MILITARY COMPENSATION 

BACKGROUND PAPERS

SIXTH EDITION 

MAY 2005

 

DEPARTMENT OF DEFENSE 

UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND READINESS
Table of Contents 

Introduction to the Sixth Edition ....................................................................................... ii 

Pays and Allowances Summary ......................................................................................... v 

Preface to Analytical Table of Contents .......................................................................... vii 

Analytical Table of Contents ............................................................................................ xi 

Section I. Overview of Military Compensation: Theory, Concepts, 

 and Principles of Military Compensation ....................................................... 2 

Section II. Compensation for Military Service: Active and 

 Inactive Duty Compensation ......................................................................... 11 

A. Overview of Compensation for Military Service: 

 Active and Inactive Duty Compensation ................................................... 11 

B. Regular Military Compensation (RMC)/ 

 Basic Military Compensation (BMC) ....................................................... 14 

C. Compensation for Non-Regular Service: 

 Reserve Components Pay ........................................................................ 225 

D. Special and Incentive Pays ...................................................................... 247 

E. Attraction and Retention Pays ................................................................. 518 

Section III. Retired and Retainer Pay, Separation Payments, 

 and Post-Service Benefits ........................................................................... 682 

A. Overview of Retired and Retainer Pay, Separation 

 Payments, and Post-Service Benefits ..................................................... 682 

B. Retirement and Retainer Pays .................................................................684

C. Separation Pays and Post-Service Benefits ............................................ 786 

D. Benefits Specially Applicable to Retired 

 Personnel and Their Dependents ............................................................ 819 

Section IV. Supporting Benefits ................................................................................... 855 

A. Overview of Supporting Benefits ........................................................... 855 

B. Benefits Specially Applicable to Active Duty and 

 Reserve Personnel and Their Dependents .............................................. 857 

C. Benefits Specially Applicable to both Active Duty and 

 Retired Members and Their Dependents ................................................ 884 

Section V. Manpower-Related Cost Items ................................................................. 942 

A. Overview of Manpower-Related Cost Items .......................................... 942 

B. Miscellaneous Manpower-Related Cost Items ....................................... 944 

C. Reimbursements .................................................................................. 988 

Appendices ................................................................................................................... 1046 

References and Citations .............................................................................................. 1160 

Index ............................................................................................................................. 1194 

- i -
Introduction to the Sixth Edition 

In the eight years since the publication of the Fifth Edition of the Military 

Compensation Background Papers, the country has undergone a number of significant 

changes that have affected the military services. The nation has been adjusting to the 

demise of the Soviet Union and end of the Cold War. In fact, many of the Warsaw Pact 

countries, which had allied themselves with the Soviet Union, have become NATO 

members. Since the threat from the Soviet Union and the Warsaw Pact countries has 

evaporated, the United States has been seeking a new global positioning based upon its 

new relationships with Europe and Asia. The terrorist attacks of September 11, 2001, 

and the Global War on Terrorism have given rise to a new enemy and underscored the 

need for transformation. 

This new enemy has forced defense strategy to focus on an enemy, which, unlike 

adversaries of the past, has no specific location, government sponsor or targets. In this 

environment transformation has meant that our forces have had to become light and 

mobile while continuing to be lethal. Both the wars in Afghanistan and Iraq were 

prosecuted successfully, using this new alignment. The Global War on Terrorism, 

Operation Enduring Freedom and Operation Iraqi Freedom placed new demands on our 

Reserve Forces that resulted in an increased need for civil affairs, linguists and security 

forces. Increased utilization of these forces led to changes in the way its members were 

paid. In addition, increased tempo, that is, more frequent and longer deployments, 

resulted in new pays as well as changes in existing pays in order for military manpower 

to accommodate an increased level of utilization. 

- ii -
Also, in the interval between editions of the Military Compensation Background 

Papers, are major changes to the two principal allowances that all military members 

receive – housing and food. Not only has the administration of these pays changed, but 

also their philosophical underpinnings. For example, the housing allowance is no longer 

based upon a member’s actual housing expenditure; it is instead calculated as the amount 

needed to rent adequate housing. Changes in the Basic Allowance for Subsistence are 

now tied to changes in food prices rather than changes to basic pay. There are also a 

substantial number of new pays, allowances and bonuses, including assignment incentive 

pay, high deployment allowance and career status bonus. The legislative changes for 

these new elements of compensation are detailed in the ensuing chapters. 

Dr. Glenn Curtis of the Federal Research Division of the Library of Congress 

prepared this edition of the Military Compensation Background Papers. Drafts of the 

component chapters were circulated to the staffs of the Office of the Secretary of Defense 

and the military services for their review and comment. In addition, chapters of this 

volume were sent to individuals in the Department of Labor and Veterans’ Affairs. This 

office recognizes their input and greatly appreciates their contribution. Mr. Don 

Musselman, a retired attorney from the Office of General Counsel, Department of 

Defense, was a consultant on this project and also reviewed the draft chapters. I would 

also like to recognize the contribution of Peter Ogloblin, the force behind the first five 

editions of the Military Compensation Background Papers. Even though he is now 

retired, his contribution can be found on every page of this edition. 

The Military Compensation Background Papers continues to be the only 

legislative history of military compensation and, as such, is an important research tool for 

- iii -
anyone who wants to understand the military compensation system. Although the fifth 

edition is now eight years old, I continue to get requests for copies of it, as well as 

questions as to when the new volume will be released. I can now point them to the sixth 

edition. 

SAUL PLEETER 

 Assistant Director 

 Compensation 

- iv -
PAYS AND ALLOWANCES SUMMARY 

Title Compensation Range Initial Date Last 

 Change 

Acceleration subject duty pay $150 per month 1955 1998 

Air weapons controller flight pay 

 (AWACS flight pay) $150 to $350 per month 1981 1998

Aviation career incentive pay $125 to $840 per month 1974 1999 

Aviation officer continuation pay Up to $25,000 per year if officer 

 agrees to remain on active duty 

 to complete 14 years of commis- 

 sioned service 1980 1999 

Basic allowance for housing (BAH) formula provided in 37 USC §403(b) 1878 2001 

Basic allowance for subsistence formulas provided in 37 USC §402 1808 1998, 20011 

Basic pay $1,193.40 to $14,634.20 per month 1790 2004 

Career sea pay maximum $750 per month 1835 2001 

Chemical munitions exposure pay $150 per month 1981 1998 

Clothing basic replacement allowance $216 to $478.80 per year 1949 2004 

Combat pay (also known as 

 hostile fire pay or imminent 

 danger pay) $225 per month 1952 2004 

CONUS COLA varies with duty station and location 

 of dependents 1996 2004 

Crew member flight pay $110 to $250 per month 1913 1985 

Critical nursing specialties pay Up to $50,000 per year 1990 2001

Dangerous organisms exposure pay $150 per month 1981 1998 

Death gratuity $12,000 1908 2004 

Deceleration subject duty pay $150 per month 1955 1998 

Demolition duty pay $150 per month 1949 1998 

Dental officers special pays 1967 1997 

 • Variable special pay $3,000 to $7,000 per year 

 • Additional special pay $4,000 to $10,000 per year 

 • Board certification pay $2,500 to $6,000 per year 

Dependency and indemnity 

 compensation $935 to $2,317 per month 1957 2001 

Disability retired pay Up to 75% of basic pay at time of 

 retirement for disability 1861 1985 

Dislocation allowance 2 1⁄2 months’ BAH 1955 1997 

Diving duty pay Up to $240 (officers) and $340 

 (enlisted members) per month 1886 2000 

 Engineering and scientific career 

 continuation pay Up to $3,000 per year for each year 

 of an extension agreement 1981 1981 

Enlistment bonus Up to $20,000 1791 2001 

Family separation allowance FSA I: 1 month's BAH (without 

 dependents rate) 1963 1981 

 FSA II: $100 per month 1963 1998 

Flight deck duty pay $150 per month 1965 1998 

Flight pay (air weapons control- 

 lers or AWACS flight pay) $150 to $350 per month 1981 1998 

Flight pay (aviation career 

 incentive pay) $125 to $840 per month 1974 1999 

 

1

 The formula for officers was established in 1998, that for enlisted members in 2001. 

- v -
Flight pay (aviation officer Up to $25,000 per year if officer 

 continuation pay) agrees to remain on active duty 

 to complete 14 years of commis- 

 sioned service 1980 1999 

Flight pay (crew member) $110 to $250 per month 1913 1985 

Flight pay (non-crew member) $150 per month 1934 1998 

Foreign language proficiency pay Up to $300 per month 1986 2000

Glider duty pay Authority terminated 1984 1944 1984 

HALO parachute duty pay $225 per month 1885 1998 

High pressure chamber duty pay $150 per month 1983 1998 

Hardship duty location pay maximum $300 per month 1900 1998 

Hostile fire pay (also known as 

 combat pay or imminent 

 danger pay) $225 per month 1952 2002 

Inactive duty training pay 1/30th of a month's basic pay 

 per unit training 1916 1996 

Leprosy duty pay Authority terminated 1984 1949 1984 

Low pressure chamber duty pay $150 per month 1955 1998 

Medical officers special pays 1947 1989 

 • Variable special pay $1,200 to $10,000 per year 1947 1989 

 • Additional special pay $15,000 per year 1947 1989 

 • Board certification pay $2,500 to $6,000 per year 1947 1989 

 • Incentive special pay Up to $50,000 per year 1947 2003 

Nonphysician health care providers 

 special pay Up to $5,000 per year 1990 1990 

Nuclear career accession Bonus Up to $20,000 1976 2000 

Nuclear career annual 

 incentive bonus Up to $22,000 per year for each 

 nuclear service year 1976 2000 

Nuclear qualified officers $25,000 per year for each year of an 

 continuation pay extension agreement up to $60,000 1969 2000 

Nuclear trained and qualified 

 enlisted members Up to $15,000 for a reenlistment 1972 1972 

Nurse anesthetists special pay Up to $50,000 per year 1989 2003 

Operational submersible duty pay $75 to $595 per month 1960 1987

Optometrists special pay 

• Regular special pay $100 per month 1971 1971 

• Retention special pay Up to $15,000 per year 1990 2003 

Overseas station cost of living allowance Up to $6,732 per month 1942 2004 

Parachute duty pay $150 per month ($225 HALO) 1941 1998 

Personal exposure pay 

 (toxic pesticides, etc.) $150 per month 1981 1998 

Personal money allowance $41.67 to $333.33 per month 1922 1949 

Premium career sea pay $350 per month 1980 2001 

Psychologists special pay Up to $5,000 per year 1987 1987 

Reenlistment bonus (SRB) Up to $60,000 1791 2000 

Registered nurses accession bonus One time payment of up to $30,000 1989 2003 

Responsibility pay $50 to $150 per month 1958 1958 

Retired and retainer pay Currently 50% to 75% of basic pay 

 or monthly retired pay base 1861 1996 

Selective reenlistment bonus (SRB) Up to $60,000 1791 2000 

Separation pay (nondisability) 120% of product of years of serv- 

 ice and monthly basic pay 1800 1996 

Servicemen's Group Life 

 Life Insurance (SGLI) Up to $200,000 for survivors 1917 1996 

- vi -
Severance pay (disability) Up to 2 years basic pay at time 

 of separation 1949 1996 

SGLI (Servicemen's Group 

 Life Insurance) Up to $200,000 for survivors 1917 1996 

Special duty assignment pay 

 (formerly, proficiency pay) Up to $1,500 1958 2003 

Submarine duty incentive pay $75 to $595 per month 1901 1987

Survivor Benefit Plan (SBP) Up to 55% of retired or retainer pay 1953 1989 

Thermal experiment subject pay $150 per month 1957 1998 

Toxic fuels and propellants 

 exposure pay $150 per month 1981 1998 

Toxic pesticides exposure pay $150 per month 1981 1998 

Veterinarians special pay $100 per month 1953 1953 

- vii -
 Preface to Analytical Table of Contents 

 A Note on the Organization of the Third and Subsequent Editions

 The organization of the third and subsequent editions of Military Compensation 

Background Papers: Compensation Elements and Related Manpower Cost Items—Their 

Purposes and Legislative Backgrounds has been changed from that of the first two 

editions in that pays that are functionally similar or that have a common legislative 

heritage are physically grouped together.1

 This regrouping has had the incidental effect of 

emphasizing the common concepts and principles, as articulated in Chapter I of this 

edition, that underlie the various compensation elements and manpower cost items that 

have been grouped together. 

In thus regrouping and reorganizing the third and subsequent editions of 

Military Compensation Background Papers, the various compensation elements and 

manpower cost items that make up the military compensation system considered as a 

whole have been subsumed under four major headings identified by Roman numerals II 

through V, respectively. Thus, Roman numeral II covers all forms of "pay" for active and 

inactive duty military service; Roman numeral III covers all forms of post-service 

compensation, including separation payments as well as retired and retainer pay and other 

benefits; Roman numeral IV covers benefits supporting the active and inactive duty 

forces; and Roman numeral V covers the category of miscellaneous payments to active 

and inactive duty forces that are, for present purposes, referred to as "manpower-related 

cost items." Roman numeral I provides an over-view of the military compensation system 

as a whole, emphasizing the principles and concepts that underlie and inform the system 

and give it substance and cohesion. 

Each of the major categories covered by Roman numerals II through V is in turn 

broken down into further groupings and sub-groupings of compensation elements and 

man-power cost items. Thus, for example, section B of Roman numeral II covers the four 

elements of military compensation that are subsumed under the heading of "regular 

 

1 In most cases, the grouping of one element of compensation with another can be easily and persuasively 

defended. In some cases, however, the grouping of one element with another has been more arbitrary, 

resulting from a felt need to impose structure and coherence on a subject that is not always well-structured 

or coherent. The reader's indulgence is solicited in those cases where the grouping chosen offends the 

reader's sensibilities. 

- viii -
military compensation." These four elements—namely, basic pay, basic allowance for 

housing, basic allowance for subsistence, and federal income tax advantage—are, in turn, 

each covered by a separate chapter. Each of these chapters is designated by a number that 

reflects its grouping under section B of Roman numeral II. Thus, Chapter II.B.1. is 

entitled "Basic Pay;" Chapter II.B.2., "Basic Allowance for Housing;" Chapter II.B.3., 

"Basic Allowance for Subsistence;" and Chapter II.B.4., "Federal Income Tax Advantage." In a similar vein, section C of Roman numeral II covers compensation for nonregular service; section D covers special and incentive pays; and section E covers 

attraction and retention pays. As was true of section B, sections C, D, and E of Roman 

numeral II also are broken down into finer groupings. Subsection 1 under section D, for 

example, covers combat and hazardous duty incentive pays; subsection 2, aviation-related 

pays; subsection 3, submarine and naval pays; and subsection 4, medical hazardous duty 

pays. Subsection 1 of section D under Roman numeral II is itself further broken down 

into two paragraphs—paragraphs a and b, which cover, respectively, general combat and 

hazardous duty incentive pays, on the one hand, and aviation pays, on the other hand. In 

keeping with the organizational principles previously set out, Chapter II.D.1.a.(1) is titled 

"Hostile Fire Pay;" Chapter II.D.1.a.(2), "Demolition Duty Pay;" and so forth.2

 This 

organizational principle is maintained throughout the third and 'subsequent editions of 

Military Compensation Background Papers. 

In addition to regrouping the various chapters—at least to some extent—the 

third and subsequent editions of Military Compensation Background Papers differ in 

one other respect from prior editions in that a number of short overview chapters have 

been added to provide summary information with respect to the different elements of 

military compensation that have been grouped under a particular heading. Thus, for 

instance, an overview chapter (Chapter II.B.) has been added to introduce the various 

elements of military compensation grouped under the general heading of "regular 

military compensation." In the case of this particular overview chapter, a short history of 

the derivation of the concept of "regular military compensation" is set out together with 

statistical data covering all of the elements of military compensation subsumed under the 

"regular military compensation" heading. Similar overview chapters are provided for 

compensation for non-regular service (Chapter II.C.1.); for the special and incentive 

- ix -
pays and the attraction and retention pays (Chapter II.D.); for the so-called "military 

estate program," consisting of retired and retainer pays, separation pays, and post-service 

benefits (Chapter III.A.); for supporting benefits (Chapter W.A.); and for manpowerrelated cost items (Chapter V.A.). 

Several appendices have been added to the third and subsequent editions of 

Military Compensation Background Papers to deal with a number of issues that, 

although not directly concerned with any one particular element of military 

compensation, have an impact, in one form or another, on military compensation 

generally. Thus, an appendix has been added detailing the background of the Department 

of Defense Military Retirement Fund and its relationship to active and inactive duty 

military compensation. Similar appendices have been added dealing with the background 

and impact of the Uniformed Services Former Spouses' Protection Act on military 

compensation; on the overall structures of the income tax systems of the various States 

and their impacts on military compensation; and so forth. The reader's attention is 

directed to the Analytical Table of Contents, which immediately follows this Preface, for 

more details on these appendices and what they cover. 

Beginning with the sixth edition of Military Compensation Papers, the costs of 

the various types of military compensation, including pay, benefits, and bonuses, are 

listed in a separate volume, together with the numbers of Armed Forces personnel who 

have received such compensation. Normally, the beginning date of such listings is 1972, 

unless the compensation program began at a later date. When applicable, each of the 

chapters whose arrangement is discussed above contains a reference to the table or tables 

relevant to the contents of the chapter. 

- x -
ANALYTICAL TABLE OF CONTENTS 

Military Compensation Elements and 

Related Manpower Cost Items

 Page

Military Compensation Background Papers: Compensation Elements and Related 

 Manpower Cost Items—Their Purposes and Legislative Backgrounds .................................................... ii 

I. Overview of Military Compensation: Theory, Concepts, and 

 Principles of Military Compensation ....................................................................................................... 1 

II. Compensation for Military Service: Active and Inactive Duty Compensation ....................................... 11 

 A. Overview of Compensation for Military Service: Active and Inactive 

 Duty Compensation .......................................................................................................................... 11 

B. Regular Military Compensation (RMC)/Basic 

 Military Compensation (BMC) ........................................................................................................ 14 

1. Basic Pay ............................................................................................................................ 19 

2. Basic Allowance for Housing .......................................................................................... 102 

3. Basic Allowance for Subsistence .....................................................................................183 

4. Federal Income Tax Advantage ...................................................................................... 208 

C. Compensation for Non-Regular Service: Reserve Components Pay .............................................. 225 

1. Overview of Compensation for Non-Regular Service: 

 Reserve, Components Pay .............................................................................................. 225 

2. Compensation for Inactive-Duty Training ..................................................................... 228 

D. Special and Incentive Pays .............................................................................................................. 247 

 1. Combat and Hazardous Duty Incentive Pays 

 a. General 

 (1) Hostile Fire Pay (Hostile Fire and Imminent Danger) ............................................... 250 

 (2) Demolition Duty Pay ................................................................................................. 266 

 (3) Special Pay for Officers Holding Positions of 

 Unusual Responsibility .............................................................................................. 278 

 b. Aviation Pays 

 (1) Flight Pay (Crew Member) ........................................................................................ 282 

 (2) Flight Pay (Non-Crew Member) ................................................................................ 305 

 (3) Aviation Career Incentive Pay (ACID) and 

 Aviation Career Continuation Pay (AOCP) ............................................................ 320 

 (4) Flight Pay (Air Weapons Controllers) ...................................................................... 357 

 2. Aviation-Related Pays 

 a. Parachute Duty Pay ....................................................................................................... 367 

 b. Glider Duty Pay ............................................................................................................ 383 

 c. Flight Deck Duty Pay .................................................................................................... 391 

d. Toxic Fuels and Propellants and Chemical Munitions Exposure Pay............................ 403 

 3. Submarine/Naval Pays 

 a. Submarine Duty Incentive Pay ...................................................................................... 418 

 b. Operational Submersible Duty Pay ............................................................................... 443 

 c. Diving Duty Pay ............................................................................................................ 447 

 d. Special Pay for Career Sea Duty ................................................................................... 457 

 e. Special Continuation, Accession, and Annual Incentive Pays 

 for Nuclear-Qualified Officers ...................................................................................... 476 

 4. Medical Hazardous Duty Pays 

 a. Experimental Stress Duty Pays ..................................................................................... 486 

 b. Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ........................ 498 

 c. Leprosy Duty Pay ......................................................................................................... 510 

- xi -
 E. Attraction and Retention Pays .................................................................................................... 518 

 1. Health-Related Pays 

 a. Special Pay for Physicians (Medical Officers of the Armed Forces) ............................... 518 

 b. Special Pay for Dentists (Dental Officers of the Armed Forces)...................................... 550 

 c. Special Pay for Veterinarians ........................................................................................... 567 

 d. Special Pay for Optometrists ............................................................................................ 572 

 e. Special Pay for Psychologists and Other Nonphysician 

 Health Care Providers ...................................................................................................... 578 

 f. Special Pay for Nurse Anesthetists and Other Nurses 

 and Accession Bonus for Registered Nurses ................................................................... 585 

 2. Other Attraction and Retention Pays 

 a. Engineering and Scientific Career Continuation Pay ...................................................... 593 

 b. Enlistment Bonus ............................................................................................................. 598 

 c. Selective Reenlistment Bonus .......................................................................................... 610 

 d. Critical Skills Retention Bonus ........................................................................................ 630 

 e. MOS Conversion Bonus .................................................................................................. 632 

 f. Reserve Affiliation, Enlistment and Reenlistment Bonuses 

 Special Unit Pay, and Educational Assistance ................................................................. 633 

 g. Special Duty Assignment Pay and Proficiency Pay ......................................................... 654 

 h. Assignment Incentive Pay ................................................................................................ 659 

 i. Special Pay: Hardship Duty .............................................................................................. 660 

 j. Overseas Duty Extension Pay ........................................................................................ 667 

 k. Foreign Language Proficiency Pay ................................................................................. 671 

 l. Reserve Officers Pay for Administrative Duty ................................................................ 675 

 m. High Deployment Allowance ........................................................................................... 679 

III. Retired and Retainer Pay, Separation Payments, and Post-Service Benefits........................................ 682 

 A. Overview of Retired and Retainer Pay, Separation Payments, 

and Post-Service Benefits ........................................................................................................... 682 

 B. Retirement and Retainer Pays ................................................................................................... 684 

 1. Nondisability Retired and Retainer Pay ............................................................................... 684 

 2. Retired Pay for Non-Regular Service .................................................................................. 722 

 3. Disability Retired Pay .......................................................................................................... 736

 4. Adjustments to Retired and Retainer Pay ............................................................................ 756 

 5. Imputed Contribution for Retirement Benefits .................................................................... 774 

 C. Separation Pays and Post-Service Benefits ............................................................................... 786 

 1. Nondisability Separation Pay ............................................................................................... 786 

 2. Disability Severance Pay ..................................................................................................... 798 

 3. Unemployment Compensation ............................................................................................. 801

 4. Temporary Voluntary Separation Incentives ....................................................................... 810 

 D. Benefits Specially Applicable to Retired Personnel and Their Dependents .............................. 819 

 1. Retired Members Medical Care ........................................................................................... 819 

 2. Servicemen's Group Life Insurance ..................................................................................... 827 

 3. Death Gratuity ..................................................................................................................... 836 

 4. Dependency and Indemnity Compensation ........................................................................ 844

IV. Supporting Benefits ............................................................................................................................ 855 

 A. Overview of Supporting Benefits ............................................................................................ 855 

 B. Benefits Specially Applicable to Active Duty and Reserve Personnel 

 and Their Dependents .............................................................................................................. 857 

 1. Annual Leave/Accrued Leave Payments/Leave Lost ........................................................ 857 

 2. Voluntary Education and Training ..................................................................................... 865 

 3. Mortgage Insurance Premiums .......................................................................................... 870 

 4. Medical Care (Servicemembers and Dependents).............................................................. 873 

 C. Benefits Applicable to Both Active Duty and Retired Members 

 and Their Dependents .............................................................................................................. 884 

 1. Government Contribution to Social Security ...................................................................... 884 

 2. Survivor Benefit Plan ......................................................................................................... 902 

- xii -
 3. Commissaries ..................................................................................................................... 928 

 4. Military Exchanges ............................................................................................................ 935

 5. Thrift Savings Plan ............................................................................................................. 939

 V. Manpower-Related Cost Items ........................................................................................................... 942 

 A. Overview of Manpower-Related Cost Items ............................................................................. 942 

 B. Miscellaneous Manpower-Related Benefits .............................................................................. 944 

 1. Professional Education and Training .................................................................................. 944 

 2. Veterans' Educational Assistance (GI Bill) ......................................................................... 954 

 3. GI Bill (Home Loan Assistance) ......................................................................................... 969 

 4. Homeowners Assistance Program ....................................................................................... 973 

 5. Enlisted Aides ......................................................................................................................976 

 C. Reimbursements ........................................................................................................................ 988 

 1. Travel and Transportation Allowances ............................................................................... 988 

 2. Clothing Issues and Maintenance Allowances .................................................................... 998 

 3. Overseas Station Allowances ............................................................................................ 1003 

 4. Cost of Living Allowance for the Continental United States 

 (CONUS COLA) ............................................................................................................... 1012 

 5. Family Separation Allowance ........................................................................................... 1015 

 6. Dislocation and Departure Allowances ............................................................................. 1022 

 7. Separation Travel and Transportation Allowances ........................................................... 1026 

 8. Personal Money Allowance/Special Position Allowance ................................................. 1033 

 9. Reimbursement for Recruiting Expenses .......................................................................... 1040 

 Appendices

 Appendix I. Department of Defense Military Retirement Fund ....................................................... 1046 

Appendix II. Uniformed Services Former Spouses' Protection Act ................................................... 1052 

Appendix III. Highlights of Major Structural Studies of Military Compensation ............................... 1058 

Appendix IV. BAQ Entitlements of Members of the Uniformed Services 

 Married to Other Members of the Uniformed Services ................................................ 1066 

Appendix V. Federal Taxation of Members of the Armed Forces ..................................................... 1068 

Appendix VI. Impact of State Income Taxes on Military Compensation ........................................... 1090 

Appendix VII. Special Pay and Other Benefits for Missing Persons, 

 Prisoners of War (POWs), and Victims of Terrorism ................................................. 1108 

Appendix VIII. Special Benefits Applicable to Certain Members of the Armed Forces Assigned 

 to the National Security Agency, the Central Intelligence Agency, 

 and The Defense Intelligence Agency .......................................................................... 1122 

Appendix IX. Death Benefits Payable to Survivors of Military Decedents ........................................ 1126 

Appendix X. CHAMPUS and TRICARE .......................................................................................... 1130 

Appendix XI. Manpower-Related Mobilization Actions to be Taken by the Department 

 of Defense ..................................................................................................................... 1141 

Appendix XII. Poverty Guidelines in Relation to Military Compensation .......................................... 1144 

Appendix XIII. Critical Dates Relating to Entitlement to Various Military 

 and Veterans Benefits ................................................................................................. 1149 

Appendix XIV. United States Casualties in 20th Century Wars .......................................................... 1156 

Appendix XV. Statute of Limitations for Claims Against the Federal Government for Back Pay 

 and Other Matters ....................................................................................................... 1158 

References and Citations ....................................................................................................................... 1160 

Index ...................................................................................................................................................... 1194 

- xiii -
Chapter I 

Overview of Military Compensation: 

Theory, Concepts, and Principles of Military Compensation 

The first and second editions of this volume, Military Compensation Background 

Papers: Compensation Elements and Related Manpower Cost Items--Their Purposes and 

Legislative Backgrounds, demonstrated that the legislative history, annual cost, numbers 

of recipients and various quantitative trends are generally well documented for essentially 

every item of military compensation. Neither those editions nor other substantive studies 

gave comparable analytic thought to the underlying principles and concepts that cause the 

whole structure of military compensation to cohere in a logical and self-reinforcing 

fashion. It was in part to remedy this deficiency that the President's memorandum to the 

Secretary of Defense of August 17, 1982, authorizing the Fifth Quadrennial Review of 

Military Compensation (QRMC), sought "[a] coherent and logical statement of the 

principles and concepts of military compensation in relation to national security 

objectives...." 

 In fact, the President's memorandum focused attention on the basic Congressional 

mandate contained in 37 U.S.C. §1008(b) that each QRMC conduct "a complete review 

of the principles and concepts of the compensation system for members of the uniformed 

services" (emphasis added).1

 Since 37 U.S.C. §1008(a) already provides for annual 

Presidential review of the short-term "adequacy" of military compensation, the need for a 

periodic review of the long-term underlying principles and concepts is self-evident--

particularly in an era typified by rapid technological developments and changing 

battlefield tactics. But before one can review "principles and concepts," those principles 

and concepts must be articulated and explicitly stated. Hence this "overview." It restates 

 

1

 Title 37, United States Code, “Pay and Allowances of the Uniformed Services,” is the main source of 

statutory authority for active- and inactive-duty compensation for members of the uniformed services. For 

the purposes of Title 37, United States Code, the term "uniformed services" refers not only to the traditional 

Armed Forces, i.e., the Army, the Navy, the Air Force, the Marine Corps, and the Coast Guard, see 37 

1
the principles and concepts developed by Peter K. Ogloblin and later elaborated by the 

Fifth QRMC.2

A. CONCEPTS 

Any military compensation system should be based on certain underlying 

principles that, in the aggregate, comprise its theory. That theory necessarily must be 

consistent with and reflect the fundamental concepts and principles of our nation's form 

of government. Compensation should be designed to foster and maintain the concept of 

the profession of arms as a dignified, respected, sought after, and honorable career. The 

emotional and spiritual satisfactions gained from the dedicated performance of uniformed 

service should be coupled with compensation sufficient for an individual member to 

maintain a standard of living commensurate with the carrying out of responsibilities that 

directly affect the security of the nation. Without basic patriotism on the part of its 

members, however, there could be no Armed Forces. At the same time, in peacetime, 

patriotism by itself is not an adequate motivation for a service career. 

Lawyers, comptrollers, statisticians, and military compensation specialists have 

performed considerable research on individual military compensation items by. As a 

result, the Congressional purpose, legislative history, annual cost, numbers of recipients, 

and various quantitative trends of compensation are well documented. What has not 

received comparable research attention and thought are the underlying concepts and 

principles that cause the structure of military compensation to cohere in a logical and 

self-reinforcing fashion. In short, the relationships between the individual components of 

compensation and their systemic interrelationships as a coherent structure remain largely 

 

U.S.C. §101(4), but to the National Oceanic and Atmospheric Administration and the Public Health Service 

as well: 

The term "uniformed services" means the Army, Navy, Air Force, Marine Corps, Coast Guard, National 

Oceanic and Atmospheric Administration, and Public Health Service. 37 U.S.C. §101(3). 

2

 We have not followed totally the statement of principles and concepts elaborated by the Fifth QRMC 

because, since the enactment of the Goldwater-Nichols Department of Defense Reorganization Act of 

1986, Public Law 99-433, 100 Stat. 992 (1986), the service-specific emphasis is not germane. See, e.g., 

Goldwater-Nichols Department of Defense Reorganization Act of 1986, Public Law 99-433, id., §3, 100 

Stat. at 993-994. Instead, the statement of principles and concepts contained in the Report of the Fifth 

QRMC has been modified according to the changes mandated by that Act. 

2
implicit rather than explicit. Virtually every aspect of military activity has explicit 

doctrines, principles, and practices embodied in field manuals, technical manuals, and 

various joint publications. Military compensation is noteworthy in its lack of such an 

explicit intellectual foundation. 

It is prudent to clarify a number of points when dealing with principles. First, 

principles are value judgments stating what ought to be done and what course of 

procedure ought to be followed. Second, principles refer to the most basic propositions of 

a system and, as such, are to be distinguished from the specific policies used to apply 

them in specific situations. Policies, whether statutory or administrative, are contingent 

on the vagaries of time, place, and national mood. Third, the prescriptive nature of 

principles can often lead to a category of "sub-principles," more enduring than policies 

but less basic than principles. The various structural propositions deriving from basic 

principles are of this nature. An example is that basic military compensation levels should 

be comparable to those of the American economy, while special and incentive pays 

should be competitive, both internally and externally, with manning supply and demand 

in specific duties. Fourth, an important by-product of explicit principles is the stability of 

the system affected and the capability of coherent long-term planning. 

It is basic to individual morale as well. Secretary Robert A. Lovett recognized this 

in 1952 when he wrote to the Strauss Commission concerning compensation. 

Only a carefully considered answer will enhance or ensure the possibility 

of a permanent solution, and too much emphasis cannot be placed on permanency 

of solution because of its importance and impact on service morale. As you know, 

the effect on morale is most adverse when individuals who have entered service 

with expectancy of a permanent rate of compensation are constantly exposed to 

unfavorable ex post facto adjustments. 

Fifth, a statement of principles has an educational by-product, making the whole 

system more understandable both to the Defense leadership and to the forces under their 

command. It ties together various disparate elements into a consistent, logical structure. It 

is not necessary that the system as a whole be simple, only that its logical exposition be 

understandable and credible. No system as large and complex as military compensation 

3
will ever be simple, any more than that of any other large organization. With these 

matters in mind, the following basic principles and sub-principles have been developed. 

B. PRINCIPLES

1. MANPOWER/COMPENSATION INTERRELATIONSHIP. The first 

principle underlying the basic philosophy of the military compensation system is that the 

system must be an integral part of the overall system by which military manpower is 

managed. Compensation, by the very nature of its basic purpose, must support defense 

manpower policies that, in turn, support the military, strategic and operational plans of 

this nation. If they do not, then manpower imbalances, deteriorating unit cohesion and 

integrity, poor morale, and a general degradation of discipline and motivation, are likely 

to ensue. This in turn can frustrate the successful accomplishment of strategic and 

operational plans in the field, and thus negate our foreign policy objectives. 

Compensation for members of the Armed Forces, therefore, must be synchronized with 

the rest of the military manpower system and not be treated as an isolated part of the 

national labor market. This basic principle of compensation was implied in the 

Presidential memorandum establishing the Fifth QRMC in which it was understood that 

military compensation is and should remain an integral part of military activities. The 

importance of this principle can be appreciated when reviewing the suggestions of 

various critics of military compensation. These critics view military compensation as an 

autonomous system, unrelated to other military operations, and thus a logical candidate 

for the supply-and-demand labor market analysis often applied to the private sector by 

the same critics. 

2. COMPATIBILITY WITH TECHNOLOGY AND TACTICS. Military 

compensation should reflect the realities of the high level technology employed by the 

Armed Forces and the combat tactics of today's battlefield environment. This refers to the 

inevitable time-lag between the realities of the battlefield and the systems, such as 

compensation, designed to support the combat forces. The effect of changing combat 

tactics (often resulting from the characteristics of new weapons) is most noticeable in 

4
certain special and incentive pays (e.g., aviation pays) but permeate the military 

compensation systems. The introduction of newer, high-performance weapons and their 

effects on combat tactics was the reason why long-term reviews of military compensation 

were instituted in the first place. The importance of keeping military compensation in 

synchronization with changing combat tactics is a cardinal precept that cannot be 

overstressed. 

3. EQUITY. The third principle is that of equity, in the sense of "fairness". Few 

things are more important for morale than that service members believe that they are 

being treated as fairly as possible and, conversely, few things undermine morale more 

than a sense of unfair treatment. This principle requires that all service members be 

allowed to compete equally for pay and promotion according to their own abilities. This 

principle applies equally to the regular, reserve, and retired forces whose combined 

strength constitutes the backbone of our national security. This principle also deals with 

the concept of equal pay for substantially equal work under the same general working 

conditions. This aspect of the equity principle establishes the basis for the two important 

sub-principles of pay: comparability and competitiveness. 

a. Comparability. The basis for determining the appropriate pay levels for the 

service-specific aspects of the compensation of the uniformed services should be 

comparability with the American economy. This addresses the question: "How much 

should service members be paid?" by answering, "About the same as their approximate 

counterparts (in terms of function and responsibility) are paid in the American economy." 

The specific items referred to here are basic pay, basic-pay-related items, the allowances, 

and benefits. This also responds to the main reason articulated in international law 

pertaining to why service members wear distinguishing uniforms, which is to 

differentiate between armed combatants and noncombatants. This distinction implies that 

the major difference is that members of the Armed Forces are legally liable to armed 

combat. This is their distinguishing characteristic, and whatever specialization for 

specific duties a member of an armed force may have is secondary to the primary 

5
function of armed combat. Hence, the fact that basic pay rates are the same for each grade 

and longevity step recognizes this basic function. 

Much of the controversy over the comparability principle has arisen because of 

the different meanings attached to the word and to the perception that comparability 

means "sameness" or "exactness". Many consider that comparability implies that military 

duties are exactly the same as civilian jobs and that civilians use and intend the word to 

mean equal or identical pay. Including the word "substantially" in the definition "equal 

pay for substantially equal work" recognizes that there are different conditions of 

employment between any two organizations, and that it would be fruitless to attempt to 

locate exactly equal work for comparison with federal civilian workers. The British 

recognize that an exact comparison between military and civilian jobs is unnecessary as a 

condition for using that comparison in setting pay levels for their service members. 

Quoting from a report on their pay system: 

 

 There is obviously no basis for comparing civilian jobs with jobs like 

infantryman and gunner, for which there are no civilian counterparts; or even with 

pilots, seamen, policemen, nurses, cooks and others with similarly denominated 

civilian jobs, but which are frequently very different jobs in civilian life. 

However, all jobs, whether service or civilian, possess certain common demands 

for which any employer is willing to pay wages. These demands can be assessed 

and given values as proportions of a whole job. The important ones like 

knowledge, mental or physical skills and demand, or responsibility, are obvious, 

and there are many others, some of which are of little consequence in 

differentiating between the sizes of jobs. What is intended is that members of the 

armed forces should be paid generally what they might fairly expect were they to 

apply the knowledge, skill, and responsibility of their Service jobs to jobs 

required to be done in the civilian life. 

b. Competitiveness. Compensation competitiveness is needed to ensure the 

adequate manning of certain military specialties. This sub-principle applies to special and 

incentive pays, particularly in peacetime. "Competitiveness" refers to both external (i.e., 

private market pressures) and internal competition (i.e., those military duties requiring 

volunteer manning because of their hazardous, arduous, uncomfortable, long training 

lead-time, and/or high training investment characteristics). Competitiveness includes 

those bonuses and special pays that can and will be discontinued during major 

6
mobilization and wartime. This is possible because the competitiveness for attraction 

would likely be negated by a draft, and competitiveness for retention is nullified through 

"stop-loss" and retirement denial policies. During peacetime, such special and incentive 

pays are needed for specific duties that are in high demand in the economy, that are 

inherently more dangerous than most peacetime duties, or that are just uncomfortable and 

unattractive. 

4. EFFECTIVENESS IN PEACE AND WAR. The fourth guiding principle for 

the military compensation system is that it must operate effectively in both peace and 

war. This principle suggests that one military compensation system is required because 

there will be no time to switch systems in wartime (even if that course were theoretically 

desirable). Further, any system must be flexible enough to permit the entry and departure 

in both peace and war situations of reservists and retirees in a way that will not confuse 

their promotion patterns, retirement credit, and various related compensation elements. 

This has significant implications for any proposal to adopt a salary system, for example. 

Any military compensation system must be designed to allow for rapid and smooth 

expansions and contractions of the force. Military personnel should be allowed to 

concentrate on their duties without having to adapt to changes in a system that is 

supposed to support them, not hinder them. 

In line with this latter principle, the military compensation system should accommodate 

mobilization planning, promotion patterns, force levels and training lead-times of the 

Department of Defense. Many proposals for the "reform" of the compensation system 

ignore mobilization plans; and, indeed, the existing structure does so to some degree by 

requiring Congressional action to terminate or install certain items in the event of 

mobilization or war. Such times are the least propitious moments to effect the needed 

changes in a thoughtful manner. It would be far preferable to enact provisions that allow 

the necessary steps to be taken administratively. 

5. FLEXIBILITY. The fifth principle underlying the overall compensation 

system is that it ought to be designed in a way to adjust quickly to changing conditions of 

7
combat tactics, technology, and manpower supply and demand. Here again, there are 

several sub-principles involved. An effective system cannot be designed without a 

reasonable specification of the force size and manpower profile that the system is to 

support; i.e., a definitive statement of manpower requirements is needed which has as its 

foundation reasonable standards. 

a. Efficiency. The sub-principle of efficiency deals with the concept of economic 

efficiency. The amount or level of military compensation should be no higher or lower 

than necessary to fulfill the basic objective of attracting, retaining, and motivating the 

kinds and numbers of Service personnel needed for the active and Reserve forces of the 

United States. 

 b. Supply and Demand. Differing manpower supply conditions (skill and 

experience profiles) and demand conditions (desired force profiles) among the uniformed 

services, for both the regular and the reserve forces, require a system with flexibility and 

a broad pricing base to satisfy the varying needs of different military situations. Special 

and incentive pays, which are the basic compensation tools employed to satisfy this 

principle are, if nonfunctional, inconsistent with efficient compensation practices. 

 c. Linkage of Elements ("Drag-Alongs"). When a rigid linkage of compensation 

elements exists (as whenever one element, such as basic pay, changes, it automatically 

causes a similar change in a half-dozen or more other compensation elements), it 

generally creates inefficiencies because of differing needs served by each element. Such 

linkages (often called "drag-alongs") should not be a part of the basic compensation 

system design, unless the respective elements are clearly driven by the same criterion. 

d. Rapid and Equitable Adjustments. The compensation system should have a 

rapid and equitable adjustment mechanism to reflect changes in the national economy. 

Servicemembers must receive sufficient compensation to enable them to establish 

standards of living that will allow the simultaneous discharge of their responsibilities to 

their country and to their families. The compensation system of the uniformed services 

8
should, therefore, be related to the state of the national economy so that its members may 

participate in the gradual rise in the standard of living. 

 6. MOTIVATIONAL ASPECTS. The sixth, and last, principle relates to the 

need to incorporate into the system a relationship between compensation and the effort, 

or contribution, required of the individual. The basic system, as well as any special or 

supplemental aspects, should be designed to encourage meritorious performance and 

advancement to higher responsibilities. There are several associated sub-principles: 

a. Institutional Benefits. The overall institutional benefits component of the 

military compensation system should be awarded according to the military value of the 

member to the Service. This sub-principle provides a guide to the recipients in regard to 

approximate levels of benefits. Many benefits, however, are (and should be) automatic in 

their entitlement, such as Dependency and Indemnity Compensation, Death Gratuity, and 

the group insurance programs. Nonetheless, the criterion of military value, including the 

possibility of mobilization or recall to active duty in times of national emergency, should 

govern the eligibility for and level of benefits to the various categories of beneficiaries. 

b. Distinctiveness. The overall compensation system must reflect the distinctive 

characteristics of serving in the Armed Forces. The very essence of this distinctiveness is 

that members of the Armed Forces must be able to engage in mortal combat and put their 

lives in jeopardy. The services can scarcely be manned with members possessing the 

alertness and vitality needed to be able to provide the leadership necessary to win wars 

unless service members are compelled to leave active service at reasonable ages or 

sooner if no longer sufficiently competitive. This requires a system of severance and 

retirement compensation that is designed to meet the many problems of superannuation. 

The theory underlying the solution to this problem, which is not only one of age but of 

other factors affecting ability and competence, must make sense to the intelligent citizen 

who finally pays the cost. This aspect of the compensation system should be viewed by 

most rational people as being "good business" despite the associated cost. The 

compensation sub-principles that underlie the military retirement system are as follows: 

9
(1) the system should be structured to meet legitimate defense requirements, such 

as recall to active duty of some or all retired members, in support of our national security 

objectives; 

(2) the system should support and complement force management requirements 

(e.g., youth, vigor, and career development opportunities) of the active and Reserve 

components of the Armed Forces; and (3) the system should be integrated into the 

military compensation system and be structured to meet an income replacement function 

as well as an income maintenance function acceptable to the nation. 

 These are the six principles of uniformed services compensation. Together, they 

form the logical basis that should set the standards for assessing the effectiveness of the 

military compensation system. 

10
Chapter II.A. 

Overview of Compensation for Military Service: 

Active and Inactive-Duty Compensation 

 For its defense manpower requirements, the United States relies on three 

major categories of military personnel--active duty personnel, inactive-duty personnel, 

and retired personnel. Roughly speaking, active duty personnel include all those members 

of the Army, Navy, Air Force, Marine Corps, and Coast Guard who are on active duty1

every day and are at all times subject to the Uniform Code of Military Justice.2

 For 

present purposes, inactive-duty personnel include all those members of the reserve 

components of the Army, Navy, Air Force, Marine Corps, and Coast Guard, as well as all 

members of the Army National Guard and Air National Guard, who are not on full-time 

"active duty" or "full-time National Guard duty" as those terms are defined at 10 U.S.C. 

§101(d)(1) and (d)(5), respectively.3 4

 Retired personnel include all former active and 

inactive-duty personnel who have an entitlement to retired or retainer pay under Title 10, 

United States Code.5

 The active and inactive-duty forces of the United States provide 

 

1 The term "active duty" is defined at 10 U.S.C. §101(d)(1) to mean: 

... full-time duty in the active military service of the United States. Such term includes full-time training 

duty, annual training duty, and attendance, while in the active military service, at a school designated as a 

service school by law or by the Secretary of the military department concerned. Such term does not include 

full-time National Guard duty. 

2

 The Uniform Code of Military Justice is codified as Chapter 47 of Title 10, United States Code, 10 U.S.C. 

§§801-946. 

3

 See footnote 1, above, for a definition of the term "active duty" as set out at 10 U.S.C. §101(d)(1). The 

term "full-time National Guard duty" is defined at 10 U.S.C. §101(d)(5) as follows: 

... training or other duty, other than inactive duty, performed by a member of the Army National Guard of 

the United States or the Air National Guard of the United States in the member's status as a member of the 

National Guard of a State or territory, the Commonwealth of Puerto Rico, or the District of Columbia under 

section 316, 502, 503, 504, or 505 of title 32 [United States Code] for which the member is authorized pay 

from the United States or for which the member has waived pay from the United States. 

4

 Although the term "inactive duty" is not formally defined in Title 10, United States Code, the term 

"inactive-duty training" is defined at 10 U.S.C. §101(d)(7). This definition is quoted in full at footnote 1 to 

Chapter II.C.1., "Overview of Compensation for Non-Regular Service: Reserve Components Pay," below. 

5

 As used here, the term "entitlement" does not necessarily imply that a person is actually receiving retired 

or retainer pay. Former members of the inactive duty forces may, for instance, be authorized retired pay for 

their service in the reserve components of the Armed Forces, although they may not actually receive such 

pay until they reach 60 years of age. See, e.g., Chapter III.B.2., "Retired Pay for Non-Regular (Reserve) 

Service," below. 

11
services to the Federal and State Governments and are, by virtue of providing such 

services, authorized "compensation" under Titles 10 and 37 of the United States Code. 

The compensation entitlements of active duty personnel are collectively referred to in 

Military Compensation Background Papers: Compensation Elements and Related 

Manpower Cost Items--Their Purposes and Legislative Backgrounds as "active duty 

compensation," whereas the compensation entitlements of inactive-duty personnel are 

collectively referred to as "inactive-duty compensation." 

 

All personnel authorized active duty compensation receive the three main 

elements of military compensation subsumed under the heading "regular military 

compensation" (RMC)--namely, basic pay, basic allowance for quarters (or 

quarters in kind), and basic allowance for subsistence (or subsistence in kind). 

Such personnel may also receive other elements of military compensation--

whether pays or allowances of one sort or another--depending on the nature of 

their duty assignment, their military specialty, where they are stationed, their 

conditions of service, and so forth. They may, for instance, be authorized 

increased housing allowances if they are stationed in a high-housing-cost area of 

the United States and are not assigned to government quarters. In a similar vein, 

they may be authorized one or more forms of pay subsumed under the heading of 

"special and incentive pays" or "attraction and retention pays." Typically, 

entitlement to these pays turns on having special educational or training 

qualifications or on being assigned to military duty for which such special or 

incentive pays are otherwise authorized. 

Inactive duty personnel, on the other hand, are authorized inactive-duty 

compensation for the performance of inactive-duty training. They may also, under some 

conditions, be authorized special and incentive pays or attraction and retention pays for 

the performance of inactive-duty training. When on annual training duty, they are 

authorized active duty compensation. 

This Section II of Military Compensation Background Papers sets out the active 

and inactive-duty compensation entitlements of active and inactive-duty personnel. The 

basic compensation entitlements of active duty personnel are covered in Subsection B of 

Section II, whereas the basic compensation entitlements of inactive-duty personnel are 

covered in Subsection C. Special and incentive pays and attraction and retention pays for 

12
both active and inactive-duty personnel are covered in Subsections D and E of this 

Section II, respectively. Retired and retainer pay entitlements of (former) active and 

inactive-duty personnel are covered in Section III of Military Compensation Background 

Papers, below. 

The total costs6

 of basic compensation entitlements of active-duty and inactive-duty 

military personnel over the period 1972 to 2004 are set out in Table II-1 of Volume II, 

Military Compensation Statistics Tables. 

 

6

 Includes regular military compensation for active-duty personnel (cash elements only) and compensation 

for inactive-duty training for Reserve forces personnel. See Chapter II.B., "Regular Military 

Compensation/Basic Military Compensation," and Chapter II.C.2., "Compensation for Inactive-Duty 

Training." 

13
Chapter II.B. 

Regular Military Compensation and 

Basic Military Compensation 

The military compensation system consists of a wide variety of pays, allowances, 

and benefits. Based on the enumeration of pays, allowances, and benefits covered by this 

edition of Military Compensation Background Papers: Compensation Elements and 

Related Manpower Cost Items--Their Purposes and Legislative Backgrounds, there are 

over seventy separate pays, allowances, or benefits of one sort or another that go to make 

up the military compensation system considered as a whole. Discounting the benefits 

component of the military compensation system, there are over forty separate pays and 

allowances. While the military compensation system considered as a whole thus consists 

of many separate pays and allowances, it is the rare member of the uniformed services 

who in practice ever becomes entitled to receive as many as seven or eight pays and 

allowances--even over the course of a full career. Even though no one member ever 

becomes entitled to receive very many separate pays and allowances, every member of 

the uniformed services, by virtue of being a member, automatically becomes entitled to 

receive three basic elements of military compensation--namely, basic pay, basic 

allowance for housing (or quarters in kind), and basic allowance for subsistence (or 

subsistence in kind). 

 The observation that every member of the uniformed services is entitled to 

receive these three basic elements of military compensation led the Gorham Commission 

in 1962 to develop the construct of "regular military compensation" as a rough yardstick 

to be used in comparing the compensation of members of the uniformed services to the 

used in comparing the compensation of members of the uniformed services to the 

compensation of civilian-sector employees.1

 When initially developed as a comparison 

tool, "regular military compensation"--sometimes also referred to as "RMC"--consisted 

of basic pay, basic allowance for quarters, and basic allowance for subsistence. Later, 

during the course of the First Quadrennial Review of Military Compensation, it was 

 

1

 See discussion of the Gorham Commission in Appendix III, below 

14
pointed out that members of the uniformed services did not have to pay income tax on 

any amounts they received--whether in cash or in kind--on account of quarters or 

subsistence, and it was concluded that, for the purpose of comparing military and civilian 

compensation, it would be appropriate to include in "regular military compensation" 

some additional amount to account for the non-taxability of the allowances for quarters 

and subsistence.2

 This additional amount came to be referred to as "Federal income tax 

advantage." Conceptually, an individual service member's "tax advantage" is the added 

amount of taxable income he would have to receive in cash if his quarters and subsistence 

allowances were suddenly to become taxable in order for him to be as well off in after-tax 

income as he currently is under the existing system of taxable pay and non-taxable 

allowances.3

 Congress first gave formal recognition to the "regular military 

compensation" construct in 1974 when, in the Act of September 19, 1974, Public Law 

93-419, §1, 88 Stat. 1152 (1974), it added paragraph (25) to Section 101 of Title 37, 

United States Code. From the time Title 37, United States Code, was enacted into 

positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), 

37 U.S.C. §101 contained definitions of general applicability to Title 37. As added 

by the Act of September 19, 1974, Public Law 93-419, id., paragraph (25) of 37 U.S.C. 

§101 originally provided: 

"[R]egular compensation" or "regular military compensation (RMC)" 

means the total of the following elements that a member of a uniformed service 

accrues or receives, directly or indirectly, in cash or in kind every payday: basic 

pay, basic allowance for housing, basic allowance for subsistence; and Federal tax 

advantage accruing to the aforementioned allowances because they are not subject 

to Federal income tax. 

In 1980, the statutory definition of "regular military compensation" was broadened to 

include the variable housing allowance and overseas housing allowance.4

 The basic 

 

2

 For a discussion of the reasons underlying the tax-free status of the basic allowances for housing and 

subsistence--as well as various other allowances--see Chapter II.B.4., "Federal Income Tax Advantage," 

below. 

3

 For a discussion of the assumptions necessary to quantify this "added" or "additional amount" for an 

individual member of the uniformed services, see Chapter II.B.4., "Federal Income Tax Advantage," below. 

4

 This amendment to the definition of "regular military compensation" was effected by the Military Pay and 

Allowances Benefits Act of 1980, Public Law 96-579, §11, 94 Stat. 3359, 3368-3369 (1980). As explained 

15
allowance for housing replaced the basic allowance for quarters and variable housing 

allowance in 1998. As thus amended, the "regular military compensation" construct is 

incorporated in current Section 101(25) of Title 37, United States Code, 37 U.S.C. 

§101(25): 

 

"[R]egular compensation" or "regular military compensation (RMC)" 

means the total of the following elements that a member of a uniformed service 

accrues or receives, directly or indirectly, in cash or in kind every payday: basic 

pay, basic allowance for housing , basic allowance for subsistence; and Federal 

tax advantage accruing to the aforementioned allowances because they are not 

subject to Federal income tax. 

As previously indicated, the "regular military compensation" construct developed by the 

Gorham Commission was originally intended to provide a crude yardstick by which 

military compensation could be compared to civilian compensation. It soon grew, 

however, to have operational significance. From 1967 to 1973, the "regular military 

compensation" construct was used to set and adjust military basic pay rates. Increases in 

the average salary levels of federal general schedule (Civil Service) employees were 

applied to "regular military compensation" to determine the percentage increase in basic 

pay rates necessary to make the two equal. The resulting percentage increase was applied 

to the basic pay rates of all military personnel. This adjustment mechanism was 

abandoned in 1974, and the "regular military compensation" construct is now used for the 

purpose for which it was originally intended--namely, to provide a rough basis for 

comparing military and civilian compensation rates. 

After Congress's insertion of variable housing allowance and overseas housing 

allowance into the definition of "regular military compensation" in 1980, the RMC 

construct came to include certain pay elements not received by all members of the armed 

 in the relevant Congressional report, this change in the definition of RMC was made to "insure that these 

[variable and station housing] allowances are included in the information on Regular Military 

Compensation presented to the Congress each year." Senate Report No. 96-1051 (Committee on Armed 

Services), p. 8, accompanying H.R. 7626, 96th Congress, 2d Session (1980). The Senate Report noted, 

however, that the change in the definition "will not affect the pay received by any Service member." id. For 

further discussion of the reasons underlying this change in the definition of "regular military 

compensation," see Chapter II.B.3., "Basic Allowance for Housing ," below. 

16
forces--namely, variable housing allowance (VHA) and overseas or "station" housing 

allowance (SHA), the receipt of which hinged upon being assigned to "high housing cost 

areas," either in the United States (VHA) or overseas (SHA). With the inclusion of pay 

elements not received by all members of the armed forces, it soon became apparent that 

RMC no longer could serve its original purpose as a rough yardstick for the comparison 

of military and civilian compensation levels. Accordingly, a new term, "basic military 

compensation," was adopted to characterize all those elements of military compensation 

received by every member of the armed forces. "Basic military compensation," or BMC, 

thus was the same as the pre-1980 definition of "regular military compensation"--namely, 

it included all the elements of "regular military compensation" except for variable 

housing allowance and overseas housing allowance. 

 Although Congress formally defined the term "regular military compensation" for 

the purposes of Title 37, United States Code, “Pay and Allowances of the Uniformed 

Services, at §101(25), the term "basic military compensation” has not been similarly 

defined. Accordingly, although "basic military compensation" is used as a rough measure 

of an individual service member's military compensation for comparison purposes, it has 

no statutory imprimatur. 

 The housing reform provisions of the National Defense Authorization Act 

for Fiscal Year 1998 (Public Law 105-85) consolidated the overseas housing allowance 

into a single payment, eliminating the distinction between the separate housing allowance 

received by members stationed overseas and the basic allowance for quarters that all 

members received. Despite this change, in 2004 “basic military compensation” remained 

in use as a basis of quantifying and comparing the basic pay and allowances of members. 

As indicated in the quoted material, "regular military compensation" as currently 

defined at 37 U.S.C. §101(25) includes the following elements: 

 

 Basic Pay; 

 Basic Allowance for Housing or Overseas Housing Allowance, depending on duty

 location;

 Basic Allowance for Subsistence; 

and 

 Federal Income Tax Advantage.

17
These elements of military compensation are dealt with respectively in Chapter 

II.B.1, "Basic Pay," Chapter II.B.2., "Basic Allowance for Housing," Chapter II.B.3., 

"Basic Allowance for Subsistence," and Chapter II.B.4., "Federal Income Tax 

Advantage," below. 

 With respect to the concepts and principles of military compensation set out in 

Chapter I, above, "regular military compensation" exemplifies the principles of equity, 

insofar as that principle incorporates comparability of basic pay, effectiveness, and the 

support of the manpower/compensation interrelationship. 

18
Chapter II.B.1. 

Basic Pay 

Legislative Authority: 37 U.S.C. §§203, 204, and 1009. See 37 U.S.C. §907. 

 Purpose: Basic pay is the primary means of compensating members of the Armed 

Forces for their service to the country. Except during periods of unauthorized absence, 

excess leave, and confinement after an enlistment has expired, every member is entitled 

to basic pay while on active duty. Basic pay is paid to individual members on a regular 

basis; the amount of basic pay to which a particular member is entitled depends on the 

member's pay grade and length of service. 

Background: All active-duty members of the Armed Forces are entitled to one 

primary, or principal, form of pay as recompense or compensation for the military service 

they render to their country. This primary, or principal, form of pay--currently known as 

"basic pay"1

--is in practice, at least for the vast majority of members of the Armed 

Forces, supplemented by a number of additional pays and allowances that are intended to 

address various specialized needs and requirements of the Armed Forces or to offset 

certain costs that members have to bear as a result of conditions of service. 

The practice by which members of the Armed Forces have come to be entitled to 

one primary form of compensation that is supplemented by a number of additional pays 

and allowances that are either based on conditions of service or are paid to meet 

particular needs or serve particular purposes can be traced to resolutions of the 

Continental Congress and, shortly thereafter, to the earliest enactments of the Federal 

Congress. Thus, the Act of April 30, 1790, ch. 10, §§5-10, 1 Stat. 119, 120-121 (1790), 

for instance, provided funds for "pay" of the "troops"; additional pay for adjutants, 

quartermasters, and paymasters; "rations" for commissioned officers, non-commissioned 

officers, privates, and musicians; money in lieu of "forage" for specified commissioned 

 

1 As indicated below, the one primary, or principal, form of pay to which all members of the armed forces 

are entitled has been known by a number of different names over the years. See footnote 6 and associated 

text, below. 

19
officers; and "uniform clothing" for "every non-commissioned officer, private and 

musician."2

 In this same connection, see also, e.g., Act of March 3, 1791, ch. 28, §3, 1 

Stat. 222 (1791) (raising additional troops for the United States and providing that they 

"shall receive the same pay and allowances ... as stipulated for the troops of the United 

States" in the Act of April 30, 1790, ch. 10, 1 Stat. 119 (1790) (emphasis added)); Act of 

March 5, 1792, ch. 9, §§7-10, 1 Stat. 241, 242 (1792) (establishing new, and higher, rates 

of pay but adopting the same allowances as theretofore in effect); Act of May 2, 1792, ch. 

28, §4, 1 Stat. 264 (1792) (adopting the "same pay and allowances" for "militia employed 

in the service of the United States" as were payable to "the troops of the United States"); 

Act of March 27, 1794, ch. 12, §§6-8, 1 Stat. 350, 351 (1794) (establishing a "naval 

force" for the United States and providing for "pay and subsistence"--the "subsistence" 

consisting of a number of "rations," depending on grade--for commissioned and warrant 

officers and "pay" and "rations" for "petty officers, midshipmen, seamen, ordinary 

seamen and marines"); Act of May 9, 1794, ch. 24, §4, 1 Stat. 366 (1794) (raising and 

organizing a corps of "artillerists and engineers" and providing for their "pay and 

allowances"); Act of March 3, 1795, ch. 44, §§7-12, 1 Stat. 430, 430-431 (1795); Act of 

May 30, 1796, ch. 39, §§8-14, 1 Stat. 83, 484-485 (1796); and Act of March 2, 1799, ch. 

27, §6, 1 Stat. 721, 722 (1799) (establishing medical departments of the Army and Navy 

and providing for "compensations" for members of those departments and additional 

"compensation for forage, rations, and ... expenses"). 

Although the components of this system--that is, the system of pay plus 

allowances--together with applicable rates--have changed from time to time, the system 

itself has been remarkably enduring. It has been the exclusive method by which enlisted 

personnel of the Armed Forces have been compensated since the earliest days of the 

republic; and with the exception of the period from July 1, 1870, through June 30, 1922, 

 

2

cf., e.g., Act of September 29, 1789, ch. 25, §2, Stat. 95, 96 (1789), providing “[t]hat the pay and 

allowances of the ....troops be the same as have been established by the United States in [Continental] 

Congress assembled, by their resolution of the twelfth of April, one thousand seven hundred eighty-five" 

(emphasis added). The Act of September 29, 1789, thus incorporated the first usage of the term "pay and 

allowances" as applied to the compensation of the armed forces of the United States after the convention of 

the First Congress following adoption of the Constitution. 

20
when a "salary" system was in effect for officers, it has also been the method by which 

officers have been compensated. 

Although the original military compensation structure was quite straightforward, 

it soon became complicated, with a proliferation of special allowances, especially for 

officers. To clear up some of the complexity and confusion surrounding officers' 

compensation, the Army and Navy Appropriation Acts for 1871 (Act of July 15, 1870 

(Army Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870), and Act of 

July 15, 1870 (Navy Appropriation Act of 1871), ch. 295, §§3-4, 16 Stat. 321, 330-333 

(1870)) prescribed annual "pay" rates for officers of the Army and Navy, respectively, 

which rates, in the case of Army officers, were provided to be "in full of all commutation 

of quarters, fuel, forage, servants' wages and clothing, longevity rations, and all 

allowances of every name and nature whatsoever," Army Appropriation Act of 1871, ch. 

294, id., §24, 16 Stat. at 320, and, in the case of Navy officers, were provided to be their 

"full and entire compensation" with "no additional allowance" being permitted "on any 

account whatever," Navy Appropriation Act of 1871, ch. 295, id., §4, 16 Stat. at 332.3 4

The Army and Navy Appropriations Acts of 1871 did not include a mechanism for 

review, or adjustment, of the salary rates thus established, and but one major change was 

made to them (in 1908) in the 52 years of their existence. As a consequence, and in order 

both to respond to increased living costs and other changed circumstances and to remove 

the disparity in treatment as between officers who were, and those who were not, 

furnished "free" quarters, heat, and, later, electricity in kind, the absolute bar against 

allowances of "every name and nature," Army Appropriation Act of 1871, ch. 294, id., 

 

3

 Despite the provision that the "pay" thus established was to be the "full and entire compensation" of 

affected officers and thus in lieu of all commutations of items normally furnished in kind, so that no 

commutation was to be made for such items when not in fact furnished in kind, the Appropriations Acts 

were not interpreted to prohibit the provision in kind of quarters, fuel, and forage, and these items 

continued to be furnished in kind to officers without charge. Indeed, the Army Appropriation Act of 1871 

specifically provided that, notwithstanding the prohibition on commutation payments, "fuel, quarters, and 

forage in kind may be furnished to officers," Act of July 15, 1870, ch. 294, §24, 16 Stat. 315, 320 (1870), 

and the Navy Appropriation Act of 1871 provided for "allowing rations ... to officers" as well as 

commutation of rations when not provided in kind, Act of July 15, 1870, ch. 295, §4, 16 Stat. 320, 332-333 

(1870). 

4

 See also Revised Statutes §§1261,1269, 1270, 1271, and 1272 (1878) concerning Army officers and 

Revised Statutes §§1556, 1558, 1578, and 1585 (1878) concerning Navy officers. 

21
§24, 16 Stat. at 320, was soon eased, and cash commutation of those items was 

authorized. By 1922, when separate pay and allowances were once again statutorily 

prescribed, the officers' salary system had, in practical effect, already reverted to a pay 

and allowances system. 

Before 1922, separate pay legislation had been enacted--although pay rates were 

generally equivalent--for the Army and Navy.5

 Coast Guard pay was normally tied to that 

of the Navy, while Marine Corps pay was at times linked to that of the Navy and at other 

times to that of the Army. The Act of June 10, 1922 (Joint Service Pay Readjustment Act 

of 1922), ch. 212 [Public Law 235, 67th Congress], 42 Stat. 625 (1922), was the first pay 

legislation that dealt with compensation for all the armed services. In addition to 

increasing rates of pay for members of the armed services, principally in response to 

higher living costs, the 1922 Act created a system under which officers of general or flag 

rank were entitled to "base pay" determined by rank, plus rental and subsistence 

allowances, whereas officers below general or flag rank were entitled to "base pay" at 

rates determined by "pay periods," plus rental and subsistence allowances.6

"Pay periods" for this latter group of officers were, in turn, determined by a 

combination of rank and length of service. The "pay periods" construct was adopted to 

relieve the adverse financial impact of the post-World War I promotion slowdowns. 

Under this construct, it was not necessary for an officer to be promoted to advance to the 

next higher "period"; conversely, a promotion to the next higher rank did not necessarily 

entail an increase in pay and allowances. Enlisted members, on the other hand, were 

entitled to base pay determined by rank, and cash allowances in lieu of quarters and 

subsistence were authorized when those items were not furnished in kind. Officers were 

 

5

 For a good portion of the 19th century and the early years of the 20th century, Navy officers not assigned to 

sea duty received a lower rate of pay than officers assigned to sea duty, on the theory that the former were 

performing less than full duty and thus were entitled to only a part of the pay otherwise appropriate to their 

grades. See Chapter II.D.3.d., "Special Pay for Career Sea Duty," below. 

6

 "Base pay" was the term used from 1922 to 1949 to denote the primary pay element in the compensation 

of military personnel. Before 1922, this primary pay was known variously as "pay proper," "pay of the 

troops," or simply "pay." The current term, "basic pay," was adopted in the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §§201 and 202, 63 Stat. 802, 805-809 (1949). 

22
entitled to additive longevity pay equal to 5 percent of their base pay for each three years 

of service, up to a maximum of 30 years. Enlisted personnel received longevity credit by 

"permanent additions" to base pay. Navy and Coast Guard enlisted members were 

authorized a "permanent addition" equal to 10 percent of base pay after four years' 

service and to 5 percent for each additional four years, up to a maximum of 16 years; 

Army and Marine Corps enlisted members were entitled to a "permanent addition" equal 

to 5 percent of base pay for each four years of service, up to 20 years. The Pay 

Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], 56 Stat. 359 (1942), 

made the method of computing enlisted longevity pay for enlisted personnel the same as 

that for officers, that is, 5 percent of base pay for each three years of service, up to a 

maximum of 30 years.7

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802 (1949), revamped the military compensation structure to provide a pay and 

allowances system that was intended to be both equitable to military personnel as well as 

responsive to the needs of the United States in terms of attracting and retaining the 

numbers and types of personnel needed during the period following World War II. To 

that end, it replaced the "base pay" provisions of the Act of June 10, 1922 (Joint Service 

Pay Readjustment Act of 1922), ch. 212 [Public Law 235, 67th Congress], 42 Stat. 625 

(1922), including the "pay periods" overlay, with the present system of basic pay and 

allowances. Under the "Career Compensation" system adopted in the Career 

Compensation Act of 1949, ch. 681, id., the "basic pay" to which a member is entitled is 

determined by the member's pay grade and length of service. Special and incentive pays, 

allowances, and reimbursements, if any, are then added to the member's basic pay to 

arrive at the total "pay" the member is to receive.8

 Thus, the Career Compensation Act 

 

7

 Compare Section 1 of the Pay Readjustment Act of 1942, ch. 413, id., 56 Stat. at 359, with Section 9 of 

the Act, id., 56 Stat. at 363. 

8

 As used here, the term "pay" is intended to refer to the actual amount of money--gross, before deductions 

for taxes, etc.—a member receives each month on account of military service. It is not used in the sense in 

which "pay" is defined in 37 U.S.C. §101(21) as "includ[ing] basic pay, special pay, retainer pay, incentive 

pay, retired pay, and equivalent pay, but ... not ... allowances." 

23
retained the underlying principle of a primary pay broadly supplemented by other pays 

and allowances--the two most important being quarters and subsistence allowances. In 

addition to denominating the primary pay element "basic pay," the act denominated the 

quarters allowance "basic allowance for quarters" and the subsistence allowance "basic 

allowance for subsistence."9

 Commissioned officers (other than commissioned warrant 

officers) were assigned to pay grades O-1 through O-8; warrant officers, to pay grades 

W-1 through W-4; and enlisted personnel, to pay grades E-1 through E-7. Rates of basic 

pay within each pay grade included incremental "longevity steps" to reflect length of 

service. Such "steps" ranged from a top step--that is, the "longevity step" for a particular 

pay grade after which additional increments in longevity did not result in additional 

increments to basic pay--of "Over 4" years of service for pay grade E-1 to a top step of 

"Over 30" years for pay grades W-2, W-3, W-4, O-6, O-7, and O-8. 

 The Act of May 20, 1958 (Uniformed Services Pay Act of 1958), Public 

Law 85-422, §1(1), 72 Stat. 122, 122-123 (1958), increased basic pay rates to make them 

more competitive and added pay grades O-9 and O-10 to the officer pay structure and pay 

grades E-8 and E-9 to the enlisted structure. The new officer pay grades recognized, for 

both active-duty and retired pay purposes, a grade distinction that had long existed in 

fact--namely, three- and four-star general and flag officers.10 In addition to recognizing 

pay grades O-9 and O-10 as new pay grades, the Uniformed Services Pay Act of 1958, 

 

9

 Career Compensation Act of 1949, ch. 681 [Public Law 381, 81st Congress], §301 (Basic Allowance for 

Subsistence) and §302 (Basic Allowance for Quarters), 63 Stat. 802, 812-813 (1949). 

10 The Career Incentive Act of 1955, Public Law 84-20, §2(3), 69 Stat. 18, 19 (1955), had amended Section 

201 of the Career Compensation Act of 1949, Public Law 81-351, §201, 63 Stat. 802, 806-807 (1949), to 

provide that an officer serving on active duty in the grade of Lieutenant General or Vice Admiral was 

entitled to receive an additional $100 per month in basic pay, in addition to the pay and allowances to 

which otherwise entitled under the Career Compensation Act, id., while so serving, and an officer serving 

in the grade of General or Admiral was entitled to receive an additional $200 per month, although the 

amendment specifically provided that neither of these additions to basic pay could be taken into account in 

the computation of retired pay entitlements. Under Section 201 of the Career Compensation Act of 1949, 

id., prior to amendment by the Career Incentive Act of 1955 as set out in the preceding sentence, officers 

serving in the grade of Lieutenant General, Vice Admiral, General, and Admiral were merely entitled to the 

basic pay of an officer serving in pay grade O-8. The special increases effected by the Career Incentive Act 

of 1955 for officers serving in the grades of Lieutenant General, Vice Admiral, General, and Admiral were 

adopted in recognition of the "high ... leadership responsibilities" of the persons serving in these "key 

positions". Senate Report No. 84-125 (Committee on Armed Services), p. 11, accompanying H.R. 4720, 

84th Congress, 1st Session (1955). 

24
id., §1(1), 72 Stat. at 123, also provided that persons in pay grade O-10 serving as 

Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army, Chief of Naval 

Operations, Chief of Staff of the Air Force, and Commandant of the Marine Corps would 

be entitled to a special rate of basic pay independent of years of service while serving in 

any of the named positions.11 While being higher than the rate of basic pay for other 

officers serving in pay grade O-10 whose entitlement depended on years of service, the 

special rate of basic pay applicable to the specified positions also applied to the 

computation of retired pay. See, e.g., Uniformed Services Pay Act of 1958, id., §6, 72 

Stat. at 129-130. The new enlisted pay grades were designed to provide additional 

incentives to encourage enlisted personnel and potential enlistees to undertake career 

enlisted service. The act also changed the longevity step configuration by precluding 

increases beyond the length-of-service point in each pay grade at which individuals were 

normally promoted, so as to maintain a closer relationship between performance and 

higher pay. As revised, the top longevity steps ranged from "Over 2" years of service for 

pay grade E-1 to "Over 26" years for pay grades W-3, O-6, O-7, O-8, O-9 and O-10 and 

"Over 30" for pay grade W-4.12 To prevent members appointed to a commissioned grade 

after long enlisted service from having to accept a reduction in basic pay, and hence to 

prevent any disincentive to the acceptance of commissioned service, the act established a 

special category of basic pay for personnel in pay grades O-1 through O-3 who had more 

than four years of prior active enlisted service. This special category of pay differed from 

 

11 Entitlement to the same special rate of basic pay was extended to the Vice Chairman of the Joint Chiefs 

of Staff by the National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, 

§1314(d)(3), 101 Stat. 1019, 1176 (1987). The reason for the extension of this special rate of basic pay to 

the Vice Chairman of the Joint Chiefs of Staff is not completely clear from the legislative history, although 

it probably derives from the amendments to Title 10, United States Code, made by the Goldwater-Nichols 

Department of Defense Reorganization Act of 1986, Public Law 99-433, §201, 100 Stat. 992, 1009 (1986), 

establishing a new 10 U.S.C. §154, which provided, inter alia, that the Vice Chairman of the Joint Chiefs of 

Staff holds the rank of General or Admiral, as the case may be, and outranks all other officers of the armed 

forces except the Chairman of the Joint Chiefs of Staff. See 10 U.S.C. §154(f). Thus, the 1988/1989 

National Defense Authorization Act had the effect of entitling the Vice Chairman of the Joint Chiefs of 

Staff to the same rate of basic pay as applicable to the Chiefs of Staff of the Army and Air Force, the Chief 

of Naval Operations, and the Commandant of the Marine Corps, all of whom the Vice Chairman outranked. 

12After enactment of the Uniformed Services Pay Act of 1958, Public Law 85-422, id., pay grade W-4 

became the only pay grade with a top longevity step of "Over 30" years of service. That state of affairs 

lasted, however, only until the pay raise adopted pursuant to Section 2 of the Uniformed Services Pay Act 

of 1963, Public Law 88-132, §2, 77 Stat. 210, 210-211 (1963), when Congress provided that the top 

longevity step for warrant officers in pay grade W-4 would be the same "Over 26" category applicable to 

all other military personnel. 

25
the normal pay progression for pay grades O-1, O-2, and O-3 in essence by extending the 

top longevity step for each of these pay grades beyond normal promotion points for 

officers without extensive prior enlisted service. The special category thus reflected the 

additional service time personnel in these special pay grades would be expected to have 

as a result of prior enlisted service before becoming eligible for promotion from one 

officer grade to the next.13 

 

13 The general structure of the basic pay table--that is, with pay grades ranging from O-10 to O-1, O-3E to 

O-1E, W-4 to W-1, and E-9 to E-1, and longevity steps ranging from under 2 years of service to more than 

26--resulting from the Act of May 20, 1958 (Uniformed Services Pay Act of 1958), Public Law 85-422, 72 

Stat. 122 (1958), has changed little since 1958. Of the three changes to the basic pay table since that time, 

two have involved creation of new pay grades that apply to very few personnel and the third added a 

longevity step that also affects relatively few personnel. 

The Act of December 16, 1967, Public Law 90-207, §1(1), 81 Stat. 649, 649-650 (1967), effectively 

adopted a new enlisted pay grade by providing a special rate of basic pay for the senior enlisted member of 

each of the military services--namely, the "Sergeant Major of the Army," the "Senior Enlisted Member of 

the Navy" (subsequently retitled the "Master Chief Petty Officer of the Navy"), the "Chief Master Sergeant 

of the Air Force," and the "Sergeant Major of the Marine Corps." The rate of basic pay adopted for the 

senior enlisted member of each of the services in the 1967 Act was a single rate of basic pay that exceeded 

the highest rate of basic pay for a member in pay grade E-9 and was independent of years of service. The 

pay rate originally adopted was $150 higher than the rate of basic pay for a member in pay grade E-9 with 

over 26 years of service, but with subsequent pay raises the differential has increased. The reason 

underlying adoption of this special rate of basic pay was explained by the Senate Armed Services 

Committee as follows: At the present time [1967] in the Army, Navy, Air Force, and Marine Corps there is 

one enlisted man who has been designated as the senior noncommissioned officer in each of the services. 

This noncommissioned officer is the principal enlisted adviser to the Chiefs of Staff of the Army and Air 

Force, Chief of Naval Operations, and the Commandant of the Marine Corps. For many years the Marine 

Corps has designated such a position. It is relatively new, however, in the other services. 

Under the existing arrangement, each senior noncommissioned officer receives the basic pay of an E-9 with 

his years of service together with proficiency pay of $150 per month. 

Under the bill a special rate is proposed of $844.20 per month. This enlisted person will receive this pay 

while serving in this position regardless of his years of service for pay purposes. The proficiency pay of 

$150 per month which has been received as an interim measure will be rescinded. As a result, the bill will 

not cause any increase in the total active duty compensation for the senior noncommissioned officer. 

In addition, there are other provisions of the bill which will entitle the senior noncommissioned officer to 

compute his retired pay in accordance with the basic pay of his position even though he may not be in 

receipt of this particular rate of pay at the time of his retirement. Such a provision is similar to that now in 

effect with respect to the Chiefs of Staff of the Army and Air Force, the Chief of Naval Operations, and the 

Commandant of the Marine Corps. Senate Report No. 90-808 (Committee on Armed Services), p. 8, 

accompanying H.R. 13510, 90th Congress, 1st Session (1967); cf. House Report No. 90-787 (Committee 

on Armed Services), p. 8, accompanying H.R. 13510, 90th Congress, 1st Session (1967) ("This special rate 

is designed to recognize and reward appropriately the additional responsibilities of these new and important 

positions."). As the new rate of basic pay did not increase the amount of active-duty pay persons occupying 

the four specified positions were entitled to, the main effect of the provision was to allow affected 

personnel to have their retired or retainer pay entitlements computed on the new and higher pay base. (The 

Master Chief Petty Officer of the Coast Guard was authorized to receive this special rate of pay and the 

26
Apart from periodic but irregular increases, little of note happened to the basic 

structure of military compensation between 1958 and 1967. In the Act of December 16, 

1967, Public Law 90-207, 81 Stat. 649 (1967), Congress adopted a new mechanism for 

adjusting basic pay rates. Section 8 of the 1967 Act, id., 81 Stat. at 654-655, required 

that, whenever the general schedule of compensation for federal classified employees--

i.e., Civil Service employees--was increased, a "comparable increase" was to be made to 

the basic pay of members of the uniformed services. The 1967 act was adopted 

contemporaneously with, and against the backdrop of, the Federal Salary Act of 1967, 

enacted as Title II of the Postal Revenue and Federal Salary Act of 1967, Public Law 90-

 attendant retirement benefits by the Act of October 2, 1972, Public Law 92-455, §3 (basic pay) and §2 

(retired pay), 86 Stat. 761 (1972).) 

The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §1111(a), 

105 Stat. 1290, 1491-1492 (1991), established a new warrant officer pay grade, "Chief Warrant Officer, W5". In addition to authorizing the new pay grade, the 1992/1993 Defense Authorization Act provided 

special rates of basic pay and basic allowance for quarters, §1111(c), 105 Stat. at 1491, and special and 

incentive pays, §1111(d), 105 Stat. at 1492, for members appointed to the new pay grade "in order to 

provide an incentive for warrant officers to continue to serve their country and to recognize the highly 

complex and technical skills these individuals possess." House Report No. 102-311 (Committee of 

Conference), p. 614, accompanying H.R. 2100, 102d Congress, 1st Session (1991); see also House Report 

No. 102-60 (Committee on Armed Services), p. 241, accompanying H.R. 2100, 102d Congress, 1st Session 

(1991) ("... establish the permanent grade of chief warrant officer, W-5, as an added promotion incentive to 

entice selected service members to remain on active duty as warrant officers."). 

The National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4402, 106 Stat. 2315, 

2701-2702 (1992), effectively established a new longevity step of "Over 24" years of service for members 

of the armed services in pay grades O-6, W-5, W-4, E-9, E-8, and E-7. As originally adopted by the 1993 

Defense Authorization Act, this new longevity step for members in the identified pay grades was to be 

effective from January 1, 1993, through October 1, 1995. The National Defense Authorization Act for 

Fiscal Year 1994, Public Law 103-160, §602, 107 Stat. 1547, 1678 (1993), however, provided for the 

"continuation" of the new longevity step indefinitely. As explained by the Senate Armed Services 

Committee, the interim provision was originally adopted to "provide a temporary incentive for military 

personnel to voluntarily retire in lieu of facing involuntary selection for early retirement" under the 

expected defense drawdown following the end of the Cold War. Senate Report No. 102-352 (Committee on 

Armed Services), p. 208, accompanying S. 3114, 102d Congress, 2d Session (1992); cf., House Report No. 

102-966 (Committee of Conference), p. 886, accompanying H.R. 5006, 102d Congress, 2d Session (1992). 

(Under the basic pay table in existence before enactment of the 1993 Defense Authorization Act, members 

in the affected pay grades received a longevity increase upon completion of 22 years of service and another 

longevity increase upon completion of 26 years of service. Under the new basic pay table, they are entitled 

to longevity increases upon completion of 22, 24, and 26 years of service. With the new longevity pay step, 

therefore, affected members completing 22 years of service need not make mental commitments to 

complete 26 years of service before receiving their last longevity pay increase to boost their retired or 

retainer pay entitlements. Presumably the problem leading to adoption of this new longevity pay increase 

will gradually ease after the year 2006, when the retired or retainer pay entitlements of service members 

come more and more to be based on a "high three average". See, e.g., Chapter III.B.1 hereof, below, 

"Nondisability Retired and Retainer Pay".) 

27
206, Title II, §§201-225, 81 Stat. 613, 624-645 (1967), which required increases in 

general schedule--so-called civil service--salaries in 1968 and 1969 to close the thenperceived gap between federal civilian and private sector pays. For the uniformed 

services, the two acts in concert insured an increase in basic pay rates in 1968 and 1969 

without further Congressional action, even if no Presidential recommendations stemming 

from the 1967 Quadrennial Review of Military Compensation--the so-called First 

Quadrennial Review of Military Compensation,

14 which was then in process at the 

Department of Defense--were forthcoming, or if such recommendations, even though 

forwarded to Congress, were not adopted. In fact, no revision to the military 

compensation structure ever resulted from the First Quadrennial Review of Military 

Compensation, and the Act of December 16, 1967, Public Law 90-207, id., in 

conjunction with the Postal Revenue and Federal Salary Act of 1967, Public Law 90-206, 

id., resulted in a military-civilian pay adjustment linkage that remained in effect until 

fairly recently.15

 The Act of December 16, 1967, Public Law 90-207, §8, 81 Stat. 649, 

654-655 (1967), required that the "comparable increase" between civilian and military 

pay raises be determined by equating regular military compensation (RMC) to general 

schedule salaries. RMC was, in turn, defined as basic pay, quarters and subsistence 

allowances (either in cash or in kind), and the "tax advantage" deriving from the non-

 

14 The Act of August 21, 1965, Public Law 89-132, §2, 79 Stat. 545, 546-547 (1965), adopted a special 

provision, codified at 37 U.S.C. §1008, requiring the President to conduct "a complete review of the 

principles and concepts of the compensation system for members of the uniformed services" at least once 

every four years and, after completing such a review, to "submit a detailed report to Congress summarizing 

the results of such review together with any recommendations ... proposing changes" to the compensation 

system. Pursuant to Section 2(a) of the Act, id., as codified at 37 U.S.C. §1008(b), the first such review was 

to be undertaken "[w]henever the President considers it appropriate, but in no event later than January 1, 

1967." In the House and Senate Reports on the bill, H.R. 9075, 89th Congress, 1st Session (1965), the 

required Presidential review was referred to as a "quadrennial review ... of military compensation," House 

Report No. 89-549 (Committee on Armed Services), pp. 1 and 50, and Senate Report No. 89-544 

(Committee on Armed Services), p. 1, accompanying H.R. 9075, 89th Congress, 1st Session (1965); and the 

seven reviews of military compensation that have been completed under the direction of 37 U.S.C. 

§1008(b) have been referred to, successively, as the First, Second, Third, Fourth, Fifth, Sixth, and Seventh 

Quadrennial Review of Military Compensation, respectively. The First Quadrennial Review was convened 

in 1966, and the most recent to have been completed, the Seventh, in 1990. The Eighth Quadrennial 

Review of Military Compensation was convened, pursuant to Presidential directive, in the fall of 1994. 

15 For a summary overview of the achievements of the First through the Eighth Quadrennial Reviews of 

Military Compensation, see Appendix III hereof, below. 

28
taxable status of the allowances.16 17 The whole of the military increase so determined 

had to be implanted in basic pay, which at the time made up only about 75 percent of 

RMC. Thus, the percentage increase in basic pay needed to be greater than the percentage 

increase in civilian salaries to enable the RMC and general schedule raises to be 

equivalent. For example, general schedule rates were increased 4.5 percent effective 

October 1, 1967. To achieve a comparable percentage increase in RMC, it was necessary 

to increase basic pay by 5.6 percent. 

The use of basic pay, quarters allowance, subsistence allowance, and tax 

advantage--the original RMC--as the base for determining the increase needed in military 

pay rates to maintain comparability with general schedule pay rates had the effect of 

 

16 See 37 U.S.C. §101(25) as in existence before passage of the Military Pay and Allowances Benefits Act 

of 1980, Public Law 96-579, 94 Stat. 3368 (1980), concerning the original statutory definition of "Regular 

Military Compensation." (The original statutory definition of "regular military compensation" was 

incorporated as new paragraph (25) of 37 U.S.C. §101 by the Act of September 19, 1974, Public Law 93-

419, §1, 88 Stat. 1152 (1974). The text of 37 U.S.C. §101(25) as added by the Act of September 19, 1974, 

Public Law 93-419, id., is set out in full in the text preceding footnote 4 to Chapter II.B., "Regular Military 

Compensation/Basic Military Compensation," above. 37 U.S.C. §101 (25) was subsequently amended by 

the Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, §11, 94 Stat. 3359, 3368-3369 

(1980), to include variable and station housing allowances in the "regular military compensation" construct. 

For the reasons underlying this amendment, and its effects on the military compensation system and the pay 

adjustment mechanism, see Chapter II.B., "Regular Military Compensation/Basic Military Compensation," 

above, as well as Chapter II.B.4., "Federal Income Tax Advantage," below; see, especially, footnote 4 and 

accompanying text to Chapter II.B., above, and footnote 25 to Chapter II.B.4., below.) 

17 "Tax advantage," so-called, is a construct peculiar to military compensation. Under the rationale of Jones 

v. United States, 60 Ct.Cl. 552 (1925), a tax case decided by the United States Court of Claims in 1925, and 

statutory provisions subsequently adopted by Congress in the Tax Reform Act of 1986, Public Law 99-514, 

§1168(a), 100 Stat. 2085, 2512 (1986), as Section 134 of the Internal Revenue Code of 1986, 26 U.S.C. 

§134, the allowances for quarters and subsistence are not subject to taxation under the Federal Internal 

Revenue Code. (More accurately, the allowances for quarters and subsistence--along with various other 

allowances and reimbursements not here in issue--are specifically excluded from the definition of "gross 

income" under Section 134 of the Internal Revenue Code of 1986, 26 U.S.C. §134, on the grounds that they 

are "qualified military benefits." With respect to the question how basic allowance for quarters and basic 

allowance for subsistence fall within the definition of Section 134 "qualified military benefits," see footnote 

16 to Chapter II.B.4., "Federal Income Tax Advantage," below.) Conceptually, the "tax advantage" 

accruing to the benefit of any particular member of the armed forces may be measured by the additional 

taxable income the member would have to receive if his quarters and subsistence allowances were suddenly 

to become subject to Federal taxation in order to leave him with the same after-tax income he enjoys under 

the present system of taxable basic pay and nontaxable allowances for quarters and subsistence. For a 

discussion of Jones v. United States, Section 134 of the Internal Revenue Code of 1986, and the so-called 

"tax advantage" attributed to members of the armed services as a result of the nontaxability of these 

allowances, including various simplifying assumptions underlying the calculation of the "tax advantage" to 

be imputed to particular classes of individuals in the uniformed services, see Chapter II.B.4., "Federal 

Income Tax Advantage," below. 

29
imputing an increase in all four of these elements of military compensation each time a 

comparable general schedule increase occurred. However, concentrating the entire 

increase into basic pay caused the increase in the elements other than the so-called tax 

advantage to be implicit only.18 As indicated in the preceding paragraph, it also required 

that the basic pay increase be inflated by the percentage necessary to absorb the implicit 

increase in the other RMC elements. 

The Federal Pay Comparability Act of 1970, Public Law 91-656, 84 Stat. 1946 

(1971), required that general schedule rates be measured annually against rates of pay for 

the same levels of work in private enterprise and that federal compensation be adjusted 

by executive order as of October 1 each year (unless the President submitted an alternate 

plan to Congress by August 31 and neither house of Congress disapproved) by the 

percentage necessary to maintain comparability between the federal and private 

enterprise rates. These "automatic" adjustment provisions, together with the coupling of 

general schedule and basic pay increases under the Act of December 16, 1967, Public 

Law 90-207, 81 Stat. 649 (1967), resulted in a systematic procedure for increasing basic 

pay rates which theretofore (with the exception of the raises of 1968 and 1969) had been 

solely dependent on Congressional discretion.19

In the exercise of this discretion, Congress excluded enlisted members with less 

than two years of service from the general raises in basic pay awarded in 1955, 1958, 

 

18 While the "value" of the tax advantage accruing to any particular member increases whenever an increase 

in basic pay rates causes the member's RMC to increase enough to move the member into a higher RMC 

tax bracket, the entire amount of the tax advantage imputed to the member is implicit, inasmuch as the 

member never receives any part of this "advantage" as an express addition to take-home or pre-tax pay. 

19 In Immigration and Naturalization Service v. Chadha, 462 U.S. 919, 103 S. Ct. 2764 (1983), the Supreme 

Court declared the so-called one-house veto unconstitutional. Under later applications of the Chadha 

doctrine, it would appear that the one-house-veto provisions of the Federal Pay and Comparability Act, 

codified at 5 U.S.C. §5305(c)(2), are similarly unconstitutional. American Federation of Government 

Employees, AFL-CIO, v. Reagan, 806 F.2d 1034 (Fed. Cir. 1986), cert. denied sub nom. National Treasury 

Employees Union v. Reagan, 481 U.S. 1068, 107 S.Ct. 2460 (1987); see also, e.g., Process Gas Consumers 

Group v. Consumer Energy Council of America, 463 U.S. 1216, 103 S. Ct. 3556, rehearing denied, 463 

U.S. 1250 (1983), summarily affirming 673 F.2d 425 (D.C. Cir. 1982) and 691 F.2d 575 (D.C. Cir. 1982). 

(For Congressional comment on the likely effect of Chadha on the civil service pay adjustment mechanism, 

see Senate Report No. 98-174 (Committee on Armed Services), pp. 215-216, accompanying S. 675, 98th

Congress, 1st Session (1983).) 

30
1963, and 1964; officers with less than two years of service were similarly, but less 

severely, treated during those same years. Starting in 1966, however, both groups began 

to receive across-the-board basic pay increases in the same percentage as other personnel, 

thereby enabling them to maintain their then-existing position relative to the previously 

more favorably treated personnel. To eliminate the lag created by the earlier years of 

exclusion, and to make entry pay rates more competitive in an all-volunteer force setting, 

the Act of September 28, 1971, Public Law 92-129, 85 Stat. 348 (1971), provided a 

substantial increase in basic pay rates for members with less than two years of service. A 

slight increase was also made in some pay grades for personnel with more than two years 

of service, so as to prevent the large increase in the "under two" rates from causing an 

undue compression between pay grades. 

Experience proved that the military pay raise adjustment mechanism adopted 

under the Act of December 16, 1967, Public Law 90-207, §8, 81 Stat. 649, 654-655 

(1967), was undesirable in some respects. Inflating basic pay rates to absorb the entire 

RMC increase resulted in a corresponding inflation in items linked to basic pay, such as 

various bonuses, drill pay, separation pay, and, particularly, retired and retainer pays. 

Moreover, raising quarters and subsistence allowances in an implicit rather than explicit 

way tended to obscure their relationship to the expenses they had originally been 

intended to defray, as well as, especially in the case of the quarters allowance, distorting 

the relationship between the value of government quarters to members assigned to such 

quarters and the amount of the quarters allowance they had to give up as a result of such 

assignment. Finally, increasing basic pay rates by a higher percentage than general 

schedule rates created an inaccurate impression that military personnel were getting a 

bigger increase than their civilian counterparts in the federal government. Offsetting these 

disadvantages from the point of view of the government--at least in part--was the fact 

that, since all of any increase in regular military compensation was concentrated in the 

basic pay element, the whole of the pay increase immediately became subject to federal 

income tax. 

While retaining the principle of military pay raises linked to civil service 

increases, the Act of September 19, 1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-

31
1153 (1974), adopted a new pay adjustment mechanism, codified at 37 U.S.C. §1009, 

under which the entire increase in military compensation was no longer incorporated 

solely in basic pay. Instead, raises were to be distributed to all three cash elements of 

RMC--basic pay, basic allowance for quarters, and basic allowance for subsistence--each 

of which was to be increased by the same percentage as general schedule salaries.20

Because the act required that the three cash elements of RMC be increased by the same 

percentage as general schedule salaries, the "tax advantage" was effectively cut out of the 

base used to calculate increases in basic pay and allowances. Although the tax advantage 

was thus effectively removed from the equation that determined pay increases, individual 

members in fact accrued an added tax advantage over and above that of the preceding 

adjustment mechanism, but now not only because the increase in basic pay rates resulted 

in military personnel being moved into higher tax brackets but also because part of the 

raise would go into nontaxable allowances. Before enactment of the Act of September 19, 

1974, Public Law 93-419, id., the law required that enlisted commuted and leave ration 

rates be periodically adjusted by the secretary of defense to approximate the raw food 

cost of the daily ration; with enactment, all subsistence allowance rates were brought 

directly under the comparability adjustment formula, and commuted and leave ration 

allowances no longer reflected a direct relationship to government food costs. 

The Department of Defense Appropriation Authorization Act, 1977, Public Law 

94-361, §303(b), 90 Stat. 923, 925 (1976), amending 37 U.S.C. §1009 as added by the 

Act of September 19, 1974, Public Law 93-419, id., permitted a further change in the 

method for distributing military pay increases by authorizing the President to allocate 

future overall increases among the three main cash elements of RMC--namely, basic pay, 

basic allowance for quarters, and basic allowance for subsistence21--on other than an 

 

20 See, e.g., Senate Report No. 93-1132 (Committee on Armed Services), p. 2, accompanying H.R. 15406, 

93d Congress, 2d Session (1974): [The bill] H.R. 15406 [93d Congress, 2d Session (1974)] will retain the 

principle that military pay raises are to be linked to federal civilian pay increases but will change the 

method of allocating pay raises. Instead of putting all of each pay raise solely into basic pay, future 

increases will be allocated to the three cash elements of RMC--basic pay, Basic Allowance for Quarters and 

Basic Allowance for Subsistence. 

21 See footnote 16 and accompanying text to this chapter, above. 

32
equal percentage basis whenever he determined such action to be "in the best interest of 

the Government." The act provided, however, that the amount allocated to basic pay 

could not be less than 75 percent of the amount that would otherwise have been so 

allocated on an equal percentage allocation basis. The purpose of providing for a 

"reallocation" of compensation increases among the three cash elements of RMC was to 

enable progressive adjustments to be made to the two basic allowance elements so that 

those allowances would, after time, more nearly cover the costs they had originally been 

intended to defray, as well as to provide for more adequate quarters and subsistence 

allowances in general.22 Under the amendments to 37 U.S.C. §1009 made by the 1977 

Appropriation Authorization Act, the President was required to advise Congress 

regarding any planned reallocation at the earliest practicable time before the effective 

date of a military pay increase. Furthermore, all allocations of increases among the 

different elements of RMC were to be assessed in conjunction with the quadrennial 

reviews of military compensation required by 37 U.S.C. §1008(b),23 and a full report was 

to be made to Congress summarizing the objectives and results of any non-proportional 

allocations the President chose to prescribe under the authority given him in the 1977 

Appropriation Authorization Act. 

The 1977 Appropriation Authorization Act, Public Law 94-361, id., §303(b), 90 

Stat. at 925, also allowed, but did not require, the President to provide for the payment of 

"partial BAQ" to members without dependents not entitled to cash BAQ. See 37 U.S.C. 

§1009(c)(2). The act stipulated that any partial BAQ payment made under this authority 

should be an amount equal to the difference between (1) the amount by which BAQ was 

increased on the basis of reallocation and to which affected members would be entitled 

were they not on sea or field duty or living in government quarters and (2) the amount by 

which BAQ would have been increased had the pay raise been distributed among the 

 

22 To the extent this reallocation authority is used to redirect increases that would otherwise have taken 

effect in basic pay to either the quarters or subsistence allowance, or both, reallocation has the incidental 

effect of lowering certain bonuses, separation payments, retired and retainer pays, drill pay, and any other 

pays the level or amount of which is, or has at one time or another been, linked to basic pay. 

23 See footnote 14 to this chapter, above. 

33
three cash elements of RMC on an equal percentage basis. See Chapter II.B.2., "Housing 

Allowances," below. 

The Department of Defense Authorization Act, 1981, Public Law 96-342, 94 Stat. 

1077 (1980), effected several additional changes to the theretofore existing mechanism 

for adjusting basic pay and allowance rates. First, because of a general feeling that 

military pay had lagged behind civilian wages and that the comparability basis under 

which federal general schedule civilian wages were adjusted may have limited 

applicability to military pay,24 the general schedule linkage adjustment mechanism 

incorporated in present 37 U.S.C. §1009(b)(3) was suspended for fiscal year 1981 in 

favor of an 11.7 percent overall increase--subject to reallocation by the President as more 

fully described below--in the three cash elements of RMC,25 and the President was 

directed to make recommendations to Congress by April of 1981 on an appropriate 

measure of comparability for military pay and an appropriate mechanism for determining 

the amount of future increases in such pay.26 

Second, in order to give the President greater flexibility in adjusting military 

compensation under the adjustment mechanism set out in the then-current 37 U.S.C. 

§1009,27 and in particular to allow the President at his discretion to grant 

disproportionately greater increases in pay to so-called "career" members, the 1981 

Authorization Act, Public Law 96-342, id., gave the President authority to reallocate 

whatever amount of any overall increase in military compensation was allocated to basic 

 

24 See, e.g., Senate Report No. 96-826 (Committee of Conference), p. 121, and House Report No. 96-1222 

(Committee of Conference), p. 95, accompanying H.R. 6974, 96th Congress, 2d Session (1980). Also see, 

e.g., 126 CONG. REC. 1643-1645 (1980) (daily ed., 126 Cong. Rec. S828-S830, February 4, 1980) 

(remarks of Senator Matsunaga in debate on H.R. 5168, subsequently adopted, with amendments, as the 

Military Personnel and Compensation Amendments of 1980, Public Law 96-343, 94 Stat. 1123 (1980), on 

the same day as the Department of Defense Authorization Act, 1981, Public Law 96-342, 94 Stat. 1077 

(1980)). 

25 Department of Defense Authorization Act, 1981, Public Law 96-342, id., §801, 94 Stat. at 1090-1091. 

26 Department of Defense Authorization Act, 1981, Public Law 96-342, id., §802, 94 Stat. at 1091. 

27 See, e.g., Senate Report No. 96-826 (Committee of Conference), p. 122, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). 

34
pay among pay-grade and years-of-service categories after application of the authority to 

reallocate among the three cash elements of RMC.28 In using this new reallocation 

authority, however, the President was prohibited from reallocating more than 25 percent 

of the increase in basic pay that would otherwise have gone to any specific paygrade/years-of-service category. In addition, the President also was prohibited from using 

the new reallocation authority to increase the basic pay of personnel with less than four 

years of service by a greater percentage than federal general schedule civilian wages were 

increased, thus underlining the intended purpose of allowing the President to grant 

disproportionately greater increases to "career" personnel. With respect to the 11.7 

percent increase in military compensation mandated by the 1981 Authorization Act, the 

President was explicitly given reallocation authority as regards both the distribution of 

the overall increase between the three cash elements of RMC and the distribution of the 

resulting increase in basic pay among pay grades and years-of-service groupings.29 

 Contemporaneous with enactment of the Department of Defense 

Authorization Act, 1981, Public Law 96-342, 94 Stat. 1077 (1980), the Military 

Personnel and Compensation Amendments of 1980, Public Law 96-343, §6(b), 94 Stat. 

1123, 1127 (1980), effected a technical amendment to the preexisting basic pay structure 

by adding a new "saved pay" provision. The provision insured that enlisted personnel 

appointed as officers (either commissioned officers or warrant officers) and warrant 

officers appointed as commissioned officers would not have to suffer any reduction in 

pay as a result of such appointments, thus removing any disincentives to the acceptance 

of such appointments.30 See 37 U.S.C. §907. In addition, the Compensation Amendments 

 

28 Department of Defense Authorization Act, 1981, Public Law 96-342, id., §801(b)(2), 94 Stat. at 1091. 

29 Before the 11.7 percent overall pay increase became effective on October 1, 1980, the Military Personnel 

and Compensation Amendments of 1980, Public Law 96-343, §7, 94 Stat. 1123, 1128 (1980), adopted the 

same day as the Department of Defense Authorization Act, 1981, Public Law 96-342, 94 Stat. 1077 (1980), 

further sidestepped the pay adjustment mechanism of 37 U.S.C. §1009 by granting a 10 percent increase in 

basic allowance for subsistence rates. Under the Military Personnel and Compensation Amendments Act, 

Public Law 96-343, id., the subsistence allowance was increased by 10 percent effective September 1, 

1980, only to be increased further under the 1981 Authorization Act, Public Law 96-342, id., on October 1, 

1980. See Chapter II.B.3., "Basic Allowance for Subsistence", below. 

30 House Report No. 96-1233 (Committee of Conference), p. 14, accompanying H.R. 5168, 96th Congress, 

2d Session (1980). 

35
provided that, to the extent the "saved pay" provisions were inapplicable, commissioned 

officers in pay grades O-1, O-2, and O-3 who were credited with more than four years of 

active service as warrant officers were to receive basic pay computed in the same way as 

the basic pay of commissioned officers credited with more than four years of active 

enlisted service. See 37 U.S.C. §203(d) as in effect after adoption of the Military 

Personnel and Compensation Amendments of 1980.31

 The pay adjustment mechanism incorporated in 37 U.S.C. §1009 was suspended 

again the following year--this time in its entirety--by the Uniformed Services Pay Act of 

1981, Public Law 97-60, 95 Stat. 989 (1981). Under that act, congressionally mandated 

increases in basic pay, basic allowance for subsistence, and basic allowance for quarters--

in short, for all three of the main cash components of RMC--were adopted as of October 

1, 1981, effectively preempting the President's reallocation authority. In adopting these 

new pay rates, under which quarters and subsistence allowances were increased by 14.3 

percent across the board and basic pay was increased from 10 to 17 percent, depending 

on pay grade, Congress made it clear that it was trying to "restore, in current dollars, the 

relative relationship of military compensation to pay in the private sector that existed in 

1972" when Congress adopted the "all-volunteer force" construct as the manning 

principle for the armed services.32 33 While noting that some improvement in retention 

 

31 See 37 U.S.C. §203 note (under heading "1983 Amendment") for the text of 37 U.S.C. §203(d) as in 

effect after adoption of the Military Personnel and Compensation Amendments of 1980 and before 

amendment by the Department of Defense Authorization Act, 1984, Public Law 98-94, §902(a), 97 Stat. 

614, 635 (1983). 

32 See, e.g., House Report No. 97-109 (Part I) (Committee on Armed Services), pp. 1 and 4, accompanying 

H.R. 3380, and Senate Report No. 97-146 (Committee on Armed Services), pp. 2 and 3, accompanying S. 

1181, 97th Congress, 1st Session (1981). Also see 127 Cong. Rec. 20288-20290 (1981) (daily ed., 127 Cong. 

Rec. S9452, September 11, 1981) (remarks of Senator Hatfield). 

33 In debate, Congress noted that military compensation had fallen behind civilian comparability levels 

because of a number of pay caps imposed as part of the government's efforts to fight inflation. See, e.g., 

127 Cong. Rec. 20620 (1981) (daily ed., 127 CONG. REC. H6217, September 15, 1981) (remarks of 

Representative Nichols). (The same point had been made the preceding year, also in Congressional debate, 

in connection with the Senate's consideration of H.R. 5168, subsequently adopted, with amendments, as the 

Military Personnel and Compensation Amendments of 1980, Public Law 96-343, 94 Stat. 1123 (1980). See, 

e.g., 126 Cong. Rec. 1643-1645 (1980) (daily ed., 126 CONG. REC. S828-S830, February 4, 1980) 

(remarks of Senator Matsunaga in debate on H.R. 5168, subsequently adopted, with amendments, as the 

Military Personnel and Compensation Amendments of 1980, Public Law 96-343, 94 Stat. 1123 (1980)).) 

36
and manning levels had occurred after the 11.7 percent pay increase adopted in the 1981 

Authorization Act, Congress went on to state that "additional actions are required"34 and 

"further substantial improvements [in pay rates] are necessary in fiscal year 1982 to 

provide necessary incentives for a career of military service"35 and adopted the 1981 Pay 

Act raises as the method for achieving the needed improvements in manning and 

retention levels. In addition, Congress, especially the Senate, noted that it was convinced 

that the existing comparability indices used in determining the annual increase in military 

pay under the linkage mechanism of 37 U.S.C. §1009(b)(3) were defective and that a new 

adjustment mechanism should be developed.36 As a result, the pay rates established under 

the 1981 Pay Act were more or less provisional in nature, awaiting the development of a 

more refined adjustment mechanism "appropriately weighted to reflect the military skill 

mix."37 In particular, Congress specifically noted that "the Administration [had under the 

1981 Authorization Act been] directed to provide recommendations by April 1, 1981, 

concerning the appropriate mechanism for making annual adjustments to military pay ... 

[but that] final recommendations have not yet been provided"38 and that the pay tables 

adopted under the Act were in the nature of a stopgap pending the development of 

Administration recommendations for a new pay adjustment mechanism. The Senate 

Armed Services Committee expressly noted that it "strongly believes [such a] mechanism 

must be developed within the next year."39 

 34 House Report No. 97-109 (Part I) (Committee on Armed Services), p. 1, accompanying H.R. 3380, 97th 

Congress, 1st Session (1981). 

35 Senate Report No. 97-146 (Committee on Armed Services), p. 2, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

36 Senate Report No. 97-146 (Committee on Armed Services), p. 7, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

37 Senate Report No. 97-146 (Committee on Armed Services), p. 7, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

38 Senate Report No. 97-146 (Committee on Armed Services), p. 7, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

39 Senate Report No. 97-146 (Committee on Armed Services), p. 7, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

37
 No such mechanism was developed, however, and in 1982 basic pay rates for 

members of the uniformed services were increased by four percent. The 4 percent figure 

derived from a 4 percent "cap" placed on civil service pay increases for fiscal year 1983; 

this 4 percent "cap" was translated into the uniformed services arena through the pay 

adjustment mechanism of 37 U.S.C. §1009. See Executive Order 12387, 47 Fed. Reg. 

44981 (October 8, 1982). 

In 1983, Congress again expressed its dissatisfaction with the pay adjustment 

mechanism of 37 U.S.C. §1009. The Senate in particular recommended that the link 

between "military pay" and civil service wages be "severed" and that an appropriate 

"index" for "military pay" be developed.40 As stated in the Senate report: 

To date, no military pay adjustment standard has been adopted for the 

specific purpose of establishing appropriate pay comparisons between the military 

and the private sectors. The current General Schedule/PATC [Professional, 

Administrative, Technical and Clerical Survey] linkage measures select white 

collar private sector occupation [sic] which closely match the composition of the 

Federal civilian work force. The PATC survey was not intended to mirror the 

predominantly blue collar military force.41

 As reflected in the Senate report, the basic concern was that the pay 

adjustment linkage between civil service wages and uniformed services pay resulted in 

inordinately large increases for uniformed services personnel, and that what was wanted 

was an index that would "provide assurance to the country that military members are 

receiving no more than what the average private sector worker is receiving in annual pay 

raises."42 The Senate then went on to note that its preferred index had increased "8.1% in 

contrast to PATC growth of 9.5%" over the period March 1981 - March 1982.

43

 

40 Senate Report No. 98-174 (Committee on Armed Services), p. 215, accompanying S. 675, 98th Congress, 

1st Session (1983). 

41 Senate Report No. 98-174 (Committee on Armed Services), p. 215, accompanying S. 675, 98th Congress, 

1st Session (1983). 

42 Senate Report No. 98-174 (Committee on Armed Services), p. 215, accompanying S. 675, 98th Congress, 

1st Session (1983). 

43 Senate Report No. 98-174 (Committee on Armed Services), p. 215, accompanying S. 675, 98th Congress, 

1st Session (1983). But see House Report No. 98-107 (Committee on Armed Services), pp. 208-209, 

38
Compromising their respective concerns, the House and Senate agreed once again 

to suspend the pay adjustment mechanism of 37 U.S.C. §1009. In the Department of 

Defense Authorization Act, 1984, Public Law 98-94, §901, 97 Stat. 614, 634-635 (1983), 

the uniformed services were granted a 4 percent increase in basic pay, basic allowance 

for quarters, and basic allowance for subsistence. This increase applied to all members of 

the uniformed services except for "enlisted members in pay grade E-1 with less than 4 

months of active duty." Section 901(b)(2) of the Department of Defense Authorization 

Act, 1984, Public Law 98-94, id., §901(b)(2), 97 Stat. at 634; see 37 U.S.C. §1009 note. 

This pay increase became effective January 1, 1984.44

In addition to increasing basic pay and allowances as previously indicated, the 

1984 Department of Defense Authorization Act, Public Law 98-94, id., also amended 37 

U.S.C. §203(d) to provide that the basic pay of a commissioned officer in pay grades O1, O-2, or O-3 who had more than four years of "active service" as a warrant officer or as 

a warrant officer and enlisted member was to be computed in the same way as the basic 

pay of a commissioned officer in the same pay grade with over four years of "active 

service" as an enlisted member. Section 902(a) of the 1984 Authorization Act, Public 

Law 98-94, id., 97 Stat. at 635.45 This amendment became effective October 1, 1983. id.,

§902(b). As explained by the House Armed Services Committee, the amendment was 

intended to rectify an incorrect interpretation of Congress's intent in the Military 

Personnel and Compensation Amendments of 1980, Public Law 96-343, §6(b), 94 Stat. 

1123, 1127 (1980): 

Current law authorizes a special basic pay table for commissioned officers 

who served over four years of active service as warrant officers or as enlisted 

members. The table recognizes the experience such officials bring to the 

 accompanying H.R. 2969, 98th Congress, 1st Session (1983), in which the primary concern expressed was 

that uniformed service pay rates not be allowed to fall too far behind "comparability". 

44 Executive Order No. 12456, 49 Fed. Reg. 347 (December 30, 1983). See House Report No. 98-352 

(Committee of Conference), pp. 223-224, and Senate Report No. 98-213 (Committee of Conference), pp. 

223-224, accompanying S. 675, 98th Congress, 1st Session (1983). 

45 See footnotes 30 and 31 and accompanying text to this chapter, above. 

39
commissioned officer corps. Unfortunately, the wording of the current authority 

has been interpreted to mean that a member have either four years of prior 

enlisted service or over four years of prior warrant officer service in order to be 

eligible to use the special table. Combined enlisted and warrant officer service 

totaling over four years is not considered to meet the requirements of the law. 

The committee recommends correction of this anomaly by permitting 

active service as warrant officer and enlisted member to be combined for the 

purpose of establishing eligibility to use the special basic pay.46 47 

 The Department of Defense Authorization Act, 1985, Public Law 98-525, §601, 98 

Stat 2492, 2533 (1984), again bypassed the pay adjustment mechanism of 37 U.S.C. 

§1009. In the 1985 Authorization Act, basic pay and basic allowance for subsistence 

were each increased by 4 percent, while basic allowance for quarters was effectively 

restructured. See Chapter II.B.2., "Housing Allowances ," below. The 4 percent increase 

applied to all members of the uniformed services except personnel in pay grade E-1 with 

less than four months of active duty. Although the House expressed concern that 

members of the uniformed services were continuing to fall farther behind "comparability 

with private sector wages,"48 both Houses of Congress agreed to limit the increase to 4 

percent because of "the extraordinary pressure to reduce defense spending"49 and 

"difficult budgetary constraints."50 The limited pay raise was characterized as "identical to 

the terms of the cost-of-living increase"51 given to uniformed services personnel the 

 

46 House Report No. 98-107 (Committee on Armed Services), pp. 209-210, accompanying H.R. 2969, 98th

Congress, 1st Session (1983). See House Report No. 98-352 (Committee of Conference), p. 224, and Senate 

Report No. 98-213 (Committee of Conference), p. 224, accompanying S. 675, 98th Congress, 1st Session 

(1983). 

47See text accompanying footnotes 30 and 31 to this chapter, above. 

48 House Report No. 98-691 (Committee on Armed Services), pp. 255-256, accompanying H.R. 5167, 98th

Congress, 2d Session (1984). 

49 House Report No. 98-691 (Committee on Armed Services), p. 256, accompanying H.R. 5167, 98th

Congress, 2d Session (1984). 

50 Senate Report No. 98-500 (Committee on Armed Services), p. 204, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

51 Senate Report No. 98-500 (Committee on Armed Services), p. 204, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

40
preceding year.52 The increase became effective January 1, 1985. Section 601(b)(1) of the 

1985 Authorization Act, Public Law 98-525, id., §601(b)(1), 98 Stat. at 2533; see 37 

U.S.C. §1009 note. 

 The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§601, 99 Stat. 583, 635-636 (1985), provided a 3 percent increase in basic pay, basic 

allowance for subsistence, and basic allowance for quarters, thus again bypassing the pay 

adjustment mechanism of 37 U.S.C. §1009. These increases, which applied to all 

members of the uniformed services, became effective on October 1, 1985. Section 601(b) 

of the 1986 Authorization Act, id., §601(b), 99 Stat. at 636; see 37 U.S.C. §1009 note. 

Again, "difficult budgetary constraints" were cited as factors limiting the increase 

authorized.53 Nevertheless, the House Armed Services Committee indicated that it... 

recognizes the importance of adequate pay to recruiting and retaining high quality 

personnel and reiterates its commitment to providing periodic pay increases for our 

nation's men and women in uniform.54 

Like the 1986 Defense Authorization Act, the authorization acts for fiscal years 

1987, 1988, 1989, 1990, and 1991 all bypassed the Section 1009 adjustment mechanism. 

In bypassing this adjustment mechanism, the National Defense Authorization Act for 

Fiscal Year 1987, Public Law 99-661, §601(a) and (b), 100 Stat. 3816, 3873 (1986), 

incorporated a 3 percent increase in basic pay, basic allowance for subsistence, and basic 

allowance for quarters, effective January 1, 1987; the National Defense Authorization 

Act for Fiscal Years 1988 and 1989, Public Law 100-180, §601(b) and (c), 101 Stat. 

1019, 1092 (1987), as amended by the Act of December 22, 1987 (Continuing 

Appropriations for Fiscal Year 1988), Public Law 100-202, §110(b), 101 Stat. 1329, 

1329-436 (1987), a 2 percent increase in basic pay, basic allowance for subsistence, and 

basic allowance for quarters, effective January 1, 1988; the National Defense 

 

52 See House Report No. 98-1080 (Committee of Conference), pp. 294-295, accompanying H.R. 5167, 98th

Congress, 2d Session (1984). 

53 Senate Report No. 99-41 (Committee on Armed Services), p. 190, accompanying S. 1029, 99th Congress, 

1st Session (1985). 

54 House Report No. 99-41 (Committee on Armed Services), p. 216, accompanying S. 1872, 99th Congress, 

1st Session (1985). 

41
Authorization Act, Fiscal Year 1989, Public Law 100-456, §601(b) and (c), 102 Stat. 

1918, 1976 (1988), a 4.1 percent increase in basic pay and basic allowance for 

subsistence and a 7 percent increase in basic allowance for quarters, effective January 1, 

1989; the National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §601(b), 103 Stat. 1352, 1444 (1989), a 3.6 percent increase in basic pay, 

basic allowance for quarters, and basic allowance for subsistence, effective January 1, 

1990; and the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, §601(b), 104 Stat. 1485, 1575 (1990), a 4.1 percent increase in basic pay, basic 

allowance for quarters, and basic allowance for subsistence, effective January 1, 1991.55 

In adopting these increases, Congress continued to express concern about the 

level of military compensation and its relationship to private sector wage rates, on the 

once hand, and the overall budget deficit, on the other. In connection with its 

consideration of the 1987 National Defense Authorization Act, Public Law 99-661, 100 

Stat. 3816 (1986), cited above, the Senate Armed Services Committee noted: 

Military pay levels continue to lag behind comparable civilian wages. As 

measured by the Employment Cost Index of the Bureau of Labor Statistics, 

military pay trails civilian wages by 8.3 percent. Without a four percent increase 

in military pay [the increase proposed by the Senate Armed Services Committee 

in its original bill, S. 2638] during1987, it is likely that this gap will grow even 

larger. The committee believes that, even in light of the severe budget constraints 

being imposed on defense, it is essential that military pay not be permitted to fall 

further behind civilian wages.56 

The House-Senate conference agreed on a three percent pay increase.57

 

55 In providing these increases in military pay for fiscal years 1986 through 1991, the relevant 

Authorization Acts did not in terms provide authority for the President to redistribute, or reallocate, the 

increase pursuant to the supplementary adjustment mechanisms incorporated in 37 U.S.C. §1009(c)(1) and 

(d)(1). 

56 Senate Report No. 99-331 (Committee on Armed Services), p. 225, accompanying S. 2638, 99th

Congress, 2d Session (1986). 

57 National Defense Authorization Act for Fiscal Year 1987, Public Law 99-661, §601(a), 100 Stat. 3816, 

3873 (1986). See House Report No. 99-1001 (Committee of Conference), p. 476, accompanying S. 2638, 

99th Congress, 2d Session (1986). 

42
In considering a military pay raise for fiscal year 1988, the House Armed Services 

Committee apparently concluded that a 3 percent raise would keep "military pay ... 

competitive with the private sector."58 As the Committee stated more fully: 

Recognizing the importance of maintaining a competitive edge, 

particularly as the recruiting environment becomes tighter, the committee is 

strongly committed to ensuring that active duty personnel receive a pay raise. 

However, given the climate of fiscal austerity, the committee was unable to grant 

the Administration's request for a four percent increase. 

The ... [House Committee on Armed Services] assumes that military 

personnel will receive a three percent pay raise on January 1, 1988; .... This 

increase is consistent with the pay raise granted last year and allows pay to keep 

ahead of inflation. 

Clearly, the large military pay raises provided in 1980 (11.7 percent) and 

1981 (14.3 percent) restoring pay comparability with the private sector were 

critical to the dramatic turn-around in recruitment and retention experienced since 

that time. The committee believes that military pay must remain competitive with 

the private sector and, therefore, recommends a three percent pay raise in January 

1988.59

The Senate, on the other hand, saw matters somewhat differently and again 

proposed a 4 percent increase in the cash elements of RMC, noting as follows: 

The committee recommends approval of the 4.0 percent request 

[submitted by the Administration] for fiscal year 1988.... The 4 percent raise in 

fiscal year 1988 will essentially match expected wage growth in the private sector 

and prevent the 9.4 percent gap between military pay and private sector pay from 

widening.60

In conference, the House and Senate Conferees did not directly address their 

seemingly differing views on the adequacy of military compensation in relationship to 

private sector wage rates. Rather, in recommending the bill that became the National 

 

58 House Report No. 100-58 (Committee on Armed Services), p. 203, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

59 House Report No. 100-58 (Committee on Armed Services), p. 203, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

60 Senate Report No. 100-57 (Committee on Armed Services), p. 144, accompanying S. 1174, 100th

Congress, 1st Session (1987). 

43
Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, 100 

Stat. 1019 (1987), the Conferees agreed to a 3 percent increase in basic pay and basic 

allowance for subsistence and a 6 percent increase in basic allowance for quarters, stating 

simply: 

The Conferees note that, in 1985, basic allowance for quarters (BAQ) 

rates are [sic, were?] restructured so that they would cover 65 percent of national 

median housing costs in each pay grade. Since the 1985 restructuring, BAQ has 

lagged behind housing cost growth, causing BAQ to fall below the 65 percent 

standard. The Conferees intend the six percent increase in BAQ to be a step 

toward restoring BAQ to the 65 percent standard.61

The House view on the adequacy of military compensation levels evidently prevailed sub 

silentio. Despite the 3 percent increase in basic pay and basic allowance for subsistence 

and the 6 percent increase in basic allowance for quarters provided for in the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §601(b) 

and (c), 101 Stat. 1019, 1092 (1987), that amount was scaled back to a 2 percent increase 

in basic pay, basic allowance for quarters, and basic allowance for subsistence by the 

"budget summit agreement" memorialized in the Act of December 22, 1987 (Continuing 

Appropriations for Fiscal Year 1988), Public Law 100-202, §110(b), 101 Stat. 1329, 

1329-436 (1987). The driving force behind the reduction from the increases proposed in 

the 1988/1989 Authorization Act was concern over the overall federal budget deficit. No 

specific concerns were expressed about the impact of the limitation on military 

recruitment or retention--just as no concerns were expressed for parallel reductions in 

increases that otherwise would have become effective for federal Civil Service 

employees.62 

In recommending a military pay increase in connection with its consideration of 

the 1989 National Defense Authorization Act--enacted as the National Defense 

 

61 House Report No. 100-446 (Committee of Conference), p. 641, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 62 See Act of December 22, 1987 (Continuing Appropriations for Fiscal Year 1988), Public Law 100-202, 

§110(a), 101 Stat. 1329, 1329-436 (1987). 

44
Authorization Act, Fiscal Year 1989, Public Law 100-456, 102 Stat. 1918 (1988)—the 

House Armed Services Committee stated: 

In fiscal year 1988, as a part of the budget summit agreement, military 

personnel received only a two percent pay raise. The committee anticipates 

considerable budgetary pressure to reduce substantially the pay raise request for 

fiscal year 1989.... 

Today, the nation's armed forces have the highest quality young men and 

women in history, representing a dramatic reversal of the dark days of the 1970's 

when recruiting and retention rates plummeted. Although several factors 

contributed to the turnaround, the large pay raises in October 1980 and 1981 

played a paramount role. The committee believes that a competitive rate of pay 

remains important and is deeply concerned that the gap between private sector 

and military salaries, as measured by the Employment Cost Index (ECI), is 

widening. Currently, military pay lags 11 percent behind wages in the civilian 

economy. If this trend is not reversed, the nation's armed forces could again fall 

on hard times. 

The committee therefore recommends a four percent increase in basic pay 

and basic allowance for subsistence (BAS) and a seven percent increase in basic 

allowance for quarters (BAQ). The committee believes reallocation of a small 

fraction of the pay raise into the basic allowance for quarters is sensible because 

basic allowance for quarters continues to fall behind the soaring cost of housing in 

the civilian economy. 

 In an effort to address the problem of inadequate reimbursement for 

housing costs for certain individuals, Congress in the 1985 Defense Authorization 

Act (Public Law 98-525 [98 Stat. 2492 (1984)]) restructured the basic allowance 

for quarters and variable housing allowance (VHA) programs, pegging the basic 

allowance for quarters to a percentage (65 percent) of national median housing 

costs. The service member was expected to absorb 15 percent of housing costs, at 

which point the variable housing allowance kicks in. 

The program envisioned that the Department of Defense would 

periodically seek to update the BAQ rates, in order to maintain the linkage with 

national median housing costs. This, however, has not occurred. Instead, basic 

allowance for quarters has been increased each year, along with and by the same 

percentage as the annual pay raise, but national housing costs have gone up faster 

than pay raises. The Department of Defense has attempted to address this problem 

through increased variable housing allowance. This year's budget proposes a 3.4 

percent VHA increase. Unfortunately, due to budget constraints, variable housing 

allowance has been capped through the appropriations process for the past two 

years. 

Currently, the BAQ rates have declined to slightly over 59 percent of 

national median housing costs, instead of 65 percent. With the caps on variable 

45
housing allowance, service members are now absorbing over 22 percent of their 

housing costs, instead of the 15 percent envisioned when the program was 

restricted [sic, restructured?63 by Public Law 98-525 [Department of Defense 

Authorization Act, 1985, 98 Stat. 2492 (1984)]. 

In an attempt to address this problem, last year the fiscal 1988/1989 

Defense Authorization Act (Public Law100-180 [§601(b) and (c), 101 Stat. 1019, 

1092 (1987)]) authorized a six percent increase in basic allowance for quarters, 

along with a three percent increase in basic pay. Both the pay raise and the BAQ 

increase were subsequently limited to two percent in compliance with the 

budget summit agreement. 

 The seven percent increase [in basic allowance for quarters, as proposed 

in the House bill, H.R. 4264, 100th Congress, 2d Session (1988)] would raise 

basic allowance for quarters to 62 percent of national median housing costs and, 

hopefully, would constitute the first step of a return to the 65 percent level 

established in the 1985 Defense Authorization Act [Public Law 98-525, 

§602(a)(1), 98 Stat. 2492, 2533 (1984) (establishing new BAQ rates), see House 

Report No. 98-1080 (Committee of Conference), p. 295, accompanying H.R. 

5167, 98th Congress, 2d Session (1984) (stating that the BAQ rates thus 

established are 65 percent of national median housing costs)].64

The Senate Armed Services Committee, on the other hand, accepted the 

recommendations of the Department of Defense for a 4.3 percent pay raise, which the 

Committee noted should "keep the reported pay gap between private sector wages and 

military pay of 11 percent from widening."65 

In conference, a 4.1 percent increase in basic pay and basic allowance for 

subsistence and a seven percent increase in basic allowance for quarters were agreed 

upon, with the Conferees noting: 

The 4.3 percent across the board [sic] military pay raise requested by the 

Administration was based on projected private sector wage growth as measured 

 

63 See characterization of the 1985 Defense Authorization Act, Public Law 98-525, as having "restructured 

the basic allowance for quarters and variable housing allowance (VHA) programs" in the second preceding 

paragraph. In granting increases in basic allowance for quarters and pegging BAQ rates at 65 percent of

national median housing costs, the 1985 Defense Authorization Act can hardly be said to have "restricted" 

the BAQ program. 

64 House Report No. 100-563 (Committee on Armed Services), p. 251-252, accompanying H.R. 4624, 

100th Congress, 2d Session (1988). 

65 Senate Report No. 100-326 (Committee on Armed Services), p. 92, accompanying S. 2355, 100th

Congress, 2d Session (1988). 

46
by the employment cost index (ECI). At the time the request was submitted, the 

projected ECI was 4.3 percent. The 4.3 percent pay raise request matched the 

projected ECI increase to keep the 11 percent gap between private sector pay 

increases and military pay increases from widening. 

The actual ECI has now been reported as 3.5 percent. Therefore, the 

projection on which the Administration's request was based is overstated by 0.8 of 

a percentage point. As a result, the conference agreement will actually close the 

gap between private sector and military wage growth by 0.6 of a percentage point, 

the first time the military pay raise will exceed the ECI since 1981.66

The conference committee did not specifically address the question of the 

appropriateness of a 7 percent increase in basic allowance for quarters, apparently 

accepting the reasoning of the House Committee on Armed Services as expounded in 

House Report No. 100-563, quoted above in extenso. 

In recommending approval of the administration's proposal to increase military 

pay rates by 3.6 percent in fiscal year 1990, the House Armed Services Committee stated: 

 Recognizing the importance of pay to the total military compensation 

package, especially in a tight recruiting environment, the committee remains 

committed to ensuring that military pay remains competitive with the private 

sector. Accordingly, the committee recommends approval of the administration 

request for a 3.6 percent increase in basic pay, basic allowance for quarters and 

basic allowance for subsistence and regrets that fiscal constraints preclude the 

payment of a higher pay raise.67 

Expressing concern over the gap between military and private sector pays, the 

Senate Armed Services Committee nevertheless recommended approval of the 3.6 

percent pay increase proposed by the Department of Defense: 

The committee recommends ... approval of the 3.6 percent pay raise 

requested by the Department of Defense for military personnel effective January 

1, 1990. 

 

66 House Report No. 100-753 (Committee of Conference), p. 403, accompanying H.R. 4264, and House 

Report No. 100-989 (Committee of Conference), pp. 404-405, accompanying H.R. 4481, 100th Congress, 

2d Session (1988).

67 House Report No. 101-121 (Committee on Armed Services), p. 274, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

47
The committee notes that the requested pay raise for military personnel is 

less than the projected wage growth in the private sector, as measured by the 

Employment Cost Index (ECI), of 4.3 percent. Using this measure, the gap 

between military and private sector pay has grown from relative comparability in 

1981 to 11 percent. This gap is of concern to the committee.68

In connection with its consideration of a military pay increase for fiscal year 

1991, the Senate Armed Services Committee noted: 

The committee notes that the recommended pay raise [of 3.5 percent] is less than 

the expected wage growth in the private sector. However, the committee also 

notes that the administration recommended the 3.5 percent pay raise in its annual 

report on the adequacy of pay and allowances of the Armed Forces as "... 

adequate at this time to support our force objectives going into the early 1990s."69 

In commenting on a 1991 pay increase, the House Armed Services Committee, on 

the other hand, stated: 

The committee remains committed to preserving a total military 

compensation package that will continue to attract and retain the high quality 

young men and women in the nation's armed forces today. The committee is 

determined to maintain a competitive level of compensation in the future and to 

protect the quality of life for service members and their families. Accordingly the 

committee recommends a 4.1 percent increase in basic pay, basic allowance for 

quarters, and basic allowance for subsistence.... This is a 0.6 percent increase over 

the President's budget request of 3.5 percent.70

The House proposal to increase military pay by 4.1 percent beginning January 1, 

1991, was adopted in Conference without discussion.71 

In contrast to the extensive concern expressed over the level and adequacy of 

military pay raises for fiscal years 1987 through 1991, as well as the appropriate index to 

 

68 Senate Report No. 101-82 (Committee on Armed Services), p. 176, accompanying S. 1352, 101st

Congress, 1st Session (1989). 

69 Senate Report No. 101-384 (Committee on Armed Services), p. 171, accompanying S. 2884, 101st

Congress, 2d Session (1990). 

70 House Report No. 101-665 (Committee on Armed Services), p. 286, accompanying H.R. 4739, 101st

Congress, 2d Session (1990). 

71 House Report No. 101-923 (Committee of Conference), p. 611, accompanying H.R. 4739, 101st 

Congress, 2d Session (1990). 

48
use in adjusting pay rates from year to year, some of the military pay raises for fiscal 

years 1992 through 1996-- were treated as more of a routine affair. Like the pay raises 

stretching back to fiscal year 1983, the authorization acts for fiscal years 1992 through 

1996 all bypassed the Section 1009 adjustment mechanism,72 although during that period 

only in 1985 and 1994 did the Congressionally mandated raises not match those that 

would have been called for by Section 1009.73 

The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public 

Law 102-190, §601(b), 105 Stat. 1290, 1372 (1991), provided for a 4.2 percent increase 

in basic pay, basic allowance for quarters, and basic allowance for subsistence, effective 

January 1, 1992; the National Defense Authorization Act for Fiscal Year 1993, Public 

Law 102-484, §601(b), 106 Stat. 2315, 2420 (1992), a 3.7 percent increase in basic pay, 

basic allowance for quarters, and basic allowance for subsistence, effective January 1, 

1993; the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, 

 

72 The Section 1009 adjustment mechanism, 37 U.S.C. §1009, was used on an interim basis to provide a 

1996 military pay raise, but the pay raise effected by the Section 1009 mechanism was subsequently 

rescinded. On December 28, 1995, President Clinton vetoed H.R. 1530, 104th Congress, 1st Session (1995), 

the National Defense Authorization Bill for Fiscal Year 1996, which incorporated a 2.4 percent increase in 

basic pay and basic allowance for subsistence and a 5.2 percent increase in basic allowance for quarters, 

while at the same time issuing Executive Order 12984, 61 FED. REG. 237 (January 3, 1996), as required 

by and under the authority of 37 U.S.C. §1009, to provide a 2.0 percent increase in military pay effective 

January 1, 1996. A substitute bill, S. 1124, 104th Congress, 1st Session (1995), was presented to the 

President on January 30, 1996, and approved by him on February 10, 1996, thereby becoming the National 

Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, 110 Stat. 186 (1996). In addition to 

providing a 2.4 percent increase in basic pay and basic allowance for subsistence, Section 601(b) of the 

Act, §601(b), id., 110 Stat. at 356, and a 5.2 percent increase in basic allowance for quarters, Section 601(c) 

of the Act, §601(c), id., 110 Stat. at 356, effective retroactively to January 1, 1996, Section 601(d) of the 

Act, §601(d), id., 110 Stat. at 356, as had H.R. 1530, Section 601(a) of the Act, id., §601(a), 110 Stat. at 

356, specifically rescinded the pay increase effected by Executive Order 12984. (The President's reason for 

vetoing H.R. 1530 had nothing to do with the increases in basic pay and the basic allowances for quarters 

and subsistence incorporated in the bill. President's Message to the House of Representatives Returning 

Without Approval the National Defense Authorization Act for Fiscal Year 1996, 31 WEEKLY COMP. OF 

PRES. DOC. 2233 (December 28, 1995), and President's Letter to the Speaker of the House of 

Representatives on Vetoing the National Defense Authorization Act, 31 WEEKLY COMP. PRES. DOC. 

2235 (December 28, 1995); see 142 CONG. REC. H12 (daily ed. January 3, 1996).) 

The increases in basic pay and the basic allowances for quarters and subsistence authorized by the National 

Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §601(b) and (c), 110 Stat. 186, 356 

(1996), were implemented by Executive Order 12990 of February 29, 1996, 61 FED. REG. 8467 (March 5, 

1996). See in particular the schedule attached to Executive Order 12990 titled "Pay and Allowances of the 

Uniformed Services (Effective January 1, 1996)", id., 61 FED. REG. at 8468-8470 (schedule reprinted at 

37 U.S.C. §1009 note). 

73 Robert L. Goldich, “Military Pay and Benefits: Key Questions and Answers,” CRS Issue Brief for 

Congress, 27 December 2001, 6. 

49
§601(b), 107 Stat. 1547, 1677 (1993), a 2.2 percent increase in basic pay, basic allowance 

for quarters, and basic allowance for subsistence, effective January 1, 1994; the National 

Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §601(b), 108 Stat. 

2663, 2779 (1994), a 2.6 percent increase in basic pay, basic allowance for quarters, and 

basic allowance for subsistence, effective January 1, 1995; and the National Defense 

Authorization Act for Fiscal Year 1996, Public Law 104-106, §601(b) and (c), 110 Stat. 

186, 356 (1996), a 2.4 percent increase in basic pay and basic allowance for subsistence 

and a 5.2 percent increase in basic allowance for quarters, effective January 1, 1996. 

Except for the pay raises for military personnel for fiscal years 1994 and 1996, 

none of the deliberations on allowance adjustments in these years explicitly dealt with 

either the level or adequacy of military pay in terms of attracting and retaining 

appropriate numbers of military personnel or the skills necessary for a modern military 

force. The question of the appropriate index to use in adjusting military pay rates from 

year to year also did not arise.74 

 

74 With respect to the National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-

190, §601(b), 105 Stat. 1290, 1372 (1991), and the pay raise authorized for calendar year 1992, see House 

Report No. 102-60 (Committee on Armed Services), p. 247, accompanying H.R. 2100, and Senate Report 

No. 102-113 (Committee on Armed Services), p. 221, accompanying S. 1507, cf. House Report No. 102-

311 (Committee of Conference), p. 548, accompanying H.R. 2100, 102d Congress, 1st Session (1991); with 

respect to the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §601(b), 106 

Stat. 2315, 2420 (1992), and the pay raise authorized for calendar year 1993, see House Report No. 102-

527 (Committee on Armed Services), p.243, accompanying H.R. 5006, and Senate Report No. 102-352 

(Committee on Armed Services), p. 208, accompanying S. 3114, cf. House Report No. 102-966 

(Committee of Conference), p. 712, accompanying H.R. 5006, 102d Congress, 2d Session (1992); with 

respect to the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §601(b), 107 

Stat. 1547, 1677 (1993), and the pay raise authorized for calendar year 1994, see House Report No. 103-

200 (Committee on Armed Services), p. 293, accompanying H.R. 2401, Senate Report No. 103-112 

(Committee on Armed Services), pp. 151-152, accompanying S. 1298, and House Report No. 103-357 

(Committee of Conference), p. 682, accompanying H.R. 2401, 103d Congress, 1st Session (1993); with 

respect to the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §601(b), 108 

Stat. 2663, 2779 (1994), and the pay raise authorized for calendar year 1995, see House Report No. 103-

499 (Committee on Armed Services), p. 601, accompanying H.R. 4301, Senate Report No. 103-282 

(Committee on Armed Services), p. 193, accompanying S. 2182, and House Report No. 103-701 

(Committee of Conference), p. 711, accompanying S. 2182, 103d Congress, 2d Session (1994); and with 

respect to the National Defense Act for Fiscal Year 1996, Public Law 104-106, §601(b) and (c), 110 Stat. 

186, 356 (1996), and the pay raise authorized for calendar year 1996, see House Report No. 104-131 

(Committee on National Security), p. 229, accompanying H.R. 1530, Senate Report No. 104-112, p. 253, 

accompanying S. 1026, and House Report No. 104-406 (Committee of Conference), p. 813, accompanying 

H.R. 1530, 104th Congress, 1st Session (1995), as well as House Report No. 104-450 (Committee of 

Conference), pp. 803-804, accompanying S. 1124, 104th Congress, 2d Session (1996). 

In providing these increases in military pay for calendar years 1992 through 1996, the relevant 

Authorization Acts did not in terms provide authority for the President to redistribute, or reallocate, the 

50
For fiscal year 1994, the Clinton Administration had proposed a freeze on military 

pay, but neither the Senate nor the House chose to go along with the administration. The 

Senate in particular felt it would be inequitable to freeze the pay of military personnel 

when federal civilian employees would almost certainly get a pay raise and the 

"comparability gap" between private sector and military pay would increase. As the 

Senate noted: 

The committee recommends a provision ... that would authorize a 2.2 

percent pay raise for military personnel on January 1, 1994. The administration 

proposed a pay freeze for federal civilian employees, including military 

personnel, in its budget request. Under current law, the normal pay raise would 

have been a 2.2 percent increase on January 1, 1994 [under the provisions of 37 

U.S.C. §1009]. In testimony before the committee, Defense Department witnesses 

indicated that military personnel overwhelmingly oppose the pay freeze, but that 

they could justify the pay freeze as long as military personnel are not singled out 

to bear a disparate sacrifice. 

Although federal civilians would forego the normal January 1 pay raise 

just as military personnel would under the administration's pay freeze proposal, 

current law provides for a second component to federal civilian pay, a locality 

adjustment, to address pay disparities for different areas which takes effect on 

January 1, 1994. Locality payments are mandated by law for areas where the 

difference between federal and non-federal pay exceeds five percent. According 

to the Office of Management and Budget, because federal civilian pay lags private 

sector pay by over 25 percent in the aggregate, practically all civilian white collar 

workers would receive a locality pay increase. 

The administration has requested in its budget that the locality pay 

adjustment be delayed for one year to January 1, 1995. This would require 

legislative action. At the time of this report, the House [Budget] Reconciliation 

bill contains a provision that would delay the implementation of federal civilian 

locality pay by six months to July 1, 1994. The Senate Reconciliation bill contains 

no provision on federal civilian locality pay. Therefore, the committee assumes 

that civilian locality pay will be implemented on January 1, 1994 as provided for 

under current law or by July 1, 1994 as provided for in the House bill. 

The committee also notes that under the pay freeze recommended by the 

administration, the comparability gap between private sector pay as measured by 

the employment cost index and military pay would widen to 14.5 percent. This 

would be the largest gap since the Congress equalized private sector and military 

 increase pursuant to the supplementary adjustment mechanisms incorporated in 37 U.S.C. §1009(c)(1) and 

(d)(1). 

51
pay by authorizing a 14.3 percent military pay raise for October 1, 1981 [in the 

Uniformed Services Pay Act of 1981, Public Law 97-60, 95 Stat. 989 (1981)].75

The committee further notes that military personnel are operating at a 

higher tempo as our military downsizes. While the state of personnel readiness is 

high, there are signs of strain, such as the decline in the propensity of youth to 

serve in the military, and persistent shortages in certain skills that are also in 

demand in the private sector. 

In view of the foregoing, the committee believes that it would be fair and 

prudent to provide a pay raise for military personnel.76

In recommending its own version of a pay raise for military personnel for fiscal 

year 1994, the House Committee on Armed Services noted: 

The budget proposed a freeze on military pay during fiscal year 1994. The 

committee has identified offsets elsewhere within the defense budget request for 

fiscal year 1994 sufficient to fund the full 2.2 percent pay raise authorized under 

current law. 

The committee, therefore, recommends a 2.2 percent increase in basic pay, 

basic allowance for quarters and basic allowance for subsistence, for military 

personnel.77 

 

 For fiscal year 1995, the Clinton Administration proposed a 1.6 percent military

pay raise--one percentage point less than the 2.6 percent pay raise that would have been 

automatically authorized under the pay adjustment mechanism of 37 U.S.C. §1009. 

Noting that it had "identified offsets elsewhere within the defense budget request" made 

by the Clinton Administration, the House Armed Services Committee recommended the 

full 2.6 percent increase,78 and the Senate Armed Services Committee agreed.79 President 

Clinton approved the 2.6 percent military pay raise incorporated in the National Defense 

 

75 See text following footnote 31 of this chapter, above. 

76 Senate Report No. 103-112 (Committee on Armed Services), pp. 151-152, accompanying S. 1298, 103d 

Congress, 1st Session (1993). 

77 House Report No. 103-200 (Committee on Armed Services), p. 293, accompanying H.R. 2401, 103d 

Congress, 1st Session (1993). 

78 House Report No. 103-499 (Committee on Armed Services), p. 249, accompanying H.R. 4301, 103d 

Congress, 2d Session (1994). 

79 Senate Report No. 103-282 (Committee on Armed Services), p. 193, and House Report No. 103-701 

(Committee of Conference), p. 711, accompanying S. 2182, 103d Congress, 2d Session (1994). 

52
Authorization Act for Fiscal Year 1995, Public Law 103-337, §601(b), 108 Stat. 2663, 

2779 (1994), on October 5, 1994. 

For fiscal year 1996, Congress, although evidencing some concern about the level 

of the military pay raise urged by the Clinton Administration, approved the 

Administration's proposed 2.4 percent increase in basic pay rates. Referring to the 

"cumulative gap" between private sector and military pay levels, the House Committee 

on National Security noted: 

This section [Section 601 of the National Defense Authorization Bill for 

Fiscal Year 1996, H.R. 1530, 104th Congress, 1st Session (1995)] would provide 

a 2.4 percent military pay raise as proposed in the President's budget. The 

Committee has reservations about this level of raise because it would 

institutionally sanction a one-half of one percent lower level of increase than is 

expected within the private sector. The committee expects the ongoing Eighth 

Quadrennial Review of Military Compensation (QRMC) to evaluate the 

importance of the cumulative gap that exists between military and private sector 

ay levels and to reassess the process for determining the level of pay increases. 

