When you are the spouse of an active member of the military who is close to or has reached retirement age, there are several career paths the military member may choose at this point. The Military member may have incurred a disability.
The military member, in attempting to obtain a determination of not being capable of world wide duty; If this is the case, the military member does not have the fitness to remain on active duty. The Member could be Medically Discharged under Chapter 61 of Title 10 USC (Medical Retirement).
The military member could be on a TDRL (temporary disabled retirement list) such as when a soldier gets cancer he would be put on this list during treatment and if treatment was successful he would be back on active duty . Some do not recover and are not able to be ready for world wide duty and they are discharged on permanent disability. This would be a percentage of the disability multiplied by the years of service., a complicated formula but it is important to know that the member would receive retirement pay plus disability.
The source of payment to members of the military, Defense Finance and Accounting Services (DFAS) has a policy that will not allow medical discharge funds to be divided in a divorce.
It is possible for a Reservist to be medically discharged under Chapter 61 and then once the member turns 60 ask for retirement pay to be recomputed because the medical discharge payment would not include reserve points – only the computation of active duty years; when he goes to retire they use base pay and rank.
The Retirement portion of medical retirement is computed using the disability rating. FAST FORWARD to age 60, now the member can get their retirement reevaluated to allow his reserve points to be included in the amount received. There is a new and greater amount calculated based on Active Duty time plus retirement points that were not counted under a medical retirement.
Rank counts for Medical Discharge because it is base pay + rank; Disability pays a disability compensation that is NOT based on rank. Disability pay is paid based on the disability and not Rank.
FORREST GUMP example: Lieutenant Dan was medically retired after 9.5 years of service when he lost both of his legs. The amount he would receive would be calculated as 9.5 years and his rank (one amount) and then another amount would be determined from the disability of two missing legs. Lieutenant Dan then received Disability Pay + Retirement Pay as an immediate payment.