Pay & Allowances
(Note: The below article is from the Aug 97 edition of Navy "All Hands" Magazine. While it is written with Navy personnel in mind, for the most part, the information is applicable for members of all of the services.
- Of vital concern to you is the adequacy of your pay, or, in other words, the competitiveness of the Navy's Total Military Compensation Package as compared to the compensation that may be offered in the private sector.
- First we'll address some background intricacies of the current compensation system. Then, we'll address the key cash compensation elements that may comprise your Total Military Compensation Package (TMCP). Also briefly discussed will be the dollar value of your current and future benefits that contribute significantly to ascertaining the "enhanced" dollar value of your TMCP.
Compensation system background
- The biggest misconception about your military compensation is that popular changes can be accomplished by simply revising governing instructions. The truth is that each element of the TMCP is authorized by specific legal authority, generally found in Titles 37 and 10 of the United States Code.
- These elements are either legal "entitlements" earned by you, the Sailor, or are discretionary under the law, meaning the Secretary of the Navy (SECNAV) has the option of payment.
Resolving your pay problems
- Almost all your pay problems or questions can be resolved by using your chain of command. Most commands have copies of the two major entitlement manuals: the Department of Defense Financial Management Regulation (DODFMR), Volume 7A and the Joint Federal Travel Regulations.
- For those commands that are serviced by a Personnel Support Detachment (PSD), share your pay problem with your command's local PSD Liaison Representative (PLR). Let your PLR work with you to resolve your pay problems.
- When the answer can't be resolved locally, have your appropriate chain of command representative call either the Defense Finance Accounting Service, Cleveland Center (DFAS-CL), or the applicable pay expert at BUPERS for the right policy decision.
Personal Statement of Military Compensation (PSMC)
- You can ascertain the total dollar value of your TMCP. The tool for accomplishing this is the Personal Statement of Military Compensation (PSMC). The current PSMC program software can be found on the Navy's BUPERS ACCESS Bulletin Board System. The DOS-based PSMC program software is available for download under the MAIN MENU on BUPERS ACCESS. See your Command or Divisional Career Counselor to get the current PSMC.
- Using your Leave and Earnings Statement (LES) as the input document, you can generate the PSMC printout. The one-page PSMC printout will clearly itemize your direct cash compensation (cash pays and allowances, in-kind housing or food allowances, federal tax advantages) and the dollar value of current benefits (Morale, Welfare and Recreation, health care, leave/holidays and commissary/exchange) and future benefits (retired pay, Social Security and active-duty death/survivor benefits). The PSMC program software also generates a supplementary explanation printout that briefly describes each pay and allowance you receive and details how the cost of current and future benefits are calculated.
Key TMCP elements
- With some of the compensation system's peculiarities explained and with your own PSMC in hand, it's now time to briefly explain some of the key elements of your TMCP.
- Every Sailor receives basic pay to underscore the long-standing compensation principle of "equal pay for equal work." It is roughly 70 percent of your annual direct cash compensation and varies according to your pay grade and time in service (15 different longevity pay raises). The basic pay table is structured to give you the incentive to seek promotion (increased leadership and responsibility) and to recognize that as your experience increases within the same pay grade, so should your basic pay incrementally to reward your increased rating competency level.
- Basic pay for active-duty personnel is the basis for computing Reserve component drill pay and for establishing the initial levels of retired pay.
- Consult Chapters 1 and 2 of the DODFMR for more detailed information on basic pay.
Housing and food allowances
- Basic Allowance for Quarters (BAQ). The law that governs BAQ establishes different entitlement guidelines for members on shore and sea duty. You generally receive BAQ if you are not assigned to government quarters ashore that are considered adequate for you and/or your dependents. Shipboard berthing (except those ships or craft that displace less than a 1,000 tons) is always considered as adequate government quarters.
- When stationed ashore, single members in pay grades above E-6 (and single E-6s housed in inadequate quarters) may choose not to live in government quarters and receive BAQ. When stationed aboard ship, single members in pay grades above E-5 may choose not to live aboard ship and receive BAQ. Effective July 1, 1997, single E-5 members on sea duty may be authorized either quarters ashore (either adequate or inadequate by DOD standards) or if quarters ashore are not available, the responsible installation commander may authorize housing allowances.
