605-2 E. MILITARY PAY
Members of the military receive their wages through the Leave and Earnings Statement (LES Leave and Earnings Statement). This statement reflects a military person’s monthly payments and allowances, tax deductions, and other allotments that are deducted from their gross pay. Please see Addendum 3 for a detailed list of LES Leave and Earnings Statement Entitlement, Deduction and Allotment definitions and instructions on how to count each in the military household’s benefit determination.
How the resources, income, and deductions of military personnel affect the household’s benefits depends on:
The military person’s location,
The military person’s deployment status, and
Please see FS MS 602-1 A for more information about household composition.
Types of resources typical to a military person’s household are as follows:
Joint bank account. If the military person is deployed, any monies deposited into a joint bank account and accessible to the household will count as unearned income to the household in the month received and as a resource the following month. Before determining the amount of the deposit that's available to the family, deduct any money regularly kept by the deployed member for their own use.
Bonuses for reenlistment and special pay for warfare. Bonuses paid to a military person will appear in the Entitlements section of the LES Leave and Earnings Statement. If a bonus is received in a lump sum, it is exempt as income under the non-recurring lump sum provision but is counted as a resource in the month received. If the bonus is paid in installments, it counts as earned income in the month received.
Vehicles. There is no special treatment for the vehicles of military families. Please see FS MS 602-2 C.
The Thrift Savings Plan (TSP The Thrift Savings Plan). This is a form of a government employee retirement plan and is an excluded resource as long as the employee does not withdraw the funds.
Savings bonds. The cash in value of a savings bond is a countable resource once the funds can be accessed.
A military person’s income is treated differently if the military person is living with the household or if the person is deployed.
Note on Budgeting
The income on the LES Leave and Earnings Statement is considered as monthly income, even when the military person receives a mid-month check. See FS MS 603-1.
a. Earned Income
If the military person is living in the home, payments and allowances shown in the Entitlements section of the Leave and Earnings Statement (LES Leave and Earnings Statement) will be considered earned income and counted in the budget. The most common of these are base pay, or basic pay, basic allowance for subsistence (BAS Basic Allowance Subsistence), a military person’s food allowance, and basic allowance for housing (BAH Basic Allowance Housing).
If the allowance is listed in the Entitlements section and is also listed in the Deductions or Allotments section of the LES Leave and Earnings Statement, count only the amount above the Deductions or Allotments amount as earned income in the budget.
a. Housing and food allowance (BAS Basic Allowance Subsistence, BAQ Basic Allowance Quarters or BAH Basic Allowance Housing):
Households living on base: exempt as in-kind income.
Households living off base who receive the allowance directly: counts as earned income.
Households living on or off base whose housing expenses are paid directly to the vendor: exempt vendor payment.
b. Bonuses paid to a military person will appear in the Entitlements section of the LES. If a bonus is received in a lump sum, it is exempt as income under the non-recurring lump sum provision
but is counted as a resource in the month received. If the bonus is paid in installments, it counts as earned income in the month received.
Doug and his family move to a new off-base location. He receives his monthly rent on his LES Leave and Earnings Statement. His BAH Basic Allowance Housing allotment in the entitlement column is $1500. Doug’s landlord verifies that his monthly rent is $1300. The $1500 BAH Basic Allowance Housing is countable earned income and rent of $1300 is allowed as a shelter deduction.
Exclude the amount of the Clothing Maintenance Allowance (CMA) used to purchase clothing as a reimbursement.
Dislocation Allowance (DLA) or any other allowance which are one-time payments, will only count as earned income if the allowance can be anticipated.
The portion of a military retirement payment which goes to an ex-spouse under a divorce decree property settlement is not counted as income to the retiree.
William receives his LES Leave and Earnings Statement and it shows a Clothing Maintenance Allowance (CMA) of $125 in the entitlement column. In the deduction column, the (CMA) is listed as $100. Even though William did not spend the entire amount of the clothing allowance the entire $125 is exempt income.
b. Uearned Income
Deposit to a Joint Account
The amount that a deployed military person deposits to a joint account will be counted as unearned income to the household. Any amount spent by the deployed member is not available to the household so is not counted as income.
