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The Professor Nedley Series
Military Money – Part I
Military Allowances
August 1, 2003
Military Pay-Part I - outlines various allowances provided by the military in an attempt to make military compensation equivalent to that of comparable jobs and locations in the civilian world.
Military Pay – Part II - is an outline of the many separate pays provided by the military while a member is on active duty.
Military Pay - Part III explains how the courts deal with the division and jurisdiction issues of military retired pay.
Military Pay III 1/2 - delves into the mysteries of what to do with the post judgment election of the military member to take disability payments in lieu of earned retirement.
Active military compensation comes roughly in three forms:
1. Base Pay and
2. Special Incentive Pay
3. Allowances
Base Pay: Base Pay is that accorded to all personnel according to rank and years of service. It is the same for all services at any given grade and service level. This information is available at www.dod.mil/dfas/
Special and Incentive Pay: Special and incentive pay are offered as compensation either for doing special tasks or as an inducement to remain in the service. Examples are dive pay, flight pay, sub pay, JAG pay or medical officers pay. Special and incentive pay will be covered in Part II of this report.
Tax Note: If it is called “pay,” it is taxable income. If it is an “allowance,” it is non-taxable. (except CONUS COLA allowance)
Thrift Savings Plan (TSP): A member may voluntarily contribute up to 8% of his/her basic pay and up to 100% of any incentive or special pay to a TSP up to a cap of $12,000 per year (subject to COLA’s). All such contributions should be added back as either taxable or non-taxable pay for guideline purposes. The taxes are your call.
Allowances: This third category of compensation is often the most confusing for judges and attorneys alike, because housing allowance changes as marital status and dependency status change. There are other types of allowances such as Travel and Transportation allowances, however, the most common allowance with which judges must deal is the Basic Allowance for Housing (BAH). There is no longer any Basic Allowance for Quarters (BAQ.) This has all kinds of permutations, but it is fundamentally payable to members on active duty according to their pay grade, dependents status and geographical location. The goal is to put military personnel at equivalency with their civilian counterparts both as to location and professional/educational status.
Member Living in Government Quarters: A member with dependents living in appropriate government quarters is not entitled to BAH. An E-7 or above, without dependents, may reject government quarters and instead receive the BAH. An unmarried member, who does live in government quarters and is therefore not authorized for BAH, may receive a BAH differential if the member pays child support.
Unaccompanied Members: When dependents are not authorized to accompany the member (i.e. a war zone), the member is entitled to receive BAH with dependents as if the member were assigned to duty in the area where the dependents live. That member may also receive (FSH), Family Separation Housing allowance, if he/she does not elect to live in government quarters. (i.e. he elects to live in Saddam’s palace instead of the back of a HUMVEE.)
Relationships: A spouse is a dependent until divorce is final. Minor children are dependents until majority. Stepchildren are dependents until a final divorce is concluded.
Payment: If a member fails to support a dependent, it is grounds for termination of the member’s BAH. It is unlawful for a member to claim BAH at a “with dependents” rate without providing support to that dependent. That is why a call to his/her local command will generally get support rolling long before a court order.
Other Relationships:
* A disabled child over 21 who is dependent on the member for one-half his support entitled the member to draw BAH.
* A college kid under age 23 who is dependent on the member for one-half of his support entitles the member to draw BAH.
* An order establishing the members paternity or even an order obligating the member to pay for a child not technically his will draw BAH.
BAH Will Go Down If:
* There is a disso and there are no other dependents.
* Death or discharge.
* When government quarters are furnished. (Imputation of housing cost as
income should be considered, but it is a matter of judicial discretion. The
foregone BAH is a fair guide.)
BAH Will Vary: Location, location, location. BAH changes depending on the duty station. As an example, an E-7 assigned to San Diego is entitled to BAH of $1,200 as of 1/1/03, whereas the same E-7 in 29 Palms is only entitled to $611 and if reassigned to Santa Clara, he would receive $2,069. Go figure. Santa Clara ???
BAS (Basic Allowance for Subsistence): This cash allowance is paid in lieu of in-kind subsistence such as MRE’s or military dining facilities. It may co-exist with BAH where dependents are in the housing and the member is in military quarters.
Other Allowances:
BAH Differential is for a member in military housing who is obligated to pay child support. It is a housing allowance paid to the member that is halfway in between the “with” dependents and “without” dependents amounts for their rank.
Dislocation Allowance: If a service member moves, they receive a one time amount equal to ½ times normal BAH.
CONU COLA (Continental United States cost of living allowance): Temporary lodging and expenses paid to members moving stateside. It is taxable. It is to accommodate various non-housing costs in high-cost areas. It is paid both “with” and “without” dependents.
Overseas Allowance: This is a local per diem rate paid in short increments for overseas duty.
Uniform Allowance: Officers get a “one-shot” allowance upon commissioning. They get no on-going clothing allowance. Enlisted members are issued clothing and thereafter get a replacement allowance in their anniversary month. It may surprise you, but the female allowance is greater than the male’s.