- Also effective July 1, 1997, if both members of a joint military couple (without other dependents), are in pay grades E-1 through E-4, and are both assigned to shipboard sea duty, the senior member will be entitled to BAQ at the single rate (BAQ-S).
- The BAQ law also states that deployments of less than 90 days are not considered "sea duty" for BAQ
- Additionally, shipboard deployments of more than 90 days by members under TAD orders (helicopter detachments, SEALS, EOD, etc.) who return to their parent command after the deployment are not considered "sea duty" for BAQ purposes.
- Rules and regulations for determining relationship, dependency and support for dependents for BAQ entitlement purposes are discussed in detail in Chapter 26 of the DODFMR.
- A frequently misunderstood variation of BAQ is called BAQ Difference (or BAQ-DIFF), which became law Dec. 5, 1991.
- On or after that date, members residing in government quarters and paying child support payments are entitled to the difference between BAQ at the dependent rate (BAQ-D) and BAQ-S. Members who were in receipt of BAQ-D on Dec. 4, 1991, solely because of child support payments and were residing in government quarters were "grandfathered" from the law until the member is entitled to receive BAQ-D for another eligible dependent, or loses the child as a dependent.
- Basic Allowance for Subsistence (BAS). BAS, like BAQ, has numerous entitlement peculiarities associated with it. The complicated allowance is best explained in both Chapter 25 of DODFMR and MILPERSMAN 2640110-2640180.
- By law, officers receive a monthly BAS allowance whether ashore or at sea. Enlisted members, also by law, may receive BAS when: subsistence in kind is not available or use of a government mess is determined as impractical; they are authorized permission to mess separately (commonly referred to as SEPRATS, COMRATS or RATSSEP); or they are assigned to duty under emergency conditions where messing facilities of the United States are not available.
- When authorized BAS, the allowance compensates the member for monthly food costs. BAS is not intended to compensate a family's monthly food costs - BAS is a member allowance only. BAS has three different possible incremental rates: leave or RATSSEP; messing not available; and under emergency conditions).
- The complexities of enlisted BAS entitlements span both the spectrum of married member vs. single member and shore duty vs. sea duty issues.
- Just as shipboard berthing is determined to be adequate government quarters, a functioning mess aboard ship is also considered adequate government messing, therefore, BAS is not paid to enlisted members assigned to shipboard sea duty.
- When assigned to shore duty, both married enlisted members and senior enlisted members in pay grades E-7 through E-9 are entitled to RATSSEP.
- Shore activity commanding officers may authorize RATSSEP to any enlisted member upon determining that the member routinely misses at least two meals per day in a messing facility because of the member's: location of residence; specialized duties; working hours; inordinate on-base commuting distance to the messing facility; or the messing facility's serving/seating capacity limitations.
Variable Housing Allowances (VHA)
- VHA is paid to service members residing in high-cost housing areas in the United States. VHA is usually based upon your pay grade, dependency status and duty station location.
- In certain circumstances, SECNAV has the authority to pay VHA based on the location of your family members. VHA rates are established based upon your reported housing expenses in the VHA survey.
- These expenses include rent (or rental equivalency for homeowners), insurance, utilities and maintenance expenses. The accuracy of the rates for VHA depends upon the data received from you in the VHA survey.
- VHA is paid in a locality when the local median housing cost exceeds 80 percent of national median housing costs (NMHC). VHA plus BAQ was intended to provide 85 percent of the NMHC, while you paid an out-of-pocket amount equal to 15 percent of the NMHC. However, BAQ rate changes tied to base pay increases have caused housing allowances to lag behind housing cost increases, resulting in a median out-of-pocket expense of approximately 20 percent of NMHC.
- VHA offset. The VHA offset program became effective March 1, 1986. Your housing allowances for BAQ and VHA are compared to your actual housing expenses. If your allowances exceed the expenses, your VHA is reduced by an amount equal to one-half of the difference, not to exceed the total VHA. All VHA may be lost but no BAQ can be lost.
