In the Mansell v. Mansell case of 1988, the U.S Supreme Court ruled that federal law does not permit state courts to divide military retirement pay waived by a retiree in order to receive veterans' disability benefits as part of a divorce settlement. The case involved an Air Force veteran, Mr. Mansell who had agreed during his divorce proceedings to share his total military retirement pay with his ex-wife Mrs. Mansell but later elected to waive a portion of this pay in favor of tax-free disability benefits which resulted in reduced payments for Mrs. Mansell. She took him back to court arguing that she was entitled to half of what his total retired pay would have been without the waiver and won at both trial and appellate levels before losing at the Supreme Court level where it was decided that under Uniformed Services Former Spouses’ Protection Act (USFSPA), only "disposable retired or retainer pay" could be divided between spouses during divorces.

In the dissenting opinion for Mansell v. Mansell, Justice Blackmun argued that the majority's interpretation of the Former Spouses' Protection Act (FSPA) was too narrow and failed to consider Congress's intent in passing it. He believed that Congress intended to allow state courts to divide all military retirement pay, including disability benefits, as part of a divorce settlement. According to him, this broader interpretation would better serve both military personnel and their former spouses by providing more flexibility in property division during divorces. Furthermore, he criticized the majority for ignoring previous court decisions which allowed such divisions and expressed concern about potential negative impacts on future cases involving similar issues.