Bill is in the military and receives $1000 per month in wages. Bill’s wife Virginia and their daughter Anna have an open case in Alaska while Bill is deployed. Bill has his military pay deposited into a bank account in his name only; Virginia has no access to the funds or to the account. Do not count any of Bill’s income in the eligibility determination for Virginia and Anna.
Joe is in the military and deployed out of state. His paycheck is $1000 a month. He deposits $500 into his account and $500 into a joint account with his wife, Andrea. The $500 deposited into the joint account is budgeted as unearned income to the household. Since Andrea does not have access to Joe’s account, only the amount deposited in their joint account counts.
Ralph is in the military making $1200 a month. While he’s deployed, an allotment check of $1000 is paid directly to his wife Karla, and $200 to himself. The money sent to Karla counts as unearned income.
Bill is in the military making $1500 a month. He is deployed and deposits the entire amount of his pay into a joint account with his wife, Joy. Joy states Bill uses his debit card to access monies from this account for his personal use. The money that Bill withdraws is not accessible to Joy, so does not count as income. To verify the amount Bill withdraws each month, Joy can either provide a written statement from Bill stating the amount of the funds he keeps for personal use or bank statements showing regular withdrawals from out of state. If bank statements are used, the caseworker should note the amounts withdrawn in Bill’s area each month and determine an average monthly amount. This amount is then deducted from the amount deposited from Bill’s pay each month. The amount remaining is considered unearned income for Joy.
Combat pay is exempt when determining eligibility. Disregard any amount of combat pay that goes to the household in excess of the military person’s pre-deployment earnings.
Combat pay will be listed in the Entitlements column, and may appear as follows:
Hostile fire pay
Imminent danger pay
Incentive pay for hazardous duty
Hardship duty pay-Location
Hardship duty pay-Mission
Hardship duty pay-Involuntary Extension
Combat zones are designated by an Executive Order from the President as areas in which the U.S. Armed Forces are engaging or have engaged in combat. For combat pay to be excluded as income, the military person must be deployed to one of the combat zones listed at: http://www.irs.gov/newsroom/article/0,,id=108331,00.html
Budgeting Combat Pay
1. If the military person was in the household before deployment, the amount of their military pay that is available to the family after deployment is countable earned income.
2.If the military person was not in the household before deployment, the amount provided to the household before deployment is considered countable unearned income.
3. Once the military person is deployed to a combat zone:
If the amount provided to the household is equal to or less than the amount provided before deployment, the amount provided is countable unearned income.
If the amount provided to the household is more than the amount provided before deployment, the additional amount is considered exempt combat pay.
Mike is in the military stationed overseas. Mike’s wife Bonnie and their daughter have an open case. Mike sends his wife $1000 every month. When Mike is deployed to a combat zone his pay is increased to $1300 a month, which is deposited into a joint account. The additional $300 is considered combat pay and is exempt. The remaining $1000 is budgeted as countable unearned income because that’s the amount she was receiving before Mike was deployed to a combat zone.
There are certain allowable expenses that are specific to a military person’s pay. Listed below are allowable expenses that are located in the Deductions column of the LES Leave and Earnings Statement.
a. Housing allowances (BAQ Basic Allowance Quarters or BAH Basic Allowance Housing):
Households living on base whose housing is paid as in-kind income: no deductions are allowed for expenses paid by in-kind income.
Households living off base whose housing allowance is received directly: shelter deductions paid by the household are allowed.
Households living on or off base whose housing expenses are paid directly to the vendor: no shelter deductions are allowed for expenses paid via a vendor payment.
b. Support or Community Debt: This deduction is either a spousal or child support obligation. A deduction is allowed for the monthly child support obligation if verified by a court order or through CSSD Child Support Services Division.