- VHA Rate Protection. Part of the FY96 Defense Authorization Act, VHA rate protection became effective Feb. 10, 1997. It protects your VHA rate from being reduced as a result of systematic change in the annual VHA rate table. Your VHA shall not be reduced from one year to the next unless there has been a break in your eligibility to receive VHA within the military housing area or your certified housing costs are reduced.
- VHA Locality Floor. Included in the FY97 Authorization Act, VHA locality floor is the minimum VHA rate set for each pay grade for each MHA. If you don't have family members, the VHA locality floor is equal to 85 percent of the Housing and Urban Development's (HUD) fair market rent (FMR) for a one bedroom apartment. If you have family members, the floor is equal to HUD's FMR for a two bedroom apartment. If VHA survey data indicate the VHA rates will be below the floor amount, you will receive the VHA floor amount. If the surveys indicate the VHA rates should be higher than the VHA floor, you will receive the higher amount.
Special and incentive pay
- The TMCP includes more than 50 special and incentive pays to compensate you for acquiring and maintaining certain skills or performing duties considered unusually arduous or hazardous. Special and incentive pays are taxable, and normally paid monthly. The more common types of special and incentive pays that you may be eligible for are:
- Foreign Duty Pay (FDP). Foreign duty pay, sometimes referred to as Certain Places Pay, is payable only to enlisted members assigned to permanent duty at specified places outside the 48 contiguous United States and the District of Columbia. The list of eligible FDP countries is found in Chapter 17 of the DODFMR. FDP is not authorized for personnel who are residents of Alaska, Hawaii, U.S. possessions or foreign countries during any period they are serving within their home continuous days.
- Career Sea Pay (CSP). This pay is designed to compensate eligible members for serving many tours of arduous shipboard sea duty throughout a career. As such, it is payable to enlisted members in pay grades E-4 through E-9, warrant officers and officers who have accumulated more than three years of cumulative sea duty.
- CSP is paid continuously to eligible members (either ship's company or staff) when they are assigned to and serve in ships whose primary mission is accomplished under way. It is also payable to crew members of ships/craft whose primary mission is accomplished in port (Category B) only when those vessels are at sea or at a port at least 50 miles from the ship's home port (a day-for-day vice continuous payment basis).
- Cumulative sea duty credit accrues continuously for all ship's company or staff members assigned to and serving in either Category A or B ships or continuous CSP designated ship-based staffs, respectively. For all other members, both CSP and cumulative credit accrue only when day-for-day assigned to and serving in a ship.
- After 36 consecutive months on shipboard sea duty, a CSP Premium (CSPP) of $100 per month is payable to all warrant officers, officers and enlisted members in pay grades E-5 through E-9 with less than five years of cumulative sea credit. Members in pay grade E-4 retain Premium eligibility regardless of length of accrued cumulative sea service. Consult SECNAVINST 7220.77D for more details on CSP and CSPP.
- Special Duty Assignment Pay (SDAP). This pay replaced proficiency pay in FY85. It is a monthly pay used first to help obtain high-quality personnel for designated special-duty assignments involving demanding duties or an unusual degree of responsibility, and then to sustain adequate manning levels. People serving in the designated skills may receive an additional $55 to $275 per month. Production recruiters may receive up to $375 per month. Details of the SDAP program are contained in OPNAVINST 1160.6A and annual SDAP NAVADMINs.
- Selective Reenlistment Bonus (SRB). SRB is a retention incentive special pay awarded to members serving in certain selected ratings or Navy Enlisted Classifications (NECs) who reenlist or extend their enlistment for at least three years. The purpose of the bonus is to increase the number of reenlistments in those ratings or NECs having insufficient retention. SRB amounts of up to $30,000 per bonus may be paid to enlisted members who are serving in critically undermanned ratings. A member may receive up to three bonuses, one for each eligibility zone:
- Zone A. For those with at least 21 months but no more than six years of service.
- Zone B. At least six but no more than 10 years of service.
- Zone C. At least 10 but no more than 14 years of service.
- Details of the SRB program are contained in OPNAVINST 1160.6A.
