Pay and Benefits
OTHER ALLOWANCES
CLOTHING — INITIAL ISSUE
Officers get a one-time payment of $400 after commissioning to buy uniforms and insignia.
Enlisted members get an initial-issue allowance for uniforms, shoes, boots and insignia when they come on active duty. Because uniform requirements are different for each service as well as for men and women, payments vary by service and gender. The value of a new service member’s initial clothing issue ranges from $1,371.22 for a male Coast Guardsman to $1,921.22 for a female sailor.
CLOTHING — REPLACEMENT
Following the initial issue of uniforms, enlisted members receive an annual allowance to replace worn-out uniform items and insignia.
Basic allowance. This is paid for the first three years of service and varies by branch and gender. The Air Force’s basic clothing replacement allowance is $230.40 for men and $262.80 for women. The Army pays $309.60 to men and $345.60 to women; the Marine Corps pays $410.40 to men and $414.00 to women; the Navy pays $338.40 to both men and women; and the Coast Guard pays $343.99 to men and $351.53 to women.
At the end of their first year of active duty, enlisted personnel get only half the yearly allowance because it is assumed they do not need to replace any clothing in their first six months of service.
Standard allowance. After enlisted members finish three years of active duty, they begin receiving the standard clothing allowance, which is higher than the basic allowance. Again, rates vary by service and gender. The Air Force pays $331.20 to men and $374.40 to women; the Army pays $440.86 to men and $493.76 to women; the Marine Corps pays $583.40 to men and $604.80 to women; the Navy pays $482.40 to both men and women; and the Coast Guard pays $491.42 to men and $502.18 to women.
Navy special allowances. Navy chief petty officers in paygrades E-7 through E-9 have different uniform requirements than do sailors in paygrades E-6 and below and thus receive higher annual clothing replacement allowances — $716.40 for men and $763.20 for women, on top of their standard clothing replacement allowance.
Reservists. The services replace enlisted National Guard and reserve members’ worn-out uniforms with new clothing items rather than paying an allowance. Guard and reserve officers receive an initial $400 allowance and can get an additional allowance if called to active duty for at least 90 days.
Contact. Military regulations on all clothing allowance rates and policies are at http://comptroller.defense.gov/fmr/ 07a/07a_29.pdf.
COST-OF-LIVING ALLOWANCE
ConUS COLA. A cost-of-living allowance is paid to military personnel assigned to high-cost locations in the continental U.S.
Payments are based on rank, years of service, location and whether the service member has dependents. The money is intended to cover transportation, food, clothing and other nonhousing costs in areas where those costs exceed the national average by more than 8 percent.
For 2012, the taxable allowance is paid in 51 high-cost locations. It is paid automatically based on the member’s military duty ZIP code. Monthly rates start at $18 for single, junior enlisted members and can run to $700 for married officers in the most senior paygrades in the costliest location, Staten Island, N.Y.
Overseas COLA. The overseas cost-of-living allowance is a supplement to regular pay that reflects higher prices overseas for goods and services. The nontaxable allowance varies with location, rank and number of family members. Rates are reviewed periodically and adjusted to reflect fluctuations in costs as well as foreign currency exchange rates.
About 250,000 service members in more than 600 locations receive overseas COLA at a cost of about $2 billion a year.
The Defense Department maintains an OHA calculator at www.defensetravel.dod .mil/site/colaCalc.cfm.
DISLOCATION ALLOWANCE
Government-paid moves and travel allowances often fall short of actual costs of permanent change-of-station moves. The nontaxable dislocation allowance covers some of that extra expense.
For 2012, the allowance, based on rank and whether a member has dependents, ranges from $867.98 to $4,351.37.
For dislocation allowance rates, visit www.militarytimes.com/money and click on “Pay Charts.”
FAMILY SEPARATION ALLOWANCE
Service members assigned or deployed to places outside the continental U.S. and Alaska where the government will not move families face dozens of extra expenses, from the cost of minor home repairs and yard work to baby-sitting.
Family Separation Allowance, a nontaxable monthly payment of $250, is provided as reimbursement for some of the daily expenses incurred when members are separated from their families.
Service members deployed away from their families for more than 30 days get this allowance.