The committee looks forward to receiving the recommendations of the QRMC for 

changes that will protect readiness and the ability of the armed services to recruit 

and retain quality personnel.80

The President approved the National Defense Authorization Act for Fiscal Year 

1996, Public Law 104-106, 110 Stat. 186 (1996), on February 12, 1996.81 The pay raise 

incorporated in the Act became effective retroactively to January 1, 1996.82 The National 

Defense Authorization Act for Fiscal Year 1997 (Public Law 104-201, 110 Stat. 2538) 

provided for 3.0 percent increases in basic pay and subsistence and an increase of 4.6 

percent in the BAQ. Thus, the year 1995 was the last year in which housing and 

 

80 House Report No. 104-131 (Committee on National Security), p. 229, accompanying H.R. 1530, 104th

Congress, 1st Session (1995). cf. Senate Report No. 104-112 (Committee on Armed Services), p. 253, 

accompanying S. 1026, 104th Congress, 1st Session (1995); House Report No. 104-406 (Committee of 

Conference), p. 813, accompanying H.R. 1530, 104th Congress, 1st Session (1995); and House Report No. 

104-450 (Committee of Conference), pp. 803-804, accompanying S. 1124, 104th Congress, 2d Session 

(1996). 

81 As ultimately enacted, Section 601 of the National Defense Authorization Act for Fiscal Year 1996, 

Public Law 104-106, §601, 110 Stat. 186, 356 (1996), also incorporated a 2.4 percent increase in basic 

allowance for subsistence, §601(b), 110 Stat. at 356, and a 5.2 percent increase in basic allowance for 

quarters, §601(c), 110 Stat. at 356. For the reasons underlying the differentially greater increase in BAQ, 

see Chapter II.B.2 hereof, "Housing Allowances,” below. 

82 See footnote 72 to this chapter, above. 

53
subsistence increase rates both matched the increase rate of basic pay, and 1997 was the 

last year in which the increase rate in subsistence allowance matched the increase rate in 

basic pay. 

In the report it issued in 1997, the Eighth Quadrennial Review of Military 

Compensation reviewed and modified the recommendations made by the Seventh QRMC 

for reform of the military pay tables, which had undergone only minor changes since 

1949. See Appendix III, Highlights of Major Structural Studies of Military 

Compensation. In ensuing years, administrations and Congress showed greater awareness 

of disparities between military and civilian pay rates, of the need to reward particularly 

valuable segments of the military profession, and of inequities within the system of 

military basic pay. This increased awareness was stimulated by rapid growth in the 

civilian economy, which provided more alternatives to military service; post-Cold War 

manpower contraction, which complicated military personnel management; and a general 

public perception that post-Cold War military service was no longer as vital or as 

economically attractive as it had been in previous decades.83 Recognizing that these 

factors were at work, in 1999 the House Committee on Armed Services noted that the 

restructuring of military pay tables would “reduce pay compression between grades, 

eliminate inconsistencies in the pay table, and increase incentives for promotion.”84

This awareness brought about the recommendation of greater annual percentage 

increases in military pay than had been the practice in the mid-1990s. Section 601 of the 

National Defense Authorization Bill for 1997 ratified the Clinton Administration’s 

proposed basic pay increase of 3 percent, which was .7 percent higher than the 

Employment Cost Index (ECI). Increases passed by Congress in the Defense 

Authorization bills for FY 1998, 1999, and 2000 were 2.8 percent, 3.6 percent, and 4.8 

percent respectively. The 1998 figure matched the ECI guideline, but the 1999 increase 

was .5 percent above the guideline and the 2000 increase exceeded the guideline (and the 

level that the Clinton Administration requested) by .4 percent. 

 

83 Robert L. Goldich, “Military Pay and Benefits: Key Questions and Answers,” CRS Issue Brief, 3 October 

2002, 2. 

84 House Report 106-162 (Committee on Armed Forces), p. 364 (accompanying H.R. 106—65), 106th

Congress, 1st Session. 

54
Beginning in 2000, legislative changes began responding to the pay inequity 

issue. The National Defense Authorization Act for 2000 put forward a new formula that 

replaced the Section 1009 guideline for the years 2001-2006. Initially, the House and 

Senate disagreed on the terms of the new formula. The conference resolution accepted the 

Senate version, which set basic pay increases over the following five years at .5 percent 

above, rather than .5 percent below, the ECI, effectively adding 1 percent to each year’s 

pay increase compared with the Section 1009 guideline. (The House version would have 

mandated an increase equal to the ECI percentage.) The new formula went into effect 

October 1, 2000. The purpose of this stipulation was to ensure that the gap between 

military pay and the pay of civilian government employees continued to close during the 

five-year period. Accordingly, the the new National Defense Appropriation Act for 

FY2001, Public Law 106-398, set the pay increase for FY 2001 at 3.7 percent, compared 

with the 2.7 percent increase that would have been mandated by Section 1009. 

 In 2000 and 2001, some personnel also received midyear pay increases. The 

reform of the military pay tables, which took effect on July 1 2000 in accordance with

Section 601 of the National Defense Authorization Act for Fiscal Year 2000, Public Law 

106-65, §601, 113 Stat. 644, introduced the concept of pay increases targeted to members 

at certain pay grades and with certain lengths of service. Targeting is to make pay 

increases more responsive to advancement in grade and less responsive to years in 

service. This policy in turn aims at encouraging members who show particular promise to 

remain in the military once they reach mid-career. The initial application of targeting in 

mid-2000 raised the basic pay of mid-career officers and enlisted members and resulted 

in a midyear increase that averaged 1.4 percent. Additional restructuring of the pay 

tables, prescribed by the FY2001 national defense authorization law, resulted in a second 

round of midyear targeting-based increases. Based solely on targeted increases for 

grades E-5 through E-7, basic pay increased by an average of .4 percent beginning July 1, 

2001. 

The national defense authorization legislation for 2002, 2003, and 2004 included 

full tables of adjusted pay rates by rank, targeting.mid-level officers and mid- to- seniorlevel noncommissioned officers for raises exceeding the average. Beginning in 2002, the 

targeting procedure made the overall basic pay increase percentage for a given year an 

55
average figure rather than one applying across-the-board to every grade. Including 

increases for targeted grades, the average increases for 2002 and 2003 were, respectively, 

6.9 and 4.7 percent. The National Defense Authorization Bill for 2002, Public Law 107-

107, 115 Stat. 1128, prescribed raises between 5 and 9.5 percent for the targeted pay 

levels. That legislation awarded the highest raises to mid-career officers at grade O-5 

with 10 to 12 years of service and enlisted personnel in grades E-5 through E-9 with 

service time ranging from 6 to 26 years. 

The maximum increases in the 2004 legislation were 6.25 percent, targeting midlevel officers, some warrant officers, and mid-level and senior enlisted personnel. At the 

other end of the scale, some grades received only a 2 percent increase for 2004. The 

National Defense Authorization Act for 2004, Public Law 108-136, 117 Stat. 1498, set 

out guidelines for basic pay increases in the years after 2006, in which average annual 

increases would match the ECI. 

However, the goal of the plan that Congress set out in 2000 was to achieve parity 

between military and civilian pay by 2006. The House Report on the National Defense 

Appropriations Act of 2003 put this goal, and possible future Congressional policy on 

military pay, into perspective: 

The [House Armed Services] committee recognizes that, depending on the pay 

raises planned for the defense budgets through fiscal year 2006, the pay gap will likely 

not be eliminated during fiscal year 2006. The committee is inclined to extend beyond 

fiscal year 2006 the period of time that military pay raises are required to exceed the 

private sector pay raise rates. While such an action would signal military forces and their 

leaders that the committee is committed to restoring and maintaining parity between 

military and private sector pay raises, it may also prematurely set a goal that will 

ultimately be unnecessary.85

 ______________________________________ 

The present chapter, dealing with basic pay, has focused on how military 

personnel have been paid over the years and the process by which adjustments to basic 

pay have been made, not on how much military personnel have been paid. Innumerable 

adjustments have of course been made to military pay rates during the past 200-plus 

 

85 House Report No. 107-436 (House Armed Services Committee), accompanying HR 2586, 107th Congress,

2d Session. (2003). 

56
years. The following pages set out the schedule of basic pay rates by pay grade and 

longevity step for 2004, as they have changed from 1945 to 2003, and as pay increase 

rates compare between military and civilian service.

Cost: For the cost of basic pay from 1972 to 2004, see Table II-1 of Military 

Compensation Statistics Tables, volume II of this edition. 

57
BASIC PAY SCHEDULE - Historical Data

Pay Grade O-10 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 O

Jun-58 1200.00 1250.00 1250.00 1250.00 1250.00 1300.00 1300.00 1400.00 1400.00 1500.00 1500.00 1600.00 1600.00 Oct-63 1200.00 1315.00 1315.00 1315.00 1315.00 1365.00 1365.00 1470.00 1470.00 1575.00 1575.00 1680.00 1680.00 Sep-64 1302.00 1347.90 1347.20 1347.90 1347.90 1399.20 1399.20 1506.90 1506.90 1614.30 1614.30 1722.00 1722.00 Sep-65 1380.00 1428.90 1428.90 1428.90 1428.90 1483.20 1483.20 1597.20 1597.20 1711.20 1711.20 1825.20 1825.20 Jul-66 1424.10 1474.50 1474.50 1474.50 1474.50 1530.60 1530.60 1648.20 1648.20 1766.10 1766.10 1883.70 1883.70 Oct-67 1503.90 1557.00 1557.00 1557.00 1557.00 1616.40 1616.40 1740.60 1740.60 1865.10 1865.10 1989.30 1989.30 Jul-68 1607.70 1664.40 1664.40 1664.40 1664.40 1728.00 1728.00 1860.60 1860.60 1993.80 1993.80 2126.70 2126.70 Jul-69 1810.20 1874.10 1874.10 1874.10 1874.10 1945.80 1945.80 2094.90 2094.90 2244.90 2244.90 2394.60 2394.60 Jan-70 1956.90 2025.90 2025.90 2025.90 2025.90 2103.30 2103.30 2264.70 2264.70 2426.70 2426.70 2588.70 2588.70 Jan-71 2111.40 2185.80 2185.80 2185.80 2185.80 2269.50 2269.50 2443.50 2443.50 2618.40 2618.40 2793.30 2793.30 Nov-71 2111.40 2185.80 2185.80 2185.80 2185.80 2269.50 2269.50 2443.50 2443.50 2618.40 2618.40 2793.30 2793.30 Jan-72 2263.50 2343.30 2343.30 2343.30 2343.30 2433.00 2433.00 2619.60 2619.60 2807.10 2807.10 2994.60 2994.60 Oct-72 2415.00 2500.20 2500.20 2500.20 2500.20 2595.90 2595.90 2794.80 2794.80 2994.90 2994.90 3000.00 3000.00 Oct-73 2564.10 2654.40 2654.40 2654.40 2654.40 2756.10 2756.10 2967.30 2967.30 3000.00 3000.00 3000.00 3000.00 Oct-74 2705.70 2800.80 2800.80 2800.80 2800.80 2908.20 2908.20 3000.00 3000.00 3000.00 3000.00 3000.00 3000.00 Oct-75 2841.00 2940.90 2940.90 2940.90 2940.90 3053.70 3053.70 3150.00 3150.00 3150.00 3150.00 3150.00 3150.00 Oct-76 2943.90 3047.40 3047.40 3047.40 3047.40 3164.10 3164.10 3300.00 3300.00 3300.00 3300.00 3300.00 3300.00 Oct-77 3126.30 3236.40 3236.40 3236.40 3236.40 3360.30 3360.30 3618.00 3618.00 3876.60 3876.60 3958.20 3958.20 Oct-78 3298.20 3414.30 3414.30 3414.30 3414.30 3545.10 3545.10 3816.90 3816.90 3958.20 3958.20 3958.20 3958.20 Oct-79 3529.80 3654.00 3654.00 3654.00 3654.00 3794.10 3794.10 4084.80 4084.80 4176.00 4176.00 4176.00 4176.00 Oct-80 3942.90 4081.50 4081.50 4081.50 4081.50 4176.00 4176.00 4176.00 4176.00 4176.00 4176.00 4176.00 4176.00 Oct-81 4506.60 4665.30 4665.30 4665.30 4665.30 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 Oct-82 4686.90 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 4791.60 Jan-84 4874.40 5046.00 5046.00 5046.00 5046.00 5239.50 5239.50 5533.20 5533.20 5533.20 5533.20 5533.20 5533.20 Jan-85 5069.40 5247.90 5247.90 5247.90 5247.90 5449.20 5449.20 5866.20 5866.20 6285.90 6285.90 6706.50 6706.50 Oct-85 5221.50 5405.40 5405.40 5405.40 5405.40 5612.70 5612.70 6042.30 6042.30 6474.60 6474.60 6907.80 6907.80 Jan-87 5378.10 5567.70 5567.70 5567.70 5567.70 5781.00 5781.00 6223.50 6223.50 6668.70 6668.70 7115.10 7115.10 Jan-88 5485.80 5679.00 5679.00 5679.00 5679.00 5896.50 5896.50 6223.50 6223.50 6668.70 6668.70 7115.10 7115.10 Jan-89 5710.80 5911.80 5911.80 5911.80 5911.80 6138.30 6138.30 6478.80 6478.80 6875.10 6875.10 7115.10 7115.10 Jan-90 5916.30 6124.50 6124.50 6124.50 6124.50 6359.40 6359.40 6711.90 6711.90 7191.90 7191.90 7673.40 7673.40 Jan-91 6159.00 6375.60 6375.60 6375.60 6375.60 6620.10 6620.10 6987.00 6987.00 7486.80 7486.80 7988.10 7988.10 Jan-92 6417.60 6643.50 6643.50 6643.50 6643.50 6898.20 6898.20 7280.40 7280.40 7801.20 7801.20 8323.50 8323.50 Jan-93 6655.20 6889.20 6889.20 6889.20 6889.20 7153.50 7153.50 7549.80 7549.80 8089.80 8089.80 8631.60 8631.60 Jan-94 6801.60 7040.70 7040.70 7040.70 7040.70 7311.00 7311.00 7716.00 7716.00 8267.70 8267.70 8821.50 8821.50 Jan-95 6978.30 7223.70 7223.70 7223.70 7223.70 7501.20 7501.20 7916.70 7916.70 8482.80 8482.80 9016.80 9016.80 Jan-96 7145.70 7397.10 7397.10 7397.10 7397.10 7681.20 7681.20 8106.60 8106.60 8686.50 8686.50 9016.80 9016.80 Jan-97 7360.20 7619.10 7619.10 7619.10 7619.10 7911.60 7911.60 8349.90 8349.90 8947.20 8947.20 9016.80 9016.80 Jan-98 7566.30 7832.40 7832.40 7832.40 7832.40 8133.00 8133.00 8583.60 8583.60 9197.70 9197.70 9225.00 9225.00 Jan-99 7838.70 8114.40 8114.40 8114.40 8114.40 8425.80 8425.80 8892.60 8892.60 9225.00 9225.00 9225.00 9225.00 

Jan-00 8214.90 8503.80 8503.80 8503.80 8503.80 8830.20 8830.20 9319.50 9319.50 9986.40 9986.40 10655.10 10655.10 Jul-00 10655.10 10707.60 

Jan-01 11049.30 11103.90 Jan-02 11516.70 11516.70 

Jan-03 11874.90 11874.90 Jan-04 12133.20 12133.20 

58
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-9 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jun-58 1063.30 1100.00 1122.00 1122.00 1122.00 1150.00 1150.00 1200.00 1200.00 1300.00 1300.00 1400.00 1400.00 Oct-63 1063.30 1155.00 1180.00 1180.00 1180.00 1210.00 1210.00 1260.00 1260.00 1365.00 1365.00 1470.00 1470.00 Sep-64 1153.80 1183.80 1209.60 1209.60 1209.60 1240.20 1240.20 1291.50 1291.50 1399.20 1399.20 1506.90 1506.90 Sep-65 1223.10 1254.90 1282.20 1282.20 1282.20 1314.60 1314.60 1368.90 1368.90 1483.20 1483.20 1597.20 1597.20 Jul-66 1262.10 1295.10 1323.30 1323.30 1323.30 1356.60 1356.60 1412.70 1412.70 1530.60 1530.60 1648.20 1648.20 Oct-67 1332.90 1367.70 1397.40 1397.40 1397.40 1432.50 1432.50 1491.90 1491.90 1616.40 1616.40 1740.60 1740.60 Jul-68 1425.00 1462.20 1493.70 1493.70 1493.70 1531.20 1531.20 1594.80 1594.80 1728.00 1728.00 1860.60 1860.60 Jul-69 1604.40 1646.40 1681.80 1681.80 1681.80 1724.10 1724.10 1795.80 1795.80 1945.80 1945.80 2094.90 2094.90 Jan-70 1734.30 1779.90 1818.00 1818.00 1863.90 1863.90 1941.30 1941.30 2103.30 2103.30 2103.30 2264.70 2264.70 Jan-71 1871.40 1920.60 1961.70 1961.70 1961.70 2011.20 2011.20 2094.60 2094.60 2269.50 2269.50 2443.50 2443.50 Nov-71 1871.40 1920.60 1961.70 1961.70 1961.70 2011.20 2011.20 2094.60 2094.60 2269.50 2269.50 2443.50 2443.50 Jan-72 2006.40 2059.20 2103.00 2103.00 2103.00 2156.10 2156.10 2245.50 2245.50 2433.00 2433.00 2619.60 2619.60 Oct-72 2140.50 2196.90 2243.70 2243.70 2243.70 2300.40 2300.40 2395.80 2395.80 2595.90 2595.90 2794.80 2794.80 Oct-73 2272.50 2332.50 2382.00 2382.00 2382.00 2442.30 2442.30 2543.70 2543.70 2756.10 2756.10 2967.30 2967.30 Oct-74 2397.90 2461.20 2513.40 2513.40 2513.40 2577.00 2577.00 2684.10 2684.10 2908.20 2908.20 3000.00 3000.00 Oct-75 2517.90 2584.20 2639.10 2639.10 2639.10 2706.00 2706.00 2818.20 2818.20 3053.70 3053.70 3150.00 3150.00 Oct-76 2609.10 2677.80 2734.50 2734.50 2734.50 3804.10 2804.10 2920.20 2920.20 3164.10 3164.10 3300.00 3300.00 Oct-77 2770.80 2843.70 2904.00 2904.00 2904.00 2978.10 2978.10 3101.40 3101.40 3360.30 3360.30 3618.00 3618.00 Oct-78 2923.20 3000.00 3063.60 3063.60 3063.60 3141.90 3141.90 3272.10 3272.10 3545.10 3545.10 3816.90 3816.90 Oct-79 3128.40 3210.60 3278.70 3278.70 3278.70 3362.40 3362.40 3501.90 3501.90 3794.10 3794.10 4084.80 4084.80 Oct-80 3494.40 3586.20 3662.40 3662.40 3662.40 3755.70 3755.70 3911.70 4176.00 4176.00 4176.00 4176.00 4176.00 Oct-81 3994.20 4098.90 4186.20 4186.20 4186.20 4292.70 4292.70 4471.20 4471.20 4844.10 4791.60 4791.60 4791.60 Oct-82 4154.10 4263.00 4353.60 4353.60 4353.60 4464.30 4464.30 4650.00 4650.00 4791.60 4791.60 4791.60 4791.60 Jan-84 5320.30 4433.40 4527.60 4527.60 4527.60 4642.80 4642.80 4836.00 4836.00 5239.50 5239.50 5533.20 5533.20 Jan-85 4493.10 4610.70 4708.80 4708.80 4708.80 4828.50 4828.50 5029.50 5029.50 5449.20 5449.20 5866.20 5866.20 Oct-85 4627.80 4749.00 4850.10 4850.10 4850.10 4973.40 4973.40 5180.40 5180.40 5612.70 5612.70 6042.30 6042.30 Jan-87 4766.70 4891.50 4995.60 4995.60 4995.60 5122.50 5122.50 5335.80 5335.80 5781.00 5781.00 6223.50 6223.50 Jan-88 4862.10 4989.30 5095.50 5095.50 5095.50 5225.10 5225.10 5442.60 5442.60 5896.50 5896.50 6223.50 6223.50 Jan-89 5061.30 5193.90 5304.30 5304.30 5304.30 5439.30 5439.30 5665.80 5665.80 6138.30 6138.30 6478.80 6478.80 Jan-90 5243.40 5380.80 5495.40 5495.40 5495.40 5635.20 5635.20 5869.80 5869.80 6359.40 6359.40 6711.90 6711.90 Jan-91 5485.50 5601.30 5720.70 5720.70 5720.70 5866.20 5866.20 6110.40 6110.40 6620.10 6620.10 6987.00 6987.00 Jan-92 5687.70 5836.50 5961.00 5961.00 5961.00 6112.50 6112.50 6366.90 6366.90 6898.20 6898.20 7280.40 7280.40 Jan-93 5898.00 6052.50 6181.50 6181.50 6181.50 6338.70 6338.70 6602.40 6602.40 7153.50 7153.50 7549.80 7549.80 Jan-94 6027.90 6185.70 6317.40 6317.40 6317.40 6478.20 6478.20 8747.60 6747.60 7311.00 7311.00 7716.00 7716.00 Jan-95 6184.50 6346.50 6481.80 6481.80 6481.80 6646.50 6646.50 6923.10 6923.10 7501.20 7501.20 7916.70 7916.70 Jan-96 6333.00 6498.90 6637.50 6637.50 6637.50 6806.10 6806.10 7089.30 7089.30 7681.20 7681.20 8106.60 8106.60 Jan-97 6522.90 6693.90 6836.70 6836.70 6836.70 7010.40 7010.40 7302.00 7302.00 7911.60 7911.60 8349.90 8349.90 Jan-98 6705.60 6881.40 7028.10 7028.10 7028.10 7206.60 7206.60 7506.60 7506.60 8133.00 8133.00 8583.60 8583.60 Jan-99 6947.10 7129.20 7281.00 7281.00 7281.00 7466.10 7466.10 7776.90 7776.90 8425.80 8425.80 8892.60 8892.60 Jan-00 7280.70 7471.50 7630.50 7630.50 7630.50 7824.60 7824.60 8150.10 8150.10 8830.20 8830.20 9319.50 9319.50 Jul-00 9319.50 9453.60 Jul-01 9664.20 9803.40 Jan-02 10147.50 10293.60 Jan-03 10563.60 10715.70 Jan-04 10954.50 11112.30 

59
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-8 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22

6594.30 

666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 

Jun-42 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 Jul-46 733.33 733.33 733.33 733.33 733.33 733.33 733.33 733.33 733.33 733.33 733.33 733.33 733.33 Oct-49 926.25 926.25 926.25 926.25 926.25 926.25 926.25 926.25 926.25 926.25 926.25 926.25 926.25 May-52 963.30 963.30 963.30 963.30 963.30 963.30 963.30 963.30 963.30 963.30 963.30 963.30 963.30 Apr-55 963.30 963.30 1021.80 1021.80 1021.80 1021.80 1021.80 1021.80 1021.80 1021.80 1021.80 1021.80 1021.80 Jun-58 963.30 1000.00 1022.00 1022.00 1022.00 1100.00 1100.00 1150.00 1150.00 1200.00 1250.00 1300.00 1350.00 Oct-63 963.30 1050.00 1075.00 1075.00 1075.00 1155.00 1155.00 1210.00 1210.00 1260.00 1315.00 1365.00 1420.00 Sep-64 1045.20 1076.40 1101.90 1101.90 1101.90 1183.80 1183.80 1240.20 1240.20 1291.50 1347.90 1399.20 1455.60 Sep-65 1107.90 1140.90 1167.90 1167.90 1167.90 1254.90 1254.90 1314.60 1314.60 1368.90 1428.90 1483.20 1542.90 Jul-66 1143.30 1177.50 1205.40 1205.40 1205.40 1295.10 1295.10 1356.60 1356.60 1412.70 1474.50 1530.60 1592.40 Oct-67 1207.20 1243.50 1272.90 1272.90 1272.90 1367.70 1367.70 1432.50 1432.50 1491.90 1557.00 1616.40 1681.50 Jul-68 1290.60 1329.30 1360.80 1360.80 1360.80 1462.20 1462.20 1531.20 1531.20 1594.80 1664.40 1728.00 1797.60 Jul-69 1453.20 1496.70 1532.40 1532.40 1646.40 1646.40 1724.10 1724.10 1795.80 1874.10 1945.80 2024.10 2024.10 Jan-70 1570.80 1617.90 1656.60 1656.60 1656.60 1779.90 1779.90 1863.90 1863.90 1941.30 2025.90 2103.30 2188.20 Jan-71 1695.00 1745.70 1787.40 1787.40 1787.40 1920.60 1920.60 2011.20 2011.20 2094.60 2185.80 2269.50 2361.00 Nov-71 1695.00 1745.70 1787.40 1787.40 1787.40 1920.60 1920.60 2011.20 2011.20 2094.60 2185.80 2269.50 2361.00 Jan-72 1817.10 1871.70 1916.40 1916.40 1916.40 2059.20 2059.20 2156.10 2156.10 2245.50 2343.30 2433.00 2531.10 Oct-72 1938.60 1996.80 2044.50 2044.50 2044.50 2196.90 2196.90 2300.40 2300.40 2395.80 2500.20 2595.90 2700.30 Oct-73 2058.30 2120.10 2170.50 2170.50 2170.50 2332.50 2332.50 2442.30 2442.30 2543.70 2654.40 2756.10 2866.80 Oct-74 2172.00 2237.10 2290.20 2290.20 2290.20 2461.20 2461.20 2577.00 2577.00 2684.10 2800.80 2908.20 3000.00 Oct-75 2280.60 2349.00 2404.80 2404.80 2404.80 2584.20 2584.20 2706.00 2706.00 2818.20 2940.90 3053.70 3150.00 Oct-76 2363.10 2433.90 2491.80 2491.80 2491.80 2677.80 2677.80 2804.10 2804.10 2920.20 3047.40 3164.10 3291.00 Oct-77 2509.50 2584.80 2646.30 2646.30 2646.30 2843.70 3843.70 2978.10 2978.10 3101.40 3236.40 3360.30 3495.00 Oct-78 2647.50 2727.00 2791.80 2791.80 2791.80 3000.00 3000.00 3141.90 3141.90 3272.10 3414.30 3545.10 3687.30 Oct-79 2833.50 2918.40 2987.70 2987.70 2987.70 3210.60 3210.60 3362.40 3362.40 3501.90 3654.00 3794.10 3946.20 Oct-80 3165.00 3259.80 3337.20 3337.20 3337.20 3586.20 3586.20 3755.70 3755.70 3911.70 4081.50 4176.00 4176.00 Oct-81 3617.70 3726.00 3814.50 3814.50 3814.50 4098.90 4098.90 4292.70 4292.70 4471.20 4665.30 4791.60 4791.60 Oct-82 3762.30 3875.10 3967.20 3967.20 3967.20 4263.00 4263.00 4464.30 4464.30 4650.00 4791.60 4791.60 4791.60 Jan-84 3912.90 4030.20 4125.90 4125.90 4125.90 4433.40 4433.40 4642.80 4642.80 4836.00 5046.00 5239.50 5449.50 Jan-85 4069.50 4191.30 4290.90 4290.90 4290.90 4610.70 4610.70 4828.50 4828.50 5029.50 5247.90 5449.20 5667.60 Oct-85 4191.60 4317.00 4419.60 4419.60 4419.60 4749.00 4749.00 4973.40 4973.40 5180.40 5405.40 5612.70 5837.70 Jan-87 4317.30 4446.60 4552.20 4552.20 4552.20 4891.50 4891.50 5122.50 5122.50 5335.80 5567.70 5781.00 6012.90 Jan-88 4403.70 4535.40 4643.10 4643.10 4643.10 4989.30 4989.30 5225.10 5225.10 5442.60 5679.00 5896.50 6041.70 Jan-89 4584.30 4721.40 4833.60 4833.60 4833.60 5193.90 5193.90 5439.30 5439.30 5665.80 5911.80 6138.30 6289.50 Jan-90 4749.30 4891.50 5007.60 5007.60 5007.60 5380.80 5380.80 5635.20 5635.20 5869.80 6124.50 6359.40 6516.00 Jan-91 4944.00 5092.20 5212.80 5212.80 5212.80 5601.30 5601.30 5866.20 5866.20 6110.40 6375.60 6620.10 6783.30 Jan-92 5151.60 5306.10 5431.80 5431.80 5431.80 5836.50 5836.50 6112.50 6112.50 6366.90 6643.50 6898.20 7068.30 Jan-93 5342.10 5502.30 5632.80 5632.80 5632.80 6052.50 6052.50 6338.70 6338.70 6602.40 6889.20 7153.50 7329.90 Jan-94 5459.70 5623.50 5756.70 5756.70 5756.70 6185.70 6185.70 6478.20 6478.20 6747.60 7040.70 7311.00 7491.30 Jan-95 5601.60 5769.60 5906.40 5906.40 5906.40 6346.50 6346.50 6646.50 6646.50 6923.10 7223.70 7501.20 7686.00 Jan-96 5736.00 5908.20 6048.30 6048.30 6048.30 6498.90 6498.90 6806.10 6806.10 7089.30 7397.10 7681.20 7870.50 Jan-97 5908.20 6085.50 6229.80 6229.80 6229.80 6693.90 6693.90 7010.40 7010.40 7302.00 7619.10 7911.60 8106.60 Jan-98 6073.50 6255.90 6404.10 6404.10 6404.10 6881.40 6881.40 7206.60 7206.60 7506.60 7832.40 8133.00 8333.70 Jan-99 6292.20 6481.20 6634.50 6634.50 6634.50 7129.20 7129.20 7466.10 7466.10 7776.90 8114.40 8425.80 8633.70 Jan-00 6792.30 6953.10 6953.10 6953.10 7471.50 7471.50 7824.60 7824.60 8150.10 8503.80 8830.20 9048.00 Jul-00 6594.30 6810.30 6953.10 6993.30 7171.80 7471.50 7540.80 7824.60 7906.20 8150.10 8503.80 8830.20 9048.00 Jan-01 6838.20 7062.30 7210.50 7252.20 7437.30 7747.80 7819.80 8114.10 8198.70 8451.60 8818.50 9156.90 9382.80 Jan-02 7180.20 7415.40 7571.10 7614.90 7809.30 8135.10 8210.70 8519.70 8608.50 8874.30 9259.50 9614.70 9852.00 Jan-03 7474.50 7719.30 7881.60 7927.20 8129.40 8468.70 8547.30 8868.90 8961.30 9238.20 9639.00 10008.90 10255.80 Jan-04 7751.10 8004.90 8173.20 8220.60 8430.30 8781.90 8863.50 9197.10 9292.80 9579.90 9995.70 10379.10 10635.30 

60
BASIC PAY SCHEDULE - Historical Data

Pay Grade O-7 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 Jun-42 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 Jul-46 550.00 550.00 550.00 550.00 550.00 550.00 550.00 550.00 550.00 550.00 550.00 550.00 550.00 Oct-49 769.50 769.50 769.50 769.50 769.50 769.50 769.50 769.50 769.50 769.50 769.50 769.50 769.50 May-52 800.28 800.28 800.28 800.28 800.28 800.28 800.28 800.28 800.28 800.28 800.28 800.28 800.28 Apr-55 800.28 800.28 850.20 850.20 850.20 850.20 850.20 850.20 850.20 850.20 850.20 850.20 850.20 Jun-58 800.28 860.00 860.00 860.00 900.00 900.00 950.00 950.00 1000.00 1100.00 1175.00 1175.00 1175.00 Oct-63 800.28 905.00 905.00 905.00 945.00 945.00 1000.00 1000.00 1050.00 1155.00 1235.00 1235.00 1235.00 Sep-64 868.20 927.60 927.60 927.60 968.70 968.70 1025.10 1025.10 1076.40 1183.80 1266.00 1266.00 1266.00 Sep-65 920.40 983.40 983.40 983.40 1026.90 1026.90 1086.60 1086.60 1140.90 1254.90 1341.90 1341.90 1341.90 Jul-66 949.80 1014.90 1014.90 1014.90 1059.90 1059.90 1121.40 1121.40 1177.50 1295.10 1384.80 1384.80 1384.80 Oct-67 1002.90 1071.60 1071.60 1071.60 1119.30 1119.30 1184.10 1184.10 1243.50 1367.70 1462.20 1462.20 1462.20 Jul-68 1072.20 1145.40 1145.40 1145.40 1196.40 1196.40 1265.70 1265.70 1329.30 1462.20 1563.00 1563.00 1563.00 Jul-69 1207.20 1289.70 1289.70 1289.70 1347.00 1347.00 1425.30 1425.30 1496.70 1646.40 1759.80 1759.80 1759.80 Jan-70 1305.00 1394.10 1394.10 1394.10 1456.20 1456.20 1540.80 1540.80 1617.90 1779.90 1902.30 1902.30 1902.30 Jan-71 1408.20 1504.20 1504.20 1504.20 1571.10 1571.10 1662.60 1662.60 1745.70 1920.60 2052.60 2052.60 2052.60 Nov-71 1408.20 1504.20 1504.20 1504.20 1571.10 1571.10 1662.60 1662.60 1745.70 1920.60 2052.60 2052.60 2052.60 Jan-72 1509.60 1612.80 1612.80 1612.80 1684.50 1684.50 1782.60 1782.60 1871.70 2059.20 2200.50 2200.50 2200.50 Oct-72 1610.70 1720.80 1720.80 1720.80 1797.30 1797.30 1902.00 1902.00 1996.80 2196.90 2347.80 2347.80 2347.80 Oct-73 1710.00 1827.00 1827.00 1827.00 1908.30 1908.30 2019.30 2019.30 2120.10 2332.50 2492.70 2492.70 2492.70 Oct-74 1804.50 1927.80 1927.80 1927.80 2013.60 2013.60 2130.90 2130.90 2237.10 2461.20 2630.40 2630.40 2630.40 Oct-75 1894.80 2024.10 2024.10 2024.10 2114.40 2114.40 2237.40 2237.40 2349.00 2584.20 2761.80 2761.80 2761.80 Oct-76 1963.50 2097.30 2097.30 2097.30 2190.90 2190.90 2318.40 2318.40 2433.90 2677.80 2861.70 2861.70 2861.70 Oct-77 2085.30 2227.20 2227.20 2227.20 2326.80 2326.80 2462.10 2462.10 2584.80 2843.70 3039.00 3039.00 3039.00 Oct-78 2199.90 2349.60 2349.60 2349.60 2454.90 2454.90 2597.40 2597.40 2727.00 3000.00 3206.10 3206.10 3206.10 Oct-79 2354.40 2514.60 2514.60 2514.60 2627.10 2627.10 2779.80 2779.80 2918.40 3210.60 3431.10 3431.10 3431.10 Oct-80 2629.80 2808.90 2808.90 2808.90 2934.60 2934.60 3105.00 3105.00 3259.80 3586.20 3832.50 3832.50 3832.50 Oct-81 3006.00 3210.60 3210.60 3210.60 3354.30 3354.30 3549.00 3549.00 3726.00 4098.90 4380.60 4380.60 4380.60 Oct-82 3126.30 3339.00 3339.00 3339.00 3488.40 3488.40 3690.90 3690.90 3875.10 4263.00 4555.80 4555.80 4555.80 Jan-84 3251.40 3472.50 3472.50 3472.50 3627.90 3627.90 3838.50 3838.50 4030.20 4433.40 4737.90 4737.90 4737.90 Jan-85 3381.60 3611.40 3611.40 3611.40 3773.10 3773.10 3992.10 3992.10 4191.30 4610.70 4927.50 4927.50 4927.50 Oct-85 3483.00 3719.70 3719.70 3719.70 3886.20 3886.20 4111.80 4111.80 4317.00 4749.00 5075.40 5075.40 5075.40 Jan-87 3587.40 3831.30 3831.30 3831.30 4002.90 4002.90 4235.10 4235.10 4446.60 4891.50 5227.80 5227.80 5227.80 Jan-88 3659.10 3907.80 3907.80 3907.80 4083.00 4083.00 4319.70 4319.70 4535.40 4989.30 5332.50 5332.50 5332.50 Jan-89 3809.10 4068.00 4068.00 4068.00 4250.40 4250.40 4496.70 4496.70 4721.40 5193.90 5551.20 5551.20 5551.20 Jan-90 3946.20 4214.40 4214.40 4214.40 4403.40 4403.40 4658.70 4658.70 4891.50 5380.80 5751.00 5751.00 5751.00 Jan-91 4107.90 4387.20 4387.20 4387.20 4584.00 4584.00 4849.80 4849.80 5092.20 5601.30 5986.80 5986.80 5986.80 Jan-92 4280.40 4571.40 4571.40 4571.40 4776.60 4776.60 5053.50 5053.50 5306.10 5836.50 6238.20 6238.20 6238.20 Jan-93 4438.80 4740.60 4740.60 4740.60 4953.30 4953.30 5240.40 5240.40 5502.30 6052.50 6468.90 6468.90 6468.90 Jan-94 4536.60 4845.00 4845.00 4845.00 5062.20 5062.20 5355.60 5355.60 5623.50 6185.70 6611.10 6611.10 6611.10 Jan-95 4654.50 4971.00 4971.00 4971.00 5193.90 5193.90 5494.80 5494.80 5769.60 6346.50 6783.00 6783.00 6783.00 Jan-96 4766.10 5090.40 5090.40 5090.40 5318.70 5318.70 5626.80 5626.80 5908.20 6498.90 6945.90 6945.90 6945.90 Jan-97 4909.20 5243.10 5243.10 5243.10 5478.30 5478.30 5795.70 5795.70 6085.50 6693.90 7154.40 7154.40 7154.40 Jan-98 5046.60 5389.80 5389.80 5389.80 5631.60 5631.60 5958.00 5958.00 6255.90 6881.40 7354.80 7354.80 7354.80 Jan-99 5528.40 5583.90 5583.90 5583.90 5834.40 5834.40 6172.50 6172.50 6481.20 7129.20 7619.70 7619.70 7619.70 Jan-00 5479.50 5851.80 5851.80 5851.80 6114.60 6114.60 6468.90 6468.90 6792.30 7471.50 7985.40 7985.40 7985.40 Jul-00 5479.50 5851.80 5851.80 5894.40 6114.60 6282.00 6475.80 6669.00 6863.10 7471.50 7985.40 7985.40 7985.40 Jan-01 5682.30 6068.60 6068.40 6112.50 6340.80 6514.50 6715.50 6915.90 7116.90 7747.80 8280.90 8280.90 8280.90 

61
BASIC PAY SCHEDULE - Historical Data

Pay Grade O-7 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-02 5966.40 6371.70 6371.70 6418.20 6657.90 6840.30 7051.20 7261.80 7472.70 8135.10 8694.90 8694.90 8694.90 Jan-03 6210.90 6499.20 6633.00 6739.20 6930.90 7120.80 7340.40 7559.40 7779.00 8468.70 9051.30 9051.30 9051.30 Jan-04 6440.70 6739.80 6878.40 6988.50 7187.40 7384.20 7611.90 7839.00 8066.70 8781.90 9386.10 9386.10 9386.10 

62
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-6 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22 291.67 291.67 306.25 306.25 320.83 320.83 335.42 350.00 350.00 364.58 379.17 393.75 408.33 Jun-42 333.33 333.33 350.00 350.00 366.67 366.67 383.33 400.00 400.00 416.67 433.33 450.00 450.00 Jul-46 366.67 366.67 385.00 385.00 403.33 403.33 421.67 440.00 440.00 458.33 476.67 495.00 495.00 Oct-49 570.00 570.00 570.00 570.00 570.00 570.00 570.00 570.00 570.00 584.25 612.75 612.75 641.25 May-52 592.80 592.80 592.80 592.80 592.80 592.80 592.80 592.80 592.80 607.62 637.26 637.26 666.90 Apr-55 592.80 592.80 631.80 631.80 631.80 631.80 631.80 631.80 631.80 655.20 717.60 717.60 748.80 Jun-58 592.80 628.00 670.00 670.00 670.00 670.00 670.00 670.00 690.00 800.00 840.00 860.00 910.00 Oct-63 592.80 690.00 735.00 735.00 735.00 735.00 735.00 735.00 760.00 880.00 925.00 945.00 1000.00 Sep-64 643.20 707.40 753.30 753.30 753.30 753.30 753.30 753.30 779.10 902.10 948.00 968.70 1025.10 Sep-65 681.90 749.70 798.60 798.60 798.60 798.60 798.60 798.60 825.90 956.10 1005.00 1026.90 1086.60 Jul-66 703.80 773.70 824.10 824.10 824.10 824.10 824.10 824.10 852.30 986.70 1037.10 1059.90 1121.40 Oct-67 743.10 816.90 870.30 870.30 870.30 870.30 870.30 870.30 900.00 1041.90 1095.30 1119.30 1184.10 Jul-68 794.40 873.30 930.30 930.30 930.30 930.30 930.30 930.30 962.10 1113.90 1170.90 1196.40 1265.70 Jul-69 894.60 983.40 1047.60 1047.60 1047.60 1047.60 1047.60 1047.60 1083.30 1254.30 1318.50 1347.00 1425.30 Jan-70 967.20 1063.20 1132.50 1132.50 1132.50 1132.50 1132.50 1132.50 1170.90 1356.00 1425.30 1456.20 1540.80 Jan-71 1043.70 1147.20 1221.90 1221.90 1221.90 1221.90 1221.90 1221.90 1263.30 1463.10 1537.80 1571.10 1662.60 Nov-71 1043.70 1147.20 1221.90 1221.90 1221.90 1221.90 1221.90 1221.90 1263.30 1463.10 1537.80 1571.10 1662.60 Jan-72 1119.00 1230.00 1310.10 1310.10 1310.10 1310.10 1310.10 1310.10 1354.50 1568.70 1648.80 1684.50 1782.60 Oct-72 1194.00 1312.20 1397.70 1397.70 1397.70 1397.70 1397.70 1397.70 1445.10 1673.70 1759.20 1797.30 1902.00 Oct-73 1267.80 1393.20 1483.80 1483.80 1483.80 1483.80 1483.80 1483.80 1534.20 1776.90 1867.80 1908.30 2019.30 Oct-74 1337.70 1470.00 1565.70 1565.70 1565.70 1565.70 1565.70 1565.70 1618.80 1875.00 1971.00 2013.60 2130.90 Oct-75 1404.60 1543.50 1644.00 1644.00 1644.00 1644.00 1644.00 1644.00 1699.80 1968.90 2069.70 2114.40 2237.40 Oct-76 1455.30 1599.30 1703.40 1703.40 1703.40 1703.40 1703.40 1703.40 1761.30 2040.30 2144.70 2190.90 2318.40 Oct-77 1545.60 1698.60 1809.00 1809.00 1809.00 1809.00 1809.00 1809.00 1870.50 2166.90 2277.60 2326.80 2462.10 Oct-78 1630.50 1791.90 1908.60 1908.60 1908.60 1908.60 1908.60 1908.60 1973.40 2286.00 2403.00 2454.90 2597.40 Oct-79 1745.20 1917.60 2042.70 2042.70 2042.70 2042.70 2042.70 2042.70 2112.00 2446.50 2571.60 2627.10 2779.80 Oct-80 1949.40 2142.00 2281.80 2281.80 2281.80 2281.80 2281.80 2281.80 2359.20 2732.70 2872.50 2934.60 3105.00 Oct-81 2228.10 2448.30 2608.20 2608.20 2608.20 2608.20 2608.20 2608.20 2696.70 3123.60 3283.20 3354.30 3549.00 Oct-82 2317.20 2546.10 2712.60 2712.60 2712.60 2712.60 2712.60 2712.60 2804.70 3248.40 3414.60 3488.40 3690.90 Jan-84 2409.90 2647.80 2821.20 2821.20 2821.20 2821.20 2821.20 2821.20 2916.90 3378.30 3551.10 3627.90 3838.50 Jan-85 2506.20 2753.70 2934.00 2934.00 2934.00 2934.00 2934.00 2934.00 3033.60 3513.30 3693.00 3773.10 3992.10 Oct-85 2581.50 2836.20 3021.90 3021.90 3021.90 3021.90 3021.90 3021.90 3124.50 3618.60 3803.70 3886.20 4111.80 Jan-87 2658.90 2921.40 3112.50 3112.50 3112.50 3112.50 3112.50 3112.50 3218.10 3727.20 3917.70 4002.90 4235.10 Jan-88 2712.00 2979.90 3174.90 3174.90 3174.90 3174.90 3174.90 3174.90 3282.60 3801.60 3996.00 4083.00 4319.70 Jan-89 2823.30 3102.00 3305.10 3305.10 3305.10 3305.10 3305.10 3305.10 3417.30 3957.60 4159.80 4250.40 4496.70 Jan-90 2925.00 3213.60 3424.20 3424.20 3424.20 3424.20 3424.20 3424.20 3540.30 4100.10 4309.50 4403.40 4658.70 Jan-91 3045.00 3345.30 3564.60 3564.60 3564.60 3564.60 3564.60 3564.60 3685.50 4268.10 4486.20 4584.00 4849.80 Jan-92 3172.80 3485.70 3714.30 3714.30 3714.30 3714.30 3714.30 3714.30 3840.30 4447.50 4674.60 4776.60 5053.50 Jan-93 3290.10 3614.70 3851.70 3851.70 3851.70 3851.70 3851.70 3851.70 3982.50 4612.20 4847.70 4953.30 5240.40 Jan-94 3362.40 3694.20 3936.30 3936.30 3936.30 3936.30 3936.30 3936.30 4070.10 4713.60 4954.20 5062.20 5355.60 Jan-95 3449.70 3790.20 4038.60 4038.60 4038.60 4038.60 4038.60 4038.60 4176.00 4836.30 5082.90 5193.90 5494.80 Jan-96 3532.50 3881.10 4135.50 4135.50 4135.50 4135.50 4135.50 4135.50 4276.20 4952.40 5205.00 5318.70 5626.80 Jan-97 3638.40 3997.50 4259.70 4259.70 4259.70 4259.70 4259.70 4259.70 4404.60 5100.90 5361.30 5478.30 5795.70 Jan-98 3740.40 4109.40 4379.10 4379.10 4379.10 4379.10 4379.10 4379.10 4527.90 5243.70 5511.30 5631.60 5958.00 Jan-99 3875.10 4257.30 4536.60 4536.60 4536.60 4536.60 4536.60 4536.60 4690.80 5432.40 5709.60 5834.40 6172.50 Jan-00 4061.10 4461.60 4754.40 4754.40 4754.40 4754.40 4754.40 4754.40 4916.10 5693.10 5983.80 6114.60 6468.90 Jul-00 4061.10 4461.60 4754.40 4754.40 4772.40 4976.70 5004.00 5004.00 5169.30 5791.20 6086.10 6381.30 6549.00 Jan-01 4211.40 4626.60 4930.20 4930.20 4949.10 5160.90 5189.10 5189.10 5360.70 6005.40 6311.40 6617.40 6791.40 

63
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-6 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-02 4422.00 4857.90 5176.80 5176.80 5196.60 5418.90 5448.60 5448.60 5628.60 6305.70 6627.00 6948.30 7131.00 Jan-03 4603.20 5057.10 5388.90 5388.90 5409.60 5641.20 5672.10 5672.10 5994.60 6564.30 6898.80 7233.30 7423.50 Jan-04 4773.60 5244.30 5588.40 5588.40 5609.70 5850.00 5882.10 5882.10 6216.30 6807.30 7154.10 7500.90 7698.30 

64
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-5 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22 250.00 250.00 262.50 262.50 275.00 275.00 287.50 300.00 300.00 312.50 325.00 393.75 408.33 Jun-42 291.67 291.67 306.25 306.25 320.83 320.83 335.42 350.00 350.00 364.58 379.17 393.75 408.33 Jul-46 320.83 320.83 336.88 336.88 352.92 352.92 368.96 385.00 385.00 401.04 417.08 433.13 433.13 Oct-49 456.00 456.00 456.00 456.00 456.00 456.00 456.00 470.25 484.50 498.75 527.25 527.25 555.75 May-52 474.24 474.24 474.24 474.24 474.24 474.24 474.24 489.06 503.88 518.70 548.34 548.34 577.98 Apr-55 474.24 474.24 507.00 507.00 507.00 507.00 507.00 530.40 561.60 577.20 608.40 608.40 639.60 Jun-58 474.24 503.00 540.00 540.00 540.00 540.00 560.00 590.00 630.00 680.00 720.00 745.00 775.00 Oct-63 474.24 590.00 630.00 630.00 630.00 630.00 650.00 685.00 730.00 785.00 830.00 855.00 885.00 Sep-64 514.50 604.80 645.90 645.90 645.90 645.90 666.30 702.00 748.20 804.60 850.80 876.30 907.20 Sep-65 545.40 641.10 684.60 684.60 684.60 684.60 706.20 744.00 793.20 852.90 901.80 928.80 961.50 Jul-66 562.80 661.50 706.50 706.50 706.50 706.50 728.70 767.70 818.70 880.20 930.60 958.50 992.40 Oct-67 594.30 698.40 746.10 746.10 746.10 746.10 769.50 810.60 864.60 929.40 982.80 1012.20 1047.90 Jul-68 635.40 746.70 797.70 797.70 797.70 797.70 822.60 866.40 924.30 993.60 1050.60 1082.10 1120.20 Jul-69 715.50 840.90 898.20 898.20 898.20 898.20 926.10 975.60 1040.70 1118.70 1182.90 1218.30 1261.20 Jan-70 773.40 909.00 971.10 971.10 971.10 971.10 1001.10 1054.50 1125.00 1209.30 1278.60 1317.00 1363.50 Jan-71 834.60 980.70 1047.90 1047.90 1047.90 1047.90 1080.80 1137.90 1213.80 1304.70 1379.70 1421.10 1471.20 Nov-71 834.60 980.70 1047.90 1047.90 1047.90 1047.90 1080.80 1137.90 1213.80 1304.70 1379.70 1421.10 1471.20 Jan-72 894.90 1051.50 1123.50 1123.50 1123.50 1123.50 1158.30 1219.80 1301.40 1398.90 1479.30 1523.70 1577.40 Oct-72 954.90 1121.70 1198.80 1198.80 1198.80 1198.80 1235.70 1301.40 1388.40 1492.50 1578.30 1625.70 1683.00 Oct-73 1013.70 1191.00 1272.90 1272.90 1272.90 1272.90 1311.90 1381.80 1474.20 1584.60 1675.80 1725.90 1786.80 Oct-74 1069.80 1256.70 1343.10 1343.10 1343.10 1343.10 1384.20 1458.00 1555.50 1672.20 1768.20 1821.30 1885.50 Oct-75 1123.20 1319.40 1410.30 1410.30 1410.30 1410.30 1453.50 1530.90 1633.20 1755.90 1856.70 1912.50 1979.70 Oct-76 1164.00 1367.10 1461.30 1461.30 1461.30 1461.30 1506.00 1586.40 1692.30 1819.50 1923.90 1981.80 2051.40 Oct-77 1236.30 1452.00 1551.90 1551.90 1551.90 1551.90 1599.30 1684.80 1797.30 1932.30 2043.30 2104.80 2178.60 Oct-78 1304.40 1531.80 1637.40 1637.40 1637.40 1637.40 1687.20 1777.50 1896.30 2038.50 2155.80 2220.60 2298.30 Oct-79 1395.90 1639.20 1752.30 1752.30 1752.30 1752.30 1805.70 1902.30 2029.50 2181.60 2307.00 2376.60 2459.70 Oct-80 1559.10 1830.90 1957.20 1957.20 1957.20 1957.20 2016.90 2124.90 2267.10 2436.90 2577.00 2654.70 2747.40 Oct-81 1782.00 2092.80 2237.10 2237.10 2237.10 2237.10 2305.20 2428.80 2591.40 2785.50 2945.40 3034.20 3140.40 Oct-82 1853.40 2176.50 2326.50 2326.50 2326.50 2326.50 2397.30 2526.00 2695.20 2896.80 3063.30 3155.70 3266.10 Jan-84 1927.50 2263.50 2419.50 2419.50 2419.50 2419.50 2493.30 2627.10 2802.90 3012.60 3185.70 3282.00 3396.60 Jan-85 2004.60 2354.10 2516.40 2516.40 2516.40 2516.40 2592.90 2732.10 2915.10 3133.20 3313.20 3413.40 3532.50 Oct-85 2064.60 2424.60 2592.00 2592.00 2592.00 2592.00 2670.60 2814.00 3002.70 3227.10 3412.50 3515.70 3638.40 Jan-87 2126.40 2497.20 2669.70 2669.70 2669.70 2669.70 2750.70 2898.30 3092.70 3324.00 3514.80 3621.30 3747.60 Jan-88 2159.00 2547.00 2723.10 2723.10 2723.10 2723.10 2805.60 2956.20 3154.50 3390.60 3585.00 3693.60 3822.60 Jan-89 2257.80 2651.40 2834.70 2834.70 2834.70 2834.70 2920.50 3077.40 3283.80 3529.50 3732.00 3845.10 3979.20 Jan-90 2339.10 2746.80 2936.70 2936.70 2936.70 2936.70 3025.50 3188.10 3402.00 3656.70 3866.40 3983.40 4122.60 Jan-91 2435.10 2589.30 3057.00 3057.00 3057.00 3057.00 3149.40 3318.90 3541.50 3806.70 4024.80 4146.60 4291.50 Jan-92 2537.40 2979.30 3185.40 3185.40 3185.40 3185.40 3281.70 3458.40 3690.30 3966.60 4193.70 4320.90 4471.80 Jan-93 2631.30 3089.40 3303.30 3303.30 3303.30 3303.30 3403.20 3586.50 3826.80 4113.30 4348.80 4480.80 4637.40 Jan-94 2689.20 3157.50 3375.90 3375.90 3375.90 3375.90 3478.20 3665.40 3911.10 4203.90 4444.50 4579.50 4739.40 Jan-95 2759.10 3239.70 3463.80 3463.80 3463.80 3463.80 3568.50 3760.80 4012.80 4313.10 4560.00 4698.60 4862.70 Jan-96 2825.40 3317.40 3546.90 3546.90 3546.90 3546.90 3654.00 3851.10 4109.10 4416.60 4669.50 4811.40 4979.40 Jan-97 2910.30 3417.00 3653.40 3653.40 3653.40 3653.40 3763.50 3966.60 4232.40 4549.20 4809.60 4955.70 5128.80 Jan-98 2991.90 3512.70 3755.70 3755.70 3755.70 3755.70 3868.80 4077.60 4350.90 4676.70 4944.30 5094.60 5272.50 Jan-99 3099.60 3639.30 3891.00 3891.00 3891.00 3891.00 4008.00 4224.30 4507.50 4845.00 5122.20 5277.90 5462.40 Jan-00 3248.40 3813.90 4077.90 4077.90 4077.90 4077.90 4200.30 4427.10 4723.80 5077.50 5368.20 5531.10 5724.60 Jul-00 3248.40 3813.90 4077.90 4127.70 4291.80 4291.80 4420.80 4659.30 4971.90 5286.00 5436.00 5583.60 5751.90 Jan-01 3368.70 3954.90 4228.80 4280.40 4450.50 4450.50 4584.30 4831.80 5155.80 5481.60 5637.00 5790.30 5964.60 

65
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-5 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-02 3537.00 4152.60 4440.30 4494.30 4673.10 4673.10 4813.50 5073.30 5413.50 5755.80 5919.00 6079.80 6262.80 Jan-03 3837.60 4323.00 4622.40 4678.50 4864.80 4977.00 5222.70 5403.00 5635.50 5991.90 6161.70 6329.10 6519.60 Jan-04 3979.50 4482.90 4793.40 4851.60 5044.80 5161.20 5415.90 5602.80 5844.00 6213.60 6389.70 6563.40 6760.80 

66
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-4 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 

Jul-22 200.00 200.00 210.00 210.00 220.00 220.00 230.00 240.00 240.00 312.50 325.00 337.50 408Jun-42 250.00 250.00 262.50 262.50 275.00 275.00 287.50 300.00 300.00 312.50 325.00 337.50 408Jul-46 275.00 275.00 288.75 288.75 302.50 302.50 316.25 330.00 330.00 343.75 357.50 371.25 433Oct-49 384.75 384.75 384.75 384.75 384.75 399.00 413.25 427.50 441.75 456.00 484.50 484.50 498May-52 400.14 400.14 400.14 400.14 400.14 414.96 429.78 444.60 459.42 474.24 503.88 503.88 518Apr-55 400.14 400.14 429.00 429.00 429.90 452.40 483.60 499.20 514.80 530.40 561.60 561.60 577Jun-58 400.14 424.00 455.00 455.00 465.00 485.00 520.00 550.00 570.00 610.00 630.00 630.00 630Oct-63 400.14 515.00 550.00 550.00 560.00 585.00 625.00 660.00 690.00 720.00 740.00 740.00 740Sep-64 434.10 528.00 563.70 563.70 573.90 599.70 640.50 676.50 707.40 738.00 758.40 758.40 758Sep-65 460.20 559.80 597.60 597.60 608.40 635.70 678.90 717.00 749.70 782.40 804.00 804.00 804Jul-66 474.90 577.80 616.80 616.80 627.90 656.10 700.50 739.80 773.70 807.30 829.80 829.80 829Oct-67 501.60 610.20 651.30 663.00 692.70 739.80 781.20 816.90 852.60 876.30 876.30 876.30 876Jul-68 536.10 652.20 696.30 696.30 708.60 740.40 790.80 835.20 873.30 911.40 936.90 936.90 936Jul-69 603.60 734.40 783.90 783.90 798.00 833.70 890.40 940.50 983.40 1026.30 1054.80 1054.80 1054Jan-70 652.50 793.80 847.50 847.50 862.50 901.20 962.40 1016.70 1063.20 1109.40 1140.30 1140.30 1140Jan-71 704.10 856.50 914.40 914.40 930.60 972.30 1038.30 1097.10 1147.20 1197.00 1230.30 1230.30 1230Nov-71 704.10 856.50 914.40 914.40 930.60 972.30 1038.30 1097.10 1147.20 1197.00 1230.30 1230.30 1230Jan-72 754.80 918.30 980.40 980.40 997.80 1042.50 1113.30 1176.30 1230.00 1283.40 1319.10 1319.10 1319Oct-72 805.20 979.80 1046.10 1064.70 1064.70 1112.10 1187.70 1254.90 1312.20 1369.20 1407.30 1407.30 1407Oct-73 855.00 1040.40 1110.60 1110.60 1130.40 1180.80 1260.90 1332.30 1393.20 1453.80 1494.00 1494.00 1494Oct-74 902.10 1097.70 1171.80 1171.80 1192.80 1245.90 1330.50 1405.80 1470.00 1533.90 1576.50 1576.50 1576Oct-75 947.10 1152.60 1230.30 1230.30 1252.50 1308.30 1397.10 1476.00 1543.50 1610.70 1655.40 1655.40 1655Oct-76 981.30 1194.30 1274.70 1274.70 1297.80 1355.70 1447.80 1529.40 1599.30 1668.90 1715.40 1715.40 1715Oct-77 1042.20 1268.40 1353.60 1353.60 1378.20 1439.70 1537.50 1624.20 1698.60 1772.40 1821.90 1821.90 1821Oct-78 1099.50 1338.30 1428.00 1428.00 1454.10 1518.90 1622.10 1713.60 1791.90 1869.90 1922.10 1922.10 1922Oct-79 1176.60 1432.20 1528.20 1528.20 1556.10 1625.40 1736.10 1833.90 1917.60 2001.30 2057.10 2057.10 2057Oct-80 1314.30 1599.90 1707.00 1707.00 1738.20 1815.60 1939.20 2048.40 2142.00 2235.60 2297.70 2297.70 2297Oct-81 1502.10 1828.80 1951.20 1951.20 1986.90 2075.10 2216.10 2341.20 2448.30 2555.40 2626.20 2626.20 2626Oct-82 1562.10 1902.00 2029.20 2029.20 2066.40 2158.20 2305.20 2434.80 2546.10 2657.70 2731.20 2731.20 2731Jan-84 1624.50 1978.20 2110.50 2110.50 2149.20 2244.60 2397.30 2532.30 2647.80 2763.90 2840.40 2840.40 2840Jan-85 1689.60 2057.40 2194.80 2194.80 2235.30 2334.30 2493.30 2633.70 2753.70 2874.60 2954.10 2954.10 2954Oct-85 1740.30 2119.20 2260.50 2260.50 2302.50 2404.20 2568.00 2712.60 2836.20 2960.70 3042.60 3042.60 3042Jan-87 1792.50 2182.80 2328.30 2328.30 2371.50 2476.20 2645.10 2793.90 2921.40 3049.50 3133.80 3133.80 3133Jan-88 1828.50 2226.60 2374.80 2374.80 2418.90 2525.70 2697.90 2849.70 2979.90 3110.40 3196.50 3196.50 3196Jan-89 1903.50 2317.80 2472.30 2472.30 2518.20 2629.20 2808.60 2966.40 3102.00 3237.90 3327.60 3327.60 3327Jan-90 1971.90 2401.20 2561.40 2561.40 2608.80 2724.00 2909.70 3073.20 3213.60 3354.60 3447.30 3447.30 3447Jan-91 2052.60 2499.60 2666.40 2666.40 2715.90 2835.60 3029.10 3199.20 3345.30 3492.00 3588.60 3588.60 3588Jan-92 2138.70 2604.60 2778.30 2778.30 2829.90 2954.70 3156.30 3333.60 3485.70 3638.70 3739.20 3739.20 3739Jan-93 2217.90 2700.90 2881.20 2881.20 2934.60 3063.90 3273.00 3456.90 3614.70 3773.40 3877.50 3877.50 3877Jan-94 2266.80 2760.30 2944.50 2944.50 2999.10 3131.40 3345.00 3533.10 3694.20 3856.50 3862.70 3862.70 3862Jan-95 2325.60 2832.00 3021.00 3021.00 3077.10 3212.70 3432.00 3624.90 3790.20 3956.70 4065.60 4065.60 4065Jan-96 2381.40 2900.10 3093.60 3093.60 3150.90 3289.80 3514.50 3711.90 3881.10 4051.80 4163.10 4163.10 4163Jan-97 2452.80 2987.10 3186.30 3186.30 3245.40 3388.50 3619.80 3823.20 3997.50 4173.30 4287.90 4287.90 4287Jan-98 2521.50 3070.80 3275.40 3275.40 3336.30 3483.30 3721.20 3930.30 4109.40 4290.30 4407.90 4407.90 4407Jan-99 2612.40 3181.20 3393.30 3393.30 3456.30 3608.70 3855.30 4071.90 4257.30 4444.80 4566.60 4566.60 4566Jan-00 2737.80 3333.90 3556.20 3556.20 3622.20 3781.80 4040.40 4267.50 4461.60 4658.10 4785.90 4785.90 4785Jul-00 2737.80 3333.90 3556.20 3606.00 3812.40 3980.40 4252.50 4464.00 4611.00 4758.90 4808.70 4808.70 4808Jan-01 2839.20 3457.20 3687.90 3739.50 3953.40 4127.70 4409.70 4629.30 4781.70 4935.00 4986.60 4986.60 4986Jan-02 3023.70 3681.90 3927.60 3982.50 4210.50 4395.90 4696.20 4930.20 5092.50 5255.70 5310.60 5310.60 5310Jan-03 3311.10 3832.80 4088.70 4145.70 4383.00 4637.70 4954.50 5201.40 5372.70 5471.10 5528.40 5528.40 5528Jan-04 3433.50 3974.70 4239.90 4299.00 4545.30 4809.30 5137.80 5394.00 5571.60 5673.60 5733.00 5733.00 5733

67
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-3 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22 200.00 200.00 210.00 210.00 220.00 220.00 230.00 240.00 240.00 250.00 325.00 337.50 350.00 Jun-42 200.00 200.00 210.00 210.00 220.00 230.00 230.00 240.00 240.00 312.50 325.00 337.50 350.00 Jul-46 230.00 230.00 241.50 241.50 253.00 264.50 264.50 276.00 276.00 343.75 357.50 371.25 385.00 Oct-49 313.50 313.50 313.50 327.75 342.00 356.25 370.50 384.75 399.00 413.25 427.50 427.50 441.75 May-52 326.04 326.04 326.04 340.86 355.68 370.50 385.32 400.14 414.96 429.78 444.60 444.60 459.42 Apr-55 326.04 326.04 351.00 374.40 405.60 421.20 436.80 452.40 468.00 483.60 499.20 499.20 514.80 Jun-58 326.04 346.00 372.00 415.00 440.00 460.00 480.00 510.00 525.00 525.00 525.00 525.00 525.00 Oct-63 326.04 440.00 470.00 520.00 545.00 565.00 595.00 625.00 640.00 640.00 640.00 640.00 640.00 Sep-64 353.70 450.90 481.80 533.10 558.60 579.00 609.90 640.50 656.10 656.10 656.10 656.10 656.10 Sep-65 427.80 477.90 510.60 565.20 592.20 613.80 646.50 678.90 695.40 695.40 695.40 695.40 695.40 Jul-66 441.60 493.20 526.80 583.20 611.10 633.30 667.20 700.50 717.60 717.60 717.60 717.60 717.60 Oct-67 466.20 520.80 556.20 615.90 645.30 668.70 704.70 739.80 757.80 757.80 757.80 757.80 757.80 Jul-68 498.30 556.80 594.60 658.50 689.70 714.90 753.30 790.80 810.00 810.00 810.00 810.00 810.00 Jul-69 561.00 627.00 669.60 741.60 776.70 804.90 848.10 890.40 912.00 912.00 912.00 912.00 912.00 Jan-70 606.30 677.70 723.90 801.60 839.70 870.00 916.80 962.40 985.80 985.80 985.80 985.80 985.80 Jan-71 654.30 731.10 781.20 864.90 906.00 938.70 989.10 1038.30 1063.80 1063.80 1063.80 1063.80 1063.80 Nov-71 654.30 731.10 781.20 864.90 906.00 938.70 989.10 1038.30 1063.80 1063.80 1063.80 1063.80 1063.80 Jan-72 701.40 783.90 837.60 927.30 971.40 1006.50 1060.50 1113.30 1140.60 1140.60 1140.60 1140.60 1140.60 Oct-72 748.20 836.40 893.70 989.40 1036.50 1073.70 1131.30 1187.70 1216.80 1216.80 1216.80 1216.80 1216.80 Oct-73 794.40 888.00 948.90 1050.30 1100.40 1140.00 1201.20 1260.90 1291.80 1291.80 1291.80 1291.80 1291.80 Oct-74 838.20 936.90 1001.40 1108.20 1161.00 1203.00 1267.50 1330.50 1363.20 1363.20 1363.20 1363.20 1363.20 Oct-75 880.20 983.70 1051.50 1163.70 1219.20 1263.30 1330.80 1397.10 1431.30 1431.30 1431.30 1431.30 1431.30 Oct-76 912.00 1019.40 1089.60 1205.70 1263.30 1308.90 1379.10 1447.80 1483.20 1483.20 1483.20 1483.20 1483.20 Oct-77 968.40 1082.70 1157.10 1280.40 1341.60 1390.20 1464.60 1537.50 1575.30 1575.30 1575.30 1575.30 1575.30 Oct-78 1021.80 1142.10 1220.70 1350.90 1415.40 1466.70 1545.30 1622.10 1662.00 1662.00 1662.00 1662.00 1662.00 Oct-79 1093.50 1222.20 1306.50 1445.70 1514.70 1569.60 1653.90 1736.10 1778.70 1778.70 1778.70 1778.70 1778.70 Oct-80 1221.30 1365.30 1459.50 1614.90 1692.00 1753.20 1847.40 1939.20 1986.90 1986.90 1986.90 1986.90 1986.90 Oct-81 1395.90 1560.60 1668.30 1845.90 1934.10 2004.00 2111.70 2216.40 2271.00 2271.00 2271.00 2271.00 2271.00 Oct-82 1451.70 1623.00 1734.90 1919.70 2011.50 2084.10 2196.30 2305.20 2361.90 2361.90 2361.90 2361.90 2361.90 Jan-84 1509.90 1687.80 1804.20 1996.50 2091.90 2167.50 2284.20 2397.30 2456.40 2456.40 2456.40 2456.40 2456.40 Jan-85 1570.20 1755.30 1876.50 2076.30 2175.60 2254.20 2375.70 2493.30 2554.80 2554.80 2554.80 2554.80 2554.80 Oct-85 1617.30 1808.10 1932.90 2138.70 2241.00 2321.70 2447.10 2568.00 2631.30 2631.30 2631.30 2631.30 2631.30 Jan-87 1665.90 1862.40 1990.80 2202.90 2308.20 2391.30 2520.60 2645.10 2710.20 2710.20 2710.20 2710.20 2710.20 Jan-88 1699.20 1899.60 2030.70 2247.00 2354.40 2439.00 2571.00 2697.90 2764.50 2764.50 2764.50 2764.50 2764.50 Jan-89 1768.80 1977.60 2114.10 2339.10 2451.00 2538.90 2676.30 2808.60 2877.90 2877.90 2877.90 2877.90 2877.90 Jan-90 1832.40 2048.70 2190.30 2423.40 2539.20 2630.40 2772.60 2909.70 2981.40 2981.40 2981.40 2981.40 2981.40 Jan-91 1907.40 2132.70 2280.00 2522.70 2643.30 2738.10 2886.30 3029.10 3103.50 3103.50 3103.50 3103.50 3103.50 Jan-92 1987.50 2222.40 2375.70 2628.60 2754.30 2853.00 3007.50 3156.30 3233.70 3233.70 3233.70 3233.70 3233.70 Jan-93 2061.00 2304.60 2463.60 2725.80 2856.30 2958.60 3118.80 3273.00 3353.40 3353.40 3353.40 3353.40 3353.40 Jan-94 2106.30 2355.30 2517.90 2785.80 2919.00 3023.70 3187.50 3345.00 3427.20 3427.20 3427.20 3427.20 3427.20 Jan-95 2161.20 2416.50 2583.30 2858.10 2994.90 3102.30 3270.30 3432.00 3516.30 3516.30 3516.30 3516.30 3516.30 Jan-96 2213.10 2474.40 2645.40 2926.80 3066.90 3176.70 3348.90 3514.50 3600.60 3600.60 3600.60 3600.60 3600.60 Jan-97 2279.40 2548.50 2724.90 3014.70 3159.00 3272.10 3449.40 3619.80 3708.60 3708.60 3708.60 3708.60 3708.60 Jan-98 2343.30 2619.90 2801.10 3099.00 3247.50 3363.60 3546.00 3721.20 3812.40 3812.40 3812.40 3812.40 3812.40 Jan-99 2427.60 2714.10 2901.90 3210.60 3364.50 3484.80 3673.80 3855.30 3949.50 3949.50 3949.50 3949.50 3949.50 Jan-00 2544.00 2844.30 3041.10 3364.80 3525.90 3652.20 3850.20 4040.40 4139.10 4139.10 4139.10 4139.10 4139.10 Jul-00 2544.00 2884.20 3112.80 3364.80 3525.90 3702.60 3850.20 4040.40 4139.10 4139.10 4139.10 4139.10 4139.10 Jan-01 2638.20 2991.00 3228.00 3489.30 3656.40 3839.70 3992.70 4189.80 4292.10 4292.10 4292.10 4292.10 4292.10 

68
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-3 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-02 2796.60 3170.40 3421.80 3698.70 3875.70 4070.10 4232.40 4441.20 4549.50 4549.50 4549.50 4549.50 4549.50 Jan-03 2911.20 3300.30 3562.20 3883.50 4069.50 4273.50 4405.80 4623.30 4736.10 4736.10 4736.10 4736.10 4736.10 Jan-04 3018.90 3422.40 3693.90 4027.20 4220.10 4431.60 4568.70 4794.30 4911.30 4911.30 4911.30 4911.30 4911.30 

69
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-2 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22

Jan-88 

166.67 166.67 175.00 175.00 183.33 183.33 191.67 240.00 240.00 250.00 260.00 270.00 280.00 

Jun-42 166.67 166.67 175.00 175.00 183.33 191.67 230.00 240.00 240.00 250.00 260.00 270.00 280.00 Jul-46 200.00 200.00 210.00 210.00 220.00 230.00 264.50 276.00 276.00 287.50 299.00 310.50 322.00 Oct-49 249.38 263.63 263.63 277.88 292.13 306.38 320.63 334.88 349.13 349.13 349.13 349.13 349.13 May-52 259.36 274.18 274.18 289.00 303.82 318.64 333.46 348.28 363.10 363.10 363.10 363.10 363.10 Apr-55 259.36 274.18 335.40 335.40 351.00 366.60 382.20 397.80 413.40 413.40 413.40 413.40 413.40 Jun-58 259.36 291.00 360.00 370.00 380.00 380.00 380.00 380.00 380.00 380.00 380.00 380.00 380.00 Oct-63 259.36 375.00 450.00 465.00 475.00 475.00 475.00 475.00 475.00 475.00 475.00 475.00 475.00 Sep-64 281.40 384.30 461.40 476.70 486.90 486.90 486.90 486.90 486.90 486.90 486.90 486.90 486.90 Sep-65 342.60 407.40 489.00 505.20 516.00 516.00 516.00 516.00 516.00 516.00 516.00 516.00 516.00 Jul-66 353.70 420.30 504.60 521.40 532.50 532.50 532.50 532.50 532.50 532.50 532.50 532.50 532.50 Oct-67 373.50 443.70 532.80 550.50 562.20 562.20 562.20 562.20 562.20 562.20 562.20 562.20 562.20 Jul-68 399.30 474.30 569.70 588.60 600.90 600.90 600.90 600.90 600.90 600.90 600.90 600.90 600.90 Jul-69 449.70 534.00 641.40 662.70 676.50 676.50 676.50 676.50 676.50 676.50 676.50 676.50 676.50 Jan-70 486.00 577.20 693.30 716.40 731.40 731.40 731.40 731.40 731.40 731.40 731.40 731.40 731.40 Jan-71 524.40 622.80 748.20 773.10 789.30 789.30 789.30 789.30 789.30 789.30 789.30 789.30 789.30 Nov-71 570.30 622.80 748.20 773.10 789.30 789.30 789.30 789.30 789.30 789.30 789.30 789.30 789.30 Jan-72 611.40 667.80 802.20 828.90 846.30 846.30 846.30 846.30 846.30 846.30 846.30 846.30 846.30 Oct-72 652.20 712.50 855.90 884.40 903.00 903.00 903.00 903.00 903.00 903.00 903.00 903.00 903.00 Oct-73 692.40 756.60 908.70 939.00 958.80 958.80 958.80 958.80 958.80 958.80 958.80 958.80 958.80 Oct-74 730.50 798.30 958.80 990.90 1011.60 1011.60 1011.60 1011.60 1011.60 1011.60 1011.60 1011.60 1011.60 Oct-75 767.10 838.20 1006.80 1040.40 1062.30 1062.30 1062.30 1062.30 1062.30 1062.30 1062.30 1062.30 1062.30 Oct-76 795.00 868.50 1043.10 1078.20 1100.70 1100.70 1100.70 1100.70 1100.70 1100.70 1100.70 1100.70 1100.70 Oct-77 844.20 922.20 1107.90 1145.10 1168.80 1168.80 1168.80 1168.80 1168.80 1168.80 1168.80 1168.80 1168.80 Oct-78 890.70 972.90 1168.80 1208.10 1233.00 1233.00 1233.00 1233.00 1233.00 1233.00 1233.00 1233.00 1233.00 Oct-79 953.10 1041.30 1250.70 1293.00 1319.70 1319.70 1319.70 1319.70 1319.70 1319.70 1319.70 1319.70 1319.70 Oct-80 1064.70 1163.10 1397.10 1444.20 1474.20 1474.20 1474.20 1474.20 1474.20 1474.20 1474.20 1474.20 1474.20 Oct-81 1217.10 1329.30 1596.90 1650.60 1685.10 1685.10 1685.10 1685.10 1685.10 1685.10 1685.10 1685.10 1685.10 Oct-82 1265.70 1382.40 1660.80 1716.60 1752.60 1752.60 1752.60 1752.60 1752.60 1752.60 1752.60 1752.60 1752.60 Jan-84 1316.40 1437.60 1727.10 1785.30 1822.80 1822.80 1822.80 1822.80 1822.80 1822.80 1822.80 1822.80 1822.80 Jan-85 1369.20 1495.20 1796.10 1856.70 1895.70 1895.70 1895.70 1895.70 1895.70 1895.70 1895.70 1895.70 1895.70 Oct-85 1410.30 1540.20 1830.10 1912.50 1952.70 1952.70 1952.70 1952.70 1952.70 1952.70 1952.70 1952.70 1952.70 Jan-87 1452.60 1586.40 1905.60 1969.80 2011.20 2011.20 2011.20 2011.20 2011.20 2011.20 2011.20 2211.20 2011.20 

1481.70 1618.20 1943.70 2009.10 2051.40 2051.40 2051.40 2051.40 2051.40 2051.40 2051.40 2051.40 2051.40 

Jan-89 1542.30 1684.50 2023.50 2091.60 2135.40 2135.40 2135.40 2135.40 2135.40 2135.40 2135.40 2135.40 2135.40 Jan-90 1597.80 1745.10 2096.40 2166.90 2212.20 2212.20 2212.20 2212.20 2212.20 2212.20 2212.20 2212.20 2212.20 Jan-91 1663.20 1816.50 2182.50 2255.70 2302.80 2302.80 2302.80 2302.80 2302.80 2302.80 2302.80 2302.80 2302.80 Jan-92 1733.10 1892.70 2274.30 2350.50 2399.40 2399.40 2399.40 2399.40 2399.40 2399.40 2399.40 2399.40 2399.40 Jan-93 1797.30 1962.60 2358.30 2437.50 2488.20 2488.20 2488.20 2488.20 2488.20 2488.20 2488.20 2488.20 2488.20 Jan-94 1836.90 2005.80 2410.20 2491.20 2542.80 2542.80 2542.80 2542.80 2542.80 2542.80 2542.80 2542.80 2542.80 Jan-95 1884.60 2058.00 2472.90 2556.00 2608.80 2608.80 2608.80 2608.80 2608.80 2608.80 2608.80 2608.80 2608.80 Jan-96 1929.90 2107.50 2532.30 2617.20 2671.50 2671.50 2671.50 2671.50 2671.50 2671.50 2671.50 2671.50 2671.50 Jan-97 1987.80 2170.80 2608.20 2695.80 2751.60 2751.60 2751.60 2751.60 2751.60 2751.60 2751.60 2751.60 2751.60 Jan-98 2043.60 2231.70 2681.10 2771.40 2828.70 2828.70 2828.70 2828.70 2828.70 2828.70 2828.70 2828.70 2828.70 Jan-99 2117.10 2312.10 2777.70 2871.30 2930.40 2930.40 2930.40 2930.40 2930.40 2930.40 2930.40 2930.40 2930.40 Jan-00 2218.80 2423.10 2910.90 3009.00 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 Jul-00 2218.80 2527.20 2910.90 3009.00 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 3071.10 Jan-01 2301.00 2620.80 3018.60 3120.30 3184.80 3184.80 3184.80 3184.80 3184.80 3184.80 3184.80 3184.80 3184.80 

70
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-2 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-02 2416.20 2751.90 3169.50 3276.30 3344.10 3344.10 3344.10 3344.10 3344.10 3344.10 3344.10 3344.10 3344.10 Jan-03 2515.20 2864.70 3299.40 3410.70 3481.20 3481.20 3481.20 3481.20 3481.20 3481.20 3481.20 3481.20 3481.20 Jan-04 2608.20 2970.60 3421.50 3537.00 3609.90 3609.90 3609.90 3609.90 3609.90 3609.90 3609.90 3609.90 3609.90 

71
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-1 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-22 125.00 125.00 131.25 131.25 183.33 183.33 191.67 200.00 200.00 208.33 216.67 225.00 233.33 Jun-42 150.00 150.00 157.50 157.50 183.33 183.33 191.67 200.00 200.00 208.33 216.67 225.00 233.33 Jul-46 180.00 180.00 189.00 189.00 220.00 230.00 230.00 240.00 240.00 250.00 260.00 270.00 280.00 Oct-49 213.75 228.00 228.00 242.25 256.50 270.75 285.00 299.25 313.50 313.50 313.50 313.50 313.50 May-52 222.30 237.12 237.12 251.94 266.76 281.58 296.40 311.22 326.04 326.04 326.04 326.04 326.04 Apr-55 222.30 237.12 296.40 296.40 312.00 327.60 343.20 358.80 374.40 374.40 374.40 374.40 374.40 Jun-58 222.30 251.00 314.00 314.00 314.00 314.00 314.00 314.00 314.00 314.00 314.00 314.00 314.00 Oct-63 222.30 300.00 375.00 375.00 375.00 375.00 375.00 375.00 375.00 375.00 375.00 375.00 375.00 Sep-64 241.20 307.50 384.30 384.30 384.30 384.30 384.30 384.30 384.30 384.30 384.30 384.30 384.30 Sep-65 294.60 325.80 407.40 407.40 407.40 407.40 407.40 407.40 407.40 407.40 407.40 407.40 407.40 Jul-66 303.90 336.30 420.30 420.30 420.30 420.30 420.30 420.30 420.30 420.30 420.30 420.30 420.30 Oct-67 321.00 355.20 443.70 443.70 443.70 443.70 443.70 443.70 443.70 443.70 443.70 443.70 443.70 Jul-68 343.20 379.80 474.30 474.30 474.30 474.30 474.30 474.30 474.30 474.30 474.30 474.30 474.30 Jul-69 386.40 427.80 534.00 534.00 534.00 534.00 534.00 534.00 534.00 534.00 534.00 534.00 534.00 Jan-70 417.60 462.60 577.20 577.20 577.20 577.20 577.20 577.20 577.20 577.20 577.20 577.20 577.20 Jan-71 450.60 499.20 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 Nov-71 495.00 515.40 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 622.80 Jan-72 530.70 552.60 667.80 667.80 667.80 667.80 667.80 667.80 667.80 667.80 667.80 667.80 667.80 Oct-72 566.10 589.50 712.50 712.50 712.50 712.50 712.50 712.50 712.50 712.50 712.50 712.50 712.50 Oct-73 600.90 625.80 756.60 756.60 756.60 756.60 756.60 756.60 756.60 756.60 756.60 756.60 756.60 Oct-74 634.20 660.30 798.30 798.30 798.30 798.30 798.30 798.30 798.30 798.30 798.30 798.30 798.30 Oct-75 666.00 693.30 838.20 838.20 838.20 838.20 838.20 838.20 838.20 838.20 838.20 838.20 838.20 Oct-76 690.00 718.50 868.50 868.50 868.50 868.50 868.50 868.50 868.50 868.50 868.50 868.50 868.50 Oct-77 732.90 762.90 922.20 922.20 922.20 922.20 922.20 922.20 922.20 922.20 922.20 922.20 922.20 Oct-78 773.10 804.90 972.90 972.90 972.90 972.90 972.90 972.90 972.90 972.90 972.90 972.90 972.90 Oct-79 827.40 861.30 1041.30 1041.30 1041.30 1041.30 1041.30 1041.30 1041.30 1041.30 1041.30 1041.30 1041.30 Oct-80 924.30 962.10 1163.10 1163.10 1163.10 1163.10 1163.10 1163.10 1163.10 1163.10 1163.10 1163.10 1163.10 Oct-81 1056.60 1099.80 1329.30 1329.30 1329.30 1329.30 1329.30 1329.30 1329.30 1329.30 1329.30 1329.30 1329.30 Oct-82 1098.90 1143.90 1382.40 1382.40 1382.40 1382.40 1382.40 1382.40 1382.40 1382.40 1382.40 1382.40 1382.40 Jan-84 1143.00 1189.80 1437.60 1437.60 1437.60 1437.60 1437.60 1437.60 1437.60 1437.60 1437.60 1437.60 1437.60 Jan-85 1188.60 1237.50 1495.20 1495.20 1495.20 1495.20 1495.20 1495.20 1495.20 1495.20 1495.20 1495.20 1495.20 Oct-85 1224.30 1274.70 1540.20 1540.20 1540.20 1540.20 1540.20 1540.20 1540.20 1540.20 1540.20 1540.20 1540.20 Jan-87 1260.90 1312.80 1586.40 1586.40 1586.40 1586.40 1586.40 1586.40 1586.40 1586.40 1586.40 1586.40 1586.40 Jan-88 1286.10 1339.20 1618.20 1618.20 1618.20 1618.20 1618.20 1618.20 1618.20 1618.20 1618.20 1618.20 1618.20 Jan-89 1338.90 1394.10 1684.50 1684.50 1684.50 1684.50 1684.50 1684.50 1684.50 1684.50 1684.50 1684.50 1684.50 Jan-90 1387.20 1444.20 1745.10 1745.10 1745.10 1745.10 1745.10 1745.10 1745.10 1745.10 1745.10 1745.10 1745.10 Jan-91 1444.20 1503.30 1816.50 1816.50 1816.50 1816.50 1816.50 1816.50 1816.50 1816.50 1816.50 1816.50 1816.50 Jan-92 1504.80 1566.30 1892.70 1892.70 1892.70 1892.70 1892.70 1892.70 1892.70 1892.70 1892.70 1892.70 1892.70 Jan-93 1560.60 1624.20 1962.60 1962.60 1962.60 1962.60 1962.60 1962.60 1962.60 1962.60 1962.60 1962.60 1962.60 Jan-94 1594.80 1659.90 2005.80 2005.80 2005.80 2005.80 2005.80 2005.80 2005.80 2005.80 2005.80 2005.80 2005.80 Jan-95 1636.20 1703.10 2058.00 2058.00 2058.00 2058.00 2058.00 2058.00 2058.00 2058.00 2058.00 2058.00 2058.00 Jan-96 1675.50 1743.90 2107.50 2107.50 2107.50 2107.50 2107.50 2107.50 2107.50 2107.50 2107.50 2107.50 2107.50 Jan-97 1725.90 1796.10 2170.80 2170.80 2170.80 2170.80 2170.80 2170.80 2170.80 2170.80 2170.80 2170.80 2170.80 Jan-98 1774.20 1846.50 2231.70 2231.70 2231.70 2231.70 2231.70 2231.70 2231.70 2231.70 2231.70 2231.70 2231.70 Jan-99 1838.10 1913.10 2312.10 2312.10 2312.10 2312.10 2312.10 2312.10 2312.10 2312.10 2312.10 2312.10 2312.10 Jan-00 1926.30 2004.90 2423.10 2423.10 2423.10 2423.10 2423.10 2423.10 2423.10 2423.10 2423.10 2423.10 2423.10 Jan-01 1997.70 2079.00 2512.80 2512.80 2512.80 2512.80 2512.80 2512.80 2512.80 2512.80 2512.80 2512.80 2512.80 Jan-02 2097.60 2183.10 2638.50 2638.50 2638.50 2638.50 2638.50 2638.50 2638.50 2638.50 2638.50 2638.50 2638.50 

72
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-1 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-03 2183.70 2272.50 2746.80 2746.80 2746.80 2746.80 2746.80 2746.80 2746.80 2746.80 2746.80 2746.80 2746.80 Jan-04 2264.40 2356.50 2848.50 2848.50 2848.50 2848.50 2848.50 2848.50 2848.50 2848.50 2848.50 2848.50 2848.50 

73
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-3E 

(Commissioned Officers with Over 4 Years of Active Service as Enlisted Members or Warrant Officers) 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jun-58 414.90 440.10 459.90 480.00 510.00 534.90 534.90 534.90 534.90 534.90 Oct-63 519.90 545.10 564.90 594.90 624.90 650.10 650.10 650.10 650.10 650.10 Sep-64 533.10 558.60 579.00 609.90 640.50 666.30 666.30 666.30 666.30 666.30 Sep-65 565.20 592.20 613.80 646.50 678.90 706.20 706.20 706.20 706.20 706.20 Jul-66 583.20 611.10 633.30 667.20 700.50 728.70 728.70 728.70 728.70 728.70 Oct-67 615.90 645.30 668.70 704.70 739.80 769.50 769.50 769.50 769.50 769.50 Jul-68 658.50 689.70 714.90 753.30 790.80 822.60 822.60 822.60 822.60 822.60 Jul-69 741.60 776.70 804.90 848.10 890.40 926.10 926.10 926.10 926.10 926.10 Jan-70 801.60 839.70 870.00 916.80 962.40 1001.10 1001.10 1001.10 1001.10 1001.10 Jan-71 864.90 906.00 938.70 989.10 1038.30 1080.30 1080.30 1080.30 1080.30 1080.30 Nov-71 864.90 906.00 938.70 989.10 1038.30 1080.30 1080.30 1080.30 1080.30 1080.30 Jan-72 927.30 971.40 1006.50 1060.50 1113.30 1158.30 1158.30 1158.30 1158.30 1158.30 Oct-72 989.40 1036.50 1073.70 1131.30 1187.70 1235.70 1235.70 1235.70 1235.70 1235.70 Oct-73 1050.30 1100.40 1140.00 1201.20 1260.90 1311.90 1311.90 1311.90 1311.90 1311.90 Oct-74 1108.20 1161.00 1203.00 1267.50 1330.50 1384.20 1384.20 1384.20 1384.20 1384.20 Oct-75 1163.70 1218.90 1263.00 1330.80 1397.10 1453.50 1453.50 1453.50 1453.50 1453.50 Oct-76 1205.70 1263.30 1308.90 1379.10 1447.80 1506.00 1506.00 1506.00 1506.00 1506.00 Oct-77 1280.40 1341.60 1390.20 1464.60 1537.50 1599.30 1599.30 1599.30 1599.30 1599.30 Oct-78 1350.90 1415.40 1466.70 1545.30 1622.10 1687.20 1687.20 1687.20 1687.20 1687.20 Oct-79 1445.70 1514.70 1569.60 1653.90 1736.10 1805.70 1805.70 1805.70 1805.70 1805.70 Oct-80 1614.90 1692.00 1753.20 1847.40 1939.20 2016.90 2016.90 2016.90 2016.90 2016.90 Oct-81 1845.90 1934.10 2004.00 2111.70 2216.40 2305.20 2305.20 2305.20 2305.20 2305.20 Oct-82 1919.70 2011.50 2084.10 2196.30 2305.20 2397.30 2397.30 2397.30 2397.30 2397.30 Jan-84 1996.50 2091.90 2167.50 2284.20 2397.30 2493.30 2493.30 2493.30 2493.30 2493.30 Jan-85 2076.30 2175.60 2254.20 2375.70 2493.30 2592.90 2592.90 2592.90 2592.90 2592.90 Oct-85 2138.70 2241.00 2321.70 2447.10 2568.00 2670.60 2670.60 2670.60 2670.60 2670.60 Jan-87 2202.90 2308.20 2391.30 2520.60 2645.10 2750.70 2750.70 2750.70 2750.70 2750.70 Jan-88 2247.00 2354.40 2439.00 2571.00 2697.90 2805.60 2805.60 2805.60 2805.60 2805.60 Jan-89 2339.10 2451.00 2538.90 2676.30 2808.60 2920.50 2920.50 2920.50 2920.50 2920.50 Jan-90 2423.40 2539.20 2630.40 2772.60 2909.70 3025.50 3025.50 3025.50 3025.50 3025.50 Jan-91 2522.70 2643.30 2738.10 2886.30 3029.10 3149.40 3149.40 3149.40 3149.40 3149.40 Jan-92 2628.60 2754.30 2853.00 3007.50 3156.30 3281.70 3281.70 3281.70 3281.70 3281.70 Jan-93 2725.80 2856.30 2958.60 3118.80 3273.00 3403.20 3403.20 3403.20 3403.20 3403.20 Jan-94 2785.80 2919.00 3023.70 3187.50 3345.00 3478.20 3478.20 3478.20 3478.20 3478.20 Jan-95 2858.10 2994.90 3102.30 3270.30 3432.00 3568.50 3568.50 3568.50 3568.50 3568.50 Jan-96 2926.80 3066.90 3176.70 3348.90 3514.50 3654.00 3654.00 3654.00 3654.00 3654.00 Jan-97 3014.70 3159.00 3272.10 3449.40 3619.80 3763.50 3763.50 3763.50 3763.50 3763.50 Jan-98 3099.00 3247.50 3363.60 3546.00 3721.20 3868.80 3868.80 3868.80 3868.80 3868.80 Jan-99 3210.60 3364.50 3484.80 3673.80 3855.30 4008.00 4008.00 4008.00 4008.00 4008.00 Jan-00 3364.80 3525.90 3652.20 3850.20 4040.40 4200.30 4200.30 4200.30 4200.30 4200.30 Jul-00 3364.80 3525.90 3702.60 3850.20 4040.40 4200.30 4291.80 4416.90 4416.90 4416.90 Jan-01 3489.30 3656.40 3839.70 3992.70 4189.80 4355.70 4450.50 4580.40 4580.40 4580.40 Jan-02 3698.70 3875.70 4070.10 4232.40 4441.20 4617.00 4717.50 4855.20 4855.20 4855.20 Jan-03 3883.50 4069.50 4273.50 4405.80 4623.30 4806.30 4911.00 5054.40 5054.40 5054.40 Jan-04 4027.20 4220.10 4431.60 4568.70 4794.30 4984.20 5092.80 5241.30 5241.30 5241.30 

74
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-2E 

(Commissioned Officers with Over 4 Years of Active Service as Enlisted Members or Warrant Officers) 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jun-58 369.90 380.10 395.10 414.90 435.00 450.00 450.00 450.00 450.00 450.00 Oct-63 465.00 474.90 489.90 515.10 534.90 549.90 549.90 549.90 549.90 549.90 Sep-64 476.70 486.90 502.20 528.00 548.40 563.70 563.70 563.70 563.70 563.70 Sep-65 505.20 516.00 532.20 559.80 581.40 597.60 597.60 597.60 597.60 597.60 Jul-66 521.40 532.50 549.30 577.80 600.00 616.80 616.80 616.80 616.80 616.80 Oct-67 550.50 562.20 580.20 610.20 633.60 651.30 651.30 651.30 651.30 651.30 Jul-68 588.60 600.90 620.10 652.20 677.40 696.30 696.30 696.30 696.30 696.30 Jul-69 662.70 676.50 698.10 734.40 762.90 783.90 783.90 783.90 783.90 783.90 Jan-70 716.40 731.40 754.50 793.80 824.70 847.50 847.50 847.50 847.50 847.50 Jan-71 773.10 789.30 814.20 856.50 889.80 914.40 914.40 914.40 914.40 914.40 Nov-71 773.10 789.30 814.20 856.50 889.80 914.40 914.40 914.40 914.40 914.40 Jan-72 828.90 846.30 873.00 918.30 954.00 980.40 980.40 980.40 980.40 980.40 Oct-72 884.40 903.00 931.50 979.80 1017.90 1046.10 1046.10 1046.10 1046.10 1046.10 Oct-73 939.00 958.80 989.10 1040.40 1080.60 1110.60 1110.60 1110.60 1110.60 1110.60 Oct-74 990.90 1011.60 1043.70 1097.70 1140.30 1171.80 1171.80 1171.80 1171.80 1171.80 Oct-75 1040.40 1062.30 1095.90 1152.60 1197.30 1230.30 1230.30 1230.30 1230.30 1230.30 Oct-76 1078.20 1100.70 1135.50 1194.30 1240.50 1274.70 1274.70 1274.70 1274.70 1274.70 Oct-77 1145.10 1168.80 1206.00 1268.40 1317.30 1353.60 1353.60 1353.60 1353.60 1353.60 Oct-78 1208.10 1233.00 1272.30 1338.30 1389.90 1428.00 1428.00 1428.00 1428.00 1428.00 Oct-79 1293.00 1319.70 1361.70 1432.70 1487.40 1528.20 1528.20 1528.20 1528.20 1528.20 Oct-80 1444.20 1474.20 1521.00 1599.90 1661.40 1707.00 1707.00 1707.00 1707.00 1707.00 Oct-81 1650.60 1685.10 1738.50 1828.80 1899.00 1951.20 1951.20 1951.20 1951.20 1951.20 Oct-82 1716.60 1752.60 1808.10 1902.00 1974.90 2029.20 2029.20 2029.20 2029.20 2029.20 Jan-84 1785.30 1822.80 1880.40 1978.20 2053.80 2110.50 2110.50 2110.50 2110.50 2110.50 Jan-85 1856.70 1895.70 1955.70 2057.40 2136.00 2194.80 2194.80 2194.80 2194.80 2194.80 Oct-85 1912.50 1952.70 2014.50 2119.20 2200.20 2260.50 2260.50 2260.50 2260.50 2260.50 Jan-87 1969.80 2011.20 2074.80 2182.80 2266.20 2328.30 2328.30 2328.30 2328.30 2328.30 Jan-88 2009.10 2051.40 2116.20 2226.60 2311.50 2374.80 2374.80 2374.80 2374.80 2374.80 Jan-89 2091.60 2135.40 2202.90 2317.80 2406.30 2472.30 2472.30 2472.30 2472.30 2472.30 Jan-90 2166.90 2212.20 2282.10 2401.20 2493.00 2561.40 2561.40 2561.40 2561.40 2561.40 Jan-91 2255.70 2302.80 2375.70 2499.60 2595.30 2666.40 2666.40 2666.40 2666.40 2666.40 Jan-92 2350.50 2399.40 2475.60 2604.60 2704.20 2778.30 2778.30 2778.30 2778.30 2778.30 Jan-93 2437.50 2488.20 2567.10 2700.90 2804.40 2881.20 2881.20 2881.20 2881.20 2881.20 Jan-94 2491.20 2542.80 2623.50 2760.30 2866.20 2944.50 2944.50 2944.50 2944.50 2944.50 Jan-95 2556.00 2608.80 2691.60 2832.00 2940.60 3021.00 3021.00 3021.00 3021.00 3021.00 Jan-96 2617.20 2671.50 2756.10 2900.10 3011.10 3093.60 3093.60 3093.60 3093.60 3093.60 Jan-97 2695.80 2751.60 2838.90 2987.10 3101.40 3186.30 3186.30 3186.30 3186.30 3186.30 Jan-98 2771.40 2828.70 2918.40 3070.80 3188.10 3275.40 3275.40 3275.40 3275.40 3275.40 Jan-99 2871.30 2930.40 3023.40 3181.20 3303.00 3393.30 3393.30 3393.30 3393.30 3393.30 Jan-00 3009.00 3071.10 3168.60 3333.90 3461.40 3556.20 3556.20 3556.20 3556.20 3556.20 Jan-01 3120.30 3184.80 3285.90 3457.20 3589.50 3687.90 3687.90 3687.90 3687.90 3687.90 Jan-02 3276.30 3344.10 3450.30 3630.00 3768.90 3872.40 3872.40 3872.40 3872.40 3872.40 Jan-03 3410.70 3481.20 3591.90 3778.80 3923.40 4031.10 4031.10 4031.10 4031.10 4031.10 Jan-04 3537.00 3609.90 3724.80 3918.60 4068.60 4180.20 4180.20 4180.20 4180.20 4180.20 

75
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-1E 

(Commissioned Officers with Over 4 Years of Active Service as Enlisted Members or Warrant Officers) 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-58 314.10 335.10 350.10 365.10 380.10 399.90 399.90 399.90 399.90 399.90 Oct-63 375.00 399.90 414.90 429.90 444.90 465.00 465.00 465.00 465.00 465.00 Sep-64 384.30 410.10 425.40 440.70 456.00 476.70 476.70 476.70 476.70 476.70 Sep-65 407.40 434.70 450.90 467.10 483.30 505.20 505.20 505.20 505.20 505.20 Jul-66 420.30 448.50 465.30 482.10 498.90 521.40 521.40 521.40 521.40 521.40 Oct-67 443.70 473.70 491.40 509.10 526.80 550.50 550.50 550.50 550.50 550.50 Jul-68 474.30 506.40 525.30 544.20 563.10 588.60 588.60 588.60 588.60 588.60 Jul-69 534.00 570.30 591.60 612.90 634.20 662.70 662.70 662.70 662.70 662.70 Jan-70 577.20 616.50 639.60 662.40 685.50 716.40 716.40 716.40 716.40 716.40 Jan-71 622.80 665.10 690.00 714.60 739.80 773.10 773.10 773.10 773.10 773.10 Nov-71 622.80 665 .10 690.00 714.60 739.80 773.10 773.10 773.10 773.10 773.10 Jan-72 667.80 713.10 739.80 766.20 793.20 828.90 828.90 828.90 828.90 828.90 Oct-72 712.50 760.80 789.30 817.50 846.30 884.40 884.40 884.40 884.40 884.40 Oct-73 756.60 807.60 837.90 867.90 898.50 939.00 939.00 939.00 939.00 939.00 Oct-74 798.30 852.30 884.10 915.90 948.00 990.90 990.90 990.90 990.90 990.90 Oct-75 838.20 894.90 928.20 961.80 995.40 1040.40 1040.40 1040.40 1040.40 1040.40 Oct-76 868.50 927.30 961.80 996.60 1031.40 1078.20 1078.20 1078.20 1078.20 1078.20 Oct-77 922.20 984.90 1021.50 1058.40 1095.30 1145.10 1145.10 1145.10 1145.10 1145.10 Oct-78 972.90 1039.20 1077.60 1116.60 1155.60 1208.10 1208.10 1208.10 1208.10 1208.10 Oct-79 1041.30 1112.10 1153.20 1194.90 1236.90 1293.00 1293.00 1293.00 1293.00 1293.00 Oct-80 1163.10 1242.30 1288.20 1334.70 1381.20 1444.20 1444.20 1444.20 1444.20 1444.20 Oct-81 1329.30 1419.90 1472.40 1525.50 1578.60 1650.60 1650.60 1650.60 1650.60 1650.60 Oct-82 1382.40 1476.60 1531.20 1586.40 1641.60 1716.60 1716.60 1716.60 1716.60 1716.60 Jan-84 1437.60 1535.70 1592.40 1650.00 1707.30 1785.30 1785.30 1785.30 1785.30 1785.30 Jan-85 1495.20 1597.20 1656.00 1716.00 1775.70 1856.70 1856.70 1856.70 1856.70 1856.70 Oct-85 1540.20 1645.20 1705.80 1767.60 1829.10 1912.50 1912.50 1912.50 1912.50 1912.50 Jan-87 1586.40 1694.70 1757.10 1820.70 1884.00 1969.80 1969.80 1969.80 1969.80 1969.80 Jan-88 1618.20 1728.60 1792.20 1857.00 1921.80 2009.10 2009.10 2009.10 2009.10 2009.10 Jan-89 1684.50 1799.40 1865.70 1933.20 2000.70 2091.60 2091.60 2091.60 2091.60 2091.60 Jan-90 1745.10 1864.20 1932.90 2002.80 2072.70 2166.90 2166.90 2166.90 2166.90 2166.90 Jan-91 1816.50 1940.70 2012.10 2085.00 2157.60 2255.70 2255.70 2255.70 2255.70 2255.70 Jan-92 1892.70 2022.30 2096.70 2172.60 2248.20 2350.50 2350.50 2350.50 2350.50 2350.50 Jan-93 1962.60 2097.00 2174.40 2253.00 2331.30 2437.50 2437.50 2437.50 2437.50 2437.50 Jan-94 2005.80 2143.20 2222.10 2302.50 2382.60 2491.20 2491.20 2491.20 2491.20 2491.20 Jan-95 2058.00 2199.00 2280.00 2362.50 2444.40 2556.00 2556.00 2556.00 2556.00 2556.00 Jan-96 2107.50 2251.80 2334.60 2419.20 2503.20 2617.20 2617.20 2617.20 2617.20 2617.20 Jan-97 2170.80 2319.30 2404.50 2491.80 2578.20 2695.80 2695.80 2695.80 2695.80 2695.80 Jan-98 2231.70 2384.10 2471.70 2561.70 2650.50 2771.40 2771.40 2771.40 2771.40 2771.40 Jan-99 2312.10 2469.90 2560.80 2653.80 2745.90 2871.30 2871.30 2871.30 2871.30 2871.30 Jan-00 2423.10 2588.40 2683.80 2781.30 2877.60 3009.00 3009.00 3009.00 3009.00 3009.00 Jan-01 2512.80 2684.10 2783.10 2884.20 2984.10 3120.30 3120.30 3120.30 3120.30 3120.30 

76
BASIC PAY SCHEDULE - Historical Data 

Pay Grade O-1E 

(Commissioned Officers with Over 4 Years of Active Service as Enlisted Members or Warrant Officers) 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-02 2638.50 2818.20 2922.30 3028.50 3133.20 3276.30 3276.30 3276.30 3276.30 3276.30 Jan-03 2746.80 2933.70 3042.00 3152.70 3261.60 3410.70 3410.70 3410.70 3410.70 3410.70 Jan-04 2848.50 3042.30 3154.50 3269.40 3382.20 3537.00 3537.00 3537.00 3537.00 3537.00 Note 1: Notwithstanding the basic pay rates specified in this table, the actual rate of basic pay for commissioned officers in pay grades O-7 through O-10 may not exceed the rate of 

Schedule ($12,133.20 in 2004), and the actual rate of basic pay for all other officers may not exceed the rate of pay for level V of the Executive Schedule ($10,683.30 in 2004). 

Note 2: In fiscal year 2004, the monthly rate of basic pay for an officer serving as Chairman or Vice Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army, Chief of Nav

Air Force, Commandant of the Marine Corps, Commandant of the Coast Guard, or commander of a unified or specified combatant command, as defined in section 161(c) of Title 1

regardless of cumulative years of service computed under section 205 of Title 37, U.S. Code. 

77
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-5 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Feb-92 3455.70 3587.10 Jan-93 3583.80 3719.70 Jan-94 3662.70 3801.60 Jan-95 3757.80 3900.30 Jan-96 3848.10 3993.90 Jan-97 3963.60 4113.60 Jan-98 4074.60 4228.80 Jan-99 4221.30 4380.90 Jan-00 4423.80 4591.20 Jul-00 4475.10 4628.70 Jan-01 4640.70 4800.00 Jan-02 4965.60 5136.00 Jan-03 5169.30 5346.60 Jan-04 5360.70 5544.30 

78
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-4 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Oct-49 320.10 320.10 320.10 320.10 334.65 349.20 363.75 378.30 392.85 407.40 421.95 421.95 436.50 May-52 332.90 332.90 332.90 332.90 348.04 363.17 378.30 393.43 408.56 423.70 438.83 438.83 453.96 Apr-55 332.90 354.90 354.90 354.90 370.50 386.10 401.70 421.20 452.40 468.00 483.60 483.60 499.20 Jun-58 332.90 376.00 376.00 383.00 399.00 416.00 435.00 465.00 486.00 504.00 516.00 528.00 543.00 Oct-63 332.90 430.00 430.00 440.00 460.00 480.00 500.00 535.00 560.00 580.00 595.00 615.00 635.00 Sep-64 361.20 440.70 440.70 450.90 471.60 492.00 512.40 548.40 573.90 594.60 609.90 630.30 651.00 Sep-65 435.60 467.10 467.10 477.90 499.80 521.40 543.00 581.40 608.40 630.30 646.50 668.10 690.00 Jul-66 449.40 482.10 482.10 493.20 515.70 538.20 560.40 600.00 627.90 650.40 667.20 689.40 712.20 Oct-67 474.60 509.10 509.10 520.80 544.50 568.20 591.90 633.60 663.00 686.70 704.70 728.10 752.10 Jul-68 507.30 544.20 544.20 556.80 582.00 607.50 632.70 677.40 708.60 734.10 753.30 778.20 804.00 Jul-69 571.20 612.90 612.90 627.00 655.20 684.00 712.50 762.90 798.00 826.50 848.10 876.30 905.40 Jan-70 617.40 662.40 662.40 677.70 708.30 739.50 770.10 824.70 862.50 893.40 916.80 947.40 978.60 Jan-71 666.30 714.60 714.60 731.10 764.40 798.00 831.00 889.80 930.60 963.90 989.10 1022.10 1056.00 Nov-71 666.30 714.60 714.60 731.10 764.40 798.00 831.00 889.80 930.60 963.90 989.10 1022.10 1056.00 Jan-72 714.30 766.20 766.20 783.90 819.60 855.60 891.00 954.00 997.80 1033.50 1060.50 1095.90 1132.20 Oct-72 762.00 817.50 817.50 836.40 874.50 912.90 950.70 1017.90 1064.70 1102.50 1131.30 1169.10 1207.80 Oct-73 809.10 867.90 867.90 888.00 928.50 969.30 1009.50 1080.60 1130.40 1170.60 1201.20 1241.10 1282.20 Oct-74 853.80 915.90 915.90 936.90 979.80 1022.70 1065.30 1140.30 1192.80 1235.10 1267.50 1309.50 1353.00 Oct-75 896.40 961.80 961.80 983.70 1028.70 1073.70 1118.70 1197.30 1252.50 1296.90 1330.80 1374.90 1420.80 Oct-76 982.80 996.60 996.60 1019.40 1065.90 1112.70 1159.20 1240.50 1297.80 1343.70 1379.10 1424.70 1472.10 Oct-77 986.40 1058.40 1058.40 1082.70 1131.90 1181.70 1231.20 1317.30 1378.20 1427.10 1464.60 1512.90 1563.30 Oct-78 1040.70 1116.60 1116.60 1142.10 1194.30 1246.80 1299.00 1389.90 1454.10 1505.70 1545.30 1596.00 1649.40 Oct-79 1113.90 1194.90 1194.90 1222.20 1278.00 1334.40 1390.20 1487.40 1556.10 1611.30 1653.90 1707.90 1765.20 Oct-80 1244.10 1334.70 1344.70 1365.30 1427.40 1490.40 1552.80 1661.40 1738.20 1799.10 1847.60 1907.70 1971.60 Oct-81 1422.00 1524.50 1525.50 1560.60 1631.40 1703.40 1774.80 1899.00 1986.90 2057.10 2111.70 2180.40 2253.60 Oct-82 1479.00 1586.40 1586.40 1623.00 1696.80 1771.50 1845.90 1974.90 2066.40 2139.30 2196.30 2267.70 2343.60 Jan-84 1538.10 1650.00 1650.00 1687.80 1764.60 1842.30 1919.70 2053.80 2149.20 2224.80 2284.20 2358.30 2437.20 Jan-85 1599.60 1716.00 1716.00 1755.30 1835.10 1916.10 1996.50 2136.00 2235.30 2313.90 2375.70 2452.50 2534.70 Oct-85 1647.60 1767.60 1767.60 1808.10 1890.30 1973.70 2056.50 2200.20 2302.50 2383.20 2447.10 2526.00 2610.60 Jan-87 1697.10 1820.70 1820.70 1862.40 1947.00 2032.80 2118.30 2266.20 2371.50 2454.60 2520.60 2601.90 2688.90 Jan-88 1731.00 1857.00 1857.00 1899.60 1986.00 2073.60 2160.60 2311.50 2418.90 2503.80 2571.00 2653.80 2742.60 Jan-89 1802.10 1933.20 1933.20 1977.60 2067.30 2158.50 2249.10 2406.30 2518.20 2606.40 2676.30 2762.70 2855.10 Jan-90 1866.90 2002.80 2002.80 2048.70 2141.70 2236.20 2330.10 2493.00 2608.80 2700.30 2772.60 2862.30 2958.00 Jan-91 1943.40 2085.00 2085.00 2132.70 2229.60 2328.00 2425.50 2595.30 2715.90 2811.00 2886.30 2979.60 3079.20 Jan-92 2025.00 2172.60 2172.60 2222.40 2323.20 2425.80 2527.50 2704.20 2829.90 2929.20 3007.50 3104.70 3208.50 Jan-93 2100.00 2253.00 2253.00 2304.60 2409.30 2515.50 2621.10 2804.40 2934.60 3037.50 3118.80 3219.60 3327.30 Jan-94 2146.20 2302.50 2302.50 2355.30 2462.40 2570.70 2678.70 2866.20 2999.10 3104.40 3187.50 3290.40 3400.50 Jan-95 2202.00 2362.50 2362.50 2416.50 2526.30 2637.60 2748.30 2940.60 3077.10 3185.10 3270.30 3375.90 3489.00 Jan-96 2254.80 2419.20 2419.20 2474.40 2586.90 2700.90 2814.30 3011.10 3150.90 3261.60 3348.90 3456.90 3572.70 Jan-97 2322.30 2491.80 2491.80 2548.50 2664.60 2781.90 2898.60 3101.40 3245.40 3359.40 3449.40 3560.70 3679.80 Jan-98 2387.40 2561.70 2561.70 2619.90 2739.30 2859.90 2979.90 3188.10 3336.30 3453.60 3546.00 3660.30 3782.70 Jan-99 2473.20 2653.80 2653.80 2714.10 2838.00 2962.80 3087.30 3303.00 3456.30 3577.80 3673.80 3792.00 3918.90 Jan-00 2592.00 2781.30 2781.30 2844.30 2974.20 3105.00 3235.50 3461.40 3622.20 3749.40 3850.20 3974.10 4107.00 Jul-00 2592.00 2788.50 2868.60 2947.50 3083.40 3217.20 3352.80 3485.10 3622.20 3753.60 3888.00 4019.40 4155.60 Jan-01 2688.00 2891.70 2974.80 3056.70 3197.40 3336.30 3477.00 3614.10 3756.30 3892.50 4032.00 4168.20 4309.50 Jan-02 2889.60 3108.60 3198.00 3285.90 3437.10 3586.50 3737.70 3885.30 4038.00 4184.40 4334.40 4480.80 4632.60 Jan-03 3008.10 3236.10 3329.10 3420.60 3578.10 3733.50 3891.00 4044.60 4203.60 4356.00 4512.00 4664.40 4822.50 Jan-04 3119.40 3355.80 3452.40 3547.20 3710.40 3871.50 4035.00 4194.30 4359.00 4617.30 4782.60 4944.30 5112.00 

79
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-3 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Oct-49 291.00 291.00 291.00 291.00 298.28 305.55 312.83 320.10 327.38 334.65 349.20 349.20 363.75 May-52 302.64 302.64 302.64 302.64 310.21 317.77 325.34 332.90 340.48 348.04 363.17 363.17 378.30 Apr-55 302.64 323.70 323.70 323.70 331.50 339.30 347.10 358.80 374.40 382.20 405.60 405.60 428.00 Jun-58 302.64 343.00 343.00 348.00 353.00 380.00 398.00 412.00 427.00 441.00 458.00 470.00 487.00 Oct-63 302.64 395.00 395.00 400.00 405.00 435.00 460.00 475.00 490.00 505.00 520.00 540.00 560.00 Sep-64 328.50 405.00 405.00 410.10 415.20 445.80 471.60 486.90 502.20 517.50 533.10 533.50 573.90 Sep-65 396.00 429.30 429.30 434.70 440.10 472.50 499.80 516.00 532.20 548.40 565.20 586.80 608.40 Jul-66 408.60 443.10 443.10 448.50 454.20 487.50 515.70 532.50 549.30 565.80 583.20 605.70 627.90 Oct-67 431.40 468.00 468.00 473.70 479.70 514.80 554.50 562.20 580.20 597.60 615.90 639.60 663.00 Jul-68 461.10 500.40 500.40 506.40 512.70 550.20 582.00 600.90 620.10 638.70 658.50 683.70 708.60 Jul-69 519.30 563.40 563.40 570.30 577.20 619.50 655.20 676.50 698.10 719.10 741.60 769.80 798.00 Jan-70 561.30 609.00 609.00 616.50 624.00 669.60 708.30 731.40 754.50 777.30 801.60 832.20 862.50 Jan-71 605.70 657.00 657.00 665.10 673.20 722.40 764.40 789.80 814.20 838.80 864.90 897.90 930.60 Nov-71 605.70 657.00 657.00 665.10 673.20 722.40 764.40 789.80 814.20 838.80 864.90 897.90 930.60 Jan-72 649.50 704.40 704.40 713.10 721.80 774.60 819.60 846.30 873.00 899.40 927.30 962.70 997.80 Oct-72 693.00 751.50 751.50 760.80 770.10 826.50 874.50 903.00 931.50 959.70 989.40 1027.20 1064.70 Oct-73 735.90 798.00 798.00 807.60 817.50 877.50 928.50 958.80 989.10 1018.80 1050.30 1090.50 1130.40 Oct-74 776.40 842.10 842.10 852.30 862.50 925.80 979.80 1011.60 1043.70 1074.90 1108.20 1150.80 1192.80 Oct-75 815.10 884.10 884.10 894.90 905.70 972.00 1028.70 1062.30 1095.90 1128.60 1163.70 1208.40 1252.50 Oct-76 844.50 916.20 916.20 927.30 938.40 1007.10 1065.90 1100.70 1135.50 1169.40 1205.70 1252.20 1297.80 Oct-77 897.00 927.90 972.90 984.90 996.60 1059.50 1131.90 1168.80 1206.00 1242.00 1280.40 1329.90 1378.20 Oct-78 946.20 1026.30 1026.30 1039.20 1051.50 1128.30 1194.30 1233.00 1272.30 1310.40 1350.90 1403.10 1454.10 Oct-79 1012.50 1098.30 1098.30 1112.10 1125.30 1207.50 1278.00 1319.70 1361.70 1402.50 1445.70 1501.50 1556.10 Oct-80 1131.00 1226.70 1226.70 1242.30 1257.00 1348.80 1427.40 1474.20 1521.00 1566.60 1614.90 1677.30 1738.20 Oct-81 1292.70 1402.20 1402.20 1419.90 1436.70 1541.70 1631.40 1685.10 1738.50 1790.70 1845.90 1917.30 1986.90 Oct-82 1344.30 1458.30 1458.30 1476.60 1494.30 1603.50 1696.80 1752.60 1808.10 1862.40 1919.70 1994.10 2066.40 Jan-84 1398.00 1516.50 1516.50 1535.70 1554.00 1667.70 1764.60 1822.80 1880.40 1936.80 1996.50 2073.90 2149.20 Jan-85 1453.80 1577.10 1577.10 1597.20 1616.10 1734.30 1835.10 1895.70 1955.70 2014.20 2076.30 2157.00 2235.30 Oct-85 1497.30 1624.50 1624.50 1645.20 1664.70 1786.20 1890.30 1952.70 2014.50 2074.50 2138.70 2221.80 2302.50 Jan-87 1542.30 1673.10 1673.10 1694.70 1714.50 1839.90 1947.00 2011.20 2074.80 2136.60 2202.90 2288.40 2371.50 Jan-88 1573.20 1706.70 1706.70 1728.60 1748.70 1876.80 1986.00 2051.40 2116.20 2179.20 2247.00 2334.30 2418.90 Jan-89 1637.70 1776.60 1776.60 1799.40 1820.40 1953.60 2067.30 2135.40 2202.90 2268.60 2339.10 2430.00 2518.20 Jan-90 1696.80 1840.50 1840.50 1864.20 1885.80 2023.80 2141.70 2212.20 2282.10 2350.20 2423.40 2517.60 2608.80 Jan-91 1766.40 1916.10 1916.10 1940.70 1963.20 2106.90 2229.60 2302.80 2375.70 2446.50 2522.70 2620.80 2715.90 Jan-92 1840.50 1996.50 1996.50 2022.30 2045.70 2195.40 2323.20 2399.40 2475.60 2549.40 2628.60 2730.90 2829.90 Jan-93 1908.60 2070.30 2070.30 2097.00 2121.30 2276.70 2409.30 2488.20 2567.10 2643.60 2725.80 2832.00 2934.60 Jan-94 1950.60 2115.90 2115.90 2143.20 2168.10 2326.80 2462.40 2542.80 2623.50 2701.80 2785.80 2894.40 2999.10 Jan-95 2001.30 2170.80 2170.80 2199.00 2224.50 2387.40 2526.30 2608.80 2691.60 2772.00 2858.10 2969.70 3077.10 Jan-96 2049.30 2223.00 2223.00 2251.80 2277.90 2444.70 2586.90 2671.50 2756.10 2838.60 2926.80 3041.10 3150.90 Jan-97 2110.80 2289.60 2289.60 2319.30 2346.30 2517.90 2664.60 2751.60 2838.90 2923.80 3014.70 3132.30 3245.40 Jan-98 2196.90 2353.80 2353.80 2384.10 2412.00 2588.40 2739.30 2828.70 2918.40 3005.70 3099.00 3219.90 3336.30 Jan-99 2247.90 2438.40 2438.40 2469.90 2498.70 2681.70 2838.00 2930.40 3023.40 3114.00 3210.60 3335.70 3456.30 Jan-00 2355.90 2555.40 2555.40 2588.40 2618.70 2810.40 2974.20 3071.10 3168.60 3263.40 3364.80 3495.90 3622.20 Jul-00 2355.90 2555.40 2555.40 2588.40 2694.30 2814.90 2974.20 3071.10 3177.00 3298.20 3418.50 3539.10 3659.40 Jan-01 2443.20 2649.90 2649.90 2684.10 2793.90 2919.00 3084.30 3184.80 3294.60 3420.30 3545.10 3669.90 3794.70 Jan-02 2638.80 2862.00 2862.00 2898.90 3017.40 3152.40 3330.90 3439.50 3558.30 3693.90 3828.60 3963.60 4098.30 Jan-03 2747.10 2862.00 2979.30 3017.70 3141.00 3281.70 3467.40 3580.50 3771.90 3915.60 4058.40 4201.50 4266.30 Jan-04 2848.80 2967.90 3089.40 3129.30 3257.10 3403.20 3595.80 3786.30 3988.80 4140.60 4291.80 4356.90 4424.10 

80
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-2

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Oct-49

1566.60

254.63 254.63 254.63 254.63 254.63 261.90 269.18 276.45 283.73 291.00 305.55 305.55 320.10 

May-52 264.82 264.82 264.82 264.82 264.82 272.38 279.95 287.51 295.08 302.64 317.77 317.77 332.90 Apr-55 264.82 280.80 280.80 280.80 288.60 304.20 319.80 335.40 350.00 357.80 373.40 373.40 389.00 Jun-58 264.82 298.00 298.00 307.00 328.00 342.00 355.00 369.00 381.00 393.00 406.00 417.00 440.00 Oct-63 264.82 345.00 345.00 355.00 375.00 395.00 410.00 425.00 440.00 455.00 470.00 485.00 505.00 Sep-64 287.40 353.70 353.70 363.90 384.30 405.00 420.30 435.60 450.90 466.50 481.80 497.10 517.50 Sep-65 346.50 375.00 375.00 385.80 407.40 429.30 445.50 461.70 477.90 494.40 510.60 526.80 548.40 Jul-66 357.60 387.00 387.00 398.10 420.30 443.10 459.90 476.40 493.20 510.30 526.80 543.60 565.80 Oct-67 377.70 408.60 408.60 420.30 443.70 468.00 485.70 503.10 520.80 538.80 556.20 573.90 597.60 Jul-68 403.80 436.80 436.80 449.40 474.30 500.40 519.30 537.90 556.80 576.00 594.60 613.50 638.70 Jul-69 454.80 491.70 491.70 506.10 534.00 563.40 584.70 605.70 627.00 648.60 669.60 690.90 719.10 Jan-70 491.70 531.60 531.60 547.20 577.20 609.00 632.10 654.90 677.70 701.10 723.90 747.00 777.30 Jan-71 530.40 573.60 573.60 590.40 622.80 657.00 681.90 706.50 731.10 756.60 781.20 806.10 838.80 Nov-71 530.40 573.60 573.60 590.40 622.80 657.00 681.90 706.50 731.10 756.60 781.20 806.10 838.80 Jan-72 568.50 615.00 615.00 633.00 667.80 704.40 731.10 757.50 783.90 811.20 837.60 864.30 899.40 Oct-72 606.60 656.10 656.10 675.30 712.50 751.50 780.00 808.20 836.40 865.50 893.70 922.20 959.70 Oct-73 644.10 696.60 696.60 717.00 756.60 798.00 828.00 858.00 888.00 918.90 948.90 979.20 1018.80 Oct-74 679.80 735.00 735.00 756.60 798.30 842.10 873.60 905.40 936.90 969.60 1001.40 1033.20 1074.90 Oct-75 713.70 771.90 771.90 794.40 838.20 884.10 917.40 950.70 983.70 1018.20 1051.50 1084.80 1128.60 Oct-76 739.50 799.80 799.80 823.20 868.50 916.20 950.70 985.20 1019.40 1055.10 1089.60 1124.10 1169.40 Oct-77 785.40 849.30 849.30 874.20 922.20 972.90 1009.50 1046.40 1082.70 1120.50 1157.10 1193.70 1242.00 Oct-78 828.60 896.10 896.10 922.20 972.90 1026.30 1065.00 1104.00 1142.10 1182.00 1220.70 1259.40 1310.40 Oct-79 886.80 959.10 959.10 987.00 1041.30 1098.30 1139.70 1181.40 1222.20 1265.10 1306.50 1347.90 1402.50 Oct-80 990.60 1071.30 1071.30 1102.50 1163.10 1226.70 1272.90 1319.70 1365.30 1413.00 1459.50 1505.70 Oct-81 1132.20 1224.60 1224.60 1260.30 1329.30 1402.20 1455.00 1508.40 1560.60 1615.20 1668.30 1721.10 1790.70 Oct-82 1177.50 1273.50 1273.50 1310.70 1382.40 1458.30 1513.20 1568.70 1623.00 1679.70 1734.90 1789.80 1862.40 Jan-84 1224.60 1324.50 1324.50 1363.20 1437.60 1516.50 1573.80 1631.40 1687.80 1746.90 1804.20 1861.50 1936.80 Jan-85 1273.50 1377.60 1377.60 1417.80 1495.20 1577.10 1636.80 1696.80 1755.30 1816.80 1876.50 1935.90 2014.20 Oct-85 1311.60 1419.00 1419.00 1460.40 1540.20 1624.50 1686.00 1747.80 1808.10 1871.40 1932.90 1994.10 2074.50 Jan-87 1350.90 1461.60 1461.60 1504.20 1586.40 1673.10 1736.70 1800.30 1862.40 1927.50 1990.80 2053.80 2136.60 Jan-88 1377.90 1490.70 1490.70 1534.20 1618.20 1706.70 1771.50 1836.30 1899.60 1966.20 2030.70 2094.90 2179.20 Jan-89 1434.30 1551.90 1551.90 1597.20 1684.50 1776.60 1844.10 1911.60 1977.60 2046.90 2114.10 2180.70 2268.60 Jan-90 1485.90 1607.70 1607.70 1654.80 1745.10 1840.50 1910.40 1980.30 2048.70 2120.70 2190.30 2259.30 2350.20 Jan-91 1546.80 1673.70 1673.70 1722.60 1816.50 1916.10 1988.70 2061.60 2132.70 2207.70 2280.00 2352.00 2446.50 Jan-92 1611.90 1743.90 1743.90 1794.90 1892.70 1996.50 2072.10 2148.30 2222.40 2300.40 2375.70 2450.70 2549.40 Jan-93 1671.60 1808.40 1808.40 1861.20 1962.60 2070.30 2148.90 2227.80 2304.60 2385.60 2463.60 2541.30 2643.60 Jan-94 1708.50 1848.30 1848.30 1902.00 2005.80 2115.90 2196.30 2276.70 2355.30 2438.10 2517.90 2597.10 2701.80 Jan-95 1752.90 1896.30 1896.30 1951.50 2058.00 2170.80 2253.30 2335.80 2416.50 2501.40 2583.30 2664.60 2772.00 Jan-96 1794.90 1941.90 1941.90 1998.30 2107.50 2223.00 2307.30 2391.90 2474.40 2561.40 2645.40 2728.50 2838.60 Jan-97 1848.60 2000.10 2000.10 2058.30 2170.80 2289.60 2376.60 2463.60 2548.50 2638.20 2724.90 2810.40 2923.80 Jan-98 1900.50 2056.20 2056.20 2115.90 2231.70 2353.80 2443.20 2532.60 2619.90 2712.00 2801.10 2889.00 3005.70 Jan-99 1968.90 2130.30 2130.30 2192.10 2312.10 2438.40 2531.10 2623.80 2714.10 2809.50 2901.90 2993.10 3114.00 Jan-00 2063.40 2232.60 2232.60 2297.40 2423.10 2555.40 2652.60 2749.80 2844.30 2944.50 3041.10 3136.80 3263.40 Jul-00 2063.40 2232.60 2232.60 2305.80 2423.10 2555.40 2652.60 2749.80 2844.30 2949.00 3056.40 3163.80 3270.90 Jan-01 2139.60 2315.10 2315.10 2391.00 2512.80 2649.90 2750.70 2851.50 2949.60 3058.20 3169.50 3280.80 3391.80 Jan-02 2321.40 2454.00 2569.80 2654.10 2726.40 2875.20 2984.40 3093.90 3200.40 3318.00 3438.90 3559.80 3680.10 Jan-03 2416.50 2554.50 2675.10 2763.00 2838.30 2993.10 3148.50 3264.00 3376.50 3453.90 3579.90 3705.90 3831.00 

81
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-2

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-04 2505.90 2694.00 2774.10 2865.30 2943.30 3157.80 3321.60 3443.40 3562.20 3643.80 3712.50 3843.00 3972.60 

82
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-1 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Oct-49 210.98 210.98 210.98 210.98 218.25 225.53 232.80 240.08 247.35 254.63 269.18 269.18 283.73 May-52 219.42 219.42 219.42 219.42 226.98 234.55 242.11 249.68 257.24 264.82 279.95 279.95 295.08 Apr-55 219.42 251.20 251.20 251.20 266.80 286.30 294.10 305.80 313.60 321.40 337.00 337.00 352.60 Jun-58 219.42 266.00 266.00 285.00 299.00 313.00 334.00 345.00 354.00 364.00 375.00 390.00 390.00 Oct-63 219.42 305.00 305.00 330.00 345.00 360.00 375.00 390.00 405.00 420.00 435.00 450.00 450.00 Sep-64 238.20 312.60 312.60 338.40 353.70 369.00 384.30 399.90 415.20 430.50 445.80 461.40 461.40 Sep-65 288.90 331.50 331.50 358.80 375.00 391.20 407.40 423.90 440.10 456.30 472.50 489.00 489.00 Jul-66 298.20 342.00 342.00 370.20 387.00 403.80 420.30 437.40 454.20 471.00 487.50 504.60 504.60 Oct-67 315.00 361.20 361.20 390.90 408.60 426.30 443.70 462.00 479.70 497.40 514.80 532.80 532.80 Jul-68 336.60 386.10 386.10 417.90 436.80 455.70 474.30 493.80 512.70 531.60 550.20 569.70 569.70 Jul-69 378.90 434.70 434.70 470.70 491.70 513.00 534.00 555.90 577.20 598.50 619.50 641.40 641.40 Jan-70 409.50 469.80 469.80 508.80 531.60 554.70 577.20 600.90 624.00 647.10 669.60 693.30 693.30 Jan-71 441.90 507.00 507.00 549.00 573.60 598.50 622.80 648.30 673.20 698.10 722.40 748.20 748.20 Nov-71 441.90 507.00 507.00 549.00 573.60 598.50 622.80 648.30 673.20 698.10 722.40 748.20 748.20 Jan-72 473.70 543.60 543.60 588.60 615.00 641.70 667.80 695.10 721.80 748.50 774.60 802.20 802.20 Oct-72 505.50 579.90 579.90 627.90 656.10 684.60 712.50 741.60 770.10 798.60 826.50 855.90 855.90 Oct-73 536.70 615.60 615.60 666.60 696.60 726.90 756.60 787.50 817.50 847.80 877.50 908.70 908.70 Oct-74 566.40 649.50 649.50 703.50 735.00 767.10 798.30 831.00 862.50 894.60 925.80 958.80 958.80 Oct-75 594.60 681.90 681.90 738.60 771.90 805.50 838.20 872.70 905.70 939.30 972.00 1006.80 1006.80 Oct-76 616.20 706.50 706.50 765.30 799.80 834.60 868.50 904.20 938.40 973.20 1007.10 1043.10 1043.10 Oct-77 654.30 750.30 750.30 812.70 849.30 886.20 922.20 960.30 996.60 1033.50 1069.50 1107.90 1107.90 Oct-78 690.30 791.70 791.70 857.40 896.10 934.80 972.90 1013.10 1051.50 1090.20 1128.30 1168.80 1168.80 Oct-79 738.90 847.20 847.20 917.70 959.10 1000.50 1041.30 1084.20 1125.30 1166.70 1207.50 1250.70 1250.70 Oct-80 825.30 946.20 946.20 1025.10 1071.30 1117.50 1163.10 1211.10 1257.00 1303.20 1348.80 1397.10 1397.10 Oct-81 943.20 1081.50 1081.50 1171.80 1224.60 1277.40 1329.30 1384.20 1436.70 1489.50 1541.70 1596.90 1596.90 Oct-82 981.00 1224.70 1124.70 1218.60 1273.50 1328.40 1382.40 1439.70 1494.30 1549.20 1603.50 1660.80 1660.80 Jan-84 1020.30 1169.70 1169.70 1267.20 1324.50 1381.50 1437.60 1497.30 1554.00 1611.30 1667.70 1727.10 1727.10 Jan-85 1061.10 1216.50 1216.50 1317.90 1377.60 1436.70 1495.20 1557.30 1616.10 1675.80 1734.30 1796.10 1796.10 Oct-85 1092.90 1253.10 1253.10 1357.50 1419.00 1479.90 1540.20 1604.10 1664.70 1726.20 1786.20 1850.10 1850.10 Jan-87 1125.60 1290.60 1290.60 1398.30 1461.60 1524.30 1586.40 1652.10 1714.50 1778.10 1839.90 1905.60 1905.60 Jan-88 1148.10 1316.40 1316.40 1426.20 1490.70 1554.90 1618.20 1685.10 1748.70 1813.80 1876.80 1943.70 1943.70 Jan-89 1195.20 1370.40 1370.40 1484.70 1551.90 1618.80 1684.50 1754.10 1820.40 1888.20 1953.60 2023.50 2023.50 Jan-90 1238.10 1419.60 1419.60 1538.10 167.70 1677.00 1745.10 1817.10 1885.80 1956.30 2023.80 2096.40 2096.40 Jan-91 1288.80 1477.80 1477.80 1601.10 1673.70 1745.70 1816.50 1891.50 1963.20 2036.40 2106.90 2182.50 2182.50 Jan-92 1342.80 1539.90 1539.90 1668.30 1743.90 1818.90 1892.70 1971.00 2045.70 2121.90 2195.40 2274.30 2274.30 Jan-93 1392.60 1596.90 1596.90 1730.10 1808.40 1886.10 1962.60 2043.90 2121.30 2200.50 2276.70 2358.30 2358.30 Jan-94 1423.20 1632.00 1632.00 1768.20 1848.30 1927.50 2005.80 2088.90 2168.10 2248.80 2326.80 2410.20 2410.20 Jan-95 1460.10 1674.30 1674.30 1814.10 1896.30 1977.60 2058.00 2143.20 2224.50 2307.30 2387.40 2472.90 2472.90 Jan-96 1495.20 1714.50 1714.50 1857.60 1941.90 2025.00 2107.50 2194.50 2277.90 2362.80 2444.70 2532.30 2532.30 Jan-97 1540.20 1765.80 1765.80 1913.40 2000.10 2085.90 2170.80 2260.20 2346.30 2433.60 2517.90 2608.20 2608.20 Jan-98 1583.40 1815.30 1815.30 1967.10 2056.20 2144.40 2231.70 2323.50 2412.00 2501.70 2588.40 2681.10 2681.10 Jan-99 1640.40 1880.70 1880.70 2037.90 2130.30 2221.50 2312.10 2407.20 2498.70 2591.70 2681.70 2777.70 2777.70 Jan-00 1719.00 1971.00 1971.00 2135.70 2232.60 2328.00 2423.10 2522.70 2618.70 2716.20 2810.40 2910.90 2910.90 

83
BASIC PAY SCHEDULE - Historical Data 

Pay Grade W-1 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-00 1719.00 1971.00 1971.00 2135.70 2232.60 2332.80 2433.30 2533.20 2634.00 2734.80 2835.00 2910.90 2910.90 Jan-01 1782.60 2043.90 2043.90 2214.60 2315.10 2419.20 2523.30 2626.80 2731.50 2835.90 2940.00 3018.60 3018.60 Jan-02 2049.90 2217.60 2330.10 2402.70 2511.90 2624.70 2737.80 2850.00 2963.70 3077.10 3189.90 3275.10 3275.10 Jan-03 2133.90 2308.50 2425.50 2501.10 2662.50 2782.20 2888.40 3006.90 3085.20 3203.40 3320.70 3409.50 3409.50 Jan-04 2212.80 2394.00 2515.20 2593.50 2802.30 2928.30 3039.90 3164.70 3247.20 3321.90 3443.70 3535.80 3535.80 Note: Notwithstanding the basic pay rates specified in this table, the actual rate of basic pay for warrant officers may not exceed the rate of pay for level V of the Executive Schedul

84
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-9 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jun-58 380.00 380.00 400.00 410.00 420.00 430.00 440.00 Oct-63 435.00 445.00 455.00 465.00 475.00 485.00 510.00 Sep-64 445.80 456.00 466.50 476.70 486.90 497.10 522.90 Sep-65 494.70 506.10 517.80 529.20 540.60 551.70 580.50 Jul-66 510.60 522.30 534.30 546.00 558.00 569.40 599.10 Oct-67 539.10 551.40 564.30 576.60 589.20 601.20 632.70 Jul-68 576.30 589.50 603.30 616.50 630.00 642.60 676.50 Jul-69 648.90 663.90 679.20 694.20 709.50 723.60 761.70 Jan-70 701.40 717.60 734.10 750.30 767.10 782.10 823.50 Jan-71 756.90 774.30 792.00 809.70 827.70 843.90 888.60 Nov-71 756.90 774.30 792.00 809.70 827.70 843.90 888.60 Jan-72 811.50 830.10 849.00 868.20 887.40 904.80 952.80 Oct-72 865.80 885.60 905.70 926.40 946.80 965.40 1016.40 Oct-73 919.20 940.20 961.50 983.70 1005.30 1025.10 1079.10 Oct-74 969.90 992.10 1014.60 1038.00 1060.80 1081.80 1138.80 Oct-75 1018.50 1041.60 1065.30 1089.90 1113.90 1135.80 1195.80 Oct-76 1055.40 1079.40 1104.00 1129.50 1154.10 1176.90 1239.00 Oct-77 1120.80 1146.30 1172.40 1199.40 1225.80 1249.80 1315.80 Oct-78 1182.30 1209.30 1236.90 1265.40 1293.30 1318.50 1388.10 Oct-79 1265.40 1294.20 1323.60 1354.20 1384.20 1411.20 1485.60 Oct-80 1413.60 1445.70 1478.40 1512.60 1546.20 1576.20 1659.30 Oct-81 1653.90 1691.40 1729.80 1769.70 1809.00 1844.10 1941.30 Oct-82 1720.20 1759.20 1799.10 1840.50 1881.30 1917.90 2019.00 Jan-84 1788.90 1829.70 1871.10 1914.00 1956.60 1994.70 2099.70 Jan-85 1860.60 1902.90 1945.80 1990.50 2034.90 2074.50 2183.70 Oct-85 1916.40 1959.90 2004.30 2050.20 2095.80 2136.60 2249.10 Jan-87 1974.00 2018.70 2064.30 2111.70 2158.80 2200.80 2316.60 Jan-88 2013.60 2059.20 2105.70 2154.00 2202.00 2244.90 2362.80 Jan-89 2096.10 2143.50 2192.10 2242.20 2292.30 2337.00 2459.70 Jan-90 2171.70 2220.60 2271.00 2322.90 2374.80 2421.00 2548.20 Jan-91 2260.80 2311.50 2364.00 2418.00 2472.30 2520.30 2652.60 Jan-92 2355.90 2408.70 2463.30 2519.70 2576.10 2626.20 2763.90 Jan-93 2443.20 2497.80 2554.50 2613.00 2671.50 2723.40 2866.20 Jan-94 2496.90 2552.70 2610.60 2670.60 2730.30 2783.40 2929.20 Jan-95 2561.70 2619.00 2678.40 2739.90 2801.40 2855.70 3005.40 Jan-96 2623.20 2682.00 2742.60 2805.60 2868.60 2924.10 3077.40 Jan-97 2701.80 2762.40 2824.80 2889.90 2954.70 3011.70 3169.80 Jan-98 2777.40 2839.80 2904.00 2970.90 3037.50 3096.00 3258.60 Jan-99 2877.30 2942.10 3008.40 3078.00 3147.00 3207.60 3375.90 Jan-00 3015.30 3083.40 3152.70 3225.60 3298.20 3361.50 3537.90 Jul-00 3015.30 3083.40 3169.80 3271.50 3373.20 3473.40 3609.30 Jan-01 3126.90 3197.40 3287.10 3392.40 3498.00 3601.80 3742.80 Jan-02 3423.90 3501.30 3599.40 3714.60 3830.40 3944.10 4098.30 Jan-03 3564.30 3645.00 3747.00 3867.00 3987.30 4180.80 4344.30 Jan-04 3769.20 3854.70 3962.40 4089.30 4216.50 4421.10 4594.20 

85
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-8 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jun-58

310.00 320.00 330.00 340.00 350.00 360.00 370.00 380.00 

Oct-63 365.00 375.00 385.00 395.00 405.00 415.00 425.00 450.00 Sep-64 374.10 384.30 394.50 405.00 415.20 425.40 435.60 461.40 Sep-65 415.20 426.60 438.00 449.40 460.80 472.20 483.60 512.10 Jul-66 428.40 440.40 452.10 463.80 475.50 487.20 499.20 528.60 Oct-67 452.40 465.00 477.30 489.90 502.20 514.50 527.10 558.30 Jul-68 483.60 497.10 510.30 523.80 537.00 549.90 563.40 596.70 Jul-69 544.50 559.80 574.50 589.80 604.80 619.20 634.50 672.00 Jan-70 588.60 605.10 621.00 637.50 653.70 669.30 685.80 726.30 Jan-71 635.10 652.80 670.20 687.90 705.30 722.10 740.10 783.60 Nov-71 635.10 652.80 670.20 687.90 705.30 722.10 740.10 783.60 Jan-72 681.00 699.90 718.50 737.40 756.30 774.30 793.50 840.00 Oct-72 726.60 746.70 766.50 786.60 807.00 826.20 846.60 896.10 Oct-73 771.30 792.90 813.90 835.20 856.80 877.20 898.80 951.30 Oct-74 813.90 836.70 858.90 881.40 904.20 925.50 948.30 1003.80 Oct-75 854.70 878.40 901.80 925.50 949.50 971.70 995.70 1053.90 Oct-76 885.60 910.20 934.50 959.10 984.00 1006.80 1031.70 1092.00 Oct-77 940.50 966.60 992.40 1018.50 1044.90 1069.20 1095.60 1159.80 Oct-78 992.10 1019.70 1047.00 1074.60 1102.50 1128.00 1155.90 1223.70 Oct-79 1061.70 1091.40 1120.50 1149.90 1179.90 1207.20 1236.90 1309.50 Oct-80 1185.90 1219.20 1251.60 1284.30 1317.90 1348.50 1381.50 1462.80 Oct-81 1387.50 1426.50 1464.30 1502.70 1542.00 1577.70 1616.40 1711.50 Oct-82 1443.00 1483.80 1522.80 1562.70 1603.80 1640.70 1681.20 1779.90 Jan-84 1500.60 1543.20 1583.70 1625.10 1668.00 1706.40 1748.40 1851.00 Jan-85 1560.60 1605.00 1647.00 1690.20 1734.60 1774.80 1818.30 1925.10 Oct-85 1607.40 1653.30 1696.50 1740.90 1786.50 1827.90 1872.90 1983.00 Jan-87 1655.70 1702.80 1747.50 1793.10 1840.20 1882.80 1929.00 2042.40 Jan-88 1688.70 1737.00 1782.60 1829.10 1877.10 1920.60 1967.70 2083.20 Jan-89 1758.00 1808.10 1855.80 1904.10 1954.20 1999.20 2048.40 2168.70 Jan-90 1821.30 1873.20 1922.70 1972.50 2024.70 2071.20 2122.20 2246.70 Jan-91 1896.00 1950.00 2001.60 2053.50 2107.80 2156.10 2209.20 2338.80 Jan-92 1975.50 2031.90 2085.60 2139.60 2196.30 2246.70 2301.90 2436.90 Jan-93 2048.70 2107.20 2162.70 2218.80 2277.60 2329.80 2387.10 2527.20 Jan-94 2093.70 2153.70 2210.40 2267.70 2327.70 2381.10 2439.60 2582.70 Jan-95 2148.00 2209.80 2268.00 2326.80 2388.30 2442.90 2502.90 2649.90 Jan-96 2199.60 2262.90 2322.30 2382.60 2445.60 2501.40 2562.90 2713.50 Jan-97 2265.60 2330.70 2391.90 2454.00 2519.10 2576.40 2639.70 2794.80 Jan-98 2328.90 2396.10 2458.80 2522.70 2589.60 2648.40 2713.50 2873.10 Jan-99 2412.60 2482.50 2547.30 2613.60 2682.90 2743.80 2811.30 2976.60 Jan-00 2528.40 2601.60 2669.70 2739.00 2811.60 2875.50 2946.30 3119.40 Jul-00 2528.40 2601.60 2669.70 2751.60 2840.10 2932.50 3026.10 3161.10 Jan-01 2622.00 2697.90 2768.40 2853.30 2945.10 3041.10 3138.00 3278.10 Jan-02 2858.10 2940.60 3017.70 3110.10 3210.30 3314.70 3420.30 3573.00 Jan-03 2975.40 3061.20 3141.30 3237.60 3342.00 3530.10 3625.50 3787.50 Jan-04 3085.50 3222.00 3306.30 3407.70 3517.50 3715.50 3815.70 3986.40 

