TN 91 (05-24)

SI 00820.400 Uniformed Services—Pay and Allowances Effective on or after September 1, 2008


Section 1612(a)(1)(A) and 1612(a)(2) of the Social Security Act

A. Introduction

The policy and procedures in this section are effective for Supplemental Security Income (SSI) benefits payable on or after September 1, 2008 and are based on the Heroes Earnings Assistance and Relief Tax Act of 2008 (the Heart Act), which changed how we treat certain cash payments to members of the Uniformed Services. Such cash payments are considered earned income for SSI purposes. For a list of Uniformed Services, see SI 00830.540B20.

The policy and procedures before September 1, 2008 affecting cash payments and other policies not specifically addressed in this section (e.g., transitional compensation, overpayments, retroactive adjustments, resources, etc.) continue to apply. See SI 00830.540 Uniformed Services - Pay and Allowances, Effective Before September 1, 2008 for additional information.

B. Definitions

This listing is not all inclusive, but defines common acronyms and terminology shown on a service member's payment records, referred to as a Leave and Earnings Statement (LES). The LES will identify the type of cash payment and the amount for each applicable payment type. See SI 00830.540H for more LES abbreviations.

1. Additional pay

Additional pay is any extra increment in pay, other than an increase in basic pay. Increases in basic pay include items such as cost-of-living allowances (COLA) and promotions.

2. Advance pay

Advance pay is a cash loan to be repaid in cash installments, usually by payroll deductions, rather than by future work. Advance pay is not taxed and is not income for SSI purposes. (See SI 00815.350 for information regarding the treatment of loans in the SSI program.)

3. Allowances

Allowances are cash benefits that compensate the service member, at least in part, for the expenses of housing, food, clothing, and special situations during periods of active-duty service. Allowances are not paid for weekend drills of Reserve and National Guard components.

Allowances are not subject to FICA tax and usually are not subject to income taxes.

Often, for accounting purposes, a service branch changes a subcategory of allowance retroactively (e.g., from one type of subsistence allowance to another). The change is explained on the pay slip by showing, as an entitlement, the full amount due for the earlier month under the correct subcategory (e.g., leave rations). The full amount previously paid as the entitlement for the earlier month under the incorrect subcategory is shown as a deduction (e.g., separate rations). The amounts may be identical or different. (See SI 00830.540D.7. for the policy governing retroactive adjustments.)

4. Basic Allowance for Housing (BAH)

The basic allowance for housing (BAH) is an amount of money that a service member receives to pay for housing not provided by the Government. It is a combination of the old Basic Allowance for Quarters (BAQ) and the variable housing allowance (VHA). The BAH was designed to make housing allowances more equitable throughout the services and the ranks, and more in line with civilian cost of living in the areas surrounding military installations.

In some cases, the service branch may pay a BAH to a service member living in free on-base housing, but then deduct the allowance (rather than rent) in the same month. This transaction is merely for accounting purposes and results in a zero payment transaction. What is actually received is rent-free shelter. The BAH is based on the service person's rank, and has nothing to do with the current market rental value (CMRV) of the shelter. The CMRV of the shelter must be obtained, for presumed maximum value rebuttal purposes, by determining what the shelter would rent for in the community (i.e., off the military installation).

5. Basic Allowance for Subsistence (BAS)

Subsistence means food and is also referred to as rations. Service members usually receive either free rations from a service facility or an allowance for rations. (The value of free rations does not appear on pay records.)

Effective 2002, subsistence is paid at a fixed monthly rate for both officers and enlisted persons which applies to all branches of military service.

6. Basic Discount Meal Rate (BAS DISC MEAL RATE)

The Basic Discount Meal Rate (BAS DISC MEAL RATE) is the amount deducted from the service member’s pay for subsistence (rations) when a meal card is issued for purchasing food at an on-base dining hall. The meal card is based on a standard daily rate.

7. Basic Needs Allowance (BNA)

Effective in 2023, the Basic Needs Allowance is paid to service members with dependents whose household income is below a certain threshold. These payments bring the household income up to 130 percent of the federal poverty guidelines set by the Department of Health and Human Services.