- Imminent Danger Pay (IDP). All members serving ashore, aboard a ship, or aloft in an aircraft within an area designated by the Secretary of Defense as an imminent danger area, are eligible to receive this pay at a rate of $150 per month. Designated areas and effective dates for the entitlement are specified in Chapter 10 of the DODFMR.
- Incentive pay for submarine duty. There are two types of submarine duty incentive pay: operational and continuous. Operational sub pay goes to both submarine-designated and non-submarine-designated personnel when assigned to and serving in submarines, if not otherwise entitled to continuous submarine pay.
- Continuous sub pay is paid to active-duty personnel who remain in the submarine service on a career basis.
- Submarine career screening gates are established at the 12th and 18th year of submarine service to verify members are still eligible for continuous sub pay based on total years of service.
- The monthly rate for enlisted members ranges from $75 to $355; for warrant officers, $235 to $355; and for officers, $175 to $595. Each pay rate is determined by grade and years of service based upon pay entry base date.
- Special Pay for Diving Duty (Dive Pay). Officers and enlisted members who are qualified divers and assigned to billets requiring diving duty and who actually perform diving duty are eligible to receive dive pay in amounts ranging from $110 to $300 per month. Rates of dive pay are determined by the type and degree of diving qualifications the member possesses. A member who receives dive pay is restricted from receiving more than one hazardous duty incentive pay.
- Consult Chapter 11 of the DODFMR for more information on dive pay.
- Hazardous Duty Incentive Pay (HDIP). There are several different types of HDIP. HDIP is generally paid (with exceptions noted below) at a rate of $110 per month to both officers and enlisted members who are required by competent orders to participate in "frequent and regular" duties considered unusually arduous or hazardous. If not receiving dive pay, members may accrue two different HDIP payments (except for Flight Deck Hazardous Duty Incentive Pay) at the same time.
- Flight Deck Hazardous Duty Incentive Pay (FDHDIP). FDHDIP is payable to members required to participate in flight deck operations from an air-capable ship, amphibious assault ship or aircraft carriers. A member who receives FDHDIP may not receive any other HDIP. Consult OPNAVINST 7220.4H for more details on FDHDIP.
- Crew Member Flight Pay. Payable to designated crew members, who are required to fly on a frequent and regular basis. Rates range from $110 to $250 per month.
- Non-crew Member Flight Pay. Payable to members required to fly to perform their duties (not as passengers), but who are not designated as crew members. Greater detail on both crew member and non-crewmember flight pay is found in BUPERSINST 1326.4B and MILPERSMAN 2620330.
- Parachute Jumping Duty (JUMP) Pay. Payable to members when parachute jumping is required as an essential portion of their duties. An additional $55 per month (or $165) is payable to members required to perform high altitude, low opening (HALO) parachute jumps as an essential part of their duties.
- Demolition (DEMO) Duty Pay. Payable to members required to perform demolition using live explosives, including during training, as a primary duty.
- Experimental Stress Duty (ESD) Pay. Payable to members required to perform any of the following duties: duty in high- or low-pressure chambers (to include inside instructor, observer or research technician); or as a test subject in thermal stress/acceleration/deceleration experiments. Consult Chapter 24 of the DODFMR for more details on JUMP, DEMO and ESD pays.
- Overseas Tour Extension Incentive Pay (OTEIP). Enlisted personnel who agree to extend their tours at certain overseas locations may be eligible to receive special pay of up to $80 per month. Instead of this pay, the member may elect to receive either a 30-day rest and recuperation absence or a round-trip CONUS flight at government expense (with a fifteen day R&R absence) for extending for at least a twelve-month period. Details are found in OPNAVINST 1306.1 or Enlisted Transfer Manual, Article 4.11.
- Special pay for nuclear-qualified officers. This has three categories:
- Nuclear Officer Accession Bonus. Naval officers or prospective naval officers, accepted for training for duty in connection with the supervision, operation and maintenance of naval nuclear propulsion plants, are entitled to an accession bonus of $6,000 when they meet all requirements listed in the entitlement manual and SECNAVINST 7220.65 series. Upon completion of training, the Nuclear Career Accession Bonus payment is an additional $2,000.