86
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-7 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05 126.00 126.00 126.00 132.30 132.30 138.60 138.60 144.90 144.90 151.20 151.20 157.50 157.50 Oct-40 126.00 126.00 126.00 138.60 138.60 144.90 144.90 151.20 151.20 157.50 157.50 157.50 157.50 Aug-41 136.00 136.00 136.00 148.60 148.60 154.90 154.90 161.20 161.20 167.50 167.50 167.50 167.50 Jun-42 138.00 138.00 144.90 144.90 151.80 151.80 158.70 165.60 165.60 172.50 179.40 186.30 193.20 Jul-46 165.00 165.00 173.25 173.25 181.50 181.50 189.75 198.00 198.00 206.25 214.50 222.75 231.00 Oct-49 198.45 198.45 198.45 205.80 213.15 220.50 227.85 235.20 242.55 249.90 264.60 264.60 279.30 May-52 206.39 206.39 206.39 214.03 221.68 229.32 236.96 244.61 252.25 259.90 275.18 275.18 290.47 Apr-55 206.39 222.30 222.30 230.10 237.90 253.50 261.30 273.00 280.80 288.80 304.20 304.20 319.80 Jun-58 206.39 236.00 236.00 250.00 260.00 270.00 285.00 300.00 310.00 325.00 340.00 350.00 350.00 Oct-63 206.39 275.00 285.00 295.00 305.00 315.00 325.00 335.00 350.00 360.00 370.00 375.00 400.00 Sep-64 206.39 282.00 292.20 302.40 312.60 322.80 333.00 343.50 358.80 369.00 379.20 384.30 410.10 Sep-65 261.00 312.90 324.30 335.70 347.10 358.20 369.60 381.30 398.40 409.50 420.90 426.60 455.10 Jul-66 269.40 322.80 334.80 346.50 358.20 369.60 381.30 393.60 411.00 422.70 434.40 440.40 469.80 Oct-67 284.40 340.80 353.40 366.00 378.30 390.30 402.60 415.50 434.10 446.40 458.70 465.00 496.20 Jul-68 303.90 364.20 377.70 391.20 404.40 417.30 430.50 444.30 464.10 477.30 490.50 497.10 530.40 Jul-69 342.30 410.10 425.40 440.40 455.40 469.80 484.80 500.40 522.60 537.30 552.30 559.80 597.30 Jan-70 369.90 443.40 459.90 476.10 492.30 507.90 524.10 540.90 564.90 580.80 597.00 605.10 645.60 Jan-71 399.00 478.50 496.20 513.60 531.30 548.10 565.50 583.50 609.60 626.70 644.10 652.80 696.60 Nov-71 443.40 478.50 496.20 513.60 531.30 548.10 565.50 583.50 609.60 626.70 644.10 652.80 696.60 Jan-72 475.50 513.00 531.90 550.50 569.70 587.70 606.30 625.50 653.70 672.00 690.60 699.90 746.70 Oct-72 507.30 547.20 567.60 587.40 607.80 627.00 646.80 667.20 697.50 717.00 736.80 746.70 796.80 Oct-73 538.50 581.10 602.70 623.70 645.30 665.70 686.70 708.30 740.40 761.10 782.40 792.90 846.00 Oct-74 568.20 613.20 636.00 658.20 681.00 702.30 724.50 747.30 781.20 803.10 825.60 836.70 892.80 Oct-75 596.70 643.80 667.80 691.20 715.20 737.40 760.80 784.80 820.20 843.30 867.00 878.40 937.50 Oct-76 618.30 667.20 692.10 716.10 741.00 764.10 788.40 813.30 849.90 873.90 898.50 910.20 971.40 Oct-77 656.70 708.60 735.00 760.50 786.90 811.50 837.30 863.70 902.70 928.20 954.30 966.60 1031.70 Oct-78 692.70 747.60 775.50 802.20 820.10 856.20 883.50 911.10 952.20 979.20 1006.80 1019.70 1088.40 Oct-79 741.30 800.10 829.80 858.60 888.30 916.20 945.60 975.00 1019.10 1047.90 1077.60 1091.40 1164.90 Oct-80 828.00 893.70 927.00 959.10 992.10 1023.30 1056.30 1089.00 1138.20 1170.60 1203.60 1219.20 1301.10 Oct-81 968.70 1045.50 1084.50 1122.00 1160.70 1197.30 1236.00 1274.10 1331.70 1369.50 1408.20 1426.50 1522.20 Oct-82 1007.40 1087.20 1128.00 1167.00 1207.20 1245.30 1285.50 1325.10 1385.10 1424.40 1464.60 1483.50 1583.10 Jan-84 1047.60 1130.70 1173.00 1213.80 1255.50 1295.10 1336.80 1378.20 1440.60 1481.40 1523.10 1542.90 1646.40 Jan-85 1089.60 1176.00 1219.80 1262.40 1305.60 1347.00 1390.20 1433.40 1498.20 1540.80 1584.00 1604.70 1712.40 Oct-85 1122.30 1211.40 1256.40 1300.20 1344.90 1387.50 1431.90 1476.30 1543.20 1587.00 1631.40 1652.70 1763.70 Jan-87 1155.90 1247.70 1294.20 1339.20 1385.10 1429.20 1474.80 1520.70 1589.40 1634.70 1680.30 1702.20 1816.50 Jan-88 1179.00 1272.60 1320.00 1365.90 1412.70 1457.70 1504.20 1551.00 1621.20 1667.40 1713.90 1736.10 1852.80 Jan-89 1277.30 1324.80 1374.00 1422.00 1470.60 1517.40 1566.00 1614.60 1687.80 1735.80 1784.10 1807.20 1928.70 Jan-90 1271.40 1372.50 1423.50 1473.30 1523.40 1572.00 1622.40 1672.80 1748.70 1798.20 1848.30 1872.30 1998.00 Jan-91 1323.60 1428.90 1482.00 1533.60 1585.80 1636.50 1689.00 1741.50 1820.40 1872.00 1924.20 1949.10 2079.90 Jan-92 1379.10 1488.90 1544.10 1598.10 1652.40 1705.20 1759.80 1814.70 1896.90 1950.60 2004.90 2031.00 2167.20 Jan-93 1430.10 1544.10 1601.10 1657.20 1713.60 1768.20 1824.90 1881.90 1967.10 2022.90 2079.00 2106.00 2247.40 Jan-94 1461.60 1578.00 1636.20 1693.80 1751.40 1807.20 1865.10 1923.30 2010.30 2067.30 2124.60 2152.20 2296.80 Jan-95 1499.70 1619.10 1678.80 1737.90 1797.00 1854.30 1913.70 1973.40 2062.50 2121.00 2179.80 2208.30 2356.50 

87
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-7 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 1535.70 1658.10 1719.00 1779.60 1840.20 1898.70 1959.60 2020.80 2112.00 2172.00 2232.00 2261.40 2413.20 Jan-97 1581.90 1707.90 1770.60 1833.00 1895.40 1955.70 2018.40 2081.40 2175.30 2237.10 2298.90 2329.20 2485.50 Jan-98 1626.30 1755.60 1820.10 1884.30 1948.50 2010.60 2074.80 2139.60 2236.20 2299.80 2363.40 2394.30 2555.10 Jan-99 1684.80 1818.90 1885.50 1952.10 2018.70 2082.90 2149.50 2216.70 2316.60 2382.60 2448.60 2480.40 2647.20 Jan-00 1765.80 1906.20 1976.10 2045.70 2115.60 2182.80 2252.70 2323.20 2427.90 2496.90 2566.20 2599.50 2774.40 Jul-00 1765.80 1927.80 2001.00 2073.00 2147.70 2220.90 2294.10 2367.30 2439.30 2514.00 2588.10 2660.40 2787.60 Jan-01 1831.20 1999.20 2075.10 2149.80 2227.20 2303.10 2379.00 2454.90 2529.60 2607.00 2683.80 2758.80 2890.80 Jul-01 1831.20 1999.20 2075.10 2149.80 2228.10 2362.20 2437.80 2512.80 2588.10 2666.10 2742.00 2817.90 2949.60 Jan-02 1986.90 2169.00 2251.50 2332.50 2417.40 2562.90 2645.10 2726.40 2808.00 2892.60 2975.10 3057.30 3200.40 Jan-03 2068.50 2257.80 2343.90 2428.20 2516.40 2667.90 2753.40 2838.30 2990.40 3066.30 3138.60 3182.70 3331.50 Jan-04 2145.00 2341.20 2430.60 2549.70 2642.10 2801.40 2891.10 2980.20 3139.80 3219.60 3295.50 3341.70 3495.00 

88
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-6 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05 84.00 84.00 84.00 88.20 88.20 92.40 92.40 96.60 96.60 100.80 100.80 105.00 105.00 Oct-40 84.00 84.00 84.00 92.40 92.40 96.60 96.60 100.80 100.80 105.00 105.00 105.00 105.00 Aug-41 94.00 94.00 94.00 102.40 102.40 106.60 106.60 110.80 110.80 115.00 115.00 115.00 115.00 Jun-42 114.00 114.00 119.70 119.70 125.40 125.40 131.10 136.80 136.80 142.50 148.20 153.90 159.60 Jul-46 135.00 135.00 141.75 141.75 148.50 148.50 155.25 162.00 162.00 168.75 175.50 182.25 189.00 Oct-49 169.05 169.05 169.05 176.40 183.75 191.10 198.45 205.80 213.15 220.50 235.20 235.20 249.90 May-52 175.81 175.81 175.81 183.46 191.10 198.74 206.39 214.03 221.68 229.32 244.61 244.61 259.90 Apr-55 175.81 187.20 187.20 195.00 214.50 222.30 234.00 241.80 249.60 257.40 273.00 273.00 288.60 Jun-58 175.81 200.00 200.00 225.00 235.00 245.00 255.00 265.00 275.00 280.00 290.00 290.00 290.00 Oct-63 175.81 240.00 250.00 260.00 270.00 280.00 290.00 305.00 315.00 325.00 330.00 330.00 330.00 Sep-64 175.81 246.00 256.20 266.40 276.90 287.10 297.30 312.60 322.80 333.00 338.40 338.40 338.40 Sep-65 225.00 273.00 284.40 295.80 307.50 318.60 330.00 347.10 358.20 369.60 375.60 375.60 375.60 Jul-66 232.20 281.70 293.40 305.40 317.40 328.80 340.50 358.20 369.60 381.30 387.60 387.60 387.60 Oct-67 245.10 297.60 309.90 322.50 335.10 347.10 359.70 378.30 390.30 402.60 409.20 409.20 409.20 Jul-68 261.90 318.00 331.20 344.70 358.20 371.10 384.60 404.40 417.30 430.50 437.40 437.40 437.40 Jul-69 294.90 358.20 372.90 388.20 403.20 417.90 433.20 455.40 469.80 484.80 492.60 492.60 492.60 Jan-70 318.90 387.30 403.20 419.70 435.90 451.80 468.30 492.30 507.90 524.10 532.50 532.50 532.50 Jan-71 344.10 417.90 435.00 453.00 470.40 487.50 505.20 531.30 548.10 565.50 574.50 574.50 574.50 Nov-71 382.80 417.90 435.00 453.00 470.40 487.50 505.20 531.30 548.10 565.50 574.50 574.50 574.50 Jan-72 410.40 447.90 466.50 485.70 504.30 522.60 541.50 569.70 587.70 606.30 615.90 615.90 615.90 Oct-72 438.00 477.90 497.70 518.10 537.90 557.70 577.80 607.80 627.00 646.80 657.00 657.00 657.00 Oct-73 465.00 507.30 528.30 550.20 571.20 592.20 613.50 645.30 665.70 686.70 697.50 697.50 697.50 Oct-74 490.80 535.20 557.40 580.50 602.70 624.90 647.40 681.00 702.30 724.50 735.90 735.90 735.90 Oct-75 515.40 561.90 585.30 609.60 632.70 656.10 679.80 715.20 737.40 760.80 772.80 772.80 772.80 Oct-76 534.00 582.30 606.60 631.80 655.50 679.80 704.40 741.00 764.10 788.40 800.70 800.70 800.70 Oct-77 567.00 618.30 644.10 671.10 696.00 721.80 748.20 786.90 811.50 837.30 850.20 850.20 850.20 Oct-78 598.20 652.20 679.50 708.00 734.40 761.40 789.30 830.10 856.20 883.50 897.00 897.00 897.00 Oct-79 640.20 698.10 727.20 757.80 786.00 814.80 844.80 888.30 916.20 945.60 960.00 960.00 960.00 Oct-80 715.20 779.70 812.40 846.60 878.10 910.20 943.50 992.10 1023.30 1056.30 1072.20 1072.20 1072.20 Oct-81 833.10 908.40 946.50 986.40 1023.00 1060.50 1099.20 1155.90 1192.20 1230.60 1249.20 1249.20 1249.20 Oct-82 866.40 944.70 984.30 1026.00 1063.80 1102.80 1143.30 1202.10 1239.90 1279.80 1299.30 1299.30 1299.30 Jan-84 901.20 982.50 1023.60 1067.10 1106.40 1146.90 1188.90 1250.10 1289.40 1331.10 1351.20 1351.20 1351.20 Jan-85 937.20 1021.80 1064.40 1109.70 1150.80 1192.80 1236.60 1300.20 1341.00 1384.20 1405.20 1405.20 1405.20 Oct-85 965.40 1052.40 1096.20 1143.00 1185.30 1228.50 1273.80 1339.20 1381.20 1425.60 1447.50 1447.50 1447.50 Jan-87 994.50 1083.90 1129.20 1177.20 1221.00 1265.40 1311.90 1379.40 1422.60 1468.50 1491.00 1491.00 1491.00 Jan-88 1014.30 1105.50 1151.70 1200.60 1245.30 1290.60 1338.00 1407.00 1451.10 1497.90 1520.70 1520.70 1520.70 Jan-89 1056.00 1150.80 1198.80 1249.80 1296.30 1343.40 1392.90 1464.60 1510.50 1559.40 1583.10 1583.10 1583.10 Jan-90 1094.10 1192.20 1242.00 1294.80 1343.10 1391.70 1443.00 1517.40 1564.80 1615.50 1640.10 1640.10 1640.10 Jan-91 1139.10 1241.10 1293.00 1347.90 1398.30 1448.70 1502.10 1579.50 1629.00 1681.80 1707.30 1707.30 1707.30 Jan-92 1186.80 1293.30 1347.30 1404.60 1457.10 1509.60 1565.10 1645.80 1697.40 1752.30 1779.00 1779.00 1779.00 Jan-93 1230.60 1341.30 1397.10 1456.50 1511.10 1565.40 1623.00 1706.70 1760.10 1817.10 1844.70 1844.70 1844.70 Jan-94 1257.60 1370.70 1427.70 1488.60 1544.40 1599.90 1658.70 1744.20 1798.80 1857.00 1885.20 1885.20 1885.20 Jan-95 1290.30 1406.40 1464.90 1527.30 1584.60 1641.60 1701.90 1789.50 1845.60 1905.30 1934.10 1934.10 1934.10 

89
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-6 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 1321.20 1440.30 1500.00 1563.90 1622.70 1680.90 1742.70 1832.40 1890.00 1950.90 1980.60 1980.60 1980.60 Jan-97 1360.80 1483.50 1545.00 1610.70 1671.30 1731.30 1794.90 1887.30 1946.70 2009.40 2040.00 2040.00 2040.00 Jan-98 1398.90 1524.90 1588.20 1655.70 1718.10 1779.90 1845.30 1940.10 2001.30 2065.80 2097.00 2097.00 2097.00 Jan-99 1449.30 1579.80 1645.50 1715.40 1779.90 1844.10 1911.60 2010.00 2073.30 2140.20 2172.60 2172.60 2172.60 Jan-00 1518.90 1655.70 1724.40 1797.60 1865.40 1932.60 2003.40 2106.60 2172.90 2242.80 2277.00 2277.00 2277.00 Jul-00 1518.90 1678.20 1752.60 1824.30 1899.30 1973.10 2047.20 2118.60 2191.50 2244.60 2283.30 2283.30 2285.70 Jan-01 1575.00 1740.30 1817.40 1891.80 1969.50 2046.00 2122.80 2196.90 2272.50 2327.70 2367.90 2367.90 2370.30 Jul-01 1575.00 1740.30 1817.40 1891.80 1969.80 2097.30 2174.10 2248.80 2325.00 2379.60 2421.30 2421.30 2421.30 Jan-02 1701.00 1870.80 1953.60 2003.70 2117.40 2254.50 2337.30 2417.40 2499.30 2558.10 2602.80 2602.80 2602.80 Jan-03 1770.60 1947.60 2033.70 2117.10 2204.10 2400.90 2477.40 2562.30 2636.70 2663.10 2709.60 2709.60 2709.60 Jan-04 1855.50 2041.20 2131.20 2218.80 2310.00 2516.10 2596.20 2685.30 2763.30 2790.90 2809.80 2809.80 2809.80 

90
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-5 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05 72.00 72.00 72.00 75.60 75.60 79.20 79.20 82.80 82.80 86.40 86.40 86.40 86.40 Oct-40 72.00 72.00 72.00 79.20 79.20 82.80 82.80 86.40 86.40 90.00 90.00 90.00 90.00 Aug-41 82.00 82.00 82.00 89.20 89.20 92.80 92.80 96.40 96.40 100.00 100.00 100.00 100.00 Jun-42 96.00 96.00 100.80 100.80 105.60 105.60 110.40 115.20 115.20 120.00 124.80 129.60 134.40 Jul-46 115.00 115.00 120.75 120.75 126.50 126.50 132.25 138.00 138.00 143.75 149.50 155.25 161.00 Oct-49 139.65 147.00 147.00 154.35 161.70 169.05 176.40 183.75 191.10 198.45 213.15 213.15 227.85 May-52 145.24 152.88 152.88 160.52 168.17 175.81 183.46 191.10 198.74 206.39 221.68 221.68 236.96 Apr-55 145.24 163.80 163.80 183.30 191.10 202.80 210.60 218.40 226.20 234.00 241.80 241.80 257.50 Jun-58 145.24 180.00 180.00 205.00 210.00 220.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 Oct-63 145.24 210.00 220.00 230.00 245.00 255.00 266.00 275.00 280.00 280.00 280.00 280.00 280.00 Sep-64 145.24 215.40 225.60 235.80 251.10 261.30 271.50 282.00 287.10 287.10 287.10 287.10 287.10 Sep-65 194.10 239.10 250.50 261.60 278.70 290.10 301.50 312.90 318.60 318.60 318.60 318.60 318.60 Jul-66 200.40 246.90 258.60 270.00 287.70 299.40 311.10 322.80 328.80 328.80 328.80 328.80 328.80 Oct-67 211.50 260.70 273.00 285.00 303.90 316.20 328.50 340.80 347.10 347.10 347.10 347.10 347.10 Jul-68 226.20 278.70 291.90 304.80 324.90 338.10 351.30 364.20 371.10 371.10 371.10 371.10 371.10 Jul-69 254.70 313.80 328.80 343.20 365.70 380.70 395.70 410.10 417.90 417.90 417.90 417.90 417.90 Jan-70 275.40 339.30 355.50 371.10 395.40 411.60 427.80 443.40 451.80 451.80 451.80 451.80 451.80 Jan-71 297.30 366.00 383.70 400.50 426.60 444.00 461.70 470.50 487.50 487.50 487.50 487.50 487.50 Nov-71 336.30 366.00 383.70 400.50 426.60 444.00 461.70 470.50 487.50 487.50 487.50 487.50 487.50 Jan-72 360.60 392.40 411.30 429.30 457.50 476.10 495.00 513.00 522.60 522.60 522.60 522.60 522.60 Oct-72 384.60 418.80 438.90 458.10 488.10 507.90 528.00 547.20 557.70 557.70 557.70 557.70 557.70 Oct-73 408.30 444.60 465.90 486.30 518.10 539.10 560.70 581.10 592.20 592.20 592.20 592.20 592.20 Oct-74 430.80 469.60 491.70 513.00 546.60 568.80 591.60 613.20 624.90 624.90 624.90 624.90 624.90 Oct-75 452.40 492.60 516.30 538.80 573.90 597.30 621.30 643.80 656.10 656.10 656.10 656.10 656.10 Oct-76 468.90 510.30 534.90 558.30 594.60 618.90 643.80 667.20 679.80 679.80 679.80 679.80 679.80 Oct-77 498.00 541.80 568.20 592.80 631.50 657.30 683.70 708.60 721.80 721.80 721.80 721.80 721.80 Oct-78 525.30 571.50 599.40 625.50 666.30 693.60 721.20 747.60 761.40 761.40 761.40 761.40 761.40 Oct-79 562.20 611.70 641.40 669.30 713.10 742.20 771.90 800.10 814.80 814.80 814.80 814.80 814.80 Oct-80 627.90 683.40 716.40 747.60 796.50 828.90 862.20 893.70 910.20 910.20 910.20 910.20 910.20 Oct-81 731.40 796.20 834.60 870.90 927.90 965.70 1004.40 1041.30 1060.50 1060.50 1060.50 1060.50 1060.50 Oct-82 760.80 828.00 867.90 905.70 965.10 1004.40 1044.60 1083.00 1102.80 1102.80 1102.80 1102.80 1102.80 Jan-84 791.10 861.00 902.70 942.00 1003.80 1044.60 1086.30 1126.20 1146.90 1146.90 1146.90 1146.90 1146.90 Jan-85 822.60 895.50 938.70 979.80 1044.00 1086.30 1129.80 1171.20 1192.80 1192.80 1192.80 1192.80 1192.80 Oct-85 847.20 922.50 966.90 1009.20 1075.20 1119.00 1163.70 1206.30 1228.50 1228.50 1228.50 1228.50 1228.50 Jan-87 872.70 950.10 996.00 1039.50 1107.60 1152.60 1198.50 1242.60 1265.40 1265.40 1265.40 1265.40 1265.40 Jan-88 890.10 969.00 1015.80 1060.20 1129.80 1175.70 1222.50 1267.50 1290.60 1290.60 1290.60 1290.60 1290.60 Jan-89 927.60 1008.60 1057.50 1103.70 1176.00 1224.00 1272.60 1319.40 1343.40 1343.40 1343.40 1343.40 1343.40 Jan-90 960.00 1044.90 1095.60 1143.30 1218.30 1268.10 1318.50 1366.80 1391.70 1391.70 1391.70 1391.70 1391.70 Jan-91 999.30 1087.80 1140.60 1190.10 1286.40 1320.00 1372.50 1422.90 1448.70 1448.70 1448.70 1448.70 1448.70 Jan-92 1041.30 1133.40 1188.60 1240.20 1321.80 1375.50 1430.10 1482.60 1509.60 1509.60 1509.60 1509.60 1509.60 Jan-93 1079.70 1175.40 1232.70 1286.10 1370.70 1426.50 1482.90 1537.50 1565.40 1565.40 1565.40 1565.40 1565.40 Jan-94 1103.40 1201.20 1259.70 1314.30 1401.00 1458.00 1515.60 1571.40 1599.90 1599.90 1599.90 1599.90 1599.90 Jan-95 1132.20 1232.40 1292.40 1348.50 1437.30 1495.80 1554.90 1612.20 1641.60 1641.60 1641.60 1641.60 1641.60 

91
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-5 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 1159.50 1262.10 1323.30 1380.90 1471.80 1531.80 1592.10 1650.90 1680.90 1680.90 1680.90 1680.90 1680.90 Jan-97 1194.30 1299.90 1362.90 1422.30 1515.90 1577.70 1639.80 1700.40 1731.30 1731.30 1731.30 1731.30 1731.30 Jan-98 1227.60 1336.20 1401.00 1462.20 1558.20 1621.80 1685.70 1748.10 1779.90 1779.90 1779.90 1779.90 1779.90 Jan-99 1271.70 1384.20 1451.40 1514.70 1614.30 1680.30 1746.30 1811.10 1844.10 1844.10 1844.10 1844.10 1844.10 Jan-00 1332.60 1450.50 1521.00 1587.30 1691.70 1761.00 1830.00 1898.10 1932.60 1932.60 1932.60 1932.60 1932.60 

Jul-00 1332.60 1494.00 1566.00 1640.40 1714.50 1789.50 1861.50 1936.20 1936.20 1936.20 1936.20 1936.20 1936.20 Jan-01 1381.80 1549.20 1623.90 1701.00 1777.80 1855.80 1930.50 2007.90 2007.90 2007.90 2007.90 2007.90 2007.90 

Jul-01 1381.80 1549.20 1623.90 1701.00 1779.30 1888.50 1962.90 2040.30 2040.30 2040.30 2040.30 2040.30 2040.30 Jan-02 1561.50 1665.30 1745.70 1828.50 1912.80 2030.10 2110.20 2193.30 2193.30 2193.30 2193.30 2193.30 2193.30 Jan-03 1625.40 1733.70 1817.40 1903.50 2037.00 2151.90 2236.80 2283.30 2283.30 2283.30 2283.30 2283.30 2283.30 Jan-04 1700.10 1813.50 1901.10 1991.10 2130.60 2250.90 2339.70 2367.90 2367.90 2367.90 2367.90 2367.90 2367.90 

92
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-4 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05

Oct-79 

54.00 54.00 54.00 56.70 56.70 59.40 59.40 62.10 62.10 64.80 64.80 64.80 64.80 

Oct-40 60.00 60.00 60.00 66.00 66.00 69.00 69.00 72.00 72.00 75.00 75.00 75.00 75.00 Aug-41 70.00 70.00 70.00 76.00 76.00 79.00 79.00 82.00 82.00 85.00 85.00 85.00 85.00 Jun-42 78.00 78.00 81.90 81.90 85.80 85.80 89.70 93.60 93.60 97.50 101.40 105.30 109.20 Jul-46 100.00 100.00 105.00 105.00 110.00 110.00 115.00 120.00 120.00 125.00 130.00 135.00 140.00 Oct-49 117.60 124.95 124.95 132.30 139.65 147.00 154.35 161.70 169.05 176.40 191.10 191.10 191.10 May-52 122.30 129.95 129.95 137.59 145.24 152.88 160.52 168.17 175.81 183.46 198.74 198.74 198.74 Apr-55 122.30 140.40 140.40 159.90 167.70 179.40 187.20 190.00 202.80 210.60 218.40 218.40 218.40 Jun-58 122.30 150.00 160.00 170.00 180.00 190.00 190.00 190.00 190.00 190.00 190.00 190.00 190.00 Oct-63 122.30 180.00 190.00 205.00 215.00 215.00 215.00 215.00 215.00 215.00 215.00 215.00 215.00 Sep-64 122.30 184.50 194.70 210.00 220.50 220.50 220.50 220.50 220.50 220.50 220.50 220.50 220.50 Sep-65 165.50 204.90 216.00 233.10 244.80 244.80 244.80 244.80 244.80 244.80 244.80 244.80 244.80 Jul-66 168.60 211.50 222.90 240.60 252.60 252.60 252.60 252.60 252.60 252.60 252.60 252.60 252.60 Oct-67 177.90 223.20 235.50 254.10 266.70 266.70 266.70 266.70 266.70 266.70 266.70 266.70 266.70 Jul-68 190.20 238.50 251.70 271.50 285.00 285.00 285.00 285.00 285.00 285.00 285.00 285.00 285.00 Jul-69 214.20 268.50 283.50 305.70 321.00 321.00 321.00 321.00 321.00 321.00 321.00 321.00 321.00 Jan-70 231.60 290.10 306.60 330.60 347.10 347.10 347.10 347.10 347.10 347.10 347.10 347.10 347.10 Jan-71 249.90 312.90 330.90 356.70 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 Nov-71 323.40 341.40 361.20 389.40 405.00 405.00 405.00 405.00 405.00 405.00 405.00 405.00 405.00 Jan-72 346.80 366.00 387.30 417.60 434.10 434.10 434.10 434.10 434.10 434.10 434.10 434.10 434.10 Oct-72 369.90 390.60 413.10 445.50 463.20 463.20 463.20 463.20 463.20 463.20 463.20 463.20 463.20 Oct-73 392.70 414.60 438.60 473.10 491.70 491.70 491.70 491.70 491.70 491.70 491.70 491.70 491.70 Oct-74 414.30 437.40 462.90 499.20 518.70 518.70 518.70 518.70 518.70 518.70 518.70 518.70 518.70 Oct-75 435.00 459.30 486.00 524.10 544.50 544.50 544.50 544.50 544.50 544.50 544.50 544.50 544.50 Oct-76 450.60 475.80 503.70 543.00 564.30 564.30 564.30 564.30 564.30 564.30 564.30 564.30 564.30 Oct-77 478.50 505.20 534.90 576.60 599.40 599.40 599.40 599.40 599.40 599.40 599.40 599.40 599.40 Oct-78 504.90 533.10 564.30 608.40 632.40 632.40 632.40 632.40 632.40 632.40 632.40 632.40 632.40 

540.30 570.60 603.90 651.00 676.80 676.80 676.80 676.80 676.80 676.80 676.80 676.80 676.80 

Oct-80 603.60 637.50 674.70 727.20 756.00 756.00 756.00 756.00 756.00 756.00 756.00 756.00 756.00 Oct-81 682.20 720.30 762.30 821.70 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 Oct-82 709.50 749.10 792.90 854.70 888.60 888.60 888.60 888.60 888.60 888.60 888.60 888.60 888.60 Jan-84 738.00 779.10 824.70 888.90 924.00 924.00 924.00 924.00 924.00 924.00 924.00 924.00 924.00 Jan-85 767.40 810.30 857.70 924.60 960.90 960.90 960.60 960.90 960.90 960.90 960.90 960.90 960.90 Oct-85 790.50 834.60 883.50 952.20 989.70 989.70 989.70 989.70 989.70 989.70 989.70 989.70 989.70 Jan-87 814.20 859.50 909.90 980.70 1019.40 1019.40 1019.40 1019.40 1019.40 1019.40 1019.40 1019.40 1019.40 Jan-88 830.40 876.60 928.20 1000.20 1039.80 1039.80 1039.80 1039.80 1039.80 1039.80 1039.80 1039.80 1039.80 Jan-89 864.30 912.60 966.30 1041.30 1082.40 1082.40 1082.40 1082.40 1082.40 1082.40 1082.40 1082.40 1082.40 Jan-90 895.50 945.60 1001.10 1078.80 1121.40 1121.40 1121.40 1121.40 1121.40 1121.40 1121.40 1121.40 1121.40 Jan-91 932.10 984.30 1042.20 1122.90 1167.30 1167.30 1167.30 1167.30 1167.30 1167.30 1167.30 1167.30 1167.30 Jan-92 971.10 1025.70 1086.00 1170.00 1216.20 1216.20 1216.20 1216.20 1216.20 1216.20 1216.20 1216.20 1216.20 Jan-93 1007.10 1063.80 1126.20 1213.20 1261.20 1261.20 1261.20 1261.20 1261.20 1261.20 1261.20 1261.20 1261.20 Jan-94 1029.30 1087.20 1151.10 1239.90 1288.80 1288.80 1288.80 1288.80 1288.80 1288.80 1288.80 1288.80 1288.80 Jan-95 1056.00 1115.40 1181.10 1272.00 1322.40 1322.40 1322.40 1322.40 1322.40 1322.40 1322.40 1322.40 1322.40 

93
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-4 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 1081.20 1142.10 1209.30 1302.60 1354.20 1354.20 1354.20 1354.20 1354.20 1354.20 1354.20 1354.20 1354.20 Jan-97 1113.60 1176.30 1245.60 1341.60 1394.70 1394.70 1394.70 1394.70 1394.70 1394.70 1394.70 1394.70 1394.70 Jan-98 1144.80 1209.30 1280.40 1379.10 1433.70 1433.70 1433.70 1433.70 1433.70 1433.70 1433.70 1433.70 1433.70 Jan-99 1185.90 1252.80 1326.60 1428.60 1485.30 1485.30 1485.30 1485.30 1485.30 1485.30 1485.30 1485.30 1485.30 Jan-00 1242.90 1312.80 1390.20 1497.30 1556.70 1556.70 1556.70 1556.70 1556.70 1556.70 1556.70 1556.70 1556.70 Jul-00 1242.90 1373.10 1447.20 1520.10 1593.90 1593.90 1593.90 1593.90 1593.90 1593.90 1593.90 1593.90 1593.90 Jan-01 1288.80 1423.80 1500.60 1576.20 1653.00 1653.00 1653.00 1653.00 1653.00 1653.00 1653.00 1653.00 1653.00 Jan-02 1443.60 1517.70 1599.60 1680.30 1752.30 1752.30 1752.30 1752.30 1752.30 1752.30 1752.30 1752.30 1752.30 Jan-03 1502.70 1579.80 1665.30 1749.30 1824.00 1824.00 1824.00 1824.00 1824.00 1824.00 1824.00 1824.00 1824.00 Jan-04 1558.20 1638.30 1726.80 1814.10 1891.50 1891.50 1891.50 1891.50 1891.50 1891.50 1891.50 1891.50 1891.50 

94
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-3 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05 42.00 42.00 42.00 44.10 44.10 46.20 46.20 48.30 48.30 50.40 50.40 50.40 50.40 Oct-40 54.00 54.00 54.00 59.40 59.40 62.10 62.10 64.80 64.80 67.50 67.50 67.50 67.50 Aug-41 64.00 64.00 64.00 69.40 69.40 72.10 72.10 74.80 74.80 77.50 77.50 77.50 77.50 Jun-42 66.00 66.00 69.30 69.30 72.60 72.60 75.90 79.20 79.20 82.50 85.80 89.10 92.40 Jul-46 90.00 90.00 94.50 94.50 99.00 99.00 103.50 108.00 108.00 112.50 117.00 121.50 126.00 Oct-49 95.55 102.90 102.90 110.25 117.60 124.95 132.30 139.65 147.00 147.00 147.00 147.00 147.00 May-52 99.37 107.02 107.02 114.66 122.30 129.95 137.59 145.24 152.88 152.88 152.88 152.88 152.88 Apr-55 99.37 117.00 117.00 132.60 140.40 148.20 156.00 159.90 163.80 163.80 163.80 163.80 163.80 Jun-58 99.37 124.00 124.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 Oct-63 99.37 145.00 155.00 165.00 165.00 165.00 165.00 165.00 165.00 165.00 165.00 165.00 165.00 Sep-64 99.37 148.50 155.00 169.20 169.20 169.20 169.20 169.20 169.20 169.20 169.20 169.20 169.20 Sep-65 117.90 164.70 176.40 187.80 187.80 187.80 187.80 187.80 187.80 187.80 187.80 187.80 187.80 Jul-66 121.80 170.10 182.10 193.80 193.80 193.80 193.80 193.80 193.80 193.80 193.80 193.80 193.80 Oct-67 128.70 179.70 192.30 204.60 204.60 204.60 204.60 204.60 204.60 204.60 204.60 204.60 204.60 Jul-68 137.70 192.00 205.50 218.70 218.70 218.70 218.70 218.70 218.70 218.70 218.70 218.70 218.70 Jul-69 155.10 216.30 231.30 246.30 246.30 246.30 246.30 246.30 246.30 246.30 246.30 246.30 246.30 Jan-70 167.70 233.70 249.90 266.40 266.40 266.40 266.40 266.40 266.40 266.40 266.40 266.40 266.40 Jan-71 180.90 252.30 269.70 287.40 287.40 287.40 287.40 287.40 287.40 287.40 287.40 287.40 287.40 Nov-71 311.10 328.20 341.10 354.60 354.60 354.60 354.60 354.60 354.60 354.60 354.60 354.60 354.60 Jan-72 333.60 351.90 365.70 380.10 380.10 380.10 380.10 380.10 380.10 380.10 380.10 380.10 380.10 Oct-72 355.80 375.30 390.30 405.60 405.60 405.60 405.60 405.60 405.60 405.60 405.60 405.60 405.60 Oct-73 377.70 398.40 414.30 430.50 430.50 430.50 430.50 430.50 430.50 430.50 430.50 430.50 430.50 Oct-74 398.40 420.30 437.10 454.20 454.20 454.20 454.20 454.20 454.20 454.20 454.20 454.20 454.20 Oct-75 418.20 441.30 459.00 477.00 477.00 477.00 477.00 477.00 477.00 477.00 477.00 477.00 477.00 Oct-76 433.20 457.20 475.50 494.40 494.40 494.40 494.40 494.40 494.40 494.40 494.40 494.40 494.40 Oct-77 460.20 485.40 504.90 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 Oct-78 485.40 512.10 532.80 553.80 553.80 553.80 553.80 553.80 553.80 553.80 553.80 553.80 553.80 Oct-79 519.60 548.10 570.30 592.80 592.80 592.80 592.80 592.80 592.80 592.80 592.80 592.80 592.80 Oct-80 580.50 612.30 636.90 662.10 662.10 662.10 662.10 662.10 662.10 662.10 662.10 662.10 662.10 Oct-81 642.60 677.70 705.00 732.90 732.90 732.90 732.90 732.90 732.90 732.90 732.90 732.90 732.90 Oct-82 668.40 704.70 733.20 762.30 762.30 762.30 762.30 762.30 762.30 762.30 762.30 762.30 762.30 Jan-84 695.10 732.90 762.60 792.90 792.90 792.90 792.90 792.90 792.90 792.90 792.90 792.90 792.90 Jan-85 723.00 762.30 793.20 824.70 824.70 824.70 824.70 824.70 824.70 824.70 824.70 824.70 824.70 Oct-85 744.60 785.10 816.90 849.30 849.30 849.30 849.30 849.30 849.30 849.30 849.30 849.30 849.30 Jan-87 766.80 808.80 841.50 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 Jan-88 782.10 825.00 858.30 892.20 892.20 892.20 892.20 892.20 892.20 892.20 892.20 892.20 892.20 Jan-89 814.20 858.90 893.40 928.80 928.80 928.80 928.80 928.80 928.80 928.80 928.80 928.80 928.80 Jan-90 843.60 889.80 925.50 962.10 962.10 962.10 962.10 962.10 962.10 962.10 962.10 962.10 962.10 Jan-91 878.10 926.40 963.30 1001.40 1001.40 1001.40 1001.40 1001.40 1001.40 1001.40 1001.40 1001.40 1001.40 Jan-92 915.00 965.40 1003.80 1043.40 1043.40 1043.40 1043.40 1043.40 1043.40 1043.40 1043.40 1043.40 1043.40 Jan-93 948.90 1001.10 1041.00 1082.10 1082.10 1082.10 1082.10 1082.10 1082.10 1082.10 1082.10 1082.10 1082.10 Jan-94 969.90 1023.00 1063.80 1105.80 1105.80 1105.80 1105.80 1105.80 1105.80 1105.80 1105.80 1105.80 1105.80 Jan-95 995.10 1049.70 1091.40 1134.60 1134.60 1134.60 1134.60 1134.60 1134.60 1134.60 1134.60 1134.60 1134.60 

95
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-3 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 1019.10 1074.90 1117.50 1161.90 1161.90 1161.90 1161.90 1161.90 1161.90 1161.90 1161.90 1161.90 1161.90 Jan-97 1049.70 1107.00 1151.10 1196.70 1196.70 1196.70 1196.70 1196.70 1196.70 1196.70 1196.70 1196.70 1196.70 Jan-98 1079.10 1137.90 1183.20 1230.30 1230.30 1230.30 1230.30 1230.30 1230.30 1230.30 1230.30 1230.30 1230.30 Jan-99 1117.80 1179.00 1225.80 1274.70 1274.70 1274.70 1274.70 1274.70 1274.70 1274.70 1274.70 1274.70 1274.70 Jan-00 1171.50 1235.70 1284.60 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 Jul-00 1171.50 1260.60 1334.10 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 1335.90 Jan-01 1214.70 1307.10 1383.60 1385.40 1385.40 1385.40 1385.40 1385.40 1385.40 1385.40 1385.40 1385.40 1385.40 Jan-02 1303.50 1385.40 1468.50 1468.50 1468.50 1468.50 1468.50 1468.50 1468.50 1468.50 1468.50 1468.50 1468.50 Jan-03 1356.90 1442.10 1528.80 1528.80 1528.80 1528.80 1528.80 1528.80 1528.80 1528.80 1528.80 1528.80 1528.80 Jan-04 1407.00 1495.50 1585.50 1585.50 1585.50 1585.50 1585.50 1585.50 1585.50 1585.50 1585.50 1585.50 1585.50 

96
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-2 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05 30.00 30.00 30.00 31.50 31.50 33.00 33.00 34.50 34.50 36.00 36.00 36.00 36.00 Oct-40 36.00 36.00 36.00 39.60 39.60 41.40 41.40 42.30 43.20 45.00 45.00 45.00 45.00 Aug-41 46.00 46.00 46.00 49.60 49.60 51.40 51.40 53.20 53.20 55.00 55.00 55.00 55.00 Jun-42 54.00 54.00 56.70 56.70 59.40 59.40 62.10 64.80 64.80 67.50 70.20 72.90 75.60 Jul-46 80.00 80.00 84.00 84.00 88.00 88.00 92.00 96.00 96.00 100.00 104.00 108.00 112.00 Oct-49 82.50 90.00 90.00 97.50 105.00 112.50 120.00 120.00 120.00 120.00 120.00 120.00 120.00 May-52 85.80 93.60 93.60 101.40 109.20 117.00 124.80 124.80 124.80 124.80 124.80 124.80 124.80 Apr-55 85.80 101.40 101.40 109.20 117.00 124.80 132.60 132.60 132.60 132.60 132.60 132.60 132.60 Jun-58 85.80 108.00 108.00 108.00 108.00 108.00 108.00 108.00 108.00 108.00 108.00 108.00 108.00 Oct-63 85.80 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 Sep-64 85.80 123.00 123.00 123.00 123.00 123.00 123.00 123.00 123.00 123.00 123.00 123.00 123.00 Sep-65 97.50 136.50 136.50 136.50 136.50 136.50 136.50 136.50 136.50 136.50 136.50 136.50 136.50 Jul-66 100.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 141.00 Oct-67 106.20 148.80 148.80 148.80 148.80 148.80 148.80 148.80 148.80 148.80 148.80 148.80 148.80 Jul-68 113.40 159.00 159.00 159.00 159.00 159.00 159.00 159.00 159.00 159.00 159.00 159.00 159.00 Jul-69 127.80 179.10 179.10 179.10 179.10 179.10 179.10 179.10 179.10 179.10 179.10 179.10 179.10 Jan-70 138.30 193.50 193.50 193.50 193.50 193.50 193.50 193.50 193.50 193.50 193.50 193.50 193.50 Jan-71 149.10 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 Nov-71 299.10 299.10 299.10 299.10 299.10 299.10 299.10 299.10 299.10 299.10 299.10 299.10 299.10 Jan-72 320.70 320.70 320.70 320.70 320.70 320.70 320.70 320.70 320.70 320.70 320.70 320.70 320.70 Oct-72 342.30 342.30 342.30 342.30 342.30 342.30 342.30 342.30 342.30 342.30 342.30 342.30 342.30 Oct-73 363.30 363.30 363.30 363.30 363.30 363.30 363.30 363.30 363.30 363.30 363.30 363.30 363.30 Oct-74 383.40 383.40 383.40 383.40 383.40 383.40 383.40 383.40 383.40 383.40 383.40 383.40 383.40 Oct-75 402.60 402.60 402.60 402.60 402.60 402.60 402.60 402.60 402.60 402.60 402.60 402.60 402.60 Oct-76 417.30 417.30 417.30 417.30 417.30 417.30 417.30 417.30 417.30 417.30 417.30 417.30 417.30 Oct-77 443.10 443.10 443.10 443.10 443.10 443.10 443.10 443.10 443.10 443.10 443.10 443.10 443.10 Oct-78 467.40 467.40 467.40 467.40 467.40 467.40 467.40 467.40 467.40 467.40 467.40 467.40 467.40 Oct-79 500.10 500.10 500.10 500.10 500.10 500.10 500.10 500.10 500.10 500.10 500.10 500.10 500.10 Oct-80 558.60 558.60 558.60 558.60 558.60 558.60 558.60 558.60 558.60 558.60 558.60 558.60 558.60 Oct-81 618.30 618.30 618.30 618.30 618.30 618.30 618.30 618.30 618.30 618.30 618.30 618.30 618.30 Oct-82 642.90 642.90 642.90 642.90 642.90 642.90 642.90 642.90 642.90 642.90 642.90 642.90 642.90 Jan-84 668.70 668.70 668.70 668.70 668.70 668.70 668.70 668.70 668.70 668.70 668.70 668.70 668.70 Jan-85 695.40 695.40 695.40 695.40 695.40 695.40 695.40 695.40 695.40 695.40 695.40 695.40 695.40 Oct-85 716.40 716.40 716.40 716.40 716.40 716.40 716.40 716.40 716.40 716.40 716.40 716.40 716.40 Jan-87 738.00 738.00 738.00 738.00 738.00 738.00 738.00 738.00 738.00 738.00 738.00 738.00 738.00 Jan-88 752.70 752.70 752.70 752.70 752.70 752.70 752.70 752.70 752.70 752.70 752.70 752.70 752.70 Jan-89 783.60 783.60 783.60 783.60 783.60 783.60 783.60 783.60 783.60 783.60 783.60 783.60 783.60 Jan-90 811.80 811.80 811.80 811.80 811.80 811.80 811.80 811.80 811.80 811.80 811.80 811.80 811.80 Jan-91 845.10 845.10 845.10 845.10 845.10 845.10 845.10 845.10 845.10 845.10 845.10 845.10 845.10 Jan-92 880.50 880.50 880.50 880.50 880.50 880.50 880.50 880.50 880.50 880.50 880.50 880.50 880.50 Jan-93 913.20 913.20 913.20 913.20 913.20 913.20 913.20 913.20 913.20 913.20 913.20 913.20 913.20 Jan-94 933.30 933.30 933.30 933.30 933.30 933.30 933.30 933.30 933.30 933.30 933.30 933.30 933.30 Jan-95 957.60 957.60 957.60 957.60 957.60 957.60 957.60 957.60 957.60 957.60 957.60 957.60 957.60 

97
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-2 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 980.70 980.70 980.70 980.70 980.70 980.70 980.70 980.70 980.70 980.70 980.70 980.70 980.70 Jan-97 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 1010.10 Jan-98 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 1038.30 Jan-99 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 1075.80 Jan-00 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 1127.40 Jan-01 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 1169.10 Jan-02 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 1239.30 Jan-03 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 1290.00 Jan-04 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 1337.70 

98
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-1>4 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jul-05

Oct-82 

21.00 21.00 21.00 22.05 22.05 23.10 23.10 24.15 24.15 25.20 25.20 25.20 25.20 

Oct-40 30.00 30.00 30.00 33.00 33.00 34.50 34.50 36.00 36.00 37.50 37.50 37.50 37.50 Aug-41 40.00 40.00 40.00 43.00 43.00 44.50 44.50 46.00 46.00 47.50 47.50 47.50 47.50 Jun-42 50.00 50.00 52.50 52.50 55.00 55.00 57.50 60.00 60.00 62.50 65.00 67.50 70.00 Jul-46 75.00 75.00 78.75 78.75 82.50 82.50 86.25 90.00 90.00 93.75 97.50 101.25 105.00 Oct-49 80.00 87.50 87.50 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 95.00 May-52 83.20 91.00 91.00 98.80 98.80 98.80 98.80 98.80 98.80 98.80 98.80 98.80 98.80 Apr-55 83.20 98.80 98.80 106.60 106.60 106.60 106.60 106.60 106.60 106.60 106.60 106.60 106.60 Jun-58 83.20 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 Oct-63 83.20 110.00 110.00 110.00 110.00 110.00 110.00 110.00 110.00 110.00 110.00 110.00 110.00 Sep-64 83.20 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 Sep-65 93.90 125.10 125.10 125.10 125.10 125.10 125.10 125.10 125.10 125.10 125.10 125.10 125.10 Jul-66 96.90 129.00 129.00 129.00 129.00 129.00 129.00 129.00 129.00 129.00 129.00 129.00 129.00 Oct-67 102.30 136.20 136.20 136.20 136.20 136.20 136.20 136.20 136.20 136.20 136.20 136.20 136.20 Jul-68 109.50 145.50 145.50 145.50 145.50 145.50 145.50 145.50 145.50 145.50 145.50 145.50 145.50 Jul-69 123.30 163.80 163.80 163.80 163.80 163.80 163.80 163.80 163.80 163.80 163.80 163.80 163.80 Jan-70 133.20 177.00 177.00 177.00 177.00 177.00 177.00 177.00 177.00 177.00 177.00 177.00 177.00 Jan-71 143.70 191.10 191.10 191.10 191.10 191.10 191.10 191.10 191.10 191.10 191.10 191.10 191.10 Nov-71 268.50 268.50 268.50 268.50 268.50 268.50 268.50 268.50 268.50 268.50 268.50 268.50 268.50 Jan-72 288.00 288.00 288.00 288.00 288.00 288.00 288.00 288.00 288.00 288.00 288.00 288.00 288.00 Oct-72 307.20 307.20 307.20 307.20 307.20 307.20 307.20 307.20 307.20 307.20 307.20 307.20 307.20 Oct-73 326.10 326.10 326.10 326.10 326.10 326.10 326.10 326.10 326.10 326.10 326.10 326.10 326.10 Oct-74 344.10 344.10 344.10 344.10 344.10 344.10 344.10 344.10 344.10 344.10 344.10 344.10 344.10 Oct-75 361.20 361.20 361.20 361.20 361.20 361.20 361.20 361.20 361.20 361.20 361.20 361.20 361.20 Oct-76 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 374.40 Oct-77 397.50 397.50 397.50 397.50 397.50 397.50 397.50 397.50 397.50 397.50 397.50 397.50 397.50 Oct-78 419.40 419.40 419.40 419.40 419.40 419.40 419.40 419.40 419.40 419.40 419.40 419.40 419.40 Oct-79 448.80 448.80 448.80 448.80 448.80 448.80 448.80 448.80 448.80 448.80 448.80 448.80 448.80 Oct-80 501.30 501.30 501.30 501.30 501.30 501.30 501.30 501.30 501.30 501.30 501.30 501.30 501.30 Oct-81 551.40 551.40 551.40 551.40 551.40 551.40 551.40 551.40 551.40 551.40 551.40 551.40 551.40 

573.60 573.60 573.60 573.60 573.60 573.60 573.60 573.60 573.60 573.60 573.60 573.60 573.60 

Jan-84 596.40 596.40 596.40 596.40 596.40 596.40 596.40 596.40 596.40 596.40 596.40 596.40 596.40 Jan-85 620.40 620.40 620.40 620.40 620.40 620.40 620.40 620.40 620.40 620.40 620.40 620.40 620.40 Oct-85 639.00 639.00 639.00 639.00 639.00 639.00 639.00 639.00 639.00 639.00 639.00 639.00 639.00 Jan-87 658.20 658.20 658.20 658.20 658.20 658.20 658.20 658.20 658.20 658.20 658.20 658.20 658.20 Jan-88 671.40 671.40 671.40 671.40 671.40 671.40 671.40 671.40 671.40 671.40 671.40 671.40 671.40 Jan-89 699.00 699.00 699.00 699.00 699.00 699.00 699.00 699.00 699.00 699.00 699.00 699.00 699.00 Jan-90 724.20 724.20 724.20 724.20 724.20 724.20 724.20 724.20 724.20 724.20 724.20 724.20 724.20 Jan-91 753.90 753.90 753.90 753.90 753.90 753.90 753.90 753.90 753.90 753.90 753.90 753.90 753.90 Jan-92 785.70 785.70 785.70 785.70 785.70 785.70 785.70 785.70 785.70 785.70 785.70 785.70 785.70 Jan-93 814.80 814.80 814.80 814.80 814.80 814.80 814.80 814.80 814.80 814.80 814.80 814.80 814.80 Jan-94 832.80 832.80 832.80 832.80 832.80 832.80 832.80 832.80 832.80 832.80 832.80 832.80 832.80 Jan-95 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 854.40 

99
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-1 

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

Jan-96 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 874.80 Jan-97 900.90 900.90 900.90 900.90 900.90 900.90 900.90 900.90 900.90 900.90 900.90 900.90 900.90 Jan-98 926.10 926.10 926.10 926.10 926.10 926.10 926.10 926.10 926.10 926.10 926.10 926.10 926.10 Jan-99 959.40 959.40 959.40 959.40 959.40 959.40 959.40 959.40 959.40 959.40 959.40 959.40 959.40 Jan-00 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 1005.60 Jan-01 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 1042.80 Jan-02 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 1105.50 Jan-03 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 1150.80 Jan-04 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 1193.40 Note 1: Notwithstanding the basic pay rates specified in this table, the actual rate of basic pay for enlisted members may not exceed the rate of pay for level V of the Executive Sche

Note 2: The rate of basic pay for enlisted members in grade E-9 serving as Sergeant Major or the Army, Master Chief Petty Officer of the Navy, Chief Master Sergeant of the Air Fo

Corps, or Master Chief Petty Officer of the Coast Guard, is $6090.90, regardless of cumulative years of service computed under Section 205 of title 37, U.S. Code. 

100
BASIC PAY SCHEDULE - Historical Data 

Pay Grade E-1< 4 months

Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 

1997 833.401998 856.801999 887.702000 930.302001 964.802002 1022.702003 1064.702004 1104.00

Note: Members in Pay Grade E-1 with less than four months of active duty were entitled to $573.60 per month during the period effective January 1984 through September 1985, $5

through December 1986, $608.40 beginning January 1987 through December 1987, $620.70 beginning January 1988 through December 1988, $646.20 beginning January 1989 thro

beginning January 1990 through December 1990, $697.20 beginning January 1991 through December 1991, $726.60 beginning January 1992 through December 1992, $753.60 beg

December 1993, $770.10 beginning January 1994 through December 1994, $790.20 beginning January 1995 through December 1995, and $809.10 beginning January 1996. 

101
Chapter II.B.2. 

 Housing Allowances 

Legislative Authority: 37 U.S.C. §§403 and 405(b). 

Purpose: To provide a cash allowance to military personnel not provided with 

government quarters adequate for themselves and their dependents to enable such 

personnel to obtain civilian housing as a substitute. 

Background: Section 101(25) of Title 37, United States Code, 37 U.S.C. 

§101(25), defines "regular military compensation," or "RMC," to include "basic pay, 

basic allowance for housing, basic allowance for subsistence; and federal tax advantage 

accruing to the aforementioned allowances because they are not subject to Federal 

income tax."1

 Prior to the reorganization of housing allowances in 1998, variable housing 

allowances and overseas housing allowances were discussed in addition to basic 

allowance for quarters because they all were part of a housing allowance program 

intended to defray or offset the housing costs that members of the armed forces incur 

when adequate, government-provided quarters are not available. This chapter discusses 

all three allowances because until 1998 Congress expressly required that any variable 

housing allowance or overseas housing allowance a member received be included along 

with the basic pay, basic allowance for subsistence, and basic allowance for quarters 

when computing the amount of the federal income tax advantage (see Chapter II.B.4., 

"Federal Income Tax Advantage," below) to be imputed to the member in determining 

the member's overall level of "regular military compensation."2

 

 

1

 Although 37 U.S.C. §101(25) specifically refers to "station housing allowance" as being included within 

the "regular military compensation" or "RMC" construct, "station housing allowance" is commonly referred 

to as "overseas housing allowance," inasmuch as it may only be paid to "member[s] ... on duty outside of 

the United States". 37 U.S.C. §405(b). The term "overseas housing allowance" is used in this chapter to 

designate the "station housing allowance" authorized by 37 U.S.C. §405(b) and included within the "regular 

military compensation" construct in 37 U.S.C. §101(25). 

2

 Historically, the two most venerable of the three allowances--basic allowance for quarters and overseas 

housing allowance--developed, as shown below, under separate lines of statutory authority. When the 

variable housing allowance program was first implemented, on the other hand, it was legislatively 

appended to the basic allowance for quarters provisions of Title 37, United States Code. For this reason, 

while it is easy to treat the basic allowance for quarters and overseas housing allowance programs as 

separate programs that are not particularly interrelated, it is more difficult to treat the basic allowance for 

102
 Basic Allowance for Quarters (BAQ) 

Since the founding of the United States, military officers normally have been 

furnished living accommodations without charge. Except for a comparatively short 

period when a so-called "salary" system was in effect, payment of a cash substitute has 

been authorized when quarters in kind were not available. Originally, entitlement to the 

commuted quarters allowance did not rest on specific legislative authority, but was 

instead based on Army and Navy regulations and indirectly sanctioned by Congress 

through appropriations for payment of the commutation.3

The commutation of quarters authorized by early Army regulations permitted 

officers serving where public housing was not available and housing could not be rented 

by the government to be reimbursed for actual expenses paid by them for housing and 

fuel. In the mid-1800s regulations were adopted establishing adequacy standards for 

officer quarters by specifying the number of rooms to which officers of different grades 

were entitled. The number of rooms ranged from two for second lieutenants to 10 for 

lieutenant generals. When quarters adequacy standards were adopted for officers, the 

commuted quarters allowance changed from an actual expense basis to an amount 

calculated by multiplying the number of rooms authorized for the officer's grade by the 

average rental cost per room in the area in which the officer was stationed. The amount of 

the commuted allowance for heating fuel varied with the season of the year and the 

climate in the locality in which the officer was stationed. 

quarters and variable housing allowance programs as separate and distinct. Nevertheless, for reasons of 

convenience, the three programs are discussed under separate headings below insofar as feasible. 

3

The Third Amendment to the Constitution of the United States is instructive in this regard. It provides-- 

No Soldier shall, in time of peace, be quartered in any house, without the consent of the Owner, nor in time 

of war, but in a manner to be prescribed by law. 

U.S. Const. Amend. III. Thus, to the extent the government does not provide quarters to a specific service 

member, no "house ... Owner" may be forced against his will to provide accommodations to the service 

member. One way of overcoming the reluctance of a "house ... Owner" to provide accommodations to a 

service member is for the service member to rent accommodations from the "house ... Owner". Obviously, 

a cash allowance from the government in lieu of government provision of quarters to a service member will 

assist the service member in renting accommodations on the open market. 

103
Navy regulations did not follow either of the Army methods for determining 

commuted quarters and fuel allowances. Instead, Navy officers not provided public 

housing while on shore duty were paid an additional amount equal to one-third of their 

pay as a commutation for quarters and fuel. 

The Army and Navy Appropriation Acts for 1871 (Act of July 15, 1870 (Army 

Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870) and Act of July 15, 

1870 (Navy Appropriation Act of 1871), ch. 295, §§3-4, 16 Stat. 321, 330-333 (1870)) 

prescribed annual "pay" rates for officers of the Army and Navy, respectively, which 

rates, in the case of Army officers, were provided to be "in full of all commutation of 

quarters, fuel, forage, servants' wages and clothing, longevity rations, and all allowances 

of every name and nature whatsoever," Army Appropriation Act of 1871, id., §24, 16 

Stat. at 320, and, in the case of Navy officers, were provided to be their "full and entire 

compensation" with "no additional allowance" being permitted "on any account 

whatever," Navy Appropriation Act of 1871, id., §4, 16 Stat. at 332.4

 While 

"commutation of quarters" was thus specifically prohibited for Army officers and 

"additional allowance[s]" were forbidden for Navy officers, both the Army and Navy 

appropriation acts of 1871 were interpreted to allow housing to be furnished in kind to 

officers. Indeed, the Army Appropriation Act specifically provided that, notwithstanding 

the prohibition on commutation payments, "fuel, quarters, and forage in kind may be 

furnished to officers." Army Appropriation Act of 1871, id., §24, 16 Stat. at 320. In 

permitting housing to continue to be furnished in kind without charge to Army and Navy 

officers, the Army and Navy Appropriation Acts of 1871 obviously placed officers 

assigned to housing in a more favorable financial position than their contemporaries not 

assigned to quarters. 

At least in part to remedy this disparity in treatment, the Act of June 18, 1878, ch. 

263, §9, 20 Stat. 145, 151 (1878), removed the prohibition against quarters commutation 

payments to Army officers. The 1878 act--the first legislative provision that specifically 

 

4

 See also Revised Statutes §§1261,1269, 1270, 1271, and 1272 (1878), concerning Army officers and 

Revised Statutes §§1556, 1558, 1578, and 1585 (1878), concerning Navy officers. 

104
authorized a cash quarters allowance--fixed the rate of the allowance at a uniform $10 per 

room per month.5

 The law did not specify the number of rooms different officers were 

entitled to; this continued to be governed by regulation. Nor did it authorize commutation 

for fuel. While the Act of June 18, 1878, ch. 263, id., in fact removed the prohibition on 

quarters commutations for Army officers, it did not affect the prohibition on quarters 

commutations for Navy officers. Rather, the prohibition against quarters commutations 

for Navy officers continued in effect until the Act of March 3, 1899, ch. 413, §13, 30 

Stat. 1004, 1007 (1899), provided general equality of treatment for Army and Navy 

officers--at least insofar as allowances were concerned. 

In specifying the number of rooms different officers were entitled to under the 

Act of June 18, 1878, ch. 263, §9, 20 Stat. 145, 151 (1878), supra, Army regulations 

established room entitlements by grade. After adoption of the Act of March 3, 1899, ch. 

413, §13, 30 Stat. 1004, 1007 (1899), supra, the Army regulations that specified the 

number of rooms different officers were entitled to came to govern the number of rooms 

Navy officer were entitled to and hence commutation-of-quarters computations for Navy 

officers. The Act of March 2, 1907, ch. 2511 [Public Law 170, 59th Congress], 34 Stat. 

1158, 1168-1169 (1907), effectively made permanent the Army regulations governing 

room entitlements while also authorizing commutation of heat and light for Army 

officers--and hence for Navy officers as well by virtue of the 1899 allowance equivalency 

law--at varying rates depending on number of rooms, season of the year, and 

geographical area. 

The payment of commutations for quarters, fuel, heat, and light authorized by 

regulation or statute before 1918 depended on whether an officer did or did not himself 

occupy government quarters. The dependency status of an officer was first introduced as 

an element in determining the right to and the amount of commutation pay as a temporary 

World War I measure in the Act of April 16, 1918, ch. 53 [Public Law 131, 65th

Congress], 40 Stat. 530 (1918). This act authorized payment of commutation for quarters, 

 

5

 The monthly rate per room was increased to $12 the following year. 

105
heat, and light to Army officers in the field whose dependents were not occupying public 

quarters, the commutation being payable whether or not such officers were furnished 

field accommodations by the government. Since shipboard service was held to be the 

essential equivalent of service "in the field" for Army officers, Navy officers were also 

entitled to the commutation for dependents under the linkage mechanism of the Act of 

March 3, 1899, ch. 413, §13, 30 Stat. 1004, 1007 (1899), discussed above. This World 

War I measure expired June 30, 1922. 

 The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 

[Public Law 235, 67th Congress], §6, 42 Stat. 625, 628 (1922), substituted a rental 

allowance system for commutation of quarters, heat, and light. The base used to compute 

the rental allowance was the average monthly cost in the United States of renting one 

room. The act initially established the monthly value of a room at $20 and provided that 

this amount was to be adjusted annually by the President. The base amount was in fact 

adjusted downward between April 1, 1933, and April 1, 1936, to a low of $17 per room 

per month, but the Act of April 9, 1935, ch. 413 [Public Law 29, 74th Congress], §1, 49 

Stat. 120, 125 (1935), stabilized it at the $20 rate, and this rate remained in effect until 

1942. Dependency status was reflected in the number of rooms used to compute the 

rental allowance, an officer with dependents being authorized more rooms than an officer 

of the same pay status without dependents. As an example, a major in the fourth pay 

period (see Chapter II.B.1., "Basic Pay," above, concerning pay periods) with dependents 

was entitled to a rental allowance of $100 a month (five rooms), while a similarly situated 

officer without dependents was entitled to $60 a month (three rooms). In addition to 

establishing a rental allowance system, the 1922 act limited the total pay and allowances 

of a major general (and the Navy equivalent) to $9,700 annually; the total pay and 

allowances of a brigadier general to $7,500 annually; and the total pay and allowances for 

grades below brigadier general to $7,200 annually. If any officer's pay and allowances 

were such as to otherwise exceed these limits, the officer's rental allowance was reduced 

by the amount of the excess. 

106
The Pay Readjustment Act of 1942, ch. 681 [Public Law 607, 77th Congress], §6, 

56 Stat. 359, 361-362 (1942), though retaining the principle of providing a larger rental 

allowance to officers with dependents, changed the "number-of-rooms" system for 

calculating the allowance to a fixed monthly sum based on an affected officer's pay 

period and dependency status. The amount of the allowance ranged from a low of $45 a 

month for a second lieutenant without dependents upward to $120 a month for a general 

officer with dependents. Aside from differences in rates and nomenclature, the 1942 

system closely resembled the current basic allowance-for-quarters system. 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§302, 63 Stat. 802, 812-813 (1942), replaced the "rental allowance" with the "basic 

allowance for quarters" (BAQ), which continued to exist until 1998. The Career 

Compensation Act initially established BAQ rates for each officer grade at levels 

estimated by the Advisory Commission on Service Pay (the so-called Hook Commission) 

to be equal to the maximum monthly rate at which 75 percent of the civilians in 

comparable income groupings could reasonably expect to find adequate bachelor or 

family housing.6

 Because BAQ rates were thus related to comparable income groupings 

and housing costs, and since military income varied with rank, and housing costs varied 

with marital status, the officer BAQ rates recommended by the Hook Commission and 

ultimately prescribed in the Career Compensation Act were graduated by pay grade and 

the rates within each grade were further differentiated by dependency status.7

 For the 

purpose of specifying the amount of BAQ to which an officer was entitled, only two 

different dependency statuses were recognized--with dependents and without 

dependents.8

 

 

6

 “Career Compensation for the Uniformed Services, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 14, December 1948. 

7

 See “Career Compensation for the Uniformed Services, A Report and Recommendation for the Secretary 

of Defense by the Advisory Commission on Service Pay,” pp. 12-15, December 1948, generally. 

8

 The provisions relating to quarters allowances for officers that were incorporated in the Career 

Compensation Act of 1949, ch. 681, id., derived from recommendations made to the Secretary of Defense, 

and thence to Congress, by the so-called Hook Commission, more formally known as the Advisory 

Commission on Service Pay, whose report and recommendations were delivered to the Secretary of 

Defense in December 1948. In the words of the Hook Commission: 

107
 The officer BAQ rates established by the Career Compensation Act of 1949, ch. 681 

[Public Law 351, 81st Congress], §302, 63 Stat. 802, 812-813 (1942), have been 

explicitly adjusted a number of times since 1949. They were increased 14 percent in 1952 

to compensate for higher living costs. They were further increased January 1, 1963, to 

bring them up to the Federal Housing Administration (FHA) median for housing 

expenses of comparable income groups in the United States. After 1963, however, BAQ 

rates lagged behind the FHA standard as the general price level, including housing costs, 

and military income, especially the basic pay component, moved upward in succeeding 

years. In 1971, however, BAQ rates were increased again. This time to approximately 85 

percent of the FHA median for nationwide housing expenses of comparable income 

groups. This increase was a compromise between the House of Representatives, which 

wanted a 100 percent FHA standard, and the Senate, which wanted no BAQ increase at 

all. Further adjustments occurred in 1974 and 1975 when all cash elements of regular 

military compensation, including BAQ,9

 were increased 5.5 percent in step with increases 

in general schedule salaries of Federal Civil Service employees. Subsequent increases 

have been made both legislatively and through use of the pay adjustment mechanism 

incorporated in 37 U.S.C. §1009, as described more fully below. 

 Enlisted personnel, like officers, have normally been furnished living accommodations 

at Government expense, or a cash substitute when such accommodations were not 

 A. Officer[s] and warrant officers should be granted allowances for quarters at all times, subject to the 

withholding of allowances when Government quarters are assigned. 

 . . . 

 C. Allowances should be granted with due consideration for personnel who may reasonably be expected 

to have dependents accompany them. Accordingly, all officers [and] warrant officers ... in any branch 

should be authorized a higher allowance, if they have dependents. 

 “Career Compensation for the Uniformed Services, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 12, December 1948. (The rationale for 

distinguishing between officers with dependents and those without dependents was somewhat different 

from the rationale for distinguishing between enlisted personnel with dependents and those without 

dependents. See footnote 10 to this chapter, below.) 

9

 See discussion of regular military compensation (RMC) in Chapter II.B.1., "Basic Pay," above. 

108
provided. The enlisted cash substitute was for many years authorized strictly as a 

commutation of quarters in kind. Entitlement to the commuted quarters allowance rested 

on regulations rather than any specific provision of law. Statutory authority for enlisted 

commutation payments first appeared in the Act of March 4, 1915 (Army Appropriations 

Act for 1916), ch. 143 [Public Law 292, 63d Congress], §1, 38 Stat. 1062, 1069 (1915), 

which authorized commutation of quarters at $15 per month and commutation of heat and 

light at varying rates. The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 

1922), ch. 212 [Public Law 235, 67th Congress], §11, 42 Stat. 625, 630 (1922), 

previously cited in connection with officer rental allowance entitlements, provided that 

enlisted men not furnished quarters or subsistence in kind were entitled to an allowance 

not to exceed $4 a day. 

 The entitlement of specific enlisted personnel to commutations and quarters 

allowances before 1940 turned on whether they did or did not occupy Government 

quarters. The first legislative recognition that enlisted personnel in the three highest pay 

grades who had dependents were entitled to public quarters, or a cash allowance in lieu of 

quarters, appeared in the Act of October 17, 1940, ch. 899 [Public Law 872, 76th

Congress], 54 Stat. 1205 (1940), and was subsequently given more formal, as well as 

more permanent, recognition in the Pay Readjustment Act of 1942, ch. 413 [Public Law 

607, 77th Congress], §10, 56 Stat. 359, 363-364 (1942). 

 The principle that all enlisted personnel should be entitled to public quarters, or a 

cash substitute, and the related principle that certain grades of enlisted personnel should 

be entitled to quarters adequate to house themselves and their dependents--or a cash 

substitute--were continued in the Career Compensation Act of 1949, ch. 681 [Public Law 

351, 81st Congress], §302, 63 Stat. 802, 812-813 (1949), the source of present BAQ 

authority. The Career Compensation Act, however, slightly expanded the category of 

enlisted personnel entitled to dependents' housing to include "career" members instead of 

just members in the three highest pay grades.10 The act authorized payment of BAQ, at 

 

10 Just as was the case with officer BAQ entitlements, the provisions relating to quarters allowances for 

enlisted personnel that were incorporated in the Career Compensation Act of 1949, ch. 681, id., also 

109
the rate of $45 a month regardless of grade, to all enlisted members without dependents 

when government quarters were not available.11 The act also provided that, for BAQ 

purposes, members in pay grades E-1 through E-4 (less than seven years of service) were 

at all times to be considered as without dependents, regardless of actual dependency 

status.12 Members in pay grades E-4 (seven or more years of service) through E-7 with 

dependents were entitled to BAQ at the rate of $67.50 per month when not assigned 

government quarters adequate for both themselves and their dependents. The provision 

requiring that junior enlisted personnel at all times be considered as without dependents 

stemmed from the prevailing view that such personnel made better servicemen, i.e., were 

less likely to create a "social problem,"13 when not married. Consequently, a policy 

 derived from recommendations made to the Secretary of Defense, and thence to Congress, by the Hook 

Commission. In the words of the Hook Commission: 

B. Enlisted personnel should be granted separate allowances for quarters when Government quarters are not 

assigned. 

C. Allowances should be granted with due consideration for personnel who may reasonably be expected to 

have dependents accompany them. Accordingly, all ... enlisted personnel of the first three pay grades 

[corresponding to present pay grades E-7 through E-5] and grade four [corresponding to present pay grade 

E-4] with 7 years' total service in any branch should be authorized a higher allowance, if they have 

dependents. Enlisted personnel of pay grade four with less than 7 years' total service in any branch and 

grades five through seven [corresponding to present pay grades E-3 through E-1] should receive the same 

allowance regardless of dependents. 

 . . . 

... The Commission supports the principle of higher [quarters] allowances for officers with dependents and 

believes further that it should be expanded to career enlisted personnel who may reasonably be expected to 

have dependents with them. 

“Career Compensation for the Uniformed Services, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” pp. 12, 13, December 1948. In effect, the Hook 

Commission's recommendations concerning quarters allowances for enlisted personnel amounted to a 

determination that personnel in pay grades five through seven (current pay grades E-3 through E-1) and 

personnel in pay grade four (current pay grade E-4) with less than seven years of service should not 

"reasonably be expected to have dependents with them". (For the Hook Commission's recommendations 

regarding officer BAQ entitlements, and how those recommendations differed from the Commission's 

recommendations regarding enlisted BAQ entitlements, see footnote 8 to this chapter, above.) 

11 See, e.g., the table at Section 302(f) of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 

81st Congress], §302(f), 63 Stat. 802, 813 (1949). 

12 Proviso to Section 302(a) of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st 

Congress], §302(a), 63 Stat. 802, 813 (1949). 

13 An example of the sort of “social problem” adverted to was cited in the hearings on the Career 

Compensation Act in the following terms: 

110
decision was made to structure quarters allowances so as to discourage such personnel 

from marrying. 

 With the coming of the Korean conflict, Reserve and National Guard enlisted 

personnel with families were in 1950 being involuntarily ordered to active duty, and it 

was anticipated that individuals with dependents might soon be inducted under the 

Selective Service System. The Dependents Assistance Act of 1950 (DAA), ch. 922 

[Public Law 771, 81st Congress], §3, 64 Stat. 794, 795 (1950), was enacted to provide 

extra compensation to aid such personnel and their families and prevent financial 

hardship. The DAA "temporarily" substituted new enlisted BAQ rates in place of the 

"permanent" rates established in the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], §302, 63 Stat. 802, 812-813 (1949), supra. For members with 

dependents, DAA rates were graduated by number of dependents, to a maximum of $85 a 

month for any member with three or more dependents. The act also suspended the 

provisions of the preexisting law that barred junior enlisted personnel with dependents 

from qualifying for dependent BAQ. id., §2, 64 Stat. at 795. The DAA continued the 

across-the-board $45 monthly BAQ rate for members without dependents. In order to 

receive BAQ under the DAA, an enlisted member with dependents had to effect a 

monthly "Class Q" allotment for the support of such dependents in the amount of his 

BAQ entitlement plus $80, $60, or $40, depending on pay grade. id., §4, 64 Stat. at 795. 

Although the DAA had an expiration date of April 30, 1953, it was extended six times, 

completely governed enlisted BAQ entitlements until January 1, 1963, and partially 

governed them until July 1, 1973, when it was finally allowed to expire. The rates 

established by the DAA were increased 14 percent in 1952 to compensate for higher 

living costs. 

 When we started to move troops in 1940, had it not been for the Red Cross we would have had the 

worst scandal in history because of families left behind in distress by men who should not have families. 

Career Compensation for the Uniformed Services: Hearings of March 18, 1949, on H.R. 2553, before a 

subcommittee of the House Armed Services Committee, p. 1696, 81st Congress, 1st Session (1949) 

(statement of Major General John E. Duhlquist, USA). 

 

111
The Act of July 10, 1962, Public Law 87-531, §1, 76 Stat. 152 (1962), adjusted 

enlisted BAQ rates again and modified the enlisted BAQ system, effective January 1, 

1963. This act increased permanent BAQ rates, that is, those established under the Career 

Compensation Act, for pay grades E-4 (over four years of service) through E-9 to bring 

them generally up to the FHA median for housing expenses of comparable income 

groups in the United States. It also changed the within-grade differentials in enlisted 

BAQ rates from a graduated structure based on number of dependents to a structure based 

only on a with- or without-dependents determination, thus establishing essential parity 

between the BAQ entitlement status of enlisted members and officers. The BAQ rate for 

members in pay grades E-1 through E-4 (four years of service or less), whether with or 

without dependents, was left at the level established under the Career Compensation Act 

of 1949, ch. 681 [Public Law 351, 81st Congress], §302(f), 63 Stat. 802, 813 (1949), 

namely, $45 a month. For the duration of the DAA, however, the 1962 Act, Public Law 

87-531, id., substituted higher rates for the junior grades where the Career Compensation 

Act rates had not been raised. This increase in DAA rates amounted to approximately 8 

percent. In short, the 1962 Act, Public Law 87-531, id., shifted the BAQ entitlements of 

pay grades E-4 (over four years of service) through E-9 from the DAA to the Career 

Compensation Act, raised the latter rates to the FHA standard, kept the BAQ entitlements 

of pay grades E-1 through E-4 (four years of service or less) under the DAA, and raised 

DAA rates by 8 percent. This meant, among other things, that as of January 1, 1963, 

members in higher grades did not have to effect a Class Q allotment to qualify for 

dependents BAQ, but members in the lower grades were still required to allot not less 

than their monthly BAQ plus $40. 

The Act of December 16, 1967, Public Law 90-207, §4, 81 Stat. 649, 654 (1967), 

raised BAQ rates by approximately 9 percent as of October 1, 1967, for members whose 

entitlements were based on the DAA--that is, for members in pay grades E-1 through E-4 

(four years of service or less). The 9 percent represented the advance in the shelter 

component of the Consumer Price Index between January 1963 and November 1966. 

112
The Act of September 28, 1971 (Military Selective Service Act of 1967 

Amendments), Public Law 92-129, §§204 and 206, 85 Stat. 348, 359 (1971), increased 

BAQ rates authorized under both the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], §302, 63 Stat. 802, 812-813 (1949), and the Dependents 

Assistance Act of 1950 (DAA), ch. 922 [Public Law 771, 81st Congress], §3, 64 Stat. 

794, 795 (1950), to approximately 85 percent of the FHA median for housing expenses of 

comparable income groups. It also changed within-grade differentials in enlisted DAA 

rates from a graduated structure based on number of dependents to a structure based only 

on a with-or-without-dependents determination. Thus, the 1971 act, Public Law 92-129, 

id., placed officer BAQ, Career Compensation Act enlisted BAQ, and DAA enlisted 

BAQ on essentially the same basis. 

When the DAA expired July 1, 1973, the BAQ entitlements that had existed under 

it were made permanent by moving them to the Career Compensation Act structure. No 

rate adjustment was involved; the DAA rates that had been authorized in 1971 were 

merely converted into Career Compensation Act rates. This conversion was effected by 

the Act of July 9, 1973, Public Law 93-64, §105, 87 Stat. 147, 148-149 (1973), which 

also repealed the provision of the Career Compensation Act--suspended for some 23 

years--that had required junior enlisted personnel to be considered as without dependents 

at all times. The expiration of the DAA eliminated the Class Q allotment requirement for 

members in pay grades E-1 through E-4 (four years of service or less). 

 The Act of December 16, 1967, Public Law 90-207, §8, 81 Stat. 649, 654-655 (1967), 

provided that whenever the general schedule of compensation for federal classified 

employees, so-called "civil servants," was increased, a "comparable increase" was to be 

effected in the three cash components of "regular military compensation" (RMC--see 

Chapter II.B., "Regular Military Compensation/Basic Military Compensation," and 

Chapter II.B.1., "Basic Pay," above) of uniformed services personnel. As the base for 

determining the "comparable increase required in military pay," RMC, which at that time 

consisted of basic pay, BAQ, BAS, and the federal tax advantage deriving from the 

nontaxable status of those allowances (see Chapter II.B.4., "Federal Income Tax 

113
Advantage," below)14, had the effect of imputing an increase in all four of the RMC 

elements of military compensation each time a general schedule increase occurred. 

However, since the entire increase was actually allocated to basic pay, the "increase" in 

the BAQ, BAS, and tax advantage elements was implicit only. The Act of September 19, 

1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-1153 (1974), discontinued the method 

by which the entire increase in military compensation was incorporated in basic pay. 

Instead, raises were to be equally distributed among the three cash elements of RMC--

that is, basic pay, BAQ, and BAS.15 16

 

The Department of Defense Appropriation Authorization Act, 1977,17 Public Law 94-

361, §303(b), 90 Stat. 923, 925 (1976), permitted a further change in the method of 

distributing military pay increases. The Act authorized the President to allocate future 

overall increases among the three cash elements of RMC on other than an equal 

percentage basis whenever it was determined that such action was "in the best interest of 

the Government." See 37 U.S.C. §1009(c) as added by the Department of Defense 

 

14 RMC is currently defined as the sum of basic pay, housing allowance, basic allowance for subsistence, 

and the federal tax advantage deriving from the nontaxable status of all the allowances. 

15 See, e.g., Senate Report No. 93-1132 (Committee on Armed Services), p. 2, accompanying H.R. 15406, 

93d Congress, 2d Session (1974): 

 [The bill] H.R. 15406 will retain the principle that military pay raises are to be linked to federal civilian 

pay increases but will change the method of allocating pay raises. Instead of putting all of each pay raise 

solely into basic pay, future increases will be allocated to the three cash elements of RMC--basic pay, Basic 

Allowance for Quarters and Basic Allowance for Subsistence. 

16 The Act of August 21, 1965, Public Law 89-132, §2, 79 Stat. 544, 546-547 (1965), adopted a special 

provision, codified at 37 U.S.C. §1008, requiring the President to conduct "a complete review of the 

principles and concepts of the compensation system for members of the uniformed services" at least once 

every four years and, after completing such a review, to "submit a detailed report to Congress summarizing 

the results of such review together with any recommendations ... proposing changes" to the compensation 

system. Pursuant to Section 2(a) of the Act, id., as codified at 37 U.S.C. §1008(b), the first such review was 

to be undertaken "[w]henever the President considers it appropriate, but in no event later than January 1, 

1967." In the House and Senate Reports on the bill, H.R. 9075, 89th Congress, 1st Session (1965), the 

required residential review was referred to as a "quadrennial review ... of military compensation," House 

Report No. 89-549 (Committee on Armed Services), pp. 1 and 50, and Senate Report No. 89-544 

(Committee on Armed Services), p. 1, accompanying H.R. 9075, 89th Congress, 1st Session (1965); and the 

seven reviews of military compensation that have been completed under the direction of 37 U.S.C. 

§1008(b) have been referred to, successively, as the First, Second, Third, Fourth, Fifth, Sixth, and Seventh 

Quadrennial Review of Military Compensation, respectively. The First Quadrennial Review was convened 

in 1966, and the most recent to have been completed, the Seventh, in 1990. The Eighth Quadrennial 

Review of Military Compensation was convened, pursuant to Presidential directive, in the fall of 1994. 17 In the late 1970s, Defense Department authorization acts bore this longer title. 

114
Appropriation Authorization Act, 1977, Public Law 94-361, §303(b), 90 Stat. 923, 925 

(1976) (essentially, current 37 U.S.C. §1009(c)(1)). The 1977 authorization act provided, 

however, that the amount allocated to basic pay could not be less than 75 percent of the 

amount that would have been allocated on an equal percentage allocation basis. The 

purpose of providing for a "reallocation" of compensation increases among the three cash 

elements of RMC was to enable progressive adjustments to be made to the two basic 

allowance elements so that these allowances would, over time, more nearly cover the 

costs of the items they had originally been intended to defray, as well as to provide for 

more adequate quarters and subsistence allowances in general. Under the act, the 

President was required to advise Congress regarding any planned reallocation at the 

earliest practicable time before the effective date of a military pay increase. Furthermore, 

all allocations of increases among the different cash elements of RMC were to be 

assessed in conjunction with the quadrennial reviews of military compensation required 

under 37 U.S.C. §1008(b), and a full report was to be made to Congress summarizing the 

objectives and results of those allocations.18 

The 1977 Appropriation Authorization Act, Public Law 94-361, id., also 

permitted, but did not require, the President to provide for payment of partial BAQ to 

members without dependents not entitled to cash BAQ. See 37 U.S.C. §1009(d) as added 

by the Department of Defense Appropriation Authorization Act, 1977, Public Law 94-

361, §303(b), 90 Stat. 923, 925 (1976) (essentially, current 37 U.S.C. §1009(c)(2)). The 

act stipulated that any partial BAQ payment made under this authority should be an 

amount equal to the difference between (1) the amount by which BAQ was increased on 

the basis of reallocation and to which affected members would be entitled were they not 

on sea or field duty or living in government quarters and (2) the amount by which BAQ 

would have been increased had the pay raise been distributed among the three cash 

elements of RMC on an equal percentage basis. 

 

18 See, e.g., Senate Report No. 96-826 (Committee of Conference), p. 121, and House Report No. 96-1222 

(Committee of Conference), p. 95, accompanying H.R. 6974, 96th Congress, 2d Session (1980). Also see, 

e.g., 126 CONG. REC. 1643-1645 (1980) (daily ed., 126 Cong. Rec. S828-S830 (February 4, 1980)) 

(remarks of Senator Matsunaga in debate on H.R. 5168, subsequently adopted, with amendments, as the 

Military Personnel and Compensation Amendments of 1980, Public Law 96-343, 94 Stat. 1123 (1980)). 

115
The pay adjustment mechanism incorporated in 37 U.S.C. §1009 was suspended 

for fiscal year 1981 by the Department of Defense Authorization Act, 1981, Public Law 

96-342, §801, 94 Stat. 1077, 1090-1091 (1980), in favor of an 11.7 percent across-theboard increase in basic pay, BAS, and BAQ. This increase was, however, explicitly made 

subject to the President's reallocation authority under 37 U.S.C. §1009(c)(1). The basic 

reason for the legislated increase in military compensation--including BAQ--was a 

general feeling that military pay had lagged behind civilian wages and that the 

comparability basis under which federal general schedule civilian wages were adjusted 

may have limited applicability to military pay.19

In 1981, Congress again suspended the pay adjustment mechanism incorporated 

in 37 U.S.C. §1009 and further legislatively increased BAQ. In the Uniformed Services 

Pay Act of 1981, Public Law 97-60, §101(b)(3), 95 Stat. 989, 992 (1981), BAQ rates 

were increased by 14.3 percent, with a similar increase in BAS, id., §101(b)(2), 95 Stat. 

at 992, and a 10 to 17 percent increase in basic pay, depending on pay grade, id., 

§101(b)(1), 95 Stat. at 989-991. The intent was to "restore, in current dollars, the relative 

relationship of military compensation to pay in the private sector that existed in 1972" 

when Congress adopted the "all-volunteer force" construct as the manning principle for 

the armed services.20 In short, Congress felt it necessary to increase the three cash 

elements of RMC--namely, basic pay, BAS, and BAQ--to restore lost purchasing power 

and thereby to improve retention and achieve manning objectives in the armed services.21

 

19 See, e.g., House Report No. 97-109 (Committee on Armed Services), pp. 1 and 4, accompanying H.R. 

3380, and Senate Report No. 97-146 (Committee on Armed Services), pp. 2 and 3, accompanying S. 1181, 

97th Congress, 1st Session (1981). 

20 For a more detailed description of the reasons underlying adoption of the increase in all three such 

elements of RMC in the Uniformed Services Pay Act of 1981, Public Law 97-60, §101(b)(3), 95 Stat. 989, 

992 (1981), see discussion of that Act in text accompanying footnotes 32 to 39 of Chapter II.B.1., "Basic 

Pay," above. 

21 See Executive Order 12387, 47 Fed. Reg. 44981 (October 8, 1982). 

116
For fiscal year 1983, BAQ rates were adjusted under the pay-adjustment 

mechanism of 37 U.S.C. §1009,22 but that mechanism was again suspended the next year 

by the Department of Defense Authorization Act, 1984, Public Law 98-94, §901, 97 Stat. 

614, 634-635 (1983), in favor of a 4 percent, legislatively mandated increase in the three 

"basic" elements of regular military compensation--namely, basic pay, basic allowance 

for quarters, and basic allowance for subsistence. While specifying a general 4 percent 

increase in the three "basic" elements of RMC, however, the 1984 Authorization Act 

specifically permitted the President to exercise his authority to redistribute part of the pay 

raise among those three elements, pursuant to the redistribution provisions of 37 U.S.C. 

§1009(c)(1) and (d)(1). 

For fiscal year 1985, Congress specifically abandoned all adjustment mechanisms 

--whether legislative or Section 1009 mechanisms--in favor of new, restructured BAQ 

rates computed on the basis of housing costs actually experienced by personnel in 

different pay grades throughout the United States. This change was effected by the 

Department of Defense Authorization Act, 1985, Public Law 98-525, §602(a)(1), 98 Stat. 

2492, 2533-2534 (1984). 

The reasons underlying the adoption of the restructured rates were somewhat 

complex, having to do with the interrelationships between the basic allowance for 

quarters program and the variable housing allowance program. As discussed in more 

detail below, the variable housing allowance program was established by the Military 

Personnel and Compensation Amendments of 1980, Public Law 96-343, §4, 94 Stat. 

1123, 1125-1126 (1980), as an amendment to the basic allowance for quarters provisions 

of Title 37.23 From the outset, the two programs were, and were intended to be, closely 

 

22 See 37 U.S.C. §403 as in effect after enactment of the Military Personnel and Compensation 

Amendments of 1980, Public Law 96-343, §4, 94 Stat. 1123, 1125-1126 (1980), and before enactment of 

the Department of Defense Authorization Act, 1985, Public Law 98-525, §602(a)(1), 98 Stat. 2492, 2533-

2534 (1984). 

23 Senate Report No. 98-500 (Committee on Armed Services), p. 205, accompanying S. 2723, 98th

Congress, 2d Session (1984). See House Report No. 98-691 (Committee on Armed Services), p. 256, 

accompanying H.R. 587, 98th Congress, 2d Session (1984), to the same effect. cf. House Report No. 98-

1080 (Committee of Conference), p. 295, 98th Congress, 2d Session (1984). 

117
related; and this relationship led to the amendment of both programs. As stated by the 

Senate Armed Services Committee: 

The basic allowance for quarters and the variable housing allowance are 

the elements of military compensation designed to help members pay for their 

housing when the government does not provide quarters. The basic allowance for 

quarters (BAQ) is no longer directly tied to the cost of housing, either individually 

or across the uniformed services. The variable housing allowance (VHA) was 

designed as a means of defraying high housing costs experienced by those 

members who were assigned to high cost areas of the country. Under current law, 

the VHA is provided when the average housing cost of members of the same pay 

grade in a specific area exceeds 115 percent of the BAQ and is equal to the 

difference between that average housing cost and 115 percent of BAQ. However, 

since VHA is tied in law to the amount of BAQ, and since the rates of BAQ have 

not kept pace with the rise in housing costs, major program growth has occurred 

in VHA. 

In order to save money, Congress has imposed restraints on the rates of 

BAQ and VHA. These restraints have lessened the ability of VHA to serve its 

intended purpose, compensating those with high housing costs. The results of the 

combined restraints on BAQ and VHA have been to sever the relationship of 

housing compensation and housing costs and to force military members to absorb 

a higher and higher percentage of housing costs out of other compensation. 

The committee believes it is now appropriate to revise the structure of 

both BAQ and VHA, so that these combined elements will be directly tied to 

housing costs and so that each military member receiving VHA, regardless of 

grade or duty location, will be required to fund a proportionate share of their 

housing expenses out of other compensation. 

Therefore, the committee recommends that the rates for basic allowance 

for quarters, effective on January 1, 1985, be set at 65 percent of national median 

housing costs with respect to each pay grade and that variable housing allowance 

be paid only where the local median cost of housing for a pay grade exceeds 80 

percent of the national median housing costs for that pay grade. This arrangement, 

tying BAQ to national median housing costs, would be maintained by periodic 

revisions to the BAQ rates. It would also insure that no member would receive 

VHA unless that member were absorbing 15 percent of their housing costs from 

other compensation and that rate would be true for all personnel receiving VHA.24 

 

24 In providing for a three percent increase to the "basic" elements of regular military compensation, 

Congress did not provide authority for the President to redistribute any of the pay increase pursuant to 37 

U.S.C. §1009(c)(1) or (d)(1). 

118
In adopting the Senate proposal, Congress, in addition to setting new BAQ rates, 

removed variable housing allowance authority from 37 U.S.C. §403 and moved it to 37 

U.S.C. §403a, with little in the way of substantive modification other than as indicated 

above. See discussion of the variable housing allowance program, below, and the 

amendments effected by the 1985 authorization act. At the same time as it adopted new 

BAQ rates, Congress adopted a provision protecting any member of the armed forces 

from a cut in BAQ entitlement as a result of the adoption of the new rates. The new rates 

became effective January 1, 1985. 

For fiscal year 1986, Congress, again bypassing the pay-adjustment mechanism of 

37 U.S.C. §1009, legislated a 3 percent increase in each of the three "basic" elements of 

regular military compensation in the Department of Defense Authorization Act, 1986, 

Public Law 99-145, §601, 99 Stat. 583, 635-636 (1985).25 The effective date of the 

increase was October 1, 1985. 

Like the 1986 Defense Authorization Act, Public Law 99-145, id., the 

authorization acts for fiscal years 1987, 1988, 1989, 1990, and 1991 all bypassed the 

Section 1009 adjustment mechanism. In bypassing this adjustment mechanism, the 

National Defense Authorization Act for Fiscal Year 1987, Public Law No. 99-661, Div. 

A: Department of Defense Authorization Act, 1987, §601(a) and (b), 100 Stat. 3816, 

3873 (1986), incorporated a 3 percent increase in basic pay, basic allowance for 

subsistence, and basic allowance for quarters, effective January 1, 1987; the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §601(b) 

and (c), 101 Stat. 1019, 1092 (1987), as amended by the Act of December 22, 1987 

(Continuing Appropriations Act for Fiscal Year 1988), Public Law 100-202, §110(b), 101 

Stat. 1329, 1329-436 (1987), a 2 percent increase in basic pay, basic allowance for 

subsistence, and basic allowance for quarters, effective January 1, 1988; the National 

Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, §601(b) and (c), 102 

Stat. 1918, 1976 (1988), a 4.1 percent increase in basic pay and basic allowance for 

 

25 House Report No. 100-446 (Committee of Conference), p. 641, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

119
subsistence and a 7 percent increase in basic allowance for quarters, effective January 1, 

1989; the National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §601(b), 103 Stat. 1352, 1444 (1989), a 3.6 percent increase in basic pay, 

basic allowance for quarters, and basic allowance for subsistence, effective January 1, 

1990; and the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, §601(b), 104 Stat. 1485, 1575 (1990), a 4.1 percent increase in basic pay, basic 

allowance for quarters, and basic allowance for subsistence, effective January 1, 1991. 

In connection with its consideration of the National Defense Authorization Act 

for Fiscal Years 1988 and 1989, Public Law 100-180, 101 Stat. 1019 (1987), Congress 

did attempt to increase basic allowance for quarters rates above the increases proposed 

for basic pay and basic allowance for subsistence, but that attempt was effectively 

defeated when the "budget summit agreement," memorialized in the Act of December 22, 

1987 (Continuing Appropriations for Fiscal Year 1988), Public Law 100-202, §110(b), 

101 Stat. 1329, 1329-436 (1987), scaled back the proposed increase of 3 percent in basic 

pay and basic allowance for subsistence and the proposed increase of 7 percent in basic 

allowance for quarters, to 2 percent for all three cash elements of RMC. As the joint 

House-Senate Conference Committee that considered the 1988/1989 Defense 

Authorization Act noted with respect to the appropriate increase for BAQ: 

The conferees note that, in 1985, basic allowance for quarters (BAQ) rates 

are [sic, were?] restructured so that they would cover 65 percent of national 

median housing costs in each pay grade. Since the 1985 restructuring, BAQ has 

lagged behind housing cost growth, causing BAQ to fall below the 65 percent 

standard. The conferees intend the six percent increase in BAQ to be a step 

toward restoring BAQ to the 65 percent standard.26 

In connection with its consideration of the National Defense Authorization Act, 

Fiscal Year 1989, Public Law 100-456, 102 Stat. 1918 (1988), the House Armed Services 

Committee again addressed the issue of the adequacy of BAQ in relationship to national 

median housing costs and VHA rates, as follows: 

 

 

26 House Report No. 100-563 (Committee on Armed Services), p. 251-252, accompanying H.R. 4624, 100th

Congress, 2d Session (1988). 

120
In fiscal year 1988, as a part of the budget summit agreement, military 

personnel received only a two percent pay raise. The committee anticipates 

considerable budgetary pressure to reduce substantially the pay raise request for 

fiscal year 1989.... 

 Today, the nation's armed forces have the highest quality young men and 

women in history, representing a dramatic reversal of the dark days of the 1970's 

when recruiting and retention rates plummeted. Although several factors 

contributed to the turnaround, the large pay raises in October 1980 and 1981 

played a paramount role. The committee believes that a competitive rate of pay 

remains important and is deeply concerned that the gap between private sector 

and military salaries, as measured by the Employment Cost Index (ECI), is 

widening. Currently, military pay lags 11 percent behind wages in the civilian 

economy. If this trend is not reversed, the nation's armed forces could again fall 

on hard times. 

The committee therefore recommends a four percent increase in basic pay 

and basic allowance for subsistence (BAS) and a seven percent increase in basic 

allowance for quarters (BAQ). The committee believes reallocation of a small 

fraction of the pay raise into the basic allowance for quarters is sensible because 

basic allowance for quarters continues to fall behind the soaring cost of housing in 

the civilian economy. 

In an effort to address the problem of inadequate reimbursement for 

housing costs for certain individuals, Congress in the 1985 Defense Authorization 

Act (Public Law 98-525 [§602(a)(1), 98 Sta. 2492, 2533-2534 (1984)]) 

restructured the basic allowance for quarters and variable housing allowance 

(VHA) programs, pegging the basic allowance for quarters to a percentage (65 

percent) of national median housing costs. The service member was expected to 

absorb 15 percent of housing costs, at which point the variable housing allowance 

kicks in. 

The program envisioned that the Department of Defense would 

periodically seek to update the BAQ rates, in order to maintain the linkage with 

national median housing costs. This, however, has not occurred. Instead, basic 

allowance for quarters has been increased each year, along with and by the same 

percentage as the annual pay raise, but national housing costs have gone up faster 

than pay raises. The Department of Defense has attempted to address this problem 

through increased variable housing allowance. This year's budget proposes a 3.4 

percent VHA increase. Unfortunately, due to budget constraints, variable housing 

allowance has been capped through the appropriations process for the past two 

years. 

Currently, the BAQ rates have declined to slightly over 59 percent of 

national median housing costs, instead of 65 percent. With the caps on variable 

housing allowance, service members are now absorbing over 22 percent of their 

121
housing costs, instead of the 15 percent envisioned when the program was 

restricted [sic, restructured?] by Public Law 98-525. 

In an attempt to address this problem, last year the fiscal 1988/1989 

Defense Authorization Act (Public Law 100-180 [§601(b) and (c), 101 Stat. 1019, 

1092 (1987)]) authorized a six percent increase in basic allowance for quarters, 

along with a three percent increase in basic pay. Both the pay raise and the BAQ 

increase were subsequently limited to two percent in compliance with the budget 

summit agreement. 

 The seven percent increase [in basic allowance for quarters, as proposed 

in the House bill, H.R. 4264, 100th Congress, 2d Session (1988)] would raise 

basic allowance for quarters to 62 percent of national median housing costs and, 

hopefully, would constitute the first step of a return to the 65 percent level 

established in the 1985 Defense Authorization Act.27 

In conference, after the Senate had proposed a flat, across-the-board increase of 

4.3 percent in basic pay, basic allowance for quarters, and basic allowance for 

subsistence,28 a 4.1 percent increase in basic pay and basic allowance for subsistence and 

a seven percent increase in basic allowance for quarters were agreed upon, with the 

conferees noting: 

The 4.3 percent across the board [sic] military pay raise requested by the 

Administration was based on projected private sector wage growth as measured 

by the employment cost index (ECI). At the time the request was submitted, the 

projected ECI was 4.3 percent. The 4.3 percent pay raise request matched the 

projected ECI increase to keep the 11 percent gap between private sector pay 

increases and military pay increases from widening. 

The actual ECI has now been reported as 3.5 percent. Therefore, the 

projection on which the Administration's request was based is overstated by 0.8 of 

a percentage point. As a result, the conference agreement will actually close the 

gap between private sector and military wage growth by 0.6 of a percentage point, 

the first time the military pay raise will exceed the ECI since 1981.29 

 

27 See, e.g., Senate Report No. 100-326 (Committee on Armed Services), p. 92, accompanying S. 2355, 

100th Congress, 2d Session (1988). 

28 House Report No. 100-753 (Committee of Conference), p. 403, accompanying H.R. 4264, and House 

Report No. 100-989 (Committee of Conference), pp. 404-405, accompanying H.R. 4481, 100th Congress, 

2d Session (1988). 

29 With respect to the National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-

190, §601(b), 105 Stat. 1290, 1372 (1991), and the pay raise authorized for fiscal year 1992, see House 

Report No. 102-60 (Committee on Armed Services), p. 247, accompanying H.R. 2100, and Senate Report 

No. 102-113 (Committee on Armed Services), p. 221, accompanying S. 1507, cf. House Report No. 102-

122
The conference committee did not specifically address the question of the 

appropriateness of a seven percent increase in basic allowance for quarters, apparently 

accepting the reasoning of the House Committee on Armed Services as expounded in 

House Report No. 100-563, quoted above in extenso. 

 In contrast to the extensive concern expressed in deliberations on the 

National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-

180, 101 Stat. 1019 (1987), and the National Defense Authorization Act, Fiscal Year 

1989, Public Law 100-456, 102 Stat. 1918 (1988), over the level and adequacy of basic 

allowance for quarters in relation to the housing costs actually experienced by service 

members, military pay raises and concomitant increases in BAQ rates for fiscal years 

1992 through 1995 (with the possible exception of the pay raise for fiscal year 1994) 

were treated as more of a routine affair. Like the pay raises stretching back to fiscal year 

1983, the authorization acts for fiscal years 1992 through 1995 all bypassed the Section 

1009 adjustment mechanism, although in most years the Congressionally mandated rate 

of increase matched the figure that would have resulted from using that mechanism.30

 The National Defense Authorization Act for Fiscal Years 1992 and 1993, 

Public Law 102-190, §601(b), 105 Stat. 1290, 1372 (1991), provided for a 4.2 percent 

increase in basic pay, basic allowance for quarters, and basic allowance for subsistence, 

effective January 1, 1992; the National Defense Authorization Act for Fiscal Year 1993, 

Public Law 102-484, §601(b), 106 Stat. 2315, 2420 (1992), a 3.7 percent increase in 

 311 (Committee of Conference), p. 548, accompanying H.R. 2100, 102d Congress, 1st Session (1991); with 

respect to the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §601(b), 106 

Stat. 2315, 2420 (1992), and the pay raise authorized for fiscal year 1993, see House Report No. 102-527 

(Committee on Armed Services), p.243, accompanying H.R. 5006, and Senate Report No. 102-352 

(Committee on Armed Services), p. 208, accompanying S. 3114, cf. House Report No. 102-966 

(Committee of Conference), p. 712, accompanying H.R. 5006, 102d Congress, 2d Session (1992); with 

respect to the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §601(b), 107 

Stat. 1547, 1677 (1993), and the pay raise authorized for fiscal year 1994, see House Report No. 103-200 

(Committee on Armed Services), p. 293, accompanying H.R. 2401, Senate Report No. 103-112 

(Committee on Armed Services), pp. 151-152, accompanying S. 1298, and House Report No. 103-357 

(Committee of Conference), p. 682, accompanying H.R. 2401, 103d Congress, 1st Session (1993); and with 

respect to the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §601(b), 108 

Stat. 2663, 2779 (1994), and the pay raise authorized for fiscal year 1995, see House Report No. 103-499 

(Committee on Armed Services), p. 601, accompanying H.R. 4301, Senate Report No. 103-282 

(Committee on Armed Services), p. 193, accompanying S. 2182, and House Report No. 103-701 

(Committee of Conference), p. 711, accompanying S. 2182, 103d Congress, 2d Session (1994). 

30 Robert L. Goldich, “Military Pay and Benefits: Key Questions and Answers,” CRS Issue Brief for 

Congress, 27 December 2001, 6. 

123
basic pay, basic allowance for quarters, and basic allowance for subsistence, effective 

January 1, 1993; the National Defense Authorization Act for Fiscal Year 1994, Public 

Law 103-160, §601(b), 107 Stat. 1547, 1677 (1993), a 2.2 percent increase in basic pay, 

basic allowance for quarters, and basic allowance for subsistence, effective January 1, 

1994; and the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-

337, §601(b), 108 Stat. 2663, 2779 (1994), a 2.6 percent increase in basic pay, basic 

allowance for quarters, and basic allowance for subsistence, effective January 1, 1995. 

Except for the pay raise for military personnel for fiscal year 1994, none of the 

deliberations that led to any of these adjustments dealt explicitly with either the level or 

adequacy of military pay in terms of attracting and retaining appropriate numbers of 

military personnel or with the skills necessary for a modern military force; nor was the 

question of the appropriate index to use in adjusting military pay rates from year to year 

raised.31 

 In consideration of pay raises for fiscal years 1992 through 1995, special 

attention went only to those for fiscal 1994 and 1995. In both cases, the attention that was 

given to military pay raises derived from budget proposals made by the Clinton 

Administration. For fiscal year 1994, the Clinton Administration had proposed a freeze 

on military pay, but neither the Senate nor the House chose to go along with the 

administration. The Senate in particular felt it would be inequitable to military personnel 

to freeze their pay while federal civilian employees would almost certainly get a pay 

raise. As the Senate noted: 

The committee recommends a provision ... that would authorize a 2.2 

percent pay raise for military personnel on January 1, 1994. The administration 

proposed a pay freeze for federal civilian employees, including military 

personnel, in its budget request. Under current law, the normal pay raise would 

have been a 2.2 percent increase on January 1, 1994 [under the provisions of 37 

U.S.C. §1009]. In testimony before the committee, Defense Department witnesses 

indicated that military personnel overwhelmingly oppose the pay freeze, but that 

 

31 Senate Report No. 103-112 (Committee on Armed Services), pp. 151-152, accompanying S. 1298, 103d 

Congress, 1st Session (1993). 

124
they could justify the pay freeze as long as military personnel are not singled out 

to bear a disparate sacrifice. 

Although federal civilians would forego the normal January 1 pay raise 

just as military personnel would under the administration's pay freeze proposal, 

current law provides for a second component to federal civilian pay, a locality 

adjustment, to address pay disparities for different areas which takes effect on 

January 1, 1994. Locality payments are mandated by law for areas where the 

difference between federal and non-federal pay exceeds five percent. According 

to the Office of Management and Budget, because federal civilian pay lags private 

sector pay by over 25 percent in the aggregate, practically all civilian white collar 

workers would receive a locality pay increase. 

The administration has requested in its budget that the locality pay 

adjustment be delayed for one year to January 1, 1995. This would require 

legislative action. At the time of this report, the House [Budget] Reconciliation 

bill contains a provision that would delay the implementation of federal civilian 

locality pay by six months to July 1, 1994. The Senate Reconciliation bill contains 

no provision on federal civilian locality pay. Therefore, the committee assumes 

that civilian locality pay will be implemented on January 1, 1994 as provided for 

under current law or by July 1, 1994 as provided for in the House bill. 

The committee also notes that under the pay freeze recommended by the 

administration, the comparability gap between private sector pay as measured by 

the employment cost index and military pay would widen to 14.5 percent. This 

would be the largest gap since the Congress equalized private sector and military 

pay by authorizing a 14.3 percent military pay raise for October 1, 1981 [in the 

Uniformed Services Pay Act of 1981, Public Law 97-60, 95 Stat. 989 (1981)]. 

The committee further notes that military personnel are operating at a 

higher tempo as our military downsizes. While the state of personnel readiness is 

high, there are signs of strain, such as the decline in the propensity of youth to 

serve in the military, and persistent shortages in certain skills that are also in 

demand in the private sector. 

In view of the foregoing, the committee believes that it would be fair and 

prudent to provide a pay raise for military personnel.32

In recommending its own version of a pay raise for military personnel for 

fiscal year 1994, the House Committee on Armed Services noted: 

The budget proposed a freeze on military pay during fiscal year 1994. The 

committee has identified offsets elsewhere within the defense budget request for 

 

32 House Report No. 103-200 (Committee on Armed Services), p. 293, accompanying H.R. 2401, 103d 

Congress, 1st Session (1993). 

125
fiscal year 1994 sufficient to fund the full 2.2 percent pay raise authorized under 

current law. 

The committee, therefore, recommends a 2.2 percent increase in basic pay, 

basic allowance for quarters and basic allowance for subsistence, for military 

personnel.33 

 For fiscal year 1995, the Clinton Administration proposed a 1.6 percent military 

pay raise, one percentage point less than the 2.6 percent pay raise that would have been 

automatically authorized under the pay adjustment mechanism of 37 U.S.C. §1009. 

Noting that it had "identified offsets elsewhere within the defense budget request" made 

by the Clinton Administration, the House Armed Services Committee recommended the 

full 2.6 percent increase,34 and the Senate Armed Services Committee agreed.35 President 

Clinton approved the 2.6 percent military pay raise incorporated in the National Defense 

Authorization Act for Fiscal Year 1995, Public Law 103-337, §601(b), 108 Stat. 2663, 

2779 (1994), on October 5, 1994. 

The National Defense Authorization Act for Fiscal Year 1996, Public Law 104-

106, §601(c), 110 Stat. 186, 356 (1996), provided a 5.2 percent increase in basic 

allowance for quarters while at the same time providing a 2.4 percent increase in basic 

pay and basic allowance for subsistence. In explanation of the increase, the House 

Committee on National Security noted: 

This section [Section 601 of H.R. 1530, 104th Congress, 1st Session 

(1995)] would provide a 2.4 percent military pay raise as proposed in the 

President's budget. The committee has reservations about this level of raise 

because it would institutionally sanction a one-half of one percent lower level of 

 

33 House Report No. 103-499 (Committee on Armed Services), p. 249, accompanying H.R. 4301, 103d 

Congress, 2d Session (1994). 

34 Senate Report No. 103-282 (Committee on Armed Services), p. 193, and House Report No. 103-701 

(Committee of Conference), p. 711, accompanying S. 2182, 103d Congress, 2d Session (1994). 

35 House Report No. 104-131 (Committee on National Security), p. 229, accompanying H.R. 1530, 104th

Congress, 1st Session (1995); see Senate Report No. 104-112 (Committee on Armed Services), p. 253, 

accompanying S. 1026, 104th Congress, 1st Session (1995), House Report No. 104-406 (Committee of 

Conference), p. 813, accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report No. 

104-450 (Committee of Conference), p. 803, accompanying S. 1124, 104th Congress, 2d Session (1996). 

126
increase than is expected within the private sector. The committee expects the 

ongoing Eighth Quadrennial Review of Military Compensation (QRMC) to 

evaluate the importance of the cumulative gap that exists between military and 

private sector pay levels and to reassess the process for determining the level of 

pay increases. The committee looks forward to receiving the recommendations of 

the QRMC for changes that will protect readiness and the ability of the armed 

services to recruit and retain quality personnel. 

The committee notes that the President's budget request included a 

provision designed to incrementally reduce the out-of-pocket housing costs for 

service members, but that the proposal is inadequately funded to achieve the 

intended level of benefit. Accordingly, section 601 would provide a 5.2 percent 

increase in the basic allowance for quarters which will fully fund the initiative to 

achieve the President's original objective to reduce out-of-pocket housing costs 

for service members to 19.5 percent.36 

 

36 The National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, 110 Stat. 186 

(1996), made two other notable changes to the BAQ program effective July 1, 1996. First, Section 603 of 

the 1996 Authorization Act, Public Law 104-106, id., §603, 110 Stat. at 357-358, provided that unmarried 

personnel in pay grade E-6 who are assigned to "quarters ... that do not meet the minimum adequacy 

standards established by the Department of Defense" for that pay grade may elect not to occupy those 

quarters and instead receive basic allowance for quarters. Before enactment of this provision, personnel in 

pay grade E-7 and above without dependents were permitted to elect not to occupy public quarters 

independently of whether those quarters were "adequate" or not. Under the subject amendment, personnel 

in pay grade E-6 without dependents are permitted to elect not to occupy public quarters to which they 

would otherwise have been assigned, but only if those quarters are not "adequate" for members in that pay 

grade. In support of extending BAQ entitlement to unmarried service members in pay grade E-6, the Senate 

Armed Services Committee noted: 

The committee recommends a provision that would authorize payment of the basic allowance for quarters 

(BAQ) and variable housing allowance (VHA) (and overseas housing allowance (OHA) if assigned 

overseas) to single E-6 and above personnel assigned to quarters which do not meet minimum adequacy 

standards established by the Department of Defense. The committee believes that personnel in the career 

force should have the option of electing not to live in inadequate bachelor quarters. 

Senate Report No. 104-112 (Committee on Armed Services), p. 253, accompanying S. 1026, 104th

Congress, 1st Session (1995); cf., House Report No. 104-406 (Committee of Conference), p. 814, 

accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report No. 104-450 (Committee 

of Conference), p. 804, accompanying S. 1124, 104th Congress, 2d Session (1996). 

Second, Section 604 of the 1996 Authorization Act, Public Law 104-106, id., §604, 110 Stat. at 358, 

extended entitlement to BAQ to unmarried service members in pay grade E-6 assigned to sea duty. Before 

enactment of this amendment to the BAQ program, only unmarried service members in pay grade E-7 and 

above who were assigned to sea duty were entitled to BAQ. In support of extending BAQ entitlement to 

unmarried service members in pay grade E-6 assigned to sea duty, the Senate Armed Services Committee 

focused most heavily on equality of treatment as between members of different services: 

The committee recommends a provision that would authorize payment of the basic allowance for quarters 

(BAQ) and variable housing allowance (VHA) (and overseas housing allowance (OHA) if assigned to a 

ship home- orted overseas) to single E-6 Navy personnel assigned to shipboard sea duty. Current law only 

permits single E-7 Navy personnel to receive BAQ, VHA and OHA (if applicable) while assigned to 

shipboard sea duty. The other military services already have similar BAQ/VHA/ OHA authority. 

127
The pay raise, including the increase in basic allowance for quarters, was 

approved by the President on February 12, 1996, with retroactive effect to January 1, 

1996.37

Thus, while Congress had indicated in connection with its consideration of the 

Department of Defense Authorization Act, 1985, Public Law 98-525, 98 Stat. 2492 

(1984), cited above, an intention to frequently adjust BAQ rates for changes in national 

median housing costs in order to maintain the relationship established by that act between 

BAQ and VHA, on the one hand, and between BAQ and national median housing costs, 

on the other hand, as explained above, the only adjustments actually made to BAQ rates 

for that purpose were made by the National Defense Authorization Act, Fiscal Year 1989, 

Public Law 100-456, §601(c), 102 Stat. 1918, 1976 (1988), which increased BAQ rates 

by 7 percent and by the National Defense Authorization Act for Fiscal Year 1996, Public 

Law 104-106, §601(c), 110 Stat. 186, 356 (1996), which provided a 5.2 percent increase 

in basic allowance for quarters. While the latter increase narrowed the pre-existing gap to 

some extent, during most of the preceding ten years BAQ rates had continued to fall 

behind increases in housing costs, and service members had, on Congress's own 

reasoning,38 been required to absorb more and more of the difference between the amount 

of the housing allowance with which they had been provided and the housing costs they 

actually experience out of their own pockets. 

 

Senate Report No. 104-112 (Committee on Armed Services), pp. 253-254, accompanying S. 1026, 104th

Congress, 1st Session (1995); cf. House Report No. 104-131 (Committee on National Security), p. 230, 

accompanying H.R. 1530, 104th Congress, 1st Session (1995), House Report No. 104-406 (Committee of 

Conference), p. 814, accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report No. 

104-450 (Committee of Conference), p. 804, accompanying S. 1124, 104th Congress, 2d Session (1996). 

37 See Senate Report No. 98-500 (Committee on Armed Services), p. 205, accompanying S. 2773, 98th

Congress, 2d Session (1984), quoted in text accompanying footnote 23 of this chapter, above, and House 

Report No. 104-131 (Committee on National Security), p. 229, accompanying H.R. 1530, 104th Congress, 

1st Session (1995), quoted in text accompanying footnote 34, above. 

38 Part II of the schedule attached to Executive Order 12990 of February 29, 1996, 66 Fed. Reg. 8467, 8470 

(March 5, 1996), set out as a note under 5 U.S.C.A. §5332 and 37 U.S.C.A. §1009; see Section 1 of 

Executive Order 12990, id., 61 Fed.Reg. at 8467. 

128
Selected conditions relating to the basic housing entitlement: In general, the 

entitlement of any member of the Armed Forces to the basic housing allowance depends 

on whether the member is assigned to public housing that are both "appropriate" and 

"adequate" for the member and his dependents, if any. Subject to a number of exceptions 

highlighted below, if a member is assigned to adequate and appropriate housing, there is 

no entitlement to a housing allowance; if not, there is. The basic provision restricting 

entitlement to the basic housing allowance is set out at 37 U.S.C. §403(e)(1) (prior to 

1998, §403(b)(1)): 

Except as otherwise provided by law, a member of the uniformed services 

who is assigned to quarters of the United States or a housing facility under the 

jurisdiction of a uniformed service, appropriate to his grade, rank, or rating and 

adequate for himself and his dependents, if with dependents, is not entitled to 

basic allowance for housing. 

Under this provision, a member who is assigned to public quarters that are both 

appropriate and adequate for the member and his dependents, if any, is not entitled to a 

housing allowance. The major exception to this general rule is that members without 

dependents who are in pay grades above E-6, i.e., enlisted members in pay grades E-7, E8, and E-9, as well as all warrant and commissioned officers, may elect, under 37 U.S.C. 

§403(e)(2) (prior to 1998, §403(b)(1)), not to occupy quarters to which they have been 

assigned, even through those quarters are both appropriate and adequate for them, and 

instead to receive a basic allowance for housing. Questions regarding the entitlement of 

members of the Armed Forces without dependents to basic allowance for housing when 

they are assigned to field or sea duty are dealt with at 37 U.S.C. §403(f)(1) and 

§403(f)(2), respectively (prior to 1998, §403(c)(1) and (2)). In addition, under the 

provisions of 10 U.S.C. §2830, a member of the Armed Forces with dependents may 

choose to occupy substandard family housing without losing entitlement to basic housing 

allowance, providing that a charge in the amount of the "fair rental value" of the housing, 

not to exceed 75 percent of the member's BAH entitlement, may be made. For members 

occupying substandard family housing under the provisions of 10 U.S.C. §2830, the 

difference between a member's entitlement and the "fair rental value" of the housing 

occupied is sometimes referred to as the member's "substandard housing allowance." 

129
Under 37 U.S.C. §403(l) as added by the Act of December 28, 1985, Public Law 

99-227, §1, 99 Stat. 1745 (1985), and amended by the National Defense Authorization 

Act for Fiscal Year 1995, Public Law 103-337, §604, 108 Stat. 2663, 2779 (1994), the 

survivors of a member of the Armed Forces who died in the line of duty are entitled, if in 

assigned quarters at the time of the member's death, to remain in those quarters without 

charge for 180 days following the member's death. Prior to changes in the law in 1998, if 

the decedent was receiving a basic allowance for quarters, variable housing allowance, or 

overseas housing allowance at the time of death, a survivor was entitled to a continuation 

of the decedent's entitlement for 180 days following the member's death. Beginning in 

1998, this entitlement pertained to survivors of deceased members who had been 

receiving a basic allowance for housing for either domestic or overseas duty (see Basic 

Allowance for Housing, below). 

 

Variable Housing Allowance 

In the 1970s, housing costs for members assigned in the United States began to 

diverge significantly according to region. Because the BAQ was an invariable allowance, 

the out-of-pocket housing costs of members assigned in high-cost regions began to 

increase. Reportedly, such costs caused some members to refuse assignment in high-cost 

regions. To address the inequality of out-of-pocket costs that had crept into the housing 

allowance system, the Military Personnel and Compensation Amendments of 1980, 

Public Law 96-343, §4, 94 Stat. 1123, 1125-1126 (1980) added a “variable housing 

allowance program.”39 

The variable housing allowance program, which was a very significant change in 

the structure of housing allowances, entitled a member of the uniformed services who 

was eligible to receive BAQ to the new variable housing allowance whenever assigned to 

duty in any part of the United States that was a "high housing cost area with respect to 

such member." The only exceptions were duty stations in Alaska and Hawaii, where the 

 

39 See discussion of "Overseas Housing Allowance," below. 

130
overseas housing allowance program then applied.40 See former 37 U.S.C. §403(a)(2)(A), 

as added by §4(a)(1)(B) of the Military Personnel and Compensation Amendments of 

1980, Public Law 96-343, id. and Overseas Housing Allowance, below. A given area was 

a "high housing cost area" with respect to a particular member whenever the average 

monthly cost of housing in the area for members serving in the same pay grade exceeded 

115 percent of the member's BAQ entitlement. See former 37 U.S.C. §403(a)(2)(C), as 

added by §4(a)(1)(B) of the Military Personnel and Compensation Amendments of 1980, 

Public Law 96-343, id. The amount of the allowance to which any given member was 

entitled was measured by the difference between the average monthly housing costs for 

members in the member's pay grade and 115 percent of the BAQ the member received. 

See former 37 U.S.C. §403(a)(2)(B), as added by §4(a)(1)(B) of the Military Personnel 

and Compensation Amendments of 1980, Public Law 96-343, id. The allowance also was 

payable to members assigned to unaccompanied tours of duty outside the United States 

whose dependents lived in "high cost areas" in the United States. 

As previously indicated, the Department of Defense Authorization Act, 1985, 

Public Law 98-525, §602, 98 Stat. 2492, 2534-2537 (1984), substantially amended the 

variable housing allowance program in order to better enable it to serve the purposes for 

which it had originally been intended, namely, "assisting service members [to] defray 

housing expenses in high cost areas."41 At the same time as variable housing allowance 

authority was removed from 37 U.S.C. §403, where it formerly resided, and was 

transferred to new 37 U.S.C. §403a, the basis for determining the amount of the 

allowance payable was changed. Under the revised variable housing allowance program, 

the amount of the allowance to which a member is entitled is measured by the difference 

between the median monthly cost of housing in the "high-cost" area in question for 

members in the member's pay grade and 80 percent of the median monthly costs of 

housing in the United States for members in the same pay grade. Since the basic 

allowance for quarters program was also amended by the 1985 Authorization Act to set 

BAQ rates at 65 percent of nation-wide median monthly housing costs of members in the 

 

40 House Report No. 98-691 (Committee on Armed Services), p. 256, accompanying H.R. 5167, 98th

Congress, 2d Session (1984). 

41 See footnotes 22 and 23 together with accompanying text to this chapter, above. 

131
same pay grade,42 a member was effectively required to absorb the difference between 80 

percent of median nation-wide monthly housing costs for members in the same pay grade 

and 65 percent of such costs before becoming entitled to any variable housing allowance. 

Congress's stated reasons for adopting this amendment to the variable housing allowance 

program are set out in the text accompanying footnotes 21 and 22 to this chapter, above. 

In addition to changing the basis for determining when an area is a high-cost area 

for a particular member, and the basis for determining the amount of the allowance to 

which any member is entitled, the Department of Defense Authorization Act, 1985, 

Public Law 98-525, §602, 98 Stat. 2492, 2534-2537 (1984), made the variable housing 

allowance program applicable to members stationed in Alaska and Hawaii. Because the 

overseas housing allowance generally was more favorable, the amendatory language 

included a saved pay provision to protect personnel from a drop in pay.43 Transitional 

provisions enabled personnel receiving overseas housing allowance in Alaska and Hawaii 

on the effective date of the Defense Authorization Act for Fiscal Year 1985 to continue to 

receive that allowance, provided they did not receive variable housing allowance.44

 The Department of Defense Authorization Act, 1986, Public Law 99-145, 99 

Stat. 583 (1985), also made several other changes to the variable housing allowance 

program--many of which were designed to reduce or eliminate what were characterized 

as "windfalls" or "imperfections."45 Section 602(c)(1) of the 1986 Authorization Act, 99 

 

42 For a discussion of the reasons underlying the switch from the overseas housing allowance program to 

the variable housing allowance program for personnel in Alaska and Hawaii, see discussion of overseas 

housing allowance in this chapter, below. 

43 See House Report No. 99-81 (Committee on Armed Services), p. 217, accompanying H.R. 1872, and 

Senate Report No. 99-41 (Committee on Armed Services), pp. 190-191, accompanying S. 1029, 99th

Congress, 1st Session (1985). 

44 See, e.g., House Report No. 99-81 (Committee on Armed Services), pp. 216-217, accompanying H.R. 

1872, and Senate Report No. 99-41 (Committee on Armed Services), p. 191, accompanying S. 1029, 99th

Congress, 1st Session (1985). Cf., Senate Report No. 118 (Committee of Conference), pp. 426-427, and 

House Report No. 99-235 (Committee of Conference), pp. 426-427, accompanying S. 1160, 99th Congress, 

1st Session (1985). 

45 House Report No. 99-81 (Committee on Armed Services), p. 217, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). cf. Senate Report No. 118 (Committee of Conference), p. 427, and House 

Report No. 235 (Committee of Conference), p. 427, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

132
Stat. at 636, amended 37 U.S.C. §403a(c)(1) to authorize separate variable housing 

allowance rates for members with dependents and for members without dependents. 

Before amendment, only one rate of VHA had been authorized for a particular "high 

housing cost area" and pay grade. Under the variable housing allowance program as 

amended, the monthly amount of variable housing allowance for a member of a 

uniformed service with respect to a given "high housing cost area" was measured as the 

difference between (A) the median monthly cost of housing in that area for members of 

the uniformed services serving in the same pay grade and with the same dependency 

status as that member, and (B) 80 percent of the median monthly cost of housing in the 

United States for members of the uniformed services serving in the same pay grade and 

with the same dependency status as that member. 37 U.S.C. §403a(c)(1), as amended by 

Section 602(c)(1) of the 1986 authorization act. As explained by the House Armed 

Services Committee, which had been responsible for the amendment in question, the 

provision authorizing separate rates of variable housing allowance for members with and 

for members without dependents had been intended to "correct another imperfection" in 

the variable housing allowance program as it had previously existed.46 

Sections 602(a) and (b) of the 1986 Authorization Act, Public Law 99-145, id., 99 Stat. at 

636, were both addressed to the question of variable housing allowance payments to 

personnel who were entitled to basic allowance for quarters at the "with-dependents" rate 

"solely by reason of the payment of child support by the member." Section 602(a) of the 

act added a new provision, codified at 37 U.S.C. §403a(a)(4), to deal with the case of a 

member not provided with government quarters who was entitled to basic allowance for 

quarters at the "with-dependents" rate because, but only because, the member was paying 

child support. In dealing with this case, Congress provided that such a member was 

entitled to variable housing allowance at the "without-dependents" rate. Section 602(b) of 

the act dealt with the slightly different case of a member assigned to government quarters 

who was entitled to basic allowance for quarters at the "with-dependents" rate because, 

but only because, the member was paying child support. In dealing with this case, 

 

46 House Report No. 99-81 (Committee on Armed Services), pp. 216-217, accompanying H.R. 1827, 99th

Congress, 1st Session (1985). cf. Senate Report No. 99-118 (Committee of Conference), p. 427, and House 

Report No. 99-235 (Committee of Conference), p. 427, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

133
Congress amended former 37 U.S.C. §403a(b) to provide that such a member was not 

entitled to variable housing allowance at all, whether at the "with-dependents" or 

"without-dependents" rate. Both changes were characterized as having been intended to 

eliminate "windfalls" that Congress had not intended in the first place.47 

 The fourth of the major changes to the variable housing allowance program 

effected by the 1986 Authorization Act, Public Law 99-145, id., was addressed to curing 

the problem of what was characterized by the Senate Armed Services Committee as 

"excess housing cost payments" under VHA.48 Under the VHA program in effect before 

enactment of the 1986 Authorization Act, a member in a "high housing cost area" was 

entitled to both basic allowance for quarters and the variable housing allowance 

appropriate to the area in question and the member's grade independently of the amount 

of money the member was in fact spending on housing.49 For members who had been 

able to obtain inexpensive housing or who otherwise happened to have relatively low 

housing costs for any of a number of possible reasons, the sum of their basic allowance 

for quarters and their variable housing allowance could exceed their actual housing costs, 

and it was this excess that was, for members fortunate enough to have low housing costs, 

for whatever combination of reasons, characterized as a "windfall."50 In originally 

addressing the problem, the Senate bill (S. 1029, §503, 99th Congress, 1st Session (1985)) 

proposed to totally eliminate the "excess" payments by providing, in essence, that the 

maximum amount of variable housing allowance a member could receive could not, 

when added to the member's basic allowance for quarters, exceed the member's "actual" 

housing costs. The Senate proposal was amended in conference to provide that, in the 

words of the conference committee: 

... the sum of a member's variable and basic housing allowances is permitted to 

exceed the member's housing costs by up to half the difference between the [member's] 

 

47 Senate Report No. 99-41 (Committee on Armed Services), p. 191, accompanying S. 1029, 99th Congress, 

1st Session (1985). Cf., Senate Report No. 99-118 (Committee of Conference), p. 426, and House Report 

No. 99-235 (Committee of Conference), p. 426, accompanying S. 1160, 99th Congress, 1st Session (1985). 

48 Under the VHA program in effect before enactment of the Department of Defense Authorization Act, 

1986, Public Law 99-145, id., members of the uniformed services were entitled to variable housing 

allowance at a rate that did not take into account dependency status. See text preceding and accompanying 

footnotes 44 and 45 to this chapter, above, Section 602(c)(1) of the 1986 Authorization Act, id., §602(c)(1), 

99 Stat. at 636, provided for dependency status to be taken into account in determining a member's variable 

housing allowance. 

49 Senate Report No. 99-41 (Committee on Armed Services), p. 191, accompanying S. 1029, 99th Congress, 

1st Session (1985). Also see Senate Report No. 99-118 (Committee of Conference), p. 426, and House 

Report No. 99-235 (Committee of Conference), p. 426, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

50 House Report No. 99-235 (Committee of Conference), p. 426, and Senate Report No. 99-118 (Committee 

of Conference), p. 426, accompanying S. 1160, 99th Congress, 2d Session (1985). 

134
housing costs and the sum of the prescribed housing allowances for the member's pay 

grade and area.51 

This change was made by Section 602(c)(2) of the 1986 Authorization Act, Public 

Law 99-145, id., §602(c)(2), 99 Stat. at 636-637. In fact, the amount, if any, by which the 

sum of a member's basic allowance for quarters and variable housing allowance was 

reduced came entirely out of the member's variable housing allowance. That is, no matter 

how low a particular member's "actual housing costs" were, the member never would 

receive less than full BAQ.52 In addition, in determining a member's "housing costs," the 

House-Senate conferees indicated their intention that personnel administering the new 

provision include within the category of "housing costs" such housing-related items as 

utilities and maintenance costs.53 Inclusion of these items within the category of "housing 

costs" that were to be taken into consideration in implementing the provision in question 

had the effect of limiting the reduction in variable housing allowance payments over what 

would otherwise occur. 

A fifth change to the variable housing allowance program effected by Section 

604(b) of the 1986 authorization act, Public Law 99-145, id., §604(b), 99 Stat. at 638, 

permitted VHA, together with BAQ, to be paid in advance. As indicated by the Senate 

Armed Services Committee, which was responsible for the advanced payment authority: 

More and more military personnel who are not provided Government 

quarters are confronted with a requirement to pay large initial sums of money 

when renting or leasing private housing. In many areas, it is becoming customary 

to require that renters pay the first and last month's rent, along with a security 

 

51 Just as is true in the case of a member whose housing costs are below the sum of the member's basic 

allowance for quarters and (unreduced) variable housing allowance, it could be argued that a member 

fortunate enough to have housing costs below the member's basic allowance for quarters entitlement was 

getting a "windfall" or an "excess housing allowance payment" of some form or other. Be that as it may, 

the amendment made to the variable housing allowance program by Section 602(c)(2) of the 1986 

Authorization Act, Public Law 99-145, id., §602(c)(2), 99 Stat. at 636-637, did not address that question. 

52 For the purpose of computing a member's housing costs, the House-Senate Conferees indicated their 

intention to permit statistical generalization with respect to housing costs other than rent or mortgage 

payments, such as utilities and maintenance. Senate Report No. 99-118 (Committee of Conference), p. 426, 

and House Report No. 99-235 (Committee of Conference), p. 426, accompanying S. 1160, 99th Congress, 

1st Session (1985). The Conferees went on to indicate that they contemplated "use of the 80th percentile of 

surveyed utilities and maintenance costs for a pay grade in a variable housing allowance area" in computing 

a member's "housing costs" for purposes of reducing what would otherwise be a "windfall" to the member. 

Id. 

53 Senate Report No. 99-41 (Committee on Armed Services), pp. 191-192, accompanying S. 1029, 99th

Congress, 1st Session (1985). Cf., Senate Report No. 99-118 (Committee of Conference), p. 427, and House 

Report No. 99-235 (Committee of Conference), p. 427, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

135
deposit, at the time housing is obtained. For military personnel who have just 

completed a permanent change of station move, this requirement can present an 

almost insurmountable financial hurdle. 

There presently is no authority to pay either BAQ or VHA in advance. 

Such authority does exist for the payment of a station housing allowance under 

the rent-plus system outside the continental United States. 

The committee believes that authority to pay BAQ and VHA in advance 

could be used to help members meet the high financial demands often imposed 

upon them when renting or leasing private housing.... The committee expects that 

this authority will not be used routinely and that it will be limited to those cases 

where needed because of housing market costs.54 

 

 In 1993, Congress effectively amended part of the change to the VHA program 

made by Section 602 of the Department of Defense Authorization Act, 1986, Public Law 

99-145, §602, 99 Stat. 583, 636 (1985). As previously indicated, in Section 602(b) of the 

1986 Authorization Act, Public Law 99-145, id., 99 Stat. at 583, Congress provided that a 

member of the uniformed services assigned to public housing who was entitled to BAQ at 

the "with-dependents" rate solely because the member was paying child support would 

not be entitled to any form of VHA, whether at the "with-dependents" or "withoutdependents" rate.55 In Section 602(a) of the 1986 authorization act, id., however, 

Congress had provided that a member not assigned to government quarters who was 

entitled to BAQ at the "with-dependents" rate only because the member was paying child 

support would be entitled to VHA at the "without-dependents" rate. In Section 604 of the 

National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §604, 

107 Stat. 1547, 1679 (1993), Congress effectively determined to treat members on sea 

duty who elected not to occupy assigned public quarters and who were entitled to BAQ 

because they were in pay grade E-7 or above in the same way as members not assigned to 

 

54 See text accompanying footnotes 44 and 45 of this chapter, above. 

55 Under 37 U.S.C. §403(b), a member of a uniformed service without dependents who is in pay grade E-7 

or above may elect not to occupy assigned public quarters and instead to receive the basic allowance for 

quarters. See current 37 U.S.C. §403(b)(2) as amended by the National Defense Authorization Act for 

Fiscal Year 1996, Public Law 104-106, §603(a), 110 Stat. 186, 357 (1996). 

136
public quarters at all.56 Under the 1994 authorization act, a member in pay grade E-7 or 

above assigned to sea duty who elected not to occupy assigned quarters and was entitled 

to BAQ at the "with-dependents" rate solely by reason of paying child support was 

entitled to VHA at the "without-dependents" rate in the same way as a similarly 

circumstanced member not assigned to public quarters.57 

The National Defense Authorization Act for Fiscal Year 1996, Public Law 104-

106, §605(a), 110 Stat. 186, 358 (1996), further modified the variable housing allowance 

program by protecting against allowance reductions caused by declining housing costs in 

a member’s area of assignment. Under the new provision, which was called individual ate 

protection, a member’s allowance would not be reduced from year to year as long as the 

member retained uninterrupted eligibility for variable housing allowance payments in that 

area and the member's housing costs did not themselves actually decline.58 

As originally adopted, the variable housing allowance program provided that a 

member of a reserve component called to active duty could not be paid variable housing 

allowance unless under a call or order specifying a period of active duty of 140 days or 

more. See Military Personnel and Compensation Amendments of 1980, Public Law 96-

343, §4, 94 Stat. 1123, 1125-1126 (1980), originally codified at 37 U.S.C. §403 and 

subsequently recodified at 37 U.S.C. §403a(b)(3).59 This result was temporarily modified 

by the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, 

§1111(b), 104 Stat. 1485, 1635 (1990), which provided, inter alia, that members of 

 

56 See, e.g., House Report No. 103-200 (Committee on Armed Services), p. 293, and House Report No. 

103-357 (Committee of Conference), p. 682, both accompanying H.R. 2401, 103d Congress, 1st Session 

(1993). Also see footnote 34 to this chapter, above. 

57 See House Report No. 104-131 (Committee on National Security), p. 230, accompanying H.R. 1530; 

Senate report No. 104-112 (Committee on Armed Services), p. 254, accompanying S. 1026; and House 

Report No. 104-406 (Committee of Conference), pp. 814-815, accompanying H.R. 1530, 104th Congress, 

1st Session (1995); and House report No. 104-450 (Committee of Conference), pp. 804-805, accompanying 

S. 1124, 104th Congress, 2d Session (1996). 

58 See footnote 38 to this chapter and accompanying text, above. 

59 See House Report No. 102-60 (Committee on Armed Services), p. 249, accompanying H.R. 2100, and 

Senate Report No. 102-113 (Committee on Armed Services), p. 226, accompanying S. 1507, 102d 

Congress, 1st Session (1991). 

137
reserve components called to active duty "in connection with Operation Desert Shield" 

would be entitled to variable housing allowance without regard to the 140 day limitation. 

Under amendments to the variable housing allowance program made by the National 

Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §603, 

105 Stat. 1290, 1373 (1991), this temporary authority was made permanent by providing 

an exception for members of reserve components called to active duty "in support of a 

contingency operation."60 61 In addition to the changes noted above, the National Defense 

Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §603, 105 Stat. 

1290, 1373 (1991), made an additional provision to determine the amount of variable 

housing allowance that a member of a reserve component called to active duty is paid if 

not authorized transportation of household goods from the member's place of principal 

residence to the member's duty station. In that case, the member would be considered as 

assigned to duty at his place of principal residence. As a result, the member's VHA 

 

60 For the purposes of Title 37, United States Code, the term "contingency operation" is defined by 

reference to 10 U.S.C. §101, in particular §101(a)(13). See 37 U.S.C. §101(26), as added by the National 

Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §631(b), 105 Stat. 1290, 

1380 (1991), and amended by the National Defense Authorization Act for Fiscal Year 1993, Public Law 

102-484, §1052(b)(2), 106 Stat. 2315, 2498 (1992), and the National Defense Authorization Act for Fiscal 

Year 1994, Public Law 103-160, §1182(c)(1), 107 Stat. 1547, 1772 (1993). As added by the National 

Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §631(a), 105 Stat. 1290, 

1380 (1991), and thereafter amended, "contingency operation" is defined at 10 U.S.C. §101(a)(13) as 

follows: 

The term "contingency operation" means a military operation that-- 

(A) is designated by the Secretary of Defense as an operation in which members of the armed forces are or 

may become involved in military actions, operations, or hostilities against an enemy of the United States or 

against an opposing military force; 

or 

(B) results in the call or order to, or retention on, active duty of members of the uniformed services under 

sections 688, 12301(a), 12302, 12304, 12305, or 12406 of this title, chapter 15 of this title, or any other 

provision of law during a war or during a national emergency declared by the President or Congress. 

See House Report No. 102-60 (Committee on Armed Services), p. 249, accompanying H.R. 2100; Senate 

Report No. 102-113 (Committee on Armed Services), p. 225, accompanying S. 1507; and House Report 

No. 102-311 (Committee of Conference), pp. 551-552, accompanying H.R. 2100, 102d Congress, 1st

Session (1991). 

61 See House Report No. 102-60 (Committee on Armed Services), p. 247, accompanying H.R. 2100, and 

Senate Report No. 102-113 (Committee on Armed Services), p. 226, accompanying S. 1507, 102d 

Congress, 1st Session (1991). 

138
entitlement would be determined by reference to the place of principal residence rather 

than the duty station.62 

Basic Allowance for Housing (BAH) 

Because of concern about the inadequacy of housing allowances, in 1995 and 

1996 Congress increased BAQ funding in an effort to reduce out-of-pocket housing costs. 

In conjunction with this measure, the Clinton Administration announced a goal of 

reducing out-of-pocket housing expenditures to a maximum of 15 percent. However, in 

both 1995 and 1996 the apparent gains from these measures fell far short of expectations 

because of the reporting system on which the VHA system based its allotments. When 

members received larger BAQ sums, average spending on housing also grew, and thus so 

did the housing costs that members reported the following year. As larger BAQ budgets 

drove actual housing costs upward instead of reducing members’ out-of-pocket costs, 

another solution was sought. 

 By 1997 housing-cost inflation, which was particularly serious in the 1980s, 

had driven the average out-of-pocket housing expense for members of the Armed Forces 

above 20 percent. In the National Defense Authorization Act for Fiscal Year 1998 (Public 

Law 105-85, 111 Stat. 1775), Congress responded to increasing expressions of 

dissatisfaction with the BAQ and VHA allotment systems. Public Law 105-85 included a 

revision of the formulas that determined housing allowances for members within and 

outside the United States, and a separation of housing and subsistence increase rates from 

basic pay increase rates. The initial separation of the increase rates of basic pay and 

housing allowances had occurred in 1996, for which year the National Defense 

Authorization Act (Public Law 104-106, 110 Stat. 186,356) authorized a BAQ increase 

(5.2 percent) that was more than twice the basic pay increase (2.4 percent). 

 In FY 1998, the basic allowances for quarters and the variable 

allowance for housing within the United States were merged into a single sum, to be 

 

62 See, e.g., House Report No. 96-1233 (Committee of Conference), pp. 16-17, accompanying H.R. 5168, 

96th Congress, 2d Session (1980). 

139
adjusted according to a member’s grade, dependency status, and location.63 In subsequent 

years, the object of the reform was to provide market-based allowances consistent with 

the average lifestyle of civilians at job levels equivalent to the military ranks. In order to 

make allowances match more closely the local housing costs encountered by members 

living outside government-provided quarters, the 1998 legislation prescribed a new 

formula for computing a “basic allowance for housing” (BAH) that accounted for 

variations in local housing costs. This approach was an extension of the variable housing 

allowance (VHA) concept, which had provided additional housing funds for members 

assigned duty in locations where the cost of housing exceeded a specified ceiling. The 

VHA program was subject to distortions because allowances were based on reported 

individual expenditures. The most serious result of this systemic flaw was that housing 

allowances were relatively non-responsive to market changes as members, especially in 

junior grades, tried to keep their spending below their housing allowances. Members’ 

reports of the unrealistically low costs that they had incurred depressed housing 

allowances in ensuing years. The “market-based” approach of the BAH, based strictly on 

average costs by area, eliminated such distortion. (See the explanations of VHA 

computations on previous pages.) The basic conditions for housing allowance eligibility 

remained the same for the BAH as they had been for the BAQ. (See Selected Conditions 

Relating to Entitlement to BAQ, above). 