8. Cost of Living Allowance (COLA)

Private sector pay scales tend to reflect local living costs in United States locations, but military basic pay tables do not. Instead, service members may receive variable COLAs depending on their individual circumstances. The rate can vary by geographic location, years of service, the service member's rank, and whether they have dependents. Common COLAs that may not be reflected in basic pay tables are:

a. Continental United States Cost of Living Allowance (CONUS COLA)

The CONUS COLA is paid to members of the Uniformed Services as compensation for a portion of excess costs for non-housing expenses incurred based on the geographical duty location. CONUS COLA is a monthly entitlement based on a 30-day month, the same as BAH. The purpose of the CONUS COLA is to provide compensation for variations in non-housing costs in the continental United States. CONUS COLA amounts are generally adjusted annually.

b. Outside Continental United States Cost of Living Allowance (OCONUS COLA)

OCONUS COLA is a monthly allowance provided to service members stationed outside the U.S. It generally accounts for higher overseas costs for non-housing goods and services but also takes into account fluctuations in exchange rates between the U.S. dollar and foreign currencies. This amount can vary from month to month.

9. Entitlements

Entitlements are pay, allowances and other cash benefits due a service member. Entitlements can include basic pay, special and incentive pay, allowances, advance pay, and reimbursement for certain work-related expenses. In-kind benefits are not entitlements.

10. Hostile Fire/Imminent Danger pay

Hostile fire pay and imminent danger pay (sometimes referred to as “combat pay”) are types of special pay to a service member who is:

  • subject to hostile fire or explosion of hostile mines; or

  • on duty in an area in which they are in imminent danger of being exposed to hostile fire or explosion of hostile mines, and

  • while on duty in that area, other service members in the same area are subject to hostile fire or explosion of hostile mines; or

  • killed, injured, or wounded by hostile fire, explosion of a hostile mine, or any other hostile action.

11. Leave and Earnings Statement (LES)

The LES is the monthly pay slip issued to service members. Each service branch has its own version. SI 00830.540H. lists common abbreviations used on the LES.

12. Privatized Military Housing

Military bases enter into privatization agreements with private companies to provide housing for military personnel. Under privatization, the private company builds or renovates military housing and makes it available for rent to service members. The rent is limited to the service member's BAH. Privatized housing may be on the military base or off the base. Because privatization agreements are developed locally by military bases, they may be referred to under different names. Some are called “Public/Private Ventures.”

13. Reservist Differential pay

Beginning in March 2009, under 5 U.S.C. 5538, employing agencies must pay reservist differential payments to eligible Federal civilian employees who are members of the Reserve or National Guard called or ordered to active duty under certain specified provisions of law. Federal agencies must provide a payment—a "reservist differential"—equal to the amount by which an employee’s projected civilian "basic pay" for a covered pay period exceeds the employee’s actual military "pay and allowances" allocable to that pay period. Reservist differential pay is earned income for SSI purposes.

14. Special and Incentive pay

Special and incentive pay is compensation to specific groups of uniformed people for inconveniences or hazards, or provides incentives for those with skills in high demand to join or remain in the service. There are more than 30 types of Special pay. Some examples are:

  • enlistment and reenlistment bonuses;

  • flight pay; and

  • sea pay.

Special and incentive pay is usually subject to income taxes but is not subject to FICA tax.

C. Policy

1. General

All cash payments, other than for on-base or privatized military housing, paid for service as a member of a uniformed service, except those listed in SI 00820.400C.3., are treated as earned income for SSI purposes. On-base or privatized military housing is treated as in-kind support and maintenance as described in 00820.400C.2.b.

NOTE: A service member’s LES will identify the type of cash payment and the amount for each. See SI 00830.540H for an explanation of the common LES abbreviations.

Only basic pay and CONUS COLA are considered wages for title II coverage purposes.

