This study presents a mechanics-based framework for evaluating the performance of asphalt pavements subjected to annual ground surface deformations induced by frost heave and thaw settlement. Within this framework, a novel thaw settlement model is developed and coupled with a thermomechanical frost heave model to represent the heaving and subsequent thawing behavior of the soil beneath pavements. In the proposed thaw settlement model, excess water generated during the melting of ice lenses is introduced as a damage parameter within a continuum mechanics formulation, resulting in a reduction of material stiffness. The frost heave–thaw settlement model is further coupled with a thermodynamics-based asphalt damage model to capture the progressive degradation of asphalt layers. The capabilities of the proposed framework are demonstrated through two study scenarios: (i) uniform frost heave and thaw settlement occurring across the entire subgrade layer. (ii) non-uniform frost heave and thaw settlement localized within a specific region of the subgrade. The results show that the proposed framework not only captures damage in the asphalt layer but also predicts temperature distributions, ice formation, and water content during freeze–thaw cycles. Furthermore, the analysis reveals that uniform heaving and settlement cause relatively minor asphalt damage but lead to surface unevenness, whereas non-uniform frost heave and settlement result in both surface irregularities and severe damage to the asphalt layer.