Public Law 105-85 stipulated three factors in the computation of a BAH for every 

member eligible for a housing allowance: pay grade, dependency status, and geographic 

location. For every grade, dependency status, and geographic location where eligible 

members were assigned, the Department of Defense was to establish a BAH figure based 

on the difference between average monthly housing costs in the area for individuals of a 

given grade and dependency status, as determined by the department, and 15 percent of 

the national median monthly cost of housing for that grade and dependency status, also as 

determined by the department. Percentages of annual adjustments were to be determined 

by a ratio of the national monthly housing cost index for June of the previous year to the 

 

63 An exception to this formula is the so-called BAH II rate, which is paid to National Guard and reserve 

members on duty for less than 140 days. That rate, like the original BAQ rate, does not vary according to 

duty location. 

140
same index for June of the year preceding that year. In other words, the trend of national 

housing cost growth established over the previous year (June-to-June) would determine 

annual BAH increases and decreases in all areas. However, Public Law 105-85 also 

stipulated that no member who had established BAH eligibility in an area and retained 

that eligibility uninterrupted would suffer a subsequent reduction in housing allowance, 

no matter what changes occurred in the annual rate. (The VHA system guaranteed that a 

member’s allowance would not be reduced if regional costs declined, but only if the 

member’s actual housing cost did not decline.) Eligibility would be interrupted by a 

permanent change of station, reduction in grade, or change in dependency status. During 

the period of transition from the BAQ/VHA system to the BAH system (1998-2005), 

members were guaranteed that no housing allowance would drop below the level of the 

final BAQ/VHA allowance. Beginning in 2005, however, local market costs would be the 

exclusive determinant of the BAH. 

The establishment and yearly updating of specific local housing costs was 

facilitated by substantial improvements in data gathering and processing that occurred 

during the 1990s. Based on housing rental cost data collected from military housing 

offices by the Runzheimer International management consultant firm and from a number 

of local civilian sources, the Department of Defense compiled a listing of BAH rates in 

about 400 military housing areas (MHAs) within the United States (including Alaska and 

Hawaii), covering the entire country regardless of the current presence of military 

personnel in a particular area. In the 2003 listing, Texas (20) and California (18) were the 

states with the largest number of MHAs. Data also was collected on local insurance and 

utility rates, which are included in an area’s BAH. The rates for each MHA were to be 

updated annually as new data is gathered. Rates are based on average local rental costs 

for types of housing deemed “appropriate” for civilians earning salaries similar to those 

of the Armed Services pay grades. For example, in 2003 the local rate for an E-5 with 

dependents was based on the average rental cost of a 2-bedroom townhouse, but for an E6 with dependents the rate was based on average rental cost for a 3-bedroom townhouse. 

Rate formulas for other grades include percentages of the cost difference between one 

type of housing and another. An amendment in the National Defense Authorization Act 

for FY2001 (Public Law 106-398) stipulated that the Defense Department could not 

141
differentiate among the lowest four enlisted grades (E-1 through E-4) in establishing 

these standards. The housing standard for these grades was increased to be the sum of the 

average rental cost of a two-bedroom apartment and one-half the difference between that 

cost and the rental cost of a two-bedroom townhouse in the member’s MHA. 

According to the National Defense Authorization Act for Fiscal Year 1998, a 

member’s BAH would be the established monthly cost for the given MHA by grade and 

dependency status, minus 15 percent of the national average monthly housing cost for 

those categories. However, the 15 percent difference ensured that members would 

continue to incur substantial out-of-pocket housing expenses. 

Beginning in 2001, annual funding in successive years moved steadily toward 

fully eliminating members’ out-of-pocket housing expenses by 2005, a goal announced 

by Secretary of Defense William Cohen in 2000. In support of this goal, the National 

Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398) removed the “15 

percent formula” that had been added to 37 U.S.C. 403 three years earlier. The amended 

legislation simply authorized the Department of Defense to prescribe housing allowance 

rates applicable to grade, dependency status, and location, and comparable to costs 

incurred by civilians with similar income levels. 

Prior to the repeal of the “15 percent formula,” Public Law 106-65 provided for 

an additional $225 million to fund the BAH program for Fiscal Year 2000. That figure 

was a conference compromise between the Senate version, which offered no such 

funding, and the initial house position, which provided $442,500,000.64 At least two bills 

introduced and referred to the House Armed Services Committee in 2001 would have 

advanced the deadline for eliminating out-of-pocket housing expenses from 2005 to 

2003. Neither bill reached a vote in the full House. The Senate version of the National 

Defense Authorization Act for FY 2002 (Public Law 107-107) contained a provision that 

would have increased the BAH enough to accelerate completion of the original five-year 

plan by two years. This provision was dropped from the legislation in conference, but 

with this statement: 

The conferees believe that service members should not be required to pay out-ofpocket a percentage of their housing costs when they are unable to live in 

government quarters. The conferees support the plan to eliminate these out-of-

 

64 House Conference Report 106-301, p. 750, accompanying S. 1059, 106th Congress, 1st Session (1999). 

142
pocket expenses and strongly encourage the Secretary of Defense to accelerate 

this plan.65 

 Between the 2002 and 2004 budgets, the average out-of-pocket housing expense 

for members dropped from 11.7 percent to 3.5 percent of total average costs. To achieve 

this reduction, beginning in 1998 annual BAH increases were twice or even three times 

the increases in off-base housing costs for a given area. Between 1998 and 2002, national 

rental costs increased by a cumulative average of 16.2 percent; in the same period, 

average cumulative increases in the BAH for enlisted personnel varied from 32.2 percent 

for an E-8 to 60.5 percent for an E-1. During the same period, the lowest average increase 

for an officer grade was 27.8 percent (for an O-1). The average BAH increase between 

2002 and 2003 was 8 percent. 66 

 

 

Overseas Housing Allowance 

"Overseas Station Allowance" is the collective title of the payment authorized by 

law as "a per diem, considering all elements of the cost of living to members ... and their 

dependents, including the cost of quarters, subsistence, and other necessary incidental 

expenses, to ... a member who is on duty outside of the United States or in Hawaii or 

Alaska, whether or not he is in a travel status." 37 U.S.C. §405(a). Until the definition 

was amended by the National Defense Authorization Act for 2001, Public Law 106-398, 

this per diem consisted of four main components: (1) a housing allowance--termed 

"overseas housing allowance" or "overseas station housing allowance;"67 (2) a cost of 

living allowance; (3) a temporary lodging allowance; and (4) an interim housing 

allowance. The 2000 amendment to 37 U.S.C. §405 made the more general provision that 

a per diem “consider all elements of the cost of living....including the cost of quarters, 

subsistence, and other necessary incidental expenses,” without prescribing particular 

kinds of housing allowances. Overseas station allowances are considered in greater depth 

in Chapter V.C.3., "Overseas Station Allowances," below. 

 

65 U.S. Code Congressional and Administrative News, 2001, v. 3, 1101. 

66 Tom Philpott, “Stateside Housing Pay to Rise an Average of 8 Percent,” Military Update, 7 November 

2002. <http://www.fra.org/mil-up/milup-archive/11-07-02.milup.htm> 

67 Hearings before a Subcommittee of the House Appropriations Committee on the Second Supplemental 

National Defense Appropriation Bill for 1943, pp. 93-94, 77th Congress, 2d Session (1942). 

143
The overseas housing allowance is traceable to a provision in the Act of July 2, 

1942 (Military Appropriations Act for Fiscal Year 1943), ch. 477 [Public Law 649, 76th

Congress], §1, 56 Stat. 611 (1942), which authorized the expenditure of funds 

appropriated for "Contingencies of the Army" for the "actual and necessary expenses or 

per diem in lieu thereof, as may be determined and approved by the Secretary of War, of 

military and civilian personnel in and under the Military Establishment on special duty in 

foreign countries." The Act of October 26, 1942 (Second Supplemental National Defense 

Appropriation Act for Fiscal Year 1943), ch. 629 [Public Law 763, 77th Congress], §102, 

56 Stat. 990, 993 (1942), provided that Navy appropriations for fiscal year 1943 were 

available to make similar payments to military and civilian personnel of the naval 

establishment. A Navy representative explained the need for overseas allowances 

generally, including overseas housing allowance, in these terms: 

 The reason it is necessary to make provision for these personnel is that the 

cost of living in many places abroad has risen steeply and rapidly. It is estimated 

that in London the average rental costs are about 63 percent higher than in 

Washington, and other costs are about 41 percent higher.... In Chunking [sic, 

presently known as Chongqing under the Pinyin zimu system for romanization of 

Chinese place names], China, the costs of everything are reported by our naval 

attache as rising vertically. Rentals are high, but food is higher. A State 

Department estimate in July indicates that rental was 123 percent higher than in 

Washington and it is understood that the State Department is granting special 

allowances to their personnel assigned to Chunking. [The representative went on 

to list 37 other foreign countries in which rental or other living costs were 25 

percent or more in excess of Washington rates.]68

Until 1946, the expenditure of funds for overseas station allowances generally 

was authorized in annual appropriations acts for personnel on special duty in foreign 

countries. The first permanent legislative authority for overseas station allowances was 

incorporated in the Act of August 2, 1946, ch. 756 [Public Law 604, 79th Congress], 

§203, 60 Stat. 853, 859 (1946), characterized as "An Act to enact certain provisions now 

included in the Naval Appropriation Act, 1946, and for other purposes." This act changed 

the pre-existing overseas station allowances program in that it permitted payments to 

personnel on duty "outside continental United States or in Alaska," whereas the annual 

 

68 H.R. 5007, §303(b), 81st Congress, 1st Session (1949). 

144
authority under the appropriation acts had authorized payment only to those on duty in 

"foreign countries." 

Section 303(b) of the bill 69 that was later to become the Career Compensation Act 

of 1949, ch. 681 [Public Law 351, 81st Congress], §303(b), 63 Stat. 802, 814 (1949), 

restated the overseas station allowances authority but in somewhat altered terms. It 

established overseas station allowances as per diem payments, thereby withdrawing 

authority to defray actual expenses. Further, it expressly provided that the extra living 

costs experienced overseas by dependents, as well as by members themselves, could be 

included in computing the amount of the allowance entitlement.70

Section 303(b) of H.R. 5007, 81st Congress, 1st Session (1949), was enacted in the 

Career Compensation Act of 1949, ch. 681, id., exactly as initially drafted. This 

legislation is the source of the overseas station allowance provisions of Title 37, United 

States Code, including overseas housing allowances.71 As enacted, the law authorized the 

payment of overseas station allowances under regulations to be prescribed by the 

secretaries of the various services. Since the law classifies these allowances as "travel and 

transportation" allowances, the secretarial regulations are prescribed in Volume 1 of the 

Joint Federal Travel Regulations (JFTR). In implementing overseas station allowance 

authority generally, the JFTR established a housing allowance, frequently referred to as 

"overseas housing allowance," which in its original form was designed to reimburse 

military personnel for overseas housing costs in excess of their basic allowance for 

quarters, and the level of which was to be based on cost of living data from overseas 

commands. The amount of overseas housing allowance paid to a member varied 

geographically because the excess costs the allowance is intended to partially defray vary 

 

69 Section 303(b) of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress, 

§303(b), 63 Stat. 802, 814 (1949), was classified to 37 U.S.C. §253(b). Later, when Title 37 of the United 

States Code was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat 

451 (1962), the overseas station allowance provisions were codified at 37 U.S.C. §405 (76 Stat. at 473). 

See 37 U.S.C. §405. 

70 See, e.g., “Hearings before a Subcommittee of the House Armed Services Committee on H.R. 2553,” p. 

1711, 81st Congress, 1st Session (1949), and “Hearings before the House Armed Services Committee on 

H.R. 5007,” p. 280, 81st Congress, 1st Session (1949). 

71 See text accompanying footnote 47 to this chapter, above. 

145
from locality to locality. The overseas housing allowance also includes intra-pay-grade 

differentials for each locality, on the theory that a member's standard of living--including 

housing costs--is related to income level. And, since dependents' expenses were taken 

into account in determining the level of the allowances, the overseas housing allowance 

contained a within-grade differential based on dependency status, just as the variable 

housing allowance did after the amendments to the latter program effected by the 

Department of Defense Authorization Act, 1986, Public Law 99-145, §602, 99 Stat. 583, 

636 (1985).72

The Department of Defense Authorization Act, 1985, Public Law 98-525, 

§602(e), 98 Stat. 2492, 2536 (1984), amended both the variable housing allowance 

program and the overseas housing allowance program. Before January 1, 1985, all 

manifestations of overseas station allowances, specifically including housing allowances, 

were available to Armed Forces personnel stationed in Alaska and Hawaii, as well as to 

personnel stationed in Tokyo, London, Rome, etc. Without disturbing other aspects of the 

overseas station allowance program, the 1985 authorization act withdrew overseas 

housing allowance entitlements from armed forces personnel stationed in Alaska and 

Hawaii. At the same time, authority to make overseas housing allowance payments to 

armed forces personnel in Alaska and Hawaii was being withdrawn, however, authority 

to make variable housing allowance payments to such personnel was being extended. 

While the 1985 National Defense Authorization Act, Public Law 98-525, id., thus 

replaced overseas housing allowance authority for military personnel stationed in Alaska 

or Hawaii with variable housing allowance authority, the Act of October 12, 1984 

(Continuing Appropriations for Fiscal Year 1985), Public Law 98-473, §8108, 98 Stat. 

1837, 1943 (1984), which was enacted before the 1985 Authorization Act, provided that, 

notwithstanding the proposed amendment to the variable housing allowance program, 

personnel stationed in Alaska or Hawaii could be paid a station housing allowance under 

37 U.S.C. §405(b), provided they did not also receive variable housing allowance 

payments under the then-current 37 U.S.C. §403 or under the then-proposed 37 U.S.C. 

 

72 See text accompanying footnote 44 to this chapter, above. 

146
§403a.73 This limitation on variable housing allowance authority for personnel stationed 

in Alaska and Hawaii was rescinded by the Department of Defense Authorization Act, 

1986, Public Law 99-145, §603, 99 Stat. 583, 637-638 (1985). Transitional provisions 

enabled personnel receiving overseas housing allowance in Alaska and Hawaii on the 

date of enactment of the 1986 authorization act--i.e., on November 8, 1985--to continue 

to receive that allowance, which was generally more liberal than the variable housing 

allowance, but prohibited such personnel from also receiving variable housing 

allowance.74

Pursuant to amendments to 37 U.S.C. §405 made by the Department of Defense 

Authorization Act, 1980, Public Law 96-107, §807(a), 93 Stat. 803, 813 (1979), overseas 

housing allowances may be paid in advance. As explained in the relevant Congressional 

report, the advance payment authority was adopted to enable members to meet the added 

costs that the overseas housing allowance was intended to defray, at the time the 

expenses were incurred, "in order to minimize the financial impact on service members 

assigned to high-cost overseas areas."75

Until 1998, the overseas housing allowance (OHA) was the second of a two-part 

housing allowance received by members assigned overseas and housed in nongovernment quarters; the first part was the basic allowance for quarters (BAQ). The 

National Defense Authorization Act for Fiscal Year 1998, Public Law 105-85, 

consolidated the OHA into a single payment, under the same principle as that applied by 

the 1998 legislation for members assigned in the United States.76 Basic elements of the 

 

73 See House Report No. 99-81 (Committee on Armed Services), p. 217, accompanying H.R. 1872, and 

Senate Report No. 99-41 (Committee on Armed Services), pp. 190-191, accompanying S. 1029, 99th

Congress, 1st Session (1985). 

74 That Congress was aware that the substitution of VHA entitlements for overseas housing allowances 

would decrease program costs by reducing entitlements of individual members of the armed forces is 

shown by the grandfathering of overseas housing allowances for members assigned to permanent duty 

stations in Alaska or Hawaii on December 31, 1984, the day before the effective date of the provisions in 

issue. See Section 602(f)(2) of the Department of Defense Authorization Act, 1985, Public Law 98-525, 

§602(f)(2), 98 Stat. 2492, 2537 (1984), reprinted at 37 U.S.C. §403a note. 

75 House Report No. 96-166 (Committee on Armed Services), p. 139, accompanying H.R. 4040, 96th

Congress, 1st Session (1979). 

76 In one case, however, a two-part housing allowance remained in effect. Members serving overseas 

unaccompanied tours, with dependents remaining in the United States, receive a with-dependents BAH for 

147
previous legislation, such as variable payments to match geographic differences in 

housing expenses, differentiation according to grade and dependency status, and use of 

directly reported cost figures, were retained in the new system. As with the new system 

introduced concurrently for housing allowances within the United States, a principle goal 

of the overseas reform was to increase flexibility and minimize members’ out-of-pocket 

housing expenses. 

As it was constituted in 2004, the OHA included three component allowances: 

rent, utilities and recurring maintenance, and a lump-sum move-in allowance. The rent 

allowance, based on actual rental expenses reported to local finance centers by members, 

was computed so that 80 percent of members with dependents were fully reimbursed for 

their monthly rent outlay. Members without dependents received 90 percent of the withdependent rate. About 80 percent of total OHA payments went to fund the rent 

component of the program. The allowance for utilities and recurring maintenance, which 

was based on expenses reported by members, was computed to cover the full expenses of 

80 percent of members receiving OHA. The move-in housing allowance (MIHA) covered 

items such as upgrades necessary to make a dwelling habitable, rental agent fees, and 

security-related upgrades. MIHA accounted for the remaining 2 percent of the program’s 

outlays. 

For each overseas country, uniform country-wide rates are established for 

utilities/maintenance and MIHA; rental rates are established by locality within the 

country. Rental rates are revised every six months to account for currency fluctuations 

and cost changes. Utility/maintenance allowances are revised every year and MIHA 

every three years. In 2003 about 44,000 members, assigned in 430 overseas locations, 

received a total of $519 million in OHA payments.77 

Cost: For the cost of housing allowances from 1972 to 2004, see Table II-2 of Military 

Compensation Statistics Tables, volume II of this edition. 

 their dependents’ housing cost and the unaccompanied OHA for themselves, if they do not occupy 

government quarters. 

77 Defense Technical Information Center, Per Diem Travel and Transportation Allowance Committee, 

“Overseas Housing Allowance (OHA).” <http://www.dtic.mil/perdiem/allooha.html> 

148
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

 O-10 Jun 1958 $136.80 $171.00

Oct 1963 160.20 201.00

Sep 1967 160.20 201.00

1971 230.40 288.00

Oct 1974 243.00 303.90

Oct 1975 255.30 319.20

Oct 1976 297.00 371.40

Oct 1977 339.30 424.20

Oct 1978 357.90 447.60

Oct 1979 383.10 479.10

Oct 1980 427.80 535.20

Oct 1981 489.00 611.70

Oct 1982 508.50 636.30

Jan 1984 528.90 661.80

Jan 1985 537.30 660.90

Oct 1985 553.50 680.70

Jan 1987 570.00 701.10

Jan 1988 581.40 715.20

Jan 1989 613.20 754.50

Jan 1990 635.40 781.80

Jan 1991 661.50 813.90

Jan 1992 689.40 848.10

Jan 1993 714.90 879.60

Jan 1994 730.50 899.10

Jan 1995 749.40 922.50

Jan 1996 788.40 970.50

149
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

 O-9 Jul 1922 80.00 120.00

Jun 1942 105.00 120.00

Oct 1949 120.00 150.00

May 1952 136.80 171.00

Jun 1958 136.80 171.00

Oct 1963 160.20 201.00

Oct 1967 160.20 201.00

1971 230.40 288.00

Oct 1974 243.00 303.90

Oct 1975 255.30 319.20

Oct 1976 297.00 371.40

Oct 1977 339.30 424.20

Oct 1978 357.90 447.60

Oct 1979 383.10 479.10

Oct 1980 427.80 535.20

Oct 1981 489.00 611.70

Oct 1982 508.50 636.30

Jan 1984 528.90 661.80

Jan 1985 537.30 660.90

Oct 1985 553.50 680.70

Jan 1987 570.00 701.10

Jan 1988 581.40 715.20

Jan 1989 613.20 754.50

Jan 1990 635.40 781.80

Jan 1991 661.50 813.90

Jan 1992 689.40 848.10

Jan 1993 714.90 879.60

Jan 1994 730.50 899.10

Jan 1995 749.40 922.50

Jan 1996 788.40 970.50

150
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-8 Jul 1922 $80.00 $120.00

Jun 1942 105.00 120.00

Oct 1949 120.00 150.00

May 1952 136.80 171.00

Jun 1958 136.80 171.00

Oct 1963 160.20 201.00

Oct 1967 160.20 201.00

1971 230.40 288.00

Oct 1974 243.00 303.90

Oct 1975 255.30 319.20

Oct 1976 297.00 371.40

Oct 1977 339.30 424.20

Oct 1978 357.90 447.60

Oct 1979 383.10 479.10

Oct 1980 427.80 535.20

Oct 1981 489.00 611.70

Oct 1982 508.50 636.30

Jan 1984 528.90 661.80

Jan 1985 537.30 660.90

Oct 1985 553.50 680.70

Jan 1987 570.00 701.10

Jan 1988 581.40 715.20

Jan 1989 613.20 754.50

Jan 1990 635.40 781.80

Jan 1991 661.50 813.90

Jan 1992 689.40 848.10

Jan 1993 714.90 879.60

Jan 1994 730.50 899.10

Jan 1995 749.40 922.50

Jan 1996 788.40 970.50

151
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-7 Jul 1922 $80.00 $120.00

Jun 1942 105.00 120.00

Oct 1949 120.00 150.00

May 1952 136.80 171.00

Jun 1958 136.80 171.00

Oct 1963 160.20 201.00

Oct 1967 160.20 201.00

1971 230.40 288.00

Oct 1974 243.00 303.90

Oct 1975 255.30 319.20

Oct 1976 297.00 371.40

Oct 1977 339.30 424.20

Oct 1978 357.90 447.60

Oct 1979 383.10 479.10

Oct 1980 427.80 535.20

Oct 1981 489.00 611.70

Oct 1982 508.50 636.30

Jan 1984 528.90 661.80

Jan 1985 537.30 660.90

Oct 1985 553.50 680.70

Jan 1987 570.00 701.10

Jan 1988 581.40 715.20

Jan 1989 613.20 754.50

Jan 1990 635.40 781.80

Jan 1991 661.50 813.90

Jan 1992 689.40 848.10

Jan 1993 714.90 879.60

Jan 1994 730.50 899.10

Jan 1995 749.40 922.50

Jan 1996 788.40 970.50

152
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-6 Jul 1922 $80.00 $120.00

Jun 1942 105.00 120.00

Oct 1949 105.00 120.00

May 1952 119.70 136.80

Jun 1958 119.70 136.80

Oct 1963 140.10 170.10

Oct 1967 140.10 170.10

1971 211.80 258.30

Oct 1974 223.50 272.70

Oct 1975 234.60 286.20

Oct 1976 268.00 327.90

Oct 1977 304.50 371.40

Oct 1978 321.30 391.80

Oct 1979 343.80 419.40

Oct 1980 364.00 468.60

Oct 1981 438.90 535.50

Oct 1982 456.60 556.80

Jan 1984 474.90 579.00

Jan 1985 493.20 599.40

Oct 1985 507.90 617.40

Jan 1987 523.20 636.00

Jan 1988 533.70 648.60

Jan 1989 562.50 679.80

Jan 1990 582.90 704.40

Jan 1991 606.90 733.20

Jan 1992 632.40 764.10

Jan 1993 655.80 792.30

Jan 1994 670.20 809.70

Jan 1995 687.60 830.70

Jan 1996 723.30 873.90

 

153
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-5 Jul 1922 (<20 yrs) $60.00 $100.00

(>20 yrs) 80.00 120.00

Jun 1942 105.00 120.00

Oct 1949 90.00 120.00

May 1952 102.60 136.80

Jun 1958 102.60 136.80

Oct 1963 130.20 157.50

Oct 1967 130.20 157.50

1971 198.30 238.80

Oct 1974 209.10 252.00

Oct 1975 219.60 264.60

Oct 1976 249.30 300.30

Oct 1977 280.80 338.10

Oct 1978 296.10 356.70

Oct 1979 316.80 381.60

Oct 1980 354.00 426.30

Oct 1981 404.70 487.20

Oct 1982 420.90 506.70

Jan 1984 437.70 527.10

Jan 1985 465.30 552.30

Oct 1985 479.40 568.80

Jan 1987 493.80 585.90

Jan 1988 503.70 597.60

Jan 1989 562.50 679.80

Jan 1990 582.90 704.40

Jan 1991 584.40 706.50

Jan 1992 609.00 736.20

Jan 1993 631.50 763.50

Jan 1994 645.30 780.30

Jan 1995 $662.10 $800.70

Jan 1996 696.60 842.40

154
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-4 Jul 1922 (<14 yrs) $80.00

(<23 yrs) $60.00 (>14 yrs) 100.00

(>23 yrs) 80.00 (>23 yrs) 120.00

Jun 1942 (<23 yrs) 90.00 (<23 yrs) 105.00

(>23 yrs) 105.00 (>23 yrs) 120.00

Oct 1949 82.50 105.00

May 1952 94.20 119.70

Jun 1958 94.20 119.70

Oct 1963 120.00 145.05

Oct 1967 120.00 145.05

1971 178.80 215.40

Oct 1974 188.70 227.40

Oct 1975 198.00 238.80

Oct 1976 222.90 269.10

Oct 1977 249.90 301.80

Oct 1978 263.70 318.30

Oct 1979 282.30 340.50

Oct 1980 315.30 380.40

Oct 1981 360.30 434.70

Oct 1982 374.70 452.10

Jan 1984 389.70 470.10

Jan 1985 426.60 504.90

Oct 1985 439.50 519.90

Jan 1987 452.70 535.50

Jan 1988 461.70 546.30

Jan 1989 502.20 577.80

Jan 1990 520.20 598.50

Jan 1991 541.50 623.10

Jan 1992 564.30 649.20

Jan 1993 585.30 673.20

155
Jan 1994 598.20 687.90

Jan 1995 613.80 705.90

Jan 1996 645.60 742.50

156
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-3 Jul 1922 (<7 yrs) $40.00 (<7 yrs) $60.00

 (>7 yrs) 60.00 (>7 yrs) 80.00

 (>17 yrs)100.00

Jun 1942 (<17 yrs) 75.00 (<17 yrs) 90.00

(>17 yrs) 90.00 (>17 yrs)105.00

Oct 1949 75.00 90.00

May 1952 85.50 102.60

Jun 1958 85.50 102.60

Oct 1963 105.00 130.05

Oct 1967 105.00 130.05

1971 158.40 195.60

Oct 1974 167.10 206.40

Oct 1975 175.50 216.60

Oct 1976 196.80 242.70

Oct 1977 219.90 271.20

Oct 1978 231.90 286.20

Oct 1979 248.10 306.30

Oct 1980 277.20 342.00

Oct 1981 316.80 390.90

Oct 1982 329.40 406.50

Jan 1984 342.60 422.70

Jan 1985 345.30 420.90

Oct 1985 355.80 433.50

Jan 1987 366.60 446.40

Jan 1988 373.80 455.40

Jan 1989 402.60 478.20

Jan 1990 417.00 495.30

Jan 1991 434.10 515.70

Jan 1992 452.40 537.30

Jan 1993 469.20 557.10

157
Jan 1994 479.40 569.40

Jan 1995 492.00 584.10

Jan 1996 517.50 614.40

158
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-2 Jul 1922 (<10 yrs) $40.00 (<3 yrs) $40.00

(>10 yrs) 60.00 (>3 yrs) 60.00 

(>10 yrs) 80.00

Jun 1942 (<10 yrs) 60.00 (<10 yrs) 75.00

(>10 yrs) 75.00 (>10 yrs) 90.00

Oct 1949 67.50 82.50

May 1952 77.10 94.20

Jun 1958 77.10 94.20

Oct 1963 95.10 120.00

Oct 1967 95.10 120.00

1971 138.60 175.80

Oct 1974 146.40 185.40

Oct 1975 153.60 194.70

Oct 1976 171.30 216.90

Oct 1977 190.80 241.50

Oct 1978 201.30 254.70

Oct 1979 215.40 272.70

Oct 1980 240.60 304.50

Oct 1981 275.10 348.00

Oct 1982 286.20 361.80

Jan 1984 297.60 376.20

Jan 1985 278.10 360.90

Oct 1985 286.50 371.70

Jan 1987 295.20 382.80

Jan 1988 301.20 390.60

Jan 1989 319.50 408.00

Jan 1990 330.90 422.70

Jan 1991 344.40 440.10

Jan 1992 358.80 458.70

Jan 1993 372.00 475.80

159
Jan 1994 380.10 486.30

Jan 1995 390.00 498.90

Jan 1996 410.40 524.70

160
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-1 Jul 1922 $40.00 (<5 yrs) $40.00

(>5 yrs) 60.00

Jun 1942 (<5 yrs) 45.00 (<5 yrs) 60.00

(>5 yrs) 60.00 (>5 yrs) 75.00

Oct 1949 60.00 75.00

May 1952 68.40 85.50

Jun 1958 68.40 85.50

Oct 1963 85.20 110.10

Oct 1967 85.20 110.10

1971 108.90 141.60

Oct 1974 114.90 149.40

Oct 1975 120.60 156.90

Oct 1976 133.80 174.30

Oct 1977 148.80 493.80

Oct 1978 156.90 204.60

Oct 1979 168.00 219.00

Oct 1980 187.80 244.50

Oct 1981 214.80 279.60

Oct 1982 223.50 290.70

Jan 1984 232.50 302.40

Jan 1985 238.50 323.70

Oct 1985 245.70 333.30

Jan 1987 253.20 343.20

Jan 1988 258.30 350.10

Jan 1989 268.80 364.50

Jan 1990 278.40 377.70

Jan 1991 289.80 393.30

Jan 1992 302.10 409.80

Jan 1993 313.20 425.10

Jan 1994 320.10 434.40

Jan 1995 328.50 445.80

Jan 1996 345.60 468.90

161
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-3E Jan 1989 $434.40 $513.30

Jan 1990 450.00 531.90

Jan 1991 468.60 553.80

Jan 1992 488.40 577.20

Jan 1993 506.40 598.50

Jan 1994 517.50 611.70

Jan 1995 531.00 627.60

Jan 1996 558.60 660.30

Note: Before 1989, members in pay grade O-3E received the same BAQ as members in pay grade O-3.

162
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-2E Jan 1989 $369.60 $463.20

Jan 1990 382.80 480.00

Jan 1991 398.40 499.80

Jan 1992 415.20 520.80

Jan 1993 430.50 540.00

Jan 1994 440.10 552.00

Jan 1995 451.50 566.40

Jan 1996 474.90 595.80

Note: Before 1989, members in pay grade O-2E received the same BAQ as members in pay grade O-2.

163
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

O-1E Jan 1989 $317.70 $428.10

Jan 1990 329.10 443.40

Jan 1991 342.60 461.70

Jan 1992 357.00 418.80

Jan 1993 370.20 498.90

Jan 1994 378.30 510.00

Jan 1995 388.20 523.20

Jan 1996 408.30 550.50

Note: Before 1989, members in pay grade O-1E received the same BAQ as members in pay grade O-1.

164
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

W-5 Feb 1992 $573.00 $626.40

Jan 1993 594.30 649.50

Jan 1994 607.50 663.90

Jan 1995 623.40 681.30

Jan 1996 655.80 716.70

MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

W-4 Oct 1949 $82.50 $105.00

May 1952 94.20 119.70

Jun 1958 94.20 119.70

Oct 1963 120.00 145.05

Oct 1967 120.00 145.05

1971 172.50 207.90

Oct 1974 182.10 219.30

Oct 1975 191.10 230.40

Oct 1976 215.10 259.50

Oct 1977 240.90 290.70

Oct 1978 254.10 306.60

Oct 1979 271.80 328.20

Oct 1980 303.60 366.60

Oct 1981 347.10 419.10

Oct 1982 360.90 435.90

Jan 1984 375.30 453.30

165
Jan 1985 391.20 453.90

Oct 1985 402.90 442.80

Jan 1987 414.90 481.50

Jan 1988 423.30 491.10

Jan 1989 453.30 511.20

Jan 1990 469.50 529.50

Jan 1991 488.70 551.10

Jan 1992 509.10 574.20

Jan 1993 528.00 595.50

Jan 1994 539.70 608.70

Jan 1995 553.80 624.60

Jan 1996 582.60 657.00

166
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

W-3 Oct 1949 $75.00 $90.00

May 1952 85.50 102.60

Jun 1958 85.50 102.60

Oct 1963 105.00 130.05

Oct 1967 105.00 130.05

1971 155.40 191.70

Oct 1974 164.10 202.20

Oct 1975 172.20 212.40

Oct 1976 192.60 237.30

Oct 1977 214.80 264.60

Oct 1978 226.50 279.30

Oct 1979 242.40 298.80

Oct 1980 270.90 333.90

Oct 1981 309.60 381.60

Oct 1982 321.90 396.90

Jan 1984 334.80 412.80

Jan 1985 330.30 405.90

Oct 1985 340.20 418.20

Jan 1987 350.40 430.80

Jan 1988 357.30 439.50

Jan 1989 380.70 468.60

Jan 1990 394.50 485.40

Jan 1991 410.70 505.20

Jan 1992 427.80 526.50

Jan 1993 443.70 546.00

Jan 1994 453.60 558.00

Jan 1995 465.30 572.40

Jan 1996 489.60 602.10

167
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

W-2 Oct 1949 $67.50 $82.50

May 1952 77.10 94.20

Jun 1958 77.10 94.20

Oct 1963 95.10 120.00

Oct 1967 95.10 120.00

1971 137.10 173.70

Oct 1974 144.60 183.30

Oct 1975 151.80 192.60

Oct 1976 168.30 213.60

Oct 1977 186.90 237.30

Oct 1978 197.10 250.50

Oct 1979 210.90 268.20

Oct 1980 235.50 299.70

Oct 1981 269.10 342.60

Oct 1982 279.90 356.40

Jan 1984 291.00 370.80

Jan 1985 297.00 379.50

Oct 1985 306.00 390.90

Jan 1987 315.30 402.60

Jan 1988 321.60 410.70

Jan 1989 337.80 430.80

Jan 1990 350.10 446.40

Jan 1991 364.50 464.70

Jan 1992 379.80 484.20

Jan 1993 393.90 502.20

Jan 1994 402.60 513.30

Jan 1995 413.10 526.50

Jan 1996 434.70 553.80

168
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents With Dependents

W-1 Oct 1949 $60.00 $75.00

May 1952 68.40 85.50

Jun 1958 68.40 85.50

Oct 1963 85.20 110.10

Oct 1967 85.20 110.10

1971 123.90 160.80

Oct 1974 130.80 169.80

Oct 1975 137.40 178.20

Oct 1976 152.10 197.10

Oct 1977 168.60 218.40

Oct 1978 177.90 230.40

Oct 1979 190.50 246.60

Oct 1980 212.70 275.40

Oct 1981 243.00 314.70

Oct 1982 252.60 327.30

Jan 1984 262.80 340.50

Jan 1985 251.40 330.90

Oct 1985 258.90 340.80

Jan 1987 266.70 351.00

Jan 1988 272.10 357.90

Jan 1989 283.20 372.60

Jan 1990 293.40 386.10

Jan 1991 305.40 402.00

Jan 1992 318.30 418.80

Jan 1993 330.00 434.40

Jan 1994 337.20 444.00

Jan 1995 345.90 455.40

Jan 1996 363.90 479.10

169
ENLISTED MEMBERS

MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-9 Jun 1958 $51.30 $77.10 $77.10 $96.90

Oct 1963 85.20 120.00 120.00 120.00

Oct 1967 85.20 120.00 120.00 120.00

1971 130.80 184.20 184.20 184.20

Oct 1974 138.00 194.40 194.40 194.40

Oct 1975 144.90 204.00 204.00 204.00

Oct 1976 162.60 228.60 228.60 228.60

Oct 1977 181.80 255.60 255.60 255.60

Oct 1978 191.70 269.70 269.70 269.70

Oct 1979 205.20 288.60 288.60 288.60

Oct 1980 229.20 322.50 322.50 322.50

Oct 1981 261.90 368.70 368.70 368.70

Oct 1982 272.40 383.40 383.40 383.40

Jan 1984 283.20 398.70 389.70 389.70

Jan 1985 315.30 429.90 429.90 429.90

Oct 1985 324.80 442.80 442.80 442.80

Jan 1987 334.50 456.00 456.00 456.00

Jan 1988 341.10 465.00 465.00 465.00

Jan 1989 372.00 490.50 490.50 490.50

Jan 1990 385.50 508.20 508.20 508.20

Jan 1991 401.40 528.90 528.90 528.90

Jan 1992 418.20 551.10 551.10 551.10

Jan 1993 433.80 571.50 571.50 571.50

Jan 1994 443.40 584.10 584.10 584.10

Jan 1995 454.80 599.40 599.40 599.40

Jan 1996 478.50 630.60 630.60 630.60

170
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-8 Jun 1958 $51.30 $77.10 $77.10 $96.90

Oct 1963 85.20 120.00 120.00 120.00

Oct 1967 85.20 120.00 120.00 120.00

1971 122.10 172.20 172.20 172.20

Oct 1974 128.70 181.80 181.80 181.80

Oct 1975 135.00 190.80 190.80 190.80

Oct 1976 150.30 212.40 212.40 212.40

Oct 1977 167.40 236.40 236.40 236.40

Oct 1978 176.70 249.30 249.30 249.30

Oct 1979 189.00 266.70 266.70 266.70

Oct 1980 211.20 297.90 297.90 297.90

Oct 1981 241.50 340.50 340.50 340.50

Oct 1982 251.10 354.00 354.00 354.00

Jan 1984 261.00 368.10 368.10 368.10

Jan 1985 292.20 400.50 400.50 400.50

Oct 1985 300.90 412.50 412.50 412.50

Jan 1987 309.90 424.80 424.80 424.80

Jan 1988 316.20 433.20 433.20 433.20

Jan 1989 342.00 452.10 452.10 452.10

Jan 1990 354.30 468.30 468.30 468.30

Jan 1991 368.70 487.50 487.50 487.50

Jan 1992 384.30 507.90 507.90 507.90

Jan 1993 398.40 526.80 526.80 526.80

Jan 1994 407.10 538.50 538.50 538.50

Jan 1995 417.60 552.60 552.60 552.60

Jan 1996 439.20 581.40 581.40 581.40

171
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-7 Jul 1922 

(1)

Jun 1942 

(2)

Oct 1949 $45.00 $67.50 $67.50 $67.50

May 1952 51.30 77.10 77.10 96.90

Jun 1958 51.30 77.10 77.10 96.90

Oct 1963 75.00 114.90 114.90 114.90

Oct 1967 75.00 114.90 114.90 114.90

1971 104.70 161.40 161.40 161.40

Oct 1974 110.40 170.40 170.40 170.40

Oct 1975 115.80 178.80 178.80 178.80

Oct 1976 128.40 198.30 198.30 198.30

Oct 1977 142.50 219.90 219.90 219.90

Oct 1978 150.30 231.90 231.90 231.90

Oct 1979 160.80 248.10 248.10 248.10

Oct 1980 179.70 277.20 277.20 277.20

Oct 1981 205.50 316.80 316.80 316.80

Oct 1982 213.60 329.40 329.40 329.40

Jan 1984 222.00 342.60 342.60 342.60

Jan 1985 249.30 372.60 372.60 372.60

Oct 1985 256.80 383.70 383.70 383.70

Jan 1987 264.60 395.10 395.10 395.10

Jan 1988 270.00 402.90 402.90 402.90

Jan 1989 291.90 420.30 420.30 420.30

Jan 1990 302.40 435.30 435.30 435.30

Jan 1991 314.70 453.00 453.00 453.00

Jan 1992 327.90 471.90 471.90 471.90

Jan 1993 339.90 489.30 489.30 489.30

Jan 1994 347.40 500.10 500.10 500.10

Jan 1995 356.40 513.00 513.00 513.00

Jan 1996 375.00 539.70 539.70 539.70

172
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-6 Jul 1922

(1)

Jun 1942 

(2)

Oct 1949 $45.00 $67.50 $67.50 $67.50

1950 45.00 67.50 67.50 85.00

May 1952 51.30 77.10 77.10 96.90

Jun 1958 51.30 77.10 77.10 96.90

Oct 1963 70.20 110.10 110.10 110.10

Oct 1967 70.20 110.10 110.10 110.10

1971 95.70 150.00 150.00 150.00

Oct 1974 101.10 158.40 158.40 158.40

Oct 1975 106.20 166.20 166.20 166.20

Oct 1976 117.00 183.00 183.00 183.00

Oct 1977 129.30 202.20 202.20 202.20

Oct 1978 136.50 213.30 213.30 213.30

Oct 1979 136.50 228.30 228.30 228.30

Oct 1980 163.20 255.00 255.00 255.00

Oct 1981 186.60 291.60 291.60 291.60

Oct 1982 194.10 303.30 303.30 303.30

Jan 1984 201.90 315.30 315.30 315.30

Jan 1985 221.40 337.80 337.80 337.80

Oct 1985 228.00 348.00 348.00 348.00

Jan 1987 234.90 358.50 358.50 358.50

Jan 1988 239.70 365.70 365.70 365.70

Jan 1989 264.00 387.90 387.90 387.90

Jan 1990 273.60 402.00 402.00 402.00

Jan 1991 284.70 418.50 418.50 418.50

Jan 1992 296.70 436.20 436.20 436.20

Jan 1993 307.80 452.40 452.40 452.40

Jan 1994 314.70 462.30 462.30 462.30

Jan 1995 322.80 474.30 474.30 474.30

Jan 1996 339.60 498.90 498.90 498.90

173
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-5 Jul 1922

(1)

Jun 1942 

(2)

Oct 1949 $45.00 $67.50 $67.50 $67.50

1950 45.00 67.50 67.50 85.00

May 1952 51.30 77.10 77.10 96.90

Jun 1958 51.30 77.10 77.10 96.90

Oct 1963 70.20 105.00 105.00 105.00

Oct 1967 70.20 105.00 105.00 105.00

1971 92.70 138.60 138.60 138.60

Oct 1974 97.80 146.40 146.40 146.40

Oct 1975 102.60 153.60 153.60 153.60

Oct 1976 112.50 168.30 168.30 168.30

Oct 1977 124.20 185.70 185.70 185.70

Oct 1978 131.10 195.90 195.90 195.90

Oct 1979 140.40 209.70 209.70 209.70

Oct 1980 156.90 234.30 234.30 234.30

Oct 1981 179.40 267.90 267.90 267.90

Oct 1982 186.60 278.70 278.70 278.70

Jan 1984 194.10 289.80 289.80 289.80

Jan 1985 204.90 300.30 300.30 300.30

Oct 1985 210.90 309.30 309.30 309.30

Jan 1987 217.20 318.60 318.60 318.60

Jan 1988 221.40 324.90 324.90 324.90

Jan 1989 243.60 348.90 348.90 348.90

Jan 1990 252.30 361.50 361.50 361.50

Jan 1991 262.50 376.20 376.20 376.20

Jan 1992 273.60 392.10 392.10 392.10

Jan 1993 283.80 406.50 406.50 406.50

Jan 1994 290.10 415.50 415.50 415.50

Jan 1995 297.60 426.30 426.30 426.30

Jan 1996 313.20 448.50 448.50 448.50

174
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-4 Jul 1922

(1)

Jun 1942 

(2)

Oct 1949 (<7 yrs) $45.00 $45.00 $45.00 $45.00

(>7 yrs) 45.00 67.50 67.50 67.50

1950 45.00 67.50 67.50 85.00

May 1952 51.30 77.10 77.10 96.90

Jun 1958 51.30 77.10 77.10 96.96

Oct 1963 (<4 yrs) 55.20 83.10 83.10 105.00

(>4 yrs) 70.20 105.00 105.00 105.00

Oct 1967 (<4 yrs) 60.00 90.60 90.60 105.00

(>4 yrs) 70.20 105.00 105.00 105.00

1971 (<4 yrs) 81.60 121.50 121.50 121.50

(>4 yrs) 81.60 121.50 121.50 121.50

Oct 1974 86.10 128.10 128.10 128.10

Oct 1975 90.30 134.40 134.40 134.40

Oct 1976 99.30 147.90 147.90 147.90

Oct 1977 109.80 163.50 163.50 163.50

Oct 1978 115.80 172.50 172.50 172.50

Oct 1979 123.90 184.50 184.50 184.50

Oct 1980 138.30 206.10 206.10 206.10

Oct 1981 158.10 235.50 235.50 235.50

Oct 1982 164.40 244.80 244.80 244.80

Jan 1984 171.00 254.70 254.70 254.70

Jan 1985 177.60 259.50 259.50 259.50

Oct 1985 183.00 267.30 267.30 267.30

Jan 1987 188.40 275.40 275.40 275.40

Jan 1988 192.30 280.80 280.80 280.80

Jan 1989 212.10 303.60 303.60 303.60

Jan 1990 219.60 314.40 314.40 314.40

Jan 1991 228.60 327.30 327.30 327.30

Jan 1992 238.20 341.10 341.10 341.10

Jan 1993 246.90 353.70 353.70 353.70

Jan 1994 252.30 361.50 361.50 361.50

Jan 1995 258.90 370.80 370.80 370.80

Jan 1996 272.40 390.00 390.00 390.00

175
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-3 Jul 1922

(1)

Jun 1942 

(2)

Oct 1949 $45.00 $45.00 $45.00 $45.00

1950 45.00 45.00 67.50 85.00

May 1952 51.30 51.30 77.10 96.90

Jun 1958 51.30 51.30 77.10 96.90

Oct 1963 55.20 55.20 83.10 105.00

Oct 1967 60.00 60.00 90.60 105.00

1971 72.30 105.00 105.00 105.00

Oct 1974 76.20 110.70 110.70 110.70

Oct 1975 80.10 116.10 116.10 116.10

Oct 1976 88.50 128.40 128.40 128.40

Oct 1977 98.10 142.50 142.50 142.50

Oct 1978 103.50 150.30 150.30 150.30

Oct 1979 110.70 160.80 160.80 160.80

Oct 1980 123.60 179.70 179.70 179.70

Oct 1981 141.30 205.50 205.50 205.50

Oct 1982 147.00 213.60 213.60 213.60

Jan 1984 153.00 222.00 222.00 222.00

Jan 1985 172.50 238.50 238.50 238.50

Oct 1985 177.60 245.70 245.70 245.70

Jan 1987 183.00 253.20 253.20 253.20

Jan 1988 186.60 258.30 258.30 258.30

Jan 1989 208.20 282.30 282.30 282.30

Jan 1990 215.70 292.50 292.50 292.50

Jan 1991 224.40 304.50 304.50 304.50

Jan 1992 233.70 317.40 317.40 317.40

Jan 1993 242.40 329.10 329.10 329.10

Jan 1994 247.80 336.30 336.30 336.30

Jan 1995 254.10 345.00 345.00 345.00

Jan 1996 267.30 363.00 363.00 363.00

176
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-2 Jul 1922

(1)

Jun 1942 

(2)

Oct 1949 $45.00 $45.00 $45.00 $45.00

1950 45.00 45.00 67.50 85.00

May 1952 51.30 51.30 77.10 96.90

Jun 1958 51.30 51.30 77.10 96.90

Oct 1963 52.20 55.20 83.10 105.00

Oct 1967 60.00 60.00 90.60 105.00

1971 63.90 105.00 105.00 105.00

Oct 1974 67.50 110.70 110.70 110.70

Oct 1975 70.80 116.10 116.10 116.10

Oct 1976 78.30 128.40 128.40 128.40

Oct 1977 86.70 142.50 142.50 142.50

Oct 1978 91.50 150.30 150.30 150.30

Oct 1979 97.80 160.80 160.80 160.80

Oct 1980 109.20 179.70 179.70 179.70

Oct 1981 $124.80 $205.50 $205.50 $205.50

Oct 1982 129.90 213.60 213.60 213.60

Jan 1984 135.00 222.00 222.00 222.00

Jan 1985 146.40 238.50 238.50 238.50

Oct 1985 150.90 245.70 245.70 245.70

Jan 1987 155.40 253.20 253.20 253.20

Jan 1988 158.40 258.30 258.30 258.30

Jan 1989 169.20 268.80 268.80 268.80

Jan 1990 175.20 278.40 278.40 278.40

Jan 1991 182.40 289.80 289.80 289.80

Jan 1992 190.20 302.10 302.10 302.10

Jan 1993 197.10 313.20 313.20 313.20

Jan 1994 201.30 320.10 320.10 320.10

Jan 1995 206.40 328.50 328.50 328.50

Jan 1996 217.20 345.60 345.60 345.60

177
MONTHLY RATES BASIC ALLOWANCE FOR QUARTERS

Pay Grade Date Without Dependents One Dependent Two Dependents Three or More Dependents

E-1 Jul 1922

(1)

Jun 1942 

(2)

Oct 1949 $45.00 $45.00 $45.00 $45.00

1950 45.00 45.00 67.50 85.00

May 1952 51.30 51.30 77.10 96.90

Jun 1958 51.30 51.30 77.10 96.90

Oct 1963 55.20 55.20 83.10 105.00

Oct 1967 60.00 60.00 90.60 105.00

1971 60.00 105.00 105.00 105.00

Oct 1974 63.30 110.70 110.70 110.70

Oct 1975 66.60 116.10 116.10 116.10

Oct 1976 73.80 128.40 128.40 128.40

Oct 1977 81.90 142.50 142.50 142.50

Oct 1978 86.40 150.30 150.30 150.30

Oct 1979 92.40 160.80 160.80 160.80

Oct 1980 103.20 179.70 179.70 179.70

Oct 1981 117.90 205.50 205.50 205.50

Oct 1982 122.70 213.60 213.60 213.60

Jan 1984

(>4 mo.) 127.50 222.00 222.00 222.00

(<4 mo.) 122.70 213.60 213.60 213.60

Jan 1985 133.50 238.50 238.50 238.50

Oct 1985 137.40 245.70 245.70 245.70

Jan 1987 141.60 253.20 253.20 253.20

Jan 1988 144.30 258.30 258.30 258.30

Jan 1989 150.30 268.80 268.80 268.80

Jan 1990 155.70 278.40 278.40 278.40

Jan 1991 162.00 289.80 289.80 289.80

Jan 1992 168.90 302.10 302.10 302.10

Jan 1993 175.20 313.20 313.20 313.20

Jan 1994 179.10 320.10 320.10 320.10

Jan 1995 183.90 328.50 328.50 328.50

Jan 1996 193.50 345.60 345.60 345.60

(1) The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 [Public Law 235, 67th Congress], §11, 42 Stat. 625, 630 (1922), provided that each

 enlisted member not furnished quarters or rations in kind was to be granted an allowance for quarters and subsistence; the amount of the allowance depended on the 

conditions under which duty was being performed, but could not exceed $4.00 per day.

(2) The Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §10, 56 Stat. 359, 363-364 (1942), provided a maximum of $5.00 per day for quarters.

178
 GENERAL NOTES TO TABLES 

 Note 1: Dependents Assistance Act legislation rates for enlisted personnel 

are quoted where they are applicable between the years 1950 to 1973. 

 Note 2: Section 601(c)(5) of the National Defense Authorization Act for Fiscal 

Year 1989, Public Law 100-456, §601(c)(5), 102 Stat. 1918, 1976 (1988), enacted 

on September 29, 1988, authorized the Secretary of Defense to prescribe separate 

rates of basic allowance for quarters for commissioned officers credited with more 

than four years of active service as enlisted members or warrant officers, thereby in 

effect permitting the Secretary of Defense to authorize rates of basic allowance for 

quarters differentially higher than those applicable to commissioned officers in the 

same pay grades without a combination of such enlisted or warrant officer service. 

Pursuant to that authority, commissioned officers in pay grades O-1E, O-2E, and 

O-3E, all of whom are necessarily credited with more than four years of active 

service as enlisted members or warrant officers, were authorized separate and 

higher rates of basic allowance for quarters beginning January 1, 1989. Executive 

Order No. 12663, 54 FED. REG. 791 (1989), set out as a note under 5 U.S.C. 

§5332. See Chapter II.B.1 hereof, "Basic Pay", above. Differentially higher rates of 

partial basic allowance for quarters have not, however, been established for 

commissioned officers in pay grades O-1E, O-2E, and O-3E. See Note 4 of General 

Notes to Tables, below, and Part II of the schedule attached to Executive Order 

12990 of February 29, 1996, published at 61 FED. REG. 8467, 8470 (March 5, 

1996). 

 Note 3: Section 1111(b) of the National Defense Authorization Act for Fiscal 

Years 1992 and 1993, Public Law 102-190, §1111(b), 105 Stat. 1290, 1491 

(1991), established the new warrant officer pay grade, Chief Warrant Officer, W-5, 

effective February 1, 1992, and subsection (c) of that section, §1111(c), 105 Stat. 

at 1491-1492, established new rates of basic allowance for quarters for that pay 

grade, also effective February 1, 1992. The BAQ rates thus established for the new 

pay grade have been increased each year since then in keeping with increases in 

BAQ rates for all service members. See Chapter II.B.1 hereof, "Basic Pay", above. 

 Note 4: Payment of a partial basic allowance for quarters is authorized by 37 

U.S.C. §1009(c)(2) and Part IV of Executive Order 11157, as amended, to 

members without dependents not entitled to receive the full rate under 37 U.S.C. 

§403(b) or (c). Partial basic allowance for quarters is payable at the following 

monthly rates pursuant to Part II of the schedule attached to Executive Order 

12990 of February 29, 1996, 61 FED. REG. 8467, 8470 (March 5, 1996), set out 

as notes under 5 U.S.C.A. §5332 and 37 U.S.C.A. §1009: 

179
Pay Grade Rate Pay Grade Rate Pay Grade Rate

O-10 $50.70 O-3E $22.20 E-9 $18.60

O-9 50.70 O-2E 17.70 E-8 15.30

O-8 50.70 O-1E 13.20 E-7 12.00

O-7 50.70 W-5 25.20 E-6 9.90

O-6 39.60 W-4 25.50 E-5 8.70

O-5 33.00 W-3 20.70 E-4 8.10

O-4 26.70 W-2 15.90 E-3 7.80

O-3 22.20 W-1 13.80 E-2 7.20

O-2 17.70 E-1 6.90

O-1 13.20

180
Monthly Partial Housing Allowance Rates by Rank, 1997

Pay Grade Rate

O-10 53.00 

O-9 53.00 

O-8 53.00 

O-7 53.00 

O-6 41.40 

O-5 34.50 

O-4 28.00 

O-3 23.20 

O-2 18.50 

O-1 13.80 

W-5 26.40 

W-4 26.40 

W-3 21.70 

W-2 16.60 

W-1 14.40 

E-9 19.50 

E-8 16.00 

E-7 12.60 

E-6 10.40 

E-5 9.10 

E-4 8.50 

E-3 8.20 

E-2 7.50 

E-1 7.20 

Monthly Rates, Basic Allowance for Quarters by Rank, 1997 

Rank With Dependents No Dependents

O-10 1015.10 824.70 

O-9 1015.10 824.70 

O-8 1015.10 824.70 

O-7 1015.10 824.70 

O-6 914.10 756.60 

O-5 881.20 728.60 

O-4 776.70 675.30 

O-3 642.70 541.30 

181
O-2 548.80 429.30 

O-1 490.50 361.50 

O-3E 690.70 584.30 

O-2E 623.20 496.70 

O-1E 575.80 427.10 

W-5 749.70 686.00 

W-4 687.20 609.40 

W-3 629.80 512.10 

W-2 579.30 454.70 

W-1 501.10 380.60 

E-9 659.60 500.50 

E-8 608.10 459.40 

E-7 564.50 382.30 

E-6 521.80 355.20 

E-5 469.10 327.60 

E-4 407.90 284.90 

E-3 379.70 279.50 

E-2 361.50 227.20 

E-1 361.50 202.40 

182
Chapter II.B.3. 

 Basic Allowance for Subsistence 

Legislative Authority: 37 U.S.C. §402. 

Purpose: To provide a cash allowance to members of the Armed Forces to defray a 

portion of the cost of subsistence, such allowance being payable to all enlisted and officer 

personnel, with variations to account for the unavailability of adequate messing facilities 

at some duty stations. 

Background: Until 1870, officers were normally required to arrange for their 

own subsistence and received a cash allowance for this purpose in addition to their 

primary, or base, pay. At first this allowance had a direct relationship to food costs, at 

bottom being premised on the contract price of a ration at different duty stations. Under 

this relationship, an officer's ration allowance was a multiple of the daily ration cost at his 

duty station, with the number of rations to which the officer was entitled varying from 

two for lower ranking officers to 15 for general officers.1

 Beginning with the Act of April 

12, 1808, ch. 43, §6, 2 Stat. 481, 483 (1808), however, the price of a ration was fixed at a 

uniform rate of 20 cents a day, and being adjusted only twice between then and 1870, the 

ration allowance soon lost its theretofore existing relationship to food costs. 

The Army and Navy Appropriation Acts for 1871 (Act of July 15, 1870 (Army 

Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870) and Act of July 15, 

1870 (Navy Appropriation Act of 1871), ch. 295, §§3-4, 16 Stat. 321, 330-333 (1870)) 

established a salary system for officers and abolished separate allowances for subsistence 

or rations. This so-called "salary system" remained in effect until 1922, when subsistence 

allowances again became a separate part of officers' compensation. 

The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 

[Public Law 235, 67th Congress], §5, 42 Stat. 625, 628 (1922), reestablished the 

 

1

 Officers holding the grade of lieutenant general, which sometimes did and sometimes did not exist during 

this period, were authorized 40 rations. 

183
subsistence allowance for officers at a rate of 60 cents a day. Officers without dependents 

were entitled to one subsistence allowance; those with dependents were, with a minor 

exception, entitled to either two or three allowances, depending on grade. The purpose of 

the extra allowances was to help defray the food expenses of the officer's family. Married 

officers in junior or senior grades received an extra allowance and those in middle grades 

two extra allowances regardless of actual family size, on the premise that family expenses 

were greater during the middle state of an officer's career and less both before and after. 

The period from 1922 until 1949, when extra allowances for officers' dependents were 

ended, was the only time in the history of subsistence allowances that an additional sum 

has been payable expressly to help defray the food costs of a member's dependents. 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§302, 63 Stat. 802, 812 (1949), replaced the officer subsistence allowance of the Joint 

Service Pay Readjustment Act of 1922, ch. 212, id., with an allowance called the "basic 

allowance for subsistence" (BAS).2

 In contrast to the preexisting subsistence allowance, 

only one rate of BAS was authorized for officers, and this amount was payable to all 

officers regardless of dependency status or pay grade. As enunciated in testimony 

delivered on behalf of the Department of Defense by the Deputy Chief of Naval 

Operations Personnel), who was then serving as Chairman of the Pay Committee of the 

Armed Services Personnel Board, the purpose of providing a BAS allowance was to 

provide subsistence for the officer himself, not for his dependents: 

The officer would receive $42 a month to subsist himself regardless of his rank, 

pay grade, or state of dependency.3

 

2

 Section 301 of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §301, 63 

Stat. 802, 812 (1949), was initially classified to 37 U.S.C. §251. Later, when Title 37 of the United States 

Code was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat 451 

(1962), the BAS provisions were codified at 37 U.S.C. §402 (76 Stat. at 470). See 37 U.S.C. §402. 

3

 Career Compensation Act of 1949: Hearings on H.R. 5007 before the Senate Armed Services Committee, 

p. 252, 81st Congress, 1st Session (1949) (testimony of Admiral Fechteler, U.S.N., Deputy Chief of Naval 

Operations for Personnel). 

184
Despite the clarity of this testimony, however, an additional theoretical 

underpinning for officer BAS was advanced in testimony delivered by the Deputy 

Director of the Personnel and Administrative Division, U.S. Army, and also a member of 

the Pay Committee of the Armed Services Personnel Board, who stated: 

We are not paying an officer for what he eats, we are paying the officer for 

the unusual expenses he is put to in his service, because his condition 

continuously changes. With the enlisted man, we are giving him a subsistence 

allowance. 

. . . 

The justification of the ration allowance for an officer is not to compensate 

him for completely subsisting himself, but to pay him over the years for unusual 

expense--the extra expense--that he is put to throughout the career in his 

occupation.4

No documentation has, however, been found to support this "unusual expense" 

theory. Even the name, "basic allowance for subsistence," argues against the unusual 

expense theory. Nor does the theory receive any support in the recommendations made to 

the Secretary of Defense in 1948 by the Advisory Commission on Service Pay (the socalled "Hook Commission"), which recommendations led to the introduction and 

enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st 

Congress], 63 Stat. 802 (1949), the basic source of present BAS authority. 

 Under the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st §302, 

Congress], §301, 63 Stat. 802, 812 (1949), officer BAS rates of $42 a month were 

established in 1949 and subsequently raised, through legislation, to $47.88 a month in 

1952. These rates were further increased, again legislatively, to $50.52 in 1974 and 

$53.05 in 1975, when all cash elements of Regular Military Compensation,5

 which 

 

4

 Career Compensation for the Uniformed Forces: Hearings on H.R. 2553 before a Subcommittee of the 

House Armed Services Committee, pp. 1665 and 1666, 81st Congress, 1st Session (1949) (testimony of 

General Dahlquist, U.S.A., Deputy Director of Personnel and Administration). 

5

 "Regular Military Compensation," also known as "RMC," is currently defined as basic pay, BAH, BAS, 

overseas housing allowance, and the Federal tax advantage deriving from the nontaxable status of all the 

allowances. 37 U.S.C. §101(25). (For further background on the development of "regular military 

compensation" as an operational pay construct and why overseas housing allowance is now included within 

185
includes BAS, were increased proportionately with increases in General Schedule salaries 

of Federal civil service employees. As a result of the relative inflexibility of this 

legislative BAS adjustment mechanism, officer BAS quickly lost most of whatever 

relationship it originally had to food costs, whether those of the officer himself or of the 

government.

In contrast to the shifting and not wholly clear basis underlying the authority for 

paying a subsistence allowance to officers, the Government has always taken the position 

that it is obligated to provide subsistence for enlisted personnel or, if subsistence in kind 

is not furnished, to provide them with a cash substitute. Legislative authority for BAS for 

enlisted personnel, including the authority currently in effect, has reflected that 

understanding. The rate of the most common form of enlisted BAS--commuted and leave 

rations--was fixed at $1.05 a day by the Career Compensation Act of 1949, ch. 681 

[Public Law 351, 81st Congress], §301(e), 63 Stat. 802, 812 (1949). In 1951 and 1952, the 

secretary of defense was authorized by annual appropriation acts to adjust the commuted 

ration rate administratively to approximate the raw food cost of daily rations. Such 

authority was made permanent by the Act of August 1, 1953, ch. 305 [Public Law 179, 

83d Congress], §617, 67 Stat. 336, 352 (1953). 

The Act of December 16, 1967, Public Law 90-207, §8, 81 Stat. 649, 654 (1967), 

provided that whenever the general schedule of compensation for federal classified 

employees was increased, a comparable increase was to be effected in the regular military 

compensation (RMC) of military personnel. The use of RMC--which at the time 

consisted of basic pay, basic allowance for quarters, basic allowance for subsistence, and 

the Federal tax advantage deriving from the nontaxable status of those allowances6

--as 

the base for determining comparable increases between military and general schedule pay 

raises had the effect of imputing an increase in all four of these elements of military 

compensation each time a comparable General schedule increase occurred. However, 

 the RMC construct, see Chapter II.B., "Regular Military Compensation/Basic Military Compensation," 

Chapter II.B.1., "Basic Pay," and Chapter II.B.2., "Basic Allowance for Quarters, Variable Housing 

Allowance, and Overseas Housing Allowance," above. In particular, see footnote 63 to Chapter II.B.2., 

"Basic Allowance for Housing and Overseas Housing Allowance," above.) 

6

 See footnote 5 to this chapter, above. 

186
since the entire increase had traditionally been allocated only to basic pay, the increases 

in the BAQ, BAS, and tax advantage elements were implicit only. (For coverage of the 

other components of the RMC and its impact, see Chapter II.B., "Regular Military 

Compensation/Basic Military Compensation" and Chapter II.B.1., "Basic Pay," above, 

and Chapter II.B.4., "Federal Income Tax Advantage," below.) 

The Act of September 28, 1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-1153 

(1974), discontinued the method by which the entire military increase was incorporated 

in basic pay. Instead, under 37 U.S.C. §1009 as added to Title 37, United States Code, by 

Section 4 of the 1974 Act, Public Law 93-419, id., raises were to be equally distributed 

among the three cash elements of RMC--namely, basic pay, BAQ, and BAS.7

The Department of Defense Appropriation Authorization Act, 1977, Public Law 

94-361, §303, 90 Stat. 923, 925-926 (1976), permitted a further change in the method of 

distributing military pay increases by authorizing the President to allocate future overall 

increases among the three cash elements of RMC on other than an equal percentage basis 

whenever he determined such action to be "in the best interest of the Government." The 

Act provided, however, that the amount allocated to basic pay could not be less than 75 

percent of the amount that would have been allocated on an equal percentage allocation 

basis. The purpose of providing for a discretionary "reallocation" of compensation 

increases among the three elements of RMC was to enable progressive adjustments to be 

made to the two basic allowance elements so that these allowances would, over time, 

more nearly cover the costs of the items they were originally intended to defray, as well 

as to provide for more adequate quarters and subsistence allowances in general. Under 

the Act, the President was required to advise Congress regarding any planned reallocation 

at the earliest practicable time before the effective date of a military pay increase. 

Furthermore, all allocations of increases among the different elements of RMC were to be 

assessed in conjunction with quadrennial reviews of military compensation required by 

 

7

 Even today, with RMC defined to include variable housing allowance (VHA) and overseas housing 

allowance (OHA or SHA), pay raises are distributed only among basic pay, BAS, and BAQ. See footnote 5 

to this chapter together with references there cited and 37 U.S.C. §1009. (Assuming that VHA or SHA is 

authorized for a given locale, the amount of VHA or SHA a specific member is entitled to depends, among 

other things, on prevailing housing costs in that locale. For this reason, VHA and SHA rates do not 

necessarily increase when there is a general pay raise.) 

187
37 U.S.C. §1008(b), and a full report was to be made to Congress summarizing the 

objectives and results of those allocations.8

After several years experience with the adjustment mechanisms incorporated in 

the Act of September 28, 1974, Public Law 93-419, id., and the Department of Defense 

Appropriation Authorization Act, 1977, Public Law 94-361, id., Congress effectively 

preempted them by legislatively mandating a 10 percent increase in BAS, effective 

September 1, 1980, in the Military Personnel and Compensation Amendments of 1980, 

Public Law 96-343, §7, 94 Stat. 1123, 1128 (1980). The increase was adopted, essentially 

over the objections of the Carter Administration,9

 to bring the level of the allowance into 

closer alignment with food costs.10 11

 

8

 The Act of August 21, 1965, Public Law 89-132, §2, 79 Stat. 544, 546-547 (1965), adopted a special 

provision, codified at 37 U.S.C. §1008, requiring the President to conduct "a complete review of the 

principles and concepts of the compensation system for members of the uniformed services" at least once 

every four years and, after completing such a review, to "submit a detailed report to Congress summarizing 

the results of such review together with any recommendations ... proposing changes" to the compensation 

system. Pursuant to Section 2(a) of the Act, id., as codified at 37 U.S.C. §1008(b), the first such review was 

to be undertaken "[w]henever the President considers it appropriate, but in no event later than January 1, 

1967." In the House and Senate Reports on the bill, H.R. 9075, 89th Congress, 1st Session (1965), the 

required Presidential review was referred to as a "quadrennial review ... of military compensation," House 

Report No. 89-549 (Committee on Armed Services), pp. 1 and 50, and Senate Report No. 89-544 

(Committee on Armed Services), p. 1, accompanying H.R. 9075, 89th Congress, 1st Session (1965); and the 

seven reviews of military compensation that have been completed under the direction of 37 U.S.C. 

§1008(b) have been referred to, successively, as the First, Second, Third, Fourth, Fifth, Sixth, and Seventh 

Quadrennial Review of Military Compensation, respectively. The First Quadrennial Review was convened 

in 1966; the Ninth Quadrennial Review of Military Compensation was issued pursuant to Presidential 

directive in the spring of 2002. 

9

 See, e.g., Hearings on H.R. 5168, H.R. 7626, and S. 1454 before the Military Compensation 

Subcommittee of the House Committee on Armed Services, “Miscellaneous Military Personnel 

Management and Military Compensation Legislation,” House Armed Services Committee Document No. 

96-64, p. 55, 96th Congress, 2d Session (1980). 

10 Hearings on H.R. 5168, H.R. 7626, and S. 1454 before the Military Compensation Subcommittee of the 

House Committee on Armed Services, “Miscellaneous Military Personnel Management and Military 

Compensation Legislation,” House Armed Services Committee Document No. 96-64, pp. 55, 78, 96th

Congress, 2d Session (1980). 

11 The September 1, 1980, 10 percent increase in BAS rates effected by the Military Personnel and 

Compensation Amendments of 1980, Public Law 96-343, §7, 94 Stat. 1123, 1128 (1980), was followed on 

October 1 by an 11.7 percent across-the-board increase in basic pay, BAS, and BAQ--expressly made 

subject to the President's reallocation authority contained in 37 U.S.C. §1009(c)(1)--by the Department of 

Defense Authorization Act, 1981, Public Law 96-342, §801(b), 94 Stat. 1077, 1090-1091 (1980). (The 

Military Personnel and Compensation Amendments of 1980 and the 1981 Authorization Act were both 

enacted on September 8, 1980, with an effective date of September 1, 1980, for the increases authorized by 

the Personnel and Compensation Amendments and an effective date of October 1, 1980, for the increases 

authorized by the 1981 Authorization Act.) 

188
In 1981, Congress again suspended the pay-adjustment mechanism incorporated 

in 37 U.S.C. §1009 and further legislatively increased BAS. In the Uniformed Services 

Pay Act of 1981, Public Law 97-60, §101(b)(2), 95 Stat. 989, 992 (1981), BAS rates 

were increased by 14.3 percent--with a similar increase in BAQ and a 10 to 17 percent 

increase in basic pay, depending on pay grade--to "restore, in current dollars, the relative 

relationship of military compensation to pay in the private sector that existed in 1972" 

when Congress adopted the "all-volunteer force" construct as the manning principle for 

the armed services.12 In short, Congress felt it necessary to increase the three cash 

elements of RMC--namely, basic pay, BAS, and BAQ--to restore lost purchasing power 

and thereby improve retention and manning objectives in the armed services.13

Under 37 U.S.C. §402 and the BAS rates effective January 1, 1996, 

commissioned and warrant officers were entitled to basic allowance for subsistence at the 

rate of $149.67 per month. At the same time, enlisted personnel entitled to BAS received 

$10.67 a day when assigned to duty under emergency conditions where government 

messing facilities were not available, $8.06 a day when rations in kind were not available, 

and $7.15 a day when authorized to mess separately (commuted rations) or while on 

leave (leave rations).14 15 Having been legislatively adjusted over the years, these rates, 

like officer BAS rates, bore little relationship to the cost of food. 

In 1996 BAS rates continued to be lower for enlisted members in pay grade E-1 

with less than four months of service. Those personnel were entitled to basic allowance 

for subsistence in the amount of $6.59 per day when on leave or when authorized to mess 

separately, to $7.43 per day when rations in-kind were not available, and to $9.86 per day 

 

12 See e.g., House Report No. 97-109 (Committee on Armed Services), pp. 1 and 4, accompanying H.R. 

3380, and Senate Report No. 97-146 (Committee on Armed Services), pp. 2 and 3, accompanying S. 1181, 

97th Congress, 1st Session (1981). 

13 For a more detailed description of the reasons underlying adoption of the increase in all three cash 

elements of RMC in the Uniformed Services Pay Act of 1981, Public Law 97-60, 95 Stat. 989 (1981), see 

discussion of that Act in Chapter II.B.1., "Basic Pay," above. 

14 The corresponding rates for personnel in pay grad E-1 with less than four months of service were $9.86, 

$7.42, and $6.59, respectively. 

15 See Part III, “Basic Allowance for Subsistence,” of the schedule attached to Executive Order 12990 of 

February 29, 1996, 60 Fed. Reg. 8467 (March 5, 1996), set out as notes under 5 U.S.C.A. §5332 and 37 

U.S.C.A. §1009) (see also Section 1 of Executive Order 12990, id., 60 Fed. Reg. at 8467). 

189
when assigned to duty under emergency conditions where no messing facilities of the 

United States were available. 

Like housing allowances, the basic allowance for subsistence was separated from 

the yearly adjustment mechanism of §1009 in the late 1990s. The last year in which 

§1009 was the fundamental guide for yearly BAS adjustments was 1997. (In most years 

between 1984 and 1997, Congress waived the automatic computation called for by 

§100916 and instead legislated a percentage increase.)17 The National Defense 

Authorization Act for Fiscal Year 1998 (Public Law 105-85, 111 Stat. 1771) established 

a new formula for the Department of Defense to determine the BAS. The BAS reform 

came in response to strong Congressional sentiment that some members of the Armed 

Forces were not being adequately remunerated for their day-to-day costs of living. For 

example, an amendment proposed in the Senate Armed Services Committee to Senate 

Bill 936, (the Senate version of the National Defense Authorization Act for Fiscal Year 

1998), was accompanied by this observation: 

Several studies have documented significant instances of members of the 

Armed Forces and their families relying on various forms of income support 

 

16 See Executive Order 12387, 47 FED. REG. 44981 (October 8, 1982). 

17 For 1984, the adjustment was effected by Section 901 of the Department of Defense Authorization Act, 

1984, Public Law 98-94, §901, 97 Stat. 614, 634-635 (1983); for 1985, by Section 601 of the Department 

of Defense Authorization Act, 1985, Public Law 98-525, §601, 98 Stat. 2492, 2533 (1984); for 1986, by 

Section 601 of the Department of Defense Authorization Act, 1986, Public Law 99-145, §601, 99 Stat. 583, 

635-636 (1985); for 1987, by Section 601 of the National Defense Authorization Act for Fiscal Year 1987, 

Public Law 99-661, §601(a) and (b), 100 Stat. 3816, 3873 (1986); for 1988, by Section 601(b) of the 

National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §601(b), 101 

Stat. 1019, 1092 (1987), as amended by Section 110(b) of the Act of December 22, 1987 (Continuing 

Appropriations for Fiscal Year 1988), Public Law 100-202, §110(b), 101 Stat. 1329, 1329-436 (1987); for 

1989, by Section 601(b) of the National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, 

§601(b), 102 Stat. 1918, 1976 (1988); for 1990, by Section 601(b) of the National Defense Authorization 

Act for Fiscal Years 1990 and 1991, Public Law 101-189, 601(b), 103 Stat. 1352, 1444 (1989); for 1991, 

by Section 601(b) of the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, 

§601(b), 104 Stat. 1485, 1575 (1990); for 1992, by Section 601(b) of the National Defense Authorization 

Act for Fiscal Years 1992 and 1993, Public Law 102-190, §601(b), 105 Stat. 1290, 1372 (1991); for 1993, 

by Section 601(b) of the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, 

§601(b), 106 Stat. 2315, 2420 (1992); for 1994, by Section 601(b) of the National Defense Authorization 

Act for Fiscal Year 1994, Public Law 103-160, §601(b), 107 Stat. 1547, 1677 (1993); for 1995, by Section 

601(b) of the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §601(b), 108 

Stat. 2663, 2779 (1994); for 1996, by Section 601(b) of the National Defense Authorization Act for Fiscal 

Year 1996, Public Law 104-106, §601(b), 110 Stat. 186, 356 (1996); and for 1997, by Section 601(b) of the 

National Defense Authorization Act for Fiscal Year 1997, Public Law 104-201, 110 Stat. 2538. 

190
under programs of the Federal Government....under the Food Stamp Act of 

1977....and under section 17 of the Child Nutrition Act of 1966.... 

Because of this situation, the amendment called for a Department of Defense 

study including: 

An analysis of potential solutions for mitigating or eliminating the need 

for members of the Armed Forces and their families to subsist at, near, or below 

the poverty level, including potential solutions involving changes in the systems 

and rates of basic allowances for subsistence.... 

The new plan established by Public Law 105-85 moved enlisted members from a 

daily to a monthly payment schedule, ending a disparity between officer and enlisted 

payment calculations that had existed since enactment of the Career Compensation Act of 

1949. However, the starting points for determining the BAS of enlisted and officer 

personnel remained different under the 1998 reform. Enlisted BAS amounts in a given 

year were to be based on Department of Agriculture average food cost figures in effect 

the previous October 1. The enlisted BAS was to be an amount halfway between the 

monthly cost of a “moderate-cost food plan” and the monthly cost of a “liberal food plan” 

for a male in the United States between ages 20 and 50, as established by the Department 

of Agriculture. The officer BAS was to be based on the rate in effect for officers when 

the new legislation went into effect, then increased yearly by the same percentage as that 

by which the enlisted BAS increased. However, the 1998 legislation limited this yearly 

increase to 1 percent for both enlisted and officer personnel. The 1998 law also made it 

possible for enlisted personnel on temporary assignment away from their permanent duty 

station to receive full BAS allotments. 

The National Defense Authorization Act for Fiscal Year 2001 (Public Law 106-

398, 114 Stat. 1654A-144) changed the formula for the enlisted BAS. Because officers’ 

annual increase rates remained the same as those for enlisted personnel, this change had 

the same effect for both categories. Under the revised formula, beginning January 1, 

2002, monthly BAS rates were to be adjusted at the beginning of every calendar year by 

the same percentage as that by which the Department of Agriculture estimated that the 

cost of a “liberal food plan” for a male age 20 to 50 had increased over the previous year. 

In other words, the increase would match the national inflation rate for food. By 

191
eliminating the 1 percent stipulation, this change made possible substantially larger 

annual increases. The 2001 legislation also brought the BAS rates of enlisted personnel 

with less than four months of service equal with those of all other enlisted personnel, 

rectifying an inequality in the 1998 law. 

Noting that more than 6,000 members still were depending on food stamps for 

subsistence,18 Congress provided a BAS supplement, the Family Subsistence 

Supplemental Allowance (FSSA), for targeted personnel in the National Defense 

Authorization Act for Fiscal Year 2001. That provision was encoded in 37 U.S. Code 

402(a). The supplement would raise the subsistence allowance of a member with 

dependents who was eligible to receive food stamps, to the point where food stamps no 

longer were necessary, as long as the monthly payment did not exceed $500. A member’s 

eligibility for food stamps would be determined by the standards of the Food Stamp Act 

of 1977 (7 U.S.Code 201(c), taking into consideration the amount of BAH for which the 

member was eligible by virtue of grade, location, and dependency status. The BAH 

amount would be considered whether or not the member was receiving such an allowance 

by virtue of not living in government quarters. The supplement would be curtailed by a 

promotion, permanent change of station, or after payment had been made for twelve 

consecutive months. 

The National Defense Authorization Act for Fiscal Year 2003 (Public Law 107-

314, 116 Stat. 2566) provided that enlisted members assigned government quarters not 

containing or served by an adequate messing facility receive a BAS twice the amount 

called for by the standard formula. This legislation refined the language of the National 

Defense Authorization Act for Fiscal Year 2001, which had authorized payment of 

amounts higher than those called for by the legislative formula in cases where messing 

facilities were not available to enlisted personnel. The legislation for 2001, however, had 

set as a maximum the highest rate that had been available to enlisted personnel in 

previous years. 

 

18 See, for example, House Report No. 106-616 (House Armed Services Committee, p. 375, accompanying 

H.R. 5408, 106th Congress, 2d Session (2000). 

192
Among its comments on the National Defense Authorization Act for FY2003, the 

House Armed Services Committee expressed reservations about the equity of the BAS 

system and suggested that another reform might be useful: 

Based on the type of deployment and service-unique policies, some 

service members receive their full BAS while others serving at the same duty 

location receive only a portion of their BAS. While the committee remains 

committed to resolving such inequities, this concern has prompted the committee 

to question the larger issue of whether BAS continues to be a useful management 

tool. It occurs to the committee that the services would benefit from eliminating 

the administrative burden and structure associated with managing BAS and 

integrating the value of the allowance into basic pay for all personnel.19

The National Defense Authorization Act for Fiscal Year 2004, Public Law 108-

136, made no further reforms in the BAS. 

In summary, both officer and enlisted subsistence allowances were at first 

intended to be a cash equivalent of the approximate raw food cost to the Government of 

feeding its military personnel. Such equivalency did not long survive except with respect 

to enlisted commuted and leave ration allowances. A 1974 change in the law abandoned 

even this last remaining link between Government food costs and subsistence allowances 

in favor of an annual increase in BAS rates under the adjustment mechanism found in 37 

U.S.C. §1009. In the 1990s, Congress began to express a stronger concern that the level 

of BAS more nearly reflect food costs, and by 1997 the linkage with §1009 had ended. 

Congressional comments early in the 21st century indicated that additional revisions 

could be expected to follow the significant changes made in the BAS in legislation of 

1998 and 2001. 

Current rates: The National Defense Authorization Act for Fiscal Year 2001 

established the monthly BAS rate for enlisted members as $233. In 2004 the formulas for 

enlisted and officer BAS resulted in three monthly rates: of $254.46 for enlisted members 

authorized to mess separately, $262.50 for enlisted members when rations-in-kind are not 

available, and $175.23 for officers. Enlisted members in government quarters lacking 

adequate messing facilities received twice the separate messing rate, or $508.92 per 

month. 

 

19 House Report No. 107-436 (House Armed Services Committee), p. 316, accompanying HR 4546, 107th

Congress, 2d Session (2002). 

193
Cost: For the cost of basic subsistence allowances from 1972 to 2004, see Table 

II-3 of Military Compensation Statistics Tables, volume II of this edition. 

194
 OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE

Pay Grade Year With Dependents Without Dependents

O-10 Jun 1958 $47.88 $47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

195
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-9 Jun 1958 $47.88 $47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

196
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-8 Jul 1922 (<26 Yrs)$54.00 $18.00 

(26 Yrs)36.00 

Jun 1942 42.00 21.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

197
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-7 Jul 1922 (<26 Yrs)$54.00 $18.00 

(26 Yrs)36.00 

Jun 1942 42.00 21.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

198
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-6 Jul 1922 (<26 Yrs)$54.00 $18.00 

(26 Yrs)36.00 

Jun 1942 42.00 21.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

199
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-5 Jul 1922 (<30 Yrs)$54.00 $18.00 

(30 Yrs)36.00 

Jun 1942 (<30 Yrs)63.00 21.00 

(30 Yrs)42.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

200
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-4 Jul 1922 (<14 Yrs)$36.00 $18.00

(14 Yrs)54.00 

Jun 1942 63.00 21.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 $67.21 $67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

201
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-3 Jul 1922 (<17 Yrs)$36.00 $18.00 

(17 Yrs)54.00 

Jun 1942 (<17 Yrs)42.00 21.00 

(17 Yrs)63.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

202
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-2 Jul 1922 (<3 Yrs)$18.00 $18.00 

(3 Yrs)36.00 

Jun 1942 42.00 21.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

Jan 1996 149.67 149.67 

203
OFFICER BAS RATES FROM 1958 TO 1996 BY PAY GRADE (CONTINUED)

Pay Grade Year With Dependents Without Dependents

O-1 Jul 1922 (<5 Yrs)$18.00 $18.00 

(5 Yrs)36.00 

Jun 1942 42.00 21.00 

Oct 1949 42.00 42.00 

May 1952 47.88 47.88 

Jun 1958 47.88 47.88 

Oct 1974 50.52 50.52 

Oct 1975 53.05 53.05 

Oct 1976 55.61 55.61 

Oct 1977 59.53 59.53 

Oct 1978 62.80 62.80 

Oct 1979 67.21 67.21 

Oct 1980 82.58 82.58 

Oct 1981 94.39 94.39 

Oct 1982 98.17 98.17 

Jan 1984 102.10 102.10 

Jan 1985 106.18 106.18 

Oct 1985 109.37 109.37 

Jan 1987 112.65 112.65 

Jan 1988 114.90 114.90 

Jan 1989 119.61 119.61 

Jan 1990 123.92 123.92 

Jan 1991 129.00 129.00 

Jan 1992 134.42 134.42 

Jan 1993 139.39 139.39 

Jan 1994 142.46 142.46 

Jan 1995 146.16 146.16 

 Jan 1996 149.67 149.67 

 Note: Beginning in 1949, BAS rates for warrant officers were the same as those for officers.

204
 DAILY COMMUTED RATION RATES FOR ENLISTED 

 PERSONNEL FROM 1951 TO 1996

Authority Directive DateEffective Date CONUS Rate Overseas Rate

DOD Directive 8 Nov 1951 1 Nov 1951 $1.20 $1.20 

1338.3 30 Jun 1953 1 Jul 1953 1.10 1.10 

27 Aug 1955 1 Sep 1955 1.05 1.05 

25 Jul 1956 1 Sep 1956 1.00 1.00 

12 Dec 1957 1 Jan 1958 1.10 1.10 

17 Dec 1958 1 Jan 1959 1.15 1.15 

DOD Directive 30 Sep 1959 1 Jan 1960 $1.10 $1.10 

1338.7 23 Dec 1961 1 Jan 1962 1.07 1.20 

14 Dec 1962 1 Jan 1963 1.03 1.15 

7 Dec 1963 1 Jan 1964 1.05 1.13 

15 Dec 1964 1 Jan 1965 1.09 1.13 

28 Dec 1965 1 Jan 1966 1.10 1.14 

31 Mar 1966 1 Apr 1966 1.17 1.17 

14 Dec 1966 1 Jan 1967 1.30 1.30 

14 Dec 1967 1 Jan 1968 1.32 1.32 

2 Dec 1969 1 Jan 1970 1.39 1.30 

3 Dec 1970 1 Jan 1971 1.52 1.52 

9 Dec 1971 1 Jan 1972 1.46 1.46 

4 Dec 1972 1 Jan 1973 1.65 1.65 

4 Jan 1974 1 Jan 1974 2.28 2.28 

Executive Order 

No. 

11812 7 Oct 1974 1 Oct 1974 $2.41 $2.41 

11883 6 Oct 1975 1 Oct 1975 2.53 2.53 

11941 1 Oct 1976 1 Oct 1976 2.65 2.65 

12010 28 Sep 1977 1 Oct 1977 2.84 2.84 

12087 7 Oct 1978 1 Oct 1978 3.00 3.00 

12165 9 Oct 1979 1 Oct 1979 3.21 3.21 

12248 16 Oct 1980 1 Oct 1980 3.94 3.94 

12330 15 Oct 1981 1 Oct 1981 4.50 4.50 

12387 8 Oct 1982 1 Oct 1982 4.68 4.68 

12456 30 Dec 1983 1 Jan 1984 4.87 4.87 

205
Executive Order No. cont.: 

 (E-1 <4 Mo) 

4.68 

12496 28 Dec 1984 1 Jan 1985 5.06 5.06 

(E-1 <4 Mo) 

4.68 

12540 30 Dec 1985 1 Oct 1985 5.21 5.21 

(E-1 <4 Mo) 

4.82 

12578 31 Dec 1986 1 Jan 1987 5.37 5.37 

(E-1 <4 Mo) 

4.96 

12622 31 Dec 1987 1 Jan 1988 5.48 5.48 

(E-1 <4 Mo) 

5.06 

12663 6 Jan 1989 1 Jan 1989 5.70 5.70 

(E-1 <4 Mo) 

5.27 

12698 23 Dec 1989 1 Jan 1990 5.91 5.91 

(E-1 <4 Mo) 

5.46 

12736 12 Dec 1990 1 Jan 1991 6.15 6.15 

(E-1 <4 Mo) 

5.68 

12786 26 Dec 1991 1 Jan 1992 6.41 6.41 

(E-1 <4 Mo) 

5.92 

12826 30 Dec 1992 1 Jan 1993 6.65 6.65 

(E-1 <4 Mo) 

6.14 

206
Executive Order No. cont.:

12886 23 Dec 1993 1 Jan 1994 6.80 6.80 

(E-1 <4 Mo) 

6.28 

12944 28 Dec 1994 1 Jan 1995 6.98 6.98 

(E-1 <4 Mo) 

6.44 

12990 29 Feb 1996 1 Jan 1996 7.15 7.15 

(E-1 <4 Mo) 

6.59 

207
Chapter II.B.4 

 Federal Income Tax Advantage 

Legal Basis: Jones v. United States, 60 Ct.Cl. 552 (1925); Section 134 of the 

Internal Revenue Code of 1986, 26 U.S.C. §134; 37 U.S.C. §101(25). 

Purpose: The federal income tax advantage attributed to members of the Armed 

Forces derives from the non-taxable status of the basic allowance for subsistence (BAS) 

and basic and overseas housing allowances (BAH and OHA, respectively), and 

Congress's determination that those allowances be treated as part of regular military 

compensation, along with basic pay. The origin of the tax advantage attributed to military 

personnel can be traced to a 1925 decision of the United States Court of Claims that held 

that neither the provision of certain items in kind to Armed Forces personnel, nor the 

payment of an allowance in commutation thereof, was subject to federal income taxation 

under a remote precursor of the present-day Internal Revenue Code.1

 With the subsequent 

extension of the rationale underlying this decision both to other items provided in kind 

and to allowances paid in lieu thereof, the tax advantage is appropriately seen as a more 

or less incidental by-product of the way Congress has chosen to pay military personnel–

namely, the pay plus non-taxable allowances system of military compensation. 

Background: The first federal income tax law, adopted as the Act of August 5, 

1861, ch. 45, §§49-58, 12 Stat. 292, 309-313 (1861), was enacted to help finance the 

Civil War. Until then, customs receipts and, to a lesser extent, funds from the sale of 

public lands had provided by far the greatest portion of Federal Government revenues. 

With the advent of the war, however, more revenue was needed than could be provided 

from then standard sources, and the Federal Government adopted an income tax to meet 

its revenue needs. Tax rates under the Act were graduated by source of income and 

residence of the taxpayer – three percent of income over $800 for United States residents 

 

1 The Internal Revenue Code of 1986, classified to Title 26, United States Code. 

208
and five percent for citizens living abroad, subject to a limit of one and one-half percent 

on income from government securities.2

The Act of July 1, 1862, ch. 119, §§86-93, 12 Stat. 432, 472-475 (1862), extended 

the income tax provisions adopted in the Act of August 5, 1861, ch. 45, id., and 

effectively increased the tax income of the United States by making a "duty of three per 

centum" payable on incomes exceeding $600.3

 Section 86 of the 1862 Act, ch. 119, §86, 

id., 12 Stat. at 472, specifically provided that the "duty" should be "levied, collected, and 

paid on all salaries of officers, or payments to persons in the civil, military, naval, or 

other employment of the United States." Thus, although the Act of August 5, 1861, ch. 

45, id., had been interpreted to apply to members of the military and naval establishments 

of the United States, the Act of July 1, 1862, ch. 119, id., became the first Congressional 

enactment to specifically provide for taxation of members of the military and naval 

establishments of the United States. The Civil War income tax measures were, despite 

several intervening amendments and extensions, allowed to expire in 1872. 

From 1873 until 1913, customs receipts were the primary source of federal 

revenue, though excise taxes on liquor and tobacco became increasingly important. The 

Act of August 27, 1894, ch. 349, §§27-31, 28 Stat. 509, 553-556 (1894), did, however, 

impose another--albeit short-lived--individual income tax. This tax resulted more from 

the "Populist" political movement than from pressing financial need and was primarily a 

sectional victory of the South and Middle West over the Northeast. In Pollock v. 

Farmers' Loan and Trust Company, 157 U.S. 429 (1895), the Supreme Court held that, to 

the extent the Act taxed income from real estate, it was unconstitutional. The Court 

divided equally (one justice not sitting) on the broader issue of the validity of income 

taxes in general. On rehearing, Pollock v. Farmers' Loan and Trust Company, 158 U.S. 

 

2

 The Confederacy also had an income tax, which carried higher rates but produced a lower yield than that 

of the Union. 

3

 The Act of August 5, 1861, ch. 45, §49, 12 Stat. 292, 309 (1861), spoke in terms of a "tax" on incomes 

exceeding $800 per year, whereas the Act of July 1, 1862, ch. 119, §§86 and 90, 12 Stat. 432, 472-473 

(1862), spoke in terms of a "duty" on incomes exceeding $600 per year. The purpose of the distinction in 

terminology--"tax" as opposed to "duty"--was nowhere made clear. 

209
601 (1895), the Court decided, on a five to four division,4

 that none of the income taxes 

of the 1894 law met the test of constitutionality. 

After the Pollock decisions, supra, income tax advocates successfully pressed for 

a Constitutional amendment as a means of reviving an income tax. The 16th Amendment, 

which gives Congress the "power to lay and collect taxes on incomes, from whatever 

source derived," became effective on February 25, 1913, having been ratified by threefourths of the States.5

 Shortly thereafter, the Act of October 3, 1913, ch. 16 [Public Law 

16, 63d Congress], Sec. II, 38 Stat. 114, 166-181 (1913), levied another individual 

income tax.6

 Income taxes have been on the national stage ever since. 

From their secondary revenue role of the early years, income taxes have evolved 

into an engine of national taxation that directly affects nearly everyone who earns money 

from labor or capital and indirectly affects the rest of the populace. Through the process 

of amendment and reenactment, the relatively simple tax law of 1913 has evolved into 

the extraordinarily complex and lengthy tax law--the Internal Revenue Code of 19867

--of 

today. Having grown from 15 pages in 1913, the Code currently takes up more than 1,000 

pages of Title 26, United States Code, together with several thousand additional pages of 

regulations. The early tax, with its primitive rate graduation, has been refined into a 

"progressive" tax, with the now familiar tax "brackets." 

 

4

 The "swing" vote did not come from the justice who had not participated in the first action. One of the 

justices who had originally upheld the constitutionality of the income tax reversed himself. 

5

 Ratification of the Sixteenth Amendment was completed by the thirty-sixth of the forty-eight States then 

belonging to the United States on February 3, 1913--thereby meeting the requirement of Article V of the 

Constitution, U.S. CONST. art. V, that three-quarters of the States ratify an amendment before it become 

effective--but the Secretary of State did not issue a proclamation declaring ratification until February 25, 

1913. 

6

 The income tax provision was a rider to a tariff bill, which President Wilson allowed to become law 

without his signature. 

7

The Internal Revenue Code of 1954 as "heretofore, hereby, or hereafter amended" was redesignated as the 

Internal Revenue Code of 1986 by the Tax Reform Act of 1986, Public Law 99-514, §2(a), 100 Stat. 2085, 

2095 (1986). 

210
When income tax rates began to soar during World War II, the old method of 

waiting until March 15th of each year to collect the tax was shelved by the Current Tax 

Payment Act of 1943, ch. 120 [Public Law 68, 78th Congress], §2(a), 57 Stat. 126, 126-

139 (1943).8

 This law, which established a collection system that is still in effect, put 

wage and salary earners on a current withholding basis of tax collections.9

 The 

withholding system is buttressed by a requirement that certain taxpayers estimate their 

tax for the current year and pay in quarterly installments any estimated tax not covered by 

withholding. 

As previously indicated, the Act of July 1, 1862, ch. 119, §86, 12 Stat. 432, 472 (1862), 

specifically provided for a "duty of three per centum" to be "levied, collected, and paid 

on all salaries of officers, or payments [the sum of which exceeded $600 per year] to 

persons in the civil, military, naval, or other employment of the United States," and this 

language was employed in the succession of Civil War tax acts that were in effect before 

1872. The Act of August 27, 1894, ch. 349, §27, 28 Stat. 509, 553 (1894), similarly 

provided that an income tax was to be "levied, collected, and paid on all salaries of 

officers, or payments to persons in the civil, military, naval, or other employment of the 

United States." Under the express language of these enactments, the question of the tax 

treatment of military pay and allowances was resolved in favor of taxing all "payments" 

received by military and naval officers, including payments, if any, received in 

commutation of quarters, subsistence, and the like.10 Construing the language of the Act 

 

8

 The filing date for individual taxpayers was extended to April 15th by the Internal Revenue Code of 1954, 

and this situation still obtains under the Internal Revenue Code of 1986. 

9

 There was no individual income tax withholding from 1916 to 1943. Tax laws before 1916 did require 

withholding-at-source; however, unlike the modern system with periodic withholding based on an assumed 

constant level of income throughout the year, withholding under the old laws occurred only when an 

individual had income in excess of the exempt amount specified in the tax law. 

10 In this connection, however, it should be recalled that the Army and Navy Appropriation Acts for 1871 

(Act of July 15, 1870 (Army Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870) and Act of 

July 15, 1870 (Navy Appropriation Act of 1871), ch. 295, §§3-4, 16 Stat. 321, 330-333 (1870)) prescribed 

annual "pay" rates for officers of the Army and Navy, respectively, which rates, in the case of Army 

officers, were provided to be "in full of all commutation of quarters, fuel, forage, servants' wages and 

clothing, longevity rations, and all allowances of every name and nature whatsoever," Army Appropriation 

Act of 1871, id., §24, 16 Stat. at 320, and, in the case of Navy officers, were provided to be their "full and 

entire compensation" with "no additional allowance" being permitted "on any account whatever," Navy 

211
of August 27, 1894, ch. 349, id., and applicable Treasury Regulations thereunder in the 

context of mileage and quarters commutations paid to Army officers, an 1895 opinion of 

the Attorney General dealt with the question as follows: 

 ... [P]aymasters and disbursing officers shall deduct the 2 per cent 

[income tax imposed by the Act of August 27, 1894, ch. 349, id.] "from all 

salaries and payments of every kind made in money to officers or other persons in 

the civil, military, naval, and any other employment in the service of the United 

States upon the excess of said salaries over the rate of $4,000 per annum." 

 . . . 

... [C]ommutation moneys received by an officer are to be added to other 

income (including a salary of $4,000 or less) in order to ascertain the total 

income, the excess of which over $4,000 is subject to a tax of 2 per cent.11 

This opinion was effectively mooted when the Supreme Court declared the Act of 

August 27, 1894, ch. 349, id., unconstitutional in Pollock v. Farmers' Loan and Trust 

Company, 158 U.S. 601 (1895), supra. 

With adoption of the Sixteenth Amendment to the Constitution, U.S. CONST. 

amend. XVI, which expressly sanctioned federal income taxation, and the subsequent 

enactment of an income tax in the Act of October 3, 1913, ch. 16 [Public Law 16, 63d 

Congress], Sec. II, 38 Stat. 114, 166-181 (1913),12 and various later revenue enactments, 

the question again arose as to the proper tax treatment of quarters, subsistence, and other 

commutations. The Treasury Department took the position that the Treasury Regulations 

adopted under the Act of August 27, 1894, ch. 349, id., effectively governed the question, 

and that the rental value of quarters, the value of subsistence provided in kind, and 

monetary commutations thereof should be included in the income on which income taxes 

were to be paid. 

 Appropriation Act of 1871, id., §4, 16 Stat. at 332. See text accompanying footnotes 3 and 4 to Chapter 

II.B.1., "Basic Pay," above. 

1121 Op.Att'y Gen. 112, 113-114 (1895). 

12 See footnotes 5 and 6 and accompanying text to this chapter, above. 

212
In 1925 the United States Court of Claims had occasion to address the question 

and reached a decision contrary to that taken by the Treasury Department. In a case 

involving an Army major named Clifford Jones, the Court of Claims pointed out that the 

controlling language of the Revenue Act of 1921, ch. 136 [Public Law 98, 67th

Congress], §213(a), 42 Stat. 227, 237-238 (1921), which governed Major Jones's case, 

differed significantly from that of the Act of August 27, 1894, ch. 349, id., on which the 

Treasury Regulations13 were based. Under the Revenue Act of 1921, ch. 136, §213(a), 

id., the term "gross income" was defined to include 

... gains, profits, and income derived from salaries, wages, or 

compensation for personal service (including in the case of ... all other officers 

and employees, whether elected or appointed, of the United States ... the 

compensation received as such) of whatever kind and in whatever form paid.... 

In Major Jones's case, the direct issue under review was whether an officer was 

required to include as income subject to taxation the fair rental value of government 

quarters furnished him in kind during part of a tax year and/or the cash rental allowances 

he received for the part of the year he did not occupy public quarters. The Court held that, 

within the meaning of the income tax law, neither the provision of government quarters 

nor the commutation thereof was an allowance of a "compensatory" character, with the 

result that neither was "gross income" subject to taxation. Jones v. United States, 60 

Ct.Cl. 552 (1925). 

In reaching this decision, the Court of Claims drew a fundamental distinction 

between "pay" and "allowances" in the military compensation system created by 

Congress.14 The Court held that, while "pay" was income of a "compensatory" character, 

"allowances" were not. Analogizing quarters and quarters allowances provided to 

 

13 Quoted in the text accompanying footnote 11 to this chapter, above. 

14 When Title 37, United States Code, “Pay and Allowances of the Uniformed Services,” was enacted into 

positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), Congress arguably 

followed the Court of Claims decision in the Jones case in adopting the following definition of "pay," 

which is presently codified at 37 U.S.C. §101(21): 

The term "pay" includes basic pay, special pay, retainer pay, incentive pay, retired pay, and equivalent pay, 

but does not include allowances. 

213
members of the armed services to reimbursements of various expenses authorized for 

members of the executive and legislative branches of the Government, the Court stated: 

... Clearly such allowances [paid to members of the executive and 

legislative branches] are for purposes of reimbursement.... It is not even suggested 

that allowances of this character are compensation. In what respect, then, is the 

allowance of public quarters or commutation of quarters to an Army officer 

different in character from one [an allowance] intended as a reimbursement? We 

are quite firmly convinced that not only are they not allowances of a 

compensatory character, but they are not income as well. It is common knowledge 

that the President of the United States receives as compensation $75,000 per 

annum. The compensation of Federal judges is their fixed annual salary. 

Generally, and almost without exception, including the Army and Navy, the 

Federal statutes fix a certain specified pay for each employee or officer of the 

Government, known as his compensation. This is a fixed and definite sum 

annually appropriated for and to which the occupant of the office is by law fully 

entitled so long as he remains in office, and entitled to whether sick or well, 

unless separated from the office, and it is this sum, this annual salary, to which 

Congress and all others refer when they speak of the officer's compensation, and 

manifestly, unless there is some qualification of the term, some legislative 

expression that Congress intended to reach out and tax what has continuously and 

notoriously been regarded as an allowance, distinct from compensation, the just 

inference is an intent to limit the gross income of the officers mentioned to their 

pay proper, their fixed compensation. We have said we do not believe the 

allowance of quarters or commutation thereof to an officer of the Army is income. 

Jones v. United States, id., 60 Ct.Cl. at 567-568. 

In view of this distinction, the Jones case, although it specifically dealt only with quarters 

allowances, served as a precedent for the exemption of other military allowances from 

taxation. In particular, at least in part in reliance on the Jones case, the Treasury 

Department subsequently adopted regulations under Section 61 of the Internal Revenue 

Code of 1954, 26 U.S.C. §61 (1982), that specifically excluded both basic allowance for 

quarters and basic allowance for subsistence from inclusion within an individual's "gross 

income," with the ultimate result that federal income tax was not imposed upon either 

allowance, whether received as a cash payment or as an in-kind benefit.15 Later still, 

 

15Section 61 of the Internal Revenue Code of 1954 and 1986, I.R.C. §61, 26 U.S.C. §61, deals with the 

definition of "gross income," and the Tax Regulations in issue--adopted under authority of the Internal 

Revenue Code of 1954--excluded basic allowance for quarters and basic allowance for subsistence, among 

other things, from the definition of "gross income," with the obvious result that they were tax-exempt. See, 

e.g., Section 1.61-2(b) of the Federal Income Tax Regulations, 26 C.F.R. §1.61-2(b), as in effect under the 

214
Congress, in the Tax Reform Act of 1986, Public Law 99-514, §1168(a), 100 Stat. 2085, 

2512 (1986), specifically excluded "any qualified military benefit"--including basic 

allowance for quarters and basic allowance for subsistence, among other military 

benefits--from inclusion within "gross income."16 17 18 

 Internal Revenue Code of 1954 prior to the redesignation of the Internal Revenue Code of 1954 as the 

Internal Revenue Code of 1986 by the Tax Reform Act of 1986, Public Law 99-514, §2(a), 100 Stat. 2085, 

2095 (1986). 

16 In Section 1168(a) of the Tax Reform Act of 1986, Public Law 99-514, §1168(a), 100 Stat. 2085, 2512 

(1986), Congress added a new provision to the Internal Revenue Code--classified to Section 134 of the 

Internal Revenue Code of 1986, I.R.C. §134, 26 U.S.C. §134--that specifically excluded "any qualified 

military benefit" from inclusion in "gross income." The term, "qualified military benefit," was in turn 

defined as: 

 ... any allowance or in-kind benefit which-- 

(A) is received by any member or former member of the uniformed services of the United States or any 

dependent of such member by reason of such member's status or service as a member of the 

uniformed services, and 

 (B) was excludable from gross income on September 8, 1986, under any provision of law or regulation 

thereunder which was in effect on such date.... 

 As clarified by the relevant Congressional report--which, because of its overall importance to the 

general topic of military compensation, is quoted in extenso immediately hereafter--basic allowance for 

quarters and basic allowance for subsistence were included within the class of "qualified military 

benefit[s]": 

 The conferees believe that rules for the tax treatment of military benefits should be consolidated and set 

forth in one statutory provision. This will better enable taxpayers and the IRS [Internal Revenue Service] to 

understand and administer the tax rules. Also, consolidation of these rules will make clear the intent of the 

conferees that, consistent with the treatment of benefits generally in the Tax Reform Act of 1984, any 

benefits for military personnel that are not expressly excluded under the new provision or under other 

statutory provisions of the Code (e.g., sec. 132) are includible in gross income. The provision does not alter 

the definition of wages for withholding tax purposes. 

 The conference agreement excludes from income benefits which were authorized by law on September 

9, 1986, and which were excludable from income on such date. Benefits are excludable only to the extent 

of the amount authorized and excludable on September 9, 1986, except that adjustments may be made 

pursuant to a provision of law or regulation in effect on September 9, 1986, if the adjustments are 

determined by reference to fluctuations in cost, price, currency or other similar index. 

 The conferees understand that the allowances which were authorized on September 9, 1986, and 

excludable from gross income on such date are limited to the following: veteran's benefits authorized under 

28 U.S.C. [sic] sec. 3101; medical benefits authorized under 50 U.S.C. sec. 2005 or 10 U.S.C. secs. 1071-

1083; combat zone compensation and combat related benefits authorized under 37 U.S.C. sec. 310; 

disability benefits authorized under 10 U.S.C. chapter 61; professional education authorized under 10 

U.S.C. secs. 203, 205, or 141; moving and storage authorized under 37 U.S.C. secs. 404-412; group term 

life insurance authorized under 38 U.S.C. secs. 404-412 [should read 38 U.S.C. secs. 765-779?]; premiums 

for survivor and retirement protection plans authorized under 10 U.S.C. secs. 1445-1447; mustering out 

payments authorized under 10 U.S.C. sec.771a(b)(3); subsistence allowances authorized under 37 U.S.C. 

215
 secs. 209, 402; uniform allowances authorized under 37 U.S.C. secs. 415-418; housing allowances 

authorized under 37 U.S.C. secs. 403, 403a, or 405; overseas cost-of-living allowances authorized under 37 

U.S.C. sec. 405; evacuation allowances authorized under 37 U.S.C. sec. 405a; family separation allowances 

authorized under 37 U.S.C. sec. 427; death gratuities authorized under 10 U.S.C. secs. 1475-1480; 

interment allowances authorized under 10 U.S.C. secs.1481-1482; travel for consecutive overseas tours 

authorized under 37 U.S.C. sec. 411; emergency assistance authorized under 10 U.S.C. sec. 133 and 37 

U.S.C. chapter 1; family counseling services authorized under 10 U.S.C. sec. 133; defense counsel 

authorized under 10 U.S.C. secs. 133, 801-940, or 1181-1187; burial and death services authorized under 

10 U.S.C. secs. 1481-1482; educational assistance authorized under 10 U.S.C. [sec.] 141 and 37 U.S.C. 

secs. 203, 209; dependent education authorized under 20 U.S.C. sec. 921 and 10 U.S.C. sec. 7204; dental 

care for military dependents authorized under 10 U.S.C. secs. 1074 or 1078; temporary lodging in 

conjunction with certain orders authorized under 37 U.S.C. sec. 404a; travel to a designated place in 

conjunction with reassignment in a dependent-restricted status authorized under 37 U.S.C. sec. 406; travel 

in lieu of moving dependents during ship overhaul or inactivation authorized under 37 U.S.C. sec. 406b; 

annual round trip for dependent students authorized under 37 U.S.C. sec. 430; travel for consecutive 

overseas tours (dependents) authorized under 37 U.S.C. sec. 411b; and travel of dependents to a burial site 

authorized under 37 U.S.C. sec. 411f. 

 The conferees intend this list to be an exhaustive list of the allowances excludable under the new 

provision. The list is not intended, however, to limit benefits which are excludable under another section of 

the Code. Further, the conferees understand that there may be benefits which may have been 

unintentionally omitted from the list. Accordingly, the Secretary of the Treasury is authorized to expand the 

list if the Secretary finds that a benefit should have been included, i.e., that the benefit is a cash or 

reimbursement benefit which was authorized on September 9, 1986, and excludable from income on such 

date. Except as provided in the preceding sentence, the Secretary of the Treasury may not, by regulation or 

otherwise, expand the definition of excludable military benefits. 

House Report No. 99-841 (Committee of Conference), Vol. II, pp. II-548 and II-549, accompanying H.R. 

3838, 99th Congress, 2d Session (1986) (emphasis added). 

17 The Tax Reform Act of 1986, Public Law 99-514, §144, 100 Stat. 2085, 2121 (1986), also dealt with 

another tax issue affecting the basic allowance for quarters. In 1983, the Internal Revenue Service ruled 

that a minister could not deduct mortgage interest and property taxes on an owned home if the minister 

received a parsonage allowance that was excludable from gross income under Section 107 of the Internal 

Revenue Code. Rev. Rul. 83-3, 1983-1 C.B. 72. The ruling was based on former Section 265(1) of the 

Internal Revenue Code of 1954, now Section 265(a)(1) of the Internal Revenue Code of 1986, I.R.C. 

§265(a)(1), 26 U.S.C. §265(a)(1), which disallows deductions for expenses allocable to tax-exempt income. 

Based on that provision, the IRS took the position that a minister who bought rather than rented a home 

while receiving a tax-exempt parsonage rental allowances was precluded from deducting at least some 

portion of home ownership expenses--including home mortgage interest and property taxes--on the grounds 

that such home ownership expenses were properly allocable to a tax-exempt parsonage allowance. In 1984, 

the Internal Revenue Service proposed extending the effect of the ruling regarding parsonage allowances to 

military personnel receiving quarters allowances who also sought to deduct mortgage interest and property 

taxes on their owner-occupied homes. Congress, in the Tax Reform Act of 1986, Public Law 99-514, 

§§144 and 151(e), 100 Stat. 2085, 2121 (1986), retroactively amended the Internal Revenue Code 

specifically to provide that ministers receiving excludable parsonage allowances and uniformed services 

personnel receiving excludable quarters allowances are not precluded from deducting mortgage interest and 

property taxes on their residences. Internal Revenue Code of 1986, I.R.C. §265(a)(6), 26 U.S.C. §265(a)(6). 

In discussing the provision in question, Congress specifically characterized "military housing allowances" 

as "excludable" from income for federal income tax purposes, House Report No. 99-841 (Committee of 

Conference), Vol. II, p. II-23, accompanying H.R. 3838, 99th Congress, 2d Session (1986), although as 

indicated in footnote 16 and its accompanying text, supra, basic allowance for quarters was, among other 

allowances and benefits, including basic allowance for subsistence, specifically excluded from gross 

income by the same act. 

216
Whatever the basis for the exclusion of the basic allowances for quarters and 

subsistence from inclusion within "gross income," it is this exclusion that intellectually 

underlies the creation of the so-called "Federal income tax advantage" and its attribution, 

as an element of military compensation, to individual members of the uniformed services. 

Conceptually, an individual service member's "tax advantage" is the added amount of 

taxable income the member would have to receive in cash if his quarters and subsistence 

allowances were suddenly to become subject to federal income taxation in order for him 

to be as well off in after-federal-tax income as he currently is under the existing system of 

taxable pay and non-taxable allowances.19

Until 1948, the tax advantage, as thus understood, was of relatively minor 

significance to any individual member of the uniformed services. Before World War II, 

tax rates and the level of military pay and allowances were such that most military 

personnel would have had to pay little or no income tax even if their quarters and 

subsistence allowances had been included within the category of taxable income. From 

1941 through 1947, even though tax rates rose and military pay and allowances 

increased, the financial advantage flowing from the tax-exempt status of quarters and 

subsistence allowances was effectively negated for enlisted personnel and substantially 

diminished for officers by "emergency" tax-relief legislation that excluded from income 

subject to taxation the entire annual military compensation of enlisted members and 

$1,500 of the annual compensation of officers. 

Although the federal income tax advantage had existed in fact since 1925, had 

become significant in 1948, and had become increasingly more important with each 

 18 Since the cost-of-living allowance for the continental United States (CONUS COLA) authorized by the 

National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §602(a)(1), 108 Stat. 2663, 

2779-2781 (1994), and codified at 37 U.S.C. §403b, was adopted well after enactment of Section 134 of the 

Internal Revenue Code, CONUS COLA should not gain treatment as a "qualified military benefit," with the 

result that, unlike most other allowances, it should be fully taxable. See footnote 16 hereof, above. 

19 This understanding of "tax advantage" does not take into account the additional amount of taxable 

income a member would have to receive to leave him as well off in terms of after-tax income if, in addition 

to having to pay federal income tax on the additional amount of such income, the member also had to pay 

Social Security tax, i.e., Old-Age, Survivors, and Disability Insurance (OASDI) and Health Insurance (HI) 

taxes, and state income tax on that additional income. 

217
succeeding increase in basic pay,20 allowances,21 or tax rates,22 it was first given formal 

Congressional recognition in connection with the Act of August 21, 1965 (Uniformed 

Services Pay Act of 1965), Public Law 89-132, 79 Stat. 545 (1965). The House Armed 

Services Committee in its report on the pay increase effected by that Act stated: 

After determination was made of the level of pay (including allowances) 

considered appropriate for each military grade, account was taken of ... the 

amount of the Federal income tax advantage (using 1965 tax rates) on the basic 

allowances for quarters and subsistence. The importance of this step is that it 

would set out "in the record" the actual amounts by which military pay scales are 

lowered because of ... the tax-free status of the basic allowances for quarters and 

subsistence.23 

Documentation of the Federal income tax advantage in the legislative history of 

the 1965 pay bill was followed by its formal incorporation into law. The Act of 

December 16, 1967, Public Law 90-207, §1, 81 Stat. 649, 649-650 (1967), provided that 

 

20 For historical data on basic pay rates by pay grade and longevity step dating to as early as 1922, see the 

schedules of basic pay accompanying Chapter II.B.1 hereof, "Basic Pay", above. 

21 For historical data on basic allowance for quarters and basic allowance for subsistence rates dating to as 

early as 1922, see the schedules of basic allowance for quarters and basic allowance for subsistence rates 

accompanying Chapters II.B.2 and II.B.3 hereof, "Housing Allowances" and "Basic Allowance for 

Subsistence", respectively, above. 

22 Whenever tax rates change, a member's "tax advantage" changes also. Assuming no concomitant change 

in rates of pay, an increase in tax rates causes an increase in the tax advantage attributed to individual 

members of the Armed Forces, with a resulting increase in a member's "regular military compensation," or 

"RMC"--and this despite the fact that, because of the tax increase, the member's after-tax income will 

decrease. Conversely, a decrease in tax rates causes a decrease in the tax advantage, and hence RMC--

although a member's after-tax income will increase. In short, whether for good or bad, a change in tax rates 

affects the level of a member's "regular military compensation." With respect to the most important recent 

tax legislation adopted by Congress, the tax rate reductions associated with the Tax Reform Act of 1986, 

Public Law 99-514, §101, 100 Stat. 2085, 2096-2099 (1986), see House Report No. 99-841 (Committee of 

Conference), Vol. II, pp. II-1 through II-5, accompanying H.R. 3838, 99th Congress, 2d Session (1986), 

generally had the effect of decreasing the tax advantage attributed to individual members of the uniformed 

services, with a resulting decrease in their "regular military compensation." In this connection, see the table 

titled "Annualized Tax Advantage" at the end of this chapter, which shows a decrease in the aggregate tax 

advantage attributed to all members of the Armed Forces for years immediately following adoption of the 

Tax Reform Act in 1986-- especially 1987 and 1988, when aggregate "formal" tax advantage for members 

of the Armed Forces declined significantly while membership remained nearly constant. (For a discussion 

of "regular military compensation," or "RMC," its statutory derivation, and what it consists of, see Chapter 

II.B., "Regular Military Compensation/Basic Military Compensation," hereof, above.) 23 House Report No. 549 (Committee on Armed Services), p. 24, accompanying H.R. 9075, 89th Congress, 

1st Session (1965). Parenthetically, it may be noted that this statement by the House Armed Services 

Committee amounts to the first unequivocal Congressional recognition of--and, arguably, acquiescence in--

the treatment of quarters and subsistence allowances as tax-free allowances. In this same connection, 

however, also see footnote 14 to this chapter, above. 

218
whenever the General Schedule of compensation for federal classified employees--i.e. 

civil servants--was increased, a comparable increase was to be effected in the basic pay 

of members of the Armed Forces. The law required that the comparable increase be 

determined by equating "regular military compensation," or "RMC," to General Schedule 

salaries. RMC was, in turn, defined as basic pay plus quarters and subsistence allowances 

(whether provided in cash or in-kind), together with the tax advantage deriving from, and 

attributable to, the non-taxable status of the allowances.24 This use of the federal tax 

advantage as one of the elements for determining comparable increases between civilian 

and military pay raises continued until 1974. 

 The Act of September 19, 1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-1153 

(1974), while retaining the principle of military pay raises linked to civil service 

increases, required that military raises be distributed to basic pay, BAQ, and BAS, each 

of which was to be increased by the same percentage as General Schedule salaries. Under 

the changes to the pay adjustment mechanism adopted in Public Law 93-419, therefore, 

the federal income tax advantage was not taken into account in calculating the amount of 

any given military pay increase. Despite changing the way the amount of any military 

pay increase was to be computed, this change in the law did not, of course, eliminate the 

tax advantage imputed to members of the armed services because of the non-taxable 

status of quarters and subsistence allowances; individual members still benefited from the 

tax-exempt status of these items of compensation, just as they had under the preceding 

adjustment mechanism, but now not only because the increase in basic pay rates resulted 

in military personnel being moved into higher tax brackets, but also because part of the 

raise went into non-taxable allowances. In addition to changing the mechanism by which 

the various elements of military pay were to be adjusted, Public Law 93-419, id., §1, 88 

Stat. at 1152, added Section 101(25) to Title 37, United States Code, formally defining 

RMC, albeit somewhat awkwardly: 

"regular compensation" or "regular military compensation (RMC)" means 

the total of the following elements that a member of a uniformed service accrues 

 

24For a more complete discussion of "regular military compensation," its statutory incorporation into Title 

37, United States Code, and its role in structuring pay increases since 1965, see Chapter II.B., "Regular 

Military Compensation/Basic Military Compensation," hereof, above.

219
or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic 

allowance for quarters, basic allowance for subsistence; and Federal tax 

advantage accruing to the aforementioned allowances because they are not subject 

to Federal income tax.25 26 

As noted earlier, the "federal income tax advantage" is, conceptually, the 

additional amount of taxable income a member of the uniformed services would have to 

receive under given tax rates,27 in a system in which cash and in-kind housing and 

subsistence allowances were fully taxable, to produce the same after-federal-income-tax 

regular military compensation as the member receives under the present system of 

military compensation in which housing and subsistence allowances are tax-exempt. As 

may be expected, a great many factors can influence any given member's actual tax 

advantage-- including, for example, his filing status (married, single, head of household, 

etc.), additional family income, number of dependents, and so forth as set out more fully 

below. In practice, the number of factors is simply too great--in addition in many 

instances to being too non-reflective of relevant military and personal characteristics on 

which Congress has determined that military pay should be premised--to be of any 

practical benefit in determining the aggregate tax advantage accruing to members of the 

Armed Forces. For that reason, certain simplifying assumptions have been employed to 

 

25 This definition was amended in 1980 by Section 11 of the Military Pay and Allowances Benefits Act of 

1980, Public Law 96-579, §11, 94 Stat. 3359, 3368-3369 (1980), by the insertion of the parenthetical 

phrase "(including any variable housing allowance or station housing allowance)" after "basic allowance 

for quarters." As explained in the relevant Congressional report, this change in the definition of RMC was 

made to "insure that these [variable and station housing] allowances are included in the information on 

Regular Military Compensation presented to the Congress each year." Senate Report No. 96-1051 

(Committee on Armed Services), p. 8, accompanying H.R. 7626, 96th Congress, 2d Session (1980). The 

Senate Report noted, however, that the change in the definition "will not affect the pay received by any 

Service member." Id. To the extent that variable and station housing allowances (the latter also referred to 

as "overseas" housing allowance), both of which are non-taxable, are included in the RMC attributed to 

individual service members, however, the effect of the amendment to the definition is to increase the 

federal income tax advantage attributed to such members, and hence their RMCs, above the level of the 

additional cash payments received in hand on account of such allowances, with an obvious potential effect 

on comparisons between military and civilian pay scales. 

26 Although subject to legal debate, it could be argued that this amendment to Section 101 of Title 37, 

United States Code, statutorily codified the tax-free status of quarters and subsistence allowances and that 

the subsequent amendment to 37 U.S.C. §101(25) made by the Military Pay and Allowances Benefits Act 

of 1980, Public Law 96-579, §11, 94 Stat 3359, 3368-3369 (1980), as referred to in the preceding footnote, 

similarly codified the tax-free status of variable and station housing allowances. 

27 See footnote 22 to this chapter, above. 

220
enable the calculation to be made at all. The resultant construct--termed the "formal" tax 

advantage--takes into account only a few of the factors relevant to determining an 

individual's "true" tax advantage. For the purposes of calculating the "formal" tax 

advantage accruing to differently situated members of the uniformed services, the 

following factors are taken into account: 

1. the member's basic pay, which in turn depends on pay grade and length of 

service; 

2. whether the member receives housing and subsistence in cash or in kind, and 

the value thereof, respectively; 

3. the number of the member's personal tax exemptions; and 

4. the members' marital status. 

(The range and average of the "formal" federal income tax advantage by pay grade is set 

out following the "cost" discussion below.) 

 This "formal" tax advantage, reflecting the narrow range of tax 

characteristics deemed relevant for purposes of the computation, is in practice quantified 

using the following simplifying assumptions: basic pay is a member's sole source of 

taxable income; the member takes the "standard" deduction on his or her tax return, i.e., 

the member does not "itemize" deductions; if married, the member files a joint return and 

the member's spouse has no income; if unmarried, the member does not qualify as a head 

of household and is entitled to an income tax exemption for him- or herself only. While 

arguably necessary to permit the tax advantage to be quantified in the large, the 

assumptions abstract from reality so significantly as to vitiate the calculation for the vast 

majority of affected service members. Indeed, whenever any one of the assumptions is 

invalid for a particular individual, the "formal" tax advantage attributed to the member 

does not in fact measure the "true" tax advantage accruing as a result of the tax-exempt 

status of quarters and subsistence allowances. A member's "true" federal income tax 

advantage in fact depends on such factors as: 

1. whether the member receives any taxable pays in addition to basic pay, such as 

incentive or special pay, proficiency pay, sea or foreign duty pay, reenlistment 

bonus, etc.; 

221
2. whether the member has income from nonmilitary sources, no matter whether 

earned or unearned (interest, dividends, capital gains, net rental income, income 

from secondary employment, etc.); 

3. the member's tax-filing status (single, married filing jointly, married filing 

separately, unmarried head of household); 

4. whether the member's spouse (if the member has a spouse) receives income in 

his or her own right, no matter whether earned or unearned; 

5. whether the member claims the standard deduction for federal income tax 

purposes or itemizes deductions and, if the latter, the amount of such itemized 

deductions; and 

6. whether the member is entitled to a tax exclusion not related to the tax 

advantage, such as the combat zone exclusion. 

 Other things being equal, the "true" tax advantage accruing to a member of the 

armed services is greater than the "formal" tax advantage imputed in the standard 

calculation to the extent that (i) the member receives taxable pay in addition to basic pay, 

(ii) the member has additional earned or unearned income, such as interest, dividends, 

capital gains, net rental income, income from secondary employment, and the like, (iii) 

the member's spouse, if any, has earned or unearned income subject to federal income 

taxation; on the other hand, the member's "true" tax advantage is less than the "formal" 

tax advantage to the extent that (i) the member itemizes deductions exceeding the 

standard deduction otherwise allowed--including such common deductions as mortgage 

interest payments, state and local income and property taxes, alimony payments, etc.,28

(ii) the member is entitled to tax exclusions of one sort or another, e.g., the combat zone 

tax exclusion.29 

 

28 In the Tax Reform Act of 1986, Public Law 99-514, 100 Stat. 2085 (1986), Congress repealed the 

deductions for state and local sales taxes, id., §134, 100 Stat. at 2116, and for interest (except for mortgage 

interest), id., §511(b), 100 Stat. At 2246-2248. Other things being equal, the repeal of a provision allowing 

a deduction has the effect of increasing taxable income, i.e., the "income" on which federal income tax is 

assessed, which in turn has the effect of increasing an individual's "true" federal income tax advantage. For 

reasons previously given, however--namely, the assumption that members of the uniformed services take 

the standard deduction--repeal of these deductions has no effect on the "formal" tax advantage imputed to 

individual members of the uniformed services. 

29 See Section 112 of the Internal Revenue Code, 26 U.S.C. §112, "Certain combat pay of members of the 

Armed Forces", included in Part III, "Items Specifically Excluded from Gross Income", of Subchapter B, 

"Computation of Taxable Income", of the Internal Revenue Code. 

222
Because of the open-ended nature of the factors that control the determination of a 

member's "true" tax advantage, its range may vary widely. Only by coincidence is the 

"formal" tax advantage the same for any two individual members--even for members 

with such identical military characteristics as pay grade, years of service, hazardous-dutyincentive- or special-pay statuses, etc. Even more rarely, if ever, is the "true" tax 

advantage the same for such members. 

Finally, it should be emphasized that, as currently defined by statute, i.e., 37 

U.S.C. §101(25), the amount of "tax advantage" attributed to members of the uniformed 

services is based on federal income tax effects only. It does not take into account any 

additional Social Security tax, i.e., the sum of old-age, survivors, and disability insurance 

(OASDI) tax and health insurance (HI) tax, on the one hand, or state and local income 

taxes, on the other hand, that service members would almost certainly have to pay if their 

"tax advantage" were monetized. If the basic allowances for housing and subsistence 

were suddenly to become taxable for federal income tax purposes, they would almost 

certainly become part of the "income" upon which Social Security taxes, i.e., OASDI and 

HI, are imposed under IRC §3101(a) and (b), 26 U.S.C. §3101(a) and (b) (dealing, 

respectively, with OASDI taxes, on the one hand, and HI taxes, on the other), and state 

and local income taxes are imposed under the income tax laws of the various states. If 

this were in fact the way monetization of the "tax advantage" were treated by federal and 

state governments, service members would have to be given an additional amount, over 

and above the "tax advantage" currently attributed to them, to leave them as well off in 

terms of after-tax income as they currently are. 

Cost: The Federal income tax advantage--conceptually, the added amount of income 

subject to Federal income tax a member of the uniformed services would have to receive 

to leave him with the same after-tax income he has under the present system of pay and 

non-taxable allowances if his present non-taxable allowances were suddenly to become 

taxable--is not paid to any member of the uniformed services in cash. As such, it is not a 

cost item in the Federal budget for the Department of Defense. Any "cost" to the 

Government arising out of the tax advantage attributed to members of the uniformed 

services is in the nature of an "opportunity cost," reflecting the loss to the Federal 

treasury of revenue that would be collected if military quarters and subsistence, whether 

223
provided in cash or in kind, were subject to income taxation.30 Because of the wide range 

of individual circumstances confronting members of the uniformed services that also 

affect the amount or "value" of the tax advantage to specific individuals, it is difficult to 

appraise the "true" tax advantage resulting from the non-taxable status of quarters and 

subsistence allowances. With the aid of various simplifying assumptions concerning the 

distribution of certain tax characteristics among members of the Armed Forces, and 

discounting certain other real-world complications, aggregate "formal" tax advantage 

computations can be made. The results of such computations for 1971 to 2004 are set out 

in Table II-4 of Military Compensation Statistics Tables, volume II of this edition. 

 

30 The amount of such "cost," or revenue loss, to the Government is less than the aggregate "formal" tax 

advantage attributed to members of the uniformed services. That is, if the Government were simply to 

make quarters and subsistence allowances taxable without providing any additional offsetting income with 

which to pay the taxes resulting from such action, the additional amount of tax collected would be less than 

that collected if additional taxable income--measured by the tax advantage—were provided in moving to a 

system of taxable pay plus allowances. Moreover, if the allowances for quarters and subsistence were made 

taxable without providing additional income with which to pay the increased taxes due and owing, 

members of the uniformed services would suffer a decrease in after-tax income. On the other hand, if 

additional income were provided so as to leave members of the uniformed services with the same after-tax 

income, the Government would stand neither to gain nor lose revenue as a result, and the net effect, both 

for the Government and members of the armed services, would be a wash. (In practice, of course, taking 

into account all of the complexities of the tax system and doing away with the simplifying assumptions 

employed in calculating the "formal" tax advantage imputed to members of the uniformed services, it is 

unlikely that a decision to tax the allowances in question while at the same time increasing military 

compensation by the amount of the aggregate "formal" tax advantage would in fact result in a revenue 

wash.) 

224
Chapter II.C.1. 

 Overview of Compensation for Non-Regular Service: 

 Reserve Components Pay 

 Members of the reserve components of the Army, Navy, Air Force, Marine Corps, 

and Coast Guard, including members of the Army National Guard and the Air National 

Guard, all receive compensation for the performance of inactive-duty training.1 2

 

1

 The term "inactive-duty training" is defined for compensation purposes at 37 U.S.C. §101(22) to mean: 

(A) duty prescribed for members of a reserve component by the Secretary concerned under section 206 of 

[Title 37, United States Code] or any other law; or 

(B) special additional duties authorized for members of a reserve component by an authority designated by 

the Secretary concerned and performed by them on a voluntary basis in connection with the prescribed 

training or maintenance activities of the units to which they are assigned; and includes those duties when 

performed by members of a reserve component in their status as members of the National Guard, but does 

not include work or study in connection with a correspondence course of a uniformed service. 

(A similar definition of "inactive-duty training"--although one that is not relevant to the grant or receipt of 

compensation for reserve service under 37 U.S.C. §206--is found at 10 U.S.C. §101(d)(7): 

The term "inactive-duty training" means-- 

(A) duty prescribed for Reserves by the Secretary concerned under section 206 of title 37 [United States 

Code] or any other provision of law; and 

(B) special additional duties authorized for Reserves by an authority designated by the Secretary 

concerned and performed by them on a voluntary basis in connection with the prescribed training or 

maintenance activities of the units to which they are assigned. 

Such term includes those duties when performed by Reserves in their status as members of the National 

Guard.) 

2

 Members of the reserve components of the armed forces who are on full-time "active duty," as that term is 

defined at 37 U.S.C. §101(18), are entitled to compensation that is essentially the same as that authorized 

for members of the regular components of the armed forces who are on full-time "active duty"--although 

there are some differences, see, e.g., 37 U.S.C. §302(h) concerning the entitlement of reserve officers who 

are officers of the Medical Corps of the Army or Navy or who are officers of the Air Force designated as 

medical officers and who are on active duty under a call or order to active duty for a period of less than one 

year. Similarly, members of the reserve components who are performing active duty for training also are 

entitled to compensation, although the form and nature of the compensation and compensation-related 

benefits to which they are entitled differs to some extent from that authorized for members of the regular 

components of the armed forces who are on full-time "active duty." Such entitlements include leave 

accrual, medical care benefits for dependents, and housing allowances. The compensation entitlements of 

these two groups of reserve members of the armed forces are not the types of compensation entitlements 

with which this Subsection C of Section II of Military Compensation Background Papers is concerned. 

(Exceptions to the differences in treatment outlined above were temporarily authorized with respect to 

certain compensation elements for reserves called to active duty in connection with Operation Desert 

Shield/Storm during the Persian Gulf Conflict. See, e.g., Persian Gulf Conflict Supplemental Authorization 

and Personnel Benefits Act of 1991, Public Law 102-25, §304(a), 105 Stat. 75, 81 (1991) (“Reserve health 

225
Legislative authority for inactive-duty training compensation is set out at 37 U.S.C. 

§206(a): 

Under regulations prescribed by the Secretary concerned, and to the extent 

provided for by appropriations, a member of the National Guard or a member of a 

reserve component of a uniformed service who is not entitled to basic pay under 

section 204 of this title [dealing generally with the basic pay entitlements of 

members of the uniformed services on active duty3

], is entitled to compensation, 

at the rate of 1/30 of the basic pay authorized for a member of a uniformed service 

of a corresponding grade entitled to basic pay-- 

(1) for each regular period of instruction, or period of appropriate duty, at 

which the member is engaged for at least two hours, including that performed on 

a Sunday or holiday; 

(2) for the performance of such other equivalent training, instruction, duty, 

or appropriate duties, as the Secretary may prescribe; or 

 (3) for a regular period of instruction that the member is scheduled to 

perform but is unable to perform because of physical disability resulting from an 

injury, illness, or disease incurred or aggravated-- 

 (A) in line of duty while performing-- 

 (i) active duty; or 

 (ii) inactive-duty training; 

 (B) while traveling directly to or from that duty or training (unless such 

injury, illness, disease, or aggravation of an injury, illness, or disease is the result 

of the gross negligence or misconduct of the member). 

 care officers entitled to special pays for medical officers of the armed forces even though not under a call or 

order to active duty for one year or more”). In this same connection, also see Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, id., §303, 105 Stat. at 

81(“Variable housing allowance entitlement for reserves called to active duty”); §309, 105 Stat. at 83 

(“Accrued leave entitlements of members, including reserves, who die while on active duty”); §310A, 105 

Stat. at 84 (“Basic allowance for quarters entitlements for certain members of reserve components without 

dependents called to active duty”.) 

3

 For the purposes of Title 37, United States Code, the term "active duty" is defined as meaning: 

. . . full-time duty in the active service of a uniformed service, and includes full-time training duty, 

annual training duty, full-time National Guard duty, and attendance, while in the active service, at 

a school designated as a service school by law or by the Secretary concerned. 37 U.S.C. §101(18). 

226
 (C) in line of duty while remaining overnight immediately before the 

commencement of inactive-duty training, between successive periods of inactiveduty training, at or in the vicinity of the site of inactive-duty training. 

Such personnel may also be entitled to receive special and incentive pays or attraction 

and retention pays of one sort or another for the performance of inactive-duty training. 

The entitlement of reserve forces personnel to inactive-duty training pay as 

authorized by 37 U.S.C. §206 is covered in Chapter II.C.2., "Compensation for InactiveDuty Training," below. Entitlement to special and incentive pays and attraction and 

retention pays is covered under Subsections D and E, respectively, of this Section II of 

Military Compensation Background Papers: Compensation Elements and Related 

Manpower Cost Items--Their Purposes and Legislative Backgrounds, below. 

 The principles and concepts of military compensation developed in Chapter I of 

Military Compensation Background Papers apply to the compensation of reserve forces 

personnel as well as to the compensation of active duty forces personnel. As a general 

proposition, the fundamental purpose underlying the reserve force structure is to have a 

pre-trained force that is capable of augmenting the active duty forces of the United States 

during time of war or national emergency. To meet this purpose, the reserve force 

compensation system must exemplify the compensation principles of effectiveness, in the 

sense of working equally well in time of peace as well as war, and equity. It must also 

support the interrelationship between the manpower requirements of the armed forces and 

national defense objectives. 

227
Chapter II.C.2. 

 Compensation for Inactive-Duty Training 

Legislative Authority: 37 U.S.C. §206. 

Purpose: To provide a special pay as an incentive for qualified personnel to enter 

and remain in the reserve components of the military services of the United States, and to 

encourage them to maintain and improve their military skills through regular training or 

distributed learning activities in order to provide a pool of skilled, trained, and readily 

available manpower to augment active duty forces in times of national emergency. 

Background: The origin of inactive-duty training pay1

 can be traced to the militia 

system of the American colonies, incorporated into Federal law in the Act of May 8, 

1792 (Militia Act of 1792), ch. 33, 1 Stat. 271 (1792), "establishing an Uniform Militia 

throughout the United States."2 3

 Under that act, all free, able-bodied, white male citizens 

 

1

 Technically, members of the reserve components participating in inactive-duty training are entitled to 

"compensation" under 37 U.S.C. §206(a)(1) and (2), respectively, for "each regular period of instruction, or 

period of appropriate duty" in which they are engaged for at least two hours or "for the performance of such 

other equivalent training, instruction, duty, or appropriate duties" as may be prescribed. In common usage, 

these various duties for which members of reserve components are entitled to "compensation" under 37 

U.S.C. §206 are referred to as "inactive-duty training," and the "compensation" to which such members are 

entitled is referred to as "inactive-duty training pay." That usage is followed here. 

2

 The term "inactive-duty training" is defined for compensation purposes at 37 U.S.C. §101(22) to mean: 

(A) duty prescribed for members of a reserve component by the Secretary concerned under section 206 of 

[Title 37, United States Code] or any other law; or 

(B) special additional duties authorized for members of a reserve component by an authority designated by 

the Secretary concerned and performed by them on a voluntary basis in connection with the prescribed 

training or maintenance activities of the units to which they are assigned; 

and includes those duties when performed by members of a reserve component in their status as members 

of the National Guard, but (except as provided in section 206(d)(2) of this title) does not include work or 

study in connection with a correspondence course of a uniformed service. 

(A similar definition of "inactive-duty training"--although one that is not relevant to the grant or receipt of 

compensation for reserve service under 37 U.S.C. §206--is found at 10 U.S.C. §101(d)(7)): 

The term "inactive-duty training" means-- 

(A) duty prescribed for Reserves by the Secretary concerned under section 206 of title 37 [United States 

Code] or any other provision of law; and 

228
between the ages of 18 and 45 were effectively enrolled in the militia at their place of 

residence and were required to furnish their own arms, ammunition, and accoutrements, 

and to appear, properly armed and equipped, whenever called out to exercise or into 

service. A companion Act of May 2, 1792, ch. 28, §4, 1 Stat. 264 (1792), provided for 

militiamen "employed in the service of the United States" to receive the same pay and 

allowances as troops of the United States; however, it made no provision for pay for 

those "called out to exercise."4

 The Act also stipulated that, when mobilized for federal 

service, the militia could not be compelled to serve for more than three months in any one 

year. Act of May 2, 1792, ch. 28, id. This provision remained in effect until changed in 

July 1861 in response to the departure of some "3-months' men" immediately before, 

during, and shortly after the first Battle of Bull Run.5

The original acts gave the militia the dual mission, which it still retains, of serving 

as state defense forces and of augmenting the regular forces of the United States in time 

of emergency. The militia system was refined by the Militia Act of 1903, also known as 

the Dick Act, ch. 196 [Public Law 33, 57th Congress], §1, 32 Stat. 775 (1903), which two 

classes of militia--the organized militia, thenceforth to be known as the National Guard (a 

title that had been in general use for many years, though not recognized in federal law), 

and the reserve militia, composed of all other similar forces that were not a part of the 

National Guard.6

 The act began the process of federalizing the militia by authorizing 

 (B) special additional duties authorized for Reserves by an authority designated by the Secretary 

concerned and performed by them on a voluntary basis in connection with the prescribed training or 

maintenance activities of the units to which they are assigned. 

Such term includes those duties when performed by Reserves in their status as members of the National 

Guard.) 

3

 Under federal law, the "militia of the United States" 

consists of all able-bodies males at least 17 years of age and ... under 45 years of age who are, or who 

have made a declaration of intention to become, citizens of the United States and of female citizens of 

the United States who are members of the National Guard. 10 U.S.C. §311(a). 

4

 Being "called out to exercise" evidently fell short of being "employed in the service of the United States." 

5

 Act of July 29, 1861, ch. 25, §3, 12 Stat. 281, 282 (1861). 

6

 At present, there are two classes of militia--the "organized militia," which consists of the National Guard 

and the Naval Militia, and the "unorganized militia," which consists of all members of the "militia of the 

229
federal financial assistance for the National Guard of the several states and by requiring 

that each state, in order to qualify for these funds, (1) organize, arm, and equip its 

National Guard in the same fashion as prescribed for the Regular Army, (2) maintain at 

least 100 active militia for each of its Senators and Representatives in Congress, (3) 

conduct practice marches or camps of instruction for its Guard units for five consecutive 

days each year, (4) assemble its Guard units at armories for drill and instruction or target 

practice not less than 24 times each year, and (5) insure that each of its Guard units be 

inspected by an officer of the Regular Army or the organized militia at least once a year. 

The Militia Act of 1903 allowed the states to use their allotted federal funds for 

the payment, subsistence, and transportation of National Guard members who engaged in 

actual field or camp service, and provided that National Guardsmen who participated in 

encampments, maneuvers, or field instruction with the Regular Army were to receive the 

same pay and allowances as officers and men of the Army, to be paid from Army 

appropriations. It did not, however, authorize the use of federal funds for armory drill 

pay. In a different vein, the act limited to nine months the period for which the National 

Guard could be called to federal service. 

The Act of May 27, 1908, an amendment to the Militia Act of 1903, ch. 204 

[Public Law 145, 60th Congress], §4, 35 Stat. 399, 400 (1908), removed the nine-month 

limitation on federal service by the National Guard and instead permitted the President to 

call up the Guard for any specified period, subject to the condition that no individual 

guardsman could be held to service beyond the term of his existing commission or 

enlistment. The amendment of 1908 also provided that the National Guard could be 

required to serve "either within or without the territory of the United States." 

Subsequently, the Attorney General concluded that the service of state militia outside the 

United States would be unconstitutional except under very limited circumstances, such as 

pursuit across the border after repelling an invasion.7

 It was under this theory that the 

 United States" who are not members of the "organized militia." 10 U.S.C. §311(b). (See footnote 3 to this 

chapter, above, for the statutory definition of "militia of the United States.") 

7 29 Op. Atty. Gen. 322 (1912). 

230
national guards of the states of Arizona, New Mexico, and Texas, and later of other 

states, were called into federal service and deployed near the Mexican border in 1916. 

