement pay — the net amount of money received each month.
Excluded from that figure, the nation’s high court said, is money the veteran chooses to convert into tax-exempt disability benefits as well as any taxes paid on the military pension.