DISABILITY BENEFITS AND DIVORCE

Disability benefits are not subject to equitable distribution. Even if a spouse’s interest in retirement benefits is lost when the other spouse elects disability benefits, disability benefits are still not subject to equitable distribution between the parties. This also applies to lump sum amounts received for loss of past earnings. Workers’ Compensation benefits or a lump sum award for future loss of earning capacity are not considered a martial asset. This is because they are deferred benefits. However, Workers’ Compensation and disability benefits are considered ”income” when determining if alimony is applicable.