The National Defense Act of 1916, ch. 134 [Public Law 85, 64th Congress], §111, 

39 Stat. 166, 211 (1916), empowered the President, when authorized by Congress, to 

"draft into the military service of the United States ... any or all members of the National 

Guard." In response to the emergency created by World War I, the President was given 

sole "draft" authority--within the meaning of the National Defense Act of 1916, id.--by 

the Army Conscription Act of 1917, ch. 15 [Public Law 12, 65th Congress], §§1 and 2, 40 

Stat. 76, 76-78 (1917). In litigation involving this latter act, it was held that the "draft" of 

the National Guard did not constitute a call-up of the militia and, although National 

Guard designations and other identifications could continue to be used, persons so drafted 

were technically discharged from the militia during their federal service, thus neutralizing 

the constitutional restrictions on the overseas use of the militia.8

 In addition to making the draft and overseas deployment of the National Guard 

possible, the National Defense Act of 1916, ch. 134, id., also dealt with other aspects of 

the then-existing militia system. Among other things, the act authorized, for the first time, 

the use of federal funds for the payment of inactive-duty training pay, which the act 

called "compensation for ... services," to National Guard personnel.9

 The prescribed rates 

were $500 a year for officers of the grade of captain or above, $240 for first lieutenants, 

$200 for second lieutenants,10 and, for enlisted personnel, 25 percent of the annual base 

pay of enlisted men of corresponding rank in the Army for attendance at not less than 48 

drills of at least 1.5 hours in duration,11 or a proportionate amount for attendance at less 

than 24 drills.12 The amount and character of service required of officers to qualify for the 

pay was left to Army regulations. 

 

8

 See, e.g., Selective Draft Law Cases, 245 U.S. 366 (1918), and United States v. Silver, 243 Fed. 422 

(1917). 

9

 Act of June 3, 1916 (National Defense Act of 1916), ch. 134 [Public Law 85, 64th Congress], §109, 39 

Stat. 166, 209 (1916). 

10 Act of June 3, 1916 (National Defense Act of 1916), ch. 134 [Public Law 85, 64th Congress], §109, 39 

Stat. 166, 209 (1916). 

11 Act of June 3, 1916 (National Defense Act of 1916), ch. 134 [Public Law 85, 64th Congress], §110, 39 

Stat. 166, 209-210 (1916). 

12 Act of June 3, 1916 (National Defense Act of 1916), ch. 134 [Public Law 85, 64th Congress], §92, 39 

Stat. 166, 206 (1916). 

231
The National Defense Act of 1916, ch. 134, id., also raised the authorized strength 

of the Regular Army and provided for a gradual increase in the strength of the National 

Guard from about 100,000 to over 400,000, to be apportioned among the states on the 

basis of the number of their Senators and Representatives. The act required guard units to 

conduct at least 48 drill periods and 15 days of field training each year. Instructors were 

to be provided and inspections conducted by Regular Army personnel. The guard was to 

be paid with federal funds, distributed among the states "in direct ratio to the number of 

enlisted men in active service in the National Guard." The Secretary of War was 

authorized to withhold funds from states whose Guard did not meet the standards of the 

act. It created an Army Reserve Officers' Training Corps (ROTC) in civilian educational 

institutions, and established an Officers' Reserve Corps in which ROTC graduates could 

be commissioned. It also established a Regular Army Reserve, to be composed of 

enlisted personnel with prior service, and an Enlisted Reserve Corps, to consist of men 

without prior service who were by virtue of their civilian occupations technically 

qualified for duty in the Quartermaster, Engineer, or Signal Corps or the Ordnance or 

Medical Departments. 

 The National Defense Act of 1916, ch. 134, id., further divided the militia into 

three classes--the National Guard, the Naval Militia, and the Unorganized Militia.13 The 

Naval Militia had been created without any identifiable federal status, beginning in 1888 

with the formation of a Naval Militia under the law of the Commonwealth of 

Massachusetts, and followed over the next few years by several other states. The 

Congress tacitly approved the formation of these state forces by appropriating funds for 

"arms and equipment connected therewith for the Naval Militia of various states" in the 

Naval Service Appropriation Act of 1892, ch. 494, §1, 26 Stat. 799, 801 (1891), and in 

succeeding appropriation acts. The Naval Militia Act of 1914, ch. 21 [Public Law 57, 63d 

Congress], 38 Stat. 283 (1914), gave the Naval Militia a status similar to that of the land 

 

13 As previously indicated, this division survives in existing law at 10 U.S.C. §311(b). (Under 10 U.S.C. 

§311(b)(2), the "unorganized militia" consists of all members of the "militia of the United States" who are 

not members of the National Guard or the Naval Militia. See footnote 5 to this chapter, above.) 

232
militia. It authorized the President to call the Naval Militia into federal service in time of 

war or national emergency through the appropriate state governors. 

The Act of March 3, 1915, ch. 271 [Public Law 269, 63d Congress], §1, 38 Stat. 

928, 940 (1915), authorized the establishment of the United States Naval Reserve, 

composed of men honorably discharged from the Navy after having completed an 

enlistment of not less than four years or a minority enlistment. A much more elaborate 

Naval Reserve Force was set up in the Naval Service Appropriation Act of 1917, ch. 417 

[Public Law 241, 64th Congress], 39 Stat. 556, 587-592 (1916), based on a system of 

inactive-duty "retainer pay" for individuals who obligated themselves to serve in the 

Navy in time of war and national emergency. This force consisted of six classes: (1) the 

Fleet Naval Reserve, to be composed of former officer and enlisted personnel of the 

Regular Navy; (2) the Naval Reserve, to consist of men of the seagoing profession who, 

after some training, could be expected to serve on combatant ships; (3) the Naval 

Auxiliary Reserve, to be made up of persons employed on American merchant ships 

suitable for use as naval auxiliaries; (4) the Naval Coast Defense Reserve, to consist of 

persons who might perform useful service for the Navy in the defense of the coast; (5) the 

Naval Reserve Flying Corps, to be drawn from former Navy flyers and other persons 

skilled in the design, building, or operation of aircraft; and (6) the Volunteer Naval 

Reserve, to be composed of persons eligible to serve in one of the other five classes who 

obligated themselves to serve without retainer pay. 

Under the Act of August 29, 1916, ch. 417 [Public Law 241, 64th Congress], 39 

Stat. 556, 587-592 (1916), members of all classes of the Naval Reserve Force except the 

Volunteer Naval Reserve were eligible for retainer pay without regard to any actual 

performance of inactive-duty or training. Enlisted personnel of the Fleet Naval Reserve 

with less than eight years of service were entitled to an annual retainer of $50, those with 

between eight and 12 years of service were entitled to $72, and those with over 12 years, 

to $100. Enlisted personnel transferred to the Fleet Naval Reserve after completion of at 

least 16 or 20 years of active naval service were entitled to retainer pay of 1/3 or 1/2, 

respectively, of their base and longevity pay at the time of transfer. Officers of the Fleet 

233
Naval Reserve, all members of the Naval Reserve, enlisted personnel of the Naval 

Auxiliary Reserve, and members of the Naval Coast Defense Reserve and the Naval 

Reserve Flying Corps were entitled to an annual retainer equal to two months' base pay of 

the corresponding rank in the Navy. Officers of the Naval Auxiliary Reserve were 

entitled to one month's base pay of the corresponding rank in the Navy. 

Separate and apart from the Naval Reserve Force, the Act of August 29, 1916, ch. 

417, id., also created a force of National Naval Volunteers to be enrolled from officers 

and enlisted personnel of the Naval Militia. The act provided that the National Naval 

Volunteers could be ordered into federal service whenever a need arose and, evidently 

with an eye on the constitutional bar against the use of the militia outside the United 

States, stipulated that when in federal service they were relieved from all duty with the 

Naval Militia. It also authorized the payment of inactive-duty training pay--which, like 

that of the Naval Reserve Forces, it called "retainer pay"--to members of the National 

Naval Volunteers. The conditions of entitlement to and the rate of this pay were similar to 

the drill pay authorized two months earlier for members of the National Guard. The only 

difference in the two laws with respect to pay was without any practical significance: 

both Naval Militia and National Guard officers had to attend at least 48 drills or periods 

of instruction per year to qualify for inactive-duty training pay; for Naval Militia officers 

this was a requirement of the law while for National Guard officers it was imposed by 

Army regulations. 

 The Act of July 1, 1918, ch. 114 [Public Law 182, 65th Congress], 40 Stat. 704, 708 

(1918), abolished the National Naval Volunteers and repealed all Federal laws relating to 

the Naval Militia, but not the Naval Reserve Force. A portion of the Naval Militia 

legislation was revived by the Act of June 4, 1920, ch. 228 [Public Law 243, 66th

Congress], 41 Stat. 812, 817 (1920), however, so the Naval Militia remained a 

component of the Navy until a new reserve structure was established by the Armed 

Forces Reserve Act of 1952, ch. 608 [Public Law 476, 82d Congress], 66 Stat. 481 

(1952). Nevertheless, after 1918, the Naval Militia in essence reverted to the status of 

state forces only and no longer had the same relationship to the Navy as the National 

Guard had to the Army. 

The Act of June 4, 1920, ch. 227 [Public Law 242, 66th Congress], §3, 41 Stat. 

759 (1920), reorganized the Army of the United States into the Regular Army, the 

National Guard while in federal service, and the Organized Reserve, which included the 

old Officers' Reserve Corps and the Enlisted Reserve Corps. Under this act members of 

the National Guard became entitled to "compensation" for inactive-duty training--here 

234
sometimes also called "drill pay"--at the rate of one-thirtieth of the base pay of their grade 

for each attendance at a regular drill or assembly--a method of computation which 

became the standard for all inactive-duty training pay and which continues basically 

unchanged in existing law to this day. In the case of officers, the pay was authorized only 

for drills of not less than 1 1/2 hours attended and participated in by at least 50 percent of 

the commissioned and 60 percent of the enlisted strength; the number of paid drills could 

not exceed five in any month; and no more than $500 a year in drill pay could be paid to 

those above the grade of captain. For enlisted personnel, paid drills could not exceed 

eight in a month or 60 in a year, and no pay was authorized for any month in which a 

member attended less than 60 percent of the drills or other exercises scheduled for his 

organization. 

 Separate legislative proposals had been introduced in Congress to establish the 

first peacetime universal military training in the United States, to reorganize the U.S. 

Army, and to further federalize the National Guard. The hearings on all these bills were 

combined and, although a mass of testimony was taken and extensive debate occurred on 

the bills, practically no attention was given to the small item of the change in the method 

of calculating drill pay. There is, however, no evidence of any Congressional intent to 

equate the pay for one drill to "1 day's pay," even though such pay was established as 

one-thirtieth of one month's base pay. An early version of the bill had proposed drill pay 

of seven percent of monthly base pay for each drill, a later version had proposed onetwentieth of one month's base pay. It is not clear how or why the one-thirtieth formula 

was arrived at in the enactment. (In terms of multiples of a "day's pay," the rates for one 

drill were: (1) 1916 Law--1.9 days; (2) 1st proposal--2.1; (3) 2d proposal--1.5; (4) 1920 

law--1.0.) What is clear is that it was the view of both the Army and the Congress that 

some change in the method of computation was needed because of dissatisfaction with 

the way the 1916 formula was working. As the Chief of the Army Militia Bureau 

testified: 

I want to say that the Militia Bureau has been endeavoring to get the law 

changed so as to do away with the system of payments and with some of the other 

things we have found have not worked. Your committee has a recommendation to 

that effect. We would be glad to see men who attend drill paid for their services.14

 

14 Army Reorganization: Hearings before the House Committee on Military Affairs on H.R. 8287, H.R. 

8068, H.R. 7925, and H.R. 8870, Vol. II, p. 1889, 66th Congress, 1st Session (1919) (testimony of the chief 

of the Militia Bureau of the Army). 

235
Congress agreed: 

 Sections 109 and 110 [of the National Defense Act], providing for Federal 

pay for the National Guard, have been rewritten so as to simplify a system which 

experience has shown to be very cumbersome and difficult of administration. Pay 

will hereafter be based on the number of drills attended, rather than on periods of 

time.15 

The Joint Services Pay Readjustment Act of 1922, ch. 212 [Public Law 235, 67th

Congress], 42 Stat. 625 (1922), fixed the National Guard armory drill pay rate for 

enlisted personnel of the sixth and seventh grades (E-2 and E-1 under the current 

structure) at $1.15 and $1.00 per drill, respectively. Under the pay rates prescribed in the 

Act, one-thirtieth of the monthly base pay of the sixth grade was $1 and that of the 

seventh grade was 70 cents. 

The Act of June 3, 1924, ch. 244 [Public Law 186, 68th Congress], §2, 43 Stat. 

363, 363-364 (1924), changed the maximum number of drills for which National Guard 

officers could be paid from five per month with a maximum of 60 per year to "not less 

than" 48 per year, and replaced the provision that had made the attendance of 50 percent 

of the officer strength and 60 percent of the enlisted strength at any drill a condition of 

entitlement for officer drill pay with a provision that allowed the President to prescribe 

the minimum number of enlisted personnel and officers to be present at a drill in order to 

receive pay. 

 The Act of February 28, 1925, ch 374 [Public Law 512, 68th Congress], §1, 43 

Stat. 1080 (1925), abolished the Naval Reserve Force established in 1916 and in its place 

created a Naval Reserve of three classes: the Fleet Naval Reserve, the Merchant Marine 

Naval Reserve, and the Volunteer Naval Reserve. The Fleet Naval Reserve was the 

"organized" arm of the force, and its officers and one category of its enlisted personnel--

those specifically enlisting for such service--were the only classes required to perform 

drills and training. Officers below the grade of lieutenant commander and enlisted 

personnel of the "organized" Fleet Naval Reserve were entitled to compensation equal to 

one-thirtieth of the monthly base pay of their rank for each period of attendance at a 

 

15 House Report No. 680 (Committee on Military Affairs), p. 13, accompanying H.R. 12775, 66th Congress, 

2d Session (1920). 

236
regular drill or equivalent instruction, not to exceed 60 periods of drill or instruction in 

any fiscal year. 

The "retainer" system of inactive-duty reserve compensation was continued only 

for certain enlisted categories of the Fleet Naval Reserve and for members of the 

Merchant Marine Naval Reserve. The Act of February 28, 1925, ch 374, id., authorized 

the Secretary of the Navy to require a four-year reserve obligation for men enlisting in 

the Regular Navy after July 1, 1925. Personnel assigned to the Fleet Naval Reserve as a 

result of the obligation were entitled to an annual retainer of $25 but were not required to 

perform any inactive-duty training. Enlisted personnel transferred to the Fleet Naval 

Reserve after 20 years of service, and those transferred before July 1, 1925, or who were 

serving on active duty on that date and were subsequently transferred after 16 years of 

service, were entitled to retainer pay of 1/2 or 1/3, respectively, of their base and 

longevity pay at the time of transfer. Members of the Merchant Marine Naval Reserve 

were entitled to an annual retainer equal to one month's base pay of their corresponding 

grade in the Navy. Members of the Volunteer Naval Reserve were not entitled to either 

retainer pay or inactive-duty training pay. 

 

 In 1930 the Navy amended its regulations to permit, under specified 

circumstances, as many as three drills to be consolidated into one period and held in one 

day. Under the regulations, fleet reservists in attendance at a consolidated drill for at least 

4 1/2 hours were credited with three drills and paid inactive-duty training pay of threethirtieths of one month's base pay, those in attendance for less than 4 1/2 but not less than 

three hours were credited with two drills and paid two-thirtieths of one month's base pay, 

and those in attendance for less than three but not less than 1 1/2 hours were credited with 

one drill and received one-thirtieth of one month's base pay. This change in the 

regulations was made after the Comptroller General of the United States had ruled that 

the "multiple drill" was legally permissible under the Naval Reserve Act of 1925,16 and 

the Navy has conducted some of its inactive-duty training under this system ever since. 

The Judge Advocate General of the Army, however, for many years maintained the view 

that, under the drill pay authority of the National Defense Act of 1916, the Pay 

Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], 56 Stat. 359 (1942) 

(which restated the National Defense Act authority), and the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949) (which further 

 

16 Unpublished Decision A-31431 of May 12, 1930 (Comptroller General) (maintained in subsequent 

informal rulings and by regulation). 

237
restated that authority), it was legally objectionable to count for pay purposes drills or 

equivalent periods of instruction held in excess of one on a single calendar day.17

The Act of June 15, 1933, ch. 87 [Public Law 64, 73d Congress], 48 Stat. 153 

(1933), created a new Army component, the National Guard of the United States. This 

component was superimposed on and identical in personnel and organization to the 

National Guard of the several states but, in its new status, could be ordered to active duty 

in time of war or national emergency declared by Congress without the necessity of a 

"call" through the various state governors. 

The Naval Reserve Act of 1938, ch. 690 [Public Law 732, 75th Congress], 52 Stat. 

1175 (1938), dissolved the then-existing three-class Naval Reserve structure and replaced 

it with a reserve of four classes the Fleet Reserve, the Organized Reserve, the Merchant 

Marine Reserve, and the Volunteer Reserve. The Organized Reserve was the only class 

required to perform drills and training; however, members of the Merchant Marine 

Reserve were permitted to train and, in a departure from previous law, were entitled to 

inactive-duty training pay for drills or training actually performed. The act continued the 

one-thirtieth-of-one-month's-base-pay drill pay formula, removed the prohibition against 

payment of drill pay to officers in the grade of lieutenant commander or above, and 

placed a $10 ceiling on the pay for any one drill. Retainer pay was continued only for 

enlisted personnel previously or subsequently transferred to the Fleet Reserve after 16 or 

more years of service and for those assigned to the Fleet Reserve under a reserve 

obligation assumed upon enlistment in the Regular Navy. In keeping with prior practice 

under the Naval Reserve Acts of 1916 and 1925, the 1938 act provided for a Marine 

Corps Reserve that was in general parallel in structure, organization, and personnel to 

that of the Naval Reserve. 

The Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], 56 

Stat. 359 (9142), fixed the National Guard armory drill pay rate as one-thirtieth of one 

 

17 Such an opinion was expressed, for instance, in JAGA 1948/6779 of September 20, 1948, and in JAGA 

1954/4452 of May 13, 1954. 

238
month's base pay across-the-board. This action removed the $500 annual ceiling on 

officers' drill pay and eliminated the special rates for enlisted members of the sixth and 

seventh grades. 

On September 8, 1939, President Franklin D. Roosevelt proclaimed a national 

emergency, setting in motion a mobilization of the nation's manpower. This proclamation 

enabled the Navy and the Marine Corps to begin the involuntary ordering of their reserve 

members to active duty, since the Naval Reserve Act permitted such action based on a 

declaration of national emergency by the President. The National Guard of the United 

States and the Army Reserve could be ordered to active duty only in time of war or 

national emergency declared by Congress. A joint resolution of the Congress of August 

27, 1940, ch. 689 [Public Resolution 96, 76th Congress], §1, 54 Stat. 858, 858-859 

(1940), authorized the President to order these components into federal service for 12 

months' duty in the Western Hemisphere or in territories or possessions of the United 

States. (The National Guard could have been called into federal service in its militia 

status, subject to the constitutional restraints on its use beyond the borders of the United 

States, without this joint resolution.) 

The Selective Training and Service Act of 1940, ch. 720, [Public Law 783, 76th 

Congress], 54 Stat. 885 (1940), provided for the induction of male citizens between the 

ages of 21 and 36 into the land and naval forces, also for 12 months, and for service in 

the Western Hemisphere or in territories or possessions of the United States. A Joint 

Resolution of August 18, 1941, ch. 362 [Public Law 213, 77th Congress], §2, 55 Stat. 626 

(1941), extended the length of federal service required of national guardsmen, Army 

reservists, and inductees to 18 months. A joint resolution of December 13, 1941, ch. 571 

[Public Law 338, 77th Congress], §1, 55 Stat. 799, 799-800 (1941), six days after the 

Japanese attack on Pearl Harbor, further extended this required service for the duration of 

the war and six months following and removed all geographical restrictions on the use of 

such personnel. 

The National Security Act of 1947, ch. 343 [Public Law 253, 80th Congress], 

§207, 61 Stat. 495, 502-503 (1947), established the Department of the Air Force, and the 

239
Act of March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), 

made all provisions of law relating to the National Guard, the National Guard of the 

United States, and the Army Organized Reserve Corps applicable also to the Air National 

Guard and the Air Force Reserve, formed from personnel of the Army Air Force Reserve. 

The Selective Service Act of 1948, ch. 625 [Public Law 759, 80th Congress], §7, 62 Stat. 

604, 614 (1948), gave the President authority, for two years, to order members of any or 

all reserve components into active service for up to 21 months. This authority was 

extended for 15 days to July 9, 1950, by the Act of June 23, 1950, ch. 351 [Public Law 

572, 81st Congress], 64 Stat. 254 (1950), and further extended to July 9, 1951, by the Act 

of June 30, 1950, ch. 445 [Public Law 599, 81st Congress], 64 Stat. 318 (1950). The 1951 

amendments to the Universal Military Training and Service Act, enacted as Title I of the 

Act of June 19, 1951, ch. 144 [Public Law 51, 82d Congress], 65 Stat. 75 (1951), 

extended the authority once more, this time to July 1, 1953, and increased the period for 

which the reserves could be required to serve to 24 months. The 1948 Selective Service 

Act had taken another evolutionary step in the reserve program by requiring an eight-year 

total service obligation for persons between the ages of 19 and 26 who were appointed, 

enlisted, or inducted into the Armed Forces and who served on active duty for less than 

three years. The Universal Military Training and Service Act, ch. 144, id., modified the 

program by requiring an eight-year obligation for all such persons, whether they served 

on active duty for three years or not. 

The evolution of inactive-duty training pay also continued after World War II. 

The Act of March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), 

previously cited, made a significant change in the pay formula by authorizing pay to be 

computed at the rate of one-thirtieth of one month's base and longevity pay for each drill 

rather than at the rate of one-thirtieth of one month's base pay. Under the laws then 

governing military pay, "base pay" was the initial rate prescribed for each grade without 

regard to length of service; "base and longevity pay" was the equivalent of current "basic 

pay," which includes built-in percentage increases based on length of service. See 

Chapter II.B.1., "Basic Pay," above.18 Longevity pay then amounted to five percent of 

 

18 In particular, see footnote 6 to Chapter II.B.1., "Basic Pay," together with accompanying text. 

240
base pay for each three years of service; hence, the changed computation method resulted 

in a five percent increase in the drill pay rate for members with over three years of 

service, 10 percent for those with over six years of service, etc. This revision to the 

method of computing inactive-duty training pay was not mentioned in the hearings or 

reports on the legislation. The Act of March 25, 1948, ch. 157, id., grouped the Army 

Officers' Reserve Corps, the Enlisted Reserve Corps, and the Organized Reserves into a 

component called the Organized Reserve Corps, and authorized the payment of inactiveduty training pay to members of this component. This authority put the Army Reserve on 

a par with the National Guard and the reserve components of the other services for the 

first time with respect to inactive-duty training pay, and it was this aspect of the 

legislation that commanded the attention of committee members and witnesses. The act 

also combined the inactive-duty training pay authority for all branches of service into one 

statute, and it fixed two hours instead of 1 1/2 hours as the minimum length of a period of 

drill or instructions required to qualify a member for the pay. 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802 (1949),19 reenacted the 1948 inactive-duty training pay authority without any 

substantive change, and it is the basic source for the current law on the subject, codified 

at 37 U.S.C. §206. The multiple-drill issue arose during the hearings. The Army 

representative at the hearings, at the suggestion of the Chief of the National Guard 

Bureau, proposed that the language of the bill be amended to make it absolutely clear that 

no more than one-thirtieth of one month's "basic pay"20 (invariably called "1 day's pay" 

by the witnesses and subcommittee members) could be paid for drills or instructions 

 

19 After enactment of the Career Compensation Act of 1949, ch. 681, id., the inactive-duty training pay 

provisions were classified to 37 U.S.C. §301. Later, when Title 37 of the United States Code was enacted 

into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions were codified at 37 U.S.C. §206. 

20 The pre-1949 active-duty compensation system of "base and longevity pay" became "basic pay" under 

the Career Compensation Act. See Chapter II.B.1., "Basic Pay," above, generally; in particular, see footnote 

6 of that chapter together with accompanying text. 

241
performed within any single day. The bill was amended as proposed.21 Three days later, 

however, after further discussion of the matter--including consideration of a joint 

memorandum from the Navy and Air Force representatives urging the committee not to 

upset the consolidated drill systems being used by their services--the amendment was 

rescinded.22 It was not included in the legislation ultimately enacted. 

 The Armed Forces Reserve Act of July 9, 1952, ch. 608 [Public Law 476, 82d 

Congress], 66 Stat. 481 (1952), set up new statutory underpinnings for the reserve system 

of the Armed Forces. It established six reserve components within the military 

departments: (1) the National Guard of the United States, (2) the Army Reserve, (3) the 

Naval Reserve, (4) the Marine Corps Reserve, (5) the Air National Guard, and (6) the Air 

Force Reserve. See present 10 U.S.C. §10101. It also established a Coast Guard Reserve. 

The act required that the members of these components be placed in one of three 

Categories: the Ready Reserve, the Standby Reserve, or the Retired Reserve. Personnel in 

these categories are further separated into an active, inactive, or retired status. All 

members of the Ready Reserve are in an active status; those in the Standby Reserve may 

be in either an active or inactive status; and, as the title indicates, those in the Retired 

Reserve are in a retired status. Since the creation of the Selected Reserve of the Ready 

Reserve in 1967, it has been Department of Defense policy to restrict eligibility for 

inactive-duty training pay as well as retirement point credit for attendance at drills, 

periods of instruction, or other qualifying training to members of the Selected Reserve. 

Members of the Individual Ready Reserve and active status members of the Standby 

Reserve may voluntarily perform unpaid inactive-duty training and receive retirement 

point credit. Members in an inactive or retired status are not eligible for inactive-duty 

training or the pay associated therewith. Members of the Ready Reserve, which includes 

 

21 “Career Compensation for the Uniformed Services: Hearings before a Subcommittee of the House 

Armed Services Committee on H.R. 2553,” printed in Hearings before the House Committee on Armed 

Services on Sundry Legislation Affecting the Naval and Military Establishments, 1949, pp. 1721-1723, 81st

Congress, 1st Session (1949). 

22 “Career Compensation for the Uniformed Services: Hearings before a Subcommittee of the House 

Armed Services Committee on H.R. 2553,” printed in Hearings before the House Committee on Armed 

Services on Sundry Legislation Affecting the Naval and Military Establishments, 1949, pp. 1775-1778, 81st

Congress, 1st Session (1949). 

242
the National Guard and the Air National Guard, may be involuntarily ordered to full-time 

active duty in time of national emergency declared by the President after January 1, 1953, 

but only in such numbers as may be authorized by Congress. Members of the Standby 

and Retired Reserve are subject to involuntary call to full-time active duty only in time of 

war or national emergency declared by Congress. 

In a policy directive dated May 2, 1955, the Department of Defense authorized 

the military departments to conduct multiple training periods consisting of more than one 

paid drill, training assembly, or period of equivalent training or instruction, each to be of 

at least four hours in duration, within one calendar day. The directive was revised on 

March 5, 1956, to limit such multiple training periods to two per day. Evidently there still 

was doubt in some quarters about the legality of paying more than one-thirtieth of one 

month's basic pay for training performed within a single day, and the Assistant Secretary 

of Defense (comptroller) submitted the matter to the Comptroller General for resolution. 

The Comptroller General ratified the existing practices by ruling that, under the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), 

there is no legal objection to paying inactive-duty training pay for each of two training 

periods conducted within a single calendar day and, further, that members who are 

entitled to pay for two such training periods are also entitled, under Title III of the Army 

and Air Force Vitalization and Retirement Equalization Act of 1948, ch. 708 [Public Law 

810, 80th Congress], 62 Stat. 108 (1948), to two retirement point credits.23 24 

The Reserve Forces Bill of Rights and Vitalization Act, Public Law 90-168, §2, 

81 Stat. 521, 522 (1967), established a Selected Reserve within each Ready Reserve 

component to consist of elements having the highest priority in personnel, training, 

equipment, and general readiness. The Selected Reserve was required to be made up in 

part of units organized and trained as such, and its organization and training was required 

to be approved by the Secretary of Defense based upon recommendations from the 

 

23 37 Comp. Gen. 618 (1958). 

24 The number of retirement points that a member of a reserve component of an armed force may 

accumulate in one year for inactive-duty training is limited to 60. 

243
military departments as approved by the Joint Chiefs of Staff in accordance with 

contingency and war plans. Members of the Ready Reserve who did not belong to the 

Selected Reserve were administratively classified to the Individual Ready Reserve. 

The Act of May 14, 1976, Public Law 94-286, §1, 90 Stat. 517 (1976), 

empowered the President to involuntarily order not more than 50,000 members of the 

Selected Reserve to active duty for not more than 90 days without a declaration of 

national emergency. The President was required to advise the Congress within 24 hours 

after exercising this authority of the "circumstances necessitating the action taken" and of 

the anticipated use of the reserve members or units. The act further provided that 

reservists ordered to active duty under such authority could be used only for operational 

missions and not to provide assistance during domestic disturbances. It stipulated that the 

Presidential order could be revoked by a joint resolution of Congress. The Act of 

December 23, 1980, Public Law 96-584, §2, 94 Stat. 3377 (1980), increased to 100,000 

the number of members of the Selected Reserve the President could order to active duty 

without a declaration of national emergency, but left the 90-day maximum applicable to 

such duty intact. The National Defense Authorization Act for Fiscal Year 1987, Public 

Law 99-661, §521, 100 Stat. 3816, 3870 (1986), increased this number to 200,00025 and 

also permitted the President to extend the active-duty period for a second 90 days26 if he 

determined such action to be "necessary in the interests of national security." 

The Department of Defense Authorization Act, 1985, Public Law 98-525, 

§1402(a), 98 Stat. 2492, 2620-2621 (1984), adopted as a part of permanent law a 

provision specifying that a member of a reserve component or the National Guard may 

not receive pay for more than four periods of equivalent training, instruction, or other 

appropriate duties to make up for regular periods of training or instruction missed during 

 

25 See 10 U.S.C. §12304 as amended by Section 521(a) of the National Defense Authorization Act for 

Fiscal Year 1987, Public Law 99-661, §521(a), 100 Stat. 3816, 3870 (1986). 

26 See 10 U.S.C. §673b(i) as added by Section 521(b) of the National Defense Authorization Act for Fiscal 

Year 1987, Public Law 99-661, §521(b), 100 Stat. 3816, 3870-3871 (1986). (This latter provision was 

repealed by the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §511(a)(2) 

108 Stat. 2663, 2752 (1994).) 

244
a fiscal year. This provision merely adopted, and codified, practices that had been 

followed for a number of years, as set out in annual Department of Defense 

appropriations acts. 

Under the provisions of 37 U.S.C. §204(g)-(i), as added by the National Defense 

Authorization Act for Fiscal Year 1987, Public Law 99-661, §604, 100 Stat. 3816, 3874-

3878 (1986), and as amended by the National Defense Authorization Act, Fiscal Year 

1989, Public Law 100-456, §631, 102 Stat. 1918, 1984-1985 (1988), a member of a 

reserve component of a uniformed service is entitled to "incapacitation pay" in the 

amount of the pay and allowances of a member of a regular component of a uniformed 

service if the member is physically disabled as the result of an injury, illness, or disease 

incurred or aggravated-- 

 (A) in line of duty while performing active duty; 

 (B) in line of duty while performing inactive-duty training ... ; or 

 (C) while traveling directly to or from such duty or training. 

Generally speaking, any income from nonmilitary employment or selfemployment earned by an incapacitated member during a month he would otherwise have 

been entitled to incapacitation pay operates to reduce the amount of incapacitation pay 

the member actually receives on a dollar-for-dollar basis. Incapacitation pay may be paid 

for up to six months, provided that the Secretary of the member's military department 

may extend the period for receipt of such pay if a determination is made that "it is in the 

interests of fairness and equity to do so."27

 

27 For the reasons underlying the initial authorization of incapacitation pay, see Senate Report No. 99-331 

(Committee on Armed Services), pp. 238-240, accompanying S. 2638, 99th Congress, 2d Session (1986), 

and House Report No. 99-718 (Committee on Armed Services), pp. 203-204, accompanying H.R. 4428, 

99th Congress, 2d Session (1986); cf. House Report No. 99-1001 (Committee of Conference), p. 477, 

accompanying S. 2638, 99th Congress, 2d Session (1986). 

245
As previously indicated, members of reserve components participating in 

inactive-duty training are entitled to one day's basic pay for each drill period.28[28] 

Accordingly, whenever basic pay rates are increased, compensation for inactive-duty 

training is also increased. Current rates of basic pay are set out at the end of the text in 

Chapter II.B.1, "Basic Pay," above. For historical information on how basic pay rates 

have changed over time, see the tables entitled “Basic Pay Schedule—Historical Data” at 

the end of that chapter. 

 As stated at 10 U.S.C. §10102: 

The purpose of each reserve component is to provide trained units and 

qualified persons available for active duty in the Armed Forces, in time of war or 

national emergency, and at such other times as the national security may require, 

to fill the needs of the Armed Forces whenever, during and after the period 

needed to procure and train additional units and qualified persons to achieve the 

planned mobilization, more units and persons are needed than are in the regular 

components. 

Cost: For the cost of compensation for inactive-duty training from 1972 to 2004, 

see Table II-5 of Military Compensation Statistics Tables, volume II of this edition. 

 

28One day's basic pay for a given pay grade and longevity step is computed as 1/30th of the monthly basic 

pay to which a member of the uniformed services having the same pay grade and longevity-step status 

would be entitled if on active duty. 

246
Chapter II.D. 

 Overview of Special and Incentive Pays 

 Although every member of the Armed Forces receives basic pay and either the 

basic allowances for quarters and subsistence or quarters and subsistence in kind merely 

by virtue of being a member of the Armed Forces, some members also receive certain 

other pays--denominated special and incentive pays--on top of and in addition to basic 

pay, quarters, and subsistence. Historically, while the first special and incentive pays ever 

adopted were intended to provide enlistment and reenlistment incentives, the first special 

and incentive pays adopted in the twentieth century were intended to compensate 

members exposed to conditions more hazardous than those experienced by the average 

member of the Armed Forces during peacetime, and, indeed, all of the pays dealt with 

under this Section II.D. of this edition of Military Compensation Background Papers 

originally had some hazard-compensation function or derived from one or more pays that 

had such a function. While some of the twentieth century's special and incentive pays still 

primarily serve a hazard-compensation function today, the purpose presently served by 

the vast majority of special and incentive pays has gradually changed over time, so that 

today most special and incentive pays are intended more to provide additional incentives 

to induce members of the Armed Forces to volunteer for certain career fields that would, 

without those incentives, experience manning shortfalls. Aviation career incentive pay, 

aviation officer continuation pay, and submarine duty incentive pay are perhaps the 

clearest examples of special and incentive pays the major purpose of which has changed 

over time from being extra compensation for added hazards to balancing the supply of 

persons willing to enter and remain in critical military career fields with service demands. 

Other pays that have always been intended to serve a supply-demand balancing function 

are also dealt with under the present heading, not because they, themselves, were ever 

intended to compensate for added hazards, but rather because they derived from one or 

more special pays that were. Perhaps the most prominent of such special pays are the 

continuation, accession, and annual incentive pays for nuclear-qualified officers, which 

derived, historically, from submarine duty pay. For this reason, these pays are grouped, in 

this Section II.D. of this edition of Military Compensation Background Papers, with the 

247
special and incentive pays for submarine and naval service duties. As a whole, the pays 

dealt with in this Section II.D. serve to bring the number of volunteers for certain military 

career fields that involve some degree of hazard into balance with military peacetime 

manning requirements. 

Certain other special pays that were always intended to serve a supply-demand 

balancing function are dealt with under the heading, "Attraction and Retention Pays," in 

Section II.E. of this edition of Military Compensation Background Papers, below. 

Included among these pays are the various special pays for health professionals (doctors, 

dentists, optometrists, veterinarians, psychologists, nurses, and other nonphysician health 

care providers), enlistment and reenlistment bonuses, reserve forces affiliation, 

enlistment, and reenlistment bonuses and educational assistance, foreign language 

proficiency pay, and the like. While denominated as "special pays," none of the pays 

dealt with under Section II.E. were ever intended to serve a hazard-compensation 

function, nor did they derive from one or more pays that were intended to serve such a 

function. Rather, their primary function is, and has always been, to make a military career 

reasonably competitive with available non-military alternatives. 

Because the pays dealt with under Section II.D. and Section II.E. of this edition of 

Military Compensation Background Papers are all denominated as "special and incentive 

pays," the following summary statistics showing the aggregate costs of special and 

incentive pays include all Section II.D. and Section II.E. pays. For the convenience of the 

reader, however, the aggregate costs of the Section II.D. pays are shown separately from 

the Section II.E. pays--the Section II.D. pays being grouped under the heading "Special 

and Incentive Pays" and the Section II.E. pays being grouped under the heading 

"Attraction and Retention Pays," mirroring the Section II.D. and Section II.E. headings 

found in this edition of Military Compensation Background Papers.1 2

 

 

1

 Although data showing both costs and numbers of recipients are available for most of the special and 

incentive pays, data on the number of recipients of special and incentive pays are not included in the 

summary statistics set out below. The fact is, members of the Armed Forces may be entitled to more than 

one special and incentive pay, and many members actually receive more than one special or incentive pay. 

Doctors, for instance, frequently receive more than one form of health professionals’ special pay, and they 

may also be entitled to, for instance, non-crew member flight pay, submarine duty incentive pay, or career 

248
For the aggregate cost of special and incentive pays from 1972 to 2004, see Table II-6

of Volume II, Military Compensation Statistics Tables.

 sea duty pay, depending on duty assignments. Similarly, persons entitled to demolition duty pay may also 

be entitled to, for example, either diving duty pay, parachute duty pay, or flight deck duty pay, to say 

nothing of career sea duty pay. In these circumstances, it is felt that showing recipient data would be likely 

to mislead readers, and for this reason, recipient data are not shown in the tables. 

2

 Because cost data for certain special and incentive pays are no longer available--such as the experimental 

stress duty pays and the personal exposure pays--the summary statistics under the "Special and Incentive 

Pays" heading in the table volume do not include cost data for those pays. 

249
Chapter II.D.1.a.(1) 

 Hostile Fire Pay (Hostile Fire and Imminent Danger) 

Legislative Authority: 37 U.S.C. §310. 

Purpose: To provide an additional payment to personnel subject to hostile fire or 

to explosion of hostile mines; to personnel on duty in an area in which they were in 

imminent danger of being exposed to hostile fire or explosion of a hostile mine and while 

there, other members were subject to hostile fire or explosion of hostile mines; to 

personnel killed, injured, or wounded by hostile fire, explosion of a hostile mine, or any 

other hostile action; and to personnel on duty in foreign areas in which they are subject to 

the threat of physical harm or imminent danger because of civil insurrection, civil war, 

terrorism, or wartime conditions. 

Background: The principle of token additional compensation for combat 

personnel originated during World War II, though, except for the "recognition" nature of 

both, there is little similarity between the "badge pay" of that era and the "hostile fire 

pay" authorized under present law. Effective January 1, 1944, Army enlisted personnel 

awarded the Combat Infantryman Badge became entitled to an extra $10 a month, and 

those awarded the Expert Infantryman Badge, to an extra $5 a month. Act of June 30, 

1944, ch. 335 [Public Law 393, 78th Congress], §1, 58 Stat. 648 (1944). The $10 "badge 

pay" was later extended to enlisted members of the Army Medical Corps holding the 

Expert Medical Corps Badge. Act of July 6, 1945, ch. 279 [Public Law 137, 79th 

Congress], §1, 59 Stat. 462 (1945). "Badge pay" had originally been intended for the 

combat soldier, but the relationship between combat duty and receipt of the pay was not 

direct; rather, it was paid as long as a member remained qualified for the applicable 

badge independently of whether the member was physically present in a combat area. In 

addition, some members who were physically present in combat areas did not qualify for 

the pay. 

Entitlement to "badge pay" continued until October 1949 when the underlying 

authority was repealed by the Career Compensation Act of 1949, ch. 681 [Public Law 

250
351, 81st Congress], §531(b)(36) and (37), 63 Stat. 802, 839 (1949), which was enacted 

during an inter-war period when the military forces of the United States were not 

involved in armed conflict anywhere in the world. Interest in such a pay was, however, 

rekindled with the outbreak of hostilities in Korea in June 1950. 

In July 1950 the Army recommended legislation to provide "hazard duty pay" to 

personnel involved in combat. In support of its proposal, the Army argued that it was 

inequitable that combat personnel were not eligible for extra pay when other personnel 

assigned to flying duty, submarine duty, parachute duty, and other hazardous duties were 

receiving extra pay. The Air Force and Navy disagreed with the proposal on a number of 

grounds: first, on the ground that there was no relationship between pay for combat duty 

and pay for flying, submarine, parachute, and other hazardous duties, since these latter 

pays had been intended as incentives to attract and retain a sufficient number of qualified 

volunteers for continuously hazardous duties; second, since it was widely understood and 

conceded--most particularly, at least according to the Air Force and Navy, by military 

personnel--that the basic purpose of a military force was to fight, military personnel 

impliedly accepted the additional hazards incident to combat in agreeing to become a part 

of the nation's armed forces, with the result that extra pay was not justified when such 

personnel actually became involved in combat;1

 and third, if the real concern was that 

military pay levels were inadequate to maintain an efficient fighting force, what was 

needed was an increase in the general level of military pay, not a new special pay for 

combat service. 

The departmental differences were resolved by the Secretary of Defense, and a 

legislative proposal was submitted to Congress that reflected the essence of the Army 

position. The proposal recommended combat pay at the rate of $100 a month for officers 

and $50 a month for enlisted personnel engaged in combat or direct combat support for at 

least six days in any one month. The rates were equal to the lowest rates authorized for 

 

1

 This argument was, of course, advanced before adoption of the all-volunteer-force concept for manning 

the Armed Forces. It was, however, quite true that the Air Force and Navy had traditionally been able to 

rely on volunteers for staffing to a significantly greater extent than the Army. 

251
any incentive pay, and personnel entitled to incentive pay were not to be eligible for 

combat pay. Neither the House nor the Senate Armed Services Committee acted on the 

proposal. In 1952, however, a combat pay provision was incorporated as a Senate floor 

amendment to the annual Department of Defense Appropriation Bill. At a subsequent 

House-Senate conference, the amendment was rejected, only to be resurrected on the 

floor of the House. The Combat Duty Pay Act of 1952, authorizing combat pay in the 

amount of $45 per month retroactive to June 1, 1950, was enacted July 10, 1952, as Title 

VII of the Department of Defense Appropriation Act, 1953, ch. 630 [Public Law 488, 82d 

Congress], 66 Stat. 517, 538-539 (1952). 

As is clear from the floor debates in both Houses, Congress's purpose in 

authorizing combat pay was to provide special recognition for the rigors and hazards of 

combat duty by equalizing extra compensation between combat personnel and personnel 

entitled to flying pay, submarine pay, parachute pay, etc. The following individual 

remarks are typical and highlight the "recognition" and "equalization" purposes intended 

to be served: 

Mr. Teague: This is some recognition of what they are doing, Mr. Speaker, 

if anywhere in the world there are a group of men to whom we owe a debt it is to 

the men who fight in the front lines during our wars.2

 

 * * * 

Mr. Bennett: The situation is that the casualties are coming from this 

group of people. They are the people who are doing the fighting in this war; it is 

the group we should recognize here. We should have recognized them a long time 

ago.3

 * * * 

Mr. Mansfield: Am I to understand this is an amendment to put the troops 

in Korea on a comparable basis with submariners, fliers, and others who get extra 

pay and other things? 

 

2

 98 Cong. Rec. 9437 (1952). 

3

 98 Cong. Rec. 9438 (1952). 

252
 Mr. Flood: It is exactly that.... 

Mr. Hays: This motion simply does, as the gentleman from Pennsylvania has pointed out, 

for the GI in the foxhole in Korea what we have been doing for nine other categories.... I 

do not take any credit away from the Air Force or the Navy but I think it would be rank 

discrimination if we refused to give hazard pay to the fellow in Korea who is out in the 

front lines, who is fighting the battle.4

 

 

When hostilities ended in Korea, interest in combat pay waned again, until a 

substantial number of United States troops were committed to Vietnam and combat 

casualties began to mount. In January 1963, the Department of Defense submitted a 

proposal to Congress to authorize a new combat pay--now denominated "hostile fire 

pay"--of $55 a month for all personnel serving in any place designated as a "combat area" 

by the Secretary of Defense, whether or not such personnel were assigned to a combat 

unit, and to personnel serving outside a designated "combat area" when subjected to 

hostile fire or the explosion of hostile mines. Harking back to the Korean experience, the 

Department of Defense recommended the same rate of hostile fire pay for officers and 

enlisted personnel. The $55 rate was selected because it was the lowest rate at which 

incentive pay was paid at the time.5

 In contrast to the preexisting "combat pay" authority, 

however, personnel were to be eligible for "hostile fire pay" even though also entitled to 

incentive pay. 

The hostile fire pay provision was enacted as part of the Uniformed Services Pay 

Act of 1963, Public Law 88-132, §9, 77 Stat. 210, 216 (1963), with but one significant 

change from the Department of Defense proposal. The change was that hostile fire pay 

was authorized only as a limited war measure, authority for which was to terminate in 

time of war declared by Congress. Congress's intent in this regard was clear: 

... [W]hat we are really trying to do ... is to provide a special payment for 

people who are under enemy fire during a time of so-called peace. We have been 

in so-called peace in Korea; we are in so-called peace in Vietnam; we are in so-

 

4

 98 Cong. Rec. 9434-9435 (1952). 

5 At the time, the lowest monthly hazardous duty incentive pay rate under 37 U.S.C. §301 was $55. See 37 

U.S.C. §301 as in effect in 1963. 

253
called peace at the Berlin wall, and yet, as a practical matter, these people are 

getting shot at.... 

 * * * 

... [W]e have a situation which has been going on and may go on for 

many years, in which people are going to get shot at. A very small number, 

perhaps. 

On the other hand, when we turn out a full mobilization, people are being 

assigned and practically everybody may be subject to hostile fire; then it becomes 

something that everybody has to accept and there shouldn't be any special pay 

attached to it.6

The "token recognition" nature of the hostile fire pay provisions of the 1963 Act 

is apparent in testimony given by Representative Charles Bennett of Florida to a 

subcommittee of the Senate Committee on Armed Services in support of a House floor 

amendment to return hostile fire pay authority to the bill reported out of the House 

Armed Service Committee: 

I have a tremendous conviction this provision should remain in the Bill. It 

was put in there by the House and the Department of Defense approves this 

provision. It is a modest provision. The Bureau of the Budget approves it. It is an 

additional proposal. I think it is a thing which is only due and just to these men. 

Some people have said, "Well, you pay people to fight and therefore to 

pay them special pay for hostile fire is an improper thing." 

Well, perhaps that might have been a pretty good argument in 1776 when 

about 99 out of every hundred who were in the armed services were actually on 

the frontline, and 1 was back behind taking care of warehousing or something 

else. But the ratio is reversed today. 

As the chairman well knows, today almost all people, numerically 

speaking, in wartime, even wearing uniforms, are not in the frontline and 

therefore it seems to be that these people upon whom so much rests and who have 

such tremendous responsibilities on their shoulders, should have this token. 

 

6

 Subcommittee No. 1 “Consideration of H.R. 3006, To Amend Title 37, United States Code, To Increase 

the Rates of Basic Pay for Members of the Uniformed Services, and for Other Purposes: Hearings before 

Subcommittee No. 1 of the House Committee on Armed Services,” House Armed Services Committee 

Document No. 6, pp. 1720-1722, 88th Congress, 1st Session (1963) (remarks of Representatives Stratton and 

Blandford, respectively). 

254
Of course, you couldn't adequately pay them for what they are doing but it 

is a token which I assure you is appreciated, and I speak from personal experience 

in this, because in World War II, I did get the $10 infantry pay which came to 

people in World War II, and I assure you that everyone that I knew of was very 

deeply grateful to the country for this amount of money which was given. 

It wasn't the amount of money which was given but the fact that the 

country was thinking of them and realizing that they had a special responsibility 

to perform that was deeply felt by the average person in World War II. 

I can't speak of Korea, but, of course, we had this same type of pay in 

Korea. I wasn't in the Korean War so I don't know how he felt about it then. But 

the people that I have talked to who have actually been in combat are very much 

in favor of this recognition by our country for their services.7

Representative Bennett's floor amendment was accepted by the House, and later 

by the Senate. 

 In explanation of its action, the Senate Committee on Armed Services noted: 

The bill proposes a special pay not presently authorized under existing 

law. This provision [section 9 of the bill] would provide a special pay at the rate 

of $55 a month for any member of the uniformed services during any month in 

which he was subject to hostile fire or explosion of hostile mines or on duty in an 

area in which he was in imminent danger of such exposure or explosion. In 

addition, a member will be entitled to such pay if killed, injured, or wounded by 

hostile fire or explosion of a hostile mine or any other hostile action. 

This provision would be in effect except in time of war declared by the 

Congress.... 

During this period of world tension a limited number of members of our 

Armed Forces are assigned to duties in various parts of the world where they are 

exposed to the hazards of injury and death from hostile fire. This pay will provide 

tangible recognition for a dangerous task to which only a small proportion of our 

servicemen are assigned. The Department of Defense strongly urges the 

enactment of this provision.8

 

7

 “Military Pay Increase--To Amend Title 37, United States Code, to Increase the Rates of Basic Pay for 

Members of the Uniformed Services, and for Other Purposes: Hearings on H.R. 5555 before the Special 

Subcommittee of the Senate Committee on Armed Services,” p. 108, 88th Congress, 1st Session (1963) 

(statement of Representative Bennett). 

8

 Senate Report No. 88-387 (Committee on Armed Services), pp. 27-28, accompanying H.R. 5555, 88th

Congress, 1st Session (1963). 

255
The hostile fire pay rate was raised from $55 to $65, effective September 1, 1965, by the 

Act of August 21, 1965, Public Law 89-132, §4, 79 Stat. 545, 547 (1965). This 

adjustment was part of a general increase in the level of military pay, and no special 

reason was provided for the $10 raise. 

From 1963 when hostile fire pay was initially authorized, until the 

legislative authority was expanded to authorize imminent danger pay in 1983, 

four areas were designated for hostile fire pay — Vietnam, Cambodia, Laos and, 

during the period of hostilities surrounding the seizure of the American Embassy, 

Iran. In addition, hostile fire pay was authorized from time to time during this 

period for personnel assigned to service in American embassies abroad that came 

under attack. To preserve the hostile fire pay entitlement of personnel still carried 

in a missing status [9] from the Vietnam Conflict, official designation for hostile 

fire pay was continued for Vietnam and Cambodia until the U.S. reestablished 

diplomatic relations with Vietnam (and for a period thereafter). 

Effective October 1, 1983, the entitlement to hostile fire pay was extended to 

members of the uniformed services on duty in foreign areas where they were subject to 

"the threat of physical harm or imminent danger on the basis of civil insurrection, civil 

war, terrorism, or wartime conditions," and the section title was changed to read "Special 

pay: duty subject to hostile fire or imminent danger." Department of Defense 

Authorization Act, 1984, Public Law 98-94, §905, 97 Stat. 614, 636-637 (1983).9

 This 

entitlement extension resulted from a House floor amendment to the Authorization bill. 

As explained by the sponsor of the amendment, Representative Schroeder (D. Colorado): 

Mr. Chairman, my amendment is intended to provide authority for the 

Secretary of Defense to grant hostile fire pay to our military personnel in Lebanon 

and El Salvador. Over the past few months we have learned how dangerous it is to 

be an American soldier or sailor in Beirut or San Salvador. In mid-April, a car 

bomb exploded outside the American Embassy in Beirut killing as many as 16 

Americans, most of them military. In late May, Lt. Comdr. Albert Schaufelberger 

was gunned down in a parking lot on the campus of Central American University 

in San Salvador. In both cases, these attacks were followed by threats of further 

violence against Americans in both places. 

Section 310 of title 37 provides limited authority for the Secretary of 

Defense to pay $65 a month as special pay to military personnel who are subject 

 

9 See House Report No. 98-352 (Committee of Conference), p. 225, accompanying S. 675, 98th Congress, 

1st Session (1983). 

256
to hostile fire. The Defense Department has been applying this special pay 

provision only on a case-by-case basis, meaning that Commander 

Schaufelberger's family gets 1 month's pay of $65 for his being subject to hostile 

fire. I think this is wrong. We should provide blanket coverage for all Americans 

in both countries. The amendment I am offering would permit DOD to make such 

payments to all military personnel in such dangerous locations beginning October 

1. 

 * * * 

To provide some benefit for servicemembers in clearly dangerous 

locations, I urge your support for the amendment.10

As a result of the expanded statutory authority provided in the Department 

of Defense Authorization Act, 1984, Lebanon and El Salvador were designated, 

effective October 1, 1983, as areas in which personnel on official duty would 

qualify for imminent danger pay. With the operation in Grenada in late 1983, the 

Islands of Grenada and Carriacou were designated in October 1983; and, 

designation followed for Colombia in July 1985. Designations for Vietnam, 

Cambodia and Iran continued. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §638, 

99 Stat. 583, 649 (1985), further modified the hostile fire pay provisions of 37 U.S.C. 

§310 to provide that the rate of pay for duty subject to hostile fire or imminent danger is 

to be "the lowest rate for hazardous duty incentive pay specified in section 301(c)(1) of 

this title," i.e., the hazardous duty incentive pay provisions covering such hazardous 

duties as parachute jumping, non-crew member flight duty, etc. Under an amendment to 

37 U.S.C. §301(c)(1) also effected by the Department of Defense Authorization Act, 

1986, Public Law 99-145, §635(a)(3), 583, 99 Stat. 648 (1985), "the lowest rate for 

hazardous duty incentive pay" was increased to $110. Hence, with the increase in 

hazardous duty incentive pay rates under 37 U.S.C. §301(c)(1) to a minimum of $110 per 

month, the rate of pay for duty subject to hostile fire or imminent danger was increased, 

pari passu, to $110 per month from the previous $65 per month. 

 

10 129 Cong. Rec. 20970 (1983) (daily ed., 129 Cong. Rec. H5678-H5679 (July 26, 1983)) (statement of 

Representative Schroeder). 

257
The legislative history of the 1986 Authorization Act, Public Law 99-145, id., 

does not indicate the reasons for the increase in the rate of pay authorized for duty subject 

to hostile fire or imminent danger,11 primarily because no report was ever submitted on 

the Senate bill, S. 1160, in which the subject provision was first inserted.12 In fact, the 

hostile fire pay "enhancements" adopted as part of the 1986 Authorization Act exactly 

parallel recommendations advanced in 1984 by the Fifth Quadrennial Review of Military 

 

11 See Senate Report No. 99-118 (Committee of Conference), p. 431, and House Report No. 99-235 

(Committee of Conference), p. 431, accompanying S. 1160, 99th Congress, 1st Session (1985). 

12 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

When the Armed Services Committee learned that the Senate would approve no real growth in the defense 

budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program reductions to 

conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 1160, reflecting 

these new budget levels.... 

Most of Senate Report 99-41 continues to be applicable to this bill.... 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Congressional Record S6415, S6475 (May 17, 1985)) 

(statement of Senator Goldwater). In "explanatory background information" on some of the differences 

between S. 1029 and S. 1160, the following appears: 

The compensation and benefits provisions of the bill contain significant differences from those contained in 

S. 1029.... 

... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

The special and incentive pays ... involved in these recommendations include: 

 c. Danger pay. 

 

Each of these benefit increases or enhancements are in addition to the modest improvements in benefits 

previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hostile fire pay program contained in 

S. 1160 and subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-

145, 99 Stat. 583 (1985). (The term "danger pay" appears to be synonymous with "hostile fire pay," see 

footnotes 14 and 15, below, together with accompanying text.) 

258
Compensation.

13 In particular, the Fifth Quadrennial Review recommended not only that 

the rate of pay authorized for hostile fire duties be "equal to the lowest hazardous duty 

incentive pay at the time," it also recommended that the name of the entitlement be 

changed to "danger pay."14 15 In support of its recommendation to equalize the lowest rate 

of pay for hazardous duty under 37 U.S.C. §301 and hostile fire pay, the Fifth 

Quadrennial Review stated: 

Level of Payment. The final issue deals with the proper level of HFP 

[hostile fire pay] payment. It is important, when setting the level, that the rates are 

appropriate but not excessive, ... 

Finally, it should be noted that Congress, in addition to previous 

commissions studying compensation, have indicated a desire to relate HFP rates 

to those of the lowest hazardous duty pays, believing that duties such as 

parachuting from a plane or disarming a bomb are no more dangerous than 

"putting one's life on the line." In addition, it is felt that those taking the "brunt of 

the action" deserve something greater than those in the rear areas. Hence, a twotiered rate system related to the lowest hazardous duty pay is believed to be a 

logical and fair approach while staying within the original intent of "token 

recognition."16 17

 

13 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Fifth Quadrennial Review of Military Compensation was convened in 1982, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in early 

1984. 

14 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, pp. 32 and 759 (November 1983). Also see, Executive Summary, “Report of the Fifth 

Quadrennial Review of Military Compensation, pp. VI-12 and 13 (January 1984). 

15 Although the Senate Armed Services Committee recommended changing the name of the special pay 

entitlement to "Danger Pay" as recommended by the Fifth Quadrennial Review, this proposal was deleted 

in conference. Senate Report No. 99-118 (Committee of Conference), p. 431, and House Report No. 99-235 

(Committee of Conference), p. 431, accompanying S. 1160, 99th Congress, 1st Session (1985). 

16 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, pp. 754 and 757 (November 1983). 

17 When the Fifth Quadrennial Review was making its recommendations to Congress concerning hostile 

fire pay rates in 1983-1984, the hostile fire pay entitlement was $65 per month. As previously indicated, the 

Department of Defense Authorization Act, 1986, Public Law 99-145, §628, 99 Stat. 583, 649 (1985), 

effectively increased the hostile fire pay entitlement to $110 per month. See discussion of amendment to 37 

U.S.C. §301(c)(1) effected by the 1986 Authorization Act, above. At $110 per month, the present hostile 

fire pay entitlement may be thought by some to be more than a "token" payment. 

259
Whether on the basis of the recommendations and reasoning of the Fifth 

Quadrennial Review of Military Compensation or otherwise, Congress did in fact equate 

the rate of pay for duty subject to hostile fire or imminent danger to the lowest rate of pay 

for hazardous duties such as parachute jumping, explosives demolition, etc. Thus, the 

1986 Authorization Act, Public Law 99-145, id., reestablished the linkage between 

hostile fire pay and hazardous duty incentive pay originally established by the Uniformed 

Services Pay Act of 1963, Public Law 88-132, §9, 77 Stat. 210, 216 (1963).18 Given the 

linkage, the rate of pay for duty subject to hostile fire or imminent danger increased from 

$65 a month to $110 a month with enactment of the 1986 Authorization Act, Public Law 

99-145, id. 

In the last half of the 1980s and up until Operation Desert Shield in August 1990, 

several more areas were designated for imminent danger pay: Sudan in July 1986 (for a 

short period); Peru in April 1987; the Persian Gulf, Bahrain, Kuwait, the Strait of 

Hormuz, and a portion of Gulf of Oman in August 1987 (this was terminated in April 

1989); Afghanistan in November 1988; the Philippines in May 1990 (until November 

1991); Panama in December 1989 (until end of January 1990); and Laos in December 

1989 (until July 1997). 

The rate of pay for duty subject to hostile fire or imminent danger was 

temporarily increased by Congress in the Persian Gulf Conflict Supplemental 

Authorization and Personnel Benefits Act of 1991, Public Law 102-25, §301(a), 105 Stat. 

75, 80 (1991), from $110 to $150 a month.19 The increase applied "during the period 

beginning on August 1, 1990, and ending on the first day of the first month beginning on 

 

18 See discussion of the hostile fire pay provisions of the Uniformed Services Pay Act of 1963, Public Law 

88-132, §9, 77 Stat. 210, 216 (1963), and its background at text associated with footnotes 5 through 8 to 

this chapter, above. 

19 Earlier, in the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, §1111(a), 

104 Stat. 1485, 1635 (1990), Congress specifically authorized the Secretary of Defense to "provide for the 

payment of imminent danger pay ...to members of the Armed Forces assigned to duty in the Persian Gulf 

area in connection with Operation Desert Shield with respect to periods of duty served after August 1, 

1990, and before the date of enactment of this Act [November 5, 1990]." 

260
or after the date 180 days after the end of the Persian Gulf conflict."20 Persian Gulf 

Conflict Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 

102-25, id., §301(b), 105 Stat. at 80. Although no reason was given for the temporary 

increase,21 the Senate had earlier proposed the exact same action in another bill that 

would have provided several special benefits to members of the Armed Forces serving in 

the Persian Gulf in support of Operation Desert Shield/Desert Storm. In support of its 

proposal, the Senate cited both the effects of inflation and the danger service members 

faced in the Persian Gulf: 

The Committee notes that the last time the pay was increased was in 1985. 

The increase proposed in this section would adjust the previous amount to match 

inflation. The Committee believes that military personnel deserve this increase in 

recognition of the dangerous circumstances in which they are serving. 

Senate Report No. 102-9 (Committee on Armed Services), p. 2, accompanying S. 237, 

102d Congress, 1st Session (1991). 

The temporary increase to $150 per month in the rate of pay for duty subject to 

hostile fire or imminent danger was made permanent in the National Defense 

Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §613, 105 Stat. 

1290, 1377 (1991). No particular reason was given by either the House or Senate for 

making the increase permanent.22 

 

20 Although the Persian Gulf conflict provided the impetus for the increase in the rate of special pay for 

duty subject to hostile fire or imminent danger, the rate increase was not limited in its applicability to the 

Persian Gulf area. Any member of the uniformed services subject to hostile fire or imminent danger 

anywhere in the world was entitled to the increased rate of pay during the applicable period. 

21 See House Report No. 102-16 (Part 1) (Committee on Armed Services), p. 10, accompanying H.R. 1175, 

102d Congress, 1st Session (1991). (The House Report--House Report No. 102-16 (Part 1)--was issued on 

H.R. 1175, 102d Congress, 1st Session (1991), but the bill ultimately adopted as the Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, 105 Stat. 75 (1991), 

was S. 725, 102d Congress, 1st Session (1991). No report was issued on S. 725. 

22 See, e.g., House Report No. 102-60(Committee on Armed Services), p. 248, accompanying H.R. 2100; 

Senate Report No. 102-113 (Committee on Armed Services), p. 226, accompanying S. 1507; and House 

Report No. 102-311 (Committee of Conference), p. 549, accompanying H.R. 2100, 102d Congress, 1st

Session (1991). 

261
In addition to making the temporary increase to $150 per month permanent, the 

National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-

190, §611, 105 Stat. 1290, 1373 (1991), also repealed the prohibition on payment of 

hostile fire or imminent danger pay during time of war declared by Congress. Ignoring 

the earlier rationale that such pay was not justified in times of "full mobilization" because 

then "practically everybody may be subject to hostile fire,"23 the House Armed Services 

Committee indicated that it thought the prohibition should be repealed because it could 

"create pay inequities in future conflicts like Operation Desert Storm."24

 As a result of several operations in which U.S. forces were involved over the 

course of the 1990s, and the increasing threat of terrorism around the globe, many areas 

were designated as imminent danger areas, for at least a time, between the start of Desert 

Shield in August 1990 until the attacks of September 11, 2001. 

In August 1990, Kuwait, Saudi Arabia and the Persian Gulf were designated. 

Bahrain, Oman, Qatar, UAE, the Red Sea, the Gulfs of Oman and Aden, and a portion of 

the Arabian Sea were also designated (but their designations were terminated in August 

1993). In August 1990, the Department also designated Liberia and Yemen (the 

designation for Yemen was terminated in February 1998). Iraq was designated in 

September 1990. Turkey was designated in February 1991. Egypt, Jordan, Israel and 

Syria were designated that same month (but their designation ended in December 1991). 

Designations in June 1992 included: Bosnia-Herzegovina; Macedonia; the former 

Federal Republic of Yugoslavia, Croatia, and Slovenia (the latter was terminated in 

September 1995); Angola; and Mozambique and Chad (both terminated in February 

1998). In September 1992, Somalia was designated; followed by Sudan in October 1993, 

Haiti in September 1994, Algeria in March 1995, Azerbaijan in June 1995, Karachi, 

Pakistan in October 1995; and Burundi, Zaire and the rest of Pakistan in November 1996. 

In 1997, several new locations were added: In January, Athens, Greece, Egypt,

and Jordan; Tajikistan in March; Albania in May (through March 2002); Bahrain in June, 

Sierra Leone in July, Qatar in August; and Rwanda in October 1997. 

 

23 See text accompanying footnote 6 to this chapter, above. 

24 House Report No. 102-60 (Committee on Armed Services), p. 248, accompanying H.R. 2100, 102d 

Congress, 1st Session (1991). See House Report No. 102-311 (Committee of Conference), p. 549, 

accompanying H.R. 2100, 102d Congress, 1st Session (1991). 

262
As a result of operations in the Kosovo crisis in 1999, the following areas were 

designated for imminent danger pay: the Adriatic Sea and portions of the Ionean Sea 

(from April to September 1999); and specific areas in Greece, Hungary and Italy from 

May through mid-September 1999. 

Yemen was again designated for Imminent Danger Pay in May 1999, followed by 

East Timor and Ethiopia in September 1999, and Uganda in January 2000. Following the 

attacks of September 11, 2001, hostile fire pay was paid for the first time to members of the

uniformed services in the United States who were subject to the hostile acts of the terrorists

 on that day. 

 As U.S. forces commenced to fight the Global War on Terrorism, several 

additional areas were designated for imminent danger pay in September 2001: 

Kyrgyzstan, Uzbekistan, Oman, United Arab Emirates, the Red Sea, the Gulfs of Aden 

and Oman, and a portion of the Arabian Sea. The designation for Indonesia and Malaysia 

followed in October 2001; Israel in January 2002; Djibouti, Eritrea, Kenya, and all of the 

Republic of Georgia in July 2002, and Cote d’Ivoire in February 2003. 

 In connection with Operation Iraqi Freedom, most areas in which uniformed 

personnel were assigned had already been designated for imminent danger pay, and thus, 

the only new area designated was a portion of the Mediterranean Sea (designated from 

April through July 2003). The National Defense Authorization Act for Fiscal Year 2002, 

Public Law 107-107, 115 Stat. 1136, provided for hazardous duty pay for members of 

maritime visit, board, search and seizure teams. 

In order to reward military personnel participating in Operation Enduring 

Freedom, which began in 2001, and Operation Iraqi Freedom, which began in 2003, the 

Emergency Wartime Supplementary Appropriations Act for 2003, Public Law 108-11, 

117 Stat. 559 (2003) increased hostile fire pay from $150 to $225 per month. This 

increase covered only Fiscal Year 2003, the period from October 2002 to September 

2003. 

 In their respective considerations of the National Defense Authorization Act for 

Fiscal Year 2004, the House and Senate took differing approaches to continuation of this 

increase. The Senate version of the bill made the increase permanent. The House version, 

263
echoing the position of the Bush Administration, called for the higher rate in 2004 only 

for members involved in Operation Enduring Freedom and Operation Iraqi Freedom, who 

would continue to receive this rate only until the President declared those operations 

terminated. The position of the Bush Administration was that an across-the-board 

increase in hostile fire pay had no meaning as a reward for service in Afghanistan and 

Iraq if members in many other areas received the same amount. However, members of 

Congress argued that reducing the hostile fire allowance after the 2003 increase would 

constitute a pay cut for United States occupation forces at many locations in the world. 

The conference resolution endorsed the Senate version, extending the higher rate of 

hostile fire pay through 2004 and continuing the eligibility of members in all regions 

designated as hostile fire or imminent danger zones. 

Since 1963, the following zones have been designated as hostile fire pay areas: 

the Adriatic Sea, Afghanistan, Albania, Angola, the Arabian Gulf region, a portion of the 

Arabian Sea, Azerbaijan, Bahrain, Bosnia and Herzegovina, Burundi, Cambodia, Chad, 

Colombia, Cote d’Ivoire, Croatia, Djibouti, East Timor, Egypt, El Salvador, Eritrea, 

Ethiopia, Georgia, Greece, Grenada and Carriacou, the Gulf of Aden, the Gulf of Oman, 

Haiti, Hungary, Indonesia, the northern portion of the Ionian Sea, Iran, Iraq, Israel, 

portions of Italy, Jordan, Kenya, Kuwait, Kyrgyzstan, Laos, Lebanon, Liberia, 

Macedonia, Malaysia, the eastern portion of the Mediterranean Sea, Montenegro, 

Mozambique, Oman, Pakistan, Panama, Peru, the Philippines, Qatar, the Red Sea, 

Rwanda, Saudi Arabia, Serbia, Sierra Leone, Slovenia, Somalia, Sudan, Syria, Tajikistan, 

Turkey, Uganda, the United Arab Emirates, Uzbekistan, Vietnam, Yemen, and Zaire. 

As of October 2003, the following countries and regions retained their 

designation, or had been removed from the list and later redesignated: Afghanistan, 

Algeira, Angola, portions of the Arabian Sea, Azerbaijan, Bahrain, Bosnia and 

Herzegovina, Burundi, Colombia, Cote d’Ivoire, Croatia, Djibouti, East Timor, Egypt, 

Eritrea, Ethiopia, Georgia, Greece (only the immediate Athens area), the Gulf of Aden, 

the Gulf of Oman, Haiti, Indonesia, Iran, Iraq, Israel, Jordan, Kenya, Kuwait, Kyrgyzstan, 

Lebanon, Liberia, Macedonia, Malaysia, Montenegro, Pakistan, the Persian Gulf, the 

Philippines, Qatar, the Red Sea, Rwanda, Saudi Arabia, Serbia, Sierra Leone, Somalia, 

Sudan, Syria, Tajikistan, Turkey (excluding the Bosporus and Dardanelles region), 

264
Uganda, the United Arab Emirates, Uzbekistan, Yemen, and Zaire.25 Some designations 

are for the land area of a country or region, others for the land area and airspace above. 

Bodies of water have been designated as sea area, airspace, or both. Hostile fire pay also 

has been authorized from time to time for military personnel assigned to service in 

American embassies abroad that have come under attack. 

Current rate of hostile fire pay: $225 per month. 

Cost: For the cost of hostile fire pay from 1972 to 2004, see Table II-7 of Military 

Compensation Statistics Tables, volume II of this edition. 

 

25 “Special Pay: Duty Subject to Hostile Fire or Imminent Danger,” in Department of Defense Financial 

Management Regulation 7000.14R, 7A, Ch. 10 (October 2003). 

265
Chapter II.D.1.a.(2) 

 Demolition Duty Pay 

Legislative Authority: 37 U.S.C. §301(a)(4) and (c)(1). 

Purpose: To provide an additional pay to increase the ability of the uniformed 

services to attract and retain personnel for duty involving the demolition or neutralization 

of explosives, and to compensate for the more than normally dangerous character of such 

duty. 

Background: The Career Compensation Act of 1949, ch. 681 [Public Law 351, 

81st Congress], §204(a)(7), 63 Stat. 802, 809-810 (1949), added "duty involving the 

demolition of explosives as a primary duty, including training for such duty," to the list of 

duties for which incentive pay for hazardous duty was authorized. Rates of pay for this 

duty, commonly referred to simply as "demolition duty," were initially set at $100 a 

month for officers and $50 a month for enlisted personnel, the same as all other 

categories of hazardous duty incentive pay with the exception of flight pay and 

submarine duty pay. Section 204(a)(7) and (c) of the Career Compensation Act, at 63 

Stat. 810.1

 In 1948, at the request of the Secretary of Defense, the Advisory Commission on 

Service Pay, sometimes referred to as the Hook Commission, undertook the first 

comprehensive study of the military pay system since 1908. The study concluded that, 

although special pays such as demolition duty pay were designed in part to compensate 

for arduous and hazardous duties, their main purpose should be to fill a supply-demand 

function--namely, to induce personnel to enter upon and remain in hazardous military 

occupations. The Commission's rationale underlying this conclusion was that: 

The Commission, after reviewing previous studies, hearing presentations 

by the Services, and personally observing representative operational and training 

activities, is of the unanimous opinion that some additional pay should be 

 

1

After enactment of the Career Compensation Act of 1949, ch. 681, id., the hazardous duty incentive pay 

provisions thereof, including demolition duty pay, were in the main classified to 37 U.S.C. §235, and the 

demolition duty pay provisions were found at 37 U.S.C. §235(a)(7) and (c). Later, when Title 37 of the 

United States Code was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 

Stat. 451 (1962), the hazardous duty pay provisions, including the demolition duty pay provisions here in 

issue, were codified at 37 U.S.C. §301. 

266
awarded to individuals who, on a voluntary basis, carry out peacetime functions 

involving more than the ordinary military risk and danger.... 

Close examination of the nature of hazardous duty and the expressed or 

implied reasons for accepting risks indicated that the incentive to engage and 

remain in hazardous occupations provided a more realistic and practical basis for 

determining the rates of special pay than the theory of recompense for shorter 

career expectancy. The recompense or replacement concept, although promoted 

for many years as the sole argument for hazard pay, was found wanting for 

several reasons.2

 The Hook Commission's rationale for higher demolition duty pay for officers than 

for enlisted personnel, which was adopted in the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], §204(a)(7), 63 Stat. 802, 809-810 (1949), was as 

follows: 

A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all times the 

compensation for the primary responsibility will be considerably greater than that 

for any additional pay. 

(2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more 

highly trained personnel. 

(3) Officers are usually given greater responsibilities, aside from normal 

administrative control, than enlisted personnel on hazardous assignments.3

Although it is not altogether clear, Congress apparently accepted the conclusions 

of the Hook Commission concerning hazardous duties in general, and demolition duties 

in particular.4

 In any event, demolition duty was added to the list of duties for which 

 

2

 “Career Compensation for the Uniformed Forces, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948 (italicized material italicized 

in original). 

3

 “Career Compensation for the Uniformed Forces, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

4

 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act of 1949, ch. 681, id., see House Report No. 81-779 (Committee on Armed Services), p. 

15, and Senate Report No. 81-733 (Committee on Armed Services), pp. 18-19, accompanying H.R. 5007, 

81st Congress, 1st Session (1949). 

267
hazardous duty incentive pay was authorized, and an officer-enlisted pay differential was 

adopted--in keeping with the Hook Commission's recommendations. 

 Demolition duty pay rates were raised by 10 percent to $110 and $55 per month for 

officers and enlisted personnel, respectively, by the Career Incentive Act of 1955, ch. 20 

[Public Law 20, 84th Congress], §2(6), 69 Stat. 18, 21 (1955), and remained at that level 

until October 1, 1981. At that time, rates for enlisted personnel were increased 50 percent 

to $83 per month by the Uniformed Services Pay Act of 1981, Public Law 97-60, 

§111(c)(3), 95 Stat. 989, 993 (1981). As explained in the Senate Report, the 1981 

increases were made in recognition of the fact that hazardous duty incentive pay rates had 

"not been adjusted in more than 20 years, and this increase is needed to enhance the 

incentive value of this pay."5

 Demolition duty pay rates for enlisted personnel were further increased to $110 

per month in 1985 by the Department of Defense Authorization Act, 1986, Public Law 

99-145, §635(a)(3), 99 Stat. 583, 648 (1985). This increase was effected by an 

amendment to 37 U.S.C. §301(c)(1) that did away with any distinction between officers 

and enlisted personnel for the vast majority of duties qualifying for hazardous duty 

incentive pay, specifically including demolition duty pay. Prior to amendment by the 

1986 Authorization Act, 37 U.S.C. §301(c)(1) read as follows: 

For the performance of the hazardous duty described in [various clauses 

of subsection (a) of 37 U.S.C. §301, including explosives demolition duty], an 

officer is entitled to $110 a month and an enlisted member is entitled to $83 a 

month. 

After amendment by the 1986 Authorization Act, 37 U.S.C. §301(c)(1) reads as 

follows: 

For the performance of hazardous duty described in [the same clauses set 

out above, including demolition duty], a member is entitled to $110 a month.6

Thus, under the then-current 37 U.S.C. §301, all members, both officers and 

enlisted personnel,7

 were entitled to $110 per month for the performance of explosives 

demolition duties under qualifying orders. 

 

5

 Senate Report No. 97-146, p. 8, accompanying S. 1181, 97th Congress, 1st Session (1981). 

6

 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in explosives 

demolition duties became effective October 1, 1985. Section 635(b) of the Department of Defense 

Authorization Act, 1986, Public Law 99-145, §635(b), 99 Stat. 583, 648 (1985). 

268
 The legislative history of the 1986 Authorization Act per se does not indicate the 

reason for eliminating the distinction between officers and enlisted personnel with respect 

to the rates of pay authorized for explosives demolition duties. This is primarily because 

no report was ever submitted on the Senate bill, S. 1160, in which the proposal to 

equalize the rates of demolition pay for officers and enlisted personnel was made.8

 In 

fact, however, the proposal to equalize officer and enlisted rates of pay for various 

 7

 The term "member" is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

8

 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

 ... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

 When the Armed Services Committee learned that the Senate would approve no real growth in the 

defense budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program 

reductions to conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 

1160, reflecting these new budget levels.... 

Most of Senate Report 99-41 continues to be applicable to this bill. 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) (statement 

of Senator Goldwater). In "explanatory background information" on some of the differences between S. 

1029 and S. 1160, the following appears: 

 The compensation and benefits provisions of the bill contain significant differences from those 

contained in S. 1029.... 

 ... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

 The special and incentive pays ... involved in these recommendations include: 

 g. Hazardous duty pays. 

 Each of these benefit increases or enhancements are in addition to the modest improvements in benefits 

previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the demolition duty pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

269
hazardous duties, including demolition duty, had been made the preceding year in 

connection with the consideration of the Department of Defense Authorization Act, 1985, 

Public Law 98-525, 98 Stat. 2492 (1984). At that time, the Senate Committee on Armed 

Services, reporting out S. 2723, 98th Congress, 2d Session (1984), had included a 

provision that would, among other things, have equalized officer and enlisted rates of 

hazardous duty incentive pay for demolition duty.9

 In support of its recommendation, the 

Committee stated: 

The committee proposes that the enlisted and officer rates for several 

hazardous duty incentive pays be equalized.... 

The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including demolition duty pay] should be eliminated.... 

The committee agrees that enlisted and officer personnel should be paid 

the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.10

The Senate proposal was eliminated in conference.11

 As indicated immediately above, the demolition pay "enhancements" adopted as 

part of the 1986 Authorization Act closely parallel recommendations advanced by the 

Fifth Quadrennial Review of Military Compensation in 1984.12 In support of its 

recommendation to "[a]ward officer and enlisted personnel $110 per month for 

 

9

 See Section 148 of S. 2723, 98th Congress, 2d Session (1984). 

10 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing section 148 of the Senate 

bill), accompanying S. 2723, 98th Congress, 2d Session (1984). 

11 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

12 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ...proposing changes" to the compensation system of 

the uniformed services. The Fifth Quadrennial Review of Military Compensation was convened in 1982, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in early 

1984. 

270
performance of demolition duty,"13 thereby eliminating officer-enlisted differentials for 

that pay, the Fifth Quadrennial Review stated: 

A. A valid need for Demolition Duty Pay currently exists and will exist in 

the foreseeable future. 

1. Demolition duty, particularly in the Explosive Ordnance Disposal (EOD) field, 

exposes personnel to greater risks than those encountered by most Service 

personnel. 

2. Enlisted manning in demolition fields, especially EOD, is below required 

levels. 

3. Low attraction of personnel to demolition fields is a primary cause of 

undermanning. 

 4. High attrition in EOD training is also a major cause of undermanning. 

 5. Retention of personnel in demolition fields is generally satisfactory. 

 B. Current rates of Demolition Duty Pay [DDP] are generally adequate to 

compensate for the hazards of demolition duty. 

 1. The rate of DDP should be uniform for officers and enlisted personnel. 

 2. A DDP rate of $110 per month for both officers and enlisted personnel is 

currently appropriate. 

 3. Judicious use of other special and incentive pays, i.e. Enlistment Bonuses, 

SRBs [Selective Reenlistment Bonuses], and the proposed Special Duty Assignment Pay 

(replaces Proficiency Pay) along with other management actions should continue in order 

to resolve manning, attraction and retention problems and maintain satisfactory retention 

level.14

 In further comment on officer-enlisted differentials for various hazardous duty 

incentive pays, including explosives demolition duty, the Fifth Quadrennial Review

stated: 

 

13 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 84, November 1983. Also see id., p. 3, and “Executive Summary, Report of the Fifth Quadrennial 

Review of Military Compensation,” p. VI-4, January 1984. 

14 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, pp. 83-84, November 1983. Also see id., pp. 2-3, and Executive Summary, “Report of the Fifth 

Quadrennial Review of Military Compensation, pp. VI-4, January 1984. 

271
During the process of reviewing the various Hazardous Duty Incentive 

Pays, it became increasingly clear that, although there is some incentive 

associated with certain pays, the primary purpose is recognition for the hazards or 

risks involved. It was, therefore, believed that officer/enlisted personnel should 

receive the same level of payment for seven of the Hazardous Duty Incentive 

Pays: [including] ... demolition [duty pay]....15

 In arriving at this conclusion, the Fifth Quadrennial Review implicitly rejected the 

conclusions reached by the Hook Commission in 1948.16 In commenting on various 

arguments that had been advanced in favor of and against continuation of officer-enlisted 

differentials for hazardous duty incentive pays in general, the Fifth Quadrennial Review

summarized the argument against the Hook Commission's position in the following 

terms: 

The Hook Commission rationale was based primarily on an examination 

of the needs of the aviation and submarine communities. Times have changed and 

those communities now have their own separate career incentive pays and 

bonuses.17

Other arguments in favor of eliminating the differential were summarized as 

follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 * One can never really compensate for risk of life, no matter the level. 

 * Basic pay and bonuses are adequate to cover any differential. 

 * Most hazard-related pays now cover skills that are not necessarily career oriented 

(across all Services); hence, a differential is not necessary for purposes of retention. 

However, exceptions may occur and should be individually addressed, as required. 

 * [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for same 

risk" is perceived as equitable in the hazardous duty areas.18

 

15 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 919, November 1983. See id., pp. 36-37. 

16 See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnote 3 to this chapter, above. 

17 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 920, November 1983. cf. id., p. 37. 

18 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 919-920, November 1983. 

272
Whether for these or some other reasons, Congress did in fact eliminate officerenlisted pay differentials for explosives demolition duties in the Department of Defense 

Authorization Act, 1986, Public Law 99-145, 99 Stat. 583 (1985). 

As indicated above, the purpose of providing a special pay for demolition duty is 

to encourage personnel to enter and remain in a career involving the demolition or 

neutralization of explosives despite the frequent and sometimes nearly continuous 

exposure to the various hazards implicit in that duty. To carry out this purpose, Section 

109(b) of Executive Order 11157 of June 22, 1964, as amended,19 established

performance requirements--minimum exposure standards, normally exceeded by 

personnel performing the duty on a full-time basis--which must be met to qualify for the 

pay. The pay is not awarded for meeting the minimum exposure standard; it is paid for 

facing as much exposure as the needs of the service may require during a period of 

qualifying duty. A member who, as a primary assignment, engages in demolition duty or 

training using live explosives or neutralizes an explosive device during any month meets 

the minimum exposure standard and qualifies for the extra pay for that month.20

Reserve forces personnel21 entitled to compensation for inactive-duty training are 

entitled to demolition duty pay when they perform qualifying duties under competent 

orders, provided Congress has appropriated sufficient funds for that purpose.22

 

19 Reproduced, as amended, at 37 U.S.C. §301 note. 

20 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶ 20331-20334. 

21 For present purposes, the term "reserve forces personnel" refers to persons who are members either of the 

reserve components of the uniformed services or of the National Guard, and the term "reserve forces" refers 

to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. §101(24), 

the reserve components of the uniformed services consist of the Army National Guard of the United States, 

the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of the United 

States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public Health 

Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and the Air 

National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air National 

Guard, respectively. 

22 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, demolition 

duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the reserve 

forces participating in inactive-duty training to hazardous duty incentive pay for demolition duty are 

explicitly made contingent on Congressional appropriations, i.e., members of the reserve forces 

273
Under 37 U.S.C. §301(f), members of the reserve forces who perform qualifying 

demolition duties while entitled to compensation under 37 U.S.C. §206 are also entitled, 

subject to such regulations as may be prescribed by the President, to "an increase in 

compensation equal to 1/30 of the monthly incentive pay" payable to active duty 

personnel performing such duties.23 That is, for every "period of instruction ... or ... 

appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, the member is, if performing qualifying duty under 37 U.S.C. 

§301(f), also entitled to 1/30th of the demolition duty pay that would be payable to a 

member of the active duty force who was performing such duties. Under conditions 

prescribed by the relevant Secretary, a member of a reserve force who performs 

demolition duties under 37 U.S.C. §301(f) while engaged in inactive-duty training is 

entitled to demolition duty pay. See Executive Order 13294 (2003).24 

Hazardous duty incentive pay for reserve forces personnel engaged in inactiveduty training can, in one sense, be traced to the Act of July 2, 1926 (Army Air Corps 

Act), ch. 721 [Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which 

was the first legislative enactment that provided for special compensation for inactive 

duty reserve forces personnel engaged in hazardous duties of one kind of another.25 In 

fact, however, explosives demolition duties were not covered by the Air Corps Act. 

Rather, that act merely gave "officers, warrant officers, and enlisted men of the National 

 participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

23 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--basically, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

24 Reproduced, as amended, at 37 U.S.C. §301 note. Also see Department of Defense Financial 

Management Regulation,Military Pay and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 

7000.14-R, ¶ 80316. 

25 For a discussion of the origin of hazardous duty incentive pay for reserve forces personnel engaged in 

inactive-duty training, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew Member)." 

274
Guard" who were, by competent orders, required to "participate regularly and frequently 

in aerial flights" a 50 percent increase in the "armory drill pay" to which they would 

otherwise have been entitled. The first special provision for demolition duty pay for 

reserve forces personnel engaged in inactive-duty training came in the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204(a)(7), 63 Stat. 

802, 809-810 (1949). 

 The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), restated prior provisions of 

law relating to the entitlement of reserve forces personnel to special pay for the 

performance of hazardous duties while engaged in inactive-duty training. Section 501 of 

the Career Compensation Act, ch. 681, id., §501, 63 Stat. at 825-827, dealt generally with 

the entitlement of reserve forces personnel to compensation for inactive-duty training. 

Subsection (d) of Section 501 generalized the hazardous duty incentive pay entitlements 

of reserve forces personnel performing inactive-duty training by providing that hazardous 

duty incentive pay was available to such personnel whenever they were required by 

competent orders to perform any of the hazardous duties, set out at Section 204(a) of the 

Career Compensation Act of 1949, for which active duty personnel were entitled to 

hazardous duty incentive pay. The duties set out in Section 204(a) as qualifying for such 

pay included crew member and non-crew member flight duties, submarine duties, glider 

duties, parachute jumping duties, leprosy duties, explosives demolition duties, duty at a 

submarine escape training tank, and duty with certain diving units. See Section 204(a)(7) 

of the Career Compensation Act of 1949, ch. 681, id., §204(a)(7), 63 Stat. at 809-810.26

No special reason was given for this reorganization of the provisions of prior law dealing 

 

26 The inactive-duty training pay provisions contained in Section 501 of the Career Compensation Act of 

1949, ch. 681, id., §501, 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act, ch. 681, id., §204, 63 Stat. 

at 809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was enacted 

into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. The current structure of demolition duty pay entitlements for reserve 

forces personnel performing inactive-duty training thus derives from the organization imposed on Title 37 

by the Act of September 7, 1962, Public Law 87-649, id. 

275
with inactive-duty training pays, including inactive-duty training incentive pays for 

hazardous duties. The extension of incentive pay for hazardous duty to new classes of 

reserve forces personnel--e.g., to reserve forces personnel in an inactive-duty training 

status performing leprosy duties, explosives demolition duties, submarine escape training 

tank duties, etc.--appears to derive from the extension of such pays to active duty 

personnel, and not from any special concern about reserve forces personnel and whether 

they should be entitled to incentive pay for performance of various hazardous duties.27

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

Presently, members of the reserve and guard receive hazardous duty incentive pay 

(HDIP) for frequent and regular flying during active and inactive duty for training 

periods. To receive active duty HDIP, the reservist must fly four hours each month or a 

pro rata share of days on duty. For inactive duty, the requirement is two hours each 

month or a pro rata share of days on duty. The excess hours flown on inactive duty may 

be credited toward active duty flight requirements, but the reverse is not permitted. This 

situation is inconsistent and results in less than optimum use of flying hour resources. 

To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.28

 

27 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), did not concern itself with reserve forces 

compensation in any way. See e.g., "Terms of Reference," the charter given to the Hook Commission by 

the then Secretary of Defense, James Forrestal, in “Career Compensation for the Uniformed Forces, a 

Report and Recommendation for the Secretary of Defense by the Advisory Commission on Service Pay,” 

at pp. vii-viii, December 1948.

28 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

276
 While the concern that led to the amendment in issue was the appropriate use and 

apportionment of flying time, the amendment to 37 U.S.C. §301(f) was stated in broader 

terms, so that it applies to any of the hazardous duties set out in 37 U.S.C. §301(a), 

including explosives demolition duty, and not just flight duty. Thus, for any month in 

which a member of a reserve force is involved both in active duty and inactive-duty 

training for which he is entitled to demolition duty pay under the hazardous duty 

incentive pay provisions of 37 U.S.C. §301, the total amount of hazardous duty incentive 

pay the member may receive is based on his combined entitlement for both active duty 

and inactive-duty training. 

The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1770 (1997) raised the rate of demolition duty pay from $110 per month to 

$150 per month. Until 2003, the conditions of entitlement to demolition duty pay for both 

active duty and reserve forces personnel were set out in Section 109(b) of Executive 

Order 11157, as amended,29 in various supplementary regulations adopted by the service 

secretaries pursuant to Section 113 of Executive Order 11157, and the Department of 

Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R. Executive Order 13294, 

issued March 28, 2003, revoked Executive Order 11157. Executive Order 13294 placed 

responsibility for carrying out the authority delegated to the President by 37 U.S.C. 

§301(a), relevant to demolition pay and other incentive pays, with the secretaries of 

commerce, defense, health and human services, and homeland security, as those 

entitlements affect military personnel under the respective jurisdictions of those 

departments. 

Current rate of demolition duty pay: $150 per month. 

Cost: For the cost of demolition duty pay from 1972 to 2004, see Table II-8 of 

Military Compensation Statistics Tables, volume II of this edition. 

 

29 Reproduced, as amended, at 37 U.S.C. §301 note. 

277
Chapter II.D.1.a.(3) 

 Special Pay for Officers 

 Holding Positions of 

 Unusual Responsibility 

Legislative Authority: 37 U.S.C. §306. 

Purpose: To provide an additional pay for officers occupying certain critical 

positions carrying more significant responsibilities than those normal for officers of the 

same grade. 

Background: Responsibility pay was first authorized for officers in the Act of 

May 20, 1958 (Uniformed Services Pay Act of 1958), Public Law 85-422, §1(8), 72 Stat. 

122, 126-127 (1958), at the rate of $150 a month for officers in pay grade O-6, $100 a 

month for officers in pay grade O-5, and $50 a month for officers in pay grades O-4 and 

O-3. As originally adopted, responsibility pay was limited to officers in pay grades O-3 

through O-6. This special pay was adopted at the recommendation of the Senate Armed 

Services Committee, not at the urging of the Administration. The committee explained its 

recommendation as follows: 

 The committee recommended this provision because of the following factors: 

(1) Under the present pay system, an officer's pay is determined 

principally by his rank. It is recognized that both the abilities and responsibilities 

of officers within a particular grade vary to a considerable degree. 

(2) The changing nature and complexity of our weapons systems are 

creating demands for unusual responsibility in both staff and command 

assignments, or a combination of both. These responsibilities, in many cases, may 

be distinguishable from the bulk of others held by those in that rank. 

 (3) Neither the present pay system nor the promotion system adequately 

acknowledges this type of individual. An example is shown by the fact that even 

though an officer may be occupying and adequately performing in a position of 

unusual responsibility, he nevertheless may be prohibited from receiving 

additional pay because of the fact that he is not within a so-called zone of 

consideration for promotion, which is based solely on the length of service in the 

particular grade. 

278
(4) The changing nature of our military services is requiring greater 

leadership in the scientific fields as well as command leadership in the usual 

sense. In the Air Force, for instance, the proportion of officers in the technical 

fields will grow from 55 percent in a B-52 wing to approximately 75 percent in an 

intercontinental ballistic missile unit.1

In connection with Congressional consideration of the bill that became the 

Uniformed Services Pay Act of 1963, Public Law 88-132, 77 Stat. 210 (1963), the 

Department of Defense recommended that the statutory authority for 

responsibility pay be repealed, and the bill passed by the House in fact did so. 

However, the repeal provision was deleted in the Senate, and the House later 

concurred in this action. In addressing itself to the attempted repeal, the Senate 

Armed Services Committee noted: 

The Bill as passed by the House contained a provision which would repeal 

the system of responsibility pay enacted as a part of the Military Pay Act of 1958. 

The Senate Committee on Armed Services deleted the House provision and 

therefore provided for the retention of the system of responsibility pay. 

As a result of the recommendation of the Senate Committee on Armed 

Services, the Military Pay Act of 1958 introduced in the military pay system a 

new feature known as responsibility pay, for certain officers who occupy 

positions of unusual responsibility. This system, which was permissive, has never 

been implemented by the Department of Defense. 

 The Department of Defense suggested the repeal of this authority on two grounds: 

1. That there should be no distinction between persons of equal rank and 

length of service for the purpose of pay since rank itself should be considered 

equal with responsibility. 

 2. That it would be difficult to administer without serious problems of 

equity and morale. 

The Committee is of the opinion that this system should be retained for the 

following reasons: 

1. The fact that the system has not been used does not necessarily mean 

that the provision is unsound. Both the Navy and the Air Force have urged its 

implementation. 

2. The basic premise of the provision is that the relatively small number of 

officers holding positions of much greater responsibility than occur in normal 

 

1

 Senate Report No. 1472 (Committee on Armed Services), pp. 7-8, accompanying H.R. 11470, 85th

Congress, 2d Session (1958). 

279
assignments might well be rewarded with some additional compensation. Both the 

abilities and responsibilities of an officer within a particular grade vary to a 

considerable degree. The military services already recognize this variance for the 

purpose of assignments. Both the additional responsibility and often the longer 

hours that accompany such assignments would provide an added incentive for 

superior achievement.2

The Oceans Act of 1992, Public Law 102-587, §5205(a), 106 Stat. 5039, 5074 

(1992), extended the authorization for responsibility pay to all officers below pay grade 

O-7.3

 As statutorily authorized, not more than ten percent of officers in pay grades O-4, 

O-5, and O-6 in any armed force may be paid responsibility pay at the same time, and not 

more than five percent of officers in pay grade O-3 and below in any armed force may be 

paid responsibility pay at the same time. 

The Department of Defense made only limited use of responsibility pay prior to 

1980.4

 Army and Navy officers in Vietnam holding the unique civil-military positions of 

senior province/district advisers or riverine forces advisers were paid responsibility pay 

in an attempt to induce them to voluntarily remain in such positions longer than the oneyear period of duty prescribed for a combat zone. The Department of Transportation 

made somewhat broader use of the authority, having designated the position of 

commanding officer of Coast Guard vessels as a critical position of unusual 

responsibility. Responsibility pay has been paid to Coast Guard officers in pay grades O3 through O-6 who have been assigned to and were serving as commanding officers of 

Coast Guard vessels since July 1, 1973. Beginning in fiscal year 1980, the Navy 

authorized responsibility pay for officers designated under NavOp 75-80, which includes, 

with some exceptions, most officers entitled to wear the Command at Sea Pin. The only 

 

2

 Senate Report No. 387 (Committee on Armed Services), pp. 29-30, accompanying H.R. 5555, 88th

Congress, 1st Session (1963). 

3

 Under the definition set out at 37 U.S.C. §101(11), the term "officer" includes both commissioned and 

warrant officers. 

4

Under the provisions of 37 U.S.C. §306(e), responsibility pay may not be paid to medical personnel 

entitled to special pay under 37 U.S.C. §302 (medical officers of the Armed Forces), §302a (optometrists), 

§302b (dental officers of the Armed Forces), or §303 (veterinarians). 

280
Department of Defense personnel currently authorized responsibility pay are Navy 

officers in pay grades O-6 and below, occupying designated command positions. 

Current rates of responsibility pay: The current rates of responsibility pay are 

as follows: 

 Pay Grade Amount 

 O-6 $150 

 O-5 $100 

 O-4 and below $50 

Cost: For the cost of responsibility pay from 1972 to 2004, see Table II-9 of 

Military Compensation Statistics Tables, volume II of this edition. 

281
Chapter II.D.1.b.(1) 

 Flight Pay (Crew Member) 

Legislative Authority: 37 U.S.C. §301(a)(1) and (b). 

Purpose: To provide an additional pay to help the uniformed services induce 

officers and enlisted personnel to enter upon and remain in flying duty and to compensate 

for the more than normally dangerous character of such duty. 

Background: Crew member flight pay started out as an extra pay for officers 

only; it was subsequently extended to enlisted personnel; then, with the adoption of the 

aviation career incentive pay program for officers,1

 it was withdrawn from officers, thus 

being payable only to enlisted members; and now, under the amendment to the crew 

member flight pay program effected by the Department of Defense Authorization Act, 

1986, Public Law 99-145, §635(a)(1)(A), 99 Stat. 583, 697 (1985), it is again payable to 

both officers and enlisted personnel. In its earliest incarnation, crew member flight pay 

was the original flight pay. All of the existing flight pay programs are derivative from the 

progenitor of today's crew member flight pay program. 

Originally, the sole purpose of flight pay was to compensate personnel for the 

exceedingly hazardous nature of military flying duty. The first legislative authorization of 

a special pay for flying duty was incorporated in the Act of March 2, 1913 (Army 

Appropriation Act of 1914), ch. 93 [Public Law 401, 62d Congress], 37 Stat. 704, 705 

(1913), which gave Army officers detailed to "aviation duty" as "actual flyers of heavier 

than air craft" an increase of 35 percent in their pay and allowances. The Act of March 4, 

1913 (Navy Appropriation Act of 1914), ch. 148 [Public Law 433, 62d Congress], 37 

Stat. 891, 892 (1913), extended the same extra pay to Navy and Marine Corps officers 

detailed by the Secretary of the Navy to "aviation duty" as "actual flyers of heavier-thanair craft." 

 

1

See Chapter II.D.1.b.(3) hereof, "Aviation Career Incentive Pay (ACIP) and Aviation Career Continuation 

Pay (AOCP)", below. 

282
The Act of July 18, 1914, ch. 186 [Public Law 143, 63d Congress], 38 Stat. 514 

(1914), created an aviation section within the Army Signal Corps and established three 

classes of Army aviators: military aviators, junior military aviators, and aviation students. 

These classes were entitled to flight pay amounting to an additional 75, 50, and 25 

percent, respectively, of their base and longevity pay. Act of July 18, 1914, ch. 186, id., 

§3, 38 Stat. at 515-516. The act also gave Army enlisted personnel who were required to 

participate regularly and frequently in aerial flight, or who held the rating of aviation 

mechanic, a 50 percent increase in pay. Act of July 18, 1914, ch. 186, id., §3, 38 Stat. at 

515-516. The Act of March 3, 1915 (Navy Appropriation Act of 1916), ch. 83 [Public 

Law 271, 63d Congress], 38 Stat. 928, 939 (1915), provided for Navy and Marine Corps 

officers and enlisted personnel to be detailed to duty involving actual flying in balloons, 

dirigibles, and "aeroplanes." Officers so detailed were entitled to an increase of 35 

percent in pay and allowances while classified as student aviators and to 50 percent after 

becoming qualified as naval aviators; enlisted personnel so detailed received a 50 percent 

increase in pay and allowances. 

The Act of June 4, 1920 (National Defense Act Amendments of 1920), ch. 227 

[Public Law 242, 66th Congress], §13, 41 Stat. 759, 768-769 (1920), created the "Air 

Service" of the Army, redesignated as the "Air Corps" in 1926, and abolished the flight 

pay scale based on aviator classes. Under the Act of June 4, 1920, ch. 227, id., all Army 

officers and enlisted personnel were entitled to an increase of 50 percent in base and 

longevity pay while on duty requiring them to participate regularly and frequently in 

aerial flights. 

The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 

[Public Law 235, 67th Congress], §20, 42 Stat. 625, 632-633 (1922), provided that "all 

officers, warrant officers, and enlisted men of all branches of the Army, Navy, Marine 

Corps, and Coast Guard, when detailed to duty involving flying, shall receive the same 

increase of their pay ... as now authorized for the performance of like duties in the 

Army." The Joint Service Pay Readjustment Act of 1922, ch. 212, id., thus established 

uniform flight pay rates, applicable to all services, equal to 50 percent of base and 

283
longevity pay. In addition, the act required that the President issue regulations to set up 

uniform standards governing personnel entitlements to flight pay for all services. The 

resultant Executive Order 3705-B of July 1, 1922, instituted the first performance 

requirements for flight pay entitlement. A member had to make 10 flights or be in the air 

at least four hours a month to qualify for flight pay under these regulations. Executive 

Order 4610 of March 10, 1927, modified the "10 flights" requirement by specifying that 

the 10 flights had to total at least three hours. These performance prerequisites for flight 

pay entitlement, and the flight pay rate of 50 percent of pay, continued in basically the 

same form until the adoption of the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], 63 Stat. 802 (1949). 

In 1948, at the request of the Secretary of Defense, the Advisory Commission on 

Service Pay, sometimes referred to as the "Hook" Commission, undertook the first 

comprehensive study of the military pay system since 1908. In reviewing military 

compensation generally, and the flight pay program in particular, the commission 

concluded that, although special pays such as flight pay had been designed in part to 

compensate for arduous and hazardous duties, their main purpose should be to fill a 

supply-demand function--to induce personnel to enter upon and remain in hazardous 

military occupations: 

The Commission, after reviewing previous studies, hearing presentations 

by the Services, and personally observing representative operational and training 

activities, is of the unanimous opinion that some additional pay should be 

awarded to individuals who, on a voluntary basis, carry out peacetime functions 

involving more than the ordinary military risk and danger.... 

Close examination of the nature of hazardous duty and the expressed or 

implied reasons for accepting risks indicated that the incentive to engage and 

remain in hazardous occupations provided a more realistic and practical basis for 

determining the rates of special pay than the theory of recompense for shorter 

career expectancy. The recompense or replacement concept, although promoted 

for many years as the sole argument for hazard pay, was found wanting for 

several reasons.2

 

2

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948. 

284
Until crew member flight pay was replaced by aviation career incentive pay for 

officers, officer rates, except for pay grade 0-1 with under two years of service, were 

uniformly higher than enlisted rates. The Hook Commission's rationale favoring a higher 

rate of pay for officers than for enlisted personnel was that: 

 A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all times 

the compensation for the primary responsibility will be considerably greater than 

that for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more 

highly trained personnel. 

(3) Officers are usually given greater special responsibilities, aside from 

normal administrative control, than enlisted personnel on hazardous assignments. 

(4) With respect to flying in particular, death rates for enlisted personnel have 

consistently been lower than those for officers.3

Under the Hook Commission recommendations, crew member flight pay was 

paired with submarine duty pay, and the rates for these two pays ranged from $30 

monthly for pay grade E-1, through $75 for pay grade E-7, and $100 for pay grade O-1, 

up to $210 for pay grade O-6.4

 With respect to the special treatment accorded flight and 

submarine duty pays as compared with other types of incentive pay, the commission 

noted: 

 A separate scale was developed for flying and submarine duty, 

compensable today at 50 percent of pay. Because of the demonstrated greater 

actual or potential danger and the supreme importance of these services, the 

 

3

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

4 The Hook Commission recommended that officers in pay grades O-7 and O-8 receive $100 per month on 

account of flight duty. “Career Compensation for the Uniformed Forces, a Report and Recommendation 

for the Secretary of Defense by the Advisory Commission on Service Pay,” p. 27, Table XI, December 

1948. 

285
inducement must be greater. The Commission's proposals maintain approximately 

the same dollar differential for these duties as now exists except in the general 

officer ranks. This differential, plus the proposed basic compensation, should be 

adequate to attract and keep men in these pursuits at the grade and age at which, 

in the Commission's opinion, based on present practice, they are most effective.5

The reasoning and recommendations of the Hook Commission led to the 

introduction and enactment of the hazardous duty incentive pay provisions of the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 

809-810 (1949).6

 During debate in the House of Representatives, Representative Johnson 

of California, a member of the Armed Services Committee, spelled out Congress's desire 

to shift the pay from an exclusively hazard-based purpose to a primarily incentive-based 

purpose, in his statement opposing a (subsequently defeated) amendment that would have 

reduced crew member flight pay rates and eliminated grade differentials: 

 Mr. Chairman, this amendment would entirely destroy the whole 

structure of flying pay. Yesterday I took considerable time to explain to you that 

there are great hazards in military flying in time of peace. This is far more 

important in time of peace than it is in time of war, as in peacetime we must train 

our pilots who will fight for us in war.... In order to offer the incentive that is 

necessary to keep these boys flying, experience has shown you must give them 

incentive pay. That is what this is, incentive pay. We are not paying for a man's 

life. You cannot pay for a man's life, but you can pay for the financial loss 

suffered by a man's family in the loss of his life, and all the courts pay less for 

those with small income, because all that is paid for is the pecuniary loss caused 

by the death.7

 

 

 

5

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 26, December 1948. 

6 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 809-810 (1949), see 

House Report No. 81-779 (Committee on Armed Services), p. 15, and Senate Report No. 81-733 

(Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

7 95 Cong. Rec. 7773 (1949) (statement of Representative Johnson). 

286
 The rates of crew member flight pay established by the Career Compensation Act 

of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 809-810 (1949), 

were:8

 Pay Grade Flight Pay 

 O-8 $150.00 

 O-7 150.00 

 O-6 210.00 

 O-5 180.00 

 O-4 150.00 

 O-3 120.00 

 O-2 110.00 

 O-1 100.00 

 W-4 100.00 

 W-3 100.00 

 W-2 100.00 

 W-1 100.00 

 E-7 75.00 

 E-6 67.50 

 E-5 60.00 

 E-4 52.50 

 E-3 45.00 

 E-2 37.50 

 E-1 30.00 

 

 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802 (1949), is the basic source for existing crew member flight pay authority. It 

was, however, amended by the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th 

Congress], §2(5), 69 Stat. 18, 20-21 (1955), restructuring and increasing pay rates for 

 

8 After enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 

63 Stat. 802, 809-810 (1949), the hazardous duty incentive pay provisions thereof, including crew member 

flight pay, were in the main classified to 37 U.S.C. §235. See 37 U.S.C. §235(a)(1) and (b) (1952). Later, 

when Title 37 of the United States Code was enacted into positive law by the Act of September 7, 1962, 

Public Law 87-649, 76 Stat. 451 (1962), the hazardous duty pay provisions, including the crew member 

flight pay provisions here in issue, were codified at 37 U.S.C. §301. 

287
qualifying duties.9

 In urging an increase, Department of Defense witnesses again 

emphasized the incentive-based purpose of the pay during Congressional hearings: 

So long as these services must be staffed by volunteers the incentives 

offered must be enough to attract and retain the numbers required to maintain 

peak performance capabilities.10

 * * * 

My purpose here todays [sic] is to point out to you the impact which this 

legislation will have upon the successful solution of the most important of our 

personnel problems, the procurement and retention of qualified personnel. 

 * * * 

For several years the flying services have experienced difficulty in 

procuring an adequate number of qualified applicants for flying training. 

 * * * 

More serious than procurement has been the retention rate of newly 

trained pilots and observers.... It will be noted that the greatest increases in hazard 

incentive pay are recommended for first lieutenants, captains, and majors--our 

younger officers who are leaving service in the greatest numbers.11

In addition to increasing the rates of crew member flight pay, the Career Incentive 

Act of 1955, ch. 20, id., introduced longevity step differentials. 

The rates of crew member flight pay under the Career Incentive Act of 1955, ch. 

20 [Public Law 20, 84th Congress], §2(5),69 Stat. 18, 20-21 (1955), were as follows: 

 

 

9 As shown in the table below, flying duty pay rates, like basic pay, were made to depend not only on pay 

grade but also on years of service. 

10 Career Incentive Act of 1955: Hearings on H.R. 2607 before Subcommittee No. 2 of the House Armed 

Services Committee, 84th Congress, 1st Session 478 (1955) (testimony of Asst. Sec. Carter Burgess, 

Department of Defense). 

11 Career Incentive Act of 1955: Hearings on H.R. 2607 before Subcommittee No. 2 of the House Armed 

Services Committee, 84th Congress, 1st Session 519-520 (1955) (testimony of General Morris F. Lee, 

USAF). 

288
Pay Grade Creditable Years of Service 

 Under 2 Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 

 O-10 $165 $165 $165 $165 $165 $165 $165 

 O-9 165 165 165 165 165 165 165 

 O-8 155 155 165 165 165 165 165 

 O-7 150 150 160 160 160 160 160 

 O-6 200 200 215 215 215 215 215 

 O-5 190 190 205 205 205 205 205 

 O-4 170 170 185 185 185 195 210 

 O-3 145 145 155 165 180 185 190 

 O-2 115 125 150 150 160 165 170 

 O-1 100 105 135 135 140 145 155 

 W-4 115 115 115 115 120 125 135 

 W-3 110 115 115 115 120 120 125 

 W-2 105 110 110 110 115 120 125 

 W-1 100 105 105 105 110 120 125 

 E-9 105 105 105 105 105 105 105 

 E-8 105 105 105 105 105 105 105 

 E-7 80 85 85 85 90 95 100 

 E-6 70 75 75 80 85 90 95 

 E-5 60 70 70 80 80 85 90 

 E-4 55 65 65 70 75 80 80 

 E-3 55 60 60 60 60 60 60 

 E-2 50 60 60 60 60 60 60 

 E-1 50 55 55 55 55 55 55 

 E-1 less than 4 months: 50

 Aviation cadets: 50 

 

 

Pay Grade Creditable Years of Service 

Over 12 Over 14 Over 16 Over 18 Over 22 Over 26 Over 30 

 O-10 $165 $165 $165 $165 $165 $165 $165 

 O-9 165 165 165 165 165 165 165 

 O-8 165 165 165 165 165 165 165 

 O-7 160 160 160 160 160 160 160 

 O-6 215 215 220 245 245 245 245 

 O-5 210 225 230 245 245 245 245 

 O-4 215 220 230 240 240 240 240 

 O-3 200 205 205 205 205 205 205 

 O-2 180 185 185 185 185 185 185 

 O-1 160 170 170 170 170 170 170 

 W-4 145 155 160 165 165 165 165 

 W-3 135 140 140 140 140 140 140 

 W-2 130 135 135 135 135 135 135 

 W-1 130 130 130 130 130 130 130 

289
 E-9 105 105 105 105 105 105 105 

 E-8 105 105 105 105 105 105 105 

 E-7 105 105 105 105 105 105 105 

 E-6 95 100 100 100 100 100 100 

 E-5 95 95 95 95 95 95 95 

 E-4 80 80 80 80 80 80 80 

 E-3 60 60 60 60 60 60 60 

 E-2 60 60 60 60 60 60 60 

 E-1 55 55 55 55 55 55 55 

In 1974, in accordance with the report and recommendations of the Second 

Quadrennial Review of Military Compensation (QRMC),12 Congress, through the 

Aviation Career Incentive Act of 1974, Public Law 93-294, 88 Stat. 177 (1974), 

abolished crew member flight pay for officers, id., §2(1), 88 Stat. at 177, and replaced it 

with aviation career incentive pay, id., §2(3), 88 Stat. at 177-179, presently codified at 37 

U.S.C. §301a. See Chapter II.D.1.b.(3), "Aviation Career Incentive Pay and Aviation 

Career Continuation Pay," below. Officers were excluded from the crew member flight 

pay provisions of 37 U.S.C. §301 because it was generally believed that, since they 

would either be entitled to the then new aviation career incentive pay or to non-crew 

member flight pay, there was no need for crew member flight pay for officers involved in 

military aviation (see Chapter II.D.1.b.(3), "Aviation Career Incentive Pay and Aviation 

Career Continuation Pay," and Chapter II.D.1.b.(2), "Flight Pay (Non-Crew Member)," 

hereof, below). 

The rates of flight pay for enlisted crew members that had been established under 

the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(5), 69 Stat. 

18, 20-21 (1955), varying from $50 per month for members in pay grades E-1 and E-2 

with less than two years of service to $105 per month for all members in pay grades E-8 

and E-9 and members in pay grade E-7 with more than 12 years of service, remained in 

effect until September 1, 1980. At that time, crew member flight pay rates for enlisted 

members of the uniformed services were increased by 25 percent across-the-board by the 

Military Personnel and Compensation Amendments of 1980, Public Law 96-343, §2(a), 

 

12 Report of the 1971 Quadrennial Review of Military Compensation, Office of the Assistant Secretary of 

Defense for Manpower and Reserve Affairs, Department of Defense, 1971. 

290
94 Stat. 1123 (1980). As explained in the House Conference Report, Congress was in 

"unanimous agreement with the need for and desirability of" the proposed rate 

increases.13 Under the 1980 Amendments, Public Law 96-343, id., crew member flight 

pay rates varied from a low of $63 per month for members in pay grades E-1 and E-2 

with less than two years of service up to $131 per month for all members in pay grades E8 and E-9 and members in pay grade E-7 with more than 10 years of service. 

Effective October 1, 1981, Congress, through the Uniformed Services Pay Act of 

1981, Public Law 97-60, §111(b), 95 Stat. 989, 993 (1981), further increased minimum 

crew member flight pay rates to $83 per month, thereby increasing such pay for members 

in pay grades E-1 through E-3, E-4 with under four years of service, and E-5 with under 

two years of service, while at the same time substantially compressing the entire crew 

member flight pay structure. The reason for the increase, in simplest terms, was to keep 

crew member flight pay on a parity with other hazardous duty incentive pays. The 

Uniformed Services Pay Act of 1981, id., was specially directed at increasing hazardous 

duty incentive pay rates for personnel involved in noncrew member flight operations, 

parachute jumping, explosives demolition, acceleration or deceleration or thermal stress 

experiments, work in high- or low-pressure chambers, and carrier flight deck operations, 

since, as noted in the Senate Report, hazardous duty pay rates for such work had "not 

been adjusted in more than 20 years, and this increase [a 50 percent increase to $83 per 

month] is needed to enhance the incentive value of this pay."14 With this increase, 

however, hazardous duty incentive pay rates for the targeted types of duty would, in some 

cases, i.e., for certain personnel in pay grades E-4 and E-5 and for all personnel in pay 

grades E-1 through E-3, have exceeded the hazardous duty incentive pay authorized for 

crew member flight operations, and since Congress felt no such differential should 

 

13 House Report No. 96-1233 (Committee of Conference), p. 15, accompanying H.R. 5168, 96th Congress, 

2d Session (1980). 

14 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

291
exist,15 minimum rates of incentive pay for enlisted crew member flight duty were 

increased to $83 per month. 

The rates of crew member flight pay as amended by the Uniformed Service Pay 

Act of 1981, Public Law 97-60, §111(b), 95 Stat. 989, 993 (1981), were: 

Pay Grade Years of Service Computed Under Section 205 

 2 or Less Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 

 E-9 $131 $131 $131 $131 $131 $131 $131 

 E-8 131 131 131 131 131 131 131 

 E-7 100 106 106 106 113 119 131 

 E-6 88 94 94 100 106 113 119 

 E-5 83 88 88 100 100 106 113 

 E-4 83 83 83 88 94 100 100 

 E-3 83 83 83 83 83 83 83 

 E-2 83 83 83 83 83 83 83 

 E-1 83 83 83 83 83 83 83 

 E-1 less than 4 months: 83 

 Aviation cadets: 83 

 

Pay Grade Years of Service Computed Under Section 205 

 

 Over 12 Over 14 Over 16 Over 18 Over 22 Over 26 Over 30 

 E-9 $131 $131 $131 $131 $131 $131 $131 

 E-8 131 131 131 131 131 131 131 

 E-7 131 131 131 131 131 131 131 

 E-6 119 125 125 125 125 125 125 

 E-5 119 119 119 119 119 119 119 

 E-4 100 100 100 100 100 100 100 

 E-3 83 83 83 83 83 83 83 

 E-2 83 83 83 83 83 83 83 

 E-1 83 83 83 83 83 83 83 

 

In 1985, two substantive changes were made to the crew member flight pay 

provisions of 37 U.S.C. §301 by the Department of Defense Authorization Act, 1986, 

Public Law 99-145, §635(a)(1)(A) and (a)(2), 99 Stat. 583, 647-648 (1985). First, crew 

 

15 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

292
member flight pay rates were increased and years-of-service differentials were eliminated 

for all enlisted pay grades. Second, crew member flight pay was again authorized for 

officers, thus effectively reversing the policy decision underlying the rescission of crew 

member flight pay authority for officers in the Aviation Career Incentive Act of 1974, 

Public Law 93-294, 88 Stat. 177 (1974), discussed above. Current crew member flight 

pay rates, which became effective October 1, 1985,16 are set out below:17

 Pay Grade Monthly Rate 

 O-10 $110 

 O-9 110 

 O-8 110 

 O-7 110 

 O-6 250 

 O-5 250 

 O-4 225 

 O-3 175 

 O-2 150 

 O-1 125 

 W-5 250 

 W-4 250 

 W-3 175 

 W-2 150 

 W-1 125 

 E-9 200 

 E-8 200 

 E-7 200 

 E-6 175 

 E-5 150 

 E-4 125 

 E-3 110 

 E-2 110 

 E-1 110 

 

16 Section 635(b) of the Department of Defense Authorization Act, 1986, Public Law 99-145, §635(b), 99 

Stat. 583, 648 (1985). 

17 The Warrant Officer Management Act, enacted as Title XI of the National Defense Authorization Act 

for Fiscal Years 1992 and 1993, Public Law 102-190, 105 Stat. 1290, 1491-1506 (1991), established the 

new warrant officer pay grade, W-5, National Defense Authorization Act for Fiscal Years 1992 and 1993, 

id., §1111(a), 105 Stat. at 1491, and authorized members serving in that pay grade to receive crew member 

flight pay at the rate of $250 per month. National Defense Authorization Act for Fiscal Years 1992 and 

1993, id., §1111(d)(1), 105 Stat. at 1492. For the reasons underlying the establishment of the new pay 

grade, see Chapter II.B.1 hereof, above, "Basic Pay". 

293
The legislative history of the 1986 Authorization Act, Public Law 99-145, id., does not 

per se indicate the reason for increasing crew member flight pay rates for enlisted 

personnel or for extending crew member flight pay authorization to officers,18 primarily 

because no report was ever submitted on the Senate bill, S. 1160, in which the two 

changes in issue were proposed.19 In fact, however, both changes closely parallel 

 

18 See, e.g., House Report No. 99-235 (Committee of Conference), p. 431, and Senate Report No. 99-118 

(Committee of Conference), p. 431, accompanying S. 1160, 99th Congress, 1st Session (1985). 

19 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

 ... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

 When the Armed Services Committee learned that the Senate would approve no real growth in the 

defense budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program 

reductions to conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 

1160, reflecting these new budget levels.... 

 Most of the Senate Report 99-41 continues to be applicable to this bill.... 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) (statement 

of Senator Goldwater). In "explanatory background information" on some of the differences between S. 

1029 and S. 1160, the following appears: 

 The compensation and benefits provisions of the bill contain significant differences from those 

contained in S. 1029.... 

... [T]he Committee recommended increases or enhancements to a number of special and incentive 

pays.... 

 The special and incentive pays ... involved in these recommendations include: 

 g. Hazardous duty pays. 

 Each of these benefit increases or enhancements are in addition to the modest improvements in 

benefits previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the crew member flight pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

See Section 148 of S. 2723, 98th Congress, 2d Session (1984). 

294
recommendations advanced by the Fifth Quadrennial Review of Military Compensation 

in 1984.20 In support of its recommendation to "[r]aise and compress the enlisted 

Crewmember Flight Pay rates,"21 the Fifth Quadrennial Review concluded: 

 The Service manning and reenlistment portion of [the Fifth 

Quadrennial Review's] analysis has shown that, while reenlistment rates for air 

crewmembers are generally higher than those service-wide, grade imbalances and, 

in a few specific skills, overall manning shortfalls continue to exist.... 

... [T]he rates [of crew member flight pay] range from $83 to $131 

monthly, a difference of $48 stratified by nine pay grades and 14 longevity steps, 

resulting in an average incremental increase of $6. The incentive value of such 

 an amount is questionable.... 

Two actions can be taken to improve the incentive value of this pay: 

significantly increase the range of the allowable rates, or compress the pay table 

structure and increase the rates to a lesser degree. The first alternative is believed 

to be too costly and does not directly address the specific manning problems, that 

is, the grade imbalances. The latter, however, provides for greater incremental 

changes at lower program costs, since fewer steps are required. If the rates are 

differentiated by grade only, the incremental increase will appear greater than the 

actual dollar outlay by taking advantage of the pay raises coincident to 

promotions. The scale cannot be compressed by longevity without losing this 

advantage.22

20 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Fifth Quadrennial Review of Military Compensation was convened in 1982, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in early 

1984. 

21 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 133, November 1983. Also see id., p. 10, and “Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation,” p. VI-5, January 1984. 

22 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, pp. 125-126, November 1983. Also see id., p. 5. 

295
In support of its recommendation to "[r]eestablish ... Officer Crewmember Flight 

Pay,"23 the Fifth Quadrennial Review noted: 

Most officer air crewmembers are either aeronautically designated/rated 

and, therefore, covered by ACIP[aviation career incentive pay, see Chapter 

II.D.1.b.(3) hereof], or are in the Air Force's Air Weapons Control Officer career 

field which was recently extended its own incentive pay [see Chapter II.D.1.b.(4) 

hereof].... 

However, there are currently [November 1983] about 750 officers who by 

definition are crewmembers, but, due to the abolishment of officer crewmember 

pay authority in 1974, are being carried as non-crewmembers for pay purposes. 

Prior to the enactment of ACIP, rated and non-rated officer crewmembers 

received the same flight pay (up to $245 per month). Officer Non-crewmember 

Flight Pay has been held at a flat rate of $110 since 1955; consequently it is not 

unusual for an enlisted member with equal or less experience to draw a higher 

incentive pay than an officer member of the same crew.... This situation is 

contrary to one of the basic principles of an incentive pay, that is, to be effective it 

must bear some relationship to basic pay.... 

Officer non-rated crewmember positions are distributed across a wide 

range of skills; ... All but [one of the skill fields identified] are manned at less 

than 100%.... Further, the grade imbalances identified in the analysis of enlisted 

crewmembers [see quoted material accompanying footnote 17, above] are 

repeated for the officer corps. Since these officers can expect viable career 

opportunities on the ground and must be volunteers for flight duty, a need for a 

greater incentive than that currently being provided is indicated.24

Whether because of the recommendations of the Fifth Quadrennial Review of 

Military Compensation or for some other reasons, Congress, in the Department of 

Defense Authorization Act, 1986, Public Law 99-145, §635(a)(1)(A) and (a)(2), 99 Stat. 

583, 647-648 (1985), did increase crew member flight pay rates for enlisted personnel, 

compressed the crew member flight pay table by eliminating years-of-service, or 

"longevity," differentials, and restored crew member flight pay entitlements to officers. 

 

23 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 133, November 1983. Also see id., p. 6, and “Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation,” pp. VI-4 and , January 1984. 

24 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, pp. 127-128, November 1983. Also see id., p. 5, and “Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation,” pp. VI-4, January 1984. 

296
The rates of crew member flight pay adopted by Congress in the 1986 Authorization Act 

are the same as those recommended by the Fifth Quadrennial Review of Military 

Compensation.25

Reserve forces personnel26 entitled to compensation for inactive-duty training are 

entitled to crew member flight pay when they perform qualifying duties under competent 

orders, provided Congress has appropriated sufficient funds for that purpose.27 Under 37 

U.S.C. §301(f), members of the reserve forces who perform qualifying crew member 

flight duties while entitled to compensation under 37 U.S.C. §206 are also entitled, 

subject to such regulations as may be prescribed by the President, to "an increase in 

compensation equal to 1/30 of the monthly incentive pay" payable to active duty 

personnel performing such duties.28 That is, for every "period of instruction ... or ... 

 

25 Compare the rates of crew member flight pay adopted at Section 635(a)(2) of the Department of Defense 

Authorization Act, 1986, Public Law 99-145, §635(a)(2), 99 Stat. 583, 648 (1985) (codified at 37 U.S.C. 

§301(b)), with the rates proposed by the Fifth Quadrennial Review at pages 127 (Table 8, Enlisted 

Personnel) and 129 (Table 9, Officers) of Special and Incentive Pays, “Report of the Fifth Quadrennial 

Review of Military Compensation,” Volume III, November 1983. 

26For present purposes, the term "reserve forces personnel" refers to persons who are members either of the 

reserve components of the uniformed services or of the National Guard, and the term "reserve forces" refers 

to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. §101(24), 

the reserve components of the uniformed services consist of the Army National Guard of the United States, 

the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of the United 

States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public Health 

Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and the Air 

National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air National 

Guard, respectively. 

27 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

28 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

297
appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, the member is, if performing one of the hazardous duties set out in 

37 U.S.C. §301(a), including crew member flight duties, also entitled to 1/30th of the 

monthly hazardous duty incentive pay that would be payable to a member of the active 

duty force who was performing such duties. Under regulations prescribed by the relevant 

Secretary, a member of a reserve force who performs crew member flight duties while 

engaged in inactive-duty training is entitled to crew member flight pay under 37 U.S.C. 

§301(f).29

Flight pay for reserve forces personnel generally, and crew member flight pay in 

particular, derives from the Act of July 2, 1926 (Army Air Corps Act), ch. 721 [Public 

Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926). Section 6 of the Air Corps 

Act amended Section 20 of the Act of June 10, 1922 (Joint Service Pay Readjustment Act 

of 1922), ch. 212 [Public Law 235, 67th Congress], §20, 42 Stat. 625, 632 (1922), to give 

"officers, warrant officers, and enlisted men of the National Guard" who were, by 

competent orders, required to "participate regularly and frequently in aerial flights" a 50 

percent increase in the "armory drill pay" to which they would otherwise have been 

entitled. The extension of this special increase in compensation to members of the 

National Guard came about as a result of a floor amendment to the House bill, H.R. 

10827, 69th Congress, 1st Session (1926), which established the Army Air Corps. In 

offering the amendment, Representative John Philip Hill of Alabama did not offer any 

particular justification for extending this pay to members of the National Guard. Rather, 

he simply noted that the bill had "the endorsement of the War Department, the Chief of 

the Air Service [the predecessor of the Air Corps], ... and the committee [on Military 

Affairs]." 67 CONG. REC. 8765 (1926) (statement of Representative Hill). 

Flight pay for inactive-duty training was extended to "officers and enlisted men of 

the Naval Reserve ... performing aerial flights in the capacity of pilots ... as a part of their 

training" by the Naval Reserve Act of 1938, ch. 290 [Public Law 732, 75th Congress], 

 29 See Executive Order 13294.

298
§313, 52 Stat. 1175, 1184 (1938). Members of the Marine Corps Reserve were covered 

by a separate provision that gave such members the same benefits as conferred on 

members of the Naval Reserve. Naval Reserve Act of 1938, ch. 290, id., §2, 52 Stat. at 

1175. Insofar as personnel and compensation matters were concerned, the Naval Reserve 

Act had been patterned after the Army Air Corps Act, and as above noted, the Army Air 

Corps Act had extended flight pay entitlement to "officers, warrant officers, and enlisted 

men of the National Guard." The Naval Reserve Act was, however, more restrictive than 

the Army Air Corps Act had been: an amendment to the bill provided that the increase in 

compensation would apply to "only those actually serving as pilots of aircraft,"30 whereas 

the Army Air Corps Act had extended the special pay to any member of the National 

Guard "participat[ing] regularly and frequently in aerial flights," independently of 

whether the member is a pilot. 

The Act of March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 

(1948), substantially reorganized the provisions of preceding law relating to inactive-duty 

training pay for reserve forces personnel. Section 3 of the 1948 Act, id., 62 Stat. at 88-89, 

amended Section 14 of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th 

Congress], §14, 56 Stat. 359, 367 (1942), to give "officers, warrant officers, and enlisted 

personnel" of all the reserve forces entitlement to special pay for "perform[ing] aerial 

flights," among other things. As stated in the House Report: 

The purpose of the bill is to standardize inactive training pay for all 

Reserve components of the various services and also to grant such inactive duty 

training pay to Army Reservists. 

 The major departure in the legislation is the giving of this pay to the 

Army Reserves, including enlisted men. Such pay has been granted by the 

Congress heretofore to members of the National Guard and the Naval and Marine 

Corps Reserves.... 

The committee considers the need for this pay to be apparent, even though 

it is unfortunate that the country must resort to it. The Army and Navy must 

maintain active Reserve components, or else, in time of war emergency, the 

 

30 House Report No. 2763 (Committee of Conference), p. 3, accompanying H.R. 10594, 75th Congress, 3d 

Session (1938). 

299
Nation will have to depend exclusively upon Regular services for its defense. 

They are patently incapable of doing such a job alone. So, in order to vitalize the 

National Guard and Reserve components, to get more people to participate so that 

they will fit promptly and effectively into the mobilization-day plans of the 

Armed Forces, inactive duty pay is to be given each participant at the rate of onethirtieth of 1 month's base and longevity pay for each training period.... Such 

specialists as pilots, radar technicians, medical people, and so forth, will also be 

able to earn inactive duty training pay when the standards specified by the 

Secretaries [of the various departments] are met.31 32

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802 (1949), restated the provisions of the Pay Readjustment Act of 1942, ch. 413 

[Public Law 607, 77th Congress], 56 Stat. 359 (1942), as amended by the Act of March 

25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), insofar as the 

entitlement of reserve forces personnel to special pay for the performance of hazardous 

duties was concerned. Section 501 of the Career Compensation Act of 1949, ch. 681, id., 

§501, 63 Stat. at 825-827, dealt generally with the entitlement of reserve forces personnel 

to compensation for inactive-duty training. Subsection (d) of Section 501, 63 Stat. at 826, 

generalized the hazardous duty incentive pay entitlements of reserve forces personnel 

performing inactive-duty training by providing that hazardous duty incentive pay was 

available to such personnel whenever they were required by competent orders to perform 

any of the hazardous duties, set out at Section 204(a) of the Career Compensation Act of 

1949, ch. 681, id., §204(a), 63 Stat. at 810, for which active duty personnel were entitled 

to hazardous duty incentive pay. The duties set out in Section 204(a) as qualifying for 

such pay included crew member and non-crew member flight duties, submarine duties, 

 

31 House Report No. 80-971 (Committee on Armed Services), pp. 1-2, accompanying H.R. 3227, 80th

Congress, 1st Session (1947). See Senate Report No. 80-625 (Committee on Armed Services), p. 1, 

accompanying S. 1174, 80th Congress, 1st Session (1947). 

32 Section 14(c) of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §14(c), 56 

Stat. 359, 367 (1942), as amended by Section 3 of the Act of March 25, 1948, ch. 157 [Public Law 460, 

80th Congress], §3, 62 Stat 87, 88-89 (1948), extended special pay to "personnel required to perform aerial 

flights, parachute jumping, glider flights, or submarine duty" in connection with inactive-duty training. As 

stated in Senate Report No. 80-625 (Committee on Armed Services), p. 2, accompanying S. 1174, 80th

Congress, 1st Session (1947): Increases in pay authorized by law for flying, parachute jumping, submarine 

duty, etc., will be paid. 

300
glider duties, parachute jumping duties, leprosy duties, explosives demolition duties, duty 

at a submarine escape training tank, and duty with certain diving units. See Section 

204(a) of the Career Compensation Act of 1949, ch. 681, id., §204(a), 63 Stat. at 809-

810.33 No special reason was given for this reorganization of the provisions of prior law 

dealing with inactive-duty training pays, including inactive-duty training incentive pays 

for hazardous duties. The extension of incentive pay for hazardous duty to new classes of 

reserve forces personnel--e.g., to reserve forces personnel in an inactive-duty training 

status performing leprosy duties, explosives demolition duties, submarine escape training 

tank duties, etc.--appears to have derived from the extension of such pays to active duty 

personnel, and not from any special concern about reserve forces personnel and whether 

they should be entitled to incentive pay for performance of various hazardous duties.34

See, e.g., chapters of this book dealing with explosives demolition duty pay, parachute 

duty pay, etc. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

 

33 The inactive-duty training pay provisions contained in section 501 of the Career Compensation Act of 

1949, ch. 681, id., §501, 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act of 1949, ch. 681, id., §204, 

63 Stat. at 809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was 

enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the 

inactive-duty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. The current structure of hazardous duty incentive pay entitlements--

including hazardous duty incentive pay for crew member flight duty--for reserve forces personnel 

performing inactive-duty training thus derives from the organization imposed on Title 37 by the Act of 

September 7, 1962, Public Law 87-649, id. 

34 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), did not concern itself with reserve forces 

compensation in any way. See, e.g., "Terms of Reference," the charter given to the Hook Commission by 

the then Secretary of Defense, James Forrestal, in “Career Compensation for the Uniformed Forces, a 

Report and Recommendations for the Secretary of Defense by the Advisory Commission on Service Pay,” 

pp. vii-viii, December 1948. 

301
duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.35

While the concern that led to the amendment in issue was the appropriate use and 

apportionment of flying time, the amendment to 37 U.S.C. §301(f) was stated in broader 

terms so that it applies to any of the hazardous duties set out in 37 U.S.C. §301(a), and 

not just flight pay. Thus, for any month in which a member of a reserve force is involved 

both in active duty and inactive-duty training for which he is entitled to hazardous duty 

incentive pay under 37 U.S.C. §301, the total amount of hazardous duty incentive pay the 

member may receive is based on his combined entitlement for both active duty and 

inactive-duty training. 

 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1786, increased the hazardous duty pay of certain officers and enlisted 

personnel who were aerial flight crew members. Pursuant to that legislation, officers in 

grades 0-7 through 0-10 and enlisted personnel at grades E-1 through E-3 received $150 

per month instead of the previous rate of $110 per month. Officers at grade 0-1, enlisted 

personnel at E-4, and warrant officers at grade W-1 received an increase to $150 per 

month over their previous $125 per month. The National Defense Authorization Act for 

Fiscal Year 1999, Public Law 105-261, 112 Stat. 2040, raised the monthly rate of 

hazardous duty pay for aerial flight crew members in grades E-4 through E-9 by varying 

amounts. 

Until 2003 the conditions of entitlement to crew member flight pay for both active 

duty and reserve forces personnel are set out in Sections 103 and 104 of Executive Order 

 

35 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

302
11157, as amended,36 in various supplementary regulations adopted by the service 

Secretaries pursuant to Section 113 of Executive Order 11157, and the Department of 

Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R. Executive Order 13294, 

issued March 28, 2003, revoked Executive Order 11157. Executive Order 13294 placed 

responsibility for carrying out the authority delegated to the President by 37 U.S.C. 

§301(a), relevant to demolition pay and other incentive pays, with the secretaries of 

commerce, defense, health and human services, and homeland security, as those 

entitlements affect military personnel under the respective jurisdictions of those 

departments. 

Current rates of pay authorized: Crew member flight pay rates vary by pay 

grade, as follows: 

 Pay Grade Monthly Rate 

 

 O-10 $110 

O-9 110 

O-8 110 

O-7 110 

O-6 250 

O-5 250 

O-4 225 

O-3 175 

O-2 150 

O-1 125 

 W-5 250 

 W-4 250 

 W-3 175 

 W-2 150 

 W-1 125 

 E-9 240 

 E-8 240 

 E-7 240 

 E-6 215 

 E-5 190 

 

36 Reproduced, as amended, at 37 U.S.C. §301 note. 

303
 E-4 165 

 E-3 110 

 E-2 110 

 E-1 110 

Cost: For the cost of flight pay for crew members from 1972 to 2004, see Table 

II-10 of Military Compensation Statistics Tables, volume II of this edition. 

304
Chapter II.D.1.b.(2) 

 Flight Pay (Non-Crew Member) 

Legislative Authority: 37 U.S.C. §301(a)(2) and (c)(1). 

Purpose: To provide additional pay to help the uniformed services induce 

personnel to enter into and remain in flying duty assignments, and to compensate for the 

more than normally dangerous character of such duty. 

Background: Originally, the sole purpose of flight pay was to compensate 

personnel for the exceedingly hazardous nature of military flying duty. See Chapter 

II.D.1.b.(1), "Flight Pay (Crew Member)," above. From its birth in 1913 until 1934, the 

law made no distinction in the flight pay entitlements of non-crew members and 

crewmembers. Such a distinction grew out of a provision of the Independent Offices 

Appropriations Act, 1934, ch. 101 [Public Law 78, 73d Congress], §10, 48 Stat. 283, 307 

(1933), one of a series of depression-era measures influenced by a sense-of-Congress 

resolution that "the affairs of the executive branch be conducted with the utmost 

economy," that authorized the President to "... distinguish between degrees of hazard in 

various types of flying duty and make different rates of extra pay applicable thereto." 

When the President failed to take action consistent with the sense-of-Congress 

resolution and the President's discretionary authority under the Independent Offices 

Appropriation Act, 1934, ch. 101, id., Congress adopted certain limitations on flight pay 

entitlements in the Act of March 15, 1934 (Navy Appropriation Act of 1935), ch. 69 

[Public Law 122, 73d Congress], 48 Stat. 403, 411 (1934), and the Act of April 26, 1934 

(Army Appropriation Act of 1935), ch. 165 [Public Law 176, 73d Congress], 48 Stat. 

614, 618 (1934). Under the subject acts, a $120 monthly ceiling was placed on flight pay 

for "nonflying" officers--officers without an aeronautical rating or designation--in the 

grades of lieutenant commander/major and above. The ceiling was extended to cover all 

nonflying officers, regardless of grade, in the appropriation acts for the Army and Navy 

for fiscal year 1936. The maximum rate was reduced from $120 to $60 for flight surgeons 

in fiscal year 1940, and for all non-flying officers in fiscal year 1941. The rate reduction 

305
stemmed from the conclusion of the House Appropriations Committee that flight pay for 

non-flying officers was "justifiable only upon the ground of increased insurance 

premiums" and that "the hazard is certainly not as great as in the case of flying personnel 

who are in the air vastly more often and generally under more hazardous conditions."1

Though the definition of a "flying officer" was broadened by the Act of July 1, 

1943, ch. 185 [Public Law 108, 78th Congress], 57 Stat. 347, 349 (1943), to include 

flight surgeons and personnel undergoing flying training, the $60 ceiling on flight pay for 

non-flying officers remained in effect until July 1, 1950, albeit through a quirk in the law 

from October 1, 1949, to July 1, 1950. The Career Compensation Act of 1949, ch. 681 

[Public Law 351, 81st Congress], §204(a)(1) and (3), 63 Stat. 802, 809-810 (1949), 

established specific flight pay rates for aviation crew and non-crew members effective 

October 1, 1949,2

 and repealed "all Acts or parts of Acts inconsistent with the provisions 

of this Act."3

 However, the fiscal year 1950 Appropriation Act carried the $60 ceiling, 

and its enactment was delayed until a few days after adoption of the Career 

Compensation Act of 1949, id. The ceiling was thus not affected by the repeal--the new, 

higher rates for "nonflying" officers themselves being effectively repealed by the 

subsequently enacted Appropriation Act--and continued to apply throughout fiscal year 

1950. 

In 1948, at the request of the Secretary of Defense, the Advisory Commission on 

Service Pay, sometimes referred to as the "Hook Commission," undertook the first 

comprehensive study of the military pay system since 1908. The commission concluded 

that, although special pays such as flight pay were designed in part to compensate for 

arduous and hazardous duties, their main purpose should be to fill a supply-demand 

 

1 House Report No. 1912 (Committee on Appropriations), p. 13, accompanying H.R. 9209, 76th Congress, 

3d Session (1940). 

2 Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §533(a), 63 Stat. 802, 841 

(1949). 

3

 Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §531(a), 63 Stat. 802, 838 

(1949). 

306
function--namely, to induce personnel to enter into and remain in hazardous military 

occupations. The commission's rationale underlying this conclusion was that: 

 The Commission, after reviewing previous studies, hearing 

presentations by the Services, and personally observing representative operational 

and training activities, is of the unanimous opinion that some additional pay 

should be awarded to individuals who, on a voluntary basis, carry out peacetime 

functions involving more than the ordinary military risk and danger.... 

 Close examination of the nature of hazardous duty and the expressed or 

implied reasons for accepting risks indicated that the incentive to engage and 

remain in hazardous occupations provided a more realistic and practical basis for 

determining the rates of special pay than the theory of recompense for shorter 

career expectancy. The recompense or replacement concept, although promoted 

for many years as the sole argument for hazard pay, was found wanting for 

several reasons.4

The Hook Commission's rationale for higher non-crew-member flight pay rates 

for officers than for enlisted personnel was that: 

 A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all 

times the compensation for the primary responsibility will be considerably 

greater than that for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to 

undertake and continue special duties; and such an inducement need not 

be as great in monetary terms for lower paid and less advanced personnel 

as for higher paid and more highly trained personnel. 

(3) Officers are usually given greater special responsibilities, aside 

from normal administrative control, than enlisted personnel on hazardous 

assignments. 

(4) With respect to flying in particular, death rates for enlisted 

personnel have consistently been lower than those for officers.5

 

4

 “Career Compensation for the Uniformed Forces, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948. 

5

 “Career Compensation for the Uniformed Forces, A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

307
The reasoning and recommendations of the Hook Commission led to the 

introduction and enactment of the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], 63 Stat. 802 (1949), which established non-crew member flight 

pay rates of $100 a month for officers and $50 a month for enlisted personnel.6 See 

Section 204(a)(3) and (c) of the Act, id., 63 Stat. at 810.7

 These rates were raised by 10 

percent to $110 and $55 for officers and enlisted personnel, respectively, by the Career 

Incentive Act of 1955, ch 20 [Public Law 20, 84th Congress], §2(6), 69 Stat. 18, 21 

(1955), and remained at those levels until October 1, 1981, when the rates for enlisted 

personnel were increased by 50 percent to $83 per month under the Uniformed Services 

Pay Act of 1981, Public Law 97-60, §111(c), 95 Stat. 989, 993 (1981). As explained in 

the Senate report, the rates of non-crew member flight pay for enlisted personnel had "not 

been adjusted in more than 20 years, and this increase is needed to enhance the incentive 

value of this pay."8

Non-crew member flight pay rates for enlisted personnel were further increased to 

$110 per month in 1985 by the Department of Defense Authorization Act, 1986, Public 

Law 99-145, §635(a)(3), 99 Stat. 583, 648 (1985). This increase was effected by an 

amendment to 37 U.S.C. §301(c)(1) that eliminated the distinction between officers and 

enlisted personnel for the vast majority of duties qualifying for hazardous duty incentive 

pay, including non-crew member flight pay. Prior to amendment by the 1986 

 

6

 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act of 1949, ch. 681, id., see House Report No. 81-779 (Committee on Armed Services), p. 

15, and Senate Report No. 81-733 (Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st

Congress, 1st Session (1949). 

7

 After enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 

63 Stat. 802, 809-810 (1949), the hazardous duty incentive pay provisions thereof, including non-crew 

member flight pay, were in the main classified to 37 U.S.C. §235, with the non-crew member flight pay 

provisions being found at 37 U.S.C. §235(a)(3) and (c). See 37 U.S.C. §235(a)(3) and (c) (1952). Later, 

when Title 37 of the United States Code was enacted into positive law by the Act of September 7, 1962, 

Public Law 87-649, 76 Stat. 451 (1962), the hazardous duty pay provisions, including the non-crew 

member flight pay provisions here in issue, were codified at 37 U.S.C. §301. 

8 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

308
Authorization Act, Public Law 99-145, id., §635(a)(3), 99 Stat. at 648, 37 U.S.C. 

§301(c)(1) read as follows: 

 For the performance of the hazardous duty described in [various 

clauses of subsection (a) of 37 U.S.C. §301, including non-crew member flight 

duty], an officer is entitled to $110 a month and [an] enlisted member is entitled 

to $83 a month. 

