Basic Allowance for Housing (BAH)
The purpose of the Basic Allowance for Housing (BAH) program is to provide fair housing allowances to service members. This non-taxable allowance is intended to cover rent, utilities, and renter’s insurance for adequate housing. Since the goal is to help members cover the costs of housing in the private sector, rentalhousing costs in the private sector are the basis for the allowance. The allowance is set based on geographic duty location, pay grade, and dependent status for Active Duty service members and Reserve component members on active duty orders. Reserve members who are on active duty for less than 30 days will receive BAH-Transit which is based solely on pay grade and dependency status. The DoD housing standards establish BAH rates that correlate to what civilians who earn comparable amounts would pay for housing. The BAH rates are adjusted annually to reflect changes in housing costs for service members. BAH is not intended to cover the cost of mortgage payments. The purchase of a home is a personal financial decision made by the service member.
Overseas Housing Allowance (OHA)
Overseas Housing Allowance (OHA) is a cost-reimbursement based allowance paid for housing outside the United States. OHA compensates members for the majority of housing expenses while stationed overseas. The service member is reimbursed their actual rental costs not to exceed the maximum OHA rate for each locality and pay grade of the member. The maximum OHA rates are established based on surveys conducted of members’ actual rental costs in these locations. It is comprised of three components: rental ceiling, utility/recurring maintenance allowance, and move-in housing allowance (MIHA).
The Standard Initial Clothing Allowance for enlisted members only in the Navy is $1,630.62 for males and $1,853.34 for females. The Basic Cash Clothing Replacement Allowance for enlisted members only in the Navy is $327.60 for males and $331.20 for females. The Standard Cash Clothing Replacement Allowances for enlisted members only in the Navy is $468.00 for males and $417.60 for females. The Special Cash Clothing Replacement Allowances for enlisted members only in the Navy is $709.20 for males and $759.60 for females.
Basic Allowance for Subsistence (BAS)
BAS is intended to defray a portion of the cost of subsistence. There are situations (sea duty, field duty, group travel, etc) when members may be required to pay for government-provided meals through mandatory pay account collection. The installation CO (ashore) or the shipboard CO (afloat) provide the authority to mess separately. Enlisted sailors on board ship normally have BAS automatically collected for all meals due to the availability of messing onboard the ship. BAS rates are evaluated annually and adjusted based on the cost of food.
Combat Zone Tax Exclusion (CZTE)
Members performing duty in, or in “direct support” of a combat zone (any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat), are able to exclude portions of their income from federal and state taxation. Presidential Executive Order determines combat zones and the applicable dates. Earnings received while performing duties in, or in direct support of areas designated as a combat zone are excluded from taxable income. This exclusion is unlimited for enlisted members and warrant officers but for commissioned officers the amount is limited to the maximum CZTE in effect for a qualifying month (the sum of the highest rate of enlisted basic pay and the amount of hostile fire/imminent danger pay actually payable to the officer for the qualifying month).
Savings Deposit Program (SDP)
Active duty and Reserve component members may be authorized to participate in the SDP during assignments and deployments to specified locations in support of contingency operations. The program provides an interest rate of 10% and allows service members to contribute any portion of their un-allotted current pay and allowances up to a maximum amount of $10,000. Interest paid on the amounts deposited into the SDP is taxable. Specific rules and limitations apply. Contact your local finance office prior to deployment.
Family Subsistence Supplemental Allowance (FSSA in addition to BAS)
Family Subsistence Supplemental Allowance (FSSA) program is a voluntary financial benefits program for military families, intended to increase a service member’s income in order to remove their household from eligibility for SNAP benefits (formerly the food stamp program). FSSA is an additional food allowance some large military families may qualify for and is based on a member’s household size and household income. Active Component and Reserve Component members on active duty with multiple family members meeting the income-eligibility requirements may participate in the FSSA Program. Members can be eligible for up to $1,000 per month. Contact your Fleet and Family Support Center (FFSC) or your Command Financial Specialist for assistance in determining eligibility.
Federal Tax Advantage
Military personnel receive additional indirect compensation because some allowances are not taxable. These allowances include BAS, BAH, Overseas Housing Allowance (OHA), Cost-of-Living Allowance (COLA), and Family Separation Allowance (FSA). Members are eligible for further tax advantages of basic pay and other special pays through participation in the Uniformed Services Thrift Savings Plan (TSP).