2. Types of cash payments

a. Additional pay

See SI 00830.540E.3 for the policy for determining whether additional pay is income for SSI purposes . When the additional pay is considered income, we generally treat it as earned.

b. BAH for on base and privatized military housing

Service members and their families living in on-base housing may receive free housing. Service members and their families living in on-base housing or in privatized military housing may receive a BAH payment or the military may direct a BAH to a housing contractor by way of payroll deduction or allotment. In each case, the housing received is counted as outside ISM subject to the PMV rule. The BAH is not cash income.

NOTE: In-kind shelter received by a service member or the service member’s family is ISM to all individuals who benefit.

c. BAH for private housing

If service members and their families who live in private housing receive a BAH payment, it is earned income for SSI purposes.

d. BAS

A BAS payment for food is earned income for SSI purposes. If a deduction is made from the BAS to pay for meals eaten on base (e.g., a meal card), the gross amount of the BAS is still earned income, not ISM.

NOTE: All military personnel are required by military regulations to pay for their meals.

e. BNA

A BNA payment is earned income for SSI purposes.

f. Clothing allowance

A cash payment to purchase clothing is earned income. See SI 00830.540B.9 for more information on the types of clothing allowances.

g. COLAs

COLAs are considered earned income.


Due to differences in general tax treatment and the service member's individual circumstances, COLAs may be recorded on the LES using different acronyms (e.g., OCONUS COLA,CONUS COLA, DUAL COLA, etc.) See SI 00830.540H for a list of common LES abbreviations.

3. Exclusions

The following cash payments are excluded from income for SSI purposes:

  • hostile fire and imminent danger payments. See SI 00830.540D.3. for how the payment is treated for resource purposes;

  • in deeming situations, other kinds of additional pay that may be received by military personnel serving in a combat zone. See SI 00830.540D.8. for the policy regarding additional pay to a deemor);

  • advance pay; and

  • refunds of allowances previously counted in a prior month (see SI 00815.250 for the policy on refunds).

D. Procedure

If the pay is not specifically excluded per SI 00820.400C.3, treat the income as earned or ISM, as appropriate.

1. Verification

Verify the amount of pay received following the procedures in SI 00830.540E. (Uniformed Services—Pay and Allowances Effective Before September 1, 2008).

2. BAH

Determine if a service member (and family) lives in on-base housing, in privatized military housing, or private housing. Contact the base housing staff if there is a question.

See SI 00830.540E.4 for more information on determining the service member's living arrangement.

Treat a BAH payment for private housing as earned income.

Assume that ISM applies when the service member lives in:

  • privatized military housing; or

  • on-base housing.

3. BAS and BNA

Treat the gross BAS and BNA amounts as earned income.

4. Systems input

  • SSI Claim system (i.e., MSSICS)

When documenting the Wage page in the SSI claim system, include payment amounts from sources listed as earned income in SI 00820.400 as a part of the service member's total gross wages.

Enter in Remarks, the total amount of cash payments received, other than basic pay and CONUS COLA, which was included in gross wages.

  • Cases outside the SSI Claim system (i.e., Non-MSSICS)

Include payment amounts from sources listed as earned income in SI 00820.400 as a part of the service member's total gross wages received in the EN field on the SSA-450SI or SSA-1719B, as appropriate.

Enter the amount of cash payments received, other than basic pay and CONUS COLA, in the Remarks field of the SSR (see SM 01005.998 for a listing of the SSA-450SI fields, SM 01301.841 for the input instructions for the SSA-1719B Remarks field and SM 01301.900 for a listing of the SSA-1719B fields).

5. Documentation

Document evidence of pay received per the procedures in SI 00830.540E., Uniformed Services—Pay and Allowances Effective Before September 1, 2008, on a locked Report of Contact page, EVID screen., or store the paper documentation (e.g., SSA-5002, LES) in NDRED using the Evidence Portal (EP) or CEF/EF, as appropriate.

E. References

  • SI 00835.370, Rent-Free Shelter

  • SI 00830.540, Uniformed Services - Pay and Allowances Effective Before September 1, 2008.

  • MS 09701.001 Evidence Portal (EP) - Overview

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SI 00820.400 - Uniformed Services—Pay and Allowances Effective on or after September 1, 2008 - 05/29/2024
Batch run: 05/29/2024