- Nuclear Officer Continuation Pay (COPAY). Nuclear-qualified naval officers are entitled to continuation pay when they elect to remain on active duty after completion of their initial obligated service. They receive $12,000 for each year of additional obligated service. Multiple agreements for three, four or five years (not to exceed 26 years commissioned service) are available.
- Nuclear Career Annual Incentive Bonus (AIB). Nuclear-qualified officers who have completed initial obligated service and who are not serving under a continuation pay (COPAY) agreement, receive an annual incentive bonus of $10,000 for unrestricted line officers and $4,500 for limited duty officers and warrant officers.
- Psychologists and non-physician healthcare providers. Diplomate pay is awarded to Medical Service Corps officers who are psychologists and have obtained a diploma as a Diplomate in Psychology by the American Board of Professional Psychology.
- Board Certified Pay (BCP) is an entitlement awarded to Medical Service Corps officers who have a post-baccalaureate degree in a clinical specialty and are certified by a professional board in the officer's specialty. Diplomate pay and BCP range from $2,000 to $5,000 depending on years of service.
- Optometrists: These officers receive special pay of $100 monthly, provided they hold a valid license in one of the 50 states and execute a written agreement to remain on active duty for at least one year.
- Medical Corps Officers:
- Variable Special Pay. An entitlement for medical corps officers serving on active duty for periods of at least one year. Annual rates range between $1,200 and $7,000 depending on years of creditable service.
- Additional Special Pay. A medical officer is entitled to an annual bonus of $15,000 for any 12-month period if not undergoing internship or initial residency training, and who agrees to remain on active duty for not less than one year.
- Board Certified Pay. An entitlement for medical corps officers who obtain board certification. Annual rates range from $2,500 to $6,000, depending on years of creditable service.
- Incentive Special Pay (ISP). An award for medical corps officers to address retention difficulties and shortages in critical wartime specialties. Members must agree to remain on active duty for one year. ISP is an annual bonus that varies by specialty and does not exceed $36,000.
- Multi-year Special Pay (MSP). MSP is awarded to medical officers who agree to remain on active duty for two, three or four years after completion of any other service obligation. MSP is paid as an annual bonus, not to exceed $14,000 for a four-year agreement.
- Nurse Corps Officers:
- Incentive Special Pay for Certified Registered Nurse Anesthetists (CRNAs). Pay is intended for eligible CRNAs who agree to remain on active duty for a minimum of one year. Annual payment is $6,000 for any period the CRNA is obligated for training and $15,000 per year at the beginning of a contract year not obligated for training.
- Accession Bonus. An accession bonus is paid to registered nurses who agree to accept a commission as an officer in the Nurse Corps and remain on active duty not less than four years. Amount of bonus is $5,000 payable at time of appointment.
- Variable Special Pay (VSP). All dentists are entitled to receive monthly VSP at annual rates from $3,000 to $7,000 per year depending on their years of creditable service.
- Board Certification (BCP). BCP is a monthly entitlement with annual rates ranging from $2,500 to $6,000.
- Additional Special Pays (ASP). ASP is an annual lump sum bonus based on years of service. A dental officer who executes an agreement to extend for a 12-month period beyond any other obligated period may receive ASP in amounts ranging from $4,000 to $10,000.
- Accession Bonus. Dentists who accept a commission and serve on active duty for a minimum of four years may collect a bonus not to exceed $30,000.
Other key allowances
- Allowances are paid to help you meet expenses incurred while on active duty. Allowances may be paid monthly, on an occasional basis or in a one-time, lump sum. Generally, allowances are not taxable.
- Family Separation Allowance (FSA). This allowance is payable only to members with families. There are two types of FSA - Type I (equivalent to BAQ-S) and Type II ($75 per month). A member may be entitled to both types simultaneously. FSA Type I is paid to a member whose family members are restricted at the new OCONUS duty station and government quarters are not available at the new duty station.
- FSA Type II (sometimes referred to as FSA-R, FSA-S and FSA-T) is designed to compensate married members for added expenses incurred because of enforced separation from their families for each of the following circumstances: being restricted (FSA-R) from moving the member's family to a new duty station; deploying away from the ship's homeport (FSA-S) greater than 30 consecutive days; or deploying on temporary duty (FSA-T) away from the permanent command for 30 consecutive days or more.