 After amendment by the 1986 Authorization Act, Public Law 99-145, 

id., §635(a)(3), 99 Stat. at 648, 37 U.S.C. §301(c)(1) reads as follows: 

 For the performance of hazardous duty described in [the same clauses 

set out above, including non-crew member flight duty], a member is entitled to 

$110 a month.9

Thus, under current 37 U.S.C. §301, all members, both officers and enlisted 

personnel,10 are entitled to $110 per month for the performance of non-crew member 

flight duties under qualifying orders. 

The legislative history of the 1986 Authorization Act, Public Law 99-145, id., per

se does not indicate the reason for eliminating the distinction between officers and 

enlisted personnel with respect to the rates of pay authorized for non-crew member flight 

duties, primarily because no report was ever submitted on the Senate bill, S. 1160, in 

which the proposal to equalize the rates of non-crew member flight pay for officers and 

enlisted personnel was made.11 In fact, however, the proposal to equalize officer and 

 

9 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in non-crew member 

flight duties became effective October 1, 1985. Section 635(b) of the Department of Defense Authorization 

Act, 1986, Public Law 99-145, §635(b), 99 Stat. 583, 648 (1985). 

10 The term, "member," is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

11 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

...The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

309
enlisted rates of pay for various hazardous duties, including non-crew member flight 

duty, had been made the preceding year in connection with the consideration of the 

Department of Defense Authorization Act, 1985, Public Law 98-525, 98 Stat. 2492 

(1984). At that time, the Senate Committee on Armed Services, reporting out S. 2723, 

98th Congress, 2d Session (1984), had included a provision that would, among other 

things, have equalized officer and enlisted rates of hazardous duty incentive pay for noncrew member flight duty.12 In support of its recommendation, the Committee stated: 

 The committee proposes that the enlisted and officer rates for several 

hazardous duty incentive pays be equalized.... 

 The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

When the Armed Services Committee learned that the Senate would approve no real growth in the defense 

budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program reductions to 

conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 1160, reflecting 

these new budget levels.... 

Most of Senate Report 99-41 continues to be applicable to this bill.... 

131 Cong. Rec.2438, 12500 (1985) (daily ed., 131 CONG. REC. S6415, S6475 (May 17, 1985)) (statement 

of Senator Goldwater). In "explanatory background information" on some of the differences between S. 

1029 and S. 1160, the following appears: 

The compensation and benefits provisions of the bill contain significant differences from those contained in 

S. 1029.... 

... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays .... 

The special and incentive pays ... involved in these recommendations include: 

 Hazardous duty pays. 

 Each of these benefit increases or enhancements is in addition to the modest 

improvements in benefits previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the non-crew member flight pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

12 See Section 148 of S. 2723, 98th Congress, 2d Session (1984). 

310
that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including non-crew member flight pay] should be eliminated.... 

 The committee agrees that enlisted and officer personnel should be 

paid the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.13

The Senate proposal was eliminated in conference.14

As indicated immediately above, the non-crew member flight pay 

"enhancements" adopted as part of the 1986 Authorization Act, Public Law 99-145, id., 

closely parallel recommendations advanced by the Fifth Quadrennial Review of Military 

Compensation in 1984.15 In support of its recommendation to "[r]aise enlisted NonCrewmember Flight Pay to $110 per month,"16 thereby eliminating officer-enlisted 

differentials for that pay, the Fifth Quadrennial Review stated: 

 Although the need for an incentive exists to some extent, the dominant factor 

associated with non-crewmember duties is the hazard associated with performing tasks in 

the air rather than on the ground. Therefore, a flat rate of $110 per month is sufficient to 

recognize the risk and serve as an incentive for this category of officer and enlisted 

flyers.17

 

13 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing section 148 of the Senate 

bill, S. 2723), accompanying S. 2723, 98th Congress, 2d Session (1984). 

14 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

15 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of he principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Fifth Quadrennial Review of Military Compensation was convened in 1982, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in early 

1984. 

16 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 133, November 1983. Also see id., p. 6, and Executive Summary, “Report of the Fifth 

Quadrennial Review of Military Compensation,” p. VI-5, January 1984. 

17 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, pp. 5, 133, November 1983. Also see Executive Summary, “Report of the Fifth Quadrennial 

Review of Military Compensation,” pp. VI-4 and 5, January 1984. 

311
In further comment on officer-enlisted differentials for various hazardous 

duty incentive pays, including non-crew member flight duty, the Fifth 

Quadrennial Review stated: 

 During the process of reviewing the various Hazardous Duty Incentive 

Pays, it became increasingly clear that, although there is some incentive associated 

with certain pays, the primary purpose is recognition for the hazards or risks 

involved. It was, therefore, believed that officer/enlisted personnel should receive 

the same level of payment for seven of the Hazardous Duty Incentive Pays: 

[including] ... flight [pay]--non-crewmember....18

In arriving at this conclusion, the Fifth Quadrennial Review implicitly rejected the 

conclusions reached by the Hook Commission in 1948.19 In commenting on various 

arguments that had been advanced in favor of and against continuation of officer-enlisted 

differentials for hazardous duty incentive pays in general, the Fifth Quadrennial Review

summarized the argument against the Hook Commission's position in the following 

terms: 

The Hook Commission rationale was based primarily on an examination of the 

needs of the aviation and submarine communities. Times have changed and those 

communities now have their own separate career incentive pays and bonuses.20

Other arguments in favor of eliminating the differential were summarized as 

follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 * One can never really compensate for risk of life, no matter the level. 

 

18 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 919, November 1983. See id., pp. 36-37. 

19 See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnote 5 to this chapter, above. 

20 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 920, November 1983; cf. id., p. 37. (The "aviation community" referred to was that of rated 

flyers, not non-crew member flyers. Rated flyers are currently covered by the aviation career incentive and 

continuation pay programs. See Chapter II.D.1.b.(3), "Aviation Career Incentive Pay (ACIP) and Aviation 

Career Continuation Pay (AOCP)", hereof, below.) 

312
 * Basic pay and bonuses are adequate to cover any differential. 

* Most hazard-related pays now cover skills that are not necessarily career 

oriented (across all Services); hence, a differential is not necessary for purposes of 

retention. However, exceptions may occur and should be individually addressed, 

as required. 

* [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for 

same risk" is perceived as equitable in the hazardous duty areas.21

Whether for these or some other reasons, Congress did in fact eliminate officerenlisted pay differentials for non-crew member flight duties in the 1986 Authorization 

Act, Public Law 99-145, id. 

Reserve forces personnel22 entitled to compensation for inactive-duty training are 

entitled to non-crew member flight pay when they perform qualifying duties under 

competent orders, provided Congress has appropriated sufficient funds for that purpose.23

Under 37 U.S.C. §301(f), members of the reserve forces who perform qualifying noncrew member flight duties while entitled to compensation under 37 U.S.C. §206 are also 

entitled, subject to such regulations as may be prescribed by the President, to "an increase 

in compensation equal to 1/30 of the monthly incentive pay" payable to active duty 

 

21 “Special and Incentive Pays, Report of the Quadrennial Review of Military Compensation,” Volume III, 

pp. 919-920, November 1983. 

22 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

23 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, non-crew 

member flight duties, the corresponding provisions of Section 301 dealing with the entitlement of members 

of the reserve forces participating in inactive-duty training to hazardous duty incentive pay for non-crew 

member flight duties are explicitly made contingent on congressional appropriations, i.e., members of the 

reserve forces participating in inactive-duty training are entitled to such pay only "to the extent provided for 

by appropriations." 37 U.S.C. §301(f)(1). 

313
personnel performing such duties.24 That is, for every "period of instruction ... or ... 

appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, the member is, if performing qualifying duty under 37 U.S.C. 

§301(f), also entitled to 1/30th of the non-crew member flight pay that would be payable 

to a member of the active duty force who was performing such duties. Under regulations 

prescribed by the President, a member of a reserve force who performs non-crew member 

flight duties under 37 U.S.C. §301(f) while engaged in inactive-duty training is entitled to 

non-crew member flight pay.25

Flight pay for reserve forces personnel generally, and non-crew member flight 

pay in particular, derives from the Act of July 2, 1926 (Army Air Corps Act), ch. 721 

[Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926). Section 6 of the Army 

Air Corps Act amended Section 20 of the Act of June 10, 1922 (Joint Service Pay 

Readjustment Act of 1922), ch. 212 [Public Law 235, 67th Congress], §20, 42 Stat. 625, 

632 (1922), to give "officers, warrant officers, and enlisted men of the National Guard" 

who were, by competent orders, required to "participate regularly and frequently in aerial 

flights" a 50 percent increase in the "armory drill pay" to which they would otherwise 

have been entitled. The extension of this special increase in compensation to members of 

the National Guard came about as a result of a floor amendment to the House bill, H.R. 

10827, 69th Congress, 1st Session (1926), that established the Air Corps. In offering the 

amendment, Representative John Philip Hill of Alabama did not offer any particular 

justification for extending this pay to members of the National Guard. Rather, he simply 

 

24 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

25 See Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶80312; cf. id., ¶80311. 

314
noted that the bill had "the endorsement of the War Department, the Chief of the Air 

Service [the predecessor of the Air Corps], ... and the committee [on Military Affairs]."26

Flight pay for inactive-duty training was extended to "officers and enlisted men of 

the Naval Reserve ... performing aerial flights in the capacity of pilots ... as a part of their 

training" by the Naval Reserve Act of 1938, ch. 290 [Public Law 732, 75th Congress], 

§313, 52 Stat. 1175, 1184 (1938). Members of the Marine Corps Reserve were covered 

by a separate provision that gave such members the same benefits as conferred on 

members of the Naval Reserve. Naval Reserve Act of 1938, ch. 290, id., §2, 52 Stat. at 

1175. Insofar as personnel and compensation matters were concerned, the Naval Reserve 

Act had been patterned after the Army Air Corps Act, and as above noted, the Army Air 

Corps Act had extended flight pay entitlements to "officers, warrant officers, and enlisted 

men of the National Guard." The Naval Reserve Act was, however, more restrictive than 

the Army Air Corps Act had been: an amendment to the bill provided that the increase in 

compensation would apply to "only those actually serving as pilots of aircraft,"27 whereas 

the Army Air Corps Act had extended the special pay to any member of the National 

Guard "participat[ing] regularly and frequently in aerial flights," independently of the 

member's status as a pilot or otherwise. Because no Navy or Marine Corps reserve 

personnel other than pilots were entitled to flight pay under the Naval Reserve Act of 

1938, Navy and Marine Corps reserve personnel engaged in what would presently qualify 

as non-crew member flight duties would not have been entitled to hazardous duty 

incentive pay on account of performing such duties. 

The Act of March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 

(1948), substantially reorganized the provisions of preceding law relating to inactive-duty 

training pay for reserve forces personnel. Section 3 of the 1948 Act, ch. 157, id., 62 Stat. 

at 88-89, amended Section 14 of the Pay Readjustment Act of 1942, ch. 413 [Public Law 

 

26 67 Cong. Rec. 8765 (1926) (statement of Representative Hill). 

27 House Report No. 2763 (Committee of Conference), p. 3, accompanying H.R. 10594, 75th Congress, 3d 

Session (1938). 

315
607, 77th Congress], §14, 56 Stat. 359, 367 (1942), to give "officers, warrant officers, and 

enlisted personnel" of all the reserve forces entitlement to special pay for "perform[ing] 

aerial flights," among other things. As stated in the House Report: 

The purpose of the bill is to standardize inactive training pay for all 

Reserve components of the various services and also to grant such inactive duty 

training pay to Army Reservists. 

 The major departure in the legislation is the giving of this pay to the 

Army Reserves, including enlisted men. Such pay has been granted by the 

Congress heretofore to members of the National Guard and the Naval and Marine 

Corps Reserves.... 

 The committee considers the need for this pay to be apparent, even 

though it is unfortunate that the country must resort to it. The Army and Navy 

must maintain active Reserve components, or else, in time of war emergency, the 

Nation will have to depend exclusively upon the Regular services for its defense. 

They are patently incapable of doing such a job alone. So, in order to vitalize the 

National Guard and Reserve components, to get more people to participate so that 

they will fit promptly and effectively into the mobilization-day plans of the 

Armed Forces, inactive duty pay is to be given each participant at the rate of onethirtieth of 1 month's base and longevity pay for each training period.... Such 

specialists as pilots, radar technicians, medical people, and so forth, will also be 

able to earn inactive duty training pay when the standards specified by the 

Secretaries [of the various departments] are met.28 29

These provisions covered personnel of all the reserve forces performing non-crew 

member flight duties as a part of their inactive-duty training. 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st ongress], 63 

Stat. 802 (1949), restated the provisions of the Pay Readjustment Act of 1942, ch. 413 

 

28 House Report No. 80-971 (Committee on Armed Services), pp. 1-2, accompanying H.R. 3227, 80th

Congress, 1st Session (1947). See Senate Report No. 80-625 (Committee on Armed Services), p. 1, 

accompanying S. 1174, 80th Congress, 1st Session (1947). 

29 Section 14(c) of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §14(c), 56 

Stat. 359, 367 (1942), as amended by Section 3 of the Act of March 25, 1948, ch. 157 [Public Law 460, 

80th Congress], §3, 62 Stat. 87, 88-89 (1948), extended special pay to "personnel required to perform aerial 

flights, parachute jumping, glider flights, or submarine duty" in connection with inactive-duty training. As 

stated in Senate Report No. 80-625 (Committee on Armed Services), p. 2, accompanying S. 1174, 80th

Congress, 1st Session (1947): Increases in pay authorized by law for flying, parachute jumping, submarine 

duty, etc., will be paid. 

316
[Public Law 607, 77th Congress], §14, 56 Stat. 359, 367 (1942), as amended by the Act of 

March 25, 1948, ch. 157 [Public Law 460, 80th Congress], §3, 62 Stat. 87, 88-89 (1948), 

insofar as the entitlement of reserve forces personnel to special pay for the performance 

of hazardous duties was concerned. Section 501 of the Career Compensation Act of 1949, 

ch. 681, id., 63 Stat. at 825-827, dealt generally with the entitlement of reserve forces 

personnel to compensation for inactive-duty training. Subsection (d) of Section 501, 63 

Stat. at 826, generalized the hazardous duty incentive pay entitlements of reserve forces 

personnel performing inactive-duty training by providing that hazardous duty incentive 

pay was available to such personnel whenever they were required by competent orders to 

perform any of the hazardous duties, set out at Section 204(a) of the Career 

Compensation Act of 1949, ch. 681, id., §204(a), 63 Stat. at 810, for which active duty 

personnel were entitled to hazardous duty incentive pay. The duties set out in Section 

204(a) as qualifying for such pay included crew member and non-crew member flight 

duties, submarine duties, glider duties, parachute jumping duties, leprosy duties, 

explosives demolition duties, duty at a submarine escape training tank, and duty with 

certain diving units. See Section 204(a) of the Career Compensation Act of 1949, ch. 681, 

id., §204(a), 63 Stat. 809-810.30 No special reason was given for this reorganization of 

the provisions of prior law dealing with inactive-duty training pays, including inactiveduty training incentive pays for hazardous duties. The extension of incentive pay for 

hazardous duty to new classes of reserve forces personnel--e.g., to reserve forces 

personnel in an inactive-duty training status performing leprosy duties, explosives 

demolition duties, submarine escape training tank duties, etc.--appears to have derived 

from the extension of such pays to active duty personnel, and not from any special 

concern about reserve forces personnel and whether they should be entitled to incentive 

 

30 The inactive-duty training pay provisions contained in section 501 of the Career Compensation Act of 

1949, ch. 681, id., §501, 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act, ch. 681, id., §204, 63 Stat. 

at 809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was enacted 

into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. The current structure of hazardous duty incentive pay entitlements--

including hazardous duty incentive pay for non-crew member flight duty--for reserve forces personnel 

performing inactive-duty training thus derives from the organization imposed on Title 37 by the Act of 

September 7, 1962, Public Law 87-649, id. 

317
pay for performance of various hazardous duties.31 See, e.g., chapters of this book dealing 

with explosives demolition duty pay, parachute duty pay, etc. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

 Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

 To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.32

 While the concern that led to the amendment in issue was the appropriate use and 

apportionment of flying time, the amendment to 37 U.S.C. §301(f) was stated in broader 

terms, so that it applies to any of the hazardous duties set out in 37 U.S.C. §301(a), and 

not just flight pay. Thus, for any month in which a member of a reserve force is involved 

both in active duty and inactive-duty training for which he is entitled to hazardous duty 

incentive pay under 37 U.S.C. §301, the total amount of hazardous duty incentive pay the 

member may receive is based on his combined entitlement for both active duty and 

inactive-duty training. 

 

31 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), did not concern itself with reserve forces 

compensation in any way. See, e.g.,"Terms of Reference," the charter given to the Hook Commission by 

the then Secretary of Defense, James Forrestal, in “Career Compensation for the Uniformed Forces, a 

Report and Recommendation for the Secretary of Defense by the Advisory Commission on Service Pay,” 

pp. vii-viii, December 1948. 

32 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

ongress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

318
 Non-crew member flight duty was among several forms of hazardous duty that 

received a pay increase from $110 per month to $150 per month in the National Defense 

Authorization Act for Fiscal Year 1998, Public Law 105-85, 111 Stat. 1787. 

Until 2003, the conditions of entitlement to non-crew member flight pay for both 

active duty and reserve forces personnel were set out in Section 103 and 104 of Executive 

Order 11157, as amended,33 in various supplementary regulations adopted by the service 

Secretaries pursuant to Section 113 of Executive Order 11157, and in the Department of 

Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R. Executive Order 13294, 

issued March 28, 2003, revoked Executive Order 11157. Executive Order 13294 placed 

responsibility for carrying out the authority delegated to the President by 37 U.S.C. 

§301(a), relevant to demolition pay and other incentive pays, with the Secretaries of 

Commerce, Defense, Health and Human Services, and Homeland Security, as those 

entitlements affect military personnel under the respective jurisdictions of those 

departments. 

Current rate of non-crew member flight pay: The current rate of pay for noncrew member flight duties for both officers and enlisted members is $150 per month. 

Cost: For the cost of non-crew member flight pay from 1972 to 1995, see Table 

II-11 of Military Compensation Statistics Tables, volume II of this edition. 

 

33Reproduced, as amended, at 37 U.S.C. §301 note. 

319
Chapter II.D.1.b.(3) 

 Aviation Career Incentive Pay 

 and 

 Aviation Career Continuation Pay 

 Legislative Authority: 37 U.S.C. §§301a and 301b. 

Purpose: To provide additional pay for aviation service in order to increase the 

ability of the uniformed services to attract and retain officer volunteers in a military 

aviation career. As prescribed by Section 615(a) of the National Defense Authorization 

Act for Fiscal Year 1999, Public Law 105-261, 112 Stat. 2040 (1998), aviation service is 

defined by 37 U.S.C. §301a(a)6 as “service performed by an officer (except a flight 

surgeon or other medical officer) while holding an aeronautical rating or designation or 

while in training to receive an aeronautical rating or designation.” 

Background: The practice of providing additional pay to military personnel for 

undertaking flying duty has a long tradition. The primary form of this pay, currently 

known as aviation career incentive pay (ACIP), is, however, of relatively recent origin, 

having been adopted by the Aviation Career Incentive Act of 1974, Public Law 93-294, 

§2, 88 Stat. 177, 177-179 (1974), to replace the preexisting flight pay program.1

 The 

purpose underlying the creation of ACIP was described by Congress as follows: 

 The purpose of the bill is to restructure the flight-pay system of the Armed Forces 

so as to achieve a more equitable distribution of flight pay and increase the ability of the 

Armed Forces to attract and retain officer aviator crewmembers.... 

 H.R. 12670 removes flight pay for officers from Section 301 of Title 37, 

United States Code, which provides “incentive pay: hazardous duty" and puts it in 

a new Section 301a which provides for "incentive pay: aviation career." The new 

section thus recognizes the committee's desire to define flight pay as not simply 

recompense for undertaking occasional hazardous duty but as an incentive pay for 

undertaking a career that is, on a continuing basis, more hazardous than other 

service careers and at the same time involves a capacity to absorb special 

 

1

 For a discussion of the flight pay program and a history of the rates of pay authorized thereunder, see 

Chapter II.D.1.b.(1), "Flight Pay (Crew Member)," above. 

320
professional training which represents a considerable investment on the part of the 

Government.2

Representative Young of Florida, a member of the House Armed Services 

Committee, voiced the same theme in more down-to-earth language during the hearings 

on an earlier bill: 

If we are going to call it flight pay then they ought to be paid for flying, 

but there should, in my opinion, be some type of incentive or career pay for the 

men and women, if that be the case, that fall in these categories. I would hope we 

would find a way to go to the Congress with a program that would, in fact, 

provide for this money, but not give it the title of flight pay because it is a very 

deceiving situation.... We ought to devise some different program or different 

approach to the Congress and call it what it is, an incentive pay or a career pay 

rather than flight pay.3

To create an incentive for officers to undertake a career in military aviation, the 

Aviation Career Incentive Act of 1974 (1) established a system whereby an officer 

involved in the "frequent and regular performance of operational or proficiency flying 

duty" under competent orders was entitled to continuous aviation career incentive pay 

independently of whether, during any given year, the officer was actually assigned to 

flying duty; (2) set ACIP rates based on the length of an officer's aviation service rather 

than on grade and total military service, although years of officer service were used in 

determining such rates for more senior officers, i.e., those with more than 18 years of 

officer service; (3) set the highest ACIP rates for the years immediately following the 

completion of an officer's first obligated tour, which normally coincided with the 

retention-critical, flight-intensive, period of a career; (4) provided for the progressive 

phasing out of ACIP entitlements in the senior, less-flight-intensive years of a 

commissioned career, with total elimination of ACIP entitlements after 25 years of 

 

2 House Report No. 93-799 (Committee on Armed Services), pp. 1 and 3, and Senate Report No. 93-841 

(Committee on Armed Services), pp. 3 and 5, accompanying H.R. 12670, 93d Congress, 2d Session (1974). 

Also see Report of the 1971 Quadrennial Review of Military Compensation, Office of the Assistant 

Secretary of Defense for Manpower and Reserve Affairs, Department of Defense, 1971. 

3 Hearings on H.R. 8593 before Subcommittee No. 4 of the House Armed Services Committee, p. 104, 93d 

Congress, 1st Session (1973). 

321
officer service; and (5) replaced the former "excusal" system with a set of operational 

flying-time standards, or "gates," for entitlement to continuous monthly ACIP.4

The ACIP rates prescribed in the 1974 Act were: 

 Commissioned Officers 

 Phase I 

 Years of Aviation (Service including Monthly 

 Flight Training) as an Officer Rate 

 

 2 or less $100 

 Over 2 125 

 Over 3 150 

 Over 4 165 

 Over 6 245 

 Phase II 

 Years of Service as an Officer as Monthly 

 Computed under 37 U.S.C. §205 Rate

 

 Over 18 $225 

 Over 20 205 

 Over 22 185 

 Over 24 165 

 Over 25 0 

 

 Warrant Officers 

 Years of Aviation Service Monthly 

 as an Officer Rate 

 2 or less $100 

 Over 2 110 

 Over 6 200 

Note 1: ACIP for officers of pay grade O-7 could not be more than $160 a month, and that for officers of 

pay grade O-8 or above, not more than $165, regardless of years of service. Note 2: Officers with more than 18 years of officer service but less than six years of aviation service 

received Phase I rates. 

 

4

 See appendix to this chapter for a fuller explanation of the reasons for this structuring of the ACIP 

system. 

322
 Under the ACIP "gate" system, an officer qualified for aviation service, except a 

flight surgeon or other medical officer, was entitled to continuous ACIP at the 

appropriate rate (1) until he completed 12 years of aviation service; or (2) if he had at 

least six years of operational flying duty at the 12-year gate, until he completed 18 years 

of aviation service; or (3) if he had at least nine but less than 11 years of operational 

flying duty at the 18-year "gate," until he completed 22 years of officer service; or (4) if 

he had at least 11 years of operational flying duty at the 18-year gate, until he completed 

25 years of officer service in the case of a commissioned officer, or for as long as he 

remained qualified in the case of a warrant officer. An officer not entitled to continuous 

ACIP because of failure to make a gate but who was required by competent orders to 

perform operational or proficiency flying duty was nevertheless entitled to ACIP on a 

monthly basis if he performed at least four hours of aerial flight a month. A flight 

surgeon or other medical officer required by competent orders to perform operational 

flying duty was also entitled to monthly ACIP for the performance of at least four hours 

of aerial flight a month. 

Effective September 1, 1980, ACIP rates for commissioned and warrant officers 

were increased 25 percent across-the-board by the Military Personnel and Compensation 

Amendments of 1980, Public Law 96-343, §2(b), 94 Stat. 1123, 1124 (1980), because, in 

the words of the Conference Report, of the "need for and desirability of" such increases 

to improve retention.5

 In addition, the maximum rates payable to officers in pay grade O7 was increased to $200 and to officers in pay grade O-8 or above, to $206. Military 

Personnel and Compensation Amendments of 1980, Public Law 96-343, id., §2(b), 94 

Stat. at 1124. 

The perceived aviator retention problem was also addressed in another piece of 

legislation approved the same day, the Department of Defense Authorization Act, 1981, 

Public Law 96-342, §806(a)(1), 94 Stat. 1077, 1095-1096 (1980). The latter act 

effectively established a special continuation pay for aviation career officers, codified at 

37 U.S.C. §301b and commonly referred to as aviation career or aviation officer 

 

5 House Report No. 96-1233 (Committee of Conference), p. 15, accompanying H.R. 5168, 96th Congress, 

2d Session (1980). 

323
continuation pay (AOCP). Specifically, the Department of Defense Authorization Act, 

1981, Public Law 96-342, id., authorized, under regulations required to be prescribed by 

the Secretary of Defense (or the Secretary of Transportation with respect to the Coast 

Guard), the payment to a qualified and electing officer of up to four months' basic pay 

for each year the officer agreed to remain on active duty beyond the expiration of his 

obligated service. Officers qualified for such pay had to (1) be entitled to ACIP under 37 

U.S.C. §301a, (2) be in a pay grade below O-7, (3) be qualified to perform "operational 

flying duty," as that term is defined in 37 U.S.C. §30la(a)(6), (4) have at least six but less 

than 18 years of aviation service as an officer, (5) be in an aviation specialty designated 

as "critical," and (6) have executed a written agreement to remain on active duty in 

aviation service for at least one year. The aviation career continuation pay authorized by 

the provision in issue was in addition to any other pay and allowances, including ACIP, 

to which an affected officer might otherwise be entitled. Any agreement adopted under 

the provision in issue could not extend beyond the time an affected officer would 

complete 19 years of aviation service. 

The aviation career continuation pay provisions adopted in the Department of 

Defense Authorization Act, 1981, Public Law 96-342, §806(a)(1), 94 Stat. 1077, 1095-

1096 (1980), were amended by the Uniformed Services Pay Act of 1981, Public Law 97-

60, §113, 95 Stat. 989, 995 (1981), to limit their application to specified circumstances. 

First, the Uniformed Services Pay Act of 1981, Public Law 97-60, id., provided that the 

only agreements that could be accepted under the aviation career continuation pay 

program between October 14, 1981, the date of adoption of the act, and September 30, 

1982, were agreements executed by Navy or Marine Corps officers. Second, the act 

provided that any officer receiving aviation career continuation pay under an agreement 

covering a particular period of time could not receive ACIP under 37 U.S.C. §301a at a 

rate higher than the rate in effect on September 30, 1981.6

 Finally, the act provided, in 

 

6 In addition to amending the aviation career continuation pay program, the Uniformed Services Pay Act, 

Public Law 97-60, §112(b), 95 Stat. 989, 995 (1981), generally increased ACIP rates. See second following 

paragraph and ACIP rate table, as in effect after passage of the Uniformed Services Pay Act of 1981, Public 

Law 97-60, §112(b), 95 Stat. 989, 995 (1981), on following page. 

324
essence, that no agreements under the aviation career continuation pay program could be 

accepted after September 30, 1982. 

As explained in the relevant Congressional Report, authority to make aviation 

career continuation payments was restricted to Navy and Marine Corps officers because 

they were the main category of officers experiencing "retention problems."7

 Similarly, the 

provision forbidding ACIP payments at rates exceeding those in effect on September 30, 

1981, to officers receiving aviation career continuation pay was intended to insure that 

affected officers "not be entitled to the increased rates of [ACIP] during the period 

obligated as a result of the [continuation pay] bonus."8

 And the authority to make such 

payments at all was terminated as of September 30, 1982, because Congress felt "the 

[continuation pay] bonus to be an inappropriate solution to long-term retention problems" 

with military aviators.9

 As explained in the Senate Report, Congress had originally 

adopted the aviation career continuation pay program to allow the services to deal with 

"aviation specialties where retention problems and shortages exist that cannot be 

addressed by other management action or initiatives," and the 1981 amendments to the 

program were, at least in the contemplation of Congress, needed to restrict its 

applicability to precisely those situations.10

In addition to limiting the applicability of aviation career continuation pay as 

indicated above, the Uniformed Services Pay Act of 1981, Public Law 97-60, id., 

§112(b), 95 Stat. at 995, increased, effective October 1, 1981, ACIP rates for "retention 

critical" career-decision-point commissioned officers--those with over six years of 

service--as well as for senior officers referred to as Phase II officers. The Act also 

 

7 Senate Report No. 97-146 (Committee on Armed Services), p. 9, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

8 Senate Report No. 97-146 (Committee on Armed Services), pp. 9-10, accompanying S. 1181, 97th

Congress, 1st Session (1981). 

9 Senate Report No. 97-146 (Committee on Armed Services), p. 10, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

10 Senate Report No. 97-146 (Committee on Armed Services), p. 9, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

325
increased ACIP rates for warrant officers to the same rates authorized for so-called Phase 

I commissioned officers, thereby coincidentally increasing the number of years-of-service 

categories applicable to such officers. Finally, the 1981 Act extended ACIP entitlements 

to commissioned officers in pay grade O-6 or below with more than 25 years of service 

who were, despite their seniority, nevertheless required to perform flying duties. 

As explained in the relevant Senate Report, ACIP rates were increased for all 

aviators--both commissioned and warrant officers--with more than six years of aviation 

service "to improve retention and reduce ... shortages" of qualified personnel, thus 

combating what was perceived as an increasingly "serious shortage."11 Officers with 

more than six years of aviation service were targeted in particular "to provide the greatest 

incentive during the flight-intensive, retention-critical, mid-career years."12 ACIP rates 

for so-called "mid-career" officers having been thus raised, rates for the more senior 

Phase II officers also were increased "by a comparable amount to create an orderly 

incentive pay reduction" mechanism-- rather than an abrupt drop--by which ACIP 

entitlement was to be gradually phased out.13 Finally, ACIP entitlement was extended to 

commissioned officers in pay grade O-6 or below with more than 25 years of service who 

were actually required to perform flying duties in recognition of Congress's feeling that it 

was "inequitable to ask these officers to perform flying duties on a regular basis and not 

be given the incentive pay that men junior to them who are performing the same 

functions receive."14 According to the Senate Report, this situation arose as “recent 

 

11 Senate Report No. 97-146 (Committee on Armed Services), p. 9, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

12 Senate Report No. 97-146 (Committee on Armed Services), p. 9, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

13 Senate Report No. 97-146 (Committee on Armed Services), p. 9, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

14 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

326
aviator shortages” among more junior personnel substantially increased the number of 

senior officers required to perform flying duties.15 

As increased by the Uniformed Services Pay Act of 1981, Public Law 97-60, id., 

ACIP rates for commissioned and warrant officers were thus: 

 Commissioned Officers 

 Phase I 

Years of Aviation Service (including Monthly 

 Flight Training) as an Officer Rate 

 2 or less $125 

 Over 2 156 

 Over 3 188 

 Over 4 206 

 Over 6 400 

 

 Phase II 

 Years of Service as an Officer Monthly 

as Computed under Section 205 Rate

 

 Over 18 $370 

 Over 20 340 

 Over 22 310 

 Over 24 280 

 Over 25 250 

 Warrant Officers 

 Monthly 

 Years of Aviation Service as an Officer Rate 

 

 2 or Less $125 

 Over 2 156 

 Over 3 188 

 

15 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

327
 Over 4 206 

 Over 6 400 

Note: ACIP for officers in pay grade 0-7 was limited to $200 per month and that for officers in pay grade 

0-8 or above, to $206. 

 

The Department of Defense Authorization Act, 1984, Public Law 98-94, 

§904(a)(1) and (2), 97 Stat. 614, 635-636 (1983), amended the aviation career 

continuation pay program in a number of regards. First, eligibility for aviation officer 

career continuation pay under 37 U.S.C. §301b during the period October 1, 1983, to 

September 30, 1984, was limited to officers of the Navy and Marine Corps who were 

pilots, whereas under the preexisting aviation career continuation pay program, non-pilots 

had been eligible for continuation pay as well as pilots. Second, a number of restrictions 

were attached to the types of continuation agreements that could be accepted by the Navy 

and Marine Corps: under the 1984 Authorization Act, the only continuation agreements 

that could be accepted were those executed by an officer who had at least six but less 

than 11 years of active service, who had completed the minimum service required for 

aviation training, and who had not previously received aviation career continuation pay 

under 37 U.S.C. §301b; in addition, an acceptable agreement had to require the officer in 

question to remain on active duty in aviation service either three or four years. An officer 

meeting the stated criteria was eligible for up to $4,000 in aviation career continuation 

pay for each year of a three-year agreement and up to $6,000 for each year of a four-year 

agreement. In derogation of the normal three- or four-year rule, a special provision 

allowed a six-year agreement to be accepted from an officer who had completed less than 

seven years of active duty, in which case the officer was eligible for up to $6,000 for each 

year of the six-year agreement.16 Third, another provision withdrew hazardous duty 

incentive pay entitlements under 37 U.S.C. §301 during any period an officer was 

obligated to serve under a continuation agreement accepted under 37 U.S.C. §301b. 

 

16 That is, during the period October 1, 1983, to September 30, 1984, the basic authority that provided for 

aviation career continuation pay in some multiple of basic pay was effectively suspended in favor of an 

upper limit of either $4,000 per year of a three-year agreement or $6,000 per year of a four- or six-year 

agreement. Since the minimum basic pay of an officer in pay grade O-3 with more than six years of 

service--and any officer executing a continuation agreement should at least have been in pay grade O-3 

with more than six years of service--was more than $2,000 per month, the $4,000 and $6,000 per-year 

limitations on continuation agreements had the effect of keeping the actual payment below the level 

theoretically authorized for an officer executing a continuation agreement. 

328
While limiting the program as indicated, the 1984 Authorization Act did extend the 

termination date for the program from September 30, 1982, to September 30, 1984.17

 In explanation of these restrictions, the Senate Armed Services Committee 

noted: 

 In passing the fiscal year 1981 Defense Authorization Act, the 

Congress enacted a new continuation bonus for aviation officers in an effort to 

improve the serious manning shortages in these skills. Subsequent to its original 

enactment, the bonus was limited to Navy and Marine Corps aviators only.... Both 

services request that their authority to pay it [AOCP] be renewed. 

 The Committee, however, is concerned that the implementation of the 

aviation bonus by the Navy and Marine Corps has not fully achieved its intended 

goal of targeting bonus dollars to specific aviation specialties and to the career 

points where shortages which cannot be addressed by other management actions 

exist.... 

 ... [I]n [agreeing to] extend ... the authority, the Committee 

recommends the following changes to the aviation bonus program: 

a. Extend the authority to September 30, 1984, and continue to restrict its use 

to only Navy and Marine Corps aviators; however, aviators who receive the bonus 

will continue to receive Aviation Career Incentive Pay rates in effect on 

September 30, 1981; 

b. Allow only 3-, 4-, or 6-year contracts and limits [sic] each aviator to one 

contract during his eligibility; 

c. Limit the maximum bonus amounts to $6,000 per year for a 4- or 6-year 

commitment and $4,000 per year for a 3-year commitment; 

d. Limit eligibility for the bonus to those aviators who have at least six but less 

than eleven years of active duty.18

In conference, eligibility for the aviation career continuation pay program was 

restricted to pilots. As explained in the House and Senate Conference Reports: 

 

17 Since the Department of Defense Authorization Act, 1984, Public Law 98-94, 97 Stat. 614 (1983), was 

not enacted until September 24, 1983, see 97 Stat. at 707, there was a hiatus in the aviation career 

continuation pay program from October 1, 1982, to September 24, 1983, during which no continuation 

agreements whatsoever could be accepted. 

18 Senate Report No. 98-174 (Committee on Armed Services), pp. 216-217, accompanying S. 675, 98th

Congress, 1st Session (1983). See Senate Report No. 98-213 (Committee of Conference), pp. 224-225, and 

House Report No. 98-352 (Committee of Conference), pp. 224-225, accompanying S. 675, 98th Congress, 

1st Session (1983). 

329
The House recedes [to the Senate proposal highlighted above] with an 

amendment limiting the eligibility for the bonus to pilots. Although the naval 

flight officers are critical to the operations of Navy and Marine Corps aircraft, the 

conferees authorized the bonus only for the purpose of reducing critical shortfalls 

in manning. A substantial shortage exists for pilots, but the conferees agree that a 

similar shortage presently does not exist for naval flight officers. Therefore, it is 

appropriate to limit the use of the aviation officer career bonus in fiscal year 1984 

to address only the shortages of Navy and Marine Corps pilots.19

Despite the expressed intention to limit aviation career continuation pay to Navy 

and Marine Corps pilots, the Department of Defense Appropriations Act, 1984, Public 

Law 98-212, Title I, 97 Stat. 1421 (1983), without expressly overturning the amendments 

to 37 U.S.C. §301b made by the Department of Defense Authorization Act, 1984, Public 

Law 98-94, id.,20 effectively reinstituted authority to make AOCP payments to all 

aviators, pilots and flight officers alike, although the act did indicate that the bonus 

should be paid to "aviation specialties where shortages actually exist." Pursuant to the 

authority granted in the 1984 Appropriations Act, the Navy and Marine Corps began 

making aviation career continuation pay available to all eligible aviators, pilots and flight 

officers, in January 1984.21

In hearings held before the Manpower and Personnel Subcommittee of the Senate 

Committee on Armed Services in March 1984, Navy and Marine Corps officials testified 

that only the Navy continued to have a pilot shortage.22 Because of this, the Department 

of Defense Authorization Act, 1985, Public Law 98-525, §622, 98 Stat. 492, 2540-2541 

(1984), removed Marine Corps aviators from the category of officers eligible for aviation 

career continuation pay. At the same time, the 1985 Authorization Act broadened the 

 

19 House Report No. 98-352 (Committee of Conference), pp. 224-225, and Senate Report No. 98-213 

(Committee of Conference), pp. 224-225, accompanying S. 675, 98th Congress, 1st Session (1983). 

20 For a discussion of the reasons underlying the limitation on the payment of AOCP to pilots contained in 

the Department of Defense Authorization Act, 1984, Public Law 98-94, 97 Stat. 614 (1983), see text 

accompanying footnote 19 to this chapter, above. 

21 Senate Report No. 98-500 (Committee on Armed Services), p. 209, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

22 Senate Report No. 98-500 (Committee on Armed Services), p. 209, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

330
category of naval aviators eligible for the pay to include all naval aviators, not just pilots. 

In addition, the 1985 Authorization Act extended the termination date for the program to 

September 30, 1985. 

In support of this action, the Senate Committee on Armed Services stated: 

After thoroughly reviewing this matter, the committee recommends a 

provision ... extending the authority to pay the Aviation Officer Continuation Pay 

for one additional year, through September 30, 1985. Because the Marine 

Corps no longer has a shortage of aviators in the grades and years of service for 

which the bonus is authorized, the committee has restricted the payment of the 

bonus to Navy aviators only. The committee reiterates that this bonus should not 

be applied across-the-board to all Navy aviators, but should be targeted to those 

aviation communities where shortages actually exist. 

 . . . 

 Despite the original congressional intent that the Aviation Officer 

Continuation Pay be used as a short-term bonus to restore aviation retention to 

required levels, there is some indication that Navy officers are beginning to regard 

this bonus as a longer-term career aviation pay. The committee notes that the 

current Aviation Career Incentive Pay was designed to meet this goal for all of the 

Services.23

The Department of Defense Authorization Act, 1986, Public Law 99-145, §636, 

99 Stat. 583, 648 (1985), further extended the authority for aviation career continuation 

pay, this time to September 30, 1987. The Senate, which had originally proposed a oneyear extension only, stated: 

In fiscal year 1985, authority exists for the payment of aviation officer 

continuation pay to Navy aviators in aviation communities where shortages 

actually exist. The committee recognizes that the Navy has experienced an 

increase in pilot resignations in recent months, which is believed to be due 

primarily to increased hiring by the airline industry.... 

 The committee believes that the authority that existed in fiscal year 

1985 for this pay should be continued through fiscal year 1986. The committee 

expects that this pay will continue to be targeted only to Navy aviators in aviation 

communities where actual shortages truly exist.24

 

23 Senate Report No. 98-500 (Committee on Armed Services), pp. 209-210, accompanying S. 2723, 98th

Congress, 2d Session (1984). See House Report No. 98-1080 (Committee of Conference), pp. 297-298, 

accompanying H.R. 5167, 98th Congress, 2d Session (1984). 

24 Senate Report No. 99-41 (Committee on Armed Services), p. 194, accompanying S. 1029, 99th Congress, 

1st Session (1985). 

331
 The House, which had proposed a three-year extension, agreed to a two-year 

extension, until September 30, 1987, in conference.25

The National Defense Authorization Act for Fiscal Year 1987, Public Law 99-

661, §631, 100 Stat. 3816, 3883 (1986), amended the AOCP program in two regards: 

first, by extending the authority of the Secretary of Defense to accept a six-year 

agreement from officers who had completed less than eight years of active duty, as 

opposed to the seven years of active duty that had been the cutoff point under provisions 

adopted by the 1984 Authorization Act;26 and, second, by eliminating the prohibition on 

the receipt of any form of hazardous duty incentive pay under 37 U.S.C. §301 by officers 

receiving AOCP.27 Both changes were made at the urging of the Department of 

Defense.28 As indicated in the report filed by the Senate Committee on Armed Services 

with respect to the proposal to allow officers with up to eight years of active duty to enter 

into six-year continuation agreements, 

 ... under present law, only aviators with less than seven years of active duty may 

sign an agreement to remain on active duty for six years and receive AOCP at a 

rate of $6,000 a year for each of those six years. The Department of Defense has 

 

25 House Report No. 99-235 (Committee of Conference), p. 431, and Senate Report 99-118 (Committee of 

Conference), p. 431, accompanying S. 1160, 99th Congress, 1st Session (1985). 

26 See text accompanying footnote 16 to this chapter, above. 

27 In addition to these changes to the AOCP program, the 1987 Authorization Act, Public Law 99-661, id., 

also modified the ACIP program to include aviation flight cadets within the category of personnel eligible 

to have time spent in aviation cadet training count as "operational flying duty" for purposes of determining 

future entitlement to continuous aviation career incentive pay over a full military aviation career under the 

ACIP "gate" structure previously explained. As the Senate Committee on Armed Services noted: 

... Under ACIP, certain milestones based on years of aviation service are used in determining 

continued eligibility for that pay. The 12 to 18 months spent in flight training is creditable as 

aviation service, but only if the student is an officer. This creates a substantial disincentive for 

enlisted personnel to pursue their aviation training through the NAVCAD [Navy Aviation Cadet] 

program because the time spent in training will be lost throughout their later careers for purposes 

of determining eligibility for ACIP. 

Senate Report No. 99-331 (Committee on Armed Services), pp. 231-232, accompanying S. 2638, 

99th Congress, 2d Session (1986). 

28 See Senate Report No. 99-331 (Committee on Armed Services), p. 231, accompanying S. 2638, 99th

Congress, 2d Session (1986). Cf. House Report No. 99-1001 (Committee of Conference), p. 481, 

accompanying S. 2638, and House Report No. 99-718 (Committee on Armed Services), pp. 204-205, 

accompanying H.R. 4428, 99th Congress, 2d Session (1986). 

332
requested that this "window" be expanded to include those with less than eight 

years of active duty. The committee concurs ... and recommends this change.29

With respect to the proposal to permit aviators receiving AOCP also to receive hazardous 

duty incentive pay under 37 U.S.C. §301 if assigned to a qualifying billet, the House 

Committee on Armed Services simply noted that its proposal 

... would eliminate the current statutory restriction against receipt of hazardous 

duty incentive pay by officers serving under aviation continuation agreements. 

The recommended change would affect, perhaps, 50 aviators assigned, for 

example, to carrier flight deck duties--very demanding sea billets that are difficult 

to fill.30

The National Defense Authorization Act for Fiscal Years 1988 and 1989, Public 

Law 100-180, §622, 101 Stat. 1019, 1100-1101 (1987), again amended the AOCP 

program, this time in four major particulars. Under prior practice, the basic statute 

provided generalized authority, codified at 37 U.S.C. §301b(a), for the Secretary of 

Defense to accept continuation agreements from aviation officers in the different 

services, with AOCP entitlements limited to a maximum of four months of basic pay 

multiplied by the number of years covered by a continuation agreement. However, that 

generalized authority had been limited by successive authorization acts that codified the 

limitations to the generalized authority at 37 U.S.C. §301b(e). Among other things, those 

acts provided that the only officers from whom continuation agreements might be 

accepted during a specifically prescribed period were officers who never had previously 

received aviation career continuation pay under 37 U.S.C. §301b, and that the maximum 

amount of an AOCP payment to a given officer could not exceed $4,000 for each year of 

a three-year continuation agreement or $6,000 for each year of a four- or six-year 

continuation agreement. In particular, the generalized program criteria and maximum 

rates of AOCP pay set out at 37 U.S.C. §301b(a) were in practice rather severely 

circumscribed by limitations set out at 37 U.S.C. §301b(e), which applied to agreements 

proffered by aviation officers during specified periods of time. In the first amendment to 

 

29 Senate Report No. 99-331 (Committee on Armed Services), p. 231, accompanying S. 2638, 99th

Congress, 2d Session (1986). 

30 House Report No. 99-718 (Committee on Armed Services), p. 204, accompanying H.R. 4428, 99th

Congress, 2d Session (1986). 

333
the AOCP program, the National Defense Authorization Act for Fiscal Years 1988 and 

1989 effectively adopted the two previously identified special limitations in 37 U.S.C. 

§301b(e), applicable to specified periods of time, as program-wide limitations applicable 

to all agreements proffered thereafter. As its second and third amendments, the National 

Defense Authorization Act for Fiscal Years 1988 and 1989 extended the AOCP program 

through September 30, 1989, with the provision that during the period from October 1, 

1987, to September 30, 1989, the only aviation career continuation agreements that might 

be accepted were agreements from Navy officers who had completed fewer than eleven 

years of active duty and who agreed to remain on active duty for an additional three or 

four years. As a special exemption, Navy officers who had completed fewer than eight 

years of active duty were permitted to enter six-year continuation agreements. As thus 

modified, the AOCP program was available to all Navy officers who met the basic 

program criteria set out at the newly amended 37 U.S.C. §301b(a)--including non-pilots 

as well as pilots. Fourth, and finally, the National Defense Authorization Act for Fiscal 

Years 1988 and 1989 repealed the prior provision of the aviation career continuation pay 

program that had prohibited officers receiving AOCP from receiving aviation career 

incentive pay (ACIP) under 37 U.S.C. §301a at rates higher than those in effect on 

September 30, 1981. 

The amendments to the aviation career continuation pay program adopted under 

the National Defense Authorization Act for Fiscal Years 1988 and 1989 came about as a 

result of recommendations made by the Department of Defense and incorporated in the 

Senate defense authorization bill, S. 1174, 100th Congress, 1st Session (1987). As set out 

in the Report of the Senate Committee on Armed Services: 

The Department of Defense has requested that the Navy's authority to pay 

aviation officer continuation pay be extended for two years beyond the current 

expiration date of September 30, 1987. In addition, the Department of Defense 

requested that the pay be enhanced by increasing the pay multiple for a six year 

contract from $6,000 to $8,000, by eliminating the requirement that bonus 

recipients receive aviation career incentive pay at lower rates, and by elimination 

of the requirement for six years of aviation service to be eligible for the pay. The 

committee recommends a provision ... adopting the Defense Department proposal, 

except for elimination of the six year aviation service eligibility requirement. The 

committee believes this eligibility requirement places the bonus at the 

appropriate career decision point. Enhancement of this bonus is necessary, 

especially in light of increased airline hiring that draws from military aviation 

334
communities. The committee directs that aviation officer continuation pay be 

applied only to critically short, aviation skills, and that this bonus may not be 

offered to Naval Flight Officers except in those aviation communities in which a 

critical shortage of NFO's exists.31

The only part of the Department of Defense initiative recommended by the House Armed 

Services Committee, on the other hand, was the proposal to extend the termination date 

for the aviation career continuation pay program for two additional years.32 The essence 

of the Senate proposal was adopted in conference--except for the proposal to increase the 

multiple for a six-year agreement from $6,000 to $8,000 per year--without specific 

comment on the aviation career continuation pay program in general, its objectives, or 

how it was working in practice.33

In 1988 Congress again revisited the question of the aviation career continuation 

pay program, this time adopting a new, provisional replacement program roughly 

patterned on, but somewhat different from, the existing program. In the National Defense 

Authorization Act, Fiscal Year 1989, Public Law 100-456, §611, 102 Stat. 1918, 1977-

1979 (1988), Congress adopted an uncodified "Aviator Retention Bonus" program that 

applied to aviation officers who, during the period January 1 to September 30, 1989, 

executed a written agreement to remain on active duty in aviation service for at least one 

year.34 Officers entitled to participate in the program were officers who (i) were entitled 

to aviation career incentive pay under 37 U.S.C. §301a, (ii) were in pay grades below pay 

grade O-6, (iii) were qualified to perform "operational flying duty" as that term is defined 

at 37 U.S.C. §301a(a)(6), (iv) had completed at least six but less than 13 years of active 

 

31 Senate Report No. 100-57 (Committee on Armed Services), p. 146, accompanying S. 1175, 100th

Congress, 1st Session (1987). Cf. House Report No. 100-446 (Committee of Conference), pp. 643-644, 

accompanying H.R. 1748, 100th Congress, 1st Session (1987). 

32 House Report No. 100-58 (Committee on Armed Services), p. 204, accompanying H.R. 1748, 100th

Congress, 1st Session (1987) ("[T]he committee does not support such enhancements [as recommended by 

the Department of Defense] at this time."). 

33 House Report No. 100-446 (Committee of Conference), pp. 643-644, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

34 For the full text of this "Aviator Retention Bonus" program, see 37 U.S.C. §301b note. 

335
duty, (v) had completed all active duty service commitments incurred for undergraduate 

aviation training, and (vi) were in an aviation specialty designated by the Secretaries of 

their respective military departments, and approved by the Secretary of Defense, as 

"critical." A related provision restricted the designation of an aviation specialty as 

"critical" to those situations in which "there exists a current shortage of officers in that 

specialty." National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, 

id., §611(b)(2), 102 Stat. at 1978. A qualified officer who executed an approved 

agreement became eligible for "aviator retention bonus" payments of up to $12,000 for 

each year of an agreement that obligated the officer to remain on active duty through 14 

years of commissioned service or up to $6,000 for each year of an agreement that 

obligated the officer to remain on active duty for one or two years. Refunds were required 

from any officer who entered an agreement but failed to complete the term of service 

called for in the agreement. As enacted, the National Defense Authorization Act, Fiscal 

Year 1989 provided that agreements under the former aviation career continuation pay 

program could not be accepted after December 31, 1988, thereby effectively shortcircuiting the September 30, 1989, termination date that had been established for that 

program in the National Defense Authorization Act for Fiscal Years 1988 and 1989. 

Under the provisional program, Congress required the Secretary of Defense to 

submit a report "describing the manner in which the authority provided ... is to be used" 

as well as an additional "comprehensive report on the retention of aviators in the Armed 

Forces" to include, among other things, "[a]n analysis of aviator requirements and 

inventories ... of the Armed Forces by grade and years of service, including a list of those 

aviators who are assigned to duty other than operational flying duty and a justification for 

such assignments" and "[a]n analysis of current and projected aviator retention rates in 

the Armed Forces and of those current and projected retention rates actually needed to 

meet the requirements of the Armed Forces," together with recommendations on "the 

initial active duty service commitment of aviators," "the integration of the aviator career 

incentive pay under section 301a of title 37, United States Code, and the aviator retention 

bonus ... into a structure that more efficiently supports the retention requirements for 

aviators in the Armed Forces," and "changes in the aviator management policies of the 

336
Armed Forces that would eliminate the disincentives cited by aviators as retention 

detractors." National Defense Authorization Act, Fiscal Year 1989, §611(h).35

As enacted, the provisional "aviator retention bonus" program differed from the 

prior aviation career continuation pay program in several respects. First, the "aviator 

retention bonus" program was not limited to naval aviators, but instead covered all 

aviation officers of the Armed Forces in "aviation specialt[ies] designated ... as critical." 

Thus, subject to Congressional funding through the defense appropriations process, 

aviators in the Air Force, the Army, and the Marine Corps theoretically could qualify for 

the "aviator retention bonus," in addition to Navy aviators.36 Second, the new program 

eliminated the old aviation career continuation pay program’s restriction of officers to 

one continuation agreement. Under the provisional "aviator retention bonus" program, 

qualified officers could commit to completion of fourteen years of commissioned service, 

in which case they were eligible for a bonus of up to $12,000 per year from the time they 

entered the agreement until they in fact completed fourteen years of commissioned 

service. Alternatively, they could commit themselves to a succession of one- or two-year 

agreements, in which case they were eligible for up to $6,000 per year for as long as they 

continued to serve on active duty under an accepted agreement. Third, whereas the old 

aviation career continuation pay program was available to officers in pay grades below 

pay grade O-7, the provisional "aviator retention bonus" program was available only to 

officers in pay grades below pay grade O-6. Fourth, the "aviator retention bonus" 

program was available only to officers who had completed "at least six but less than 13 

years of active duty." By contrast, the prior aviation career continuation pay program 

theoretically was available to officers who had completed "at least six but less than 18 

years of aviation service as ... officer[s]," although the more restrictive provisions that 

had been set out at 37 U.S.C. §301b(e) had in practice limited the program to officers 

who had completed a maximum of eleven years of active duty. The effect of these latter 

 

35 Reprinted at 37 U.S.C. §301b note. 

36 Indeed, the program was specifically concerned with projected impending shortages of aviation officers 

in the Air Force. See, e.g., House Report No. 100-563 (Committee on Armed Services), p. 254, 

accompanying H.R. 4264, and Senate Report No. 100-326 (Committee on Armed Services), p. 94, 

accompanying S. 2355, 100th Congress, 2d Session (1988). 

337
two differences was to direct the "aviator retention bonus" program to more junior, 

career-decisional aviators, as compared with the broader focus of the prior aviation career 

continuation pay program. 

The provisional "aviator retention bonus" program was adopted essentially on the 

basis of recommendations put forward by the Department of Defense, although the House 

Armed Services Committee noted that it "shares the concerns of the Department of 

Defense about the projected dramatic increase in airline hiring during the next decade" 

and, therefore, aviator retention.37 In contrast to the recommendation of the Department 

of Defense to adopt the new program as a permanent means of dealing with aviator 

shortages in critical skill areas,38 Congress adopted the program as a provisional, ninemonth authorization with a concomitant requirement to make various reports and 

recommendations to Congress on aviator requirements and inventories, retention rates, 

integration of the aviation career incentive pay program and the continuation bonus 

program, etc., to stimulate the Department of Defense to "evaluate critically all facets of 

its management of the aviator inventory and to also give equal scrutiny to the validity of 

stated aviator requirements, especially in non-flying positions" as well as to "evaluate 

critically the capability and desirability of realigning portions of the Air Force flying 

missions, such as airlift, to the Air National Guard and the Air Force Reserve" on the 

grounds that "[r]ealignment of certain flying missions from the active to the reserve force 

may have the potential of averting some of the aviator manning problems in the active 

force and may also be cost-effective in the long term."39 To the end of insuring that the 

required reports were in fact made by November 15 and December 1, 1988, respectively, 

 

37 House Report No. 100-563 (Committee on Armed Services), p. 254, accompanying H.R. 4264, 100th

Congress, 2d Session (1988). See also Senate Report No. 100-326 (Committee on Armed Services), pp. 93-

94, accompanying S. 2355, 100th Congress, 2d Session (1988); House Report No. 100-753 (Committee of 

Conference), pp. 403-405, accompanying H.R. 4264, 100th Congress, 2d Session (1988); and House Report 

No. 100-989 (Committee of Conference), pp. 405-406, accompanying H.R. 4481, 100th

Congress, 2d Session (1988). 

38Senate Report No. 100-326 (Committee on Armed Services), p. 93, accompanying S. 2355, 100th

Congress, 2d Session (1988). 

39 House Report No. 100-753 (Committee of Conference), pp. 404-405, accompanying H.R. 4264, and 

House Report No. 100-989 (Committee of Conference), p. 406, accompanying H.R. 4481, 100th Congress, 

2d Session (1988). 

338
the 1989 National Defense Authorization Act specifically provided that authority to make 

payments under the provisional "aviator retention bonus" program, which was, as above 

noted, to be effective during the period January 1 to September 30, 1989, "shall terminate 

effective December 2, 1988"--or before the program was scheduled to begin--if the 

reports were not received on time.40

In 1989, having indicated a desire to at least consider rationalizing "the 

integration of the aviator career incentive pay under section 301a of title 37, United 

States Code, and the aviator retention bonus ... into a structure that more efficiently 

supports the retention requirements for aviators in the Armed Forces" in the National 

Defense Authorization Act, Fiscal Year 1989, 41 Congress addressed both the aviation 

career incentive pay and the aviator retention bonus programs. In the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, §§631-632, 103 

Stat. 1352, 1449-1453 (1989), Congress amended the preexisting aviation career 

incentive pay program and effectively codified the provisional "aviator retention bonus" 

adopted by the National Defense Authorization Act, Fiscal Year 1989, as a replacement 

for the prior aviation career continuation pay program.42

In amending the aviation career incentive pay program, Congress amended both 

the rates of aviation career incentive pay and the preexisting "gate" structure. The rates of 

aviation career incentive pay were increased for warrant officers and Phase I 

commissioned officers with more than six years of aviation service as an officer--or as an 

aviation cadet--from $400 per month to $650 per month, and the rates for most Phase II 

commissioned officers were increased as well. In the latter category, the exceptions were 

 

40 Since the National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, 102 Stat. 1918 

(1988), was enacted on September 29, 1988, the deadlines for the required reports were somewhat short. 

41 National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, §611(h)(2)(C)(ii), 102 Stat. 

1918, 1979 (1988), reprinted at 37 U.S.C. §301b note. 

42 In adopting the substance of the "aviator retention bonus" program enacted by the 1989 National 

Defense Authorization Act as a replacement for the preexisting aviation career continuation pay program at 

37 U.S.C. §301b, Congress did not amend the statutory catchline for the older program, with the result that 

the new program continues to be known by the same name as the older program. 

339
officers with more than 25 years of service as officers and officers in pay grades O-7 and 

above.43

 The "gate" structure of the aviation career incentive pay program was 

prospectively amended by the National Defense Authorization Act for Fiscal Years 1990 

and 199144 essentially to require more operational flying duty during the early stages of a 

military aviation career for an officer to remain entitled to continuous ACIP over the 

course of a full aviation career.45 Under the preexisting ACIP "gate" system, an officer 

qualified for aviation service was entitled to continuous ACIP through completion of 

twenty-five years of aviation service if he performed operational flying duties for six of 

his first twelve and eleven of his first eighteen years of aviation service, except that if he 

performed operational flying duties for at least nine but less than eleven of his first 

eighteen years of aviation service, he was entitled to continuous ACIP for his first 

twenty-two years of aviation service. Under the amended "gate" system, an officer 

qualified for aviation service was entitled to continuous ACIP through completion of 

twenty-five years of aviation service if he performed operational flying duties for nine of 

his first twelve and twelve of his first eighteen years of aviation service, except that if he 

performed operational flying duties for at least ten but less than twelve of his first 

eighteen years of aviation service, he was entitled to continuous ACIP for his first 

twenty-two years of aviation service. Officers actually performing operational flying duty 

remain entitled to aviation career incentive pay without regard to the "gate" system.46

 

43 In amending the ACIP rate schedule, the National Defense Authorization Act for Fiscal Years 1990 and 

1991, Public Law 101-189, id., also eliminated the "Over 24 Years of Service as an Officer" category. 

44The effective date of the prospective amendments to the "gate" structure of the aviation career incentive 

pay program was October 1, 1991. National Defense Authorization Act for Fiscal Years 1990 and 1991, 

Public Law 101-189, §631(e)(1)(B), 103 Stat. 1352, 1450 (1989). See 37 U.S.C. §301a note. 

45 In connection with Congress's increased emphasis on having aviators perform more operational flying 

duty to remain entitled to continuous aviation career incentive pay, a separate provision of the 1990/1991 

National Defense Authorization Act reduced the number of "non-operational flying duty positions" 

authorized for each of the Armed Forces. National Defense Authorization Act for Fiscal Years 1990 and 

1991, Public Law 101-189, §633, 103 Stat. 1352, 1453-1454 (1989). (For the purpose of this particular 

provision, the term "non-operational flying duty position" was defined as a position identified by a military 

department that required the assignment of an aviator but did not include operational flying duty.) 

46 Certain transitional provisions applied to officers who did not meet the new, higher "gate" requirements 

when the amendments took effect on October 1, 1991. Under these provisions, aviators with various 

340
Under the amended "gate" system, the Secretaries of the military departments are 

permitted, on a case-by-case basis, to grant "waivers" to officers who have not met the 

operational flying duty requirements for their first twelve or eighteen years of aviation 

service, so long as they have completed at least six years of operational flying duties 

while in aviation service. Officers who are granted "waivers" to the operational flying 

duty requirements set out in the "gate" system remain eligible to receive continuous 

monthly aviation career incentive pay. 

In making permanent and codifying the substance of the provisional "aviator 

retention bonus" program adopted by the National Defense Authorization Act, Fiscal 

Year 1989, Public Law 100-456, id., the National Defense Authorization Act for Fiscal 

Years 1990 and 1991, Public Law 101-189, id., extended the program to apply to aviators 

who executed continuation agreements between January 1, 1989, and September 30, 

1991.47

In proposing amendments to the incentive and special pays programs for aviators 

and other provisions intended to deal with the problem of aviator retention and manning 

 periods of aviation service as of October 1, 1991, who had not then met the new "gate" requirements were 

either "grandfathered" or given additional time to meet the "gates." 

47 In addition to the provisions amending the aviation career incentive pay and the aviation career 

continuation pay programs and establishing limits on the number of "non-operational flying duty 

positions," the National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, 

103 Stat. 1352 (1989), in an effort to deal with aviator retention in a comprehensive manner, also 

established armed-services-wide minimum service requirements for aviators, id., §634, 103 Stat. at 1454-

1455, and required the Secretary of Defense to submit a report on the adequacy of the Servicemen's Group 

Life Insurance program in terms of the risks faced by aviators resulting from the performance of 

operational flying duties, id., §635, 103 Stat. at 1455. The new minimum service requirement for aviators 

who successfully complete pilot training on fixed-wing aircraft is eight years and for aviators who 

successfully complete such training on any other type of aircraft is six years; the minimum service 

requirement for aviators who successfully complete training as navigators or naval flight officers is six 

years. See 10 U.S.C. §653(a) and (b) as added to Chapter 37 of Title 10, United States Code, by the 

National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, id., §634(a), 103 

Stat. at 1454. In general, the new, minimum service requirements apply to persons who begin 

undergraduate flight training after September 30, 1990, although the new requirements do not apply to 

persons who graduate from any of the national service academies or any of the Senior Officers' Training 

Corps programs of the Armed Forces before January 1, 1992. National Defense Authorization Act for 

Fiscal Years 1990 and 1991, Public Law 101-189, §634(b), 103 Stat. at 1454-1455. (The Comptroller 

General of the United States was also required to submit a report evaluating the effectiveness of aviator 

assignment policies and practices of the Armed Forces, id., §636, 103 Stat. at 1455, and a sense-ofCongress provision urged the President to convene a commission to study the projected national shortage of 

aviators, id., §637, 103 Stat. at 1455-1456.) 

341
shortfalls generally, in 1989 the House and Senate Committees on Armed Services 

commented extensively on their respective perceptions of the underlying problems and 

how their proposals would address them. Because of the comprehensive treatment given 

to the problem of military aviator manning and retention problems in the context of 

perceived nationwide shortages of aviators, the Senate and House reports are quoted 

below in extenso. The report of the Senate Committee on Armed Services noted as 

follows: 

 The committee recommends several provisions directed at improving the 

retention and utilization of military aviators. These provisions were developed on 

the basis of the aviator retention report submitted to the committee on December 

1, 1988 as required by the National Defense Authorization Act for Fiscal Year 

1989; a hearing the Subcommittee on Manpower and Personnel held on these 

provisions; and inputs received from individual military aviators from each 

military service. The committee believes that, together, these provisions provide a 

reasonable balance between the expectations of individual military aviators and 

the needs of the military services. The committee also believes that these 

provisions will improve the retention of military aviators to levels that will 

eliminate the projected shortages in the Navy and the Air Force. 

 The specific provisions are summarized below: 

 1. Aviation Career Incentive Pay (ACIP).—The committee recommends 

... the restructuring and enhancement of aviation career incentive Pay [sic] 

authorized by [37 U.S.C. §301a]. Specifically, the committee recommends 

increasing the rate of aviation career incentive pay in the retention sensitive years, 

especially for aviation service over six year [sic] (from $400 per month to $650 

per month). The provision would also smooth out the rates for aviators who have 

over 18 years of aviation service to eliminate pay inversions that result from the 

current steep reductions in rates. 

Concurrently, this provision would require aviators to perform more years 

of operational flying duty in order to draw continuous monthly ACIP. Under the 

current ACIP structure, aviators must perform six of the first 12 years of aviation 

service and 11 of the first 18 years of aviation service in operational flying duties 

in order to draw continuous monthly ACIP. The provision would increase the 

operational flying requirement to 9 out of the first 12 years of aviation service and 

12 out of the first 18 years of aviation service, respectively. The committee 

believes this change ensures an equitable return on the government's investment 

in the training and qualification of military aviators, and is consistent with the 

desires of aviators to spend the majority of their career in operational flying 

assignments. 

342
The Department of Defense is expected to fund the increases authorized 

by this section within the amounts provided for the military personnel 

appropriation for fiscal year 1990. 

 2. Aviator Retention Bonus. —The committee recommends ... extension of 

the expiration date of the aviator retention bonus that was authorized on a 

temporary basis in the National Defense Authorization Act for Fiscal Year 1989 

to September 30, 1992. The committee expects that the other improvements being 

recommended, operating in synergy with the bonus, would improve manning in 

aviation skills over the next few years to a point where the bonus can be phased 

out. 

 3. Reduction in Nonoperational Flying Positions.—The committee 

recommends ... a provision that would require the Department of Defense to 

reduce the number of nonoperational flying positions in the military services by 

five percent (two percent in fiscal year 1991 and three percent in fiscal year 

1992). The committee believes the number of nonoperational flying positions in 

the military services to be excessive and inadequately justified. 

 4. Minimum Active Duty Service Obligation for Aviators. —The committee 

recommends ... a provision that would establish minimum active duty service 

obligations of nine years for fixed wing jet pilots and seven years for all other 

aviators. These obligations would begin upon completion of undergraduate 

aviation training, and are established to provide a reasonable return on the 

considerable investment made in the training and qualification of military 

aviators. 

 5. Aviator Insurance.—The committee recommends ... a provision that 

would require the Secretary of Defense to submit a proposal to the committee that 

would provide $100,000 in accidental death insurance for military aviators 

performing operational flying. The committee believes this provision 

appropriately recognizes the inherent risks in military flying. 

 6. Report on Aviator Assignment Policies and Systems.—The committee 

recommends ... a provision that would require the General Accounting Office to 

evaluate the aviator assignment policies and systems of the military services and 

to report to the committee on the effectiveness and efficiency of the policies and 

systems in assigning aviators to aviator positions and in accommodating 

individual preferences within the operational needs of the military services. The 

committee believes this provision is needed to address the substantial and serious 

dissatisfaction expressed by a large number of military aviators about the lack of 

assignment visibility and their perception that the assignment system is 

preoccupied with filling squares with little regard to individual preferences. The 

committee does not expect 100 percent satisfaction; however, the committee 

believes the military services can do better in this area. 

343
 7. Commission on the National Shortage of Aviators.—The committee 

recommends ... a provision that would express the sense of the Senate that the 

President should convene a commission composed of airline industry, Department 

of Defense, and other interested parties to address the problem of the shortage of 

aviators in this country. The committee believes that this problem, which is also a 

problem in a number of other countries, merits such an effort.48

The 1989 report of the House Committee on Armed Services, on the other hand, 

noted as follows: 

The committee and the Department of Defense remain concerned about 

continuing shortages of pilots in the military and the projected increase in civilian 

airline hiring of pilots during the next decade. For instance, the Navy is already 

considerably short of its requirements today and the Air Force projects a growing 

shortfall by 1994. By the year 2000, current projections suggest a nationwide 

shortage of about 12,000 pilots. In view of these shortages and because the 

preliminary aviator bonus take rate data indicate that additional retention 

incentives may be in order, the committee recommends a number of changes to 

existing law and the compensation package for military pilots. 

 Section 621 [of the House bill, H.R. 2461, 101st Congress, 1st Session 

(1989)] would: (1) increase Aviation Career Incentive Pay (ACIP) from a 

monthly payment of $400 to one of $650 for officers with more than six years of 

aviation service; (2) restructure ACIP for senior officers in order to avoid pay 

inversions; (3) authorize the service Secretaries to delay implementation of the 

new ACIP rate structure; and (4) increase operational flying requirements for all 

aviation officers in order to qualify for ACIP from 6 of the first 12 years to 9 of 

the first 12 years and from 11 of the first 18 years to 12 of the first 18 years. 

 Section 621 would also authorize the service Secretaries to waive the 

first of the above operational flying requirements (as long as a minimum 

requirement of 6 of the first 12 years is met) in order to comply with joint officer 

personnel policy, advanced educational requirements or unique service needs. 

 The new operational flying "gates" would apply to all aviation officers 

commencing pilot, navigator or flight officer training after September 30, 1991. In 

addition, aviation officers who have complied with current operational 

requirements for ACIP but who would not be able to meet the revised requirement 

structure would be "grandfathered" so that they not forfeit eligibility for this pay. 

When calculating ACIP for pilots with breaks in their active duty service, the 

aviation service date and officer service dates would be adjusted so that only 

active duty time would be used to determine whether officers qualify for ACIP. 

 

48 Senate Report No. 101-81 (Committee on Armed Services), pp. 176-178, accompanying S. 1352, 101st

Congress, 1st Session (1989). 

344
 Finally, section 621 would require the Secretary of Defense to submit a 

report no later than February 15, 1991 detailing the number of pilots in each 

service who fail to meet the initial operational flying requirement for ACIP, the 

extent to which the service Secretary has exercised his waiver authority with 

respect to those pilots, and an explanation of why those pilots did not comply with 

the operational flying requirements. 

 . . . 

On a related matter, section 622 [of the same House bill, H.R. 2461, 101st

Congress, 1st Session (1989)] would extend for two additional years the existing 

authority for the aviator retention bonus. The committee is concerned about the 

large number of pilots who testified at recent hearings indicating that they had 

accepted the bonus because it [i.e., the agreement of the pilots to remain on active 

duty for a specified number of years] ran concurrently with already existing 

service commitment [sic]. The committee is very concerned about the situation 

and expects that the service Secretary [sic] will take steps to ensure that active 

duty service obligations incurred as a result of accepting a bonus run 

consecutively with any other preexisting service obligations. 

In addition, this provision would require the Secretary of Defense to 

submit an annual report including the following: (1) the appropriateness of 

targeting bonus payments based on a critical shortage in a given aviation 

specialty; (2) an assessment of other targeting options, such as payments based on 

the number of years of flying experience or the rated qualifications of officers; (3) 

an analysis of each year's bonus take rates, the effectiveness of existing bonus 

amounts as a retention incentive, and a detailed analysis of the costs of the bonus 

program. 

 . . . 

The committee notes that there are more than 27,000 non-operational 

flying positions in the Department of Defense, representing some 40 percent of all 

aviator positions in the military. Because the committee believes that this figure is 

excessive, section 623 [of H.R. 2461, 101st Congress, 1st Session (1989)] would 

require each service to reduce by five percent the number of non-operational 

flying duty positions by September 30, 1992. This reduction would be 

incremental, with a two percent reduction required no later than September 30, 

1991 and the remaining three percent no later than September 30, 1992. 

 . . . 

 Because there is a historical disparity in the minimum service 

obligation for aviation officers among the services (current obligations for pilots 

are eight years in the Air Force, seven years in the Navy, five years in the Army 

and four and one-half years in the Marine Corps), section 624 [of H.R. 2461, 

101st Congress, 1st Session (1989)] would require the Secretary of Defense to 

submit a report on the rationale for these disparate service obligations, the 

legitimacy of interservice differences in view of service operational requirements, 

345
and the long-term desirability of a uniform minimum service obligation for pilots 

and other aviation officers in all services. 

 . . . 

 Section 625 [of H.R. 2461, 101st Congress, 1st Session (1989)] would 

require the Secretary of Defense to review the adequacy of current insurance 

coverage under the Servicemen's Group Life Insurance program and the 

practicality and desirability of providing an accidental death insurance plan for 

aviators and other crew members. 

 Section 625 would also require the Secretary of Defense to submit a 

report no later than February 15, 1990 including the Secretary's recommendations, 

if appropriate, on ways to improve and expand those benefits. In those 

recommendations, the Secretary should consider two options: a moderate increase 

in premiums and one at no cost. In addition, the Secretary should include 

recommendations on the advisability of providing such an enhanced program to 

all other active duty personnel whose peacetime career fields entail hazardous 

duty.49

In commenting on the proposed amendments to the aviation career incentive pay 

and the aviator retention bonus programs, the 1989 report of House-Senate Conference 

Committee followed up with these observations: 

 The conferees believe that the substantial increase in ACIP in exchange 

for the requirement for more operational flying duty recognizes the vital role of 

military aviators in the overall combat effectiveness of our military forces and the 

desire of military aviators to spend more time in operational flying to hone their 

unique skills. The conferees recognize that military aviators are not solely 

motivated by monetary considerations in making career decisions. They are more 

motivated by job satisfaction: e.g., effective operational flying. The conferees 

believe both of these considerations are addressed by this provision [i.e., Section 

631 of H.R. 1461, 101st Congress, 1st Session (1989), the bill ultimately adopted 

as the National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, 103 Stat. 1352 (1989)]. 

 What is not addressed in this provision is the desire expressed by many 

military aviators for further improvements in quality of life, such as better, less 

costly medical care for dependents; better, less costly housing; better, less 

 

49 House Report No. 101-121 (Committee on Armed Services), pp. 276-279, accompanying H.R. 1461, 

101st Congress, 1st Session (1989). Also see id., p. 279, for a discussion of the proposed provisions 

requiring the General Accounting Office to report on the effectiveness and efficiency of aviator assignment 

policies and practices and the sense-of-Congress recommendation that the President convene a commission 

to consider the projected nationwide shortage of both military and civilian aviators in the 1990s and 

following. 

346
costly child care; and more visibility and control of assignments. These are not 

concerns unique to military aviators. Some of these concerns are addressed in 

other provisions of this conference report. However, the conferees are mindful 

that more needs to be done. The conferees urge the Secretary of Defense to 

evaluate and propose initiatives accordingly. 

 . . . 

[Concerning aviator retention bonuses, the] conferees expect the Navy and 

Air Force to use this authority, in coordination with the aviation career incentive 

pay increase, as a tool for retaining military aviators for operational flying duties. 

The conferees expect the report required by this provision to include a critical 

evaluation of whether or not the bonus authority needs to be continued beyond 

September 30, 1991, and if so, the justification for such an extension and a 

recommendation on any changes that should be made to improve the efficiency of 

the bonus.50

The "gate" structure of the aviation career incentive pay program was amended 

again by the National Defense Authorization Act for Fiscal Year 1996, Public Law 104-

106, §616(a), 110 Stat. 186, 362 (1996). This amendment provided that, for an officer to 

be entitled to continuous aviation career incentive pay through completion of twenty-five 

years of aviation service, he only had to perform operational flying duties for eight out of 

his first twelve years of aviation service, rather than meet the preexisting nine year 

requirement.51 Thus, under the aviation career incentive pay program now in existence, 

an officer qualified for aviation service is entitled to continuous ACIP through 

completion of twenty-five years of aviation service if he performs operational flying 

duties for eight of his first twelve and twelve of his first eighteen years of aviation 

service, except that if he performs operational flying duties for at least ten but less than 

twelve of his first eighteen years of aviation service, he is entitled to continuous ACIP for 

his first twenty-two years of aviation service.52 Under the amended "gate" system, the 

 

50 House Report No. 101-331 (Committee of Conference), p. 588, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

51 See text accompanying footnotes 44 through 46 of this chapter, above. 

52 Neither the Senate Committee on Armed Services nor the House Committee on National Security 

identified any particular reason for reducing the required years of operational flying duties from nine out of 

the first twelve to eight out of the first twelve years of aviation service. See, e.g., House Report No. 104-

131 (Committee on National Security), p. 231, accompanying H.R. 1530, 104th Congress, 1st Session 

(1995), and Senate Report No. 104-112 (Committee on Armed Services), p. 255, accompanying S. 1026, 

104th Congress, 1st Session (1995); cf. House Report No. 104-406 (Committee of Conference), p. 816, 

347
Secretaries of the military departments are permitted, on a case by case, non-delegable53

basis, to grant "waivers" to officers who have not met the operational flying duty 

requirements for their first twelve or eighteen years of aviation service, so long as they 

have completed at least six years of operational flying duties while in aviation service. 

Officers who are granted "waivers" to the operational flying duty requirements set out in 

the “gate system” remain eligible to receive continuous monthly aviation career incentive 

pay. Officers who are not granted “waivers” are entitled to so-called "conditional" 

monthly aviation career incentive pay so long as they are required by competent orders to 

perform operational flying duties and meet certain minimum monthly flying 

requirements. 

The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public 

Law 102-190, §612(a), 105 Stat. 1290, 1376 (1991), extended the "aviator retention 

bonus" program from September 1, 1991, to September 1, 1992; the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, §612(c), 106 Stat. 2315, 

2421 (1992), also extended the program expiration date from September 30, 1992, to 

September 30, 1993; the National Defense Authorization Act for Fiscal Year 1994, 

Public Law 103-160, §613(a), 107 Stat. 1547, 1681 (1993), again extended the program 

expiration date, this time from September 30, 1993, to September 30, 1994; the National 

Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §613(a), 108 Stat. 

2663, 2783 (1994), further extended the program expiration date from September 30, 

1994, to September 30, 1995; and the National Defense Authorization Act for Fiscal Year 

1996, Public Law 104-106, §613(a), 110 Stat. 186, 359 (1996), extended the program 

expiration date from September 30, 1995 to September 30, 1997. 

The National Defense Authorization Acts for fiscal years 1997 and 1998 granted 

two more one-year extensions, through September 30, 1998 and September 30, 1999, 

respectively. The National Defense Authorization Act for Fiscal Year 1999, Public Law 

 accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report No. 104-450 (Committee 

of Conference), p. 806, accompanying S. 1124, 104th Congress, 2d Session (1996). 

53 See 37 U.S.C. §301a(a)(5), as amended by the National Defense Authorization Act for Fiscal Year 1996, 

Public Law 104-106, §616(b), 110 Stat. 186, 362 (1996). 

348
105-261, 112 Stat. 2035, extended the program by only three months, through December 

31, 1999, effectively moving the end date of the ensuing yearly extensions from the end 

of the fiscal year to the end of the calendar year. Each of the next five annual national 

defense authorization acts followed the pattern of renewing the aviation retention bonus 

for one year, through the end of the following calendar year. In each of those cases, apart 

from noting that the House and Senate Committees on Armed Services had respectively 

"recommended the extension," no particular reason was given for the action in question.54

The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1770, began a two-year process of revising the pay table for the ACIP. That 

law established a new maximum level of $840 for the ACIP, to be paid to aviation 

officers with more than 14 and less than 22 years of service. That time of service became 

the last category designated in Phase I; Phase II now began with officers having more 

than 22 years of service rather than the previous 18. Thus, a large group of officers with 

an intermediate time of aviation service were rewarded with a significantly higher 

 

54 With respect to the extension of the "aviator retention bonus" program from September 30, 1991, to 

September 30, 1992, made by the National Defense Authorization Act for Fiscal Years 1992 and 1993, 

Public Law 102-190, §612(a), 105 Stat. 1290, 1376 (1991), see House Report No. 102-60 (Committee on 

Armed Services), p. 249, accompanying H.R. 2100; Senate Report No. 102-113 (Committee on Armed 

Services), pp. 222-223, accompanying S. 1507; and House Report No. 102-311 (Committee of 

Conference), p.549, accompanying H.R. 2100, 102d Congress, 1st Session (1991). With respect to the 

additional extension to September 30, 1993, made by the National Defense Authorization Act for Fiscal 

Year 1993, Public Law 102-484, §612(c), 106 Stat. 2315, 2421 (1992), see House Report No. 102-527 

(Committee on Armed Services), p. 243, accompanying H.R. 5006; Senate Report No. 102-352 

(Committee on Armed Services), p. 208, accompanying S. 3114; and House Report No. 102-966 

(Committee of Conference), p. 713, accompanying H.R. 5006, 102d Congress, 2d Session (1992). With 

respect to the further extension to September 30, 1994, made by the National Defense Authorization Act 

for Fiscal Year 1994, Public Law 103-160, §613(a), 107 Stat. 1547, 1681 (1993), see House Report No. 

103-200 (Committee on Armed Services), p. 294, accompanying H.R. 2401; Senate Report No. 103-112 

(Committee on Armed Services), p. 152, accompanying S. 1298; and House Report No. 103-357 

(Committee of Conference), p. 683, accompanying H.R. 2401, 103d Congress, 1st Session (1993). With 

respect to the extension to September 30, 1995, made by the National Defense Authorization Act for Fiscal 

Year 1995, Public Law 103-337, §613(a), 108 Stat. 2663, 2783 (1994), see House Report No. 103-499 

(Committee on Armed Services), pp. 251-252, accompanying H.R. 4301; Senate Report No. 103-282 

(Committee on Armed Services), pp. 193-194, accompanying S. 2182; and House Report No. 103-701 

(Committee of Conference), p. 713, accompanying S. 2182, 103d Congress, 2d Session (1994). With 

respect to the present program extension to September 30, 1997, made by the National Defense 

Authorization Act for Fiscal Year 1996, Public Law 104-106, §613(a), 110 Stat. 186, 359 (1996), see 

House Report No. 104-131 (Committee on National Security), p. 231, accompanying H.R. 1530, 104th 

Congress, 1st Session (1995); Senate Report No. 104-112 (Committee on Armed Services), pp. 254-255, 

accompanying S. 1026, 104th Congress, 1st Session (1995); House Report No. 104-406 (Committee of 

Conference), p. 815, accompanying H.R. 1530, 104th Congress, 1st Session (1995); and House Report No. 

104-450 (Committee of Conference), pp. 805-806, accompanying S. 1124, 104th Congress, 2d Session 

(1996). 

349
monthly ACIP for potentially an eight-year period, while the ACIP of all more junior and 

more senior aviation officers remained the same. Senior warrant officers, who until the 

1999 legislation received ACIP according to the same service chart as officers, also were 

rewarded by the new rates. Unlike officers, whose ACIP declined from $840 to $585 

when they reached 22 years of service, warrant officers continued to receive the top 

amount, regardless of length of service, once they exceeded 14 years. The ACIP reform 

was completed the following year by the National Defense Authorization Act for Fiscal 

Year 1999, Public Law 105-261, 112 Stat. 2040, which prescribed a single ACIP table for 

officers, eliminating the Phase I and Phase II designations and retaining the pay 

categories that had applied in Fiscal Year 1998. 

Aviation Career Incentive Pay for Reserves 

Reserve forces personnel55 entitled to compensation for inactive-duty training are 

entitled to aviation career incentive pay when they perform qualifying duties under 

competent orders. Under 37 U.S.C. §301a(d), members of the reserve forces who perform 

qualifying flight duties while entitled to compensation under 37 U.S.C. §206 are also 

entitled, subject to such regulations as may be prescribed by the President, to "an increase 

in compensation equal to 1/30 of the monthly incentive pay" payable to active duty 

personnel performing such duties, provided Congress has appropriated sufficient funds 

for making such payments.56 57 That is, for every "period of instruction ... or ... 

 

55 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

56 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

350
appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, he is, if he is performing qualifying duty under 37 U.S.C. 

§301a(d), also entitled to 1/30th of the aviation career incentive pay that would be 

payable to a member of the active duty force who was performing such duties. Under 

regulations prescribed by the President, a member of a reserve force who performs flight 

duties under 37 U.S.C. §301a(d) while engaged in inactive-duty training is entitled to 

aviation career incentive pay.58 See Department of Defense Financial Management 

Regulation, Military Pay: Policy and Procedures for Active Duty and Reserve Pay, 

Volume 7A, DOD 7000.14-R, ¶80312; cf. id., ¶80311. 

 Flight pay for reserve forces personnel generally, and aviation career incentive pay 

in particular, derives from the Act of July 2, 1926 (Army Air Corps Act), ch. 721 [Public 

Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926). Section 6 of the Air Corps 

Act amended Section 20 of the Act of June 10, 1922 (Joint Service Pay Readjustment Act 

of 1922), ch. 212 [Public Law 235, 67th Congress], §20, 42 Stat. 625, 632 (1922), to give 

"officers, warrant officers, and enlisted men of the National Guard" who were, by 

competent orders, required to "participate regularly and frequently in aerial flights" a 50 

percent increase in the "armory drill pay" to which they would otherwise have been 

entitled. The extension of this special increase in compensation to members of the 

National Guard came about as a result of a floor amendment to the House bill, H.R. 

10827, 69th Congress, 1st Session (1926), that established the Army Air Corps. In offering 

the amendment, Representative John Philip Hill of Alabama did not offer any particular 

justification for extending this pay to members of the National Guard. Rather, he simply 

 

57 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

58 Reproduced at 37 U.S.C. §301 note. 

351
noted that the bill had "the endorsement of the War Department, the Chief of the Air 

Service [the predecessor of the Air Corps], ... and the committee [on Military Affairs]."59

Flight pay for inactive-duty training was extended to "officers and enlisted men of 

the Naval Reserve ... performing aerial flights in the capacity of pilots ... as a part of their 

training" by the Naval Reserve Act of 1938, ch. 290 [Public Law 732, 75th Congress], 

§313, 52 Stat. 1175, 1184 (1938). Members of the Marine Corps Reserve were covered 

by a separate provision that gave such members the same benefits as conferred on 

members of the Naval Reserve. Naval Reserve Act of 1938, ch. 290, id., §2, 52 Stat. at 

1175. Insofar as personnel and compensation matters were concerned, the Naval Reserve 

Act had been patterned after the Army Air Corps Act, and as above noted, the Army Air 

Corps Act had extended flight pay entitlements to "officers, warrant officers, and enlisted 

men of the National Guard." The Naval Reserve Act was, however, more restrictive than 

the Army Air Corps Act had been: an amendment to the bill provided that the increase in 

compensation would apply to "only those actually serving as pilots of aircraft,"60 whereas 

the Army Air Corps Act had extended the special pay to any member of the National 

Guard "participat[ing] regularly and frequently in aerial flights," independently of the 

member's status as a pilot or otherwise. 

The Act of March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 

(1948), substantially reorganized the provisions of preceding law relating to inactive-duty 

training pay for reserve forces personnel. Section 3 of the 1948 Act, id., 62 Stat. at 88-89, 

amended Section 14 of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th 

Congress], §14, 56 Stat. 359, 367 (1942), to give "officers, warrant officers, and enlisted 

personnel" of all the reserve forces entitlement to special pay for "perform[ing] aerial 

flights," among other things. As stated in the House Report: 

 The purpose of the bill is to standardize inactive training pay for all Reserve 

components of the various services and also to grant such inactive duty training pay to 

Army Reservists. 

 

59 67 Cong. Rec. 8765 (1926) (statement of Representative Hill). 

60House Report No. 2763 (Committee of Conference), p. 3, accompanying H.R. 10594, 75th Congress, 3d 

Session (1938). 

352
 The major departure in the legislation is the giving of this pay to the 

Army Reserves, including enlisted men. Such pay has been granted by the 

Congress heretofore to members of the National Guard and the Naval and Marine 

Corps Reserves.... 

 The committee considers the need for this pay to be apparent, even 

though it is unfortunate that the country must resort to it. The Army and Navy 

must maintain active Reserve components, or else, in time of war emergency, the 

Nation will have to depend exclusively upon the Regular services for its defense. 

They are patently incapable of doing such a job alone. So, in order to vitalize the 

National Guard and Reserve components, to get more people to participate so that 

they will fit promptly and effectively into the mobilization-day plans of the 

Armed Forces, inactive duty pay is to be given each participant at the rate of onethirtieth of 1 month's base and longevity pay for each training period.... Such 

specialists as pilots, radar technicians, medical people, and so forth, will also be 

able to earn inactive duty training pay when the standards specified by the 

Secretaries [of the various departments] are met.61 62

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802 (1949), restated the provisions of the Pay Readjustment Act of 1942, ch. 413 

[Public Law 607, 77th Congress], 56 Stat. 359 (1942), as amended by the Act of March 

25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), insofar as the 

entitlement of reserve forces personnel to special pay for the performance of hazardous 

duties was concerned. Section 501 of the Career Compensation Act, ch. 681, id., §501, 63 

Stat. at 825-827, dealt generally with the entitlement of reserve forces personnel to 

compensation for inactive-duty training. Subsection (d) of Section 501, 63 Stat. at 826, 

generalized the hazardous duty incentive pay entitlements of reserve forces personnel 

performing inactive-duty training by providing that hazardous duty incentive pay was 

available to such personnel whenever they were required by competent orders to perform 

any of the hazardous duties, set out at Section 204(a) of the Career Compensation Act of 

 

61 House Report No. 80-971 (Committee on Armed Services), pp. 1-2, accompanying H.R. 3227, 80th

Congress, 1st Session (1947). See Senate Report No. 80-625 (Committee on Armed Services), p. 1, 

accompanying S. 1174, 80th Congress, 1st Session (1947). 

62 Section 14(c) of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §14(c), 56 

Stat. 359, 367 (1942), as amended by Section 3 of the Act of March 25, 1948, ch. 157 [Public Law 460, 

80th Congress], §3, 62 Stat 87, 88-89 (1948), extended special pay to "personnel required to perform aerial 

flights, parachute jumping, glider flights, or submarine duty" in connection with inactive-duty training. As 

stated in Senate Report No. 80-625 (Committee on Armed Services), p. 2, accompanying S. 1174, 80th

Congress, 1st Session (1947): 

Increases in pay authorized by law for flying, parachute jumping, submarine duty, etc., will be paid. 

353
1949, ch. 681, id., §204(a), 63 Stat. at 810, for which active duty personnel were entitled 

to hazardous duty incentive pay. The duties set out in Section 204(a) as qualifying for 

such pay included crew member and non-crew member flight duties,63 submarine duties, 

glider duties, parachute jumping duties, leprosy duties, explosives demolition duties, duty 

at a submarine escape training tank, and duty with certain diving units. See Section 

204(a) of the Career Compensation Act of 1949, ch. 681, id., §204(a), 63 Stat. at 809-

810.64 No special reason was given for this reorganization of the provisions of prior law 

dealing with inactive-duty training pays, including inactive-duty training incentive pays 

for hazardous duties. The extension of incentive pay for hazardous duty to new classes of 

reserve forces personnel--e.g., to reserve forces personnel in an inactive-duty training 

status performing parachute duties, explosives demolition duties, submarine escape 

training tank duties, etc.--appears to have derived from the extension of such pays to 

active duty personnel, and not from any special concern about reserve forces personnel 

and whether they should be entitled to incentive pay for performance of various 

hazardous duties.65 See, e.g., chapters of this book dealing with explosives demolition 

duty pay and parachute duty pay. 

 

63 At the time, both rated and non-rated personnel assigned to crew member duties were entitled to crew 

member flight pay. Aviation Career Incentive Pay derives from the crew member flight pay program. See 

Chapter II.D.1.b.(1), "Flight Pay (Crew Member)," above. 

64 The inactive-duty training pay provisions contained in section 501 of the Career Compensation Act of 

1949, ch. 681, id., 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act, ch. 681, id., 63 Stat. at 

809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was enacted 

into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. When aviation career incentive pay was first authorized by the Aviation 

Career Incentive Act of 1974, Public Law 93-294, 88 Stat. 177 (1974), reserve forces personnel performing 

inactive-duty raining were covered under 37 U.S.C. §301a(d), in much the same fashion as they had been 

under the preceding crew member flight pay program. See following paragraph to this chapter, below. The 

current structure of hazardous duty incentive pay entitlements--including the present-day aviation career 

incentive pay (see preceding footnote to this chapter, above)--for reserve forces personnel performing 

inactive-duty training thus effectively derives from the organization imposed on Title 37 by the Act of 

September 7, 1962, Public Law 87-649, id. 

65 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, did 

not concern itself with reserve forces compensation in any way. See, e.g., "Terms of Reference," the charter 

given to the Hook Commission by the then Secretary of Defense, James Forrestal, as set out in “Career 

Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of Defense by 

the Advisory Commission on Service Pay,” at pp. vii-viii, December 1948. 

354
With adoption of the Aviation Career Incentive Act of 1974, Public Law 93-294, 

88 Stat. 177 (1974), flight pay for rated personnel was effectively split off from crew 

member flight pay, and the aviation career incentive pay program came into being. At 

that time, the prior provisions of 37 U.S.C. §301(f), which governed the entitlements of 

reserve forces personnel to crew member flight pay, among other things, were effectively 

imported into the new 37 U.S.C. §301a(d), and members of the reserve forces entitled to 

compensation for inactive-duty training became entitled to aviation career incentive pay 

when performing qualifying duties under competent orders. As stated in the House 

Report: 

 The committee bill places Reserve-component and National Guard officers 

under the same aviation career incentive pay program as active duty officers, 

including the rate stepdowns and the 25-year termination.... The committee ... 

desire[s] to treat Reservists on an equal basis with active duty members whenever 

possible.66

Until 2003, the conditions of entitlement to non-crew member flight pay for both 

active duty and reserve forces personnel were set out in Sections 103 and 104 of 

Executive Order 11157, as amended,67 in various supplementary regulations adopted by 

the service secretaries pursuant to Section 113 of Executive Order 11157, and the 

Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R.68 Executive 

Order 13294, issued March 28, 2003, revoked Executive Order 11157. Executive Order 

13294 placed responsibility for carrying out the authority delegated to the President by 37 

U.S.C. §301(a), relevant to aviation career pay and other incentive pays, with the 

Secretaries of Commerce, Defense, Health and Human Services, and Homeland Security, 

as those entitlements affect military personnel under the respective jurisdictions of those 

departments. 

 

66 House Report No. 93-799 (Committee on Armed Services), p. 21, accompanying H.R. 12670, 93d 

Congress, 2d Session (1974). See Senate Report No. 93-841 (Committee on Armed Services), p. 24, 

accompanying H.R. 12670, 93d Congress, 2d Session (1974) (quotation the same except for a reference to 

"the same flight pay system" in place of "the same aviation career incentive pay system"). 

67 Reproduced, as amended, at 37 U.S.C. §301 note. 

68 In particular, see Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶80312-80313. 

355
Reserve forces personnel are not entitled to aviation officer career continuation 

pay under 37 U.S.C. §301b. 

An appendix to this chapter shows how ACIP developed after World War II and 

Korea in response to changes in air operations and tactics and concomitant requirements 

for increased numbers of career military aviators. 

Under the amendments to the aviation career incentive pay program made by the 

National Defense Authorization Acts for Fiscal Years 1998 and 1999, Public Laws 105-

85 and 105-261, as of 2004 the following are the current ACIP rates for commissioned 

and warrant officers: 

 Years of Aviation Service (including Monthly 

 Flight Training) as an Officer Rate 

 2 or less $125 

 Over 2 156 

 Over 3 188 

 Over 4 206 

 Over 6 650 

 Over 14 840 

 Over 22 585 

 Over 20 495 

 Over 22 385 

 Over 25 250 

Note: Warrant officers with more than 22 years of service continue to receive the rate established for “over 

14.” 

Note: ACIP for officers in pay grade 0-7 is limited to $200 per month and that for officers in pay grade 0-8 

or above, to $206. 

Cost: For the cost of aviation career incentive pay from 1974 to 2004, see Tables 

II-12 of Military Compensation Statistics Tables, volume II of this edition. 

356
Chapter II.D.1.b.(4) 

 Flight Pay (Air Weapons Controllers) 

Legislative Authority: 37 U.S.C. §301(a)(11) and (c)(2). 

Purpose: To provide an additional incentive for military personnel to undertake 

service as air weapons controllers on airborne warning and control system aircraft, and to 

compensate such personnel for the more than normally dangerous character of such duty. 

Background: Before enactment of the Uniformed Services Pay Act of 1981, 

Public Law 97-60, §111(a), 95 Stat. 989, 992-994 (1981), military officers assigned to 

duty as air weapons controllers on airborne warning and control system aircraft were, 

while actually performing such duty, eligible for non-crew member flight pay under the 

hazardous duty incentive pay provisions of 37 U.S.C. §301(a)(2) and (c). The rate of 

hazardous duty incentive pay for officers assigned to qualifying duty was a flat $110 per 

month, substantially less than the aviation career incentive pay rates applicable to officers 

with aeronautical ratings or designations under 37 U.S.C. §301a.1

 With the sharp increase 

in the number of airborne warning and control systems aircraft--frequently referred to as 

"AWACS aircraft" or, more simply, as "AWACS"--in the military service of the United 

States beginning about 1975, and the concomitant increase in demand for personnel to 

staff such aircraft, the Air Force had noted a shortage in the supply of qualified air 

weapons controllers.2

In order to increase the number of officers volunteering for such duty, Congress, 

in the Uniformed Services Pay Act of 1981, Public Law 97-60, §111(a), 95 Stat. 989, 

992-994 (1981), added a new category of service to the hazardous duty incentive pay 

 

1 Enlisted personnel assigned to non-crew member duties on air weapons control aircraft were entitled to 

$55 a month in hazardous duty incentive pay. 

2 In House debate on the Uniformed Services Pay Act of 1981, Public Law 97-60, §111(a), 95 Stat. 989, 

992-994 (1981), for instance, it was pointed out that the Air Force had had five AWACS aircraft in 1977, 

24 in 1981, and would have 33 by 1985, with a corresponding increase in the number of air weapons 

control officers needed to man such aircraft from 27 in 1976 to "about 1,000 in the mid-eighties." 127 

Cong. Rec. 20638 (1981) (daily ed., 127 Cong. Rec. H6325 (September 15, 1981)) (remarks of 

Representative Skelton). 

357
provisions of 37 U.S.C. §301--namely, duty "involving frequent and regular participation 

in aerial flight by an officer ... serving as an air weapons controller crew member ... 

aboard an airborne warning and control system aircraft...." To differentiate this pay from 

the non-crew member flight pay provisions also found in 37 U.S.C. §301, a new set of 

pay rates for air weapons control officers was provided in 37 U.S.C. §301(c)(2). Under 

the new provision, the monthly rate of pay for a particular officer in a designated air 

weapons control billet depended on that officer's cumulative years of service in such 

duty.3

 Personnel specifically excluded from eligibility for the new pay included officers 

entitled to aviation career incentive pay under 37 U.S.C. §301a as well as warrant officers 

and enlisted personnel. See 37 U.S.C. §301(a)(11) as in effect before enactment of the 

National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §615, 

110 Stat. 186, 361-362 (1996), which broadened the program by specifically including 

warrant officers and enlisted members within the category of personnel entitled to the 

special pay.4

 The monthly rates of hazardous duty incentive pay for officers assigned to 

duty as air weapons controllers initially adopted in the Uniformed Services Pay Act of 

1981, Public Law 97-60, id., were: 

 

Pay Grade Years of Service as an Air Weapons Controller 

 2 or less Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 

O-7 and above $200 $200 $200 $200 $200 $200 $200 

O-6 225 250 300 325 350 350 350 

 

3 For the purpose of computing specific entitlements under the air weapons controllers provisions in 

question, an individual officer was to be credited with all service as an air weapons control officer after the 

date he began training leading to qualification for such service except for periods exceeding 90 days in 

duration when his primary duties are other than those of such an officer. See 37 U.S.C. §301(c)(2)(B) and 

the table set out at 37 U.S.C. §301(c)(2)(A) as in effect before enactment of the National Defense 

Authorization Act for Fiscal Year 1996, Public Law 104-106, §615, 110 Stat. 186, 361-362 (1996). As 

noted in the House-Senate Conference Report, all time qualifying as "weapons controller experience," 

whether "gained in ground duties or as an air weapons controller crew member," counted for the purpose of 

determining the amount of air weapons controller pay to which any specific officer is entitled. House 

Report No. 97-265 (Committee of Conference), p. 22, accompanying S. 1181, 97th Congress, 1st Session 

(1981). 

4 With respect to the changes to the special pay program for air weapons controllers effected by the 

National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §615, 110 Stat. 186, 361-

362 (1996), see footnotes 10 to 14 to this chapter, together with accompanying text, below. 

358
O-5 200 250 300 325 350 350 350 

O-4 175 225 275 300 350 350 350 

O-3 125 156 188 206 350 350 350 

O-2 125 156 188 206 250 300 300 

O-1 125 156 188 206 250 250 250 

Pay Grade Years of Service as an Air Weapons Controller 

 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 Over 24 Over 25

O-7 and above $200 $200 $200 $200 $200 $200 $200 $110 

O-6 350 350 350 350 300 250 250 225 

O-5 350 350 350 350 300 250 250 225 

O-4 350 350 350 350 300 250 250 225 

O-3 350 350 350 300 275 250 225 200 

O-2 300 300 300 275 245 210 200 180 

O-1 250 250 250 245 210 200 180 150 

 

 In adopting the provisions in question, Congress noted, among other things, the 

nature of the duty involved: 

... One of the major reasons for the shortage of volunteers is the nature of 

AWACS duty. AWACS duty is arduous and perceived by weapons controllers as 

having few rewards.... [Recent] deployments [of AWACS aircraft to various 

locations around the world] translated to lengthy periods of family separation.... 

In the troubled decade ahead, we can expect our worldwide AWACS commitment 

to expand, thereby exacerbating the weapons controller manning problem.5

Congress went on to note, however: 

 The major reason for the shortage of volunteers ... is the great disparity 

between the flight pay paid to pilots and that paid to weapons controllers. This is a 

major disincentive.... 

 Mr. Chairman, we are on the horns of a dilemma. On the one hand, we 

have the AWACS, the most sophisticated surveillance aircraft in the world; a 

proven system which, through its many deployments since 1977, has proven to be 

an invaluable instrument of national policy. On the other hand, we are failing to 

attract and retain the very people who can insure the AWACS remains an 

 

5 127 Cong. Rec. (1981) (daily ed., 127 Cong. Rec. H6326 (September 15, 1981)) (remarks of 

Representative Skelton). 

359
effective instrument of national policy. It is time to address this problem and 

enhance hazardous duty incentive pay is the optimum vehicle [sic].6

Congress also cited the effects of inflation in reducing the incentive value of the 

hazardous duty incentive pay--i.e., non-crew member flight pay under 37 U.S.C. 

§301(a)(2)--that was the only incentive pay to which air weapons controllers were, before 

the 1981 Pay Act, entitled: 

 The existing hazardous duty incentive pay rate dates from 1955, since 

then, [sic] the Consumer Price Index has tripled. Moreover, in 1955 the hazardous 

duty incentive pay of a captain exceeded 25 percent of his basic pay; today, his 

incentive pay is less than 6 percent of basic pay.7

 In light of the manning problems noted and the perceived causes, Congress 

concluded that a separate pay for air weapons controllers was warranted: 

Today's hazardous duty incentive pay simply is not enough to attract and 

keep the people we need to overcome the hardships all aircrew members endure--

the irregular schedules, long periods of no-notice family separation, and the 

hazards involved in flying close to international trouble spots.8

 The hazardous duty incentive pay provisions of the Uniformed Services Pay Act 

of 1981, Public Law 97-60, 95 Stat. 989, 992-994 (1981), became effective October 1, 

1981.9

 The pay rates established by that law for air weapons controllers remained in 

effect until 1998. The National Defense Authorization Act for Fiscal Year 1998, Public 

Law 105-85, 111 Stat. 1786, raised the pay rates for certain enlisted, warrant officer, and 

officer air weapons controllers. In all three categories, the measure provided individuals 

with less than two years of service in the specialty (those with the smallest monthly 

allotments) with raises ranging from $25 to $50 per month. Individuals of higher rank or 

longer experience were not affected by the change. 

 

6 127 Cong. Rec. (1981) (daily ed., 127 Cong. Rec. H6326 (September 15, 1981)) (remarks of 

Representative Skelton). 

7 127 Cong. Rec. 20638 (1981) (daily ed., 127 Cong. Rec. H6326 (September 15, 1981)) (remarks of 

Representative Skelton). 

8 127 Cong. Rec. 20638 (1981) (daily ed., 127 Cong. Rec. H6326 (September 15, 1981)) (remarks of 

Representative Skelton). 

9 Section 111(d) of the Uniformed Services Pay Act of 1981, Public Law 97-60, §111(d), 95 Stat. 989, 994 

(1981). See 37 U.S.C. §301 note. 

360
 Whereas the Uniformed Services Pay Act of 1981, Public Law 97-60, id., 

specifically provided that only commissioned officers were entitled to AWACS flight 

duty pay,10 the National Defense Authorization Act for Fiscal Year 1996, Public Law 

104-106, §615, 110 Stat. 186, 361-362 (1996), broadened the program by specifically 

including warrant officers and enlisted members within the category of personnel entitled 

to the special pay. As explained by the Senate Armed Services Committee: 

 The committee recommends a provision that would authorize 

special hazardous duty incentive pay for enlisted members serving as air weapons 

controllers aboard airborne warning and control systems. The Air Force is 

converting officer air weapons controller positions to enlisted billets. This 

provision permits the enlisted air weapons controllers to receive hazardous duty 

incentive pay on the same basis as their officer counterparts.11 12

The current rates of AWACS flight duty pay covering commissioned officers, 

warrant officers,13 and enlisted personnel are set out before the cost figures at the end of 

this chapter.14

 

10 See 37 U.S.C. §301(a)(11) as in effect before passage of the National Defense Authorization Act for 

Fiscal Year 1996, Public Law 104-106, §615, 110 Stat. 186, 361-362 (1996). 

11 Senate Report No. 104-112 (Committee on Armed Services), p. 255, accompanying S. 1026, 104th

Congress, 1st Session (1996); cf. House Report No. 104-406 (Committee of Conference), p. 816, 

accompanying H.R. 1530, 104th Congress, 1st Session (1996), and House Report No. 104-450 (Committee 

of Conference), p. 806, accompanying S. 1124, 104th Congress, 2d Session (1996). 

12 As originally proposed, warrant officers were not included within the category of persons to whom 

AWACS flight pay entitlement was extended. This is perhaps explained by the fact that the Air Force does 

not have any warrant officers, and the Air Force is currently the only service that has personnel assigned to 

AWACS flight duties. In any event, as ultimately amended by the National Defense Authorization Act for 

Fiscal Year 1996, Public Law 104-106, §615, id., the AWACS flight pay program extends entitlement to 

almost all--see the following parenthetical--grades of military personnel who could theoretically be 

assigned to AWACS duties. (The National Defense Authorization Act for Fiscal Years 1992 and 1993, 

Public Law 102-190, §1111(a), 105 Stat. 1290, 1491-1492 (1991), established a new warrant officer pay 

grade, "Chief Warrant Officer, W-5". Possibly due to simple oversight, chief warrant officers in that new 

pay grade were not included within the category of persons entitled to receive AWACS flight pay if 

assigned to qualifying duties--or, perhaps more accurately, no special rates of AWACS pay were 

established for persons in that pay grade.) 

13 But see the parenthetical to footnote 12, immediately above. 

14 The rules for computing the specific amount of AWACS flight duty pay to which any given member is 

entitled are essentially the same for commissioned officers, warrant offices, and enlisted members as they 

were under the AWACS flight pay program in effect before enactment of the National Defense 

361
Reserve forces personnel15 entitled to compensation for inactive-duty training are 

technically entitled to AWACS flight pay when they perform AWACS flight duties under 

competent orders, provided Congress has appropriated sufficient funds for that purpose.16

Under 37 U.S.C. §301(f), members of the reserve forces who perform qualifying flight 

duties while entitled to compensation under 37 U.S.C. §206 are also technically entitled, 

subject to such regulations as may be prescribed by the President, to "an increase in 

compensation equal to 1/30 of the monthly incentive pay" payable to active duty 

personnel performing such duties.17 That is, for every "period of instruction ... or ... 

appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, the member is, if performing qualifying AWACS flight duties 

under 37 U.S.C. §301(f), also entitled to 1/30th of the AWACS flight pay that would be 

payable to a member of the active duty force who was performing such duty. 

 Authorization Act for Fiscal Year 1996, Public Law 104-106, §615, 110 Stat. 186, 361-362 (1996). For a 

statement of these rules, see footnote 3 to this chapter, above. 

15 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

16 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

17 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

362
As a practical matter, it is doubtful whether any reserve forces personnel 

participating in inactive-duty training would ever qualify for AWACS flight pay. 

Entitlement to AWACS flight pay is premised on "frequent and regular participation in 

aerial flight by an officer ... who is serving as an air weapons controller crew member ... 

aboard an airborne warning and control system aircraft," and it is doubtful that reserve 

forces personnel participating in inactive-duty training have access to such aircraft. Thus, 

while technically entitled to hazardous duty incentive pay for AWACS flight duties under 

37 U.S.C. §301, reserve forces personnel would appear to never have received AWACS 

flight pay.18

Technical authority to make AWACS flight pay to reserve forces personnel 

engaged in inactive-duty training can, in one sense, be traced to the Act of July 2, 1926 

(Army Air Corps Act), ch. 721 [Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-

783 (1926), which was the first legislative enactment that provided for special 

compensation for inactive duty reserve forces personnel engaged in hazardous duties of 

one kind or another.19 In fact, however, hazardous duty incentive pay for AWACS flight 

duties was not covered by the Army Air Corps Act. Rather, that Act merely gave 

"officers, warrant officers, and enlisted men of the National Guard" who were, by 

competent orders, required to "participate regularly and frequently in aerial flights" a 50 

percent increase in the "armory drill pay" to which they would otherwise have been 

entitled.20 The first special provision that authorized AWACS flight pay for reserve 

forces personnel performing inactive-duty training came, as above indicated, in the 

 

18 Indeed, applicable regulations do not make provision of any sort for reserve forces personnel to receive 

hazardous duty incentive pay for AWACS duties. See. e.g., Department of Defense Financial Management 

Regulation, Military Pay: Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 

7000.14-R, ¶¶80311-80316, generally (dealing with entitlements of reserve forces personnel participating 

in inactive-duty training to hazardous duty incentive pay). 

19 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew 

Member)," above 

20 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," for a more complete discussion of the history of hazardous duty 

incentive pay for reserve forces personnel engaged in inactive-duty training. 

363
Uniformed Services Pay Act of 1981, Public Law 97-60, §111(a), 95 Stat. 989, 992-994 

(1981), which brought AWACS flight duties within the category of duties for which 

hazardous duty incentive pay was technically authorized. 

Historically, the Uniformed Services Pay Act of 1981, Public Law 97-60, 

§111(a), 95 Stat. 989, 992-994 (1981), had been intended to extend AWACS flight pay 

entitlements to active duty personnel performing qualifying duties. The entitlements 

technically covered reserve forces personnel also because of the way Title 37 of the 

United States Code was organized. At the time, 37 U.S.C. §301(f) provided that a 

member of the reserve forces on inactive-duty training was entitled to additional pay for 

hazardous duty when he "performs, under orders, any duty described in subsection (a) of 

this section." Subsection (a), in turn, covered hazardous duty incentive pay entitlements 

of active duty personnel, and it was to that subsection that the AWACS flight pay 

entitlements were added. The Uniformed Services Pay Act of 1981, Public Law 97-60, 

id., had simply added a new category of duty for which hazardous duty incentive pay was 

authorized for active duty personnel as well under 37 U.S.C. §301(f). Thus, reserve 

forces personnel on inactive-duty training had in effect "piggybacked" on active duty 

personnel insofar as technical entitlement to AWACS flight pay was concerned. See 

discussion of the Uniformed Services Pay Act of 1981, Public Law 97-60, §111(a), 95 

Stat. 989, 992-994 (1981), above. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hours resources. 

364
 To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.21

Although the concern that led to the amendment in issue was the appropriate use 

and apportionment of flying time in general, the amendment to 37 U.S.C. §301(f) was 

stated in broader terms, so that it applied to any of the hazardous duties set out in 37 

U.S.C. §301(a), including AWACS flight duties. Thus, for any month in which a member 

of a reserve force is involved both in active duty and inactive-duty training for which he 

is entitled to hazardous duty incentive pay under 37 U.S.C. §301, the total amount of 

hazardous duty incentive pay the member may receive is based on his combined 

entitlement for both active duty and inactive-duty training. 

Current rates of AWACS flight pay: The current rates of pay for AWACS 

flight duty are: 

 

Pay Grade Years of Service as an Air Weapons Controller 

 2 or less Over 2 Over 3 Over 4 Over 6 Over 8 Over 10 

 

O-7 and above $200 $200 $200 $200 $200 $200 $200 

O-6 225 250 300 325 350 350 350 

O-5 200 250 300 325 350 350 350 

O-4 175 225 275 300 350 350 350 

O-3 150 156 188 206 350 350 350 

O-2 150 156 188 206 250 300 300 

O-1 150 156 188 206 250 250 250 

W-4 200 225 275 300 325 325 325 

W-3 175 225 275 300 325 325 325 

W-2 150 200 250 275 325 325 325 

W-1 150 150 150 175 325 325 325 

E-9 200 225 250 275 300 300 300 

E-8 200 225 250 275 300 300 300 

E-7 175 200 225 250 275 275 275 

E-6 156 175 200 225 250 250 250 

 

21 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

365
 E-5 150 156 175 188 200 200 200 

 E-4 and below 150 156 175 188 200 200 200 

 

Pay Grade Years of Service as an Air Weapons Controller 

 Over 12 Over 14 Over 16 Over 18 Over 20 Over 22 Over 24 Over 25 

O-7 and above $200 $200 $200 $200 $200 $200 $200 $150 

O-6 350 350 350 350 300 250 250 225 

O-5 350 350 350 350 300 250 250 225 

O-4 350 350 350 350 300 250 250 225 

O-3 350 350 350 300 275 250 225 200 

O-2 300 300 300 275 245 210 200 180 

O-1 250 250 250 245 210 200 180 150 

W-4 325 325 325 325 276 250 225 200 

W-3 325 325 325 325 325 250 225 200 

W-2 325 325 325 325 275 250 225 200 

W-1 325 325 325 325 275 250 225 200 

E-9 300 300 300 300 275 230 200 200 

E-8 300 300 300 300 265 230 200 200 

E-7 300 300 300 300 265 230 200 200 

E-6 300 300 300 300 265 230 200 200 

E-5 250 250 250 250 225 200 175 150 

E-4 and below 200 200 200 200 175 150 150 150 

 

Cost: For the cost of air weapons controller flight pay from 1982 to 1995, 

see Table II-13 of Military Compensation Statistics Tables, volume II of this edition. 

366
Chapter II.D.2.a. 

 Parachute Duty Pay 

Legislative Authority: 37 U.S.C. §301(a)(3) and (c)(1). 

Purpose: To provide an additional pay to increase the ability of the uniformed 

services to attract and retain volunteers for parachute duty, and to compensate for the 

more than normally dangerous character of such duty. 

Background: Parachute duty pay of $100 a month for officers and $50 for 

enlisted personnel was first authorized by the Act of June 3, 1941, ch. 166 [Public Law 

98, 77th Congress], 55 Stat. 240 (1941), about nine months after the U.S. Army formed its 

first parachute unit. In adopting these rates of pay, Congress attempted to make a precise 

calculation of the additional compensation necessary to offset the especially hazardous 

nature of flying and parachuting, both of which were involved in parachute duty. At the 

time, i.e., 1941, flight pay was 50 percent of base and longevity pay. Thus, a second 

lieutenant with less than five years of service would be entitled to annual flight pay of 

$750, with progressively higher pay upon advancement in grade or movement into a new 

longevity step. This basic $750 a year was said to represent compensation for the "direct 

hazard of flying which is the same for all,"1

 and any flight pay above that level was said 

to represent compensation for the "career hazard which involves a cumulative stress and 

strain over a period of years." As to parachute troops, it was remarked that "it is obvious 

that these personnel incur greater risks than do those who fly either as passengers or 

pilots of military aircraft, for in addition to the hazard of injury or death due to a crash of 

the airplane there is the constant and continuous risk of the parachute jump which must 

be made as a routine operation not required of other flying personnel." On this reasoning, 

Congress concluded that parachute officers should receive the $750 "direct hazard" part 

of flight pay for their flying risk plus a "reasonable amount"--$500 a year--for their 

jumping risk. The combined annual total of $1,250 was rounded to $1,200, and the 

 

1 All quotations in this paragraph are from Senate Report No. 259 (Committee on Military Affairs), p. 2, 

accompanying S. 1063, 77th Congress, 1st Session (1941) (letter of Henry L. Stimson, Secretary of War, to 

Senator Morris Sheppard, Chairman, Senate Committee on Military Affairs). 

367
officer parachute duty rate was thus set at $100 per month. The "career hazard" part of 

flight pay was not included in the parachute duty calculation because "it will be necessary 

to change the personnel of these units frequently in order to meet the requirements for 

young and vigorous men." 

The "pure hazard" theory under which officer parachute duty pay rates were set 

would appear to be applicable to enlisted parachute personnel as well, since enlisted 

parachutists were subject to exactly the same flying and jumping risks as their officer 

counterparts. However, a different, "properly compensated" standard was applied in 

determining parachute duty pay rates for enlisted personnel. Under this standard, the 

enlisted pay rate for parachute duty was set at one-half the officer rate. The Senate 

Military Affairs Committee explained: 

 Your committee, after careful consideration, is of the opinion that 

enlisted men engaged on parachute duty incur risks which other troops are not 

subject to and therefore should be properly compensated, and believe that the 

minimum additional pay for such duty should not be less than $50 per month.2

In 1948, at the request of the then Secretary of Defense, the Advisory 

Commission on Service Pay, sometimes referred to as the Hook Commission, conducted 

the first comprehensive study of the military pay system since 1908. In reviewing 

military compensation generally, and parachute duty pay in particular, the commission 

concluded that, although special pays such as parachute duty pay had been designed in 

part to compensate for arduous and hazardous duties, their main purpose was to fill a 

supply-demand function-- namely, to induce personnel to enter upon and remain in 

hazardous military occupations: 

 The Commission, after reviewing previous studies, hearing 

presentations by the Services, and personally observing representative operational 

and training activities, is of the unanimous opinion that some additional pay 

should be awarded to individuals who, on a voluntary basis, carry out peacetime 

functions involving more than the ordinary military risk and danger.... 

 

2 Senate Report No. 259 (Committee on Military Affairs), p. 1, accompanying S. 1063, 77th Congress, 1st

Session (1941). 

368
 Close examination of the nature of hazardous duty and the expressed or 

implied reasons for accepting risks indicated that the incentive to engage and 

remain in hazardous occupations provided a more realistic and practical basis for 

determining the rates of special pay than the theory of recompense for shorter 

career expectancy. The recompense or replacement concept, although promoted 

for many years as the sole argument for hazard pay, was found wanting for 

several reasons....3

 The Hook Commission also recommended higher parachute duty pay rates for 

officers than for enlisted personnel: 

 A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all 

times the compensation for the primary responsibility will be considerably 

greater than that for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to undertake 

and continue special duties; and such an inducement need not be as great 

in monetary terms for lower paid and less advanced personnel as for 

higher paid and more highly trained personnel. 

(3) Officers are usually given greater special responsibilities, aside from 

normal administrative control, than enlisted personnel on hazardous 

assignments.4 5

The Hook Commission's reasoning and recommendations led to the introduction 

and enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st

Congress], §204, 63 Stat. 802, 809-810 (1949),6

 which ratified the previously 

 

3

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948 (italicized in original). 

4

 “Career Compensation for the Uniformed Forces,” a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

5

 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), see House Report 

No. 81-779 (Committee on Armed Services), p. 15, and Senate Report No. 81-733 (Committee on Armed 

Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

6 See, e.g., House Report No. 81-779 (Committee on Armed Services), p. 2, and Senate Report No. 81-733 

(Committee on Armed Services), pp. 1-2, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

369
existing parachute duty pay rates of $100 a month for officers and $50 a month for 

enlisted personnel.7 8

 These rates were raised 10 percent to $110 per month for officers 

and $55 per month for enlisted personnel by the Career Incentive Act of 1955, ch. 20 

[Public Law 20, 84th Congress], §2(6), 69 Stat. 18, 21 (1955), and remained at that level 

until October 1, 1981, when the rates for enlisted personnel were raised a further 50 

percent, to $83 per month, by the Uniformed Services Pay Act of 1981, Public Law 97-

60, §111(c), 95 Stat. 989, 992-993 (1981). As explained in the relevant Congressional 

report, hazardous duty incentive pay rates for enlisted personnel were increased in 1981 

in recognition of the fact that they had "not been adjusted in more than 20 years, and this 

increase is needed to enhance the incentive value of this pay."9

In 1985, two additional changes were made to the parachute duty pay provisions 

of 37 U.S.C. §301 by the Department of Defense Authorization Act, 1986, Public Law 

99-145, §635(a)(3), 99 Stat. 583, 648 (1985). First, hazardous duty incentive pay rates for 

enlisted personnel involved in parachute duties, as well as for a number of other duty 

categories denominated as hazardous for the purposes of 37 U.S.C. §301(a), were further 

increased to $110 per month, thereby eliminating the preexisting pay differential between 

officers and enlisted personnel. Second, a separate, higher parachute duty pay rate was 

established for both officers and enlisted personnel engaged in duty an "essential part" of 

which involves "parachute jumping at a high altitude with a low opening"--so-called 

"HALO" parachute jumping duties. The rate of pay for HALO duties was set at $165 per 

month for both officers and enlisted personnel. 

 

7 See House Report No. 81-779 (Committee on Armed Services), p. 30, and Senate Report No. 81-733 

(Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

8 After enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 

63 Stat. 802, 809-810 (1949), the hazardous duty incentive pay provisions thereof, including parachute duty 

pay, were in the main classified to 37 U.S.C. §235. See 37 U.S.C. §235(a)(1) and (b) (1952). Later, when 

Title 37 of the United States Code was enacted into positive law by the Act of September 7, 1962, Public 

Law 87-649, 76 Stat. 451 (1962), the hazardous duty pay provisions, including the parachute duty pay 

provisions here in issue, were codified at 37 U.S.C. §301. 

9 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

370
The first change, increasing minimum parachute duty pay rates for enlisted 

personnel to $110 per month, was effected by an amendment to 37 U.S.C. §301(c)(1) that 

did away with any distinction between officers and enlisted personnel for the vast 

majority of duties qualifying for hazardous duty incentive pay. The second change was 

effected by an additional amendment to 37 U.S.C. §301(c)(1) that added a specific 

proviso concerning HALO duties. Prior to amendment by the Department of Defense 

Authorization Act, 1986, Public Law 99-145, id., 37 U.S.C. §301(c)(1) read as follows: 

 For the performance of the hazardous duty described in [various 

clauses of subsection (a) of 37 U.S.C. §301, including parachute jumping duty], 

an officer is entitled to $110 a month and an enlisted member is entitled to $83 

a month. 

After amendment by the 1986 Authorization Act, 37 U.S.C. §301 (c)(1) reads as 

follows: 

 For the performance of hazardous duty described in [the same clauses 

set out above, including parachute jumping duty], a member is entitled to $110 a 

month. However, a member performing hazardous duty [involving parachute 

jumping] who also performs as an essential part of such duty parachute jumping 

at a high altitude with a low opening is entitled to $165 a month.10

Thus, under 37 U.S.C. §301, all members engaged in parachute duties, both 

officers and enlisted personnel,11 were entitled either to $110 per month for the 

performance of "regular," or "basic," parachute jumping duties or to $165 per month for 

HALO duties. 

The legislative history of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., does not per se indicate the reason for doing away with the 

hazardous duty incentive pay differential for officers and enlisted personnel, whether for 

parachute jumping or other hazardous duties, nor does it indicate why a higher rate of 

hazardous duty incentive pay was authorized for HALO parachute jumping duties, 

 

10 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in parachute jumping 

duties became effective October 1, 1985, as did the HALO provisions. Department of Defense 

Authorization Act, 1986, Public Law 99-145, §635(b), 99 Stat. 583, 648 (1985). 

11 The term "member" is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

371
primarily because no report was ever submitted on the Senate bill, S. 1160, in which the 

two changes in issue were proposed.12 In fact, however, the first change, i.e., the proposal 

to equalize officer and enlisted rates of pay for various hazardous duties, including 

"basic"--i.e., non-HALO--parachute jumping duties, had been made the preceding year in 

connection with the consideration of the Department of Defense Authorization Act, 1985, 

Public Law 98-525, 98 Stat. 2492 (1984). At that time, the Senate Committee on Armed 

Services, reporting out S. 2723, 98th Congress, 2d Session (1984), had included a 

provision that would, among other things, have equalized officer and enlisted rates of 

 

12 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

 ... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

 When the Armed Services Committee learned that the Senate would approve no real growth in the 

defense budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program 

reductions to conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 

1160, reflecting these new budget levels.... 

 Most of the Senate Report 99-41 continues to be applicable to this bill.... 

 131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) 

(statement of Senator Goldwater). In "explanatory background information" on some of the differences 

between S. 1029 and S. 1160, the following appears: 

 The compensation and benefits provisions of the bill contain significant differences from those 

contained in S. 1029.... 

 ... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

 The special and incentive pays ... involved in these recommendations include: 

 g. Hazardous duty pays. 

Each of these benefit increases or enhancements are in addition to the modest improvements in benefits 

previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the parachute duty pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

372
hazardous duty incentive pay for "basic" parachute jumping duties.13 In support of its 

recommendation, the Committee stated: 

The committee proposes that the enlisted and officer rates for several 

hazardous duty incentive pays be equalized.... 

The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including parachute duty pay] should be eliminated.... 

 The committee agrees that enlisted and officer personnel should be 

paid the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.14

The Senate proposal was eliminated in conference.15

As indicated immediately above, the Senate's 1984 proposal to equalize officer 

and enlisted hazardous duty incentive pay rates for parachute jumping duties, the 

substance of which was adopted in the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., closely parallels recommendations advanced by the Fifth 

Quadrennial Review of Military Compensation.

16 The same is true of the proposal to 

increase the rate of parachute duty pay for HALO jumps. In support of its 

recommendation to "[i]ncrease enlisted Parachute Duty Pay rates to $110 per month, 

 

13 See section 148 of S. 2723, 98th Congress, 2d Session (1984). 

14 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing section 148 of the Senate 

bill), accompanying S. 2723, 98th Congress, 2d Session (1984). 

15 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

16 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the 

principles and concepts of the compensation system for members of the uniformed services" at least once 

every four years and, after completing such a review, to "submit a detailed report to Congress summarizing 

the results of such review together with any recommendations ... proposing changes" to the compensation 

system of the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened 

in 1999, pursuant to Presidential directive, and its report and recommendations were submitted to Congress 

in late 2001. 

373
eliminating officer and enlisted rate differentials,"17 the Fifth Quadrennial Review

concluded: 

An appropriate amount for performing basic parachute duty is $110 per 

month. This rate should be the same for officer and enlisted jump personnel, since 

they are exposed to the same risks.18

 In support of its recommendations to “[a]dd a provision to 37 USC 301 to 

Compensate HALO jumpers at a level equal to basic Parachute Duty Pay plus 

50%,”19 the Fifth Quadrennial Review stated: 

HALO jumpers are exposed to significantly increased risks and should 

receive compensation equal to regular jump pay plus 50%.20

 In reaching these conclusions, the Fifth Quadrennial Review noted: 

... The purpose of Parachute Duty Pay is twofold: to provide an incentive 

to participate in parachute jumping, and to compensate somewhat for the actual 

risk involved in jumping. 

 Current rates for Parachute Duty Pay are $110 and $83 per month for 

officers and enlisted personnel, respectively.... During field interviews, both 

officers and enlisted personnel indicated that they volunteered for other than 

monetary reasons. Most believe that the value of the payment has diminished to 

the point that it is inadequate compensation for the hazards they encounter in 

jump status. The pay is viewed as a reward for risk and has no measurable effect 

on their decisions to volunteer for or remain in jump status. 

 

17 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 184, November 1983. Also see id., p. 9, and Executive Summary, Report of the Fifty 

Quadrennial Review of Military Compensation,” p. VI-6, January 1984. 

18 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 200, November 1983. Also see id., p. 10. Cf. Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation, p. VI-6, January 1984. 

19 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” 

Volume III, p. 184, November 1983. Also see id., p. 9, and Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation, p. VI-6, January 1984. 

20 “Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,”, 

Volume III, p. 184, November 1983. Also see id., p. 9, and Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation, p. VI-6, January 1984. 

374
 Since the hazards are the same for both officer and enlisted jumpers, it 

is appropriate to establish a single basic rate for Parachute Duty Pay. This same 

rate would apply to Novices, Senior and Master jumpers (Army badge 

categories) since it cannot be demonstrated that the hazard of jumping increases 

with higher jump rating with one exception, HALO jumpers. The establishment of 

a higher pay rate for these free-fall jumpers would more adequately remunerate 

personnel who assume the extra risk of HALO duties.... 

 Since a hazard rate should be the same for officers and enlisted 

personnel, the enlisted rate should be increased to $110 per month. Furthermore, 

while it is recognized that HALO jumpers assume greater risks, it is difficult to 

gauge the degree of these added dangers to arrive at an appropriate amount. We 

believe, however, that a reasonable amount of compensation for taking on risks 

significantly greater than the basic parachutist is an additional 50% of the regular 

rate. i.e., $165.21

In further comment on officer-enlisted differentials for various hazardous duty 

incentive pays, including parachute duties, both “regular," or "basic," and HALO, the 

Fifth Quadrennial Review stated: 

During the process of reviewing the various Hazardous Duty Incentive Pays, it 

became increasingly clear that, although there is some incentive associated with certain 

pays, the primary purpose is recognition for the hazards or risks involved. It was, 

therefore, believed that officer/enlisted personnel should receive the same level of 

payment for seven of the Hazardous Duty Incentive Pays: [including] parachute [duty 

pay]....22

 In arriving at this conclusion, the Fifth Quadrennial Review implicitly rejected the 

conclusions reached by the Hook Commission in 1949.23 In commenting on various 

arguments that had been advanced in favor of and against continuation of officer-enlisted 

differentials for hazardous duty incentive pays in general, the Fifth Quadrennial Review

summarized the argument against the Hook Commission's position in the following 

terms: 

 

21 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 182, November 1983. 

22 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 919, November 1983. Also see id., pp. 36-37. 

23 See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnote 4 to this chapter, above. 

375
The Hook Commission rationale was based primarily on an examination 

of the needs of the aviation and submarine communities. Times have changed and 

those communities now have their own separate career incentive pays and 

bonuses.24

 Other arguments in favor of eliminating the differential were summarized as 

follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 * One can never really compensate for risk of life, no matter the level. 

 * Basic pay and bonuses are adequate to cover any differential. 

* Most hazard-related pays now cover skills that are not necessarily career 

oriented (across all Services); hence, a differential is not necessary for purposes of 

retention. However, exceptions may occur and should be individually addressed, 

as required. 

* [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for 

same risk" is perceived as equitable in the hazardous duty areas.25

Whether because of the recommendations of the Fifth Quadrennial Review or for 

some other reasons, Congress, in the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., did eliminate officer-enlisted pay differentials for parachute 

duties generally and also established a new, and higher, hazardous duty incentive pay 

entitlement for high-altitude-low-opening, or HALO, parachute duties. 

The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public 

Law 102-190, §614, 105 Stat. 1290, 1377 (1991), modified the provisions relating to the 

higher rate of parachute duty pay authorized for members involved in HALO operations. 

Under the 1992/1993 Authorization Act, id., §614, 105 Stat. at 1377, the description of 

the type of parachute duties for which the higher rate of pay was authorized was 

expanded from "parachute jumping at a high altitude with a low opening" to include all 

 

24Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation , Volume 

III, p. 920, November 1983; cf. id., p. 37. 

25 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 919-920, November 1983. 

376
"parachute jumping in military free fall operations involving parachute deployment by 

the jumper without the use of a static line". In support of the modification, the Senate 

Armed Services Committee noted: 

The committee recommends a provision ... that would expand current 

authority ... which provides for a monthly hazardous duty pay of $165 per month 

to high altitude/low opening parachute jumps to include all free fall operations 

involving jumper deployed parachute openings.26

 The National Defense Authorization act for Fiscal Year 1998, Public Law 105-85, 

111 Stat. 1787, raised the special pay for all the categories of hazardous duty covered in 

37 U.S. Code §301(c)(1), for all personnel engaged in those activities. Accordingly, the 

measure increased the monthly pay for standard parachute duty from $110 to $150 and 

for HALO duty from $165 to $225. 

Reserve forces personnel27 entitled to compensation for inactive-duty training are 

entitled to parachute duty pay when they perform qualifying duties under competent 

orders, provided Congress has appropriated sufficient funds for that purpose.28 Under 37 

U.S.C. §301(f), members of the reserve forces who perform qualifying parachute 

jumping duties while entitled to compensation under 37 U.S.C. §206 are also entitled, 

 

26 Senate Report No. 102-113 (Committee on Armed Services), p. 222, accompanying S. 1507, 102d 

Congress, 1st Session (1991). Cf. House Report No. 102-311 (Committee of Conference), pp. 549-550, 

accompanying H.R. 2100, 102d Congress, 1st Session (1991). See 37 U.S.C. §301(c)(1) as modified by the 

National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §614, 105 Stat. 

1290, 1377 (1991). 

27 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

28 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, parachute 

jumping, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for parachute jumping 

are explicitly made contingent on Congressional appropriations, i.e., members of the reserve forces 

participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

377
subject to such regulations as may be prescribed by the President, to "an increase in 

compensation equal to 1/30 of the monthly incentive pay" payable to active duty 

personnel performing such duties.29 That is, for every "period of instruction ... or ... 

appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, he is, if he is performing qualifying duty under 37 U.S.C. §301(f), 

also entitled to 1/30th of the parachute duty pay, including both regular parachute duty 

pay and HALO pay, that would be payable to a member of the active duty force who was 

performing such duties. Under regulations prescribed by the President, a member of a 

reserve force who performs parachute jumping duties under 37 U.S.C. §301(f) while 

engaged in inactive-duty training is entitled to parachute duty pay.30

Hazardous duty incentive pay for reserve forces personnel engaged in inactiveduty training can, in one sense, be traced to the Act of July 2, 1926 (Army Air Corps 

Act), ch. 721 [Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which 

was the first legislative enactment that provided for special compensation for inactive 

duty reserve forces personnel engaged in hazardous duties of one kind or another.31 In 

fact, however, parachute jumping duties were not covered by the Army Air Corps Act. 

Rather, that act merely gave "officers, warrant officers, and enlisted men of the National 

Guard" who were, by competent orders, required to "participate regularly and frequently 

in aerial flights" a 50 percent increase in the "armory drill pay" to which they would 

otherwise have been entitled. The first special provision for parachute duty pay for 

 

29 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

30 See Executive Order 11157, Section 108(d), as amended (reproduced, as amended, at 37 U.S.C. §301 

note). Also see Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶80315. 

31 For a discussion of the origin of hazardous duty incentive pay for reserve forces personnel engaged in 

inactive-duty training, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew Member)," above. 

378
reserve forces personnel engaged in inactive-duty training came in the Act of March 25, 

1948, ch. 157 [Public Law 460, 80th Congress], §3, 62 Stat. 87, 88 (1948), which gave 

"officers, warrant officers, and enlisted personnel" of all the reserve forces entitlement to 

special pay for "perform[ing] ... parachute jumping," among other things. As stated in the 

House Report: 

The purpose of the bill is to standardize inactive training pay for all 

Reserve components of the various services and also to grant such inactive duty 

training pay to Army Reservists. 

The major departure in the legislation is the giving of this pay to the Army 

Reserves, including enlisted men. Such pay has been granted by the Congress 

heretofore to members of the National Guard and the Naval and Marine Corps 

Reserves [for participating in flight duties of one kind or another].... 

The committee considers the need for this pay to be apparent, even though 

it is unfortunate that the country must resort to it. The Army and Navy must 

maintain active Reserve components, or else, in time of war emergency, the 

Nation will have to depend exclusively upon the Regular services for its defense. 

They are patently incapable of doing such a job alone. So, in order to vitalize the 

National Guard and Reserve components, to get more people to participate so that 

they will fit promptly and effectively into the mobilization-day plans of the 

Armed Forces, inactive duty pay is to be given each participant at the rate of onethirtieth of 1 month's base and longevity pay for each training period.... Such 

specialists as pilots, radar technicians, medical people, and so forth, will also be 

able to earn inactive duty training pay when the standards specified by the 

Secretaries [of the various departments] are met.32 33

These provisions covered personnel of all the reserve forces performing parachute 

jumping duties as a part of their inactive-duty training. 

 

32 House Report No. 80-971 (Committee on Armed Services), pp. 1-2, accompanying H.R. 3227, 80th

Congress, 1st Session (1947). See Senate Report No. 80-625 (Committee on Armed Services), p. 1, 

accompanying S. 1174, 80th Congress, 1st Session (1947). 

33 Section 14(c) of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §14(c), 56 

Stat. 359, 367 (1942), as amended by Section 3 of the Act of March 25, 1948, ch. 157 [Public Law 460, 

80th Congress], §3, 62 Stat 87, 88-89 (1948), extended special pay to "personnel required to perform aerial 

flights, parachute jumping, glider flights, or submarine duty" in connection with inactive-duty training. As 

stated in Senate Report No. 80-625 (Committee on Armed Services), p. 2, accompanying S. 1174, 80th

Congress, 1st Session (1947): Increases in pay authorized by law for flying, parachute jumping, submarine 

duty, etc., will be paid. 

379
The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802 (1949), restated the provisions of the Pay Readjustment Act of 1942, ch. 413 

[Public Law 607, 77th Congress], 56 Stat. 359 (1942), as amended by the Act of March 

25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), insofar as the 

entitlement of reserve forces personnel to special pay for the performance of hazardous 

duties was concerned. Section 501 of the Career Compensation Act, ch. 681, id., §501, 63 

Stat. at 825-827, dealt generally with the entitlement of reserve forces personnel to 

compensation for inactive-duty training. Subsection (d) of Section 501, 63 Stat. at 826, 

generalized the hazardous duty incentive pay entitlements of reserve forces personnel 

performing inactive-duty training by providing that hazardous duty incentive pay was 

available to such personnel whenever they were required by competent orders to perform 

any of the hazardous duties, set out at Section 204(a) of the Career Compensation Act of 

1949, ch. 681, id., §204(a), 63 Stat. at 810, for which active duty personnel were entitled 

to hazardous duty incentive pay. The duties set out in Section 204(a) as qualifying for 

such pay included crew member and noncrew member flight duties, submarine duties, 

glider duties, parachute jumping duties, leprosy duties, explosives demolition duties, duty 

at a submarine escape training tank, and duty with certain diving units.34 Section 204(a) 

of the Career Compensation Act of 1949, ch. 681, id., §204(a), 63 Stat. at 809-810.35 No 

special reason was given for this reorganization of the provisions of prior law dealing 

with inactive-duty training pays, including inactive-duty training incentive pays for 

hazardous duties. The extension of incentive pay for hazardous duty to new classes of 

reserve forces personnel--e.g., to reserve forces personnel in an inactive-duty training 

 

34 See Section 204(a) of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

63 Stat. 802, 809-810 (1949). 

35 The inactive-duty training pay provisions contained in section 501 of the Career Compensation Act of 

1949, ch. 681, id., 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act, ch. 681, id., 63 Stat. at 

809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was enacted 

into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. The current structure of hazardous duty incentive pay entitlements--

including hazardous duty incentive pay for parachute duty--for reserve forces personnel performing 

inactive-duty training thus derives from the organization imposed on Title 37 by the Act of September 7, 

1962, Public Law 87-649, id. 

380
status performing leprosy duties, explosives demolition duties, submarine escape training 

tank duties, etc.--appears to have derived from the extension of such pays to active duty 

personnel, and not from any special concern about reserve forces personnel and whether 

they should be entitled to incentive pay for performance of various hazardous duties.36

See, e.g., chapters of this book dealing with explosives demolition duty pay, leprosy pay, 

etc. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

 Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

 To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.37

 While the concern that led to the amendment in issue was the appropriate use and 

apportionment of flying time, the amendment to 37 U.S.C. §301(f) was stated in broader 

terms, so that it applies to any of the hazardous duties set out in 37 U.S.C. §301(a), 

including parachute duty, and not just flight duty. Thus, for any month in which a 

 

36 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, did 

not concern itself with reserve forces compensation in any way. See, e.g., "Terms of Reference," the charter 

given to the Hook Commission by the then Secretary of Defense, James Forrestal, in “Career 

Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of Defense by 

the Advisory Commission on Service Pay,” pp. vii-viii, December 1948. 

37 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

381
member of a reserve force is involved both in active duty and inactive-duty training for 

which he is entitled to hazardous duty incentive pay under 37 U.S.C. §301, the total 

amount of hazardous duty incentive pay the member may receive is based on his 

combined entitlement for both active duty and inactive-duty training. 

 Until 2003, Executive Order 11157 of June 22, 1964, as amended, established 

performance requirements--minimum exposure standards, normally exceeded by 

personnel performing the duty on a full-time basis—that must be met to qualify for the 

pay. Executive Order 13294, issued March 28, 2003, revoked Executive Order 11157. 

Executive Order 13294 placed responsibility for carrying out the authority delegated to 

the President by 37 U.S.C. §301(a), relevant to parachute duty pay and other incentive 

pays, with the Secretaries of Commerce, Defense, Health and Human Services, and 

Homeland Security, as those entitlements affect military personnel under the respective 

jurisdictions of those departments. 

 

 Parachute duty pay is not awarded for meeting the minimum exposure standard; 

rather, it is paid for facing as much exposure as the needs of the service may require 

during a period of parachute duty. In general, one jump meets the minimum exposure 

standard and qualifies a member for the extra pay for a three-month period. A member 

who is unable to perform a jump in a three-month period because of military operations 

or the absence of jump equipment or aircraft may qualify for the pay for the three-month 

non-jumping period plus the following nine consecutive months by performing four 

jumps at any time during the nine-month period. Jump requirements may be waived 

during combat operations in a hostile fire pay area. 

Current rates of parachute duty pay: The current rates of pay authorized for 

parachute duty are as follows: 

 

Category of parachute jumping duty Pay authorized 

Military free fall operations 

 without the use of a static line (HALO) $ 225 per month 

All other forms of parachute duty $ 150 per month 

Cost: For the cost of parachute duty pay from 1972 to 2004, see Table II-14 of 

Military Compensation Statistics Tables, volume II of this edition. 

382
Chapter II.D.2.b. 

 Glider Duty Pay 

Legislative Authority: Formerly, 37 U.S.C. §301(a)(3) and (c)(1). The legislative 

authority for this hazardous duty incentive pay was repealed by the Department of 

Defense Authorization Act, 1985, Public Law 98-525, §624(a)(1), 98 Stat. 2492, 2542 

(1984). 

