In military divorces, one of the most misunderstood and heavily litigated issues involves the treatment of special compensation benefits under federal law. One of the most contentious of these benefits is Combat-Related Special Compensation (CRSC). CRSC was created to provide retired service members with tax-free compensation for combat-related disabilities. But can this form of compensation be divided in a divorce proceeding in Florida? Is it considered marital property, or is it off-limits to equitable distribution?
For military spouses and service members going through a divorce in Tampa, understanding the legal treatment of CRSC is crucial. The answer isn’t always straightforward, but there are clear legal principles that govern how CRSC is handled in Florida courts. A knowledgeable Tampa divorce lawyer can help navigate the complex intersection between state equitable distribution laws and federal military benefit protections.
What Is Combat-Related Special Compensation (CRSC)?
Combat-Related Special Compensation is a federal benefit that allows certain military retirees to receive tax-free payments in place of waived military retired pay. CRSC was enacted to address the long-standing issue where veterans had to waive a portion of their military retirement to receive VA disability compensation, which is non-taxable but not divisible in divorce. CRSC is intended to supplement retirement income lost due to such waivers, but only when the underlying disability is combat-related.
To qualify for CRSC, the service member must:
- Be retired from military service,
- Have a VA-rated disability of at least 10%,
- Have at least some of the disability attributable to combat-related activities (e.g., hazardous duty, armed conflict, training with war simulations),
- Apply through their branch of service and receive approval.
Once awarded, CRSC provides an additional, tax-free payment that is not included in gross military retirement.
Why CRSC Matters in Divorce
In Florida, retirement benefits accrued during the marriage are typically considered marital property subject to equitable distribution. This includes military pensions. However, certain forms of compensation—especially those classified as disability benefits—are not treated the same way.
CRSC falls into a gray area. While it originates from military service and replaces waived pension payments, it is technically disability-based compensation rather than retirement income. The result is that CRSC is not divisible as marital property under both federal and state law.
This has enormous implications for divorcing spouses. If a service member elects CRSC and their retired pay is reduced to account for it, the non-military spouse may receive less or no share of the military pension—even if a Florida court previously awarded it in a final judgment.
A Tampa divorce lawyer must understand how to address these complications in initial divorce proceedings and post-judgment enforcement cases.
Federal Preemption and Mansell v. Mansell
The landmark case that governs the treatment of military disability benefits in divorce is Mansell v. Mansell, a 1989 U.S. Supreme Court decision. The Court ruled that state courts cannot divide military retirement pay that has been waived to receive VA disability benefits.
CRSC, like VA disability compensation, involves a waiver of disposable retired pay in exchange for tax-free disability compensation. Because of this, many courts—including those in Florida—have concluded that CRSC is protected from equitable distribution under federal preemption. That means state courts are not permitted to treat CRSC as marital property, even if the underlying disability stems from service during the marriage.
A Tampa divorce lawyer must anticipate this limitation when negotiating settlements or drafting final judgments.
Equitable Distribution vs. Enforceability of Agreements
While Florida courts cannot divide CRSC directly, spouses can still contract around this limitation. For example:
- A prenuptial or postnuptial agreement may include terms addressing CRSC offset,
- A marital settlement agreement may provide for indemnity payments if the service member later elects CRSC and reduces the pension share payable to the spouse.
Florida courts generally uphold such agreements unless they violate public policy or federal law. A Tampa divorce lawyer must draft these provisions carefully to avoid indirect attempts to divide a federally protected benefit.
The Problem of Post-Divorce CRSC Elections
One of the most contentious issues arises when a divorce is finalized and the military spouse later elects CRSC, reducing or eliminating the amount of retirement pay the non-military spouse receives.
Consider this scenario:
- A Florida court awards the non-military spouse 50% of the disposable military retired pay.
- The service member later applies for and is granted CRSC.
- DFAS recalculates retirement pay and reduces the amount subject to division.
- The non-military spouse’s payments drop significantly or cease altogether.
Under Mansell, the court cannot modify the order to enforce payment from CRSC. This creates real financial hardship for the former spouse and legal complexity for the attorneys involved.
A Tampa divorce lawyer should include indemnity language in the final judgment that requires the service member to reimburse the former spouse for any lost share of retirement due to a CRSC election. While such a clause cannot compel DFAS to divide CRSC, it can form the basis for a contempt action or money judgment enforceable by other means.
Enforcement Challenges: What the Court Can and Cannot Do
Once CRSC is elected and retirement pay is reduced, enforcement becomes more complicated. DFAS will only divide disposable retired pay, which excludes amounts waived for CRSC or VA benefits. Therefore, even if the court ordered a 50% division of retirement, that order cannot be enforced through direct DFAS payments if the retired pay has been replaced with CRSC.
This is where the concept of indemnification becomes critical. Courts can:
- Order the service member to make monthly payments to the former spouse in the amount of the lost retirement,
- Enter money judgments for past-due amounts,
- Impose interest and penalties,
- Enforce through wage garnishment (of other income),
- Use contempt powers for willful non-compliance.
However, courts cannot garnish or directly divide CRSC, nor can they require DFAS to treat CRSC as marital property. A Tampa divorce lawyer must understand these distinctions and craft enforceable orders that protect the client’s rights without violating federal protections.
