Does the GI Bill BAH count as income for the purposes of determining maintenance and child support in a Colorado family law case? The answer is yes – but only the GI Bill BAH, not the tuition assistance or the book/supply stipend.
This is a rare “case of first impression” in Colorado, which means it’s the first time there is a reported decision from the appellate courts on an issue.
What is the Post-9/11 GI Bill?
Veterans from the more distant past may recall the Montgomery G.I. Bill – it cost the military member money, and somewhat limited benefits. After 9/11, the federal government completely revamped the educational assistance program, and the result – the Post-9/11 GI Bill, is something radically different from the benefit paid to veterans from the close of World War II through the 1990s.
The Veterans Educational Assistance Act of 2008, codified at 38 U.S. Code § 3301, provides eligible veterans with up to 36 months of educational benefits, including:
- Tuition & Fees – the full in-state costs at a public school, or up to $24,477/yr at a private school (rate effective August 1, 2019 – see this page for details).
- Books & Supplies Stipend – $1000/yr
- Housing Allowance – the GI Bill BAH is the E-5 BAH With Dependents rate based upon where the school is located. For example, in Colorado Springs, the 2019 rate is $1605/mo. See the BAH Calculator page for rates in other areas.
Active duty members can also receive the tuition payments, but not the housing allowance. The benefits are transferable to family members in certain situations.
Online/Correspondence Schools. Note that the tuition and housing allowances are halved if the recipient is attending a correspondence school, including an online course.
This is an extremely valuable benefit – a veteran attending a private college in Colorado Springs in 2019, for example, would receive a whopping $159,688 over 4 years, broken down as follows: $97,908 for 4 years of tuition, $4000 for books, and $57,780 in GI Bill BAH allowances.
For more information about the post-9/11 GI Bill, see the VA Post-9/11 GI Bill website.
Is the Post-9/11 GI Bill BAH Income in a Colorado Divorce?
The Colorado child support and maintenance statutes have long had a very broad definition of income, which includes virtually all receipts from all sources. For a complete discussion, see the Income – Definition & Expenses article in the Colorado Family Law Guide.
But neither statute specifically addresses Post-9/11 GI Bill benefits, and Colorado trial courts have been all over the place. I’ve personally seen cases where the court counted the full benefits, including tuition, as income, and other cases where the court only counted the monthly housing allowance.
The Colorado Court of Appeals has now provided some long-needed clarity to this issue. In Tooker, a retired veteran was receiving GI Bill BAH and other benefits while attending college, specifically the tuition assistance, the book/supply stipend, and the monthly housing allowance.
When calculating the veteran’s income for purposes of a maintenance and child support modification, the trial court (our very own Judge Sokol in Division 10) included only the monthly housing allowance (the GI Bill BAH) as income, and excluded the tuition assistance and book stipend.
The Court of Appeals found that the court got it right, and upheld her order. The court reviewed cases where employer-paid benefits such as health insurance and 401(k) matching contributions were excluded from income:
“The principle that emerges from these cases is that, to be included as gross income for purposes of maintenance and child support, benefits received by an individual (if not otherwise excluded from the definition of gross income in the maintenance and child support statutes) must be available for the individual’s discretionary use or to reduce daily living expenses.”Tooker, ¶ 18.
In short, unless the recipient had the right to cash in lieu of the benefit, or the benefit directly reduced “daily living expenses”, it would be excluded from income for maintenance and child support calculations.
Other Post-9/11 GI Bill Benefits Not Income
What does this mean for the Post-9/11 GI Bill? The GI Bill BAH was both cash, and also directly reduced the person’s living needs, so it counted as income for purposes of maintenance and child support. But not the book stipend (which is curious – it’s cash, but it’s theoretically earmarked for books/supplies). And with respect to the hotly-contested issue of tuition assistance?
“Because the tuition assistance benefit was not available to Mark for general living expenses and would in no discernible way assist him in paying maintenance or child support, we conclude that the district court properly excluded the tuition assistance benefit as gross income for purposes of calculating maintenance and child support.”Tooker, ¶ 20.
Post-9/11 GI Bill as Divisible Property in a Divorce?
One other quick point about the GI Bill. Under federal law, it is not a divisible asset in a divorce. So a family law judge cannot treat it as marital property and award the educational benefits to the spouse. For more information about this, see our GI Bill and Divorce post. And the Post-9/11 GI Bill is not just a valuable asset, but it is also a potential liability, when the member transfers the benefits to a spouse but fails to complete the required service – see our blog post on GI Bill debt in a divorce for more details.
Finally, for a more complete discussion of the GI Bill BAH and other aspects of the Post-9/11 GI Bill, see our Post-9/11 GI Bill Benefits in a Divorce article in the Military Divorce Guide.
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