Gavel pounding down on stack of money in front of teddy bear.

VA Disability Payments are Income

The Colorado Court of Appeals just issued a new VA disability and child support decision in what the court itself regarded as an unsettled issue:

“As a matter of first impression in Colorado, whether a provision of the Uniformed Services Former Spouses’ Protection Act (USFSPA)… prohibits a trial court from including a parent’s veteran’s disability benefits in that parent’s gross income when calculating a child support obligation.”

M.E.R.-L., ¶ 2.

It came as somewhat of a surprise to me that this issue was even in doubt – as we discuss in our VA Disability article in the Military Divorce Guide, there is a long history in VA disability and child support cases of Colorado family law judges treating the benefits as income for purposes of calculating family support. And this has been true in every case we have seen here at Graham.Law.

However, while the primary case where VA disability payments were found to be included as income for purposes of alimony is more than 30 years old, that Nevil decision really had no actual analysis. The Colorado Court of Appeals has now fully addressed the issue of whether VA disability should count as income for purposes of child support, with a full analysis of the objections raised.

In M.E.R.-L., the family law judge included as income to the father both his salary, plus the $3433/mo Veterans Administration disability payments he was receiving. The father appealed on several grounds, each of which was discussed, and rejected, by the Court of Appeals.

VA Disability and Child Support Income

VA Disability and Child SupportVA Disability and Child Support

The father first argued that since disability payments are not expressly included in the “laundry list” of income under Colorado’s child support statute, C.R.S. 14-10-115, they do not count as income for purposes of calculating child support. While it is technically true that the statute does not mention “disability”, that’s not the end of the inquiry.

The Court noted that prior Colorado cases have treated disability benefits as income. Moreover, the Colorado statute is expansive, and includes income “from any source.” “Thus, we conclude that veteran’s disability benefits fall within the broad definition of gross income.” M.E.R.-L., ¶ 21.

Fact that VA Disability Benefits Not Taxable is Irrelevant

The father tried to argue that since the VA disability benefits were non-taxable, they should not count as income. After all, if the IRS doesn’t treat the payments as income, why should they count in a VA disability and child support case in Colorado?

The court was not impressed, quoting from a prior Colorado Supreme Court decision that “the [child support] statute makes no distinction between sources of income based on the federal or state tax codes.” M.E.R.-L., ¶ 22.

Federal Law Not Preclude States Treating VA Disability as Income

The Uniformed Services Former Spouses Protection Act (USFSPA) prohibits, upon divorce, state courts from dividing Veterans Administration disability payments as marital property. See our VA Disability article in the Military Divorce Guide.

The father in M.E.R.-L. attempted to apply that rule to VA disability and child support cases, arguing that the USFSPA precludes state courts from considering VA disability payments at all, including as income for purposes of child support or maintenance. The Court of Appeals was not persuaded:

“But father misses a very important distinction. Howell discusses only the treatment of disability benefits as community property. Nothing in Howell, or in the USFSPA itself for that matter, addresses whether a state – through statute or judicial decision – may treat disability benefits as income for calculating a child support obligation.”

M.E.R.-L., ¶ 28 (Cleaned up).

The father’s position was not helped by the fact that every reported VA disability and child support decision nationwide on this point actually went against him, with states routinely including VA disability payments as income:

“Father cites to no case that holds that the USFSPA prohibits states from including veteran’s disability benefits in a veteran-parent’s income when calculating a child support obligation. Nor are we aware of any such case. To the contrary, every court we have found that faced this issue rejected the preemption argument.”

M.E.R.-L., ¶ 29.

The court also analyzed the U.S. Supreme Court decision in Rose, at 626, where SCOTUS noted “a state court may consider disability benefits as part of the veteran’s income in setting the amount of child support to be paid.”

Because in Rose neither party had appealed the state court’s decision to include VA disability payments as income, this quote is more dicta than an actual holding. However, not only did the U.S. Supreme Court have the opportunity to express its disapproval of doing so, but the Court went the other way, and implicitly approved of disability counting as income in the child support calculation.

And as the M.E.R.-L. court found:

“Notably, several courts have read Rose as explicitly authorizing the treatment of veteran’s disability benefits as income for purposes of calculating a veteran-parent’s support obligation.”

M.E.R.-L., ¶ 25.

Congratulations to El Paso County’s own Dan West for prevailing in the M.E.R.-L. case and clarifying what most of us already believed to be true about VA disability and child support.

VA Disability Not Divisible as Marital Property

Finally, note the limitation on M.E.R.-L. While the case supports VA disability payments being included as income when determining child support or maintenance, those payments are still not divisible as property upon dissolution of marriage, and, as we addressed in a blog post last year, courts do not consider VA disability payments when dividing a marital estate at divorce.

VA Disability and Child Support Q&A

Is VA Disability Considered Income for Child Support?

Yes, VA disability payments are treated as income for purposes of calculating child support.

Is VA Disability Considered Income for Alimony?

Yes. VA disability payments count as income for purposes of calculating spousal support.

Can VA Disability Be Garnished for Child Support?

It depends. Normally VA disability payments cannot be garnished by a state family law court, however federal law allows garnishment to the extent that a military retiree who is receiving disability benefits has waived retirement to receive VA payments.

Is a Divorced Spouse Entitled to VA Disability Benefits?

No. State family law courts may not treat VA disability payments as marital property, nor divide them in a divorce. VA benefits do, however, count as income for purposes of calculating child support or alimony.

Award-Winning El Paso County VA Disability and Child Support Lawyers

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