Purpose: To induce Armed Forces personnel to volunteer for and remain in glider 

flying duties, and to compensate for the more than normally dangerous character of such 

duties. 

Background: Glider duty pay was first authorized by the Act of July 1, 1944, ch. 

372 [Public Law 409, 78th Congress], 58 Stat. 682 (1944), in order "to place glider units 

of the Army and Navy on the same parity as to pay as now given to the air forces of the 

Army and Navy and paratroops."1

 At the time, the existing flight pay rate was 50 percent 

of base and longevity pay,2

 and the parachute duty pay rate was $100 a month for officers 

and $50 for enlisted personnel. The Act of July 1, 1944, ch. 372, id., achieved the soughtafter "parity" for personnel assigned to glider duties by establishing a hybrid glider duty 

pay rate of 50 percent of base and longevity pay, but not to exceed $100 a month for 

officers or $50 a month for enlisted personnel.3

 As explained by the House Military 

Affairs Committee: 

 

1

Extra pay for members of the "air forces of the Army and Navy and paratroops" had earlier been 

authorized primarily in recognition of the hazardous nature of such duties. See Chapters II.D.1.b.(1), 

II.D.1.b.(2), and II.D.2.a. hereof, above, "Flight Pay (Crew Member)", "Flight Pay (Non-Crew Member)," 

and "Parachute Duty Pay," respectively. 

2 For an explanation of the base and longevity pay system in operation in 1944, see Chapter II.B.1. hereof, 

above, "Basic Pay." 

3 For many officer and enlisted pay grades, base and longevity pay was sufficiently low that glider duty pay 

entitlement was less than the $100 and $50 ceilings, respectively. See 1944 base and longevity pay rates by 

pay grade in the tables accompanying Chapter II.B.1., "Basic Pay” above. 

383
The bill as amended by your committee would authorize glider personnel to 

receive an increase of 50 percent of their pay, as is now provided for persons who 

regularly and frequently participate in aerial flights, but would restrict such pay so as not 

to exceed that now provided for parachute troops.4

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§204(a)(9) and (c), 63 Stat. 802, 810 (1949), classified glider duty pay, together with 

crew member flight pay and parachute duty pay, among others, as an incentive pay for 

hazardous duty. Rates of pay for glider duties were set at a flat $100 per month for 

officers and $50 per month for enlisted personnel, thereby bypassing the formulaic 

provisions of the Act of July 1, 1944, ch. 372 [Public Law 409, 78th Congress], 58 Stat. 

682 (1944). Gliders went out of operational service in the early 1950s, and as a practical 

matter hazardous duty incentive pay entitlements for glider duty ceased at that time.5

Even so, glider duty continued to be classified as one of the duties for which hazardous 

duty incentive pay was authorized, and every time the rates of pay authorized for such 

duties in general were adjusted, the adjustment automatically applied to glider duty as 

well. Thus, when the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th 

Congress], §2(6), 69 Stat. 18, 21 (1955), increased the statutory monthly rates of pay for 

hazardous duties generally to $110 for officers and to $55 for enlisted personnel, such 

increases were technically authorized for glider duty as well. Similarly, when the 

Uniformed Services Pay Act of 1981, Public Law 97-60, §111(c), 95 Stat. 989, 993 

(1955), further increased the rates of hazardous duty incentive pay for enlisted personnel 

to $83 per month, the increase applied to glider duty also. 

As explained in the relevant Congressional Report, the rates of pay authorized for 

the general group of duties classified as hazardous were increased in 1981 in recognition 

 

4 House Report No. 1712 (Committee on Military Affairs), p. 2, accompanying H.R. 4466, 78th Congress, 

2d Session (1944). 

5 Since then, the Armed Forces have made non-operational use of gliders in some training programs, see, 

e.g., Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, 

Volume III, pp. 155-156, November 1983, but no Armed Forces personnel involved in such programs have 

been authorized to receive glider duty pay on account of such involvement. 

384
of the fact that they had "not been adjusted in more than 20 years, and this increase is 

needed to enhance the incentive value of this pay."6

 Despite the increase in the rates of 

pay authorized for hazardous duties generally, however, and the expressed rationale 

therefor, no one in the Armed Forces received the higher rates of pay for glider duty. 

In 1984, the authorization for glider duty pay was repealed, on the grounds that 

the pay was "no longer necessary,"7

 by Section 624(a)(1) of the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §624(a), 98 Stat. 2492, 2542 (1984). As 

explained by Congress, the determination that glider duty pay was "no longer necessary" 

derived from the recommendation of the Fifth Quadrennial Review of Military 

Compensation8

 that the authorization for such pay be rescinded. The basis for the 

recommendation by the Fifth Quadrennial Review was that there was "no valid need [for 

such pay]; pay under crew member/non-crew member possible."9

 In short, the Fifth 

Quadrennial Review concluded that the vast majority, if not all, of the nonaviator-rated 

Armed Forces personnel who might conceivably become entitled to glider duty pay by 

reason of performing glider duties of some sort would be entitled to receive either crew 

member flight pay, under present 37 U.S.C. §301(a)(1),10 or non-crew member flight pay, 

 

6 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

7

 Senate Report No. 98-500 (Committee on Armed Services), p. 211, accompanying S. 2723, and House 

Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 2d 

Session (1984). 

8

 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ...proposing changes" to the compensation system of 

the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

pursuant to the requirements of 37 U.S.C. §1008(b), and its report and recommendations were submitted to 

Congress in late 2001. 

9

 Executive Summary, Report of the Fifth Quadrennial Review of Military Compensation, p. VI-5, January 

1984 (emphasis in original). 

10 After enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§204, 63 Stat. 802, 809-810 (1949), the hazardous duty incentive pay provisions thereof, including glider 

duty pay, were in the main classified to 37 U.S.C. §235. See 37 U.S.C. §235(a)(1) and (b) (1952). Later, 

when Title 37 of the United States Code was enacted into positive law by the Act of September 7, 1962, 

Public Law 87-649, 76 Stat. 451 (1962), the hazardous duty pay provisions, including the glider duty pay 

385
under present 37 U.S.C. §301(a)(2),11 since entitlement to such pays depends, among 

other things, on whether a person is assigned to duty requiring "frequent and regular 

participation in aerial flight,” 37 U.S.C. §301(a)(1) and (2), and "aerial flight" is defined 

in implementing Presidential regulations12 to include "flight" in, among other things, a 

"glider."13 Rated personnel assigned to glider duties, on the other hand, would under most 

circumstances be entitled to aviation career incentive pay under present 37 U.S.C. 

§301a.14 Congress appears to have been persuaded by this reasoning.15

Before the repeal of glider duty pay authority, reserve forces personnel16 entitled 

to compensation for inactive-duty training were technically entitled to glider duty pay 

 provisions here in issue, were codified at 37 U.S.C. §301, and the various classifications of hazardous duty 

for which special pay was authorized were set out in subsection (a) thereof. 

11 See preceding footnote to this chapter, above. 

12 Under 37 U.S.C. §301(a), the President is to prescribe regulations covering the hazardous duty incentive 

pay program generally. 

13 See Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, 

Volume III, pp. 7, 155-157, November 1983. 

14 See 37 U.S.C. §301a, generally, and Chapter II.D.1.b.(3) hereof, above, "Aviation Career Incentive Pay 

(ACIP) and Aviation Career Continuation Pay (AOCP)". Also see Special and Incentive Pays, “Report of 

the Fifth Quadrennial Review of Military Compensation,” Volume III, p. 155, November 1983. 

15 The Report of the Fifth Quadrennial Review noted the possibility that non-aviator-rated officers might 

be assigned to duties involving gliders and glider flight, although it suggested that such an eventuality 

would be unlikely, having happened "only once in the past 25 years." Special and Incentive Pays, Report of 

the Fifth Quadrennial Review of Military Compensation, Volume III, pp. 7, 156-157. At the time the report 

was issued, a non-aviator-rated officer assigned to glider-related duties would not have been entitled to 

crew member flight pay under 37 U.S.C. §301(a)(1) since only enlisted personnel were entitled to such pay 

at that time. See 37 U.S.C. §301(a)(1) as in effect in 1983-1984. The Department of Defense Authorization 

Act, 1986, Public Law 99-145, §635(a)(1)(A), 99 Stat. 583, 647 (1985), remedied this possible problem by 

extending crew member flight pay entitlement to all crew members, not just enlisted crew members. See 

present 37 U.S.C. §301(a)(1) and Chapter II.D.1.b.(1) hereof, above, "Flight Pay (Crew Member)." Even 

apart from the 1986 Authorization Act, however, non-aviator-rated officers might have been entitled to 

non-crew member flight pay under 37 U.S.C. §301(a)(2) if assigned to glider-related duties, provided all 

requirements of that provision and its implementing regulations otherwise were met. 

16 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

386
when they performed qualifying duties under competent orders, provided adequate funds 

were appropriated by Congress for that purpose.17 Under 37 U.S.C. §301(f), members of 

the reserve forces who performed qualifying glider duties while entitled to compensation 

under 37 U.S.C. §206 were also entitled, subject to such regulations as may be prescribed 

by the President, to "an increase in compensation equal to 1/30 of the monthly incentive 

pay" payable to active duty personnel performing such duties.18 That is, before repeal of 

the basic legal authority for glider duty pay, for every "period of instruction ... or ... 

appropriate duty" for which a member of the reserve forces was entitled to compensation 

under 37 U.S.C. §206, the member was, if performing qualifying glider duty under 37 

U.S.C. §301(f), also entitled to 1/30th of the glider duty flight pay that would be payable 

to a member of the active duty force who was performing such duties. Thus, until the 

legal authority for glider duty pay was repealed, as set out above, glider duty was one of 

the duties for which hazardous duty incentive pay was available, at least as a technical 

matter, to reserve forces personnel performing inactive-duty training: under the nowrepealed Executive Order 11157, a member of a reserve force who performed glider 

duties under 37 U.S.C. §301(f) while engaged in inactive-duty training was entitled to 

glider duty flight pay. 

 Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

17 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

1837 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to basic 

pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to compensation, at 

the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a corresponding grade 

entitled to basic pay, for each regular period of instruction, or period of appropriate duty, at which he is 

engaged for at least two hours ... or for the performance of such other equivalent training, instruction, duty, 

or appropriate duties" as may be prescribed. The term "inactive-duty training" is commonly used to refer to 

the "period of instruction ... or ... appropriate duty" for which Section 206 "compensation" is authorized. 

387
 Glider duty pay authority for reserve forces personnel engaged in inactive-duty 

training can, in one sense, be traced to the Act of July 2, 1926 (Army Air Corps Act), ch. 

721 [Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which was the 

first legislative enactment that provided for special compensation for inactive duty 

reserve forces personnel engaged in hazardous duties of one kind or another.19 In fact, 

however, glider duties were not covered by the Army Air Corps Act. Rather, that Act 

merely gave "officers, warrant officers, and enlisted men of the National Guard" who 

were, by competent orders, required to "participate regularly and frequently in aerial 

flights" a 50 percent increase in the "armory drill pay" to which they would otherwise 

have been entitled.20 The first special provision for glider duty pay for reserve forces 

personnel engaged in inactive-duty training came in the Act of March 25, 1948, ch. 157 

[Public Law 460, 80th Congress], §3, 62 Stat. 87, 88 (1948), which gave "officers, 

warrant officers, and enlisted personnel" of all the reserve forces entitlement to special 

pay for "perform[ing] ... glider flights," among other things. As stated in the House 

Report: 

 The purpose of the bill is to standardize inactive training pay for all 

Reserve components of the various services and also to grant such inactive duty 

training pay to Army Reservists. 

 The major departure in the legislation is the giving of this pay to the 

Army Reserves, including enlisted men. Such pay has been granted by the 

Congress heretofore to members of the National Guard and the Naval and Marine 

Corps Reserves [for participating in flight duties].... 

 The committee considers the need for this pay to be apparent, even 

though it is unfortunate that the country must resort to it. The Army and Navy 

must maintain active Reserve components, or else, in time of war emergency, the 

Nation will have to depend exclusively upon the Regular services for its defense. 

They are patently incapable of doing such a job alone. So, in order to vitalize the 

National Guard and Reserve components, to get more people to participate so that 

they will fit promptly and effectively into the mobilization-day plans of the 

Armed Forces, inactive duty pay is to be given each participant at the rate of onethirtieth of 1 month's base and longevity pay for each training period.... Such 

specialists as pilots, radar technicians, medical people, and so forth, will also be 

 

19 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1) hereof, above, "Flight Pay 

(Crew Member)." 

20 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," for a more complete discussion of the history of hazardous duty 

incentive pay for reserve forces personnel engaged in inactive-duty training. 

388
able to earn inactive duty training pay when the standards specified by the 

Secretaries [of the various departments] are met.21 22

These provisions covered personnel of all the reserve forces performing glider 

duties as a part of their inactive-duty training. The Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), restated prior provisions of law 

relating to the entitlement of reserve forces personnel to special pay for the performance 

of hazardous duty, including glider duties, while engaged in inactive-duty training. 

Section 501 of the Career Compensation Act, ch. 681, id., §501, 63 Stat. at 825-827, dealt 

generally with the entitlement of reserve forces personnel to compensation for inactiveduty training. Subsection (d) of Section 501, 63 Stat. at 826, generalized the hazardous 

duty incentive pay entitlements of reserve forces personnel performing inactive-duty 

training by providing that hazardous duty incentive pay was available to such personnel 

whenever they were required by competent orders to perform any of the hazardous duties, 

set out at Section 204(a) of the Career Compensation Act of 1949, ch. 681, id., §204(a), 

63 Stat. at 810, for which active duty personnel were entitled to hazardous duty incentive 

pay. The duties set out in Section 204(a) as qualifying for such pay included crew 

member and noncrew member flight duties, submarine duties, parachute jumping duties, 

leprosy duties, explosives demolition duties, duty at a submarine escape training tank, 

duty with certain diving units, as well as glider duties. Section 204(a) of the Career 

Compensation Act of 1949, ch. 681, id., §204(a), 63 Stat. at 809-810.23 No special reason 

 

21 House Report No. 80-971 (Committee on Armed Services), pp. 1-2, accompanying H.R. 3227, 80th

Congress, 1st Session (1947). See Senate Report No. 80-625 (Committee on Armed Services), p. 1, 

accompanying S. 1174, 80th Congress, 1st Session (1947). 

22 Section 14(c) of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §14(c), 56 

Stat. 359, 367 (1942), as amended by Section 3 of the Act of March 25, 1948, ch. 157 [Public Law 460, 

80th Congress], §3, 62 Stat 87, 88-89 (1948), extended special pay to "personnel required to perform aerial 

flights, parachute jumping, glider flights, or submarine duty" in connection with inactive-duty training. As 

stated in Senate Report No. 80-625 (Committee on Armed Services), p. 2, accompanying S. 1174, 80th

Congress, 1st Session (1947): Increases in pay authorized by law for flying, parachute jumping, submarine 

duty, etc., will be paid. 

23 The inactive-duty training pay provisions contained in section 501 of the Career Compensation Act of 

1949, ch. 681, id., 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act, ch. 681, id., 63 Stat. at 

809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was enacted 

into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

389
was given for this reorganization of the provisions of prior law dealing with inactive-duty 

training pays, including inactive-duty training incentive pays for hazardous duties. The 

extension of incentive pay for hazardous duty to new classes of reserve forces personnel--

e.g., to reserve forces personnel in an inactive-duty training status performing leprosy 

duties, explosives demolition duties, submarine escape training tank duties, etc.--appears 

to derive from the extension of such pays to active duty personnel, and not from any 

special concern about reserve forces personnel and whether they should be entitled to 

incentive pay for the performance of various hazardous duties.24

The repeal of the basic authority for glider duty pay by the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §624(a), 98 Stat. 2492, 2542 (1984), 

effectively cut off reserve entitlements as well as active duty entitlements. 

 personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. The current structure of hazardous duty incentive pay entitlements for 

reserve forces personnel performing inactive-duty training thus derives from the organization imposed on 

Title 37 by the Act of September 7, 1962, Public Law 87-649, id. 

24 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, did 

not concern itself with reserve forces compensation in any way. See e.g., "Terms of Reference," the charter 

given to the Hook Commission by the then Secretary of Defense, James Forrestal, in “Career 

Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of Defense by 

the Advisory Commission on Service Pay,” pp. vii-viii, December 1948. 

390
Chapter II.D.2.c. 

 Flight Deck Duty Pay 

Legislative Authority: 37 U.S.C. §301(a)(8) and (c)(1). 

Purpose: To provide an additional pay to increase the Navy's ability to attract and 

retain personnel for duty involving the launching of aircraft from and their recovery on 

aircraft carriers and other ships from which aircraft are launched, and to compensate for 

the more than normally dangerous character of such duty. 

Background: The Act of August 28, 1965, Public Law 89-149, §1(3), 79 Stat. 

585 (1965), created a new category of duty for which hazardous duty incentive pay was 

authorized--namely, "duty involving frequent and regular participation in flight 

operations on the flight deck of an aircraft carrier." As initially adopted, the rates of pay 

for such duty were set at $110 per month for officers and $55 per month for enlisted 

personnel.1

 Congress described the purpose underlying the payment of incentive pay for 

so-called "flight deck duty" in these terms: 

 Payment of incentive pay to flight deck personnel is thus justified, fully 

and primarily, upon the basis of the hazards involved, aside from all other 

considerations. Nevertheless, there are important collateral reasons why the 

proposed legislation would be highly beneficial to the Government as well as to 

the individual recipient. 

 A large proportion of flight-deck personnel are newly-rated third-class 

aviation boatswain's mates (E-4) or nonrated personnel (E-3 or E-2). Their 

reenlistment rate is about one-third the overall Navy first reenlistment rate.... The 

inevitable result is an experience level chronically below the optimum desired for 

maximum safety and efficiency.... However, an improvement in retention rate and 

 

1 Under the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204(c), 63 Stat. 

802, 810 (1949), officers received $100 per month and enlisted personnel received $50 per month for the 

hazardous duty incentive pays--other than flight and submarine duty pay--ultimately codified at 37 U.S.C. 

§301. Hazardous duty incentive pay rates were increased by 10 percent for both officers and enlisted 

personnel by the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(6), 69 Stat. 18, 21 

(1955)--to $110 for officers and to $55 for enlisted personnel. Thus, when members of the uniformed 

services first became entitled to hazardous duty incentive pay for flight deck duty under amendments to 37 

U.S.C. §301 made by the Act of August 28, 1965, Public Law 89-149, §1(3), 79 Stat. 585 (1965), the rates 

of pay were $110 a month for officers and $55 a month for enlisted personnel. 

391
experience level could be expected to follow enactment of this legislative 

proposal, and this improvement should further result in a significant reduction of 

fatalities, injuries, and property damage, and an increase in the combat potential 

of naval airpower.2

In implementing this new hazardous duty pay authority, the President, through 

Executive Order 11157 of June 22, 1964, as amended,3

 originally restricted flight deck 

duty pay to the crews of fixed-wing-aircraft carriers or aviation units operating therefrom. 

The initial officer-enlisted differential in flight deck duty pay rates was a product 

of the hazardous duty incentive pay structure deriving from the Career Compensation Act 

of 1949, ch. 681 [Public Law 351, 81st Congress], §204(c), 63 Stat. 802, 809-810 (1949),4

which was in turn based on recommendations of the Advisory Commission on Service 

Pay, sometimes referred to as the Hook Commission, in 1948. The Hook Commission's 

rationale for an officer-enlisted differential was that: 

 A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all times the 

compensation for the primary responsibility will be considerably greater than that for 

any additional duty. 

 (2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more highly 

trained personnel. 

 (3) Officers are usually given greater responsibilities, aside from normal 

administrative control, than enlisted personnel on hazardous assignments.5 6

 

2

 House Report No. 89-171 (Committee on Armed Services), p. 2, accompanying H.R. 3044, 89th Congress, 

1st Session (1965). 

3 Reproduced, as amended, at 37 U.S.C. §301 note. 

4 See footnote 1 to this chapter, above. 

5

 “Career Compensation for the Uniformed Forces, “A Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

6 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act, see House Report No. 81-779 (Committee on Armed Services), p. 15, and Senate 

392
Under the Uniformed Services Pay Act of 1981, Public Law 97-60, §111, 95 Stat. 

989, 993 (1981), Congress expanded the category of personnel eligible for flight deck 

duty pay and increased the pay rates for enlisted personnel involved in qualifying duty by 

50 percent, to $83 per month, effective October 1, 1981. As explained in the Senate 

report, flight deck duty pay was extended to personnel involved in flight deck duties on 

ships other than aircraft carriers in recognition of the "extensive personal sacrifices made 

by military members ... whose routine duties involve hazardous working conditions."7

Flight deck duty pay rates for enlisted personnel were increased in recognition of the fact 

that they had "not been adjusted in more than 20 years [in the case of flight deck duty, 

since original adoption in 1965], and this increase is needed to enhance the incentive 

value of this pay."8

Flight deck duty pay rates for enlisted personnel were further increased to $110 

per month in 1985 by the Department of Defense Authorization Act, 1986, Public Law 

99-145, §635(a)(3), 99 Stat. 583, 648 (1985). This increase was effected by an 

amendment to 37 U.S.C. §301(c)(1) that did away with any distinction between officers 

and enlisted personnel for the vast majority of duties qualifying for hazardous duty 

incentive pay, specifically including flight deck duty pay. Prior to amendment by the 

Department of Defense Authorization Act, 1986, Public Law 99-145, id., 37 U.S.C. 

§301(c)(1) read as follows: 

 For the performance of the hazardous duty described in [various 

clauses of subsection (a) of 37 U.S.C. §301, including flight deck duty], an officer 

is entitled to $110 a month and an enlisted member is entitled to $83 a month. 

 After amendment by the 1986 Authorization Act, Public Law 99-145, id., 37 

U.S.C. §301(c)(1) reads as follows: 

 Report No. 81-733 (Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st

Session (1949). 

7 Senate Report No. 97-146 (Committee on Armed Services), p. 7, accompanying S.1181, 97th Congress, 

1st Session (1981). 

8 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S.1181, 97th Congress, 

1st Session (1981). 

393
 For the performance of hazardous duty described in [the same clauses set out 

above, including flight deck duty], a member is entitled to $110 a month.9

Thus, under 37 U.S.C. §301, all members, both officers and enlisted personnel,10

were entitled to $110 per month for the performance of flight deck duties under 

qualifying orders. 

The legislative history of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., does not per se indicate the reason for doing away with the 

distinction between officers and enlisted personnel with respect to the rates of pay 

authorized for flight deck duties. This omission was primarily because no report was ever 

submitted on the Senate bill, S. 1160, in which the proposal to equalize the rates of flight 

deck duty pay for officers and enlisted personnel was made.11 In fact, however, the 

 

9 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in flight deck duties 

became effective October 1, 1985. Department of Defense Authorization Act, 1986, Public Law 99-145, 

§635(b), 99 Stat. 583, 648 (1985). 

10 The term "member" is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

11 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: ... The Armed Services Committee reported S. 1029 to 

the Senate on April 29 of this year. The bill was accompanied by Senate Report No. 99-41. 

When the Armed Services Committee learned that the Senate would approve no real growth in the defense 

budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program reductions to 

conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 1160, reflecting 

these new budget levels.... 

Most of the Senate Report 99-41 continues to be applicable to this bill.... 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 CONG. REC. S6415, S6475 (May 17, 1985)) 

(statement of Senator Goldwater). In "explanatory background information" on some of the differences 

between S. 1029 and S. 1160, the following appears: 

The compensation and benefits provisions of the bill contain significant differences from those contained in 

S. 1029.... 

... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

The special and incentive pays ... involved in these recommendations include: 

394
proposal to equalize officer and enlisted rates of pay for various hazardous duties, 

including flight deck duty, had been made the preceding year in connection with the 

consideration of the Department of Defense Authorization Act, 1985, Public Law 98-525, 

98 Stat. 2492 (1984). At that time, the Senate Committee on Armed Services, reporting 

out S. 2723, 98th Congress, 2d Session (1984), had included a provision that would, 

among other things, have equalized officer and enlisted rates of hazardous duty incentive 

pay for flight deck duty.12 In support of its recommendation, the committee stated: 

The committee proposes that the enlisted and officer rates for several 

hazardous duty incentive pays be equalized.... 

The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including flight deck duty pay] should be eliminated.... 

 The committee agrees that enlisted and officer personnel should be paid 

the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.13

The 1984 Senate proposal was eliminated in conference.14

 

 g. Hazardous duty pays. 

 Each of these benefit increases or enhancements are in addition to the modest improvements in 

benefits previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 CONG. REC. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the flight deck duty pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

12 See Section 148 of S. 2723, 98th Congress, 2d Session (1984). 

13 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing section 148 of the Senate 

bill), accompanying S. 2723, 98th Congress, 2d Session (1984). 

14 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

395
As indicated above, the flight deck duty pay "enhancements" adopted as part of 

the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 583 

(1985), closely parallel recommendations advanced by the Fifth Quadrennial Review of 

Military Compensation in 1984.15 In support of its recommendation to "[e]liminate the 

officer/enlisted differential" and "[s]et the FDDP [flight deck duty pay] rate at $110 per 

month,"16 the Fifth Quadrennial Review stated: 

Flight deck duty is non-voluntary in nature, therefore, the function of 

FDDP is to recognize that such duty is more hazardous than those assigned to the 

typical service member. 

 Since the concept of an incentive pay is not believed applicable to this 

pay, an officer/enlisted differential is not considered valid. 

 The appropriate level of payment is $110 per month, irrespective of 

grade.17 18

 In further comment on officer-enlisted differentials for various hazardous duty 

incentive pays, including flight deck duty, the Fifth Quadrennial Review stated: 

 

15 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Fifth Quadrennial Review of Military Compensation was convened in 1982, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in early 

1984. 

16 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 150, November 1983. Also see id., p. 7, and Executive Summary, “Report of the Fifth Quadrennial 

Review of Military Compensation,” p. VI-5, January 1984. 

17 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 149-150, November 1983. Also see id., p. 6 ("Since the performance of flight deck duty is generally 

nonvoluntary in nature, the dominant feature of this pay is the hazard, not the incentive.") and p. 7, and 

Executive Summary, Report of the Fifth Quadrennial Review of Military Compensation, p. VI-5, January 

1984. 

18 In concluding that "the concept of an incentive pay is not believed applicable" in the case of flight deck 

duties, the Fifth Quadrennial Review apparently rejected Congress's explicitly stated conclusion that 

implementation of a hazardous duty incentive pay for flight deck duties would result in "an improvement in 

retention rate[s]" for affected personnel. See House Report No. 89-171 (Committee on Armed Services), p. 

2, accompanying H.R. 3044, 89th Congress, 1st Session (1965), quoted in text at footnote 2 to this chapter, 

above. 

396
During the process of reviewing the various Hazardous Duty Incentive 

Pays, it became increasingly clear that, although there is some incentive 

associated with certain pays, the primary purpose is recognition for the hazards or 

risks involved. It was, therefore, believed that officer/enlisted personnel should 

receive the same level of payment for seven of the Hazardous Duty Incentive 

Pays: [including] ... flight deck [duty pay]....19

 In arriving at this conclusion, the Fifth Quadrennial Review implicitly rejected the 

conclusions reached by the Hook Commission in 1948.20 In commenting on various 

arguments that had been advanced in favor of and against continuation of officer-enlisted 

differentials for hazardous duty incentive pays in general, the Fifth Quadrennial Review 

summarized the argument against the Hook Commission's position in the following 

terms: 

The Hook Commission rationale was based primarily on an examination 

of the needs of the aviation and submarine communities. Times have changed and 

those communities now have their own separate career incentive pay and 

bonuses.21

Other arguments in favor of eliminating the differential were summarized as follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 

 * One can never really compensate for risk of life, no matter the level. 

 * Basic pay and bonuses are adequate to cover any differential. 

* Most hazard-related pays now cover skills that are not necessarily career 

oriented (across all Services); hence, a differential is not necessary for purposes of 

retention. However, exceptions may occur and should be individually addressed, 

as required. 

* [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for 

same risk" is perceived as equitable in the hazardous duty areas.22

 

19 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 919, November 1983. See id., pp. 36-37. 

20 See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnotes 5 and 6 to this chapter, above. 

21 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 920, November 1983; cf. id., p. 37. 

22 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 919-920, November 1983. 

397
Whether for these or some other reasons, Congress did in fact eliminate officerenlisted pay differentials for flight deck duties in the Department of Defense 

Authorization Act, 1986, Public Law 99-145, §635(a)(3), 99 Stat. 583, 648 (1985). 

As stated by Congress, the primary justification for flight deck duty pay is "upon 

the basis of the hazards involved"23 in flight deck duties. A "collateral" purpose is to 

encourage personnel to enter and remain involved in flight-deck operations.24 Such 

operations frequently necessitate nearly continuous exposure to the hazards of flight deck 

duty on a career basis. To carry out this purpose, until 2003 Executive Order 11157 of 

June 22, 1964, as amended,25 established performance requirements—minimum exposure 

standards, normally exceeded by personnel performing flight-deck duty on a full-time 

basis--that must be met to qualify for the pay. The pay is not awarded for meeting the 

minimum exposure standard: it is paid for facing as much exposure as the needs of the 

service may require during a period of carrier flight deck duty. Participation in flight 

operations a minimum of four days a month, or the equivalent thereof as set out in 

regulations adopted by the Secretary of the Navy, is required to meet the minimum 

exposure standard and, subject to certain billet limitations and numerical quotas, qualifies 

a member for the extra pay. A member's presence during a month at an assigned station 

on the flight deck of an aircraft carrier where at least 160 aircraft are launched and/or 

recovered is, under regulations promulgated by the Secretary of the Navy, the equivalent 

of four days participation in flight operations. For ships other than aircraft carriers, the 

number of launches and/or recoveries required to meet eligibility criteria varies with the 

pace of operations. Hazardous duty incentive pay for flight deck duty may not be paid to 

a member for any month the member is also eligible to receive incentive pay for other 

hazardous duty under 37 U.S.C. §301. 

 

23 House Report No. 89-171 (Committee on Armed Services), p. 2, accompanying H.R. 3044, 89th

Congress, 1st Session (1965), quoted in text at footnote 2 to this chapter, above. 

24 House Report No. 89-171 (Committee on Armed Services), p. 2, accompanying H.R. 3044, 89th

Congress, 1st Session (1965). Also see footnote 18 to this chapter, above. 

25 Reproduced, as amended, at 37 U.S.C. §301 note. 

398
 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1770, raised the monthly rate for several types of hazardous duty pay 

covered by 37 U.S.C. 301(c)(1), including pay given for flight-deck duty, from $110 to 

$150. The increase applied to all personnel engaged in this duty. 

Reserve forces personnel26 entitled to compensation for inactive-duty training are 

entitled to flight deck duty pay when they perform qualifying duties under competent 

orders, provided Congress has appropriated sufficient funds for that purpose.27 Under 37 

U.S.C. §301(f), members of the reserve forces who perform qualifying flight deck duty 

while entitled to compensation under 37 U.S.C. §206 are also entitled, subject to such 

regulations as may be prescribed by the President, to "an increase in compensation equal 

to 1/30 of the monthly incentive pay" payable to active duty personnel performing such 

duties.28 That is, for every "period of instruction ... or ... appropriate duty" for which a 

member of the reserve forces is entitled to compensation under 37 U.S.C. §206, the 

member is, if performing qualifying flight deck duty under 37 U.S.C. §301(f), also 

 

26 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

27 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

28 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

399
entitled to 1/30th of the flight deck duty pay that would be payable to a member of the 

active duty force who was performing such duty. Under regulations prescribed by the 

President, a member of a reserve force who performs flight deck duty under 37 U.S.C. 

§301(f) while engaged in inactive-duty training is entitled to flight deck duty pay.29

Hazardous duty incentive pay for reserve forces personnel engaged in inactiveduty training can, in one sense, be traced to the Act of July 2, 1926 (Army Air Corps 

Act), ch. 721 [Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which 

was the first legislative enactment that provided for special compensation for inactive 

duty reserve forces personnel engaged in hazardous duties of one kind or another.30 In 

fact, however, flight deck duty was not covered by the Air Corps Act. Rather, that Act 

merely gave "officers, warrant officers, and enlisted men of the National Guard" who 

were, by competent orders, required to "participate regularly and frequently in aerial 

flights" a 50 percent increase in the "armory drill pay" to which they would otherwise 

have been entitled.31 The first special provision for flight deck duty pay for reserve forces 

personnel engaged in inactive-duty training came in the Act of August 28, 1965, Public 

Law 89-149, 79 Stat. 585 (1965), which, as above noted, brought "duty involving 

frequent and regular participation in flight operations on the flight deck of an aircraft 

carrier" within the category of duties for which hazardous duty incentive pay was 

authorized for reserve forces personnel performing inactive-duty training. 

As a practical matter, the 1965 act had been intended to extend flight deck duty 

pay entitlement to active duty personnel performing qualifying duties. The entitlements 

 

29 See Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶80316. 

30 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew 

Member)." 

31 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," for a more complete discussion of the history of hazardous duty 

incentive pay for reserve forces personnel engaged in inactive-duty training. 

400
technically covered reserve forces personnel also because of the way Title 37 of the 

United States Code was organized. At the time, 37 U.S.C. §301(f) provided that a 

member of the reserve forces on inactive-duty training was entitled to additional pay for 

hazardous duty when he "performs, under orders, any duty described in subsection (a) of 

this section." Subsection (a), in turn, covered hazardous duty incentive pay entitlements 

of active duty personnel, and it was to that subsection that the flight deck duty entitlement 

was added. The 1965 act had simply added a new category of duty for which hazardous 

duty incentive pay was authorized for active duty personnel, but the pay was technically 

available to reserve forces personnel as well under 37 U.S.C. §301(f). Thus, reserve 

forces personnel on inactive-duty training had in effect "piggybacked" on active duty 

personnel insofar as technical entitlement to flight deck duty pay was concerned. Reserve 

forces personnel similarly benefited when the category of personnel entitled to flight deck 

duty pay was expanded by the Uniformed Services Pay Act of 1981, Public Law 97-60, 

95 Stat. 993 (1981). See discussion of the 1981 act, above. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

 Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.32 

 

32 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st

401
 While the concern that led to the amendment in issue was the appropriate use and 

apportionment of flying time, the amendment to 37 U.S.C. §301(f) was stated in broader 

terms, so that it applies to any of the hazardous duties set out in 37 U.S.C. §301(a), and 

not just flight pay. Thus, for any month in which a member of a reserve force is involved 

both in active duty and inactive-duty training for which he is entitled to hazardous duty 

incentive pay under 37 U.S.C. §301, the total amount of hazardous duty incentive pay the 

member may receive is based on his combined entitlement for both active duty and 

inactive-duty training. 

Until 2003, the conditions of entitlement to flight deck duty pay for both active 

duty and reserve personnel were set out in Section 109(g) of Executive Order 11157, as 

amended, and in various supplementary regulations adopted by the service Secretaries 

pursuant to Section 113 of Executive Order 11157. Executive Order 13294, issued March 

28, 2003, revoked Executive Order 11157. Executive Order 13294 placed responsibility 

for carrying out the authority delegated to the President by 37 U.S.C. §301(a), relevant to 

flight deck duty pay and other incentive pays, with the Secretaries of commerce, defense, 

health and human services, and homeland security, as those entitlements affect military 

personnel under the respective jurisdictions of those departments. To the extent reserve 

forces personnel can claim entitlement to such pays, the language of the current executive 

order is applicable to them as well. 

Current rate of flight deck duty pay: The current rate of pay for flight deck 

duty is $150 per month for both officers and enlisted personnel. 

Cost: For the cost of compensation for flight deck duty from 1972 to 2004, see 

Table II-15 of Military Compensation Statistics Tables, volume II of this edition. 

 Session (1985). 

402
Chapter II.D.2.d. 

 Toxic Fuels and Propellants 

 and 

 Chemical Munitions Exposure Pay 

Legal Authority: 37 U.S.C. §301(a)(10) and (c)(1). 

Purpose: To provide an additional incentive for uniformed services personnel to 

engage in various activities in which they may be exposed to toxic fuels or propellants, or 

to chemical munitions, and to compensate such personnel for the more than normally 

dangerous character of such duty. 

Background: The Uniformed Services Pay Act of 1981, Public Law 97-60, 

§111(a), 95 Stat. 989, 992-993 (1981), amended 37 U.S.C. §301 to authorize the payment 

of hazardous duty incentive pay to uniformed services personnel assigned to duty 

"involving the servicing of aircraft or missiles with highly toxic fuels or propellants." As 

explained in relevant Congressional documents, military personnel who "service aircraft 

or missiles with highly toxic fuels or propellants" were added to the "categories of 

personnel whose duties have been determined to be hazardous" for the purposes of 37 

U.S.C. §301 in recognition of the "extensive personal sacrifices made by military 

members whose daily duties place them in imminent danger from hazards such as toxic, 

lethal, or carcinogenic substances or whose routine duties involve hazardous working 

conditions."1

 Under other amendments to the hazardous duty incentive pay program 

made by the Uniformed Services Pay Act of 1981, Public Law 97-60, id., §111(c), 95 

Stat. at 993, the rate of pay for enlisted personnel performing duty "involving the 

servicing of aircraft or missiles with highly toxic fuels or propellants" was set at $83 per 

month, an increase of 50 percent over the rate that had applied theretofore, and the rate of 

pay for officers performing such duties was maintained at $110 per month.2

 

1 Senate Report No. 97-146 (Committee on Armed Services), pp. 7-8, accompanying S. 1181, 97th

Congress, 1st Session (1981). See House Report No. 97-265 (Committee of Conference), p. 22, 

accompanying S. 1181, 97th Congress, 1st Session (1981). 

2

 Under the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204(c), 63 Stat. 

802, 810 (1949), officers received $100 per month and enlisted personnel received $50 per month for the 

hazardous duty incentive pays--other than flight and submarine duty pay--ultimately codified at 37 U.S.C. 

403
The Department of Defense Authorization Act, 1984, Public Law 98-94, §903(a), 

97 Stat. 614, 635 (1983), extended entitlement to toxic fuels and propellants exposure pay 

to uniformed services personnel involved in "the testing of aircraft or missile systems (or 

components of such systems) during which highly toxic fuels or propellants are used." As 

explained by the House Armed Services Committee, Congress, in adopting the toxic fuels 

and propellants pay provisions of the Uniformed Services Pay Act of 1981, Public Law 

97-60, §111(a), 95 Stat. 989, 992-993 (1981), had originally intended to include this 

category of personnel within the general class entitled to toxic fuels and propellants 

exposure pay but, having inadvertently excluded them, was now taking action 

specifically to include them: 

 Recently, the committee recommended extension of hazardous duty 

pay to service members whose daily duties placed them in imminent danger from 

hazards, such as toxic fuels. Due to an inadvertent oversight, some individuals 

meeting this general criterion were not covered by the legislative language. 

 The committee recommends minor changes to clarify the original intent 

to provide hazardous duty pay to fuel handlers who work on components of 

rocket engines and aircraft, as well as other fuel handlers who work on rockets 

and aircraft themselves. For example, fuel handlers who work on rocket test sleds 

experience the same hazards as those who fuel large scale rockets. It is the 

committee's intent to cover all such similarly situated categories equally.3

 

 

 §301. Hazardous duty incentive pay rates were increased by 10 percent for both officers and enlisted 

personnel by the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(6), 69 Stat. 18, 21 

(1955)--to $110 for officers and to $55 for enlisted personnel. Enlisted personnel received a further 

increase to $83 per month--a 50 percent raise--by the Uniformed Services Pay Act of 1981, Public Law 97-

60, §111(c), 95 Stat. 989, 993 (1981), the same act that extended hazardous duty incentive pay entitlements 

to personnel exposed to toxic fuels and propellants. See Uniformed Services Pay Act of 1981, Public Law 

97-60, id., §111(a), 95 Stat. at 992-993. As indicated by Congress, the reason for the 1981 increase in 

hazardous duty incentive pay rates for enlisted personnel was that such rates had "not been adjusted in 

more than 20 years, and this increase is needed to enhance the incentive value of this pay." Senate Report 

No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 1st Session 

(1981). Thus, when members of the uniformed services first became entitled to hazardous duty incentive 

pay for exposure to toxic fuels or chemicals under amendments to 37 U.S.C. §301 made by the Uniformed 

Services Pay Act of 1981, Public Law 97-60, id., §111(a), 95 Stat. at 992-993, the rates of pay were $110 a 

month for officers and $83 a month for enlisted personnel. 

3 House Report No. 98-107 (Committee on Armed Services), p. 210, accompanying H.R. 2969, 98th

Congress, 1st Session (1983). Cf. House Report No. 98-352 (Committee of Conference), p. 224, 

accompanying S. 675, 98th Congress, 1st Session (1983). 

404
 When duties involving personal exposure to toxic fuels and propellants were 

added to the "categories of personnel whose duties [were] determined to be hazardous" 

for the purposes of 37 U.S.C. §301 by the Uniformed Services Pay Act of 1981, and, 

later, by the Department of Defense Authorization Act, 1984, Public Law 98-94, §903(a), 

97 Stat. 614, 635 (1983), the rates of pay for the hazardous duties covered by that 

provision were $110 per month for officers and $83 per month for enlisted personnel, and 

these rates applied, pari passu, to personnel entitled to hazardous duty incentive pay on 

account of exposure to toxic fuels and propellants. The officer-enlisted rate differential 

was a product of the hazardous duty incentive pay structure adopted in the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 

809-810 (1949),4

 which had in turn been based on the recommendations of the Advisory 

Commission on Service Pay, sometimes referred to as the Hook Commission. The Hook 

Commission's rationale for an officer-enlisted pay differential was that: 

 A higher rate of hazard pay for officers as compared with enlisted personnel is 

justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all 

times the compensation for the primary responsibility will be considerably 

greater than that for any additional duty. 

 (2) The rates proposed for hazard pay serve as an inducement to 

undertake and continue special duties; and such an inducement need not 

be as great in monetary terms for lower paid and less advanced personnel 

as for higher paid and more highly trained personnel. 

 (3) Officers are usually given greater special responsibilities, aside from 

normal administrative control, than enlisted personnel on hazardous 

assignments.5 6

In 1985, the rates of hazardous duty incentive pay generally, and for duty 

involving exposure to toxic fuels and propellants in particular, were increased to $110 per 

month for enlisted personnel by the Department of Defense Authorization Act, 1986, 

 

4 For a history of the different rates of hazardous duty incentive pay authorized under 37 U.S.C. §301 and 

its predecessor provisions, beginning with the Career Compensation Act of 1949, ch. 681 [Public Law 351, 

81st Congress], §204, 63 Stat. 802, 809-810 (1949), see footnote 2 to this chapter, above. 

5

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

6

 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 809-810 (1949), 

see House Report No. 81-779 (Committee on Armed Services), p. 15, and Senate Report No. 81-733 

(Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

405
Public Law 99-145, §635(a)(3), 99 Stat. 583, 648 (1985). This increase was effected by 

an amendment to 37 U.S.C. §301(c)(1) that did away with any distinction between 

officers and enlisted personnel for the vast majority of duties qualifying for hazardous 

duty incentive pay, including duty involving exposure to toxic fuels and propellants. Prior 

to amendment by the Department of Defense Authorization Act, 1986, Public Law 99-

145, id., 37 U.S.C. §301(c)(1) read as follows: 

For the performance of the hazardous duty described in [various clauses of 

subsection (a) of 37 U.S.C. §301, including exposure to toxic fuels and 

propellants], an officer is entitled to $110 a month and an enlisted member is 

entitled to $83 a month. 

After amendment by the Department of Defense Authorization Act, 1986, 37 

U.S.C. §301(c)(1) read as follows: 

For the performance of hazardous duty described in [the same clauses set 

out above, including exposure to toxic fuels and propellants], a member is entitled 

to $110 a month.7

 Thus, under 37 U.S.C. §301, all members, both officers and enlisted personnel,8

were entitled to $110 per month for the performance of duty involving exposure to toxic 

fuels and propellants under qualifying orders. 

The legislative history of the Department of Defense Authorization Act, 1986, 

does not per se indicate the reason for doing away with the distinction between officers 

and enlisted personnel with respect to the rates of pay authorized for exposure to toxic 

fuels and propellants. This omission was primarily because no report was ever submitted 

on the Senate bill, S. 1160, in which the proposal to equalize the rates of toxic fuels and 

 

7 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in personal exposure 

duties became effective October 1, 1985. Department of Defense Authorization Act, 1986, Public Law 99-

145, §635(b), at 99 Stat. 583, 648 (1985). 

8

 The term "member" is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

406
propellants exposure pay for officers and enlisted personnel was made.9

 In fact, however, 

the proposal to equalize officer and enlisted rates of pay for various hazardous duties, 

including toxic fuels and propellants exposure duties, had been made the preceding year 

in connection with the consideration of the Department of Defense Authorization Act, 

1985, Public Law 98-525, 98 Stat. 2492 (1984). At that time, the Senate Committee on 

Armed Services, reporting out S. 2723, 98th Congress, 2d Session (1984), had included a 

provision that would, among other things, have equalized officer and enlisted rates of 

 

9 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

 ... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

 When the Armed Services Committee learned that the Senate would approve no real growth in the 

defense budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program 

reductions to conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 

1160, reflecting these new budget levels.... 

 Most of Senate Report 99-41 continues to be applicable to this bill.... 

 131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) 

(statement of Senator Goldwater). In "explanatory background information" on some of the differences 

between S. 1029 and S. 1160, the following appears: 

 The compensation and benefits provisions of the bill contain significant differences from those 

contained in S. 1029.... 

 ... In addition, the Committee recommended increases or enhancements to a number of special incentive 

pays.... 

 The special and incentive pays ... involved in these recommendations include: 

 g. Hazardous duty pays. 

Each of these benefit increases or enhancements are in addition to the modest improvements in benefits 

previously recommended in S. 1029. 

131 Cong. Rec.12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the toxic fuels and propellants exposure pay program in particular, that were contained in 

S. 1160 and subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-

145, 99 Stat. 583 (1985). 

407
hazardous duty incentive pay for toxic fuels and propellants exposure duties.10 In support 

of its recommendation, the Committee stated: 

The committee proposes that the enlisted and officer rates for several hazardous 

duty incentive pays be equalized.... 

The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including toxic fuels and propellants exposure pay] should be 

eliminated.... 

The committee agrees that enlisted and officer personnel should be paid 

the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.11

The Senate proposal was eliminated in conference.12

 As indicated above, the toxic fuels and propellants exposure pay "enhancements" 

adopted as part of the Department of Defense Authorization Act, 1986, closely parallel 

recommendations advanced by the Fifth Quadrennial Review of Military Compensation 

in 1984.13 In support of its recommendation to "[e]ntitle both officer and enlisted 

personnel to $110/month for performance of TF&P [toxic fuels and propellants] 

duties,"14 the Fifth Quadrennial Review stated: 

 

10 See section 148 of S. 2723, 98th Congress, 2d Session (1984). 

11 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing section 148 of the Senate 

bill), accompanying S. 2723, 98th Congress, 2d Session (1984). 

12 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

13 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ...proposing changes" to the compensation system. The 

Fifth Quadrennial Review of Military Compensation was convened in 1982, pursuant to Presidential 

directive, and its report and recommendations were submitted to Congress in early 1984. 

14 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 200, November 1983. Also see id., p. 10, and Executive Summary, Report of the Fifth Quadrennial 

Review of Military Compensation, p. VI-6, January 1984. 

408
The effectiveness of TF&P Pay rates cannot be determined because of the 

recent authorization of the pay. 

Officer and enlisted personnel serving in the TF&P fields should receive 

equal compensation for exposure to TF&Ps. 

An appropriate rate for both officer and enlisted personnel receiving 

TF&P Pay is $110 per month.15

In reaching this conclusion, the Fifth Quadrennial Review also noted: 

The rates of TF&P Pay are identical to the rates for other Hazardous Duty 

Incentive Pays. The enlisted rate of $83 per month was increased by 50% from 

$55.00 per month at the same time TF&P Pay was authorized [by the Uniformed 

Services Pay Act of 1981]. Assuming $83.00 per month was an appropriate value 

at the time of the 1981 Pay Act, the current rate of TF&P Pay for enlisted 

members based upon CPI [Consumer Price Index] increases should be roughly 

$100.00 per month. 

Here, the issue of different rates for officer and enlisted personnel should also be 

addressed. In determining the degree of hazard to which personnel receiving TF&P Pay 

are exposed, it is difficult, if not impossible, to gauge an exact measure of hazard in 

comparison to other types of duty. To discern a measurable difference in the degree of 

hazard to which officers versus enlisted personnel are exposed would prove equally 

futile. Thus, equal rates of hazard pay for both are believed to be appropriate as each is 

subjected to the same general degree of hazard. The current officer rate is $110 per 

month. As previously discussed, $100 per month is believed to be a generally appropriate 

enlisted rate. In order to avoid reductions in payments to officers, and because the $100 

rate was based primarily on a generally increasing CPI, a flat rate of $110 per month for 

both officer and enlisted is believed appropriate.16

 In further comment on officer-enlisted differentials for various hazardous duty 

incentive pays, including toxic fuels and propellants exposure duties, the Fifth 

Quadrennial Review stated: 

 

15 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 200, November 1983. Also see id., p. 10. cf. Executive Summary, Report of the Fifth Quadrennial 

Review of Military Compensation, p. VI-6, January 1984. 

16 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 198, November 1983. 

409
During the process of reviewing the various Hazardous Duty Incentive 

Pays, it became increasingly clear that, although there is some incentive 

associated with certain pays, the primary purpose is recognition for the hazards or 

risks involved. It was, therefore, believed that officer/enlisted personnel should 

receive the same level of payment for seven of the Hazardous Duty Incentive 

Pays: [including] ... toxic fuels [and propellants exposure pay]....17

 In arriving at this conclusion, the Fifth Quadrennial Review implicitly rejected the 

conclusions reached by the Hook Commission in 1948.18 In commenting on various 

arguments that had been advanced in favor of and against continuation of officer-enlisted 

differentials for hazardous duty incentive pays in general, the Fifth Quadrennial Review 

summarized the argument against the Hook Commission's position in the following 

terms: 

The Hook Commission rationale was based primarily on an examination 

of the needs of the aviation and submarine communities. Times have changed and 

those communities now have their own separate career incentive pays and 

bonuses.19

 Other arguments in favor of eliminating the differential were summarized as 

follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 * One can never really compensate for risk of life, no matter the level. 

 * Basic pay and bonuses are adequate to cover any differential. 

* Most hazard-related pays now cover skills that are not necessarily career oriented 

(across all Services); hence, a differential is not necessary for purposes of retention. 

However, exceptions may occur and should be individually addressed, as required. 

 

17 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 919, November 1983. See id., pp. 36-37. 

18 See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnotes 5 and 6 to this chapter, above. 

19 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 920, November 1983; cf. id., p. 37. 

410
* [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for same 

risk" is perceived as equitable in the hazardous duty areas.20

In addition to eliminating officer-enlisted pay differentials for toxic fuels and 

propellants exposure pay, the Department of Defense Authorization Act, 1986, also 

extended entitlement to hazardous duty incentive pay under 37 U.S.C. §301(a)(10) to a 

third category of personnel--namely, personnel involved in "the handling of chemical 

munitions (or components of such munitions)."21 For reasons previously discussed,22 the 

legislative history of the 1986 Authorization Act does not deal with the reasons for 

extension of toxic fuels and propellants exposure pay entitlement to personnel involved in 

handling chemical munitions. Insofar as can be determined, however, the extension of 

hazard duty pay to chemical munitions handlers under 37 U.S.C. §301(a)(10) derives 

from the recommendations of the Fifth Quadrennial Review of Military Compensation23

to "[i]nclude duty involving the handling of chemical munitions within the definition of 

hazardous duties.”24 In support of this recommendation, the Fifth Quadrennial Review 

noted: 

Certain personnel in the chemical munitions field risk exposure to 

chemicals of an equal or greater toxicity than many highly toxic fuels and 

propellants for which no Hazardous Duty Incentive Pay entitlement exists.25

 

20 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 919-920, November 1983. 

21 In effecting this amendment, the Department of Defense Authorization Act, 1986, Public Law 99-145, 

id., restructured 37 U.S.C. §301(a)(10) by designating the two previous categories of duties qualifying for 

toxic fuels and propellants exposure pay as clauses (A) and (B), respectively, and the new category of 

duties as clause (C). See Department of Defense Authorization Act, 1986, Public Law 99-145, id., 

§635(a)(1)B), 99 Stat. at 648, and new 37 U.S.C. §301(a)(10)(A), (B), and (C), as amended. 

22 See footnote 9 to this chapter and accompanying text, above. 

23 See footnote 13 to this chapter, above. 

24 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 10 and 200, November 1983. See Executive Summary, Report of the Fifth Quadrennial Review of 

Military Compensation, p. VI-6, January 1984. 

25 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 200, November 1983. See id., p. 10. 

411
Expanding on this observation, the Fifth Quadrennial Review went on: 

Personnel assigned to duties requiring the handling of chemical munitions 

belong to a spectrum of career fields...Assignments are not made on a volunteer 

basis and thus, manning shortfalls in these positions do not exist. Department of 

Defense Civilian Personnel involved in chemical munitions maintenance are paid 

environmental differentials of 8 or 4 percent, depending on whether the job 

represents a high or low degree of hazard. Under the current provision of Title 37 

[United States Code], military personnel are not entitled to Hazardous Duty 

Incentive Pay for handling chemical munitions. 26

Whether for these or some other reasons, Congress, in the Department of Defense 

Authorization Act, 1986, did in fact eliminate officer-enlisted pay differentials for duties 

involving exposure to toxic fuels and propellants and also extended hazardous duty 

incentive pay entitlement under 37 U.S.C. §301(a)(10) to personnel handling chemical 

munitions. Because of this new, broadened scope of hazardous duty incentive pay 

entitlements under 37 U.S.C. §301(a)(10), the pay is referred to herein as toxic fuels and 

propellants and chemical munitions exposure pay. The National Defense Authorization 

Act for Fiscal Year 1998, Public Law 105-85, 111 Stat. 1770, raised the monthly rate for 

several types of hazardous duty pay covered by 37 U.S.C. 301(c)(1), including pay given 

for duty involving toxic fuels and propellants and chemical munitions exposure, from 

$110 to $150. The increase applied to all personnel engaged in this duty. 

Reserve forces personnel27 entitled to compensation for inactive-duty training are 

technically entitled to toxic fuels and propellants exposure pay when they perform duties 

"involving (A) the servicing of aircraft or missiles with highly toxic fuels or propellants, 

(B) the testing of aircraft or missile systems (or components of such systems) during 

 

26 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 199-200, November 1983. 

27 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

412
which highly toxic fuels or propellants are used, or (C) the handling of chemical 

munitions (or components of such munitions)" under competent orders, provided 

Congress has appropriated sufficient funds for that purpose.28 Under 37 U.S.C. §301(f), 

members of the reserve forces who perform qualifying exposure duties while entitled to 

compensation under 37 U.S.C. §206 are also technically entitled, subject to such 

regulations as may be prescribed by the President, to "an increase in compensation equal 

to 1/30 of the monthly incentive pay" payable to active duty personnel performing such 

duties.29 That is, for every "period of instruction ... or ... appropriate duty" for which a 

member of the reserve forces is entitled to compensation under 37 U.S.C. §206, the 

member is, if performing qualifying toxic fuels and propellants and chemical munitions 

exposure duties under 37 U.S.C. §301(f), also entitled to 1/30th of the toxic fuels and 

propellants exposure duty pay that would be payable to a member of the active duty force 

who was performing such duty. Under regulations, the only personnel entitled to toxic 

fuels and propellants and chemical munitions exposure pay are personnel whose "primary 

duty" involves exposure to such hazards, and it is doubtful whether reserve forces 

personnel performing inactive-duty training could qualify for exposure pay under this 

provision. In any event, the Department of Defense Financial Management Regulation, 

Military Pay: Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, 

DOD 7000.14-R, makes no provision for entitlement of reserve forces personnel to toxic 

 

28 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

29 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

413
fuels and propellants and chemical munitions exposure pay.30 Thus, while technically 

entitled to hazardous duty incentive pay for duty involving exposure to toxic fuels and 

propellants and chemical munitions under 37 U.S.C. §301, reserve forces personnel 

would appear to be excluded from such entitlement by regulations prescribed by the 

President and the Department of Defense.31 It is always possible, however, that the 

President may prescribe regulations extending toxic fuels and propellants and chemical 

munitions exposure pay to reserve forces personnel on inactive-duty training. 

Legislative authority to make toxic fuels and propellants and chemical munitions 

exposure pay technically available to reserve forces personnel engaged in inactive-duty 

training--independently of whether they could ever in practice actually qualify for it--can, 

in one sense, be traced to the Act of July 2, 1926 (Army Air Corps Act), ch. 721 [Public 

Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which was the first legislative 

enactment that provided for special compensation for inactive-duty reserve forces 

personnel engaged in hazardous duties of one kind or another.32 In fact, however, toxic 

fuels and propellants and chemical munitions exposure duty was not covered by the Air 

Corps Act. Rather, that Act merely gave "officers, warrant officers, and enlisted men of 

the National Guard" who were, by competent orders, required to "participate regularly 

and frequently in aerial flights" a 50 percent increase in the "armory drill pay" to which 

they would otherwise have been entitled.33 The first special provision for toxic fuels 

 

30 See Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶80311-80316, generally (dealing with 

incentive pay entitlements of members of the reserve forces performing inactive-duty training). 

31 While it is possible that reserve forces personnel are assigned to, and do perform, duty involving 

exposure to toxic fuels and propellants or chemical munitions during inactive-duty training, it would seem 

unlikely that they do so "as a primary duty." 

32 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew 

Member)," above. 

33 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," above, for a more complete discussion of the history of hazardous 

duty incentive pay for reserve forces personnel engaged in inactive-duty training. 

414
and propellants exposure duty pay for reserve forces personnel engaged in inactive-duty 

training came in the Uniformed Services Pay Act of 1981, Public Law 97-60, §111(a), 95 

Stat. 989, 992-993 (1981), which, as above noted, brought toxic fuels and propellants 

exposure duty within the category of duties for which hazardous duty incentive pay was 

technically authorized for reserve forces personnel performing inactive-duty training. The 

Department of Defense Authorization Act, 1984, Public Law 98-94, §903, 97 Stat. 614, 

635 (1983), and the Department of Defense Authorization Act, 1986, expanded the 

categories of reserve forces personnel for whom exposure pay was technically authorized 

in connection with the performance of inactive-duty training. 

As a practical matter, the 1981 Pay Act and the 1984 and 1986 authorization acts 

had been intended to extend toxic fuels and propellants and chemical munitions exposure 

pay entitlements to active duty personnel performing qualifying duties. The entitlements 

technically covered reserve forces personnel also because of the way Title 37 of the 

United States Code was organized. At the time, 37 U.S.C. §301(f) provided that a 

member of the reserve forces on inactive-duty training was entitled to additional pay for 

hazardous duty when he "performs, under orders, any duty described in subsection (a) of 

this section." Subsection (a), in turn, covered hazardous duty incentive pay entitlements 

of active duty personnel, and it was to that subsection that the toxic fuels and propellants 

and chemical munitions exposure entitlements were added. The 1981 Pay Act and the 

1984 and 1986 authorization acts had simply added a new category of duty for which 

hazardous duty incentive pay was authorized for active duty personnel, but the pay was 

technically available to reserve forces personnel as well under 37 U.S.C. §301(f). Thus, 

reserve forces personnel on inactive-duty training had in effect "piggybacked" on active 

duty personnel insofar as technical entitlement to personal exposure pay was concerned. 

See discussion of the 1981 Pay Act and the 1984 and 1986 Authorization Acts, above. 

In addition to expanding the categories of personnel for whom toxic fuels and 

propellants and chemical munitions exposure pay was authorized, the Department of 

Defense Authorization Act, 1986, also amended 37 U.S.C. §301(f) by adding certain 

415
housekeeping provisions concerning how hazardous duty incentive pay for inactive-duty 

training was to be computed. As explained by the House Committee on Armed Services: 

Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

 To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.34

 While the concern that led to the amendment in issue was the appropriate use and 

apportionment of flying time, the amendment to 37 U.S.C. §301(f) was stated in broader 

terms, so that it applies to any of the hazardous duties set out in 37 U.S.C. §301(a), 

including toxic fuels and propellants and chemical munitions exposure duties, and not 

just flight duty. Thus, for any month in which a member of a reserve force is involved 

both in active duty and inactive-duty training for which he is entitled to hazardous duty 

incentive pay under 37 U.S.C. §301, the total amount of hazardous duty incentive pay the 

member may receive is based on his combined entitlement for both active duty and 

inactive-duty training. 

 

Until 2003, the conditions of entitlement to toxic fuels and propellants and 

chemical munitions exposure pays, for both active duty and reserve personnel, were set 

out in Section 109(g) of Executive Order 11157, as amended, and in various 

supplementary regulations adopted by the service Secretaries pursuant to Section 113 of 

Executive Order 11157. Executive Order 13294, issued March 28, 2003, revoked 

Executive Order 11157. Executive Order 13294 placed responsibility for carrying out the 

authority delegated to the President by 37 U.S.C. §301(a), relevant to flight deck duty pay 

and other incentive pays, with the Secretaries of Commerce, Defense, Health and Human 

Services, and Homeland Security, as those entitlements affect military personnel under 

the respective jurisdictions of those departments. To the extent reserve forces personnel 

 

34House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

416
can claim entitlement to such pays, the language of the current executive order is 

applicable to them as well. 

Current rate of pay: The current rate of pay for duties involving exposure to 

toxic fuels and propellants and chemical munitions is $150 per month for both officers 

and enlisted personnel. 

Cost: For the cost of compensation for exposure to toxic fuels and propellants and 

chemical munitions from 1982 to 2004, see Table II-16 of Military Compensation 

Statistics Tables, volume II of this edition. 

417
Chapter II.D.3.a. 

 Submarine Duty Incentive Pay 

Legislative Authority: 37 U.S.C. §301c. 

Purpose: To provide an additional pay to increase the Navy's ability to attract and 

retain volunteers for submarine duty, and to compensate for the more than normally 

dangerous character of such duty. 

Background: Extra pay of $5 a month for submarine service was authorized for 

enlisted members by an Executive Order of January 1, 1901, soon after the 

commissioning of the first submarine in October 1900. Executive Order No. 366-B of 

November 8, 1905, provided that, in addition to the $5 a month, enlisted personnel who 

were "qualified for submarine torpedo boat work" were entitled to $1 for each day they 

submerged in a submarine, not to exceed an additional $15 in any one month. 

A 1971 special study of the historical development of submersible duty pay 

commissioned by the Department of Defense concluded that the $5 monthly component 

of such pay was awarded to enable enlisted personnel "to purchase new dungarees to 

replace those ruined by battery acid."1

 Though the uncommon wear and tear on clothing 

inherent in submarine duty may well have inspired the pay, its announced purpose was to 

compensate for the arduous and hazardous nature of submarine duty. As the Comptroller 

of the Treasury put it, "[T]he $5 was provided on account of the hazardous character of 

service on board this type of vessel and the $1 per day was to be given for experience and 

skill as well as on account of hazardous service."2

 A Navy representative voiced a similar 

rationale for the pay in testifying on a bill to raise the rates of submersible duty pay: 

Every man on the submarine gets $5 a month extra now--every man; and 

in addition, those who are qualified get a dollar a day per dive, not to exceed $15 

per month.... 

 

1 Report of the 1971 Quadrennial Review of Military Compensation, p. I.1, December 1971. 

2 19 Comp. Dec. (Treasury) 468 (1913). 

418
Now, that provides for the risk of all hands that go down with submarines, 

and in addition, pays an extra compensation to the qualified men who do the work 

in diving.3

Congress first took cognizance of the desirability of offering a special payment 

for submarine duty in the Act of June 10, 1922 (Joint Service Pay Readjustment Act of 

1922), ch. 212 [Public Law 235, 67th Congress], §21, 42 Stat. 625, 633 (1922), by 

providing that "nothing in this Act shall operate to change in any way existing laws, or 

regulations ... governing ... extra pay to enlisted men ... engaged in ... service on 

submarines." The Act of April 9, 1928, ch. 327 [Public Law 244, 70th Congress], 45 Stat. 

412 (1928), authorized submarine duty pay of 25 percent of base and longevity pay for 

officers and not less than $5 nor more than $30 a month for enlisted personnel. The $5 

floor was adopted to ensure that all enlisted submariners would be compensated, at least 

to some extent, for the hazards of their duty, regardless of their special qualifications. The 

Act of August 4, 1942, ch. 546 [Public Law 697, 77th Congress], 56 Stat. 736 (1942), set 

submarine duty pay at 50 percent of base and longevity pay for both officers and enlisted 

personnel.4

 This latter act brought the rate of pay for submarine duty up to that for flight 

duty, thereby reflecting Congress's view that the hazards of submarine duty and flying 

duty were equivalent. 

In 1948, at the request of the Secretary of Defense, the Advisory Commission on 

Service Pay, sometimes referred to as the Hook Commission, undertook the first 

comprehensive study of the military pay system since 1908. In reviewing military pay 

generally, and submarine duty pay in particular, the Hook Commission concluded that, 

although special pays such as submarine duty pay were designed in part to compensate 

for arduous and hazardous duties, their main purpose should be to fill a supply-demand 

 

3 Hearing of February 2, 1927, on the Bill (H.R. 14251) “To Provide for Enlisted Men of the United States 

Navy Assigned to Duty on Submarine Vessels of the Navy printed in Hearings before the House Naval 

Affairs Committee on Sundry Legislation Affecting the Naval Establishment,” 1926-1927, p. 688, 69th

Congress, 2d Session (1927) (testimony of Rear Admiral Edward H. Campbell, USN, Judge Advocate 

General of the Navy). 

4 For base and longevity pay rates by pay grade in 1942, see Basic Pay Schedule set out above in this 

volume. 

419
function--to induce personnel to enter upon and remain in hazardous military 

occupations. The commission's rationale was expressed in these terms: 

Close examination of the nature of hazardous duty and the expressed or 

implied reasons for accepting risks indicated that the incentive to engage and 

remain in hazardous occupations provided a more realistic and practical basis for 

determining the rates of special pay than the theory of recompense for shorter 

career expectancy. The recompense or replacement concept, although promoted 

for many years as the sole argument for hazard pay, was found wanting for 

several reasons.5

] 

The Hook Commission's rationale for higher submarine duty pay rates for officers 

than for enlisted personnel, which was subsequently reflected in the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802, 809-

810 (1949), was that: 

A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all times the 

compensation for the primary responsibility will be considerably greater than that 

for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more 

highly trained personnel. 

(3) Officers are usually given greater special responsibilities, aside from normal 

administrative control, than enlisted personnel on hazardous assignments.6

Under the Hook Commission recommendations, submarine duty pay was paired 

with crew member flight pay, and the rates for these two pays ranged from $30 monthly 

for pay grade E-1, through $75 for pay grade E-7, and $100 for pay grade O-1, up to 

 

5

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948. 

6

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

420
$210 for pay grade O-6.7

 With respect to the special treatment accorded flight and 

submarine duty pays as compared with other types of incentive pay, the Commission 

noted: 

A separate scale was developed for flying and submarine duty, 

compensable today at 50 percent of pay. Because of the demonstrated greater 

actual or potential danger and the supreme importance of these services, the 

inducement must be greater. The Commission's proposals maintain approximately 

the same dollar differential for these duties as now exists except in the general 

officer ranks. This differential, plus the proposed basic compensation, should be 

adequate to attract and keep men in these pursuits at the grade and age at which, 

in the Commission's opinion, based on present practice, they are most effective.8

Congress adopted the major portion9

 of the Hook Commission's reasoning and 

recommendations concerning submarine duty incentive pay in the Career Compensation 

Act of 1949, ch. 681, id., referred to above, and it is this Act that is the effective source of 

existing submarine duty pay authority.10 The Career Compensation Act provisions 

concerning submarine duty pay were, however, amended by the Career Incentive Act of 

1955, ch. 20 [Public Law 20, 84th Congress], §2(5), 69 Stat. 18, 20-21 (1955), through the 

introduction of longevity step increments into the incentive pay structure.11 In addition, 

 

7

The Hook Commission recommended that officers in pay grades O-7 and O-8 receive $100 per month on 

account of submarine duty. “Career Compensation for the Uniformed Forces, a Report and 

Recommendation for the Secretary of Defense by the Advisory Commission on Service Pay,” p. 27, Table 

XI, December 1948. 

8

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 26, December 1948. 

9 The rates of pay differed to some extent from those recommended by the Hook Commission. Compare, 

e.g., Section 204(b) of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§204(b), 63 Stat. 802, 810 (1949), with Table XI of the Hook Commission's Report, “Career Compensation 

for the Uniformed Services, a Report and Recommendation for the Secretary of Defense by the Advisory 

Commission on Service Pay,” p. 27, December 1948. 

10 After enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§204(b), 63 Stat. 802, 810 (1949), the hazardous duty incentive pay provisions thereof, including 

submarine duty pay, were in the main classified to 37 U.S.C. §235. See 37 U.S.C. §235(a)(1) and (b) 

(1952). Later, when Title 37 of the United States Code was enacted into positive law by the Act of 

September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the hazardous duty pay provisions, including 

the submarine duty pay provisions here in issue, were codified at 37 U.S.C. §301. 

11Hazardous duty incentive pay rates for submarine duty were the same as hazardous duty incentive pay 

rates for the precursor of today's crew-member flight duty under both the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §204(b), 63 Stat. 802, 809-810 (1949), and the Career 

421
the Career Incentive Act of 1955, ch. 20, id., increased the rates of pay for submarine 

duty along with those for other "hazardous" duties.During the hearings on the 1955 

legislation, defense witnesses again emphasized the incentive-based purpose of the pay: 

 So long as these [flying and submarine] services must be staffed by 

volunteers the incentives offered must be enough to attract and retain the numbers 

required to maintain peak performance capabilities.12

My comments concerning personnel losses have been confined to flying 

personnel; however, in the Navy, the submarine service, too, has experienced 

considerable difficulty in recruiting and retaining qualified personnel.... 

Resignations among submarine officers are five times as high as they were in 

1948 and applications for this type of duty have sharply decreased.13

The submarine duty pay rates established in 1955 ranged from a low of $50 a 

month for members in pay grades E-1 or E-2 with less than two years of service to a high 

of $245 for members in pay grades O-5 or O-6 with over 18 years of service. Under the 

submarine duty pay system in effect until January 1, 1981, a member required by 

competent orders to perform submarine duty was entitled to submarine duty pay starting 

on (1) the date he reported for duty aboard an active submarine or one under construction, 

or (2) the date he reported to the crew or off-ship augment crew of a two-crew submarine, 

or (3) the convening date of a class of submarine instruction for personnel qualified in 

submarines (Navy ships carrying the designation SS). Entitlement stopped on the day 

after detachment, or the last day of instruction, as the case may be. In addition, a 

command staff member whose duties required service on a submarine during underway 

operations was entitled to monthly submarine duty pay for meeting minimum underway 

performance requirements of 48 hours a month. 

 Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(5), 69 Stat. 18, 20-21 (1955). The rates of 

pay under the Career Compensation Act of 1949 and the Career Incentive Act of 1955 are set out above in 

this volume. 

12 Career Incentive Act of 1955: Hearings on H.R. 2607 before Subcommittee No. 2 of the House Armed 

Services Committee, 84th Congress, 1st Session 478 (1955) (testimony of Asst. Sec. Carter Burgess, 

Department of Defense). 

13Career Incentive Act of 1955: Hearings on H.R. 2607 before Subcommittee No. 2 of the House Armed 

Services Committee, 84th Congress, 1st Session 520 (1955) (testimony of General Morris F. Lee, USAF). 

422
In 1980, Congress, through the Military Pay and Allowances Benefits Act of 

1980, Public Law 96-579, §3(d), 94 Stat. 3359, 3360-3364 (1980), as technically 

amended by the Department of Defense Supplemental Authorization Act, 1981, Public 

Law 97-39, §701, 95 Stat. 939, 942 (1981), changed the entire basis for the payment of 

special compensation for submarine duty. In simplest terms, the Military Pay and 

Allowances Benefits Act of 1980, Public Law 96-579, id., replaced the preexisting 

submarine duty pay provisions found in 37 U.S.C. §301 with a new submarine career 

incentive pay structure patterned after aviation career incentive pay, thus maintaining the 

parallel treatment established in the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], 63 Stat. 802 (1949). Under the new system, set out at 37 U.S.C. 

§301c, submarine duty incentive pay may be paid continuously to members who hold a 

submarine duty designator, or are in training leading to such designation, and who remain 

in submarine service on a career basis.14 That is, so long as a member continues to 

qualify, as explained more fully below, that member is entitled to submarine duty 

incentive pay even when not assigned to, or performing, operational submarine duty. In 

addition, personnel who do not have submarine designators, such as supply, medical, and 

intelligence personnel, are entitled to submarine duty incentive pay during periods they 

are required to perform "frequent and regular operational submarine duty." As set out in 

the statute, entitlement to continuous submarine duty incentive pay--for personnel with 

career designation--turns on meeting certain standards concerning performance of 

"operational submarine duty," not on actual performance of such duty within any 

particular time period. 

The standards governing entitlement to continuous submarine duty incentive pay 

are similar to the operational flying time standards, or "gates," used for determining 

 

14 Emphasizing the "career" aspect of the new submarine duty incentive pay program, specific provisions 

were incorporated into 37 U.S.C. § 301c prohibiting payment of submarine duty incentive pay to officers 

who fail of selection for assignment as executive officers or commanding officers of submarines, or who 

decline such service, as well as to enlisted members assigned to shore duty who do not have sufficient time 

remaining under existing enlistments to be reassigned to a normal tour of submarine sea duty. See e.g., 37 

U.S.C. § 301c(c)(1) and (2). Cf. Senate Report No. 96-1051 (Committee on Armed Services), p. 4, 

accompanying H.R. 7626, 96th Congress, 2d Session (1980). 

423
entitlement to aviation career incentive pay. The general rule for entitlement to 

continuous monthly submarine duty incentive pay is that a member must perform 

qualifying "operational submarine duty," as defined under 37 U.S.C. §301c(a)(5)(A), for 

at least six of the first 12, and at least 10 of the first 18, years of "submarine service," as 

defined at 37 U.S.C. §301c(a)(5)(B), if the member to receive such pay through 26 years 

of creditable service. On the other hand, if a member performs at least eight but less than 

10 years of qualifying service during his first 18 years of submarine service, the member 

is nevertheless entitled to continuous monthly submarine duty incentive pay through 22 

years of service.15 If a member fails to meet such standards, his entitlement to continuous 

submarine duty incentive pay ceases upon completion of 12 or 18 years of service, as 

applicable, although he is still entitled to operational submarine duty incentive pay--even 

though not on a "continuous", i.e., independent of assignment, basis--whenever he 

actually performs "operational submarine duty" within the meaning of 37 U.S.C. § 

301c(a)(5)(A). 

In explanation of this change to the submarine duty pay system, the Senate 

Committee on Armed Services noted: 

The committee amendment recommends approval of the new submarine 

duty pay rates proposed by the Administration and that the submarine duty pay 

for officers be converted to an incentive pay, similar to flight pay. A submarine 

officer will be continuously eligible for the incentive pay, provided specified 

amounts of operational submarine duty are accumulated. As long as he meets 

those operational requirements on a regular and frequent basis, he will receive the 

submarine duty incentive pay, even when assigned to shore duty. 

 The Administration's proposal did not recommend converting enlisted 

submarine pay into continuous incentive-type pay. However, the committee 

recommends that enlisted submariners receive submarine pay on the same basis as 

officers--that is, as an incentive pay--which the enlisted member will receive 

whether or not he is assigned to the submarine, as long as he meets specific 

operational requirements on a frequent and regular basis. 

 

15 A qualifying officer with prior enlisted service is entitled to such pay for a full 22 or 26 years of officer 

service, as applicable. That is, if a qualifying officer has prior enlisted service, that service may be 

discounted in determining how long the officer may continue to receive operational submarine duty 

incentive pay. See 37 U.S.C. §301c(a)(3) and (4), as amended by the Uniformed Services Pay Act of 1981, 

Public Law 97-60, §114, 95 Stat. 989, 995 (1981). 

424
 Under current law, officers and enlisted members who serve on 

submarines and meet specific operational requirements are paid a monthly special 

pay. The Committee recommendation continues this special pay and increases the 

rates of pay. In addition, members who hold a submarine duty designator and who 

are in and remain in the submarine service on a career basis will be paid 

continuous monthly submarine duty incentive pay for the regular and frequent 

performance of operational submarine duty required by orders. Officers who fail 

selection for assignment as a submarine executive officer or commanding officer 

or who decline to serve in either such billet and enlisted members who do not 

have sufficient obligated service to be reassigned to submarine sea duty are not 

eligible for continuous submarine duty incentive pay.16

The rates of submarine duty incentive pay under the Military Pay and Allowances 

Benefits Act of 1980, Public Law 96-579, id., were as follows: 

 

 COMMISSIONED OFFICERS 

Pay Grade Years of Service Computed Under Section 205 of Title 37, 

 United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

O-10 $265 $265 $265 $265 $265 $265 $265 

O-9 265 265 265 265 265 265 265 

O-8 265 265 265 265 265 265 265 

O-7 265 265 265 265 265 265 265 

O-6 440 440 440 440 440 440 440 

O-5 440 440 440 440 440 440 440 

O-4 270 270 270 300 440 440 440 

O-3 265 265 265 290 440 440 440 

O-2 175 175 175 175 175 175 265 

O-1 130 130 130 130 130 130 265 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 O-10 $265 $265 $265 $265 $265 $265 $265 

 O-9 265 265 265 265 265 265 265 

 O-8 265 265 265 265 265 265 265 

 O-7 265 265 400 395 395 305 265 

 

16 Senate Report No. 96-1051 (Committee on Armed Services), p. 4, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

425
 O-6 440 440 440 395 395 305 265 

 O-5 440 440 440 395 395 350 265 

 O-4 440 440 440 395 395 350 265 

 O-3 440 440 440 395 395 350 265 

 O-2 265 265 265 265 265 265 265 

 O-1 265 265 265 265 265 265 265 

 

 WARRANT OFFICERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 W-4 $175 $230 $230 $230 $265 $265 $265 

 W-3 175 230 230 230 265 265 265 

 W-2 175 230 230 230 265 265 265 

 W-1 175 230 230 230 265 265 265 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 W-4 $265 $265 $265 $265 $265 $265 $265 

 W-3 265 265 265 265 265 265 265 

 W-2 265 265 265 265 265 265 265 

 W-1 265 265 265 265 265 265 265 

 

 ENLISTED MEMBERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 E-9 $165 $165 $165 $200 $220 $230 $235 

 E-8 165 165 165 185 200 220 230 

 E-7 165 165 165 185 190 195 205 

 E-6 115 125 130 160 170 180 190 

 E-5 105 115 115 130 140 145 145 

 E-4 60 70 75 125 130 130 130 

 E-3 60 65 70 70 105 65 65 

 E-2 55 65 65 65 65 65 65 

 E-1 55 55 55 55 55 55 55 

426
Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 E-9 $245 $255 $265 $265 $265 $265 $265 

 E-8 235 245 245 255 255 255 255 

 E-7 220 230 230 230 230 230 230 

 E-6 195 195 195 195 195 195 195 

 E-5 145 145 145 145 145 145 145 

 E-4 130 130 130 130 130 130 130 

 E-3 65 65 65 65 65 65 65 

 E-2 65 65 65 65 65 65 65 

 E-1 55 55 55 55 55 55 55 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §633, 

99 Stat. 583, 646 (1985), modified the submarine duty incentive pay structure for officers 

in pay grades O-3 through O-6 with more than 18 years of service. Under the Military 

Pay and Allowances Benefits Act of 1980, Public Law 96-579, id., submarine duty 

incentive pay entitlements for officers in pay grades O-3 through O-6 began to decrease 

for officers with more than 18 years of service.17 These decreases effectively followed the 

decreases programmed into the aviation career incentive pay structure, upon which the 

submarine duty incentive pay program had initially been patterned.18 Under the 

amendment to the submarine duty incentive pay structure effected by the Department of 

Defense Authorization Act, 1986, Public Law 99-145, id., the programmed decreases in 

entitlements for officers in pay grades O-3 through O-6 with more than 18 years of 

service were eliminated, and the entitlement levels applicable to officers in the affected 

pay grades with more than 16 years, but less than 18 years, of qualifying service were 

continued for all further years-of-service categories--that is, for the over-18-years-ofservice category, for the over-20 category, for the over-22 category, and, finally, for the 

over-26 category. Thus, under the amendment to the submarine duty incentive pay 

program made by the Department of Defense Authorization Act, 1986, Public Law 99-

145, id., the rates of pay for commissioned officers were as follows: 

 

17See rates of submarine duty incentive pay for officers in pay grades O-3 through O-6 as set out in the 

table on the preceding page. 

18 See discussion of the aviation career incentive pay program and the structure of that pay for so-called 

Phase II officers in Chapter II.D.1.b.(3), "Aviation Career Incentive Pay (ACIP) and Aviation Career 

Continuation Pay (AOCP)," above. 

427
 COMMISSIONED OFFICERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 O-10 $265 $265 $265 $265 $265 $265 $265 

 O-9 265 265 265 265 265 265 265 

 O-8 265 265 265 265 265 265 265 

 O-7 265 265 265 265 265 265 265 

 O-6 440 440 440 440 440 440 440 

 O-5 440 440 440 440 440 440 440 

 O-4 270 270 270 300 440 440 440 

 O-3 265 265 265 290 440 440 440 

 O-2 175 175 175 175 175 175 265 

 O-1 130 130 130 130 130 130 265 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

O-10 $265 $265 $265 $265 $265 $265 $265 

O-9 265 265 265 265 265 265 265 

O-8 265 265 265 265 265 265 265 

O-7 265 265 400 395 395 305 265 

O-6 440 440 440 440 440 440 440 

O-5 440 440 440 440 440 440 440 

O-4 440 440 440 440 440 440 440 

O-3 440 440 440 440 440 440 440 

O-2 265 265 265 265 265 265 265 

O-1 265 265 265 265 265 265 265 

 

The rates of submarine duty incentive pay for enlisted members, warrant officers, 

and officers in pay grades other than O-3 through O-6 were not affected by the 

Department of Defense Authorization Act, 1986, Public Law 99-145, id. The new rates of 

pay for officers in pay grades O-3 through O-6 became effective October 1, 1985.19

 

19 See Department of Defense Authorization Act, 1986, Public Law 99-145, §633(b), 99 Stat. 583, 646 

(1985). Also see 37 U.S.C. §301c note. 

428
As explained in the Report of the House Committee on Armed Services, the 

structure of the submarine duty incentive pay program was modified for officers in the 

affected pay grades for the following reasons: 

The shortage of experienced submarine officers in pay grades O-4 through 

O-6 is becoming critical.... Requiring back-to-back sea tours with the 

abandonment of more traditional career pattern opportunities only exacerbates 

the situation. 

 Under the current structure, submarine career incentive pay is reduced 

when an officer completes 18 years of service and is again reduced when he is 

promoted to captain [Navy pay grade O-6]. These reductions usually occur during 

an officer's command tour and again during his post command tour. Thus, 

submarine pay for the commanding officer of a submarine is reduced during his 

command tour to levels below that received by his executive officer and 

department heads. Additionally, post command tours are required because a 

number of billets can only be filled by officers with nuclear submarine command 

experience. 

 The committee, therefore, recommends a change in the current 

structure of nuclear submarine incentive pay to eliminate the reduction in the level 

of this incentive pay upon completion of 18 years of service and upon 

promotion to captain. This revision will more effectively target the severe 

shortage of submarine officers in pay grades O-4 to O-6.20

As ultimately enacted by Congress, the Department of Defense Authorization Act, 

1986, Public Law 99-145, id., also eliminated the reduction in submarine duty incentive 

pay for officers in pay grade O-3 that was implicit in the structure of the program 

deriving from the Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, 

id.

21 Thus, under the 1986 restructuring of submarine duty incentive pay, the only 

commissioned officers subject to a reduction in the level of submarine pay with 

increasing years of service were officers in pay grade O-7, i.e., rear admirals of the lower 

 

20 House Report No. 99-81 (Committee on Armed Services), pp. 231-232, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

21Although the House Report did not specifically deal with officers in pay grade O-3, the bill, H.R. 1872, 

99th Congress, 1st Session (1985), that was accompanied by the report did in fact eliminate the reduction in 

submarine duty incentive pay for officers in pay grade O-3. See House Report No. 99-81 (Committee on 

Armed Services), p. 404, accompanying H.R. 1872, 99th Congress, 1st Session (1985). 

429
half. In addition, an officer in pay grade O-6 who was promoted to pay grade O-7 was 

subject to a reduction in submarine duty incentive pay.22

The rates of submarine duty incentive pay were again increased by the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, 

§623(b), 101 Stat. 1019, 1101-1103 (1987). The rates of submarine duty incentive pay 

that became effective January 1, 1988 were as follows:23

 COMMISSIONED OFFICERS 

 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 O-10 $355 $355 $355 $355 $355 $355 $355 

 O-9 335 335 335 335 335 335 335 

 O-8 335 335 335 335 335 335 335 

 O-7 335 335 335 335 335 335 335 

 O-6 595 595 595 595 595 595 595 

 O-5 595 595 595 595 595 595 595 

 O-4 365 365 365 405 595 595 595 

 O-3 355 355 355 390 595 595 595 

 O-2 235 235 235 235 235 235 355 

 O-1 175 175 175 175 175 175 355 

 

22 These reductions still obtain under the current rates of submarine duty incentive pay adopted in the 

National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §623(b), 101 

Stat. 1019, 1101-1103 (1987). See current rates of submarine duty incentive pay, set out in this chapter, 

below. 

23 The Warrant Officer Management Act, enacted as Title XI of the National Defense Authorization Act for 

Fiscal Years 1992 and 1993, Public Law 102-190, 105 Stat. 1290, 1491-1506 (1991), established the new 

warrant officer pay grade, W-5, National Defense Authorization Act for Fiscal Years 1992 and 1993, id., 

§1111(a), 105 Stat. at 1491, and authorized members serving in that pay grade to receive submarine duty 

incentive pay at the monthly rates set out on the lines relating to that pay grade in the table below, National 

Defense Authorization Act for Fiscal Years 1992 and 1993, id., §1111(d)(2), 105 Stat. at 1492. For the 

reasons underlying the establishment of the new pay grade, see footnote 13 to Chapter II.B.1 hereof, above, 

"Basic Pay.” 

430
Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 O-10 $335 $335 $335 $335 $335 $335 $335 

 O-9 335 335 335 335 335 335 335 

 O-8 335 335 335 335 335 335 335 

 O-7 335 335 540 535 535 410 335 

 O-6 595 595 595 595 595 595 595 

 O-5 595 595 595 595 595 595 595 

 O-4 595 595 595 595 595 595 595 

 O-3 595 595 595 595 595 595 595 

 O-2 355 355 355 355 355 355 355 

 O-1 355 355 355 355 355 355 355 

 

 WARRANT OFFICERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10

 W-5 $235 $310 $310 $355 $355 $355 $355 

 W-4 235 310 310 355 355 355 355 

 W-3 235 310 310 355 355 355 355 

 W-2 235 310 310 355 355 355 355 

 W-1 235 310 310 355 355 355 355 

Pay Grade OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26

 W-5 $355 $355 $355 $355 $355 $355 $355 

 W-4 355 355 355 355 355 355 355 

 W-3 355 355 355 355 355 355 355 

 W-2 355 355 355 355 355 355 355 

 W-1 355 355 355 355 355 355 355 

 

 ENLISTED MEMBERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10

 E-9 $225 $225 $225 $270 $295 $310 $315 

 E-8 225 225 225 250 270 295 310 

 E-7 225 225 225 250 255 265 275 

 E-6 155 170 175 215 230 245 255 

 E-5 140 155 155 175 190 195 195 

431
 E-4 80 95 100 170 175 175 175 

 E-3 80 90 100 170 175 175 90 

 E-2 75 90 90 90 90 90 90 

 E-1 75 75 75 75 75 75 75 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 E-9 $330 $345 $355 $355 $355 $355 $355 

 E-8 315 330 330 345 345 345 345 

 E-7 295 310 310 310 310 310 310 

 E-6 265 265 265 265 265 265 265 

 E-5 195 195 195 195 195 195 195 

 E-4 175 175 175 175 175 175 175 

 E-3 90 90 90 90 90 90 90 

 E-2 $90 90 90 90 90 90 90 

 E-1 75 75 75 75 75 75 75 

The restructuring of submarine duty incentive pay rates effected by the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, id., 

came about as a result of recommendations made to Congress by the Department of 

Defense. As indicated by the Senate Armed Services Committee: 

The Department of Defense requested that submarine duty pay be 

increased in value by 35 percent to restore its retention incentive. Currently, 

submariners spend on the average of 15 to 16 years of their first 20 year [sic] of 

service at sea. Submarine duty pay recognizes this and serves to provide a 

monetary incentive to offset to some extent the career disincentive of unusually 

arduous duty and prolonged family separation. The committee recommends a 

provision ... restoring this incentive to approximately the same level it held for 

members when it was first authorized in 1980.24

As was the case when Congress adopted aviation career incentive pay in the 

Aviation Career Incentive Act of 1974, Public Law 93-294, 88 Stat. 177 (1974), and as 

made clear in the relevant congressional report in the present case, submarine duty 

incentive pay was adopted to deal with what Congress thought to be real and significant 

retention problems in the submarine service.25 In the perception of the Senate Armed 

 

24 Senate Report No. 100-57 (Committee on Armed Services), p. 146, accompanying S. 1174, 100th

Congress, 1st Session (1987). cf. House Report No. 100-446 (Committee of Conference), p. 644, 100th

Congress, 1st Session (1987). 

25 Senate Report No. 96-1051 (Committee on Armed Services), pp. 3-4, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

432
Services Committee, there was a "critical shortage" of career personnel in the submarine 

service--officer as well as enlisted--and 

[T]he extension of submarine duty pay to a continuous incentive pay to 

include those years spent on shore duty will increase the attractiveness of the 

submarine career path, which will continue to remain dominated by sea duty, and 

should increase retention.26

 This language made the incentive-based nature of submarine duty incentive pay 

for members of the career submarine service clear beyond doubt. 

The National Defense Authorization Act for Fiscal Year 2002, Public Law 107-

107, 115 Stat. 1137, changed the authority for setting rates for submarine duty incentive 

pay set out in 37 U.S.C. 301c(b). Whereas before this change Congress had established 

pay rates for each level of service and pay grade, beginning January 1, 2002 the Secretary 

of the Navy had the authority to prescribe these rates, which could not exceed $1,000 per 

month. Thus the table of rates given in 37 U.S.C. 301c(b) was abolished in favor of a 

table issued by the Department of the Navy, whose authority in this matter was 

prescribed in a revision of that subsection of U.S.C. 37. The pay tables below are those 

issued by the Department of the Navy in January 2003 in response to this revision. 

 COMMISSIONED OFFICERS

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10

 O-10 $355 $355 $355 $355 $355 $355 $355 

 O-9 355 355 355 355 355 355 355 

 O-8 355 355 355 355 355 355 355 

 O-7 355 355 355 355 355 355 355 

 O-6 595 595 595 595 595 595 595 

 O-5 595 595 595 595 595 595 595 

 

26 Senate Report No. 96-1051 (Committee on Armed Services), p. 4, accompanying H.R. 7626, 96th 

Congress, 2d Session (1980). cf. text accompanying footnote 16, above, quoted from Senate Report No. 96-

1051 (Committee on Armed Services), p. 4, accompanying H.R. 7626, 96th Congress, 2d Session (1980). 

433
 O-4 365 365 365 525 595 595 595 

 O-3 355 355 355 510 595 595 595 

 O-2 305 305 305 305 305 305 425 

 O-1 230 230 230 230 230 230 425 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 O-10 $355 $355 $355 $355 $355 $355 $355 

 O-9 355 355 355 355 355 355 355 

 O-8 355 355 355 355 355 355 355 

 O-7 355 355 540 535 535 410 355 

 O-6 595 595 595 595 595 595 595 

 O-5 595 595 595 595 595 595 595 

 O-4 595 595 595 595 595 595 595 

 O-3 595 425 425 425 425 425 425 

 O-2 425 595 595 595 595 595 595 

 O-1 425 595 595 595 595 595 595 

 WARRANT OFFICERS 

 Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10

 W-5 $285 $375 $375 $425 $425 $425 $425 

 W-4 285 375 375 425 425 425 425 

 W-3 285 375 375 425 425 425 425 

 W-2 285 375 375 425 425 425 425 

 W-1 285 375 375 425 425 425 425 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26

 W-5 $425 $425 $425 $425 $425 $425 $425 

 W-4 425 425 425 425 425 425 425 

 W-3 425 425 425 425 425 425 425 

 W-2 425 425 425 425 425 425 425 

 W-1 425 425 425 425 425 425 425 

434
 ENLISTED MEMBERS 

 Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 E-9 $425 $425 $425 $425 $425 $425 $425 

 E-8 415 415 415 415 415 415 415 

 E-7 405 405 405 405 405 405 405 

 E-6 155 170 175 300 325 375 375 

 E-5 140 155 155 250 275 275 275 

 E-4 80 95 100 245 245 245 245 

 E-3 80 90 95 95 90 90 90 

 E-2 75 90 90 90 90 90 90 

 E-1 75 75 75 75 75 75 75 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 E-9 $425 $425 $425 $425 $425 $425 $425 

 E-8 415 415 415 415 415 415 415 

 E-7 405 405 405 405 405 405 405 

 E-6 375 375 375 375 375 375 375 

 E-5 275 275 275 275 275 275 275 

 E-4 245 245 245 245 245 245 245 

 E-3 90 90 90 90 90 90 90 

 E-2 90 90 90 90 90 90 90 

 E-1 75 75 75 75 75 75 75 

 

Reserve forces personnel27 entitled to compensation for inactive-duty training are 

entitled to submarine duty incentive pay when they perform qualifying duties under 

competent orders. Under 37 U.S.C. §301c(d), members of the reserve forces who 

perform, under competent orders, "duty on a submarine during underway operations" 

while entitled to compensation under 37 U.S.C. §206 are also entitled, subject to such 

 

27 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively 

435
regulations as may be prescribed by the President, to "an increase in ...compensation 

equal to one-thirtieth of the monthly incentive pay" payable to active duty personnel 

performing qualifying duties.28 That is, for every "period of instruction ... or ... 

appropriate duty" for which a member of the reserve forces is entitled to compensation 

under 37 U.S.C. §206, the member is, if performing qualifying submarine duty under 37 

U.S.C. §301c(d), also entitled to 1/30th of the monthly submarine duty incentive pay that 

would be payable to a member of the active duty force who was performing such duties. 

Under regulations prescribed by the President, a member of a reserve force who performs 

qualifying submarine duties while engaged in inactive-duty training is entitled to 

submarine duty incentive pay under 37 U.S.C. §301c(d).29

Submarine duty incentive pay for reserve forces personnel can, in one sense, be 

traced to the Act of July 2, 1926 (Army Air Corps Act), ch. 721 [Public Law 446, 69th

Congress], §6, 44 Stat. 780, 782-783 (1926), which was the first legislative enactment 

that provided special compensation for inactive-duty reserve forces personnel engaged in 

hazardous duties of one kind or another. In fact, however, incentive pay for submarine 

duty was not covered by the Army Air Corps Act. Rather, that act merely gave "officers, 

warrant officers, and enlisted men of the National Guard" who were, by competent 

orders, required to "participate regularly and frequently in aerial flights" a 50 percent 

increase in the "armory drill pay" to which they would otherwise have been entitled.30

 

28 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training," 

which is defined for purposes of Title 37, United States Code, at 37 U.S.C. §101(22), is commonly used to 

refer to the "period of instruction ... or ... appropriate duty" for which Section 206 "compensation" is 

authorized. 

29 See Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, Paragraph 80314; cf. id., Paragraph 80311. 

30 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1), "Flight Pay (Crew 

Member)," above. 

436
Reserve forces personnel of the Navy were first authorized hazardous duty 

incentive pay while engaged in inactive-duty training by the Naval Reserve Act of 1938, 

ch. 690 [Public Law 732, 75th Congress], §313, 52 Stat. 1175, 1184 (1938). This act 

extended flight pay for inactive-duty training to "[o]fficers and enlisted men of the Naval 

Reserve ... performing aerial flights in the capacity of pilots ... as a part of their training." 

Members of the Marine Corps Reserve were covered by a separate provision that gave 

such members the same benefits as conferred on members of the Naval Reserve.31

The Act of March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 

(1948), substantially reorganized the provisions of preceding law relating to inactive-duty 

training pay for reserve forces personnel. Section 3 of the Act of March 25, 1948, ch. 

157, id., §3(c), 62 Stat. at 88-89, amended Section 14 of the Pay Readjustment Act of 

1942, ch. 413 [Public Law 607, 77th Congress], §14, 56 Stat. 359, 367 (1942), to give 

"officers, warrant officers, and enlisted personnel" of all the reserve forces entitlement to 

special pay for "perform[ing] ... submarine duty," among other things. As stated in the 

House Report: 

The purpose of the bill is to standardize inactive training pay for all 

Reserve components of the various services and also to grant such inactive duty 

training pay to Army Reservists. 

 . . . 

The committee considers the need for this pay to be apparent, even though 

it is unfortunate that the country must resort to it. The Army and Navy must 

maintain active Reserve components, or else, in time of war emergency, the 

Nation will have to depend exclusively upon the Regular services for its defense. 

They are patently incapable of doing such a job alone. So, in order to vitalize the 

National Guard and Reserve components, to get more people to participate so that 

they will fit promptly and effectively into the mobilization-day plans of the 

Armed Forces, inactive duty pay is to be given each participant at the rate of onethirtieth of 1 month's base and longevity pay for each training period.... Such 

specialists as pilots, radar technicians, medical people, and so forth, will also be 

 

31Naval Reserve Act of 1938, ch. 690 [Public Law 732, 75th Congress], §2, 52 Stat. 1175 (1938). 

437
able to earn inactive duty training pay when the standards specified by the 

Secretaries [of the various departments] are met.32 33

The Career Compensation Act of 1949, ch. 681 [Public 351, 81st Congress], 63 

Stat. 802 (1949), restated the provisions of the Pay Readjustment Act of 1942, ch. 413 

[Public Law 607, 77th Congress], 56 Stat. 359 (1942), as amended by the Act of March 

25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), insofar as the 

entitlement of reserve forces personnel to special pay for the performance of hazardous 

duties was concerned. Section 501 of the Career Compensation Act of 1949, ch. 681, id., 

§501, 63 Stat. at 825-827, dealt generally with the entitlement of reserve forces personnel 

to compensation for inactive-duty training. Subsection (d) of Section 501, 63 Stat. at 826, 

generalized the hazardous duty incentive pay entitlements of reserve forces personnel 

performing inactive-duty training by providing that hazardous duty incentive pay was 

available to such personnel whenever they were required by competent orders to perform 

any of the hazardous duties, set out at Section 204(a) of the Career Compensation Act of 

1949, ch. 681, id., §204(a), 63 Stat. at 810, for which active duty personnel were entitled 

to hazardous duty incentive pay. The duties set out in Section 204(a) as qualifying for 

such pay included crew member and non-crew member flight duties, submarine duties, 

glider duties, parachute jumping duties, leprosy duties, explosives demolition duties, duty 

at a submarine escape training tank, and duty with certain diving units. See Section 

204(a) of the Career Compensation Act of 1949, ch. 681, id., §204(a), 63 Stat. at 809-

810.34 No special reason was given for this reorganization of the provisions of prior law 

 

32 House Report No. 80-971 (Committee on Armed Services), pp. 1-2, accompanying H.R. 3227, 80th

Congress, 1st Session (1947). See Senate Report No. 80-625 (Committee on Armed Services), p. 1, 

accompanying S. 1174, 80th Congress, 1st Session (1947). 

33 Section 14(c) of the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §14(c), 56 

Stat. 359, 367 (1942), as amended by Section 3 of the Act of March 25, 1948, ch. 157 [Public Law 460, 

80th Congress], §3, 62 Stat 87, 88-89 (1948), extended special pay to "personnel required to perform aerial 

flights, parachute jumping, glider flights, or submarine duty" in connection with inactive-duty training. As 

stated in Senate Report No. 80-625 (Committee on Armed Services), p. 2, accompanying S. 1174, 80th

Congress, 1st Session (1947): Increases in pay authorized by law for flying, parachute jumping, submarine 

duty, etc., [for active duty personnel] will be paid [to reserve forces personnel participating in such duties 

while performing inactive duty training]. 

34 The inactive-duty training pay provisions contained in Section 501 of the Career Compensation Act of 

1949, ch. 681, id., 63 Stat. at 825-827, were classified to 37 U.S.C. §301, whereas the hazardous duty 

incentive pay provisions set out in Section 204 of the Career Compensation Act, ch. 681, id., 63 Stat. at 

809-810, were classified to 37 U.S.C. §235. Later, when Title 37 of the United States Code was enacted 

438
dealing with inactive-duty training pays, including inactive-duty training incentive pays 

for hazardous duties. The extension of incentive pay for hazardous duty to new classes of 

reserve forces personnel--e.g., to reserve forces personnel in an inactive-duty training 

status performing parachute duties, explosives demolition duties, submarine escape 

training tank duties, etc.--appears to have derived from the extension of such pays to 

active duty personnel, and not from any special concern about reserve forces personnel 

and whether they should be entitled to incentive pay for performance of various 

hazardous duties.35 36

As above indicated, the Military Pay and Allowances Benefits Act of 1980, Public 

Law 96-579, 94 Stat. 3359, 3360-3364 (1980), further reorganized the hazardous duty 

incentive pay provisions relating to submarine duties. While substantive changes to the 

submarine duty incentive pay program were made for active duty personnel, the 

submarine duty pay program for reserve forces personnel performing inactive-duty 

training remained unchanged. In effect, preexisting provisions of law respecting the 

entitlement of reserve forces personnel performing inactive-duty training were moved 

intact, without substantive change, from 37 U.S.C. §301(f) to 37 U.S.C. §301c(d). 

 into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the inactiveduty training pay provisions relating to hazardous duty incentive pay entitlements of reserve forces 

personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay provisions 

relating to active duty personnel. When submarine duty incentive pay was first authorized by the Military 

Pay and Allowances Benefits Act of 1980, Public Law 96-579, §3(d), 94 Stat. 3359, 3360-3364 (1980), 

reserve forces personnel performing inactive-duty training on submarines were covered under 37 U.S.C. 

§301c(d), in much the same fashion as they had been under the preceding submarine duty pay program. 

The current structure of hazardous duty incentive pay entitlements--including incentive pay for submarine 

duty--for reserve forces personnel performing inactive-duty training thus effectively derives from the 

organization imposed on Title 37 by the Act of September 7, 1962, Public Law 87-649, id. 

35 See, e.g., chapters of this book dealing with explosives demolition duty pay, parachute duty pay, etc. 

36 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), did not concern itself with reserve forces 

compensation in any way. See, e.g., "Terms of Reference," the charter given to the Hook Commission by 

the then Secretary of Defense, James Forrestal, in “Career Compensation for the Uniformed Forces, a 

Report and Recommendation for the Secretary of Defense by the Advisory Commission on Service Pay,” at 

pp. vii-viii, December 1948. 

439
Until 2003, the conditions of entitlement to submarine duty incentive pay for both 

active duty and reserve forces personnel were set out in Section 106 of Executive Order 

11157, as amended, and in various supplementary regulations adopted by the Secretary of 

the Navy pursuant to delegated authority under Section 113 of Executive Order 11157. 

Executive Order 13294, issued March 28, 2003, revoked Executive Order 11157. 

Executive Order 13294 placed responsibility for carrying out the authority delegated to 

the President by 37 U.S.C. §301(a), relevant to submarine duty pay and other incentive 

pays, with the Secretaries of Commerce, Defense, Health and Human Services, and 

Homeland Security, as those entitlements affect military personnel under the respective 

jurisdictions of those departments. 

Current rates of pay: The current rates of pay for submarine duty are as set out 

on the following pages: 

 COMMISSIONED OFFICERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 O-10 $355 $355 $355 $355 $355 $355 $355 

 O-9 355 355 355 355 355 355 355 

 O-8 355 355 355 355 355 355 355 

 O-7 355 355 355 355 355 355 355 

 O-6 595 595 595 595 595 595 595 

 O-5 595 595 595 595 595 595 595 

 O-4 365 365 365 525 595 705 705 

 O-3 355 355 355 510 595 705 705 

 O-2 305 305 305 305 305 305 425 

 O-1 230 230 230 230 230 230 425 

Pay Grade OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26

 O-10 $355 $355 $355 $355 $355 $355 $355 

 O-9 355 355 355 355 355 355 355 

 O-8 355 355 355 355 355 355 355 

 O-7 355 355 355 355 355 355 355 

 O-6 595 595 595 835 835 835 835 

 O-5 595 790 835 835 835 835 835 

 O-4 705 790 790 790 790 790 790 

440
 O-3 705 705 705 705 705 705 705 

 O-2 425 425 425 425 425 425 425 

 O-1 425 425 425 425 425 425 425 

 

 WARRANT OFFICERS 

 Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10 

 W-5 $285 $375 $375 $425 $425 $425 $425 

 W-4 285 375 375 425 425 425 425 

 W-3 285 375 375 425 425 425 425 

 W-2 285 375 375 425 425 425 425 

 W-1 285 375 375 425 425 425 425 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 W-5 $425 $425 $425 $425 $425 $425 $425 

 W-4 425 425 425 425 425 425 425 

 W-3 425 425 425 425 425 425 425 

 W-2 425 425 425 425 425 425 425 

 W-1 425 425 425 425 425 425 425 

 ENLISTED MEMBERS 

Pay Grade Years of Service Computed Under Section 205 of 

 Title 37, United States Code 

 2 OR LESS OVER 2 OVER 3 OVER 4 OVER 6 OVER 8 OVER 10

 E-9 $425 $425 $425 $425 $425 $425 $425 

 E-8 415 415 415 415 415 415 415 

 E-7 405 405 405 405 405 405 405 

 E-6 155 170 175 300 325 375 375 

 E-5 140 155 155 250 275 275 275 

 E-4 80 95 100 245 245 245 245 

 E-3 80 90 95 95 90 90 90 

 E-2 75 90 90 90 90 90 90 

 E-1 75 75 75 75 75 75 75 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 OVER 22 OVER 26 

 E-9 $425 $425 $425 $425 $425 $425 $425 

 E-8 415 415 415 415 415 415 415 

 E-7 405 405 405 405 405 405 405 

441
 E-6 375 375 375 375 375 375 375 

 E-5 275 275 275 275 275 275 275 

 E-4 245 245 245 245 245 245 245 

 E-3 90 90 90 90 90 90 90 

 E-2 90 90 90 90 90 90 90 

 E-1 75 75 75 75 75 75 75 

Cost: For the cost of compensation for submarine duty from 1972 to 2004, see 

Table II-17 of Military Compensation Statistics Tables, volume II of this edition. 

442
Chapter II.D.3.b. 

 Operational Submersible Duty Pay 

Legislative Authority: 37 U.S.C. §301c. 

Purpose: To provide an additional pay to increase the Navy's ability to attract and 

retain volunteers for duty in deep submergence vessels and deep submergence rescue 

vessels, and to compensate for the more than normally dangerous character of such duty. 

Background: The Act of July 12, 1960, Public Law 86-635, 74 Stat. 469 (1960), 

created a new category of duty for which hazardous duty incentive pay was authorized 

under 37 U.S.C. §301--namely, for personnel assigned "as an operator or crew member of 

an operational, self-propelled submersible, including undersea exploration and research 

vehicles." The act followed by about two years the U.S. Navy's purchase and placement 

in service of the bathyscaphe Trieste. The comptroller general of the United States had 

taken the position that the Trieste was not a "submarine" and that its operators were thus 

not entitled to hazardous duty incentive pay for submarine service. The purpose of the act 

was to overcome the effect of the comptroller general's decision and to make operators 

and crew members of self-propelled submersibles eligible for the same extra pay as 

members performing submarine duty. 

As was true of all hazardous duty incentive pays covered by 37 U.S.C. §301, rates 

of pay for self-propelled submersible duty were generally higher for officers than for 

enlisted personnel. These differentials resulted from the incentive pay structure adopted 

in the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§204(c), 63 Stat. 802, 810 (1949) under recommendations of the Advisory Commission 

on Service Pay, sometimes referred to as the Hook Commission. The commission's 

rationale for these differentials was as follows: 

A higher rate of hazard pay for officers as compared with enlisted personnel is 

justifiable on several grounds: 

443
(1) Any special pay must be in proportion to the basic pay, so that at all times the 

compensation for the primary responsibility will be considerably greater than that 

for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more 

highly trained personnel. 

(3) Officers are usually given greater special responsibilities, aside from normal 

administrative control, than enlisted personnel on hazardous assignments.1

Under the Act of July 12, 1960, Public Law 86-635, id., adopting self-propelled 

submersible pay entitlements, rates of pay for such duty were the same as those for 

submarine duty and hence ranged from $50 a month for members in pay grades E-1 and 

E-2 with less than two years of service to $245 a month for members in pay grades O-5 

and O-6 with over 18 years of service. In practice, however, only qualified submarine 

personnel in pay grades E-4 through O-4 were in fact assigned to submersibles, with the 

result that rates of pay ranged from a low of $55 to a high of $240 per month. These rates 

remained in effect for roughly 25 years until the Military Pay and Allowances Benefits 

Act of 1980, Public Law 96-579, §3(d), 94 Stat. 3359, 3360-3364 (1980), as technically 

amended by the Department of Defense Supplemental Authorization Act, 1981, Public 

Law 97-39, §701, 95 Stat. 939, 942 (1981), changed the entire structure of the pay. In 

simplest terms, the two acts cited immediately above have the effect of extending the pay 

structure adopted under the former Act for submarine duty to "operational submersible" 

duty as well, thereby setting up a career incentive pay structure patterned after aviation 

career incentive pay. Under this structure, personnel assigned to "operational 

submersible" duty are entitled to submarine duty incentive pay to the same extent and 

under the same circumstances as personnel in submarine service.2

 

1

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

2 Under 37 U.S.C. §301c(a)(5)(A)(i), as amended by Section 701(b) of the Department of Defense 

Supplemental Authorization Act, 1981, Public Law 97-39, §701(b), 95 Stat. 939, 942 (1981), undersea 

exploration or research vehicles are included within the category of "operational submersibles," with the 

result that duty on such vessels qualifies as "operational submarine duty." 

444
In practice, most of the personnel assigned to duty on operational submersibles, 

including undersea exploration or research vehicles, hold submarine duty designators and 

are in the submarine service on a career basis. Such personnel are, accordingly, entitled to 

continuous monthly submarine duty incentive pay. Other personnel, such as divers, are 

occasionally assigned to duty on operational submersibles and, when so assigned, are 

entitled to monthly submarine duty incentive pay while actually performing "frequent and 

regular operational submarine duty." 37 U.S.C. §301c(a)(2). For a description of the 

submarine duty incentive pay to which personnel assigned to submarine duty are entitled, 

and the rates of such pay for affected personnel,3

 see Chapter II.D.3.a., "Submarine Duty 

Incentive Pay," above. 

Before operational submersible duty pay was subsumed within the submarine 

duty incentive pay program, reserve forces personnel performing inactive-duty training 

were technically entitled to hazardous duty incentive pay under 37 U.S.C. §301(f) if, 

while performing inactive-duty training, they also performed qualifying duty aboard an 

operational submersible under competent orders. This technical entitlement arose out of 

the Act of July 12, 1960, Public Law 86-635, 74 Stat. 469 (1960), discussed above, which 

extended hazardous duty incentive pay entitlement to personnel performing operational 

submersible duties. When the 1960 Act added a new category of duty to 37 U.S.C. 

§301(a) for which hazardous duty incentive pay was authorized for active duty personnel, 

reserve forces personnel performing operational submersible duties while engaged in 

inactive-duty training also became automatically entitled to operational submersible duty 

pay under 37 U.S.C. §301(f). Under this latter provision, reserve forces personnel 

performing inactive-duty training were entitled to "an increase in compensation equal to 

1/30 of the monthly incentive pay" payable to active duty personnel for performing 

 

3

 The rates of submarine duty incentive pay authorized for persons assigned to an operational submersible 

have been increased twice since the current submarine duty incentive pay program was adopted in the 

Military Pay and Allowances Benefits Act of 1980--first, by the Department of Defense Authorization Act, 

1986, Public Law 99-145, §633, 99 Stat. 583, 646 (1985), and second, and most recently, by the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §623(b), 101 Stat. 1019, 

1101-1103 (1987). For a discussion of these changes, the reasons therefor, and the rates of submarine duty 

incentive pay for personnel assigned to duty on operational submersibles, see Chapter II.D.3.a., "Submarine 

Duty Incentive Pay," above. 

445
operational submersible duties for every "period of instruction ... or ... appropriate duty" 

during which they performed qualifying duties. Because the overall entitlement to 

operational submersible pay was essentially intended to parallel the entitlement to 

submarine duty pay,4

 the reader is referred to Chapter II.D.3.a., "Submarine Duty 

Incentive Pay," for a more complete description of the background and history of this 

entitlement. 

Because of the peculiar conditions surrounding assignment to and duty on 

an operational submersible, it is doubtful if any reserve forces personnel 

performing inactive-duty training ever actually received hazardous duty incentive 

pay for the performance of operational submersible duties. 

Current rates of pay: For current rates of pay involving duty on an operational 

submersible, see Chapter II.D.3.a. hereof, "Submarine Duty Incentive Pay," above. 

Cost: Beginning in 1977, budgeting of compensation for operational submersible 

duty was including in budgeting for submarine duty compensation. For the cost of 

compensation for duty on an operational submersible from 1972 to 1976, see Table II-18 

of Military Compensation Statistics Tables, volume II of this edition. 

 

4 See discussion of the reasons underlying enactment of the Act of July 12, 1960, Public Law 86-635, 74 

Stat. 469 (1960), above. 

446
Chapter II.D.3.c. 

 Diving Duty Pay 

Legislative Authority: 37 U.S.C. §304. 

Purpose: To provide additional pay to increase the ability of the uniformed 

services to attract and retain volunteers for diving duty, and to compensate for the more 

than normally dangerous character of such duty. 

Background: Extra pay of $1.20 an hour for actual underwater diving, other than 

for diving under instruction, was authorized for Navy enlisted members by Navy 

Department General Order No. 346 of April 20, 1886. Entitlement to diving duty pay 

continued to be dependent wholly on regulations until the pay was legislatively 

recognized in the Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 

212 [Public Law 235, 67th Congress], §21, 42 Stat. 625, 633 (1922), which provided that 

"nothing in this Act shall operate to change in any way existing laws, or regulations ... 

governing ... extra pay to enlisted men ... engaged in submarine diving...."1

The Act of April 9, 1928, ch. 327 [Public Law 244, 70th Congress], 45 Stat. 412 

(1928), which dealt with, among other things, both submarine duty pay and diving pay, 

changed the $1.20 hourly rate for actual diving to a monthly rate of not less than $5 nor 

more than $30 for enlisted personnel assigned to such duty; it also provided for a 

payment of an additional $5 per hour to divers engaged in salvage operations in water 

depths over 90 feet, with the pay authorized for the number of hours, or fractions thereof, 

while so employed.2

 A Navy representative explained the purpose of the additional pay 

for diving duties in these terms: 

 

1 The phrase, "submarine diving," was intended to apply to undersea, i.e., "submarine," diving; it had 

nothing to do with service on a submarine. Indeed, a fuller rendition of the text of Section 21 of the Joint 

Service Pay Readjustment Act of 1922, ch. 212, id., §21, 42 Stat. at 633, provided "nothing in this Act shall 

operate to change in any way existing laws, or regulations ... governing ... extra pay to enlisted men ... 

engaged in submarine diving or service on submarines." Thus, "service on submarines" was quite distinct 

from "submarine diving." 

2 In dealing with submarine duty, the Act of April 9, 1928, authorized submarine duty pay in the amount of 

25 percent of base and longevity pay for officers and not less than $5 nor more than $30 a month for 

enlisted personnel. See Chapter II.B.3.a., "Submarine Duty Incentive Pay," above. 

447
The present law does not meet the needs of the service, for under it there is not 

sufficient inducement for sufficient men to become qualified for deep-sea diving and to 

undertake sufficient diving operations to keep themselves fit and fully qualified for actual 

service should the occasion arise.... Under the plan in view, a certain amount of practice 

diving would be required periodically in order for a man to maintain his qualification. At 

the same time extra compensation, beyond what might be termed retainer pay for 

qualification, would be paid to men engaged in the especially hazardous work incident to 

salvage operations in depths beyond 90 feet.3

The Act of January 16, 1936, ch. 1 [Public Law 415, 74th Congress], 49 Stat. 1091 

(1936), amended the Act of April 9, 1928, ch. 327, id., by adding authority for the 

payment of an extra 25 percent of base and longevity pay to officers on duty at submarine 

escape training tanks, the Navy Deep Sea Diving School, and the Naval Experimental 

Diving Unit. This action was taken by Congress to make officers performing such duty 

eligible for the same extra pay as officers performing submarine duty.4

 The Act of June 

27, 1942, ch. 448 [Public Law 627, 77th Congress], 56 Stat. 391 (1942), further amended 

the Act of April 9, 1928, ch. 327, id., by stipulating that the additional $5 per hour 

previously payable for diving at depths in excess of 90 feet of water could also be paid 

for actual diving at depths of less than 90 feet under “extraordinarily hazardous 

conditions" as well as for depths greater than 90 feet, that the $5 per hour could be paid to 

officers as well as to enlisted personnel, and that it could be paid for either "salvage or 

repair operations" instead of being restricted to salvage work alone. This amendment was 

adopted because of the extensive and dangerous salvage and repair operations then being 

carried out at Pearl Harbor, where the water depth was generally no more than 50 feet. 

The Act of April 10, 1943, ch. 47 [Public Law 33, 78th Congress], 57 Stat. 60 (1943), 

extended the same pay to Army personnel assigned to diving duty. 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§204(a)(8) and (9), 63 Stat. 802, 810 (1949), separately categorized "duty at a submarine 

 

3

A Hearing on the Bill (H.R. 9289) Providing Additional Pay for Personnel of the United States Navy 

Assigned to Duty on Submarine Vessel and Diving Duty (March 1, 1928) printed in “Hearings before the 

House Committee on Naval Affairs on Sundry Legislation Affecting the Naval Establishment,” 1927-1928, 

p. 1475, 70th Congress, 1st Session (1928) (statement of Rear Admiral R. H. Leigh, USN, Chief of the 

Bureau of Navigation). 

4 See footnote 1 to this chapter, above. 

448
escape training tank" and "duty at the Navy Deep Sea Diving School or the Navy 

Experimental Diving Unit, when such duty involves participation in training," as duties 

for which hazardous duty incentive pay was authorized at the monthly rate of $100 for 

officers and $50 for enlisted personnel.5 6

 For diving duty in general, however, the Career 

Compensation Act of 1949, ch. 681, id., §205, 63 Stat. at 810-811, continued the existing 

monthly pay of not less than $5 nor more than $30 per month for enlisted personnel, and 

the $5 per hour additional pay for "[m]embers of the uniformed services [i.e., both 

officers and enlisted personnel] ... employed as divers in actual salvage or repair 

operations in depths of over ninety feet, or in depths of less than ninety feet, when the 

officer in charge of the ... operation shall find ... that extraordinary hazardous conditions 

exist...."7 8

 Despite the classification of the general diving duty provisions as a "special" 

pay, it appears certain that Congress intended that diving duty pay serve the same 

 

5 These provisions, adopted as Section 204(a)(8) and (9), respectively, were subsequently classified to 37 

U.S.C. §235(a). See 37 U.S.C. §235(a) (1952). 

6

 With the adoption of these specific provisions, the assumed linkage of pay for "duty at a submarine 

escape training tank" and "duty at the Navy Deep Sea Diving School or the Navy Experimental Diving 

Unit" with submarine duty pay, see footnote 1 and accompanying text as well as text accompanying 

footnote 3 to this chapter, above, was broken, as the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], 63 Stat. 802 (1949), effectively paired submarine duty pay with crew member 

flight pay. See Chapter II.D.3.a., "Submarine Duty Incentive Pay," above. 

7 Senate Report No. 81-733 (Committee on Armed Services), p. 19, accompanying H.R. 5007, 81st

Congress, 1st Session (1949). See House Report No. 81-779 (Committee on Armed Services), p. 30, 

accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

8

 These latter diving duty provisions, which were enacted as Section 205 of the Career Compensation Act 

of 1949, ch. 681 [Public Law 351, 81st Congress], §205, 63 Stat. 802, 810-811 (1949), were subsequently 

classified to 37 U.S.C. §236. See 37 U.S.C. §236 (1952). Later, when Title 37 of the United States Code 

was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the 

general diving duty provisions deriving from the Career Compensation Act of 1949, ch. 681, id., §205, 63 

Stat. at 810-811, were codified at 37 U.S.C. §304. (The provisions of the Career Compensation Act of 

1949, ch. 681, id., §204(a)(8) and (9), 63 Stat. at 810, relating to "duty at a submarine escape training tank" 

and "duty at the Navy Deep Sea Diving School or the Navy Experimental Diving Unit, when such duty 

involves participation in training," were not separately codified in the new Title 37, United States Code, 

after its enactment into positive law by the Act of September 7, 1962, Public Law 87-649, id.; rather, to the 

extent such duty qualified as "diving duty," persons engaged in activities formerly covered by Section 

204(a)(8) or (9) of the Career Compensation Act of 1949, ch. 681, id., §204(a)(8) and (9), 63 Stat. at 810, 

became entitled to diving duty pay under new 37 U.S.C. §304. See discussion of the Act of August 17, 

1961, Public Law 87-145, 75 Stat. 382 (1961), which consolidated all diving duty pays into one statutory 

provision, at text accompanying footnotes 12 and 13, below.) 

449
purpose as incentive pay--that is, to attract and retain volunteers for the hazardous duty of 

diving.9

The Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §§2(6), 

2(8), 2(9), and 2(10), 69 Stat. 18, 21 (1955), increased the rates of the various extra pays 

relating to diving duty by 10 percent--to $110 a month for officers and to $55 a month for 

enlisted personnel under 37 U.S.C. §235 (1952) (hazardous duty incentive pay) and to 

$5.50 and $33 under 37 U.S.C. §236 (1952) (diving duty pay). It also added another type 

of diving duty to the general class of duties for which hazardous duty incentive pay was 

authorized under the precursor of present 37 U.S.C. §30110--"duty involving the use of 

helium-oxygen for a breathing mixture in the execution of deep-sea diving." Although 

this duty had previously qualified members for diving pay, its reclassification as a 

hazardous duty incentive pay allowed the payment of a higher monthly rate of pay to 

those divers who had to dive deeper and undergo a greater hazard than those equipped 

with a normal breathing mixture. That is, classification as a hazardous duty under the 

precursor of present 37 U.S.C. §301 permitted a higher rate of pay than duty for which 

diving duty pay was authorized under the precursor of present 37 U.S.C. §304.11 The net 

result was three categories of hazardous duty incentive pay related to diving duty: the 

first, covered by the precursor of present 37 U.S.C. §301, was payable at the monthly rate 

of $110 for officers and $55 for enlisted personnel, and the second and third, covered by 

the precursor of present 37 U.S.C. §304, consisted of a two-component special pay for 

 

9

 The Career Compensation Act of 1949, ch. 681, id., denominated extra pay for physicians and dentists as 

a "special pay" also, see Section 203 of the Career Compensation Act of 1949, ch. 681, id., §203, 63 Stat. at 

809, but the legislative history of the act shows that those pays were being "continued because of the 

critical shortage of such personnel in the uniformed services." House Report No. 81-779 (Committee on 

Armed Services), p. 15, accompanying H.R. 5007, 81st Congress, 1st Session (1949). Moreover, although 

diving duty pay was not specifically mentioned in the House report, the general group of hazardous duty 

incentive pays were grouped together for discussion purposes with extra pay for physicians and dentists 

under the comprehensive heading of "[s]pecial incentive pays." id. (emphasis added). (As far as the present, 

incentive-based nature of diving duty pay is concerned--despite the continued denomination of diving duty 

pay as a "special pay," see headnote to present 37 U.S.C. §304--consult text accompanying footnotes 14 

through 17 to this chapter, below.) 

10 See footnote 5 to this chapter, above. 

11 See footnote 5 to this chapter, above. 

450
diving duty--namely, a special pay of not less than $5.50 nor more than $33 per month 

for enlisted personnel assigned generally to diving duty and a further special pay at the 

rate of $5.50 per hour for officers and enlisted personnel engaged in salvage or repair 

diving operations deemed hazardous, either because of the depth of water in which they 

were performed, i.e., "over ninety feet," or because of a finding of "extraordinary 

hazardous conditions" by the officer in charge. 

The Act of August 17, 1961, Public Law 87-145, §1, 75 Stat. 382 (1961), replaced 

all these separate pays with a special pay for diving duty payable at a rate of not more 

than $110 a month under regulations to be prescribed by the "Secretary concerned," 

thereby consolidating all diving duty provisions under one statutory heading. Under this 

new, consolidated provision, a member could not be paid special pay for diving duty in 

addition to incentive pay for hazardous duty. The hazardous duty incentive pay program, 

on the other hand, allowed the payment of up to two types of incentive pay for the same 

period. See, e.g., former 37 U.S.C. §236(e) (as in effect after enactment of the Act of 

August 17, 1961, Public Law 87-145, id.) and present 37 U.S.C. §301(e). Thus, for 

example, under the Act of August 17, 1961, Public Law 87-145, id., a member required 

by competent orders to perform parachute jumping duty in addition to explosive ordnance 

demolition duty could be paid hazardous duty incentive pay for both parachute and 

demolition duty, whereas a member required to perform diving duty in addition to 

demolition duty could not be paid both diving pay and demolition duty pay. 

Congress described the purpose of consolidating the various diving duty pays in 

the Act of August 17, 1961, Public Law 87-145, id., in these terms: 

Because of the inequities which occur under the present system of computing 

special pay for diving duty, and because the rates of diving pay have remained 

substantially static for 30 years, for the past several years there has been a shortage of 

divers in the Navy. Insufficient members who can meet the stringent physical 

requirements are attracted to this hazardous duty.... 

 To lessen the burden of administering special diving pay and to render 

the administration of the pay more equitable, the enclosed draft bill prescribes a 

maximum flat rate of special pay for diving duty. Under regulations 

451
promulgated by the Secretary concerned, varying amounts of special pay would 

be authorized for the different categories of divers.... The flat rate to be paid a 

particular diver would depend solely upon his current qualifications as a diver, the 

master diver, for example, receiving greater pay than the first-class diver, who is 

less qualified and who will, in general, carry out less difficult and less hazardous 

diving assignments. Those clauses of Section 204(a) of the Career Compensation 

Act of 1949 [ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949)] 

authorizing incentive pay for hazardous duty relating to diving ... would be 

repealed.... 

 The simplified procedures which could be followed under the flat-rate 

system would enhance efficiency, morale, equity, and long-term incentive.12

The Uniformed Services Pay Act of 1981, Public Law 97-60, §115, 95 Stat. 989, 

995-996 (1981), changed the basic structure of diving duty pay, increasing the maximum 

rates of such pay--from $110 to $300 per month for enlisted personnel and to $200 per 

month for officers--in addition to providing the first authority for a person receiving such 

pay to also receive one form of hazardous duty incentive pay under 37 U.S.C. §301. As 

indicated in the relevant Congressional report, Congress concluded that, the maximum 

rates having last been changed in 1961 (in 1955 for officers), diving duty pay had "lost its 

incentive value,"13 and increases were accordingly necessary to attract required numbers 

of personnel to the duty. 

As explained in the Senate report dealing with the Uniformed Services Pay Act of 

1981, Public Law 97-60, id., maximum diving duty pay in 1961 amounted to 42 to 47 

percent of basic pay, depending on grade and classification of the diver, whereas in 1981 

it amounted to less than 15 percent of such pay.14 In addition, the Senate report noted low 

manning levels and the lack of sufficient volunteers for training to warrant holding 

 

12 Senate Report No. 662 (Committee on Armed Services), pp. 5-6, accompanying H.R. 4323, 87th

Congress, 1st Session (1961). 

13 Senate Report No. 97-146 (Committee on Armed Services), p. 10, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

14 Senate Report No. 97-146 (Committee on Armed Services), pp. 10-11, accompanying S. 1181, 97th

Congress, 1st Session (1981). 

452
special classes.15 To increase incentives for personnel to enter, and remain in, diving duty 

specializations, Congress felt it necessary both to increase the maximum rates payable 

and to allow personnel receiving special pay for diving duty also to receive one other 

form of hazardous duty incentive pay.16 The National Defense Authorization Act for 

Fiscal Year 2000 Public Law 106-65, 113 Stat. 652, improved this incentive by 

eliminating the limitation to one other form of hazardous duty pay. Thus, effective 

October 1, 1999, a qualified diver could receive such pay for “each hazardous duty for 

which the member is qualified.” 

As restructured, diving duty pay is payable, during periods diving duty is actually 

performed, to personnel assigned to diving duty who are required to maintain proficiency 

by "frequent and regular" dives. 37 U.S.C. §304(a). Under regulations adopted by each 

service, actual rates are dependent on the skill level of the diver and on the specific billet 

to which the diver is assigned.17

Thus, under the pay structure resulting from the Uniformed Services Pay Act of 

1981, Public Law 97-60, §115, 95 Stat. 989, 995-996 (1981), the position of diving duty 

vis-à-vis the duties for which hazardous duty incentive pay is authorized has been 

effectively reversed. Under the Career Compensation Act of 1949, ch. 681 [Public Law 

351, 81st Congress], §205, 63 Stat. 802, 810-811 (1949), the rates of pay for regular 

diving duties were less than those for duties classified as hazardous. Today, at least 

insofar as the maximum rates of pay authorized are concerned, the rates of pay for diving 

duties generally exceed the rates applicable to the hazardous duties governed by 37 

 

15 Senate Report No. 97-146 (Committee on Armed Services), pp. 10-11, accompanying S. 1181, 97th

Congress, 1st Session (1981). 

16 In allowing personnel to receive one form of hazardous duty pay in addition to special pay for diving 

duty, Congress referred to the consistency of such a practice "with the existing dual pay restriction 

incorporated in 37 U.S.C. 301" relating to incentive pay for hazardous duties. Senate Report No. 97-146 

(Committee on Armed Services), p. 11, accompanying S. 1181, 97th Congress, 1st Session (1981). 

17See Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶11102 AND 11103. 

453
U.S.C. §301.18 The National Defense Authorization Act for Fiscal Year 2000 raised the 

monthly rate for enlisted members from $300 to $340, and for officers from $200 to 

$240. This was the first rate change since the program was restructured by the Uniformed 

Services Pay Act of 1981. 

With the passage of the National Defense Authorization Act for Fiscal Years 1988 

and 1989, Public Law 100-180, §624(a), 101 Stat. 1019, 1103-1104 (1987), reserve 

forces personnel19 entitled to compensation for inactive-duty training became entitled to 

diving duty pay when performing qualifying duties under competent orders, provided 

Congress had appropriated sufficient funds for that purpose.20 Under 37 U.S.C. §304(d), 

members of the reserve forces who perform qualifying diving duties while entitled to 

compensation under 37 U.S.C. §206, are also entitled, subject to such regulations as may 

be prescribed by the President, to "an increase in compensation equal to 1/30 of the 

monthly special pay" payable to active duty personnel performing such duties.21 That is, 

 

18 Some air weapons control officer flight pay rates exceed the maximum rates of pay authorized for diving 

duty. See, e.g., 37 U.S.C. §301(c)(2)(A). Also see Chapter II.D.1.b.(4), "Flight Pay (Air Weapons 

Controllers)," above. 

19 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

20 Unlike various provisions of Title 37, United States Code, dealing with the entitlement of members of 

the active duty forces to special and incentive pays, the corresponding provisions of Section 304 dealing 

with the entitlement of members of the reserve forces participating in inactive-duty training to special pay 

for diving duty are explicitly made contingent on Congressional appropriations, i.e., members of the 

reserve forces participating in inactive-duty training are entitled to such pay only "to the extent provided for 

by appropriations." 37 U.S.C. §304(d)(1). 

21 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

454
for every "regular period of instruction or period of appropriate duty" or "such other 

equivalent training, instruction, duty, or appropriate duties" for which a member of the 

reserve forces is entitled to compensation under 37 U.S.C. §206, the member is, if 

performing qualifying duty under 37 U.S.C. §304(d), also entitled to 1/30th of the diving 

duty pay that would be payable to a member of the active duty force who was performing 

such duties. Under regulations prescribed by the "Secretary concerned," a member of a 

reserve force who performs diving duties under 37 U.S.C. §304(d), while engaged in 

inactive-duty training is entitled to diving duty pay.22 23

Congress explained its reasons for extending diving duty pay to reserve forces 

personnel performing inactive-duty training in the following terms: 

The Department of Defense has requested that divers in the Reserve 

Components be entitled to diving duty pay when they meet the requirements 

established for the pay that apply to active duty personnel. The Committee 

recommends approval of this Defense Department proposal....24

In making the above-noted "request," the Department of Defense relied heavily on 

the conclusions and recommendations of the Sixth Quadrennial Review of Military 

Compensation.25 As noted by the Sixth Quadrennial Review: 

 commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

22 For a discussion of the origin of hazardous duty incentive pay for reserve forces personnel engaged in 

inactive-duty training, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew Member)," above. 

23 Pursuant to Section 624(b) of the National Defense Authorization Act for Fiscal Years 1988 and 1989, 

Public Law 100-180, id., §624(b), 101 Stat. at 1104, the extension of diving duty pay entitlement to reserve 

force members performing inactive-duty training became effective "on the first day of the fourth calendar 

month following the month in which this Act is enacted"--or, in other words, on April 1, 1988. 

24 Senate Report No. 100-57 (Committee on Armed Services), p. 147, accompanying S. 1174, 100th

Congress, 1st Session (1987). Cf. House Report No. 100-446 (Committee of Conference), p. 644, 

accompanying H.R. 1748, 100th Congress, 1st Session (1987) (indicating merely that the House acceded to 

the Senate amendment extending diving duty pay to reserve forces personnel performing inactive-duty 

training). 

25 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ...proposing changes" to the compensation system of 

the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

455
Until December 1987, the law restricted entitlement to Diving Duty Pay to 

officer and enlisted divers in receipt of basic pay who were assigned by 

competent orders to diving duty positions, and who maintained the required 

qualifications and performed diving duty. Reservists were not eligible for diving 

duty pay during periods of IDT [inactive-duty training], because they were not 

entitled to basic pay. This restriction precluded reservists from drawing diving 

duty pay during drill weekends even though they performed diving duties. 

 The 6th QRMC [Quadrennial Review of Military Compensation] 

review indicated that undermanning existed in the diving programs of the Navy, 

Marine Corps and, to a lesser extent, the Air Force. Most critical was the Naval 

Reserve, where only 38 percent of authorized diving positions were manned. The 

6th QRMC recommended that legislation be prepared to extend the eligibility for 

diving duty pay to Selected Reservists performing inactive duty for training. 

Subsequently Section 624 of Public Law 100-180 authorized the payment of 

diving duty pay to reservists during periods of IDT.26

 Current rate of pay: The current rates of pay for diving duty are: 

Category of personnel Rate of pay 

Officers Not to exceed $240 per month27

Enlisted members Not to exceed $340 per month28

 

Cost: For the cost of diving duty pay from 1972 to 2004, see Table II-19 of 

Military Compensation Statistics Tables, volume II of this edition. 

 pursuant to Presidential directive, and its report and recommendations were submitted to Congress in late 

2001. 

26 Executive Summary, “Recommendations of the Sixth Quadrennial Review of Military Compensation,” 

p. 51, August 1988. Also see National Guard and Reserve Compensation, “Report of the Sixth Quadrennial 

Review of Military Compensation,” Volume I, p. 5-9, August 1988. 

27 For specific rates of pay authorized for different categories of officers, see Department of Defense 

Financial Management Regulation, Military Pay: Policy and Procedures for Active Duty and Reserve Pay, 

Volume 7A, DOD 7000.14-R, ¶11103.a. 

28 For specific rates of pay authorized for different categories of enlisted members, see Department of 

Defense Financial Management Regulation, Military Pay: Policy and Procedures for Active Duty and 

Reserve Pay, Volume 7A, DOD 7000.14-R, ¶11103.b. 

456
Chapter II.D.3.d. 

 Special Pay for Career Sea Duty 

Legislative Authority: 37 U.S.C. §305a. 

Purpose: To provide a special payment to personnel serving on sea duty in 

recognition of the greater-than-normal rigors of service attending such duty, and to 

efficiently target manpower dollars to improve the retention of personnel in sea-service 

skills. 

Background: The Act of March 3, 1835, ch. 27, §1, 4 Stat. 755, 755-757 (1835), 

established pay rates for Navy officers that included within-grade differentials linked to 

duty status--at sea, on other duty, or on leave or waiting orders. These differentials were 

the earliest legislative manifestation of a "sea duty pay" principle, though the higher rates 

for service at sea were then looked upon as regular pay for normal service rather than as 

"extra" pay. An officer who was not at sea was considered to be performing less than fullfledged duty and thus was entitled to only part of the regular pay of his grade. This theory 

governed Navy officers' pay for almost 75 years. The Act of March 3, 1899, ch. 413, §13, 

30 Stat. 1004, 1007 (1899), illustrated the theory clearly by providing that, while 

performing sea duty, Navy officers were entitled to no less pay than Army officers of 

corresponding rank, but when ashore or waiting orders, to 15 percent less than Army 

officers. 

The Act of June 1, 1860, ch. 67, §1, 12 Stat. 23, 24 (1860), illustrates a step in the 

gradual evolution of sea duty pay principles. Under that act, for the first time, the length 

of an officer's cumulative sea service was recognized as a pay factor in some officer 

grades. The act continued the within-grade differentials linked to an officer's sea duty, 

other duty, or leave/waiting orders status. But, for the grades of lieutenant, boatswain, 

gunner, carpenter, and sailmaker, it also prescribed pay steps based on length of sea 

service. These sea-service pay steps lasted two years for the grade of lieutenant and until 

1870 for the warrant officer grades. 

457
The Act of May 13, 1908, ch. 166 [Public Law 115, 60th Congress], §1, 35 Stat. 

127, 127-128 (1908), ended the 73-year reign of duty status differentials and established 

pay rates for Navy officers based strictly on grade and length of service. Concomitantly, 

with the establishment of a new special category of pay for officers assigned to sea duty, 

sea duty pay came to be seen as "extra" compensation, since officers became entitled to 

an additional 10 percent of base pay while performing such duty. The 10 percent 

provision remained in effect until repealed by the Act of June 10, 1922 (Joint Service Pay 

Readjustment Act of 1922), ch. 212 [Public Law 235, 67th Congress], §2, 42 Stat. 625, 

627 (1922). There was no added pay for sea duty between 1922 and 1942. 

The Act of March 7, 1942, ch. 166 [Public Law 490, 77th Congress], §18, 56 Stat. 

143, 148 (1942), revived sea duty pay as a wartime measure and for the first time 

included enlisted personnel within its scope. The act provided for commissioned officers 

to receive an additional 10 percent of base pay, and for warrant officers and enlisted 

personnel to receive an additional 20 percent, while performing sea duty. A few months 

later, the Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §2, 56 

Stat. 359, 360 (1942), enacted these sea duty pay provisions into permanent law. 

In 1948, at the request of the Secretary of Defense, the Advisory Commission on 

Service Pay, sometimes referred to as the Hook Commission, undertook the first 

comprehensive study of military compensation since 1908. In reviewing military 

compensation generally, and sea duty pay in particular, the Hook Commission 

recommended that sea duty pay be abolished for officers but continued, albeit in a 

modified form, for enlisted personnel. In support of this recommendation, the 

Commission stated: 

The Commission has concluded that sea duty for naval personnel, as well 

as oversea duty for the Army and Air Force, although probably involving more 

inconvenience than military activity ashore or at home, is a part of their normal 

career.... Officers, especially, do not deserve extra pay for this type of duty, since 

the pay recommended for them is apportioned to their relative responsibility as 

executives and administrators, regardless of their site of operation. Additional 

compensation is unnecessary and undesirable for work which should be expected 

as a normal incident in a chosen career. 

458
For enlisted personnel, the Commission proposes a flat rate increase, as in 

keeping with accepted industry practice for disagreeable or unpleasant work and 

as a morale factor. A percentage of pay increase for these duties bears no relation 

to the inconvenience felt by the individual nor is the unpleasantness in proportion 

to the grade or rating.1

Congress adopted the major portion of the Hook Commission's reasoning and 

recommendations concerning sea duty pay in the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], §206, 63 Stat. 802, 811 (1949).2

 The act eliminated 

sea duty pay authorization for officers entirely. In addition, it changed the way the 

entitlement was computed for enlisted personnel, establishing rates ranging from $8 for 

the lowest enlisted pay grade to $22.50 for the highest enlisted grade. 

In dealing with the Hook Commission's recommendations on sea duty pay, the 

House Committee on Armed Services stated: 

The committee is in complete agreement with the Hook Commission that sea and 

foreign duty pay is part of the normal career of all members of the uniformed services. It 

especially recognizes that officers should not be compensated with special pay for 

overseas assignments which must be anticipated as part of an average career in the 

services. On the other hand, the committee also agrees with the Commission that some 

small remuneration should be granted to enlisted personnel who serve at sea or in foreign 

stations because of the morale factor involved. In view of the pay increases provided in 

the bill, the committee is of the opinion that the sums provided for sea and foreign duty 

for enlisted personnel are sufficient.3 4

 

1

 “Career Compensation For the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” pp. 28-29, December 1948. (In recommending 

against continuation of sea duty pay for officers, the Commission noted that "[u]nusual expenses incurred 

by virtue of foreign or sea duty may be reimbursable under the post and duty allowance recommended by 

the Commission." Id., p. 29. Despite the Hook Commission's recognition of the possibility of higher costs 

or expenses incurred by personnel assigned to sea or foreign duty, Congress, in acting on the Commission's 

recommendations, did not adopt any special allowance program to assist affected personnel in defraying 

such costs.) 

2 But see the parenthetical in footnote 1 to this chapter, above. 

3

 House Report No. 81-779 (Committee on Armed Services), p. 16, accompanying H.R. 5007, 81st

Congress, 1st Session (1949). Also see Senate Report No. 81-733 (Committee on Armed Services), p. 19, 

accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

4 Section 206 of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §206, 63 

Stat. 802, 811 (1949), which dealt with sea duty pay, also covered foreign duty pay. After enactment of the 

Career Compensation Act of 1949, ch. 681, id., the sea and foreign duty pay provisions thereof were 

459
Even if sea duty pay rates were "sufficient" in 1949, questions concerning their 

continued sufficiency for specific purposes arose in ensuing years. In 1949, sea duty pay 

for enlisted personnel approximated 10 percent of basic pay; by 1979, however, with the 

various intervening increases in military pay rates, sea duty pay had declined in general 

to something less than 2 1/2 percent of basic pay. When increases in the consumer price 

level were also taken into account, the decline in the value of sea duty pay to recipient 

personnel became even more pronounced in terms of the "morale factor" that had been 

the intellectual underpinning of the enlisted sea duty pay program in the first instance. As 

a result, sea duty pay had come more and more to be regarded as a "token" payment and, 

as such, had little incentive--or, for that matter, morale--value for affected personnel. 

