By Dan Marnen
The question of whether Veteran’s Disability payments are considered income for support (child and spousal) purposes has come up a number of times in my practice at Sebald & Hackwelder. The answer to that question is often misconstrued by a cursory reading of the statute. 38 U.S.C. §5301(a)(1) states in pertinent part:
Payments of benefits due or to become due under any law administered by the Secretary . . . shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.
At first glance, you might think, “my Veterans’ Disability benefits can’t be touched by a support order!” However, you would be mistaken.
In Rose v. Rose, 481 U.S. 619 (1987), the United States Supreme Court addressed the issue of whether the Supremacy Clause, U. S. Const., Art. VI, cl. 2, preempted a state court contempt order for failure to pay child support. In that case, the appellant, Charlie Wayne Rose, was a totally disabled veteran of the Vietnam War. During his ten-year marriage, the Mr. Rose’s sole source of income was comprised of benefits from the Veterans’ and Social Security Administrations.
Upon dissolution of the parties’ marriage, the Circuit Court for Washington County, Tennessee considered, along with other factors identified by a Tennessee statute, the “earning capacity, obligations and needs, and financial resources of each parent.” Mr. Rose received monthly: $1,211 in veterans’ disability benefits; $1,806 in veterans’ aid and attendance benefits; $90 in veterans’ dependents’ benefits; and $281 in Social Security disability benefits. His children received an additional $94 a month in Social Security children’s insurance benefits. The Circuit Court ordered appellant to pay $800 per month as child support. The following month, Mr. Rose paid only $90 in dependents’ benefits he received from the Veterans’ Administration.
Mr. Rose was held in contempt and his case wound its way up the appellate ladder to the United States Supreme Court. Mr. Rose argued that the Tennessee Circuit Court lacked jurisdiction to order him to pay child support out of his veterans’ disability benefits because the express language of Section 5301(a)(1) [previously 38 U.S.C. §3101(a)] preempted state law and it could not attach those benefits to satisfy his support obligation. Moreover, Mr. Rose argued that the legislative intent indicated that Congress did not intend for the Veterans’ Administration to act as a collection agency and it also did not intend to deprive a veteran of his benefits when that is his only source of income.
The Supreme Court disagreed with Mr. Rose. It held that the exercise of state-court jurisdiction over appellant’s disability benefits did not deprive Mr. Rose of his means of subsistence contrary to Congress’ intent, “for these benefits are not provided to support appellant alone.” Id. at 630. “Veterans’ disability benefits compensate for impaired earning capacity, H. R. Rep. No. 96-1155, p. 4 (1980), and are intended to ‘provide reasonable and adequate compensation for disabled veterans and their families.’ “ S. Rep. No. 98-604, p. 24 (1984) (emphasis added); Rose at 630.
The Court concluded by stating that the [Section 5301] prohibition against attachment, levy or seizure does not extend to protect a veteran’s disability benefits from seizure where the veteran invokes that provision to avoid an otherwise valid order of child support.
In my experience, the reality of a support obligation is that there are only a few recognized monetary deviations from that obligation. Moreover, the only two sources of benefits that are not includable as income for calculating a support obligation are public assistance benefits from the Pennsylvania Department of Public Welfare and federal Supplemental Security Income (SSI) benefits.