A Lawyers Insight to DFAS (Defense Finance and Accounting Services)

While these articles are intended to inform you of unique issues of the military and veterans, it does not replace the need for proper legal advice by a licensed attorney in your jurisdiction.

by Barry J. Bernstein

     “DFAS” is the center of personnel finances for the US military, whether active duty or reserve, retiree or current, or any military branch.  They not only handle personnel payments, but also payments to military contractors and overseas military sales.  Since 1991, they have consolidated over 300 field offices into one central office, using about 1,200 employees, and disbursing about $500 Billion annually.  DFAS is the mother of all bureaucracies.

     Do it the DFAS way or don’t get paid timely.  They are the 800-pound gorilla.  DFAS holds the money, and they are careful before disbursing it.  You will eventually get what you are due, but your equitable arguments and your logic, if different from DFAS procedure won’t work.  

     Remember, DFAS is the Finance and Accounting office.  They will not be the repository of personnel records.  However, they will review an Order to ensure it is compliant before making payment or changing their prior records.  They are efficient, but highly technical in screening material.  Do not expect requests to be approved in the next payment cycle.  Send your document well before the expected disbursement date.

     When dividing retirement benefits, the common tool is a Qualified Domestic Relations Order (“QDRO”).  Simply stated, lawyers think QDROs are a pain, because the retirement system or clearinghouses for funds are very picky.  Often, the agreement of the parties or the order of the court can be difficult for the receiving holder of the funds or the accounts to completely understand.  Common terms in South Carolina may not be common to the reviewer.  DFAS is no different, and QDROs will be highly scrutinized and may even require a new Order to comply.

       It is difficult to determine the entitlement of a RC servicemember until the period of service is complete.  In theory, the parties could guess at the split, but a proper determination of the percentage of the retirement cannot be calculated until the service is complete.  DFAS may refuse any QDRO when the RC servicemember is not yet entitled to retirement.     

     HOWEVER, when the service is complete and the retirement is decided, the Order of Divorce may set out the retirement clearly enough that no QDRO may be required.  DFAS has plenty of information available of the key points they are looking for, and an Order of Divorce can meet all these requirements.

    There is a “gray area” for RC servicemembers (time between completing service and awaiting age 60).  Attorneys should jump at the opportunity to avoid a last minute QDRO.  Using the gray area period is an excellent opportunity to resolve anxiety before the first expected payment.

     DFAS can be a royal pain if you send in sloppy or incomplete documents.  However, their online information provides a plethora of explanations of how to their process works. 
​Attention to detail will save a great deal of time and preclude lots of headaches.    

    * The author retired as a colonel after 34 years of service.  He now practices law at Bernstein Law Firm, LLC in Irmo, South Carolina, advising clients and attorneys on military issues.