Prenuptial Agreements and CRSC
Military service members in Tampa often seek prenuptial agreements that waive or limit the division of military benefits. If drafted properly, these agreements can waive rights to all forms of military compensation, including CRSC.
The waiver must be:
- Knowing and voluntary,
- Supported by full financial disclosure,
- Specifically reference CRSC or “any form of military compensation, including disability benefits.”
If the agreement only mentions “military retired pay,” a court may determine that CRSC was not effectively waived, particularly if it is characterized as disability compensation. A Tampa divorce lawyer must use precise, inclusive language to ensure CRSC and similar benefits are clearly addressed in marital agreements.
The Importance of Full Disclosure
Because CRSC is applied for post-retirement and is not automatic, it may not exist at the time of the divorce. However, if the service member is eligible for CRSC, they are obligated to disclose that potential source of income.
A failure to disclose can lead to:
- A motion to reopen the final judgment based on fraud or nondisclosure,
- Sanctions for misleading the court,
- Unfavorable interpretations of ambiguous settlement language.
A Tampa divorce lawyer representing a non-military spouse should request discovery related to CRSC eligibility, prior combat deployments, disability ratings, and pending applications.
Likewise, military members should work closely with counsel to disclose all known or anticipated compensation sources, avoiding future litigation.
Alternative Remedies When CRSC Reduces Retirement Payments
If a court cannot divide CRSC directly, and if retirement pay is reduced or eliminated due to a CRSC award, alternative remedies may be available. These include:
- Offsetting other marital assets: If the divorce is still pending, the court may award a larger share of real estate, bank accounts, or other assets to compensate for the CRSC protection.
- Awarding permanent or bridge-the-gap alimony: Courts may award support that reflects the lost retirement income, particularly when the non-military spouse lacks comparable income sources.
- Using life insurance as a substitute: A court may require the military spouse to maintain life insurance naming the former spouse as beneficiary, particularly if the former spouse loses pension income.
Each of these strategies requires careful planning and aggressive advocacy. A Tampa divorce lawyer can ensure that clients are not left financially exposed due to an untouchable CRSC benefit.
Drafting Tips for Addressing CRSC in Marital Settlement Agreements
When crafting settlement agreements in military divorces, practitioners should include:
- Acknowledgment that CRSC and VA benefits are not divisible under federal law,
- Agreement that the military spouse will not take any action that reduces the other party’s share of retired pay, or that if they do, they will indemnify and reimburse the former spouse,
- A formula for calculating lost retirement and the timeline for reimbursement,
- A default mechanism (such as wage garnishment or property lien) if payments are not made,
- A requirement that the military spouse notify the former spouse and court within 30 days of receiving CRSC.
These clauses do not violate federal law because they do not divide CRSC directly; rather, they compensate the former spouse for a contractual breach or judgment loss resulting from the CRSC election. A Tampa divorce lawyer should ensure these clauses are enforceable under Florida contract law.
FAQ: Combat-Related Special Compensation in Florida Divorce
Q: Can a Florida court divide CRSC in a divorce?
A: No. CRSC is considered disability compensation and is federally protected from division under the Mansell ruling and the USFSPA.
Q: What happens if a service member elects CRSC after divorce and reduces my share of the pension?
A: If your final judgment doesn’t include indemnification language, your pension payments may drop or stop entirely. You may still seek enforcement based on breach of agreement.
Q: Can I include CRSC in a prenuptial agreement?
A: Yes, but it must be clearly and specifically waived. Generic references to “retirement” may not be sufficient.
Q: Can the court order my ex to pay me directly if my retirement share is reduced?
A: Yes. While the court cannot divide CRSC, it can order the military spouse to pay you the difference under an indemnity clause.
Q: What if the service member didn’t disclose their CRSC eligibility during divorce?
A: You may have grounds to reopen the judgment or seek a new equitable remedy based on nondisclosure or fraud.
Q: Does CRSC count toward child support or alimony calculations?
A: Yes. Even though CRSC is not divisible, it is income and must be included when determining support obligations.
Q: Can DFAS pay me directly from CRSC?
A: No. DFAS will only divide disposable retired pay. CRSC is not considered disposable retired pay and cannot be garnished or paid to a former spouse.
Q: Can I waive my right to CRSC reimbursement in a settlement?
A: Yes, but such a waiver must be knowing, voluntary, and in writing. A Tampa divorce lawyer should draft clear waiver language.
Q: Can I get SBP coverage if my spouse elects CRSC?
A: Possibly. SBP is separate from CRSC but must be elected and properly ordered in the divorce. CRSC may reduce retirement income, but SBP is still a survivorship benefit.
Q: What should I do if I think my spouse is receiving CRSC and hiding it?
A: Consult a Tampa divorce lawyer. You may be entitled to discovery, enforcement, or modification depending on the circumstances.
The McKinney Law Group: Strategic Divorce Representation for Tampa’s Military Families
At The McKinney Law Group, we understand the complexities of military divorce—from BAH and retirement pay to custody during deployment. We offer realistic, results-driven legal support for service members and military spouses in Tampa.
We help with:
✔ Clarifying your rights under Florida and federal law
✔ Dividing military pensions and survivor benefits
✔ Handling custody and time-sharing in light of deployments
✔ Addressing relocation, PCS orders, and jurisdictional concerns
✔ Mapping a clear legal path that supports your future
Contact us at 813-428-3400 or email [email protected] to get straightforward legal advice today.