Congress approved a change in FSA in 2009 for dual-service couples with children: Each member is eligible for the full $250 monthly payment when both are deployed. This includes mobilized National Guard and reserve couples. To qualify, the couple must have resided together before their deployments began.
PER DIEM
Per diem is a daily allotment for the cost of food and lodging for service members on government business or temporary duty away from their home station. The military also pays per diem for lodging and transportation during a permanent change-of-station move.
Lodging costs are reimbursed with a maximum amount set for each area.
The General Services Administration oversees per diem rates for the continental U.S.; the State Department oversees the program for foreign countries; and the Defense Department handles per diem for U.S. locations outside the continental U.S., such as Alaska, Hawaii and Puerto Rico.
The allowance for the cost of lodging, meals and incidental expenses ranges from as low as $1 per day in Antarctica to $721 per day in Awashima, Japan. In the U.S., it generally runs about $100 to $300 per day, although some high-cost areas have higher rates.
U.S. per diem rates are based on food and lodging costs gathered each year in more than 440 locations. Locations that are not specifically listed qualify for a standard per diem rate of $123.
SAVINGS DEPOSIT PROGRAM
Service members deployed to designated combat zones can earn a guaranteed 10 percent interest rate on their savings under this little-known program created during the Vietnam War era.
Contributions are limited to $10,000, so the most someone could earn is $500 in interest over a six-month deployment or $1,000 for a one-year deployment. The money must be withdrawn within 90 days of returning from the deployment region.
Interest earned on money in this program is taxable.
TEMPORARY LODGING
Temporary lodging allowance. TLA covers the cost of temporary housing occupied outside the continental U.S. when moving to or from an overseas assignment. It varies by location and is based on the per diem rate set for the service member’s permanent duty station.
Temporary lodging expense. TLE is intended to cover housing costs for up to 10 days at the beginning and end of moves in the continental U.S. and for up to five days for moves to locations outside the continental U.S. The daily rate is $290.
TLE may be paid for up to 30 days at the beginning and end of moves — a total of 60 days — in certain unusual circumstances. These could include the aftermath of a major disaster that forces the dislocation of some service members, or a spike in an installation’s population as a result of base closings. The services would have to invoke emergency rules for the extended TLE payments to apply.
Neither TLA nor TLE is taxed.
THRIFT SAVINGS PLAN
The federal Thrift Savings Plan allows participants to place a portion of their monthly pay into an account similar to a private-sector 401(k) investment plan. The contributions are pretax dollars and thus reduce the amount of income subject to tax, and the accounts grow tax-free.
There is no limit to the percentage of income that can be invested in the accounts, but the Internal Revenue Service sets a dollar limit for how much can be invested each year; in 2012, that limit is $17,000. Anyone age 50 or older who makes the maximum $17,000 contribution in 2012 can contribute another $5,500 as a “catch-up” payment.
Members may enroll when they first join the military or any time thereafter.
Unlike traditional military retirement, which requires a commitment of at least 20 years of active duty, money invested in the TSP belongs to individual members no matter how many years they serve.
Taxes. Regular TSP contributions are taxed when withdrawn from the account. Withdrawal before age 59½ may incur a penalty; however, a TSP account can be rolled over into an Individual Retirement Account or another employer’s retirement account, or the money can stay in the TSP after a member leaves the military.
Roth option. At press time, the Federal Retirement Thrift Investment Board, which oversees TSP, was making final preparations to launch a new Roth option, under which contributions are deducted from your pay after it’s taxed. When you begin making withdrawals later in life, you pay no taxes on your contributions or on investment growth. Although every person’s situation is unique, experts say the Roth option generally benefits people who are in low tax brackets today but expect to be in higher tax brackets later in life. As such, service members could benefit from a Roth option because they enjoy a significant array of tax breaks while in uniform that keeps them in low tax brackets, but likely will be in higher tax brackets after they leave service.
Contact: www.tsp.gov
TRAVEL
The government pays for official travel on airplanes, trains, cars and ships, but with some restrictions. In general, the type of transportation used must be the least expensive option that is timely and appropriate.
Government travelers may use frequent-flier miles accrued during government travel for whatever purposes they desire.