- FSA-R may be paid to members enrolled in the Exceptional Family Member (EFM) Program and who are ordered to move to a new duty station without their dependent(s) at the EFM Program Manager's direction. FSA-R is not paid to members who voluntarily separate from their families for personal reasons (spouse employment, school stability, etc.). See MILPERSMAN 2620350.
- In the case of joint military couples (with dependents), unlike BAQ, FSA-Type II may alternate between members based on the same dependent(s).
- Effective Sept. 24, 1996, one member of a joint military couple (without other dependents) is now entitled to FSA-Type II when they meet the aforementioned Type-II criteria. For more information on FSA, consult Chapter 27 of the DODFMR.
- Clothing Allowance, Civilian (CAC) and CAC Temporary (T). Members who are required to wear appropriate civilian clothing (coat and tie or equivalent attire), either on a permanent or temporary basis (greater than 15 consecutive days) in the performance of their official duties are authorized CAC or CACT, respectively. Host country sensitivities, terrorist threats, security or law enforcement assignments are examples of CAC or CACT entitlement duties. By law, officers stationed inside the 50 United States are restricted from CAC or CACT. More details are covered in MILPERSMAN 2640260.
- Adoption Expense Reimbursement Program. The FY92/93 Authorization Act established a program to reimburse eligible members for qualifying adoption expenses incurred in the adoption of a child less than 18 years of age.
- Members can be reimbursed not more than $2,000 for adoption of a child; not more than $5,000 for two or more adoptions per year. Guidance is provided in SECNAVINST 1V54.3A.
Navy Joint Uniform Military Pay System (NJUMPS)
- NJUMPS, in fleetwide operation since 1977, provides accurate and timely fiscal information to better manage the military personnel pay appropriation. Under NJUMPS, everyone's pay is calculated in Cleveland in advance of actual payment. Disbursing offices in the field continue to make pay record changes to reflect promotions and other pay entitlement changes occurring between Cleveland's calculation and the actual pay day, but the next DFAS-CL calculation reflects those changes in your monthly LES.
- The LES provides complete information concerning your pay entitlements, taxes, allotments and other deductions to pay, as well as the status of your leave account. Each statement reflects your master pay account at the DFAS-CL at the time the LES is produced, and shows all payments made to you that were posted to the master pay account since your last LES.
Direct Deposit System (DDS)
- DDS is a pay delivery method that allows you to have your net pay deposited electronically into a checking
or savings account at a financial institution.
- DDS eliminates deductions of greater than $100 from your next net pay, when those deductions go to pay a Navy debt. The system delays collection of a retroactive adjustment for two months and enables you to work out a pay back arrangement.
- "Dual advisory" lets you send a copy of your monthly DDS statement to your home address when deployed. This provides payment data to your spouse back home.
- DDS has a number of additional benefits, including accurate, timely pay regardless of whether you are on leave, deployed or TAD. You also don't have to stand in line to cash paychecks or make bank deposits, which eliminates the potential for lost or stolen paychecks and reduces the threat of cash theft. See your disbursing office for more information on DDS.
Other TMCP contributors
- Tax advantage. A measure of the effect on your disposable income resulting from the fact that major
allowances, like housing and food, are not subject to federal income tax withholding.
It can be defined as that amount of additional taxable income that you would have to receive in cash if your allowances were taxable to maintain the same level of disposable income you currently receive.
Lump Sum Leave Payments. Upon discharge, transfer to the Fleet Reserve or retirement, you may receive cash for accumulated leave, up to 60 days. Settlement for leave accrued before Aug. 31, 1976, includes basic pay, BAQ and BAS as appropriate. Settlement for leave accrued after that date includes basic pay only. Effective Feb. 10, 1976, you can be paid for no more than 60 days accrued leave during an entire military career.
Payment for accrued leave made before Feb. 10, 1976, is excluded from this limitation. If eligible for accrued leave settlement, you may elect to receive payment for a portion of the accrued leave, not to exceed 60 days, and have the remaining accrued leave carried forward to a new or extended enlistment. See MILPERSMAN 2650180 or Chapter 35 of the DODFMR for information.
- U.S. Military