Disabled Veterans Fight to Protect Disability Compensation

February 20, 2008
Jere Beery, OFFE Public Relations Director

(The Veterans Advocacy Group) - They call themselves the ‘5301 Club’. All 28 members of this exclusive online group are disabled veterans whom incurred life-altering injuries or illnesses during their military service. Most of the group’s members suffer from service-connected combat related injuries, including amputee and wheelchair-bound veterans. They all receive tax-exempt disability compensation from the Department of Veterans Affairs. They have one other thing in common; they are all fighting to protect their earned VA disability compensation from being used as a ‘divisible asset’ in a divorce.

The 5301 Club gets their name from the federal law that was created by Congress to protect disability compensation from third party awards; USC, Title 38, 5301(a)(1), Payments of benefits due or to become due under any law administered by the Secretary shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and 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.

According to members of the 5301 Club, it is this federal law that is being violated by state divorce courts on a routine basis, and disabled veterans are being unjustly stripped of their earned disability compensation by state judges every day. It is very obvious by the strong and absolute wording in 5301, that Congress intended to protect veteran’s benefits and compensation from third party awards “under any legal or equitable process whatever…” And it is also very clear that this federal protection exists even “after receipt by the beneficiary”. Yet, veteran’s disability compensation continues to be misused as a divisible asset in divorce courts nationwide.

Veterans disability compensation is meant to financially assist a person disabled in the line of duty live a whole and productive life. Disability compensation is not an asset, or property. This compensation is awarded to veterans that have lost some ability to work, or maintain a daily routine. Veteran’s disability compensation is tax exempt, and uniquely awarded to a single individual based on their particular disabilities.

At some point in every divorce, both parties are required to file a sworn financial statement with the divorce court. It is at this point in the legal process that the violation of veteran’s benefits occurs. Once a veteran discloses the fact that they receive VA disability compensation and/or Social Security Disability, those amounts are ‘automatically’ calculated as joint marital financial assets and will be used by the judge to determine the veteran’s ability to pay alimony, or spousal support. Most divorce court judges wrongly treat veteran’s disability compensation exactly the same as military retirement pay. Nothing could be farther from the truth. Military retirement pay is not tax exempt, and is paid out by the Department of Defense, not the Department of Veterans Affairs.

This misinterpretation of federal law by state judges is forcing many disabled veterans going through a divorce to use their veteran’s disability compensation to pay alimony, or face contempt charges and jail if they refuse. This action is contrary to the wording and intent of the Congressional Law written to protect veteran’s benefits. Disability compensation should never be considered as an ‘asset’ in determining a disabled veteran’s net worth. According to Title 38, veteran’s benefits belong solely to the person disabled, and should never be diverted to a third party under any circumstances.

Most American taxpayers would be surprised to learn that millions of tax dollars they thought were going to pay for veteran’s benefits - were in fact being diverted to able body non-military ex-spouses in the form of alimony, or spousal support. In many of these cases, the veteran was not married to their ex-spouse when they were injured in combat. Yet, state judges continue to routinely overstep their authority and jurisdiction by ordering disabled veterans to voluntarily ‘divide’ their earned veteran’s disability compensation with their ex-spouse, or go to jail.

The judge is very aware the disabled veteran doesn’t have the funds to fight his ruling, and in most cases the veteran simply pays the court order without questioning the judge’s order. The judge is also aware that the court cannot go directly to the VA and attach to a veteran’s disability compensation; the VA won’t give it to anyone else but the disabled veteran that earned the benefit in the first place.

The 5301 Club was established in 2004 by Vietnam combat disabled veterans, Jere Beery from Ohio, and Dale Vanluven from Tennessee. Both men have impressive backgrounds as grassroots veteran’s advocates, and both men went through a divorce and both were ordered to use their service-connected disability compensation to pay alimony. Over the past 4 years, Vanluven and Beery have heard from many other disabled veterans with the very same ugly divorce situation. In turn, the 5301 Club was born and has become a ‘support group’ for these disabled veterans, and club members openly share information and ideas in an effort to assist other disabled veterans faced with the same issue.

Several of the veterans that have joined the 5301 Club have contemplated suicide in the past over this issue, and the 5301 Club has acted like a life raft for these individuals. Veteran’s disability compensation is a very sensitive and emotional issue for most combat veterans. Only the veteran knows what they went through to earn that award. For a civil court judge, that has probably never served in the military, who has no idea what you went through to earn that disability award, orders you to give your ex-wife your disability compensation, a military combat survivor suffering from PTSD can become very emotionally unstable.

The 5301 Club is comprised of an elite group of disabled veterans that wish to expose this injustice, and are willing to go public with their stories. Several of the 5301 Club members have spent time behind bars in protest of court orders which give their VA disability compensation to their ex-spouse.

Vietnam combat disabled veteran Dale Vanluven, is one of the 5301 Club veterans who were incarcerated over this issue. In 2003, Vanluven spent 180 days behind bars for refusing to use his earned disability compensation to pay spousal support. In 2004, he was sentenced to 30 more days in jail for the very same thing. In other words, combat disabled veteran, Dale Vanluven spent more time behind bars for protecting his earned veteran’s benefits, than Martha Stewart served for felony insider trading.

Vietnam combat disabled veteran, and 5301 Club member, Calvin Murphy from Michigan is another veteran jailed for refusing to give his earned veteran’s disability compensation to his ex-wife. Murphy’s case is currently in appeal with the Michigan Supreme Court. 5301 Club members David Bates from North Carolina and Phillip Bakane from Alabama have also spent time behind bars for refusing to divide their earned veteran’s disability compensation with their ex-spouses.

Although a few attorneys have agreed to represent a couple of the 5301 Club members with protecting their disability compensation, most veterans cannot find representation and attorneys turn a blind eye. The attorneys know by going after a veteran’s disability compensation in a divorce settlement, their client will win the ability to pay them.

In general, VA disability is considered a ‘cash cow’ in the legal profession and it is in the attorney’s financial best interest to win an award based on a veteran’s disability compensation. In other words, your ex-spouse and her attorney are both getting a piece of your veteran’s benefits, and the judge lets it happen. Everyone wins except the disabled veteran who earned their disability compensation award in the service of their country.

Over the past 4 years, 5301 Club members have contacted the Department of Veterans Affairs, several members of Congress and the Senate, a number of state ethics commissions and a number of federal law enforcement agencies with complaints about this blatant violation of federal law, just to be told they do not get involved in civil matters, or family court rulings.

Operation Firing For Effect is monitoring all of these cases very closely. In response to this problem, OFFE has authored a customized prenuptial agreement for future disabled veterans to consider before getting married. The OFFE document specifically states; in the unfortunate event of divorce, veteran’s disability compensation and Social Security Disability will not be considered or calculated into the divorce settlement. At this time, this appears to be the only way a veteran (man, or woman) can totally protect their disability compensation. The OFFE Prenuptial Agreement will be posted on the OFFE Web site (free of charge) soon.

Here is a list of states currently represented by 5301 Club members. Georgia, Florida, Alabama, North Carolina, South Carolina, Michigan, Oklahoma, Ohio, Montana, Missouri, New Jersey, and Tennessee. Please direct all media inquires to; jerebeery@aol.com.

It is a sad state of affairs when our disabled veterans have to fight to keep their earned veterans disability benefits. OFFE will bring you any new developments on this issue.