Military Leave and Liberty
Active Duty members and Reserve Component members on active duty orders for greater than 30 consecutive days accumulate 2.5 days leave per month totaling 30 days of paid leave each year. While earned leave is intended for use throughout the year, members may carry forward leave not to exceed 60 days at the end of the fiscal year. (Effective 1 October 2008 through 30 September 2013 a member may carry forward a leave balance not to exceed 75 days) as long as the member remains on active duty. Some exceptions to this policy may apply in specific circumstances. There are additional opportunities for sell-back of unused leave at certain career progression points.
Military Pay Raises
Annual military pay raises are linked to the increase in private sector wages, as measured by the Employment Cost Index (ECI). In the 1990’s, the annual military pay raise was capped at one-half percent below private sector growth unless specifically granted a larger increase by Congress. The FY2000 National Defense Authorization Act directed that pay raises for 2000 through 2006 would automatically be one-half percent above the private-sector wage increases. Pay raises beginning in 2007 are equal to the increase in the ECI. Pay raises may exceed these automatic levels if authorized and funded by Congress.
Family Separation Allowance (FSA)
The purpose of FSA is to compensate qualified members serving inside or outside the United States for added expenses incurred because of an enforced family separation. FSA has three different categories: FSA-R, FSA-S, and FSA- T. Members are eligible for FSA-R if transportation of dependents, including dependents acquired after effective date of orders, is not authorized at Government expense and the dependents do not live in the vicinity of the member’s permanent duty station. FSA-S applies to members serving on ships away from the homeport continuously for more than 30 days. A member is eligible for FSA-T if the member is on TDY away from the permanent station continuously for more than 30 days and the member’s dependents are not residing at or near the TDY station. This includes members required to perform a period of the TDY before reporting to their initial station of assignment.
Thrift Savings Plan (TSP)
The TSP provides military members a 401(k)-like savings plan, which allows members to contribute pre-tax dollars thereby reducing current taxes, and to accumulate long-term, tax-deferred savings and earnings, which can supplement future retirement income. Participation is painless through payroll deduction, and account management is easy via worldwide web interface. The open seasons are eliminated and members can accomplish any action at any time. The Internal Revenue Code places an annual limit on elective deferrals, including tax-deferred employee contributions to the TSP. Since 2008, the elective deferral limit has been set at $15,500. The TSP in conjunction with the military pension and Social Security retirement benefits can provide for a great retirement. Beginning in January 2012, military members will be able to enjoy the same benefit of contributing to a Roth or pre-tax version of TSP as a civilian.
Morale Welfare and Recreation (MWR)
The Navy Morale, Welfare and Recreation Division administers a varied program of recreation, social and community support activities on U.S. Navy facilities worldwide. MWR programs provide active-duty, reserve and retired Navy personnel and their families with sports and physical fitness activities, child development and youth programs, and a variety of food and beverage services. MWR’s mission is to provide quality support and recreational services that contribute to the retention, readiness, mental, physical, and emotional well-being of our Sailors.
Child Care/Youth Programs
A comprehensive child and youth care and recreational program is provided at installations worldwide. Professional, accredited staff provide state-of-the-art support for all children, including child care, child development and recreational services, and school liaison support for the mobile military families. Contact any Child Development Center or Youth Center for more information on the variety of programs and services to support military families worldwide. The Child Care guiding principles are Accessibility, Affordability, Quality, and Eligibility.
The Defense Commissary Agency operates a worldwide chain of commissaries providing groceries to military personnel, retirees and their families in a safe and secure shopping environment. Authorized patrons purchase items at cost plus a 5-percent surcharge, which covers the costs of building new commissaries and modernizing existing ones. Shoppers save an average of more than 30 percent on their purchases compared to commercial prices”savings worth about $3,000 annually for a family of four. A core military family support element, and a valued part of military pay and benefits, commissaries contribute to family readiness, enhance the quality of life for America’s military and their families, and help recruit and retain the best and brightest men and women to serve their country.
The Navy JAG Corps provides legal assistance services, such as wills, power of attorney and help with consumer and family law to Active Duty Navy, Marine Corps and Coast Guard service members and their dependents, reservists on active duty for 30 days or more, and to retirees as resources permit.
Volunteer Income Tax Assistance (VITA) Program
The military also has a strong Volunteer Income Tax Assistance (VITA) Program. The Armed Forces Tax Council (AFTC) consists of the tax program coordinators for the Army, Air Force, Navy, Marine Corps, and Coast Guard. The AFTC oversees the operation of military tax programs worldwide and serves as the main conduit for outreach by the IRS to military personnel and their families. Service members and their families worldwide receive free tax preparation assistance at offices within their installation. These VITA sites provide free tax advice, tax preparation, and assistance to military members and their families. They are trained and equipped to address military specific tax issues.