To address a perceived problem with retention of qualified enlisted personnel in 

the Navy, the Department of Defense Appropriation Authorization Act, 1979, Public Law 

95-485, §804(a)(1), 92 Stat. 1611, 1620-1621 (1978), adopted a new special pay program 

for "career sea duty." Under that program, an enlisted member of a uniformed service in 

pay grade E-4 or above who had served more than three years on "sea duty" became 

entitled to so-called "career sea pay" when actually performing such duty. As authorized, 

career sea pay varied depending on the number of years of cumulative sea duty, with 

persons having more sea duty entitled to greater amounts of pay.5

 For fiscal years 1979 

and 1980, three cumulative-years-of-sea-duty categories were authorized--over three 

years, over five, and over twelve; for fiscal year 1981, four--over three years, over five, 

over seven, and over twelve; and beginning October 1, 1981, seven--over three, over five, 

over seven, over nine, over ten, over eleven, and over twelve. For fiscal years 1979, 1980, 

and 1981, career sea duty pay rates varied from a low of $25 per month to a high of $55; 

beginning October 1, 1981, such rates were programmed to vary from a low of $25 per 

 classified to 37 U.S.C. §237. See 37 U.S.C. §237 (1952). Later, when Title 37 of the United States Code 

was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the 

sea and foreign duty pay provisions were codified at 37 U.S.C. §305. For an explanation of foreign duty 

pay, formally denominated "special pay while on duty at certain places," 37 U.S.C. §305, and the reasons 

for its adoption, see Chapter II.E.2.f. hereof, "Special Pay While on Duty at Certain Places (Hardship Duty 

Pay)," below. 

5 For a partial precursor of this provision, see the discussion of the Act of June 1, 1860, ch. 67, §1, 12 Stat. 

23, 24 (1860), in this chapter, above. 

460
month to a high of $100. In implementing the career sea pay program, a member was to 

be credited with all periods of sea duty served before the effective date of the new pay--

namely, October 1, 1978. The "career sea pay" provisions of the Department of Defense 

Appropriation Authorization Act, 1979, Public Law 95-485, id., were codified at 37 

U.S.C. §305a. 

"Career sea pay" was initially proposed as a part of the Carter Administration's 

Defense Legislative Program for the 95th Congress. In a Departmental Recommendation, 

the Department of Defense noted that sea pay had "historically been a means of 

recognizing and compensating those who were willing to serve under the unique 

conditions of service associated with sea duty."6

 Among the unique conditions cited were 

(1) cramped living and working conditions aboard ship, (2) the unpredictability of 

operating schedules of Navy ships, (3) limited recreational facilities at sea, (4) inport 

duties assigned to shipboard personnel to maintain ship readiness, (5) long working hours 

at sea, (6) long and repetitive deployments, and (7) family separations.7

 Because of the 

"unattractive" features associated with the "unique conditions" of sea duty and the 

"competition for quality manpower among the services and with civilian industry," the 

Department of Defense recommended a new career sea pay program to achieve 

"stabilized manning [of Navy ships] with experienced personnel."8

 Although 

recommended to Congress as a "special pay," the "career sea pay" proposal was held out 

by the Department of Defense as being very important in "influencing the decision of 

skilled individuals to continue a career of service entailing repetitive reassignment to duty 

 

6 Quoted in Senate Report No. 95-826 (Committee on Armed Services), p. 124, accompanying S. 2571, 

95th Congress, 2d Session (1978) (enclosure to letter from W. Graham Claytor, Jr., Secretary of the Navy, 

as designated representative of the Department of Defense on the recommended sea pay legislation). 

7 Senate Report No. 95-826 (Committee on Armed Services), p. 124, accompanying S. 2571, 95th

Congress, 2d Session (1978) (enclosure to letter from W. Graham Claytor, Jr., Secretary of the Navy, as 

designated representative of the Department of Defense on the recommended sea pay legislation). 

8 Senate Report No. 95-826 (Committee on Armed Services), pp. 124-126, accompanying S. 2571, 95th

Congress, 2d Session (1978) (enclosure to letter from W. Graham Claytor, Jr., Secretary of the Navy, as 

designated representative of the Department of Defense on the recommended sea pay legislation). 

461
at sea."9

 In short, the Department of Defense's "career sea pay" proposal may 

appropriately be regarded as an incentive pay designed to meet manpower management 

goals. Congress agreed with the need to meet such goals and, noting that sea duty pay 

rates had not be "adjusted" since originally established in 1949, adopted the Department 

of Defense proposal in order to, in Congress's own words, 

(1) establish rates which would be more meaningful compared to current 

compensation levels; 

 (2) offer increased rates for increased years of sea duty experience; [and] 

 (3) remain within reasonable budgetary limitations.10 11

Before the provisions of the Department of Defense Appropriation Authorization 

Act, 1979, Public Law 95-485, id., relating to fiscal year 1981 became effective, the rates 

of pay for career sea duty were changed by the Military Personnel and Compensation 

Amendments of 1980, Public Law 96-343, §3(a), 94 Stat. 1123, 1124 (1980). As 

explained in the conference report, the rates of career sea pay that would have become 

effective on October 1, 1981, were increased by 15 percent and made effective on 

September 1, 1980, a year before they were due to become effective under the 1979 

appropriation authorization act. The reason for this increase in and acceleration of the 

effective date of the career sea pay rates was identified as the Navy's shortage of petty 

officers--particularly those with from six to twelve years of service.12 This provision, put 

 

9 Senate Report No. 95-826 (Committee on Armed Services), p. 124, accompanying S. 2571, 95th

Congress, 2d Session (1978) (enclosure to letter from W. Graham Claytor, Jr., Secretary of the Navy, as 

designated representative of the Department of Defense on the recommended sea pay legislation). 

10 Senate Report No. 95-826 (Committee on Armed Services), p. 122, accompanying S. 2571, 95th

Congress, 2d Session (1978) (enclosure to letter from W. Graham Claytor, Jr., Secretary of the Navy, as 

designated representative of the Department of Defense on the recommended sea pay legislation). 

11 As ultimately adopted, the Department of Defense Appropriation Authorization Act, 1979, Public Law 

95-485, §804(c), 92 Stat. 1611, 1621 (1978), contained a saved-pay provision that allowed all personnel 

receiving special pay for sea duty under preexisting 37 U.S.C. §305 who were not eligible for "career sea 

pay" under the new 37 U.S.C. §305a to continue to receive the old sea duty pay until September 30, 1981. 

See 37 U.S.C. §305 note, where the text of Section 804(c) of the Department of Defense Appropriation 

Authorization Act, 1979, Public Law 95-485, id., §804(c), 92 Stat. at 1621, is reproduced.

12 See, e.g., 126 CONG. REC. S829, S840, S841, S859, S860, S868 (daily ed., February 4, 1980)). 

462
forward as a floor amendment to a proposal that would have adopted an across-the-board 

increase in basic pay rates,13 was said to be specially "targeted" or "focused" on special 

retention problem areas,14 and was proposed by the Senate to provide retention incentives 

to Navy personnel coming to the end of their first term of enlistment. 

The Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, 

§4(a), 94 Stat. 3359, 3364-3366 (1980), adopted an entirely new structure of special pay 

for "career sea duty." Effective January 1, 1981,15 special pay for career sea duty was 

authorized for officers as well as enlisted personnel in pay grades E-4 and above, with the 

exception of officers in pay grades O-1 and O-2 who had less than four years of active 

enlisted or noncommissioned warrant officer service. The rates of career sea pay for 

enlisted personnel were increased substantially and, for all personnel, made to depend on 

pay grade and years of cumulative sea duty. In addition, under the new career sea pay 

structure, all qualifying enlisted members--i.e., all such members in pay grade E-4 or 

above--and all warrant officers actually assigned to sea duty were entitled to career sea 

pay, not just those with more than three years of sea duty; in the case of officers, 

however, only those with more than three years of sea duty were entitled to such pay. 

Finally, a special provision allowed a $100 per month career sea pay "premium" to be 

paid to any member of a uniformed service entitled to career sea pay for each subsequent 

month of sea duty served immediately following completion of 36 months of consecutive 

sea duty. Under the act, career sea pay was payable to qualifying personnel assigned to a 

ship, a ship-based staff, or a ship-based aviation unit while actually serving on a ship.16 17

 

13 The proposal for an across-the-board pay raise was not adopted as a part of the Military Personnel and 

Compensation Amendments of 1980, Public Law 96-343, id., but was instead adopted as part of the 

Department of Defense Authorization Act, 1981 Public Law 96-342, 94 Stat. 1077, 1090-1091 (1980), 

enacted the same day. 

14

e.g., 126 Cong. Rec. S841 (daily ed., February 4, 1980). 

15 Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, id., §4(b), 94 Stat. at 3366. 

16 In the case of service on a ship having a primary mission normally performed in port, career sea pay was 

payable only when the ship was away from its homeport 30 consecutive days or more. See 37 U.S.C. 

§305a(d) (2) as in effect after adoption of the Military Pay and Allowances Benefits Act of 1980. 

463
Under amendments made by the Uniformed Services Pay Act of 1981, Public Law 97-60, 

§116, 95 Stat. 989, 996 (1981), career sea pay also became payable to members of the 

"off-crew" of a two-crew submarine.18

According to the Senate Report on the Military Pay and Allowances Benefits Act 

of 1980, Public Law 96-579, id., career sea duty pay rates were increased because such 

action "specifically targets manpower dollars in an efficient way to improve the retention 

of Naval personnel in sea service skills."19 In extending career sea pay entitlement to 

officers for the first time since 1949, despite the fact such authority had not been sought 

by the administration, Congress, citing the "long history of granting officers at sea a 

differential in pay," specifically addressed itself to, and abandoned, the Hook 

Commission's 1948 conclusion that special pay to officers for sea duty was not warranted 

because "sea duty was normal service for Navy officers."20 Officer sea pay was 

reinstituted "because of the arduous duty and family separations involved in long 

deployments at sea and because of retention problems among Navy officers in certain 

skills."21 "Premium career sea pay" for three or more years of consecutive sea duty was, 

 17 The saved-pay provision incorporated in the Department of Defense Appropriation Authorization Act, 

1979, Public Law 95-485, id., was not affected by the new career sea duty provisions of the Military Pay 

and Allowances Benefits Act of 1980, Public Law 96-579, id.. See footnote 11, above. 

18 As explained by Senator Tower of Texas, who offered the provision in question as a floor amendment to 

a bill that did not otherwise address career sea pay, the purpose of extending entitlement to such pay to the 

off-crew of a two-crew submarine was "to correct what we believe to be a deficiency and ... to be an 

incentive and a compensation to these crews for our SSBN vessels [ballistic missile submarines] that do 

have to remain on station for a prolonged period of time." 127 Cong. Rec. 20171 (1981) (daily ed., 127 

Cong. Rec. S9393 (September 10, 1981)) (statement of Senator Tower). In particular, Senator Tower 

pointed out that affected crew members, spending 50 percent of their time at sea, frequently spent more 

time at sea than other personnel entitled to career sea pay. He also pointed out that, since officers had to 

have three years of cumulative sea duty before being entitled to career sea pay, officers on two-crew 

submarines took excessively long to qualify for such pay, with adverse effects on retention incentives. id. 

19 Senate Report No. 96-1051 (Committee on Armed Services), p. 2, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

20 Senate Report No. 96-1051 (Committee on Armed Services), p. 2, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

21 Senate Report No. 96-1051 (Committee on Armed Services), p. 3, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

464
on the other hand, adopted at the urging of the Navy "to compensate ... members who are 

on prescribed sea tours of greater than three years and as an incentive for ... members 

who are on three year shore tours or less and who volunteer beyond the prescribed sea 

service tour."22 As explained by the Navy, the revised career sea pay program was 

intended primarily to address retention problems: 

Sea pay rates at the current level are insignificant in relation to basic pay 

and as such are not achieving career force retention and accession objectives 

which currently impact the at sea manning. The additional compensation 

realized from the proposed sea pay will be most effective in the retention of 

skilled enlisted personnel. This sea pay proposal is a specifically directed costeffective method of correcting the critical shortage of career force personnel in 

sea duty assignments.23

Taken together, the Department of Defense Appropriation Authorization Act, 

1979, Public Law 95-485, id., and the Military Pay and Allowances Benefits Act of 1980, 

Public Law 96-579, id., highlight the incentive purpose intended to be served by the 

current version of sea pay--namely, to induce service personnel to enter on, and remain 

in, skill specialties entailing career sea duty. 

The Department of Defense Authorization Act, 1985, Public Law 98-525, 

§623(a), 98 Stat. 2492, 2541 (1984), further revised the career sea pay program, 

increasing the rates of pay for enlisted members in pay grades E-6 through E-9 and 

adding four additional cumulative-years-of-sea-duty categories for all qualifying enlisted 

personnel--over 13 years, over 14, over 16, and over 18.24 As explained by Congress, 

 

22 Senate Report No. 96-1051 (Committee on Armed Services), p. 27, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

23 Senate Report No. 96-1051 (Committee on Armed Services), p. 27, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

24 Pursuant to Section 623(c) of the Department of Defense Authorization Act, 1985, Public Law 98-525, 

id., §623(c), 98 Stat. at 2542, these revisions to the career sea pay program for enlisted personnel became 

effective October 1, 1984. 

465
... the increased rates of career sea pay should provide a substantial incentive for 

enlisted personnel to remain at sea. This, in turn, should ease sea-to-shore rotation 

pressures, thereby facilitating increased utilization of the reserves.25

The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§634(a), 99 Stat. 583, 647 (1985), increased the rates of career sea pay for warrant 

officers in pay grades W-3 and W-4 and added four new cumulative-years-of-sea-duty 

categories for all warrant and commissioned officers--namely, over 14 years, over 16, 

over 18, and over 20. In addition, the 1986 Authorization Act, Public Law 99-145, id., 

also removed the prohibition on payment of career sea pay to officers in pay grades O-1 

and O-2 with less than four years of active enlisted or noncommissioned warrant officer 

service. The legislative history of the 1986 Authorization Act does not indicate the reason 

for these increases,26 primarily because no report was ever submitted on the Senate bill, 

S. 1160, 99th Congress, 1st Session (1985), in which the career sea pay "enhancements" 

were first proposed.27 In fact, the career sea pay "enhancements" adopted as part of the 

 

25 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

26 See Senate Report No. 99-118 (Committee of Conference), p. 431, and House Report No. 99-235 

(Committee of Conference), p. 431, accompanying S. 1160, 99th Congress, 1st Session (1985). 

27 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

When the Armed Services Committee learned that the Senate would approve no real growth in the defense 

budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program reductions to 

conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 1160, reflecting 

these new budget levels .... 

Most of the Senate Report 99-41 continues to be applicable to this bill.... 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) (statement 

of Senator Goldwater). In "explanatory background information" on some of the differences between S. 

1029 and S. 1160, the following appears: 

The compensation and benefits provisions of the bill contain significant differences from those contained in 

S. 1029.... 

466
1986 Authorization Act exactly mirror recommendations advanced by the Fifth 

Quadrennial Review of Military Compensation in 1984.28 In support of its 

recommendations concerning career sea pay for officers, the Fifth Quadrennial Review

had stated: 

... It is appropriate to establish incremental rates beyond 12 years through 20 years 

of sea duty to properly compensate those personnel with such creditable sea time for the 

hardships of sea duty. A new maximum of $410 is sufficient. 

... Commissioned officers should be eligible for Career Sea Pay after 

accruing three years' creditable sea service, regardless of paygrade [sic].29

With respect to the extension of career sea pay to all officers in pay grades 

O-1 and O-2 with over three years of sea duty, the Fifth Quadrennial Review also 

stated: 

 ... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

The special and incentive pays ... involved in these recommendations include: 

 e. Career sea pay. 

 Each of these benefit increases or enhancements are in addition to the modest improvements in 

benefits previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background material" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the career sea pay program contained in S. 

1160 and subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 

99 Stat. 583 (1985). 

28 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the 

principles and concepts of the compensation system for members of the uniformed services" at least once 

every four years and, after completing such a review, to "submit a detailed report to Congress summarizing 

the results of such review together with any recommendations ... proposing changes" to the compensation 

system of the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened 

in 1999, pursuant to Presidential directive, and its report and recommendations were submitted to Congress 

in late 2001. 

29 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 604-605 (November 1983). Also see Special and Incentive Pays, Report of the Fifth Quadrennial 

Review of Military Compensation, Volume III, pp. 24-25, 605 (November 1983), and “Executive Summary, 

Report of the Fifth Quadrennial Review of Military Compensation,” p. VI-10 and 11 (January 1984). (The 

rates of career sea pay for commissioned and warrant officers adopted in the 1986 Authorization Act are 

the same as those proposed by the Fifth Quadrennial Review in the table at page 603 of Special and 

Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume III, November 

1983.) 

467
Related to th[e] issue of junior personnel [being entitled to career sea duty 

pay] is the dual requirement for officer personnel both to be in pay grade O-3 and 

to have accrued three years' creditable sea duty before eligibility to draw Career 

Sea Pay. The intent of Congress appears to have been to preclude officers from 

drawing the pay until they had served an appropriate period of apprenticeship at 

sea. The three-year minimum will accomplish this. 

 For those O-2's who accrue three years' creditable sea service prior to 

regular promotion to O-3, it is an inappropriate penalty to preclude payment of 

Career Sea Pay. Additionally, in this period of improved retention, promotion 

flow points may change. This has already occurred in the NOAA [National 

Oceanic and Atmospheric Administration, one of the uniformed services whose 

members are frequently assigned to sea duty] corps. Thus, officers may be beyond 

their obligated service and have up to 4 1/2 years of sea service before promotion 

to O-3. Congress stated that they were reinstating officer sea pay "because of the 

arduous duty involved in long deployments and because of the retention problems 

among Navy officers in certain skills." Surface warfare O-2's, less than a 1000 of 

whom would be affected by this change, continue to have retention rates well 

below 50 percent.30

It would appear that Congress was persuaded by the analysis and reasoning of the 

Fifth Quadrennial Review. 

The National Defense Authorization Act for Fiscal Years 1988 and 1989, Public 

Law 100-180, §621, 101 Stat. 1019, 1097-1100 (1987), further revised the career sea pay 

program, again at the urging of the Department of Defense. This revision made three 

structural changes and adopted a "save pay" provision. First, the 1988/1989 

Authorization Act, Public Law 100-180, id., adjusted the rates of career sea duty pay for 

enlisted personnel and warrant officers, making no adjustments to the rates for 

commissioned officers. Under these adjustments, career sea duty pay rates for enlisted 

personnel with more than five years of sea duty were generally increased; rates for 

enlisted personnel with less than five years of sea duty were generally decreased; and 

rates for warrant officers in pay grades W-1, W-2, and W-3 with more than nine years of 

sea duty and warrant officers in pay grade W-4 with more than ten years of sea duty were 

increased. Second, entitlements to the career sea pay premium for enlisted personnel in 

pay grades above E-4 with more than five years of sea duty were eliminated. The 

 

30 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” Volume 

III, p. 604 (November 1983). cf. id., pp. 24-25. 

468
combined effect of these two changes is that enlisted personnel with more than five years 

of sea duty are now automatically entitled to roughly the same career sea duty pay they 

would have been entitled to if they had served more than 36 consecutive months of sea 

duty and had accordingly been entitled to the career sea duty premium in addition to their 

regular career sea duty pay. Third, the definition of "sea duty" was changed in two 

particulars: first, in contrast to prior practice, the term "sea duty" as now defined includes 

all time spent on a ship the primary mission of which is accomplished in port, so that if a 

member is assigned to such duty for, e.g., two years, the member would be given credit 

for two years of sea duty for the purpose of determining the amount of career sea pay to 

which he or she might be entitled during his or her next sea duty assignment; and second, 

members assigned to ships the primary mission of which is accomplished in port are 

eligible to draw sea pay whenever the ship is away from its homeport, whereas under 

prior practice members assigned to such ships were entitled to sea pay only when their 

ship was away from its homeport for more than 30 consecutive days. Finally, in a change 

that did not effectively revise the career sea pay program, the 1988/1989 Authorization 

Act, Public Law 100-180, id., adopted a "save pay" provision to ensure that personnel 

whose career sea pay entitlements would otherwise have been cut under the new rates did 

not in fact suffer any cut in entitlement so long as they remained assigned to the same sea 

duty station. 

 As explained by the House Armed Services Committee: 

The committee recommends restructuring Career Sea Pay: (1) to provide 

increased compensation to those on their second sea tour and less to those on their 

first sea tour; (2) to protect members during fiscal year 1988 who would be 

adversely affected by the change with a "save pay" provision; and (3) to correct a 

sea pay inequity associated with members assigned to ships whose primary 

mission is accomplished in port. 

 Specifically, [the Committee proposal] would increase the rates of 

Career Sea Pay for enlisted members with more than five years of cumulative sea 

duty and eliminate the Career Sea Pay premium for these members. Rates for 

warrant officers would also be adjusted to avoid potential pay inversions 

associated with the small number of enlisted members annually selected as 

warrants who would continue sea intensive careers. In addition, this [proposal] 

would permit all time assigned to and served in ships whose primary mission to 

469
accomplished [sic] in port (e.g. destroyer and submarine repair ships and tenders) 

to be credited as sea duty and allow members assigned to these ships to receive 

Career Sea Pay for each day the ship is away from homeport.31

Career sea pay and the career sea pay premium are not authorized for 

Reserve Forces personnel performing inactive-duty training. 

Following passage of the rates National Defense Authorization Act for Fiscal 

Years 1988 and 1989, rates of special pay for career sea duty for Navy personnel were:32 

 

 COMMISSIONED OFFICERS 

Pay Grade Years of Sea Duty 

 OVER 3 OVER 4 OVER 5 OVER 6 OVER 7 OVER 8 OVER 9 

 O-1 $150 $160 $185 $190 $195 $205 $215 

 O-2 150 160 185 190 195 205 215 

 O-3 150 160 185 190 195 205 215 

 O-4 185 190 200 205 215 215 220 

 O-5 225 225 225 225 230 245 250 

 O-6 225 230 230 240 255 265 280 

Pay Grade 

 OVER 10 OVER 11 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20 

 O-1 $225 $225 $240 $250 $260 $270 $280 

 O-2 225 225 240 250 260 270 280 

 O-3 225 225 240 260 270 280 290 

 O-4 225 225 240 270 280 290 300 

 O-5 260 265 265 285 300 315 340 

 O-6 290 300 310 325 340 355 380 

 

31House Report No. 100-58 (Committee on Armed Services), p. 204, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). Cf. Senate Report No. 100-57 (Committee on Armed Services), p. 146, 

accompanying S. 1174, and House Report No. 100-446 (Committee of Conference), p. 643, 100th Congress, 

1st Session (1987). 

32 The Warrant Officer Management Act, enacted as Title XI of the National Defense Authorization Act 

for Fiscal Years 1992 and 1993, Public Law 102-190, 105 Stat. 1290, 1491-1506 (1991), established the 

new warrant officer pay grade, W-5, National Defense Authorization Act for Fiscal Years 1992 and 1993, 

id., §1111(a), 105 Stat. at 1491, and authorized members serving in that pay grade to receive special pay for 

career sea duty at the rates set out on the lines relating to that pay grade in the table below, National 

Defense Authorization Act for Fiscal Years 1992 and 1993, id., §1111(d)(3), 105 Stat. at 1492. For the 

reasons underlying the establishment of the new pay grade, see Chapter II.B.1 hereof, above, "Basic Pay". 

470
 WARRANT OFFICERS 

 Pay Grade Years of Sea Duty 

 LESS THAN 1 OVER 1 OVER 2 OVER 3 OVER 4 

 W-1 $130 $135 $140 $150 $170 

 W-2 150 150 150 150 170 

 W-3 150 150 150 150 170 

 W-4 150 150 150 150 170 

 W-5 150 150 150 150 170 

Pay Grade OVER 5 OVER 6 OVER 7 OVER 8

 W-1 $175 $200 $250 $270 

 W-2 $260 $265 $265 $270 

 W-3 $270 $280 $285 $290 

 W-4 $290 $310 $310 $310 

 W-5 $290 $310 $310 $310 

 

Pay Grade 

 OVER 9 OVER 10 OVER 11 OVER 12

 W-1 $300 $325 $325 $340 

 W-2 310 340 340 375 

 W-3 310 350 375 400 

 W-4 310 350 375 400 

 W-5 310 350 375 400 

Pay Grade 

 OVER 14 OVER 16 OVER 18 OVER 20

 W-1 $360 $375 $375 $375 

 W-2 400 400 400 400 

 W-3 425 425 450 450 

 W-4 450 450 500 500 

 W-5 450 450 500 500 

 ENLISTED MEMBERS 

Pay Grade Years of Sea Duty 

 1 OR LESS OVER 1 OVER 2 OVER 3 OVER 4 

 E-4 $50 $60 $120 $150 $160 

 E-5 50 60 120 150 170 

 E-6 100 100 120 150 170 

 E-7 100 100 120 175 190 

 E-8 100 100 120 175 190 

 E-9 100 100 120 175 190 

471
Pay Grade 

 OVER 5 OVER 6 OVER 7 OVER 8 

 E-4 $160 $160 $160 $160 

 E-5 315 325 350 350 

 E-6 315 325 350 350 

 E-7 350 350 375 390 

 E-8 350 350 375 390 

 E-9 350 350 375 390 

Pay Grade OVER 9 OVER 10 OVER 11 OVER 12 

 E-4 $160 $160 $160 $160 

 E-5 350 350 350 350 

 E-6 365 365 365 380 

 E-7 400 400 410 420 

 E-8 400 400 410 420 

 E-9 400 400 410 420 

Pay Grade OVER 13 OVER 14 OVER 16 OVER 18 

 E-4 $160 $160 $160 $160 

 E-5 350 350 350 350 

 E-6 395 410 425 450 

 E-7 450 475 500 500 

 E-8 450 475 500 520 

 E-9 450 475 520 520 

 The National Defense Authorization Act for Fiscal Year 2001, Public Law 106-

398, 114 Stat. 1654A-156, made substantial changes in the rate structure for both career 

sea pay and the career sea pay premium. The congressionally established pay table that 

had been in existence since the Military Pay and Allowances Benefits Act of 1980 was 

eliminated, and the “Secretary concerned” received authorization to prescribe the rates 

for all members serving under his/her jurisdiction. This meant in effect personnel of each 

branch received career sea duty pay at a different rate in the relatively rare case of an 

Army or Air Force member being assigned to long-term sea duty. The maximum monthly 

rate was set at $750. 

As the law stood following the National Defense Authorization Act for Fiscal 

Years 1988 and 1989, the amount of the career sea pay premium remained $100 for all 

members, with the exclusion of those in grade E-4 with more than five years of sea duty. 

The revisions in the National Defense Authorization Act for Fiscal Year 2001 eliminated 

472
that exclusion. As in the case of regular career sea pay, authorization for setting rates for 

the premium pay was moved from “regulations prescribed by the President” to the 

“Secretary concerned.” Although the law stipulated a maximum of $350 per month, in 

practice the amount of this pay remained at $100 for all members through Fiscal Year 

2004. 

 

Until 2003, the conditions of entitlement to career sea pay and premium career sea 

pay for uniformed services personnel were set out in Sections 201 and 202 of Executive 

Order 11157, as amended, in various supplementary regulations adopted by the service 

Secretaries pursuant to Section 203 of Executive Order 11157, and in the Department of 

Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R.33 Executive Order 13294, 

issued March 28, 2003, revoked Executive Order 11157. Executive Order 13294 placed 

responsibility for carrying out the authority delegated to the President by 37 U.S.C. 

§301(a), relevant to career sea pay and other incentive pays, with the Secretaries of 

Commerce, defense, Health and Human Services, and Homeland Security, as those 

entitlements affect military personnel under the respective jurisdictions of those 

departments. This change reflected the change from Presidential authority to 

departmental authority that had been prescribed for setting the amounts and conditions of 

career duty pay in §630 of the National Defense Authorization Act for Fiscal Year 2001. 

Thus the rates for career sea duty pay continued to vary among the branches. 

Current rates of pay for career sea duty: As of fiscal year 2004, the pay rates 

for career sea duty for Navy personnel were as follows: 

 

 

33 See, in particular, Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, Part 1, Chapter 18, Section A, 

¶¶11801-11806 (Career Sea Pay), and Section B, ¶¶11811-11813 (Premium Career Sea Pay). 

473
COMMISSIONED OFFICERS 

Pay Grade 

 Years of Sea Duty 

 OVER 3 OVER 4 OVER 5 OVER 6 OVER 7 OVER 8 OVER 9 

 O-6 315 320 320 335 360 370 395 

 O-5 315 315 315 315 320 345 350 

 O-4 260 265 280 285 300 310 310 

 O-3 210 225 260 265 275 285 300 

 O-2 210 225 260 265 275 285 300 

 O-1 210 225 260 265 275 285 300 

Pay Grade 

 OVER 10 OVER 11 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20

 O-6 405 420 435 455 475 500 535 

 O-5 365 370 370 400 420 440 475 

 O-4 315 315 335 380 395 405 420 

 O-3 315 315 335 365 380 395 405 

 O-2 315 335 335 350 365 380 395 

 O-1 315 335 335 350 365 380 395 

 

 WARRANT OFFICERS 

Pay Grade Years of Sea Duty 

 LESS THAN 1 OVER 1 OVER 2 OVER 3 OVER 4 OVER 5

 W-5 210 210 210 210 240 240 

 W-4 210 210 210 210 240 240 

 W-3 210 210 210 210 240 380 

 W-2 210 210 210 210 240 365 

 W-1 180 190 195 210 240 245 

Pay Grade 

 OVER 6 OVER 7 OVER 8 OVER 9 OVER 10 OVER 11

 W-5 435 435 435 435 490 525 

 W-4 435 435 435 435 490 525 

 W-3 395 400 405 435 490 525 

 W-2 370 370 380 435 475 475 

 W-1 280 350 380 420 455 455 

Pay Grade 

 OVER 12 OVER 14 OVER 16 OVER 18 OVER 20

 W-5 560 630 630 700 700 

 W-4 560 630 630 700 700 

 W-3 560 595 595 630 630 

474
 W-2 525 560 560 560 560 

 W-1 475 505 525 525 525 

 

ENLISTED MEMBERS 

Pay Grade Years of Sea Duty 

 LESS THAN 1 OVER 1 OVER 2 OVER 3 OVER 4 OVER 5

 E-9 135 135 160 305 320 350 

 E-8 135 135 160 305 320 350 

 E-7 135 135 160 305 320 350 

 E-6 135 135 160 280 300 315 

 E-5 70 80 160 280 300 315 

 E-4 70 80 160 280 290 290 

 E-3 50 60 100 100 100 100 

 E-2 50 60 75 75 75 75 

Pay Grade 

 OVER 6 OVER 7 OVER 8 OVER 9 OVER 10 OVER 11 OVER 12

 E-9 350 375 490 500 500 510 520 

 E-8 350 375 490 500 500 510 520 

 E-7 350 375 490 500 500 510 520 

 E-6 325 350 450 460 465 465 480 

 E-5 325 350 450 450 450 450 450 

 E-4 290 290 390 390 390 390 390 

 E-3 100 100 100 100 100 100 100 

 E-2 75 75 75 75 75 75 75 

Pay Grade 

 OVER 13 OVER 14 OVER 15 OVER 16 OVER 17 OVER 18

 E-9 550 575 575 620 620 620 

 E-8 550 575 575 600 600 620 

 E-7 550 575 575 600 600 600 

 E-6 495 510 510 525 525 550 

 E-5 450 450 450 450 450 450 

 E-4 390 390 390 390 390 390 

 E-3 100 100 100 100 100 100 

 E-2 75 75 75 75 75 75 

Cost: For the cost of career sea duty pay from 1972 to 2004, see Tables II-20 of 

Military Compensation Statistics Tables, volume II of this edition. 

475
Chapter II.D.3.e. 

 Special Continuation, Accession, 

 and Annual Incentive Pays for 

 Nuclear-Qualified Officers 

Legislative Authority: 37 U.S.C. §§312, 312b, and 312c. Cf. 37 U.S.C. §312a for 

nuclear-trained and -qualified enlisted members.1

Purpose: To encourage voluntary accessions into the nuclear power officer 

community and to provide an inducement for nuclear-trained and nuclear-qualified Navy 

officers to continue on active duty upon completion of obligated service. 

Background: The Act of June 3, 1969, Public Law 91-20, §1(1), 83 Stat. 12, 13 

(1969), authorized a special continuation pay of $15,000 for nuclear-qualified submarine 

officers with less than 10 years of commissioned service who agreed to remain in active 

submarine service for a period of four years after their initial service obligations. The 

House Armed Services Committee described the need for the special pay in these terms: 

 The purpose of the bill is twofold: 

 First, to arrest and reverse a rapidly increasing rate of resignation by 

qualified nuclear submarine officers, thereby retaining sufficient qualified officer 

personnel to meet present and future manning requirements of the nuclear 

submarine force; and 

Second, to maintain a sufficient officer force of qualified nuclear 

submarine officers to make possible a viable sea-shore rotation, including 

appropriate and meaningful utilization of the postgraduate education program. 

The purpose of the legislation would be effected by authorizing ... a 

substantial monetary bonus to certain nuclear-trained submarine officers who 

voluntarily extend their period of active service.2

 

1 Special pay for nuclear-trained and nuclear-qualified enlisted members, codified at 37 U.S.C. §312a, is 

covered in Chapter II.E.2.c. hereof, "Selective Reenlistment Bonus," below. See in particular footnotes 30 

and 31 to Chapter II.E.2.c. together with accompanying text. 

2 House Report No. 91-141 (Committee on Armed Services), p. 1, accompanying H.R. 9328, 91st Congress, 

1st Session (1969). See Senate Report No. 91-182 (Committee on Armed Services), p. 2, accompanying 

H.R. 9328, 91st Congress, 1st Session (1969). 

476
Under the act, the continuation pay program provided for payments to be made 

for an agreement to remain on active duty in nuclear-related operations for a four-year 

period. 

The Act of June 3, 1969, Public Law 91-20, id., had an expiration date of June 30, 

1973. The Act of October 27, 1972, Public Law 92-581, §1, 86 Stat. 1277 (1972), 

broadened the continuation pay authority to include nuclear-qualified surface officers as 

well as submarine officers and extended the expiration date to June 30, 1975.3

 Under the 

original law, continuation pay was payable on an installment basis--as a general rule, four 

yearly installments of $3,750 each, starting at the end of the officer's period of initial 

obligated service, or, alternatively, five yearly installments of $3,000 each, starting on the 

date, up to one year in advance of the end of an officer's period of initial obligated 

service, an extension agreement was accepted. Authority to make special continuation 

payments expired June 30, 1975, Congress not having extended the cut-off date. 

The Nuclear Career Incentive Act of 1975, Public Law 94-356, §2, 90 Stat. 901 

(1976), reinstated nuclear continuation pay authority effective August 1, 1976,4

 and 

raised the amount of such pay to $20,000--i.e., five installments of $4,000 or four 

installments of $5,000--with a new expiration date of September 30, 1981. In addition to 

extending the continuation pay authority and increasing the rates payable, the Nuclear 

Career Incentive Act of 1975, Public Law 94-356, id., also created a "nuclear career 

annual incentive bonus" and a "nuclear career accession bonus."5

 

3 In commenting on the proposal to broaden and extend the special continuation pay authority for nucleartrained-and-qualified officers, the Senate Committee on Armed Services characterized the special pay 

program as already having been "highly successful." Senate Report No. 92-1307 (Committee on Armed 

Services), p. 4, accompanying H.R. 16925, 92d Congress, 2d Session (1972). Indeed, the special pay 

program was deemed so "successful" that a similar special pay program, codified at 37 U.S.C. §312a, was 

adopted for nuclear-trained-and-qualified enlisted personnel. See, e.g., footnotes 30 and 31 to Chapter 

II.E.2.c., "Selective Reenlistment Bonus," below, together with accompanying text. 

4 Because of the earlier expiration, there was a hiatus in continuation pay authority from July 1, 1975, to 

August 1, 1976. See Nuclear Career Incentive Act of 1975, Public Law 94-356, §5, 90 Stat. 901, 904 

(1976). 

5

 See Senate Report No. 94-1008 (Committee on Armed Services), pp. 1-3, 94th Congress, 2d Session 

(1976), generally. 

477
The annual incentive bonus established under the Nuclear Career Incentive Act of 

1975, Public Law 94-356, id., §3, 90 Stat. at 901-903, and codified at 37 U.S.C. §312c, 

provided a special pay for nuclear-trained and nuclear-qualified officers on active duty at 

the end of each "nuclear service year"--starting October 1, 1975--at an annual rate of 

$4,000 for officers who had completed training while in officer status and $2,400 for 

officers who were nuclear trained as enlisted members. Under the act, continuation pay 

was authorized for a nuclear officer who had finished his initial service obligation, who 

had less than ten years of commissioned service, and who agreed to extend his active 

duty obligation for four years; a qualified electing officer could receive continuation pay 

of $5,000 for each of the four years. The "incentive bonus," on the other hand, was 

intended as an alternative option to continuation pay: if an affected officer chose not to 

commit himself for four years, thus not becoming eligible for continuation pay of $5,000 

per year, he could nevertheless remain on active duty without any specific commitment 

and earn the annual incentive bonus of $4,000 for each nuclear service year completed. 

As a follow-on incentive, between the 10th and 18th year of commissioned service, a 

nuclear officer became eligible for the $4,000 annual incentive bonus even when not 

assigned to nuclear duty--except when away from such an assignment for three or more 

consecutive years. Between the 18th and 26th year of commissioned service, on the other 

hand, such an officer remained eligible for the annual incentive bonus, but only when 

actually assigned to a nuclear billet. All entitlement to the annual incentive bonus stopped 

at the 26th year of commissioned service. Regardless of any other factor, no bonus 

entitlement existed for an officer receiving aviation career incentive pay or for an officer 

in pay grade O-7 or higher. The incentive bonus was authorized through the nuclear 

service year ending September 30, 1981. 

The "nuclear career accession bonus" established under the Nuclear Career 

Incentive Act of 1975, Public Law 94-356, id., §3, 90 Stat. at 901, and codified at 37 

U.S.C. §312b, on the other hand, was set up as a single payment, not to exceed $3,000, 

payable to an officer with less than five years of commissioned service upon successful 

completion of nuclear training. The primary purpose of the bonus was to induce newly478
commissioned officers to volunteer for nuclear training and duty.6

 The Navy indicated 

during hearings on the authorizing bill that the accession bonus would not be used at least 

through fiscal year 1977, pending an evaluation of the effectiveness of the other 

programs--the annual incentive bonus and the increased rates of continuation pay--

adopted to deal with retention and accession.7

 Under the act, the accession bonus was 

authorized for officers accepted for nuclear training before October 1, 1981. 

The Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, §2, 

95 Stat. 3359, 3359-3360 (1980), generally increased the various rates of pay for nuclearqualified officers and extended the termination dates in recognition of the "serious 

difficulties" encountered by the Navy "in attracting and retaining nuclear officers."8

 In 

particular, the maximum amount of special continuation pay was increased from $5,000 

for each year of an active duty continuation agreement to $7,000, or $28,000 in toto for 

the single four-year agreement contemplated under the continuation pay program, to be 

paid either in four installments of $7,000 each or, in the case of an active duty agreement 

entered one year in advance of the expiration of the initial term of obligated service, in 

five installments of $5,600 each. In addition, authority to accept active duty continuation 

agreements was extended from September 30, 1981, to September 30, 1987. Similarly, 

the maximum amount of annual nuclear career incentive bonus was increased from 

$4,000 to $6,000 (from $2,400 to $3,500 for officers nuclear-trained while enlisted), and 

authority to make such payments was extended to "nuclear service years" ending before 

October 1, 1987. Finally, new provisions were adopted under which a nuclear career 

 

6

e.g., Senate Report No. 94-1008 (Committee on Armed Services), pp. 2-3, 94th Congress, 2d Session 

(1976). 

7 As the Senate Committee on Armed Services noted: 

 . . . The Committee emphasizes that this new authority should be used by the Navy only if demonstrably 

needed and then only to the extent and at the minimum financial level necessary to meet accession 

requirements. 

 Senate Report No. 94-1008 (Committee on Armed Services), p. 2, 94th Congress, 2d Session (1976). 

8 Senate Report No. 96-105 (Committee on Armed Services), p. 5, accompanying H.R. 7626, 96th

Congress, 2d Session. 

479
accession bonus of $3,000 could be paid to an officer who had applied and been accepted 

for submarine nuclear power training. Under the preexisting law, such bonuses could be 

paid only after successful completion of training; under the Military Pay and Allowances 

Benefits Act of 1980, Public Law 96-579, id., bonuses could be paid both upon 

acceptance for, and completion of, training. In addition, authority to make such bonus 

payments was extended to personnel accepted for training on or before September 30, 

1987. The effective date of the various amendments was January 1, 1981. 

The Uniformed Services Pay Act of 1981, Public Law 97-60, §119, 95 Stat. 989, 

997 (1981), extended the nuclear career accession bonus program to personnel applying 

for surface nuclear power training so that, in addition to being entitled to a bonus upon 

completion of training, they, like their submarine counterparts, became entitled to an 

accession bonus upon acceptance for training. As explained by Senator Tower of Texas, 

who offered the extension as a Senate floor amendment, the payment of an acceptance 

bonus for submarine nuclear power training, as had been authorized by the Military Pay 

and Allowances Benefits Act of 1980, Public Law 96-579, id., had had the effect of 

shifting personnel from surface nuclear training to submarine nuclear training, and it was 

necessary to redress the balance.9

 In addition, the Uniformed Services Pay Act of 1981, 

Public Law 97-60, id., permitted nuclear qualified officers who had, before January 1, 

1981, entered a continuation agreement for a $20,000 bonus to cancel that agreement in 

exchange for a new agreement, covering the four year period commencing on such date, 

at the $28,000 rate that had become effective January 1, 1981. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §632, 

99 Stat. 583, 643-646 (1985), effected further changes to the special pay program 

applicable to nuclear-qualified officers. First, the 1986 authorization act generally 

increased the various rates of special pay for such officers. The maximum amount of 

special continuation pay was increased from $7,000 to $12,000 for each year of an active 

 

9 127 Cong. Rec. 20169-20170 (1981) (daily ed., 127 Cong. Rec. S9391-S9392 (September 10, 1981)) 

(statement of Senator Tower). 

480
duty continuation agreement; the maximum annual nuclear career incentive bonus was 

increased from $6,000 to $10,000 for officers who completed nuclear training while they 

were officers and from $3,500 to $4,500 for officers who had been nuclear-trained while 

enlisted. The nuclear career accession bonus was increased from $3,000 to a maximum of 

$8,000.10 Second, the act removed the proviso that limited nuclear-qualified officers to 

one four-year period for which special continuation pay was authorized: under the 

amendment to the continuation pay program effected by the act, nuclear-qualified officers 

may receive multiple continuation bonus payments. In the same vein, the act removed the 

proviso that limited continuation bonus payments to nuclear-qualified officers who had 

completed less than ten years of commissioned service: under the continuation pay 

program as amended by the act, nuclear-qualified officers are entitled to such pay, upon 

execution and acceptance of qualifying continuation agreements, through 26 years of 

commissioned service. The act also permitted nuclear-qualified officers to choose periods 

of three, four, or five years of extended service commitment instead of the single four 

year period specified under the preceding continuation pay program.11 Finally, the act 

extended the period for which the special continuation, annual incentive, and accession 

pays were authorized from October 1, 1987, to October 1, 1990.12

 

10 In presentations to the House Armed Services Committee, the Navy indicated that it "intend[ed] to use 

no more than $9,000 per year" per officer of the continuation pay authority; that it "does not intend at the 

present time to implement more than $7,200" per year per officer of the annual incentive bonus authority 

(not more than $3,600 per year per officer for officers who received nuclear training while enlisted); and 

that it "does not intend to implement more than the current $6,000 ceiling" of the accession bonus authority 

(although it did indicate it expected to pay more of the amount at the time of entry into the program and 

less upon completion of training). House Report No. 99-81 (Committee on Armed Services), pp. 230-231, 

accompanying H.R. 1872, 99th Congress, 1st Session (1985). 

11 The act also incorporated a provision similar to that of the preceding continuation pay program whereby 

the Secretary of the Navy--as the officer designated to administer the program--could accept an extension 

agreement as much as one year before the end of an affected officer's existing period of obligated service. 

As was true of the preceding program, the special continuation bonus was to be paid in equal annual 

installments over the period covered by the extension agreement. (In the case of officers who tendered 

extension agreements before the end of their existing period of obligated service, a special provision dealt 

with the number of installments to be paid.) See 37 U.S.C. §312(a), as amended by Section 

632(a)(1)(D)(iii) of the Department of Defense Authorization Act, 1986, Public Law 99-145, 

§632(a)(1)(D)(iii), 99 Stat. 583, 644 (1985). 

12 The amendments to the nuclear-trained-and-qualified-officer special pay programs became effective 

October 1, 1985. Department of Defense Authorization Act, 1986, Public Law 99-145, §632(d), 99 Stat. 

583, 646 (1985). See 37 U.S.C. §§312 note, 312b note, and 312c note. 

481
As explained by the House Armed Services Committee, the summarized 

enhancements to the nuclear officer special pays were recommended "to eliminate the 

inventory shortage of experienced nuclear qualified officers."13 In support of this overall 

conclusion, the committee went on to note: 

A severe shortage of experienced (pay grades O-4 to O-6) nuclear trained officers 

persists. Officers in these pay grades are required for department head, executive officer, 

commanding officer, and key post command billets. By the end of fiscal year 1984, this 

shortage was 19 percent and is projected to grow to 22 percent by 1987 unless corrective 

action is taken. The shortage is having significant impact on the career opportunities of 

the nuclear qualified officer force. For example, over 33 percent of submarine officers 

completing a 36-month sea tour as submarine department heads immediately serve a 

follow-on 36-month sea tour as submarine executive officers. Over 60 percent of 

submarine officers completing the 36 month executive officer tour immediately serve a 

follow-on 42 month submarine commanding officer tour. Such back-to-back sea tours, 

required to man key sea billets, deny officers who remain in the Navy the opportunity for 

professional development short tours and influence additional officers to leave the 

Navy.14

In short, the benefits available under the nuclear officer continuation, annual 

incentive, and accession pays were liberalized to further increase incentives for affected 

officers to remain in the Navy in nuclear officer billets. 

The National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §614, 103 Stat. 1352, 1446 (1989), further extended the termination dates 

for the special continuation, annual incentive, and accession pay programs, this time to 

September 30, 1995. The extensions were effected with almost no discussion of the 

overall aims of the programs or the specific conditions and needs underlying the 

extensions.15 The National Defense Authorization Act for Fiscal Year 1996, Public Law 

 

13 House Report No. 99-81 (Committee on Armed Services), p. 230, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

14 House Report No. 99-81 (Committee on Armed Services), p. 230, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

15 See, e.g., House Report No. 101-121 (Committee on Armed Services), p. 276, and House Report No. 

101-331 (Committee of Conference), p. 586, both accompanying H.R. 2461, 101st Congress, 1st Session 

(1989). For example, the complete text of the House Armed Services Committee Report dealing with the 

proposed extension reads as follows: 

482
104-106, §613(e), (f), and (g), 110 Stat. 186, 360 (1996), again extended the termination 

dates for the special continuation, accession, and annual incentive pay programs, 

respectively, to September 30, 1997.16 One-year extensions were prescribed in the 

respective national defense authorization acts for fiscal years 1997 through 2004; the only 

exception, the act for fiscal year 1999 (Public Law 105-261, 112 Stat. 2035), provided for 

a three-month extension from October 1, 1999 to January 1, 2000 in the process of 

adjusting funding end-points from a fiscal-year to the calendar-year cycle. As the 

program was extended from year to year, two increases occurred in all special pays for 

nuclear-qualified officers. The National Defense Authorization Act for Fiscal Year 1998, 

Public Law 105-85, 111 Stat. 1770, increased the nuclear career accession bonus from 

$8,000 to $10,000 and the continuation bonus from $12,000 to $15,000. At that time the 

career annual incentive bonuses were increased from $4,500 to $5,500 for nuclearqualified officers who trained as enlisted members and from $10,000 to $12,000 for those 

who trained as officers. The National Defense Authorization Act for Fiscal Year 2000, 

Public Law 106-65, 113 Stat. 644, made more significant increases in all the special pays 

 

Current law authorizes until September 30, 1990, the payment of (1) special pay to certain nuclear qualified 

officers who agree to remain on active duty for a specified period of time; (2) a nuclear career accession 

bonus for individuals that [sic] agree to serve as officers in connection with the supervision, operation and 

maintenance of naval nuclear power plants; and (3) a nuclear career annual incentive bonus for personnel 

serving in select grades and specialties. [The House proposal] would extend these authorities until 

September 30, 1995. 

House Report No. 101-121, id., p. 276. The Conference Report merely summarized the proposals in the 

House and Senate bills. House Report No. 101-331, id., p. 586. (Although the Conference Report, cited 

above, indicated that the Senate bill, S. 1352, 101st Congress, 1st Session (1989), had proposed extending 

the special continuation, annual incentive, and accession pay programs to September 30, 1992, the Senate 

Report on S. 1352 made no mention of the proposed extensions. See Senate Report No. 101-81 (Committee 

on Armed Services), accompanying S. 1352, 101st Congress, 1st Session (1989); see especially pp. 176-182 

of Senate Report No. 101-81.) 

16 The House of Representatives proposed a two-year extension of these termination dates to September 

30, 1998, House Report No. 104-131 (Committee on National Security), p. 231, accompanying H.R. 1530, 

104th Congress, 1st Session (1995), but the Senate proposed only a one-year extension to September 30, 

1997, expressing a concern that the Navy may not have given careful enough consideration to the effect of 

downsizing the nation's nuclear submarine force on the need for the nuclear-qualified-officer special pays, 

Senate Report No. 104-112 (Committee on Armed Services), p. 255, accompanying S. 1026, 104th

Congress, 1st Session (1995). The one-year extension recommended by the Senate was approved in 

conference. House Report No. 104-406 (Committee of Conference), pp. 815-816, accompanying H.R. 

1530, 104th Congress, 1st Session (1995), and House Report No. 104-450 (Committee of Conference), pp. 

805-806, accompanying S. 1124, 104th Congress, 2d Session (1996). 

483
for nuclear-qualified officers. Following the authorization bill for 2000, the nuclear 

career accession bonus increased from $10,000 to $20,000 and nuclear officer 

continuation pay increased from $15,000 to $25,000. The nuclear career annual incentive 

bonuses increased from $5,500 to $10,000 for officers who trained as enlisted members 

and from $12,000 to $22,000 for officers who trained while in officer status. Congress 

engaged in no significant discussion of the rationale for the increases in the 1998 or the 

2000 legislation. 

The provisions governing continuation pay for nuclear-qualified officers 

are codified at 37 U.S.C. §312; those governing the career accession bonus, at 37 

U.S.C. §312b; and those governing the annual incentive bonus, at 37 U.S.C. 

§312c.17 18

Current rates of pay: The rates of special pay for nuclear-qualified officers are 

as follows: 

 Type of pay Amount 

 

 Nuclear career accession bonus May not exceed $20,000 per year19 

 Nuclear officer continuation pay May not exceed $25,000 per year20 

 Nuclear career annual incentive 

 bonus, training as enlisted member May not exceed $10,000 per year 

 Nuclear career annual incentive 

 bonus, training as officer May not exceed $22,000 per year21 

 

17 Special pay for nuclear-trained-and-qualified enlisted personnel, codified at 37 U.S.C. §312a, is covered 

in Chapter II.E.2.c., below, which deals with selective reenlistment bonuses. See in particular footnotes 30 

and 31 to Chapter II.E.2.c., "Selective Reenlistment Bonus," below, together with accompanying text. 

Under the provisions of 37 U.S.C. §312a(e), authority for special pay for nuclear-trained-and-qualified 

enlisted personnel expired on June 30, 1975. 

18 For regulations governing the payment of special pays and bonuses for nuclear-qualified officers, see 

Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for Active 

Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶11201-11234. 

19 For rates of pay under the nuclear career accession bonus authority of 37 U.S.C. §312b currently 

authorized by regulation, see Department of Defense Financial Management Regulation, Military Pay: 

Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶11201-11204 

and 11231-11234. 

20For rates of pay under the nuclear officer continuation pay authority of 37 U.S.C. §312 currently 

authorized by regulation, see Department of Defense Financial Management Regulation, Military Pay: 

Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶11211-11215. 

484
Cost: For the cost of pays for nuclear-qualified officers from 1972 to 2004, see 

Table II-21 of Military Compensation Statistics Tables, volume II of this edition. 

 21 For rates of pay under the nuclear career annual incentive bonus authority of 37 U.S.C. §312c currently 

authorized by regulation, see Department of Defense Financial Management Regulation, Military Pay: 

Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶11221-11224. 

485
Chapter II.D.4.a. 

 Experimental Stress Duty Pays 

Legislative Authority: 37 U.S.C. §301(a)(5), (6), and (7), and (c)(1). 

Purpose: To provide additional pay to increase the ability of the uniformed 

services to induce personnel to enter into and remain in duties involving an unusually 

high level of physiological or other stress. 

Background: The Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th

Congress], §2(4), 69 Stat. 18, 19-20 (1955), added duty "as a low-pressure chamber 

inside observer" and duty "as a human acceleration or deceleration experimental subject" 

to the categories of duty for which hazardous duty incentive pay was authorized. The Act 

of August 28, 1957, Public Law 85-208, 71 Stat. 484 (1957), added a further duty 

category to the list for which such pay was authorized--namely, duty "as a human test 

subject in thermal stress experiments."1

 The Uniformed Services Pay Act of 1963, Public 

Law 88-132, §7, 77 Stat. 210, 215 (1963), amended the pressure chamber incentive pay 

provision by expanding eligibility to include "duty inside a high- or low-pressure 

chamber." The three categories of duty set out above are collectively known as 

experimental stress duties. 

Hazardous duty incentive pay rates for experimental stress duties were initially 

fixed at $110 per month for officers and $55 per month for enlisted personnel and 

remained at those levels until 1981, when the enlisted pay was increased.2

 The officer-

 

1 The hazardous duty incentive pay provisions adopted in the Career Incentive Act of 1955, ch. 20 [Public 

Law 20, 84th Congress], §2(4), 69 Stat. 18, 19-20 (1955), and the Act of August 28, 1957, Public Law 85-

208, 71 Stat. 484 (1947), including the experimental stress duty pays here in issue, were in the main 

classified to 37 U.S.C. §235. See 37 U.S.C. §235(a) and (c) (1958). Later, when Title 37 of the United 

States Code was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 

451 (1962), the hazardous duty pay provisions, including the experimental stress duty pays, were codified 

at 37 U.S.C. §301. 

2

 Under the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 

802, 809-810 (1949), officers received $100 per month and enlisted personnel received $50 per month for 

the hazardous duty incentive pays--other than flight and submarine duty pay--ultimately codified at 37 

U.S.C. §301. Hazardous duty incentive pay rates were increased by 10 percent for both officers and 

enlisted personnel by the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(6), 69 

486
enlisted rate differential in the pays was a product of the hazardous duty incentive pay 

structure adopted in the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st 

Congress], §204, 63 Stat. 802, 809-810 (1949), which was in turn based on 

recommendations of the Advisory Commission on Service Pay, frequently referred to as 

the Hook Commission. The Hook Commission's rationale for an officer-enlisted 

differential was that: 

A higher rate of hazard pay for officers as compared with enlisted 

personnel is justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all times the 

compensation for the primary responsibility will be considerably greater than that 

for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more 

highly trained personnel. 

 (3) Officers are usually given greater responsibilities, aside from normal 

administrative control, than enlisted personnel on hazardous assignments. 3 4

Effective October 1, 1981, rates of incentive pay for enlisted personnel involved 

in experimental stress duty were increased 50 percent to $83 per month by the Uniformed 

Services Pay Act of 1981, Public Law 97-60, §111(c), 95 Stat. 989, 993 (1981). As 

explained in the Senate Report, these increases were made in recognition of the fact that 

 Stat. 18, 21 (1955)--to $110 for officers and to $55 for enlisted personnel. Thus, when members of the 

uniformed services first became entitled to hazardous duty incentive pay for experimental stress duty under 

amendments to 37 U.S.C. §301 made by the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th

Congress], §2(4), 69 Stat. 18, 19-20 (1955), the rates of pay were $110 a month for officers and $55 a 

month for enlisted personnel. 

3

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay, p. 27, December 1948. 

4 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 809-810 (1949), 

see House Report No. 81-779 (Committee on Armed Services), p. 15, and Senate Report No. 81-733 

(Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

487
hazardous duty incentive pay rates had "not been adjusted in more than 20 years, and this 

increase is needed to enhance the incentive value of this pay."5

Experimental stress duty pay rates for enlisted personnel were further increased to 

$110 per month in 1985 by the Department of Defense Authorization Act, 1986, Public 

Law 99-145, §635(a)(3), 99 Stat. 583, 648 (1985). This increase was effected by an 

amendment to 37 U.S.C. §301(c)(1) that did away with any distinction between officers 

and enlisted personnel for the vast majority of duties qualifying for hazardous duty 

incentive pay, specifically including the various experimental stress duties. Prior to 

amendment by the 1986 Authorization Act, 37 U.S.C. §301(c)(1) read as follows: 

For the performance of the hazardous duty described in [various clauses of 

subsection (a) of 37 U.S.C. §301, including all the experimental stress duties], an officer 

is entitled to $110 a month and an enlisted member is entitled to $83 a month. 

After amendment by the Department of Defense Authorization Act, 1986, Public 

Law 99-145, id., 37 U.S.C. §301(c)(1) reads as follows: 

For the performance of hazardous duty described in [the same clauses set out 

above, including experimental stress duties], a member is entitled to $110 a month.6

Thus, under current 37 U.S.C. §301, all members, both officers and enlisted 

personnel,7

 are entitled to $110 per month for the performance of experimental stress 

duties under qualifying orders. 

The legislative history of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., does not per se indicate the reason for doing away with the 

 

5

 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

6 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in experimental stress 

duties became effective October 1, 1985. Department of Defense Authorization Act, 1986, Public Law 99-

145, §635(a), 99 Stat. 583, 648 (1985). 

7 The term "member" is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

488
distinction between officers and enlisted personnel with respect to the rates of pay 

authorized for experimental stress duties, primarily because no report was ever submitted 

on the Senate bill, S. 1160, 99th Congress, 1st Session (1985), in which the proposal to 

equalize the rates of experimental stress duty pay for officers and enlisted personnel was 

made.8

 In fact, however, the proposal to equalize officer and enlisted rates of pay for 

various hazardous duties, including experimental stress duties, had been made the 

preceding year in connection with the consideration of the Department of Defense 

Authorization Act, 1985, Public Law 98-525, 98 Stat. 2492 (1984). At that time, the 

 

8

 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

 ... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

 When the Armed Services Committee learned that the Senate would approve no real growth in the 

defense budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program 

reductions to conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 

1160, reflecting these new budget levels.... 

 Most of Senate Report 99-41 continues to be applicable to this bill. 

 131 Cong Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) 

(statement of Senator Goldwater). In "explanatory background information" on some of the differences 

between S. 1029 and S. 1160, the following appears: 

 The compensation and benefits provisions of the bill contain significant differences from those 

contained in S. 1029.... 

 ... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

 The special and incentive pays ... involved in these recommendations include: 

 g. Hazardous duty pays. 

 Each of these benefit increases or enhancements are in addition to the modest improvements in 

benefits previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 CONG. REC. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the experimental stress duty pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

489
Senate Committee on Armed Services, reporting out S. 2723, 98th Congress, 2d Session 

(1984), had included a provision that would, among other things, have equalized officer 

and enlisted rates of hazardous duty incentive pay for experimental stress duties.9

 In 

support of its recommendation, the Committee stated: 

The committee proposes that the enlisted and officer rates for several hazardous 

duty incentive pays be equalized.... 

The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including the experimental stress duty pays] should be 

eliminated.... 

The committee agrees that enlisted and officer personnel should be paid 

the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.10

The Senate proposal was eliminated in conference.11

As indicated immediately above, the experimental stress duty pay 

"enhancements" adopted as part of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., closely parallel recommendations advanced by the Fifth 

Quadrennial Review of Military Compensation in 1984.12 In support of its 

 

9

 See Section 148 of S. 2723, 98th Congress, 2d Session (1984). 

10 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing Section 148 of the Senate 

bill), accompanying S. 2723, 98th Congress, 2d Session (1984). 

11 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

12 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ...proposing changes" to the compensation system of 

the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in late 

2001. 

490
recommendation to "increase the enlisted rate to $110 per month, eliminating the 

officer/enlisted pay differential,"13 the Fifth Quadrennial Review concluded: 

Current rates of payment [for experimental stress duties] are generally adequate to 

recognize the hazards [implicit in such duties] and to provide a degree of incentive. 

1. Officer and enlisted personnel should receive equal compensation for exposure 

to experimental-type duties. 

2. An appropriate rate for both officer and enlisted personnel receiving 

Experimental Stress Duty Pay is $110 per month.14

In reaching this conclusion, the Fifth Quadrennial Review also noted: 

There is a need to provide special compensation to personnel performing 

duties involving acceleration/deceleration testing, thermal stress experiments, and 

high or low pressure chamber duty. 

1. The Services are obtaining sufficient volunteers for acceleration/ deceleration 

and thermal stress duties, both of which are limited in duration. 

2. Low attraction to pressure chamber duties contributes to undermining in the 

Navy. 

3. Retention rates of pressure chamber personnel in the Air Force and Navy for 

both officers and enlisted personnel are below desired levels.15

In further comment on officer-enlisted differentials for various hazardous 

duty incentive pays, including experimental stress duties, the Fifth Quadrennial 

Review stated: 

During the process of reviewing the various Hazardous Duty Incentive 

Pays, it became increasingly clear that, although there is some incentive 

associated with certain pays, the primary purpose is recognition for the hazards or 

 

13 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 101, November 1983. Also see id., p. 4, and Executive Summary, Report of the Fifth Quadrennial 

Review of Military Compensation, p. VI-4, January 1984. 

14 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 100-101, November 1983. Also see id., p. 4, and Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation, pp. VI-4, January 1984. 

15 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 100, November 1983. Also see id., p. 4. Cf. Executive Summary, Report of the Fifth Quadrennial 

Review of Military Compensation, p. VI-4, January 1984. 

491
risks involved. It was, therefore, believed that officer/enlisted personnel should 

receive the same level of payment for seven of the Hazardous Duty Incentive 

Pays: [including] ... experimental stress [duty pays]....16 

In arriving at this conclusion, the Fifth Quadrennial Review implicitly rejected the 

conclusions reached by the Hook Commission in 1948.17 In commenting on various 

arguments that had been advanced in favor of and against continuation of officer-enlisted 

differentials for hazardous duty incentive pays in general, the Fifth Quadrennial Review

summarized the argument against the Hook Commission's position in the following 

terms: 

The Hook Commission rationale was based primarily on an examination 

of the needs of the aviation and submarine communities. Times have changed and 

those communities now have their own separate career incentive pays and 

bonuses.18

Other arguments in favor of eliminating the differential were summarized 

as follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 * One can never really compensate for loss of life, no matter the level. 

 * Basic pay and bonuses are adequate to cover the differential. 

* Most hazard-related pays now cover skills that are not necessarily career 

oriented (across all Services); hence, a differential is not necessary for purposes of 

retention. However, exceptions may occur and should be individually addressed, 

as required. 

 

16 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 100, November 1983. Also see id., p. 4. cf. Executive Summary, Report of the Fifth Quadrennial 

Review of Military Compensation, p. VI-4, January 1984. 

17See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnotes 3 and 4 to this chapter, above. 

18 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 920, November 1983. cf. id., p. 37. 

492
* [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for 

same risk" is perceived as equitable in the hazardous duty areas.19

Whether for these or some other reasons, Congress did in fact eliminate officerenlisted pay differentials for experimental stress duties in the Department of Defense 

Authorization Act, 1986, Public Law 99-145, id. Based on that legislation, both enlisted 

and officer members received $110 per month for experimental stress duty pay. The 

National Defense Authorization Act for Fiscal Year 1998, Public Law 105-85, 111 Stat. 

1786, raised the monthly rate for experimental stress duty pay and a number of other 

hazardous duty pays to $150. 

As administered, a member is entitled to experimental stress duty pay for 

any month during which he performs under competent orders (1) duty as a human 

acceleration or deceleration experimental subject utilizing experimental 

acceleration or deceleration devices; (2) duty as a human thermal experimental 

subject in a thermal stress experiment; or (3) duty within a high-pressure 

(hyperbaric) or low-pressure (altitude) chamber at physiological facilities as a 

human test subject, research technician, or inside instructor-observer. Department 

of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, 

¶20341. 

Reserve forces personnel20 entitled to compensation for inactive-duty training are 

technically entitled to experimental stress duty pays, when they perform qualifying duties 

under competent orders, provided Congress has appropriated sufficient funds for that 

purpose.

21 Under 37 U.S.C. §301(f), members of the reserve forces who perform 

 

19 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 919-920, November 1983. 

20 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

21 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

493
qualifying experimental stress duties while entitled to compensation under 37 U.S.C. 

§206 are also entitled, subject to such regulations as may be prescribed by the President, 

to "an increase in compensation equal to 1/30 of the monthly incentive pay" payable to 

active duty personnel performing such duties.22 That is, for every "period of instruction ... 

or ... appropriate duty" for which a member of the reserve forces is entitled to 

compensation under 37 U.S.C. §206, the member is, if performing qualifying 

experimental stress duties under 37 U.S.C. §301(f), also entitled to 1/30th of the 

experimental stress duty pay that would be payable to a member of the active duty force 

who was performing such duty. Under regulations prescribed by the President, a member 

of a reserve force who performs experimental stress duties under 37 U.S.C. §301(f) while 

engaged in inactive-duty training is entitled, at least technically, to experimental stress 

duty pay.23 

Legislative authority to make experimental stress duty payments to reserve 

forces personnel engaged in inactive-duty training can, in one sense, be traced to 

the Act of July 2, 1926 (Army Air Corps Act), ch. 721 [Public Law 446, 69th

Congress], §6, 44 Stat. 780, 782-783 (1926), which was the first legislative 

enactment that provided for special compensation for inactive duty reserve forces 

personnel engaged in hazardous duties of one kind or another.24 In fact, however, 

experimental stress duties were not covered by the Army Air Corps Act. Rather, 

 flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

22 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

23 See Department of Defense Financial Management Regulation Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶80316. 

24 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew 

Member)." 

494
that Act merely gave "officers, warrant officers, and enlisted men of the National 

Guard" who were, by competent orders, required to "participate regularly and 

frequently in aerial flights" a 50 percent increase in the "armory drill pay" to 

which they would otherwise have been entitled.25 Technically, the first special 

provision for experimental stress duty pay for reserve forces personnel engaged in 

inactive-duty training came in the Career Incentive Act of 1955, ch. 20 [Public 

Law 20, 84th Congress], §2(4), 69 Stat. 18, 19-21 (1955), which, as above noted, 

covered duty "as a low-pressure chamber inside observer" and duty "as a human 

acceleration or deceleration experimental subject." The Act of August 28, 1957, 

Public Law 85-208, 71 Stat. 484 (1957), added duty "as a human test subject in 

thermal stress experiments" to the category of duties for which experimental 

stress duty pays were technically authorized for reserve forces personnel 

performing inactive-duty training. 

As a practical matter, the Career Incentive Act of 1955, ch. 20 [Public Law 20, 

84th Congress], id., and the Act of August 28, 1957, Public Law 85-208, id., had been 

intended to extend experimental stress duty pay entitlements to active duty personnel 

performing qualifying duties. The entitlements technically covered reserve forces 

personnel also because of the way Title 37 of the United States Code was organized. At 

the time, 37 U.S.C. §301(d) provided that reserve forces personnel on inactive-duty 

training were entitled to additional pay for hazardous duty "when required by competent 

orders to perform any hazardous duty prescribed by or pursuant to section 235 [of Title 

37]." Section 235, in turn, covered hazardous duty incentive pay entitlements of active 

duty personnel, and it was to that section that the experimental stress duties were added. 

The Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], id., and the Act 

of August 28, 1957, Public Law 85-208, id., had simply added three new categories of 

duty for which hazardous duty incentive pay was authorized for active duty personnel, 

but the pay was technically available to reserve forces personnel as well under then 37 

U.S.C. §301(d).26 Thus, reserve forces personnel on inactive-duty training had in effect 

"piggybacked" on active duty personnel insofar as technical entitlement to experimental 

stress duty pays was concerned. Later, when Title 37 of the United States Code was 

 

25 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," above, for a more complete discussion of the history of hazardous 

duty incentive pay for reserve forces personnel engaged in inactive-duty training. 

26 See 37 U.S.C. §301(d) (1952). 

495
enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 

451 (1962), the inactive-duty training pay provisions relating to hazardous duty incentive 

pay entitlements of reserve forces personnel, which had formerly been classified to 37 

U.S.C. §301(d), were codified at 37 U.S.C. §301(f), whereas the hazardous duty incentive 

pay provisions relating to active duty personnel, which had been formerly classified to 37 

U.S.C. §235, were codified at 37 U.S.C. §301(a)-(e). In essence, the same entitlement 

rules were carried over into the newly codified Title 37, and reserve forces personnel 

performing inactive-duty training became entitled to hazardous duty incentive pay for 

performing any of the duties set out in 37 U.S.C. §301(a), including experimental stress 

duties. The current structure of hazardous duty pay entitlements for reserve forces 

personnel performing inactive-duty training thus derives from the organization imposed 

on Title 37 by the Act of September 7, 1962. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §647, 

99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain housekeeping 

provisions concerning how hazardous duty incentive pay for inactive-duty training was to 

be computed. As explained by the House Committee on Armed Services: 

Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

To ensure equity for reserve members in the computation of hazardous duty 

incentive pay, the committee recommends that reserve members who are entitled to 

HDIP for flying be permitted to credit active duty or inactive duty training flight time to 

fulfill active or inactive duty flight time requirements.27

 

27 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

496
While the concern that led to the amendment in issue was the appropriate 

use and apportionment of flying time, the amendment to 37 U.S.C. §301(f) was 

stated in broader terms, so that it applies to any of the hazardous duties set out in 

37 U.S.C. §301(a), including experimental stress duties, and not just flight duty. 

Thus, for any month in which a member of a reserve force is involved both in 

active duty and inactive-duty training for which he is entitled to hazardous duty 

incentive pay under 37 U.S.C. §301, the total amount of hazardous duty incentive 

pay the member may receive is based on his combined entitlement for both active 

duty and inactive-duty training. 

So far as can be determined, no reserve forces personnel on inactive training have 

ever received experimental stress duty pay. As a practical matter, it would appear that 

reserve forces personnel simply are not assigned to qualifying duty while performing 

inactive-duty training. 

Until 2003, the conditions of entitlement to experimental stress pay for both 

active duty and reserve forces personnel were set out in Sections 109(c), (d), and (e) of 

Executive Order 11157, as amended and in various supplementary regulations adopted by 

the service Secretaries pursuant to Section 113 of Executive Order 11157; and in the 

Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶20341-

20343 (active duty forces) and ¶80316 (reserve forces personnel engaged in inactive-duty 

training). Executive Order 13294, issued March 28, 2003, revoked Executive Order 

11157. Executive Order 13294 placed responsibility for carrying out the authority 

delegated to the President by 37 U.S.C. §301, relevant to hazardous duty incentive pay, 

with the Secretaries of Commerce, Defense, Health and Human Services, and Homeland 

Security, as those entitlements affect military personnel under the respective jurisdictions 

of those departments. 

Current rates of pay: The current rate of pay authorized for persons participating 

in the three types of experimental stress duties outlined above is $150 per month. 

Cost: For the cost of experimental stress duty pay from 1972 to 1986, see Table 

II-22 of Military Compensation Statistics Tables, volume II of this edition. 

497
Chapter II.D.4.b. 

 Personal Exposure Pay 

 (Toxic Pesticides and Dangerous Organisms) 

Legal Authority: 37 U.S.C. §301(a)(9) and (c)(1). 

Purpose: To provide an additional incentive for uniformed services personnel to 

engage in various activities in which they may be exposed to toxic pesticides or to live 

dangerous viruses and bacteria, and to compensate such personnel for the more than 

normally dangerous character of such duty. 

Background: The Uniformed Services Pay Act of 1981, Public Law 97-60, 

§111(a), 95 Stat. 989, 992-993 (1981), authorized the payment of hazardous duty 

incentive pay to uniformed services personnel assigned to duty "involving frequent and 

regular exposure to highly toxic pesticides or involving laboratory work that utilizes live 

dangerous viruses or bacteria." As explained in the relevant Congressional reports, 

military personnel exposed to "highly toxic pesticides" and "laboratory workers exposed 

to live hazardous viruses and bacteria" were added to the "categories of personnel whose 

duties have been determined to be hazardous" for the purposes of 37 U.S.C. §301 in 

recognition of the "extensive personal sacrifices made by military members whose daily 

duties place them in imminent danger from hazards such as toxic, lethal, or carcinogenic 

substances or whose routine duties involve hazardous working conditions."1

When duties involving personal exposure to toxic pesticides and dangerous 

viruses and bacteria were initially added to the "categories of personnel whose duties 

[were] determined to be hazardous" for the purpose of 37 U.S.C. §301, the rates of pay 

for the hazardous duties covered by that provision were $110 per month for officers and 

$83 per month for enlisted personnel, and these rates applied, pari passu, to personnel 

entitled to hazardous duty incentive pay on account of exposure to toxic pesticides and 

 

1 Senate Report No. 97-146 (Committee on Armed Services), pp. 7-8, accompanying S. 1181, 97th

Congress, 1st Session (1981). See House Report No. 97-265 (Committee of Conference), p. 22, 

accompanying S. 1181, 97th Congress, 1st Session (1981). 

498
dangerous viruses and bacteria. The officer-enlisted rate differential was a product of the 

hazardous duty incentive pay structure adopted in the Career Compensation Act of 1949, 

ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 809-810 (1949),2

 which had 

in turn been based on the recommendations of the Advisory Commission on Service Pay, 

sometimes referred to as the Hook Commission. The Hook Commission's rationale for an 

officer-enlisted pay differential was that: 

A higher rate of hazard pay for officers as compared with enlisted personnel is 

justifiable on several grounds: 

(1) Any special pay must be in proportion to the basic pay, so that at all times the 

compensation for the primary responsibility will be considerably greater than that 

for any additional duty. 

(2) The rates proposed for hazard pay serve as an inducement to undertake and 

continue special duties; and such an inducement need not be as great in monetary 

terms for lower paid and less advanced personnel as for higher paid and more 

highly trained personnel. 

(3) Officers are usually given greater special responsibilities, aside from normal 

administrative control, than enlisted personnel on hazardous assignments.3 4

 

2 Under the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 

802, 809-810 (1949), officers received $100 per month and enlisted personnel received $50 per month for 

the hazardous duty incentive pays--other than flight and submarine duty pay--ultimately codified at 37 

U.S.C. §301. Hazardous duty incentive pay rates were increased by 10 percent for both officers and 

enlisted personnel by the Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], 69 Stat. 18 

(1955)--to $110 for officers and to $55 for enlisted personnel. Enlisted personnel received a further 

increase to $83 per month--a 50 percent raise--by the Uniformed Services Pay Act of 1981, Public Law 97-

60, §111(c), 95 Stat. 989, 993 (1981), the same Act that extended hazardous duty incentive pay 

entitlements to personnel exposed to toxic pesticides and live dangerous viruses and bacteria. See 

Uniformed Services Pay Act of 1981, Public Law 97-60, id., §111(a), 95 Stat. at 992-993. As indicated by 

Congress, the reason for the 1981 increase in hazardous duty incentive pay rates for enlisted personnel was 

that such rates had "not been adjusted in more than 20 years, and this increase is needed to enhance the 

incentive value of this pay." Senate Report No. 97-146 (Committee on Armed Services), p. 8, 

accompanying S. 1181, 97th Congress, 1st Session (1981). Thus, when members of the uniformed services 

first became entitled to hazardous duty incentive pay for exposure to toxic pesticides or dangerous 

organisms under amendments to 37 U.S.C. §301 made by the Uniformed Services Pay Act of 1981, Public 

Law 97-60, id., §111(a), 95 Stat. at 992-993, the rates of pay were $110 a month for officers and $83 a 

month for enlisted personnel. 

3

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 27, December 1948. 

4

 For a short discussion of the treatment accorded hazardous duty incentive pays under the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §204, 63 Stat. 802, 809-810 (1949), 

see House Report No. 81-779 (Committee on Armed Services), p. 15, and Senate Report No. 81-733 

(Committee on Armed Services), p. 18, accompanying H.R. 5007, 81st Congress, 1st Session (1949). 

499
In 1985, the rates of hazardous duty incentive pay generally, and for personal 

exposure to toxic pesticides and dangerous viruses and bacteria in particular, were 

increased to $110 per month for enlisted personnel by the Department of Defense 

Authorization Act, 1986, Public Law 99-145, §635(a)(3), 99 Stat. 583, 648 (1985). This 

increase was effected by an amendment to 37 U.S.C. §301(c)(1) that did away with any 

distinction between officers and enlisted personnel for the vast majority of duties 

qualifying for hazardous duty incentive pay, specifically including personal exposure 

duties. Prior to amendment by the 1986 Authorization Act, 37 U.S.C. §301(c)(1) read as 

follows: 

For the performance of the hazardous duty described in [various clauses of 

subsection (a) of 37 U.S.C. §301, including personal exposure duties], an officer is 

entitled to $110 a month and an enlisted member is entitled to $83 a month. 

After amendment by the 1986 Authorization Act, 37 U.S.C. §301(c)(1) 

reads as follows: 

For the performance of hazardous duty described in [the same clauses set 

out above, including personal exposure duties], a member is entitled to $110 a 

month.5

Thus, under 37 U.S.C. §301 as amended in 1986, all members, both officers and 

enlisted personnel,6

 were entitled to $110 per month for the performance of personal 

exposure duties under qualifying orders. 

 The legislative history of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., does not, per se, indicate the reason for doing away with the 

distinction between officers and enlisted personnel with respect to the rates of pay 

authorized for personal exposure duties, primarily because no report was ever submitted 

on the Senate bill, S. 1160, 99th Congress, 1st Session (1985), in which the proposal to 

equalize the rates of personal exposure duty pay for officers and enlisted personnel was 

 

5 The increase in hazardous duty incentive pay rates for enlisted personnel engaged in personal exposure 

duties became effective October 1, 1985. Department of Defense Authorization Act, 1986, Public Law 99-

145, §635(a), 99 Stat. 583, 648 (1985). 

6

 The term "member" is defined in 37 U.S.C. §101(23) to mean "a person appointed or enlisted in, or 

conscripted into, a uniformed service." As such, "member" includes both officers and enlisted personnel. 

500
made.7

 In fact, however, the proposal to equalize officer and enlisted rates of pay for 

various hazardous duties, including personal exposure duties, had been made the 

preceding year in connection with the consideration of the Department of Defense 

Authorization Act, 1985, Public Law 98-525, 98 Stat. 2492 (1984). At that time, the 

Senate Committee on Armed Services, reporting out S. 2723, 98th Congress, 2d Session 

(1984), had included a provision that would, among other things, have equalized officer 

 

7

 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41 (Committee on Armed Services), 99th Congress, 1st Session (1985). Before this bill was 

considered by the full Senate, the Armed Services Committee reported out a clean bill, S. 1160, but did not 

issue a report on it. As explained by Senator Goldwater, Chairman of the Armed Services Committee, when 

S. 1160 came before the Senate for consideration: 

... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

When the Armed Services Committee learned that the Senate would approve no real growth in the defense 

budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program reductions to 

conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 1160, reflecting 

these new budget levels.... 

Most of Senate Report 99-41 continues to be applicable to this bill. 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) (statement 

of Senator Goldwater). In "explanatory background information" on some of the differences between S. 

1029 and S. 1160, the following appears: 

The compensation and benefits provisions of the bill contain significant differences from those contained in 

S. 1029.... 

... In addition, the Committee recommended increases or enhancements to a number of special and 

incentive pays.... 

The special and incentive pays ... involved in these recommendations include: 

g. Hazardous duty pays. 

 Each of these benefit increases or enhancements are in addition to the modest improvements in 

benefits previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "Explanatory Background Information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the hazardous duty incentive pay program 

in general, or to the personal exposure duty pay program in particular, that were contained in S. 1160 and 

subsequently adopted in the Department of Defense Authorization Act, 1986, Public Law 99-145, 99 Stat. 

583 (1985). 

501
and enlisted rates of hazardous duty incentive pay for personal exposure duties.8

 In 

support of its recommendation, the committee stated: 

The committee proposes that the enlisted and officer rates for several hazardous 

duty incentive pays be equalized.... 

The Fifth Quadrennial Review of Military Compensation (QRMC) 

examined special and incentive pays in great detail. One of its conclusions was 

that the differential between enlisted and officer rates for seven hazardous duty 

incentive pays [including personal exposure duty pay] should be eliminated.... 

The committee agrees that enlisted and officer personnel should be paid 

the same incentive for exposing themselves to similar hazards. Therefore, it 

recommends that the rates for these seven hazardous duty pays be changed to 

entitle both enlisted and officer personnel to $110 per month.9

The Senate proposal was eliminated in conference.10

As indicated immediately above, the personal exposure duty pay 

"enhancements" adopted as part of the Department of Defense Authorization Act, 

1986, Public Law 99-145, id., closely parallel recommendations advanced by the 

Fifth Quadrennial Review of Military Compensation in 1984.11 In support of its 

recommendation that "[t]he rate of TP&DO [toxic pesticides and dangerous 

organisms] Pay should be consistent with the rates for other Hazardous Duty 

Incentive Pays,"12 the Fifth Quadrennial Review stated: 

No basis yet exists to evaluate the adequacy of the rates [of hazardous 

duty incentive pay for personal exposure duties] for these areas; however, the rate 

 

8

 See Section 148 of S. 2723, 98th Congress, 2d Session (1984). 

9 Senate Report No. 98-500 (Committee on Armed Services), p. 210 (discussing Section 148 of the Senate 

bill), accompanying S. 2723, 98th Congress, 2d Session (1984). 

10 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

11 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in late 

2001. 

12 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 11, 211, November 1983. Also see Executive Summary, Report of the Fifth Quadrennial Review of 

Military Compensation, p. VI-6, January 1984. 

502
should be consistent with other payments made for incentive purposes to those 

personnel required to continually expose themselves to uniquely hazardous 

conditions.13

In reaching this conclusion, the Fifth Quadrennial Review also noted: 

There is a need to provide special compensation to personnel performing 

duty involving highly toxic pesticides.... 

There is currently no demonstrated need to provide special compensation 

to personnel working with dangerous organisms; however, future applications for 

this pay may evolve.14

In further comment on officer-enlisted differentials for various hazardous 

duty incentive pays, including personal exposure duties, the Fifth Quadrennial 

Review stated: 

During the process of reviewing the various Hazardous Duty Incentive 

Pays, it became increasingly clear that, although there is some incentive 

associated with certain pays, the primary purpose is recognition for the hazards or 

risks involved. It was, therefore, believed that officer/enlisted personnel should 

receive the same level of payment for seven of the Hazardous Duty Incentive 

Pays: [including] ... toxic pesticides [exposure pays]....15

In arriving at this conclusion, the Fifth Quadrennial Review implicitly 

rejected the conclusions reached by the Hook Commission in 1948.16 In 

commenting on various arguments that had been advanced in favor of and against 

continuation of officer-enlisted differentials for hazardous duty incentive pays in 

general, the Fifth Quadrennial Review summarized the argument against the 

Hook Commission's position in the following terms: 

The Hook Commission rationale was based primarily on an examination 

of the needs of the aviation and submarine communities. Times have changed and 

 

13 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 211, November 1983. Also see id., p. 11, and “Executive Summary, “Report of the Fifth Quadrennial 

Review of Military Compensation,” p. VI-6, January 1984. 

14 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, pp. 210-211, November 1983. Also see id., p. 11. cf. Executive Summary, Report of the Fifth 

Quadrennial Review of Military Compensation, p. VI-6, January 1984. 

15 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 919, November 1983. See id., pp. 36-37. 

16 See discussion of Hook Commission recommendations concerning officer-enlisted differentials at text 

accompanying footnotes 3 and 4 to this chapter, above. 

503
those communities now have their own separate career incentive pays and 

bonuses.17 

 Other arguments in favor of eliminating the differential were

 summarized as follows: 

 * All personnel, officer and enlisted, experience the same hazards. 

 * One can never really compensate for risk of life, no matter the level. 

 * Basic pay and bonuses are adequate to cover any differential. 

* Most hazard-related pays now cover skills that are not necessarily career 

oriented (across all Services); hence, a differential is not necessary for purposes of 

retention. However, exceptions may occur and should be individually addressed, 

as required. 

* [F]ield interviews [conducted by the Fifth Quadrennial Review of Military 

Compensation] with both officer and enlisted personnel indicate "same rate for 

same risk" is perceived as equitable in the hazardous duty areas.18

Whether for these or some other reasons, Congress, in the Department of Defense 

Authorization Act, 1986, Public Law 99-145, id., did in fact eliminate officer-enlisted 

pay differentials for duties involving personal exposure to toxic pesticides and dangerous 

viruses and bacteria. The National Defense Authorization Act for Fiscal Year 1998, 

Public Law 105-85, increased the minimum monthly rate for personal exposure pay, 

which was among several types of hazardous duty pay raised under that legislation, from 

$110 per month to $150 per month. 

Reserve forces personnel19 entitled to compensation for inactive-duty training are 

technically entitled to personal exposure pay when they perform duties "involving 

 

17 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” Volume 

III, p. 920, November 1983; cf. id., p. 37. 

18 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation,” Volume 

III, pp. 919-920, November 1983 

19 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

504
frequent and regular exposure to highly toxic pesticides or involving laboratory work that 

utilizes live dangerous viruses or bacteria" under competent orders, provided Congress 

has appropriated sufficient funds for that purpose.20 Under 37 U.S.C. §301(f), members 

of the reserve forces who perform qualifying personal exposure duties while entitled to 

compensation under 37 U.S.C. §206 are also technically entitled, subject to such 

regulations as may be prescribed by the President, to "an increase in compensation equal 

to 1/30 of the monthly incentive pay" payable to active duty personnel performing such 

duties.21 That is, for every "period of instruction ... or ... appropriate duty" for which a 

member of the reserve forces is entitled to compensation under 37 U.S.C. §206, the 

member is, if performing qualifying duty under 37 U.S.C. §301(f), also entitled to 1/30th 

of the personal exposure duty pay that would be payable to a member of the active duty 

force who was performing such duty. Under regulations prescribed by the President, the 

only personnel entitled to personal exposure pay for duties involving exposure to toxic 

pesticides or live dangerous viruses or bacteria are personnel exposed to such hazards for 

"30 consecutive days or more," and this would appear to rule out entitlements for reserve 

forces personnel performing inactive-duty training. Similarly, the Department of Defense 

Financial Management Regulation, Military Pay: Policy and Procedures for Active Duty 

 Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

20 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

21 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

505
and Reserve Pay 22 makes no provision for entitlement of reserve forces personnel to 

personal exposure pay.23 Thus, while technically entitled to hazardous duty incentive pay 

for personal exposure to toxic pesticides and live dangerous viruses and bacteria under 37 

U.S.C. §301, reserve forces personnel would appear to be excluded from such entitlement 

by regulations prescribed by the President.24 It is always possible, however, for the 

President to prescribe regulations extending personal exposure pay to reserve forces 

personnel on inactive-duty training. 

Legislative authority to make toxic pesticides and dangerous organisms exposure 

pay available to reserve forces personnel engaged in inactive-duty training can, in one 

sense, be traced to the Act of July 2, 1926 (Army Air Corps Act), ch. 721 [Public Law 

446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which was the first legislative 

enactment that provided for special compensation for inactive duty reserve forces 

personnel engaged in hazardous duties of one kind or another.25 In fact, however, 

personal exposure duty was not covered by the Army Air Corps Act. Rather, that act 

merely gave "officers, warrant officers, and enlisted men of the National Guard" who 

were, by competent orders, required to "participate regularly and frequently in aerial 

flights" a 50 percent increase in the "armory drill pay" to which they would otherwise 

have been entitled.26 The first special provision for personal exposure duty pay for 

 

22 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R. 

23 See Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶80311-80316, 

generally. 

24 It is in any event questionable whether reserve forces personnel are ever assigned to duty involving 

qualifying exposure during inactive-duty training. 

25 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training generally, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew 

Member)." 

26 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," for a more complete discussion of the history of hazardous duty 

incentive pay for reserve forces personnel engaged in inactive-duty training. 

506
reserve forces personnel engaged in inactive-duty training came in the Uniformed 

Services Pay Act of 1981, Public Law 97-60, §111(a), 95 Stat. 989, 992-993 (1981), 

which, as above noted,27 brought duty "involving frequent and regular exposure to highly 

toxic pesticides or involving laboratory work that utilizes live dangerous viruses or 

bacteria" within the category of duties for which hazardous duty incentive pay was 

technically authorized for reserve forces personnel performing inactive-duty training. 

As a practical matter, the Uniformed Services Pay Act of 1981, Public Law 97-60, 

id., had been intended to extend personal exposure pay entitlement to active duty 

personnel performing qualifying duties. The entitlements technically covered reserve 

forces personnel also because of the way Title 37 of the United States Code was 

organized. At the time, 37 U.S.C. §301(f) provided that a member of the reserve forces 

on inactive-duty training was entitled to additional pay for hazardous duty when he 

"performs, under orders, any duty described in subsection (a) of this section." Subsection 

(a), in turn, covered hazardous duty incentive pay entitlements of active duty personnel, 

and it was to that subsection that the personal exposure entitlement was added. The 

Uniformed Services Pay Act of 1981, Public Law 97-60, §111(a), id., 95 Stat. at 992-993, 

had simply added a new category of duty for which hazardous duty incentive pay was 

authorized for active duty personnel, but the pay was technically available to reserve 

forces personnel as well under 37 U.S.C. §301(f). Thus, reserve forces personnel on 

inactive-duty training had in effect "piggybacked" on active duty personnel insofar as 

technical entitlement to personal exposure pay was concerned.28

The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§647, 99 Stat. 583, 655 (1985), amended 37 U.S.C. §301(f) by adding certain 

housekeeping provisions concerning how hazardous duty incentive pay for 

inactive-duty training was to be computed. As explained by the House Committee 

on Armed Services: 

 

27 See text accompanying footnote 1 to this chapter, above. 

28 See discussion of the Uniformed Services Pay Act of 1981, Public Law 97-60, id., at text associated with 

footnote 1 to this chapter, above. 

507
Presently, members of the reserve and guard receive hazardous duty 

incentive pay (HDIP) for frequent and regular flying during active and inactive 

duty for training periods. To receive active duty HDIP, the reservist must fly four 

hours each month or a pro rata share of days on duty. For inactive duty, the 

requirement is two hours each month or a pro rata share of days on duty. The 

excess hours flown on inactive duty may be credited toward active duty flight 

requirements, but the reverse is not permitted. This situation is inconsistent and 

results in less than optimum use of flying hour resources. 

To ensure equity for reserve members in the computation of hazardous 

duty incentive pay, the committee recommends that reserve members who are 

entitled to HDIP for flying be permitted to credit active duty or inactive duty 

training flight time to fulfill active or inactive duty flight time requirements.29

While the concern that led to the amendment in issue was the appropriate 

use and apportionment of flying time, the amendment to 37 U.S.C. §301(f) was 

stated in broader terms, so that it applies to any of the hazardous duties set out in 

37 U.S.C. §301(a), and not just flight duty. Thus, for any month in which a 

member of a reserve force is involved both in active duty and inactive-duty 

training for which he is entitled to hazardous duty incentive pay under 37 U.S.C. 

§301, the total amount of hazardous duty incentive pay the member may receive 

is based on his combined entitlement for both active duty and inactive-duty 

training. 

Until 2003, the conditions of entitlement to personal exposure pay for active duty 

personnel were set out in Sections 109(h) and (i) of Executive Order 11157, as amended; 

in various supplementary regulations adopted by the service Secretaries pursuant to 

Section 113 of Executive Order 11157; and in the Department of Defense Financial 

Management Regulation, Military Pay: Policy and Procedures for Active Duty and 

Reserve Pay, Volume 7A, DOD 7000.14-R, ¶¶20361-20362 (toxic pesticides exposure) 

and ¶¶20371-20373 (dangerous viruses or bacteria exposure). Executive Order 13294, 

issued March 28, 2003, revoked Executive Order 11157. Executive Order 13294 placed 

responsibility for carrying out the authority delegated to the President by 37 U.S.C. §301, 

relevant to hazardous duty incentive pay including personal exposure pay, with the 

Secretaries of Commerce, Defense, Health and Human Services, and Homeland Security, 

 

29 House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See House Report No. 99-235 (Committee of Conference), p. 434, and Senate 

Report No. 99-118 (Committee of Conference), p. 434, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

508
as those entitlements affect military personnel under the respective jurisdictions of those 

departments. 

Current rate of pay: The current rate of pay for duty involving exposure to toxic 

pesticides or live dangerous viruses or bacteria is $150 per month. 

Cost: For the cost of personal exposure pay from 1982 to 2004, see Table II-23 of 

Military Compensation Statistics Tables, volume II of this edition. 

509
Chapter II.D.4.c. 

 Leprosy Duty Pay 

Legislative Authority: Formerly, 37 U.S.C. §301(a)(5) and (c)(1). The legislative 

authority for this hazardous duty incentive pay was repealed by the Department of 

Defense Authorization Act, 1985, Public Law 98-525, §624(a)(1), 98 Stat. 2492, 2542 

(1984). 

Purpose: To provide an additional pay to induce uniformed services personnel to 

volunteer for duty involving contact with persons having leprosy. 

Background: Before enactment of the Department of Defense Authorization Act, 

1985, Public Law 98-525, 98 Stat. 2492 (1984), extra pay for leprosy duty had been 

authorized for Public Health Service personnel since the turn of the century and for 

Armed Forces personnel since 1949. At that time, the Career Compensation Act of 1949, 

ch. 681 [Public Law 351, 81st Congress], §204(a)(6) and (c), 63 Stat. 802, 809-810 

(1949), extended the entitlement to members of the Armed Forces on the 

recommendation of the Advisory Commission on Service Pay, also known as the Hook 

Commission. Although the commission had concluded that, like diving duties, "leprosy 

duties offered potential death and disease to a great degree, but admittedly are primarily 

not dangerous but, rather, disagreeable and generally unsought occupations,"1

 it 

recommended that Armed Forces personnel involved in the "handling of lepers" be 

entitled to extra pay as an "incentive to engage and remain in hazardous occupations."2

The commission's overall rationale was that "some additional pay should be awarded to 

individuals who, on a voluntary basis, carry out peacetime functions involving more than 

the ordinary military risk and danger."3

 The commission went on to note, however, that 

 

1

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 25, December 1948. 

2

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948 (italicized in original). 

3

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948. 

510
"[s]uch pay should be granted only when qualified personnel are actually in hazard duty 

status under orders and perform in accordance with appropriate departmental regulations 

rigorously observed."4

In response to the Hook Commission's recommendations, Congress authorized 

leprosy duty pay for all members of the uniformed services in the Career Compensation 

Act of 149, ch. 681 [Public Law 351, 81st Congress], id., classified that pay as a 

hazardous duty incentive pay, and fixed the rates for the pay at $100 a month for officers 

and $50 a month for enlisted personnel. In so doing, Congress apparently accepted the 

Hook Commission's conclusion that the extra pay was justified not because leprosy duty 

was hazardous per se but rather because it was a "disagreeable and generally unsought 

occupation" for which an "incentive to engage and remain in" was appropriate. 

The Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(6), 

69 Stat. 18, 21 (1955), increased the statutory rates of pay for the various duties that had 

been classified as "hazardous" by the Career Compensation Act of 1949, ch. 681 [Public 

Law 351, 81st Congress], id., including, pari passu, leprosy duty pay. The rates of pay 

were increased to $110 for officers and to $55 for enlisted personnel, a 10 percent 

increase, and remained at those levels until October 1, 1981. 

At that time, the Uniformed Services Pay Act of 1981, Public Law 97-60, 

§111(c), 95 Stat. 989, 993 (1981), increased the rates of pay for enlisted personnel for the 

various hazardous duty classifications then set out in 37 U.S.C. §301(a)5

 by 50 percent, to 

$83 per month. As a hazardous duty incentive pay, leprosy duty pay was increased 

accordingly. As explained in the Senate Report, increases in hazardous duty incentive pay 

rates for enlisted personnel were made in recognition of the fact that such rates had "not 

been adjusted in more than 20 years, and this increase is needed to enhance the incentive 

 

4

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 24, December 1948. 

5 Upon enactment of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 

Stat. 802 (1949), the hazardous duty incentive pay provisions of that Act, found at Section 204 thereof, 63 

Stat. at 809-810, were, in the main, classified to 37 U.S.C. §235. See 37 U.S.C. §235(a) and (c) (1952). 

Later, when Title 37 of the United States Code was enacted into positive law by the Act of September 7, 

1962, Public Law 87-649, 76 Stat. 451 (1962), the hazardous duty incentive pay provisions were codified at 

37 U.S.C. §301, and the various classifications of hazardous duty for which the special pay was authorized, 

including leprosy duty, were set out in subsection (a) thereof. 

511
value of this pay."6

 The 1981 increase presumably had little effect on "incentives" for 

enlisted personnel, however, since in practice such personnel were not assigned to 

leprosy duty. 

In 1984, the authorization for hazardous duty incentive pay for leprosy duty was 

repealed by Section 624(a)(1) of the Department of Defense Authorization Act, 1985, 

Public Law 98-525, §624(a), 98 Stat. 2492, 2542 (1984), on the grounds that extra pay 

for such duty was "no longer necessary."7

 As explained in the relevant Congressional 

reports, Congress eliminated the authorization for leprosy duty pay on the 

recommendation of the Fifth Quadrennial Review of Military Compensation.

8 9

 The Fifth 

Quadrennial Review had, in turn, recommended eliminating the authorization on the 

grounds that there was "no valid need [for leprosy duty pay]; recipients are not exposed 

to sufficient hazard to warrent [sic] special pay; no problem manning Federal 

Leprosaria."10 

While the permanent authority for leprosy duty pay was thus repealed, the 

entitlement to leprosy duty pay was continued for members of the uniformed services 

who were actually receiving the pay on the day before enactment of the Department of 

 

6 Senate Report No. 97-146 (Committee on Armed Services), p. 8, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

7 Senate Report No. 98-500 (Committee on Armed Services), p. 211, accompanying S. 2723, and House 

Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 2d 

Session (1984). 

8 Senate Report No. 98-500 (Committee on Armed Services), p. 211, accompanying S. 2723, and House 

Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 2d 

Session (1984). 

9 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in late 

2001. 

10 Executive Summary, Report of the Fifth Quadrennial Review of Military Compensation, p. VI-5, 

January 1984 (emphasis in original). Also see Special and Incentive Pays, Report of the Fifth Quadrennial 

Review of Military Compensation, Volume III, pp. 8, 161-170, November 1983. 

512
Defense Authorization Act, 1985, Public Law 98-525, id.

11 Under transitional provisions, 

which were in effect "saved pay" provisions, members who were entitled to leprosy duty 

pay on October 18, 1984, continue to be entitled to such pay for so long as they remain 

assigned, without any intervening break, to qualifying duties.12 No explicit reason was 

given by Congress for adopting these "saved pay" provisions, although it was generally 

stated that Congress "accepts this ... recommendation" of the Fifth Quadrennial Review 

of Military Compensation concerning leprosy duty pay,13 and the Fifth Quadrennial 

Review had recommended inclusion of "a provision to allow those individuals receiving 

[leprosy duty pay] at time of enactment to continue to receive that pay for the duration of 

their qualifying assignments."14

Records indicate that the only military personnel who have been assigned to 

leprosy duty, at least within the ten-year period preceding repeal of the leprosy duty pay 

authorization, were officers. So far as can be ascertained from available records, fewer 

than ten Armed Forces personnel--all of whom volunteered for leprosy duty--were 

eligible for leprosy duty pay in any year since 1970. The primary recipients of leprosy 

duty pay over the last 20 years have been officers of the Public Health Service. 

Before repeal of leprosy duty pay authority, reserve forces personnel15 entitled to 

compensation for inactive-duty training were technically entitled to leprosy duty pay 

 

11 The Department of Defense Authorization Act, 1985, Public Law 98-525, 98 Stat. 2492 (1984), was 

enacted on October 19, 1984. 

12 Department of Defense Authorization Act, 1985, Public Law 98-525, §624(b), 98 Stat. 2492, 2542 

(1984). See 37 U.S.C. §301 note. 

13 Senate Report No. 98-500 (Committee on Armed Services), p. 211, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

14 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 167. Also see Executive Summary, Report of the Fifth Quadrennial Review of Military 

Compensation, p. VI-5, January 1984. 

15 For present purposes, the term "reserve forces personnel" refers to persons who are members either of 

the reserve components of the uniformed services or of the National Guard, and the term "reserve forces" 

refers to the reserve components of the uniformed services and the National Guard. Under 37 U.S.C. 

§101(24), the reserve components of the uniformed services consist of the Army National Guard of the 

United States, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air National Guard of 

the United States, the Air Force Reserve, the Coast Guard Reserve, and the Reserve Corps of the Public 

513
when they performed qualifying duties under competent orders, provided Congress had 

appropriated sufficient funds for that purpose.16 Under 37 U.S.C. §301(f), members of the 

reserve forces who perform qualifying leprosy duties while entitled to compensation 

under 37 U.S.C. §206 are also entitled, subject to such regulations as may be prescribed 

by the President, to "an increase in compensation equal to 1/30 of the monthly incentive 

pay" payable to active duty personnel performing such duties.17 That is, for every "period 

of instruction ... or ... appropriate duty" for which a member of the reserve forces was 

entitled to compensation under 37 U.S.C. §206, the member was, if performing 

qualifying leprosy duty under 37 U.S.C. §301(f), also entitled to 1/30th of the leprosy 

duty pay that would be payable to a member of the active duty force who was performing 

such duty. Thus, until the authority for leprosy duty pay was repealed, as set out above, 

leprosy duty was one of the duties for which hazardous duty incentive pay was available, 

at least as a technical matter, to reserve forces personnel performing inactive-duty 

training; under regulations prescribed by the President, a member of a reserve force who 

performed leprosy duties under 37 U.S.C. §301(f) while engaged in inactive-duty training 

was entitled to leprosy duty pay.18 

 Health Service; under 37 U.S.C. §101(6), the "National Guard" consists of the Army National Guard and 

the Air National Guard. See 37 U.S.C. §101(7) and (9) concerning the Army National Guard and the Air 

National Guard, respectively. 

16 Unlike the provisions of Section 301 of Title 37, United States Code, dealing with the entitlement of 

members of the active duty forces to hazardous duty incentive pay for, among other things, crew member 

flight duty, the corresponding provisions of Section 301 dealing with the entitlement of members of the 

reserve forces participating in inactive-duty training to hazardous duty incentive pay for crew member 

flight duty are explicitly made contingent on Congressional appropriations, i.e., members of the reserve 

forces participating in inactive-duty training are entitled to such pay only "to the extent provided for by 

appropriations." 37 U.S.C. §301(f)(1). 

17 37 U.S.C. §206 provides, in pertinent part, that a member of the reserve forces who is not entitled to 

basic pay--essentially, a member of the reserve forces who is not on active duty--"is entitled to 

compensation, at the rate of 1/30 of the basic pay authorized for a member of a uniformed service of a 

corresponding grade entitled to basic pay, for each regular period of instruction, or period of appropriate 

duty, at which he is engaged for at least two hours ... or for the performance of such other equivalent 

training, instruction, duty, or appropriate duties" as may be prescribed. The term "inactive-duty training" is 

commonly used to refer to the "period of instruction ... or ... appropriate duty" for which Section 206 

"compensation" is authorized. 

18 As above indicated, the repeal of leprosy duty pay authority was accompanied by a "saved pay" 

provision, but under the terms of that provision, found at Section 624(b) of the Department of Defense 

Authorization Act, 1985, Public Law 98-525, id., 98 Stat. at 2542, see 37 U.S.C. §301 note, reserve forces 

514
Leprosy duty pay authority for reserve forces personnel engaged in inactive-duty 

training can, in one sense, be traced to the Act of July 2, 1926 (Army Air Corps Act), ch. 

721 [Public Law 446, 69th Congress], §6, 44 Stat. 780, 782-783 (1926), which was the 

first legislative enactment that provided for special compensation for inactive duty 

reserve forces personnel engaged in hazardous duties of one kind or another.19 In fact, 

however, leprosy duties were not covered by the Army Air Corps Act. Rather, that act 

merely gave "officers, warrant officers, and enlisted men of the National Guard" who 

were, by competent orders, required to "participate regularly and frequently in aerial 

flights" a 50 percent increase in the "armory drill pay" to which they would otherwise 

have been entitled.20 The first special provision for leprosy duty pay for reserve forces 

personnel engaged in inactive-duty training came in the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1942). 

 Among other things, the Career Compensation Act of 1949, ch. 681 [Public Law 

351, 81stCongress], id., restated the provisions of the Pay Readjustment Act of 1942, ch. 

413 [Public Law 607, 77th Congress], 56 Stat. 359 (1942), as amended by the Act of 

March 25, 1948, ch. 157 [Public Law 460, 80th Congress], 62 Stat. 87 (1948), insofar as 

the entitlement of reserve forces personnel to special pay for the performance of 

hazardous duties while engaged in inactive-duty training was concerned. Section 501 of 

the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], id., 

§501, 63 Stat. at 825-827, dealt generally with the entitlement of reserve forces personnel 

to compensation for inactive-duty training. Subsection (d) of Section 501, 63 Stat. at 826, 

generalized the hazardous duty incentive pay entitlements of reserve forces personnel 

performing inactive-duty training by providing that hazardous duty incentive pay was 

 personnel would not be entitled to leprosy duty pay as a result of any inactive-duty training they might 

perform.) 

19 For a more complete discussion of the origin of hazardous duty incentive pay for reserve forces 

personnel engaged in inactive-duty training, generally, see Chapter II.D.1.b.(1) hereof, "Flight Pay (Crew 

Member)." 

20 Subsequent enactments extended both the categories of duties for which, and the categories of personnel 

to whom, hazardous duty incentive pay was available for inactive-duty training. See Chapter II.D.1.b.(1) 

hereof, "Flight Duty (Crew Member)," for a more complete discussion of the history of hazardous duty 

incentive pay for reserve forces personnel engaged in inactive-duty training. 

515
available to such personnel whenever they were required by competent orders to perform 

any of the hazardous duties, set out at Section 204(a) of the Career Compensation Act of 

1949, 63 Stat. at 809-810, for which active duty personnel were entitled to hazardous 

duty incentive pay. The duties set out in Section 204(a) as qualifying for such pay 

included crew member and non-crew member flight duty, submarine duty, glider duty, 

parachute jumping duty, explosives demolition duty, duty at a submarine escape training 

tank, and duty with certain diving units, as well as leprosy duties. See Section 204(a) of 

the Career Compensation Act, 63 Stat. at 809-810.21 No special reason was given for this 

reorganization of the provisions of prior law dealing with inactive-duty training pays, 

including inactive-duty training incentive pays for hazardous duties. The extension of 

incentive pay for hazardous duty to new classes of reserve forces personnel--e.g., to 

reserve forces personnel in an inactive-duty training status performing leprosy duties, 

explosives demolition duties, submarine escape training tank duties, etc.--appears to 

derive from the extension of such pays to active duty personnel, and not from any special 

concern about reserve forces personnel and whether they should be entitled to incentive 

pay for performance of various hazardous duties.22

 The repeal of the basic authority for leprosy duty pay by the Department of 

Defense Authorization Act, 1985, Public Law 98-525, §624(a), 98 Stat. 2492, 2542 

 

21 The inactive-duty training pay provisions contained in section 501 of the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §501, 63 Stat. 802, 825-827 (1949), were classified to 37 

U.S.C. §301, whereas the hazardous duty incentive pay provisions set out in section 204 of the Act were 

classified to 37 U.S.C. §235. See 37 U.S.C. §235(a) and (c) (1952). Later, when Title 37 of the United 

States Code was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 

451 (1962), the inactive-duty training pay provisions relating to hazardous duty incentive pay entitlements 

of reserve forces personnel were codified at 37 U.S.C. §301, together with the hazardous duty incentive pay 

provisions relating to active duty personnel. The current structure of hazardous duty incentive pay 

entitlements for reserve forces personnel performing inactive-duty training thus derives from the 

organization imposed on Title 37 by the Act of September 7, 1962, Public Law 87-649, id., although 

insofar as leprosy duty pay is concerned, the repeal of the basic authority for such pay effectively cut off 

reserve forces entitlements as well as active duty entitlements. 

22 The Hook Commission, whose report led to the adoption of the Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), did not concern itself with reserve forces 

compensation in any way. See e.g.," Terms of Reference," the charter given to the Hook Commission by 

the then Secretary of Defense, James Forrestal, in “Career Compensation for the Uniformed Forces, a 

Report and Recommendation for the Secretary of Defense by the Advisory Commission on Service Pay,” at 

pp. vii-viii, December 1948. 

516
(1984), effectively cut off reserve entitlements, inasmuch as the "saved pay" provisions 

of that enactment applied only to personnel who "continue[d] (without a break) to be 

assigned to perform such [leprosy] duties on and after [October 18, 1984]," the day 

before the date of enactment of the Department of Defense Authorization Act, 1985, 

Public Law 98-525, id. In any event, the question of the application of the "saved pay" 

provisions to reserve forces personnel would appear to be of academic interest only since, 

at least as far as can be determined, no reserve forces personnel have performed leprosy 

duty in connection with inactive-duty training at any time in the ten years preceding 

1985. 

517
Chapter II.E.1.a. 

 Special Pay for Physicians 

 (Medical Officers of the Armed Forces) 

 

Legislative Authority: 37 U.S.C. §§301d, 302, 303a, and 303b. cf. 37 U.S.C. 

§302f. 

Purpose: To provide an additional pay to enable the Armed Forces to attract and 

retain a sufficient number of medical officers/physicians to meet health care needs of the 

services. 

Background: To the casual observer, the history of special pays for health 

professionals in the Armed Forces may appear relatively disjointed. Apart from an early, 

but short-lived, experiment with a special pay for "surgeons and surgeon's mates," as 

more fully detailed below, the United States had no special pay program for health 

professionals before 1947. At that time, a special pay program was instituted for 

physicians and dentists. Veterinarians were added to the list of health professionals 

eligible for special pay in 1953, as were optometrists in 1971. In 1967, physicians and 

dentists with critical skill specialties were made eligible for a special "continuation" pay--

provided they agreed to remain on active duty for a certain minimum period of time. In 

1974, physicians with critical skill specialties were made eligible for yet another special 

pay--this time called "variable incentive pay." In 1980, the entire special pay program for 

physicians was substantially changed, just as, in 1985, the special pay program for 

dentists was changed. 

Despite the piecemeal additions of pays and different categories of personnel to 

the health professionals special pay program, there is, and has always been, a single 

unifying theme underlying the program--namely, the need to attract and retain a sufficient 

number of qualified health professionals to meet the health care demands of the Armed 

Forces. While all of the elements of the health professionals special pay program have 

518
been, and continue to be, addressed to this need, Congress, at least prior to enactment of 

the Uniformed Services Health Professionals Special Pay Act of 1980, Public Law 96-

284, 94 Stat. 587 (1980), perceived a number of flaws in the program. First, special pay 

authority was scattered among a number of different provisions of Title 37, United States 

Code, resulting in great complexity of the system. This complexity, in turn, led to 

substantially different treatment of apparently similarly situated personnel, with 

consequent adverse effects on retention and morale.1

 Second, since each of the individual 

provisions of Title 37 that made up the system had a separate expiration date, affected 

personnel could not be certain whether a particular special pay would or would not 

survive the next Congressional review, and this uncertainty had adverse effects on 

retention and morale.2

 To address these perceived flaws, Congress in 1980 adopted the 

Uniformed Services Health Professionals Special Pay Act of 1980, Public Law 96-284, 

id., which, among other things, established a unified special pay program for physicians 

in the Armed Forces and made the entitlements for all health professionals permanent--

subject, of course, to possible future Congressional withdrawal. In the Department of 

Defense Authorization Act, 1986, Public Law 99-145, §639(a), 99 Stat. 583, 649-651 

(1985), Congress substantially changed the preexisting special pay program for dentists, 

bringing that program more into line with the special pay program applicable to 

physicians. Other changes have since been made to the medical special pays programs for 

members of the uniformed services, but the changes have in the main been marginal or 

perfecting in nature--changes in the rates of pay authorized or conditions of receipt, 

almost all keyed to special manning or retention problems--not the structural sea changes 

to the medical special pays programs effected by the Uniformed Services Health 

Professionals Special Pay Act of 1980, Public Law 96-284, id. 

 

1 See, e.g., House Report No. 95-1118 (Committee on Armed Services), p. 113, accompanying H.R. 10929, 

95th Congress, 2d Session (1978), and House Report No. 96-904 (Committee on Armed Services), p. 4, 

accompanying H.R. 6982, 96th Congress, 2d Session (1980). 

2 See, e.g., House Report No. 95-1118 (Committee on Armed Services), p. 113, accompanying H.R. 10929, 

95th Congress, 2d Session (1978), and House Report No. 96-904 (Committee on Armed Services), p. 4, 

accompanying H.R. 6982, 96th Congress, 2d Session (1980). 

519
To understand the present system of special pays for different categories of health 

professionals, which derives partially from the 1980 and 1986 acts referred to 

immediately above and partially from earlier enactments, however, it is most convenient 

to look at the gradual, accretionary process by which the system got to be what it was 

before the 1980 restructuring. 

Although the existing special pay for health professionals is of comparatively 

recent origin, the need for such a pay was recognized as long ago as the Revolutionary 

War. In March of 1777, General George Washington wrote to John Hancock, a member 

of the Continental Congress, in terms that are still applicable: 

There is one more thing which claims in my opinion the earliest attention of 

Congress. I mean the pay of regimental surgeons, and that of their mates. These 

appointments are so essential, that they cannot be done without. Their pay in the first 

instance is so low, so inadequate to the services which should be performed, that no man 

sustaining the character of gentleman, and who has the least medical abilities, or skill in 

the profession, can think of accepting it.3

Despite General Washington's recommendation, it was not until 1814 that 

Congress, in the Act of March 30, 1814, ch. 37, §18, 3 Stat. 113, 115 (1814), adopted a 

special additional pay for medical officers--$15 a month for "regimental surgeons and 

surgeon's mates." This pay remained in effect only through June 30, 1815, and from that 

time until 1947 no additional pay was authorized for medical officers. However, from 

1838 until 1908, when the same rate of pay was prescribed for all Army officers of the 

same grade, the medical department, along with the cavalry, was the highest paid branch 

of the Army. 

Special Pay for Physicians 

The Army-Navy-Public Health Service Medical Officer Procurement Act of 1947, 

ch. 494 [Public Law 365, 80th Congress], §101, 61 Stat. 776, 776-777 (1947), authorized 

a $100 special monthly pay for regular officers who were then commissioned in the 

 

3 Quoted from “Differential Pays for the Armed Services of the United States, Report of the Commission 

on Incentive-Hazardous Duty and Special Pays,” Volume II, March 1953, p. 205. 

520
Medical or Dental Corps and for those who would be so commissioned thereafter but 

before September 1, 1952. The special pay was also authorized for reserve officers of the 

Medical or Dental Corps who, during the same period, volunteered and were accepted for 

extended active duty of one year or longer. The act stipulated that no officer could be 

paid a career total of special pay for medical or dental service in excess of $36,000. The 

announced purpose of the act was to assist the armed services (and the Public Health 

Service) in attracting and retaining an adequate number of physicians and dentists by 

offering the $100 monthly special pay as an inducement to continued service. However, 

the Senate Armed Services Committee also stated that "[a]ctually, the $36,000 additional 

salary which will be paid the medical and dental officer if the bill is enacted, merely 

compensates him for the additional expense of his education, and for the five years of lost 

earning power which result from his longer period of academic training."4

 In addition to 

providing this special pay, the act authorized original appointments in the Army or Navy 

Medical or Dental Corps in any permanent commissioned grade up to colonel in the 

Army or captain in the Navy. 

In 1948 the so-called Hook Commission made a comprehensive study5

 of the 

military pay system and recommended that the special pay programs for physicians and 

dentists be continued in essentially its existing form and amount, but that it not be paid to 

interns. In line with the commission's recommendations, the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §203, 63 Stat. 802, 809 (1949), restated 

the special pay authority and barred officers serving as medical or dental interns from 

entitlement. The Career Compensation Act of 1949, ch. 681, id., retained the September 

1, 1952, cut-off date originally established in the Army-Navy-Public Health Service 

Medical Officer Procurement Act of 1947, ch. 494 [Public Law 365, 80th Congress], 

§101, 61 Stat. 776, 776-777 (1947), so that the only persons who would be entitled to 

 

4 Senate Report No. 608 (Committee on Armed Services), p. 4, accompanying S. 1661, 80th Congress, 1st

Session (1947). 

5

 “Career Compensation for the Uniformed Services, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” December 1948. 

521
special pay for medical or dental service after September 1, 1952, would be officers who 

had initially entered on active duty before that date.6

The Act of September 9, 1950, ch. 939 [Public Law 779, 81st Congress], §1, 64 

Stat. 826, 826-827 (1950), established the so-called "doctor draft," which required males 

under age 50 qualified in medical, dental, or "allied specialist categories" to register 

under the Selective Service Act and made them subject to special induction calls.7

 It also 

extended the $100 special pay entitlement to reserve medical and dental officers 

involuntarily ordered to active duty, as well as to those volunteering for active duty. The 

main purpose of this provision was to encourage draft-liable doctors and dentists to 

accept reserve commissions and to perform their active duty in that status rather than 

actually being inducted as enlisted members. 

The Act of June 25, 1952, ch. 459 [Public Law 410, 82d Congress], §1, 66 Stat. 

156, 156-157 (1952), extended the special pay cut-off date from September 1, 1952, to 

July 1, 1953, and the Act of June 29, 1953, ch. 158 [Public Law 84, 83d Congress], §8, 

67 Stat. 86, 89 (1953), further extended it to July 1, 1955. The Act of June 30, 1955, ch. 

250 [Public Law 118, 84th Congress], §203, 69 Stat. 223, 225 (1955), extended the 

special pay cut-off date once again, this time to July 1, 1959. 

The Act of April 30, 1956, ch. 223 [Public Law 497, 84th Congress], §5, 

70 Stat. 119, 122 (1956), changed the rate of special pay for physicians from a flat 

rate to a graduated scale based on length of active service--$100 a month during 

the first two years of active service; $150 during active service years two to six; 

$200 during years six to ten; and $250 thereafter. It also gave physicians a fouryear constructive service credit for promotion and pay purposes, plus an 

additional one-year constructive credit for these purposes for physicians who had 

 

6 The "cut-off" date for the special pay was not an "expiration" date; it created a bar against any new 

entitlement but did not terminate the special pay of any officer whose entitlement had been acquired prior 

to that time. 

7

Veterinarians, optometrists, pharmacists, and osteopaths were specifically included in the "allied specialist 

categories" construct in the "Doctors Draft Act." Act of September 9, 1950, ch. 939 [Public Law 779, 81st

Congress], §6, 64 Stat. 826, 828 (1950). 

522
completed one year of internship.8

 Act of April 30, 1956, ch. 223, id., §2(2), 70 

Stat. At 121. See 37 U.S.C. §205(a)(7) and (8) as in effect before enactment of the 

Defense Officer Personnel Management Act (DOPMA), Public Law 96-513, 

§402, 94 Stat. 2835, 2904 (1980). These constructive service credits, in 

combination with the higher original-appointment grade authorized by the ArmyNavy-Public Health Service Medical Officer Procurement Act of 1947, ch. 494 

[Public Law 365, 80th Congress], §101, 61 Stat. 776, 776-777 (1947), were 

designed to bring about parity between officers who entered the service after a 

delay caused by additional medical education and training and those who entered 

after receiving a bachelor degree.9

 Thus, for example, a physician entering active 

duty immediately after medical school would be appointed to pay grade O-3 and 

entitled to the basic pay of that grade for over four years of service. In addition, 

such an officer would be eligible for promotion to pay grade O-4 about three 

years after entering upon active duty. In other words, the pay grade, basic pay, 

and promotion opportunity of an affected officer would at this point be the same 

as they would have been had the officer entered the service after completing four 

years of college. The purpose of the constructive service credit and increased 

special pay was to arrest and reverse the "staggering loss" of regular medical and 

dental officers by providing them "a much more favorable income than that which 

they have heretofore experienced" and by placing them "in a somewhat more 

favorable position when their present income is compared with that of their 

counterparts serving as physicians or dentists under the civil service system or in 

the Veterans' Administration."10

The Act of March 23, 1959, Public Law 86-4, §5, 73 Stat. 13 (1959), extended the 

special pay cut-off date from July 1, 1959, to July 1, 1963, and the Act of April 2, 1963, 

Public Law 88-2, §5, 77 Stat. 4 (1963), further extended it to July 1, 1967. The 

Uniformed Services Pay Act of 1963, Public Law 88-132, §4, 77 Stat. 210, 212 (1963), 

raised the monthly rate of special pay for physicians with between six and ten years of 

active service from $200 to $250 and the rate for those with ten or more years of active 

service from $250 to $350. These rate increases were added to the pay bill by the Senate 

Armed Services Committee, which explained its action as follows: 

 

8

 The Act of April 30, 1956, ch. 223 [Public Law 497, 84th Congress], §5, 70 Stat. 119, 122 (1956), 

generally provided the same benefits for dentists. 

9 See text accompanying footnote 4 to this chapter, above. 

10 House Report No. 1806 (Committee on Armed Services), pp. 2, 4, 6, accompanying H.R. 9428, 84th

Congress, 2d Session (1956). 

523
Prior to 1956 special pay for physicians and dentists was authorized only 

in the amount of an additional $100 a month. The general military pay legislation 

of 1955 was not sufficient to retain physicians and dentists in the necessary 

numbers. In 1956 Congress increased the special pay, now ranging from $100 to 

$250 a month, in order to meet this problem. Following the 1956 legislation the 

retention rate increased considerably since, in terms of compensation, a career in 

the armed forces was made more attractive for physicians and dentists and the gap 

between military compensation for these groups was narrowed as compared to 

Government physician rates (civil service and Veterans' Administration) and the 

incomes of private physicians. Since 1956, even including the 1958 Military Pay 

Act, the gap has widened between the compensation of the military physicians 

and those in civilian Government and those in private practice. 

The increase of $50 and $100 as provided in the bill, plus the increases in 

basic pay otherwise contained in the bill for the grades concerned, should serve to 

improve the now declining retention rate for those two groups.11

The Act of June 30, 1967, Public Law 90-40, §5, 81 Stat. 100, 105 (1967), 

extended the special pay cut-off date from July 1, 1967, to July 1, 1971, and the Act of 

September 28, 1971, Public Law 92-129, §104, 85 Stat. 348, 355 (1971), further extended 

it to July 1, 1973. 

The Act of July 9, 1973, Public Law 93-64, §§201-203, 87 Stat. 147, 149 

(1973), extended the special pay cut-off date from July 1, 1973, to July 1, 1975, 

on the grounds that 

 it would be inequitable to cut off arbitrarily special pay for the health 

professionals in question who happen to have entered service after June 30, 1973, 

... however, in all probability, the entire matter of special pays and bonuses for 

health professionals will be given further consideration in the not too distant 

future.12

The Act of May 6, 1974, Public Law 93-274, §2, 88 Stat. 94, 96 (1974), extended 

the special pay cut-off date from July 1, 1975, to July 1, 1977. The purpose of the act was 

to remedy an "immediate and critical problem involv[ing] physicians."13 In addition, the 

 

11 Senate Report No. 387 (Committee on Armed Services), pp. 24-25, accompanying H.R. 5555, 88th 

Congress, 1st Session (1963). 

12 Senate Report No. 93-235 (Committee on Armed Services), p. 16, accompanying S. 1916, 93d Congress, 

1st Session (1973). 

13 House Report No. 93-984 (Committee of Conference), p. 5, accompanying S. 2770, 93d Congress, 2d 

Session (1974). 

524
act modified the special pay structure for physicians by making them eligible for the 

maximum $350 monthly rate after two or more years of active service rather than after 

ten or more years. 

The Act of September 30, 1977, Public Law 95-114, §1, 91 Stat. 1046 

(1977), further extended the cut-off date for physicians, this time to September 

30, 1978. The extension for physicians was approved because of "a critical need 

to provide extra incentives ... to recruit adequate numbers of medical personnel."14

The cut-off dates for all health professionals were further extended by the 

Department of Defense Appropriation Authorization Act, 1979, Public Law 95-

485, §801, 92 Stat. 1611, 1619 (1978), this time to September 30, 1980. As 

reflected in the relevant Congressional report, the extension was predicated on the 

need to continue the existing incentives for health professionals retention 

purposes while a detailed review of the entire question of special pay for such 

personnel was undertaken by Congress.15

Prior to enactment of the Uniformed Services Health Professionals Special Pay 

Act of 1980, Public Law 96-284, 94 Stat. 587 (1980), then, the rates of monthly special 

pay for physicians were as follows: 

 

Monthly Rate Applicable To 

 $100 Physicians with less than two years of active medical 

 service. 

 $350 Physicians with two or more years of active medical 

 service. 

Special Continuation Pay for Physicians 

The Act of December 16, 1967 (Uniformed Services Pay Act of 1967), Public 

Law 90-207, §1(2)(A), 81 Stat. 649, 651 (1967), established a special continuation pay 

entitlement for physicians and dentists, codified at former 37 U.S.C. §311.16 The act 

 

14 Senate Report 95-400 (Committee on Armed Services), p. 2, accompanying S. 1731, 95th Congress, 1st

Session (1977). See House Report No. 95-479 (Committee on Armed Services), pp. 3-4, accompanying 

H.R. 8011, 95th Congress, 1st Session (1977). 

15 House Report No. 95-1118 (Committee on Armed Services), p. 113, accompanying H.R. 10929, 95th 

Congress, 2d Session (1978). See House Report No. 95-1402 (Committee of Conference), p. 52, 

accompanying H.R. 10929, 95th Congress, 2d Session (1978). 

16 Dentists were also covered by the special continuation pay program. 

525
authorized, under regulations prescribed by the Secretary of Defense--or the Secretary of 

Health, Education, and Welfare (now the Secretary of Health and Human Services) for 

Public Health Service officers--payment of up to four months' additional basic pay for 

each year of an active duty agreement accepted by the Secretary concerned from a 

medical or dental officer who (1) had a critical specialty, (2) had completed any 

definitive active duty obligation he had under law or regulation, and (3) had executed an 

agreement to remain on active duty for at least one additional year. Although the act 

authorized continuation pay for both medical and dental officers, the dental officer 

authority was not used until 1972. In its report on the Uniformed Services Pay Act of 

1967, Public Law 90-207, id., the Senate Armed Services Committee made these 

observations with respect to continuation pay: 

The proposed continuation pay authority would be similar in form to the 

variable reenlistment bonus now authorized for the payment of first-term enlistees 

in critical skill areas. 

 The Committee would emphasize that despite the fact that dental 

officers are within the scope of the authority authorizing continuation pay, it is not 

the intention of the Committee that this pay be made applicable to dental 

officers in view of the fact that the retention problem at the present time is in no 

way comparable to the present conditions of the Medical Corps. 

 . . . 

The Committee emphasizes that the proposed permissive system for 

continuation pay is an extraordinary method of meeting a serious retention 

problem. The proposed authority appears to be the best means however for 

dealing with a serious and deteriorating problem of the retention of certain career 

medical officers. The Committee observes, at the same time, however, that this 

system does not represent the ideal approach to the matter of military 

compensation and such authority should be used only in drastic situations. The 

Committee has therefore added language which would require annual reports 

from the Secretaries of Defense and Health, Education, and Welfare regarding the 

operation of this special pay program and the justification for its continuance.17

 

17 Senate Report No. 808 (Committee on Armed Services), pp. 10-11, accompanying H.R. 13510, 90th

Congress, 1st Session (1967). 

526
These observations, and the legislative history of the act in general, make it clear 

that although the income of private physicians was used for comparison purposes to 

determine how much, if any, extra pay was needed to counter the attraction of civilian 

practice and to induce military physicians to continue on active duty, the purpose of 

continuation pay was analogous to that of such retention incentives as the variable 

reenlistment bonus. 

Defense representatives had indicated during the hearings on Uniformed Services 

Pay Act of 1967, Public Law 90-207, id., that entitlement to continuation pay "could 

begin after the end of the first obligated tour of duty." No member of Congress expressed 

a contrary view. However, after the law's enactment, the Comptroller General of the 

United States ruled that its actual language, which authorized payment to a medical 

officer "who has completed any other definitive active duty obligation that he has under 

law or regulation," meant that any and all obligated active service must be paid back as a 

prerequisite for continuation pay entitlement. The Act of October 18, 1968, Public Law 

90-603, 82 Stat. 1187 (1968), amended this language to make it clear that an officer, if 

otherwise eligible, could receive continuation pay after the completion of his initial active 

duty obligation. 

The Act of May 6, 1974, Public Law 93-274, §1(1) and (4), 88 Stat. 94, 94-96 

(1974), terminated the continuation pay authority for medical officers below pay grade 

O-7 and authorized a larger payment, variable incentive pay, in its place. Since it did not 

make medical officers of pay grade O-7 or higher eligible for the variable incentive pay, 

the act continued the existing continuation pay authority for such officers. 

Variable Incentive Pay for Medical Officers 

The Act of May 6, 1974, Public Law 93-274, §1(4), 88 Stat. 94, 95-96 (1974), 

created variable incentive pay (VIP) for medical officers of the Armed Forces and the 

Public Health Service, codified at former 37 U.S.C. §313. The act authorized, under 

regulations prescribed by the Secretary of Defense--or the Secretary of Health, 

Education, and Welfare (now the Secretary of Health and Human Services) for Public 

527
Health Service Officers--payment of up to $13,500 for each year of an active duty 

agreement accepted by the Secretary concerned from a qualified medical officer who (1) 

was below pay grade O-7, (2) had a critical specialty, (3) was not serving in an initial 

active duty obligation of four years or less or the first four years of an initial obligation of 

more than four years, and (4) was not undergoing intern or initial residency training. The 

Congressional intent in creating VIP was described in these terms: 

The purpose of the proposed legislation is to ensure a level of military 

physician staffing in an all-volunteer environment that will enable the military 

medical departments to continue to provide adequate health services for our 

Armed Forces. 

 Historically, the most difficult officer group to retain on active duty 

beyond their first obligated tour is that of the health care professionals and within 

that group physicians are, by far, the most difficult subgroup to retain on active 

duty. A major cause of the difficulty is the disparity between the income of the 

military health professional and his civilian counterpart. It is only in the physician 

group that major pay disparities currently exist. Priority action is required in order 

to overcome this problem. 

 The proposed legislation has the objective of authorizing an 

experimental eighteen months program to reduce the gap between the income of 

civilian and military physicians by improving the rates of special pay for this 

subgroup and by substituting an improved variable incentive pay in place of the 

existing continuation pay. We do not believe it feasible or desirable to attain 

complete parity with civilian physician incomes.18 

It is clear from the legislative history of the act that, while the income of 

physicians in private practice was used as a benchmark to measure how much extra pay 

was needed to induce military physicians to remain on active duty, VIP--which was 

generally referred to as a "bonus" by all witnesses and members of Congress and 

persistently called a "reenlistment bonus" by one senator--was intended as a physicians' 

analog to such retention bonuses as the selective reenlistment bonus and special pay for 

nuclear-qualified officers. One defense witness, for instance, expressed this view in these 

terms: 

 

18 Senate Report No. 93-658 (Committee on Armed Services), pp. 11-12, accompanying S. 2770, 93d 

Congress, 1st Session (1973). 

 

528
One of the reasons we are asking for a bonus plan rather than an increase in basic 

compensation, is to permit us to tailor the amounts that we would pay to individuals 

based upon changing circumstances. It would hardly seem consistent with that goal to 

permit people to enter into long-term contracts which might result in our paying larger 

bonuses than was necessary.19

As implemented by Department of Defense regulations, VIP was limited to 

medical officers in pay grades O-3 through O-6 who accepted an active duty agreement 

of one, two, three, or four years. The offer was to be made only to officers whose 

professional qualifications or demonstrated performance warranted it. The regulations 

also provided that to be eligible for VIP a medical officer must have had no disqualifying 

active duty obligation, which was defined as including, in addition to the initial 

obligation specified in the law, an obligation resulting from (1) an agreement executed by 

an officer in a reserve component to enter active duty after completion of professional 

education and training, (2) participation in an educational program in which the officer 

was on active duty during his attendance at the professional school that qualified him as a 

medical officer, not to exceed a disqualifying period of the first four years as a medical 

officer, and (3) an agreement entered into under the continuation pay program. This last 

limitation was subject to an exception, however, in that an officer who would be eligible 

for VIP were he not under a continuation pay obligation could repay the prorated 

unearned portion of his continuation pay entitlement and thus qualify for VIP. While the 

law provided that VIP should be paid only to officers in critical skill specialties, the 

Department of Defense as a matter of policy treated all medical specialties in all years of 

service categories as "critical" for the purpose of VIP eligibility. VIP rates for all medical 

specialties were as follows: 

Years of Service (including Length of Active Duty Agreement 

constructive service credit) 1 Year 2 Years 3 Years 4 Years 

 

 4 through 13 $12,000 $12,500 $13,000 $13,500 

 14 through 19 11,500 12,000 12,500 13,000 

 20 through 25 11,000 11,300 11,600 12,000 

 

19 Hearings of December 14, 1973, on S. 2770 before the Senate Armed Services Committee, p. 98, 93d 

Congress, 1st Session (1973) (testimony of the Deputy Assistant Secretary of Defense for Health Resources 

and Programs). 

529
 26 or more 10,000 10,300 10,600 11,000 

 Obligated Officers 9,000 9,000 9,000 9,000 

 Note: An obligated officer was one who had an unserved non-disqualifying active duty obligation 

resulting from participation in military-funded medical training of one school year or more.

VIP could be paid in a lump sum after completion of the period specified in the 

active duty agreement, or in advance in equal annual, semiannual, or monthly 

installments, at the option of the officer concerned. 

The Act of May 6, 1974, Public Law 93-274, §2, 88 Stat. 94, 96 (1974), specified 

that the VIP authority would expire on June 30, 1976. The Fiscal Year Adjustment Act, 

Public Law 94-273, §2(18), 90 Stat. 375 (1976), extended the authority to September 30, 

1976, as one of a group of date adjustments made in connection with the new OctoberSeptember fiscal year cycle. Section 305 of the Department of Defense Appropriation 

Authorization Act, 1977, Public Law 94-361, §305, 90 Stat. 923, 926 (1976), further 

extended the VIP authority to September 30, 1977; and the Act of September 30, 1977, 

Public Law 95-114, §1, 91 Stat. 1046 (1977), again extended the authority to September 

30, 1978. The Department of Defense Appropriation Authorization Act, 1979, Public 

Law 95-485, §801(a), 92 Stat. 1611, 1619 (1978), extended the authority to September 

30, 1980. VIP authority as pertaining to medical personnel in the Armed Forces was 

terminated by the Uniformed Services Health Professionals Special Pay Act of 1980, 

Public Law 96-284, §3(b), 94 Stat. 587, 590-591 (1980), although it continued to apply to 

qualifying medical personnel in the Public Health Service until September 15, 1981. At 

that time, that remaining authority was repealed by the Defense Officer Personnel 

Management Act (DOPMA), Public Law 96-513, §414(a), 94 Stat. 2835, 2906 (1980). 

The prohibition in the Act of May 6, 1974, Public Law 93-274, id., against 

variable incentive pay eligibility during initial residency training and its elimination of 

continuation pay for medical officers below pay grade O-7 adversely affected a small 

group of medical officers below that grade in a way not intended. The residency training 

of these officers had for various reasons--including, in some cases, a need for their 

services in combat zones--been delayed until after they had completed several years of 

530
active duty. When they were in residency training they were, under the Act of May 6, 

1974, id., excluded from eligibility for both variable incentive pay and continuation pay. 

To cover such officers, and as a "saved pay" measure, the Act of August 29, 1974, Public 

Law 93-394, 88 Stat. 792 (1974), reinstated continuation pay eligibility retroactively to 

June 1, 1974, for medical officers below pay grade O-6 who were undergoing initial 

residency training and who were on active duty on June 1, 1974. 

The Uniformed Services Health Professionals Special Pay Act of 1980, Public 

Law 96-284, §4, 94 Stat. 587, 591-592 (1980), adopted an entirely new set of special pay 

provisions for physicians and accordingly withdrew any remaining continuation pay 

entitlement authority from such personnel. 

Special Pay for Medical Officers of the Armed Forces 

The Uniformed Services Health Professionals Special Pay Act of 1980, Public 

Law 96-284, §2(a), 94 Stat. 587, 587-588 (1980), substantially amended the prior 

provisions of Title 37, United States Code, dealing with special pay entitlements of health 

professionals in the Armed Forces. All prior authority dealing with special pay for 

physicians in the Armed Forces--i.e., former 37 U.S.C. §§302, 311, and 313 as in effect 

before enactment of the Uniformed Services Health Professionals Special Pay Act of 

1980, Public Law 96-284, id.--was effectively repealed, at least to the extent it covered 

such personnel,20 to be replaced by an entirely new 37 U.S.C. §302, in which authority 

for such special pay is unified. In addition, the new §302 made permanent the special pay 

program for medical officers, thereby eliminating the concerns of many officers over 

whether the special pay programs for health professionals would be terminated. 

 

20 Neither 37 U.S.C. §§311 or 313, dealing with special continuation pay and variable incentive pay, 

respectively, was repealed outright. Rather, physicians in the Armed Forces were withdrawn from the scope 

of operation of those provisions. In particular, until enactment of the Department of Defense Authorization 

Act, 1986, Public Law 99-145, 99 Stat. 583 (1985), 37 U.S.C. §311 still in terms authorized continuation 

pay for dentists in the Armed Forces, and physicians and dentists in the Public Health Service were also 

entitled to such pay under the provisions of 42 U.S.C. §210(a), as added by Section 805 of the Mental 

Health Systems Act, Public Law 96-398, §805, 94 Stat. 1564, 1608 (1980). 37 U.S.C. §313 continued to 

authorize variable incentive pay for physicians in the Public Health Service until repealed by the Defense 

Officer Personnel Management Act (DOPMA), Public Law 96-513, §414(a), 94 Stat. 2835, 2906 (1980). 

 

531
Under the new system of special pay for physicians in the Armed Forces--now 

formally referred to as "medical officers of the Armed Forces"--four different types of 

special pay, none of them subject to a statutory cutoff date, were established. The four 

types of special pay are: (1) variable special pay, codified at 37 U.S.C. §302(a)(2) and 

(3); (2) additional special pay for physicians not in training, codified at 37 U.S.C. 

§302(a)(4); (3) special pay for board certification, codified at 37 U.S.C. §302(a)(5); and 

(4) incentive special pay, codified at 37 U.S.C. §302(b). None of these pays is dependent 

on an affected officer's obligated duty status. 

The four new special pays authorized for medical officers of the Armed Forces 21

by the Uniformed Services Health Professional Special Pay Act of 1980, Public Law 96-

284, §2(a), 94 Stat. 587, 587-588 (1980), were all directed to the problem of retention. As 

stated by Congress: 

The most serious deficiency [in the military medical care system] was the 

numerical shortage of military physicians and to a lesser degree the shortage in the four 

categories of health professionals.... The unanimous opinion of [a number of health 

professionals] interviewed [in connection with Congressional consideration of the Act] 

was that a major improvement in the compensation system was needed if the numerical 

shortage in health professionals was to be overcome.22

 

21 A separate form of special pay was authorized for reserve officers who were medical officers of the 

Armed Forces, who served on active duty as medical officers for not less than one year, and who were 

under a call or order to active duty for less than one year. As initially enacted, the rate of special pay for 

affected personnel was $100 per month for officers who had completed less than two years of active duty 

and $350 per month for officers who had completed at least two years of active duty. See 37 U.S.C. 

§302(h), as amended by Section 1342(d) of the National Defense Authorization Act for Fiscal Year 1987, 

Public Law 99-661, §1342(d), 100 Stat. 3816, 3991 (1986). This special pay for Reserve medical officers 

was increased to $450 per month for all officers on active duty under a call or order to active duty for less 

than one year by the National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-

189, §702(e), 103 Stat. 1352, 1468-1469 (1989). Under the amendments to 37 U.S.C. §302(h) made by the 

1990/1991 National Defense Authorization Act, no distinction was made in the amount of pay authorized 

for reserve medical officers on the basis of the amount of active duty time they had completed. 

22 House Report No. 96-904 (Committee on Armed Services), p. 2, accompanying H.R. 6982, 96th

Congress, 2d Session (1980). Also see id., at p. 4, and Senate Report No. 96-749 (Committee on Armed 

Services), p. 2, accompanying S. 2460, 96th Congress, 2d Session (1980). (In a special transitional 

provision, Section 7 of the Uniformed Services Health Professionals Special Pay Act of 1980, Public Law 

96-284, §7, 94 Stat. 587, 593 (1980), provides that no medical officer affected by the Act is to receive less 

pay, including basic and special pays, under the new provisions than he would have had former 37 U.S.C. 

§§302, 311, and 313 continued to apply. See 37 U.S.C. §302 note. See also, e.g., House Report 96-904 

(Committee on Armed Services), p. 14, accompanying H.R. 6982, 96th Congress, 2d Session (1980).) 

532
A discussion of each of the four special pays as initially enacted by Congress 

follows: 

Variable special pay. Under the special pays program for medical officers 

of the Armed Forces established by the Uniformed Services Health Professionals 

Special Pay Act of 1980, variable special pay is payable to all military 

physicians on active duty. Except for general and flag officers, who received a flat 

$1,000 in variable special pay per year, and persons serving an internship, who 

received $1,200 per year, the rates of variable special pay initially established by 

the Uniformed Services Health Professionals Special Pay Act of 1980 ranged 

from a low of $5,000 to a high of $10,000 per year, depending on an affected 

officer's years of creditable service, as follows: 

 

 Annual Years of 

 Creditable Service Variable Special Pay

 

 Less than 6 $5,000 

 6 but less than 8 10,000 

 8 but less than 10 9,500 

 10 but less than 12 9,000 

 12 but less than 14 8,000 

 14 but less than 18 7,000 

 18 but less than 22 6,000 

 Over 22 5,000 

 

 Variable special pay, although established as an annual entitlement, is 

payable to affected personnel monthly. 

As reflected in the relevant Congressional report, the rates of variable 

special pay initially established by Congress were "set to achieve the level of 

compensation by years of service that is believed by the [House Committee on 

Armed Services] to represent a system of compensation that would attract and 

retain the number and quality of physicians needed by the military services."23

 

23 Senate Report No. 96-749 (Committee on Armed Services), p. 3, accompanying S. 2460, 96th Congress, 

2d Session (1980). See House Report No. 96-904 (Committee on Armed Services), p. 5, accompanying 

533
Additional special pay. The Uniformed Services Health Professionals 

Special Pay Act of 1980 also established another form of special pay--known as 

"additional special pay"--for medical officers of the Armed Forces not engaged in 

medical internship or initial residency training. Entitlement to such additional pay 

was, and continues to be, conditioned on an affected officer's execution of a 

written agreement to remain on active duty for a period not less than one year. As 

initially established, medical officers with less than ten years of creditable service 

were entitled to $9,000 per year in additional special pay, whereas officers with 

ten or more years of service were entitled to $10,000 per year. Additional special 

pay is payable annually as a lump sum at the beginning of the twelve-month 

period for which the payment is to be made. An officer who leaves active duty 

before the end of the twelve-month period for which he or she received a payment 

is required to refund the "unearned" portion of the payment.24

Board certification pay. Special pay for board certification is available to 

all military physicians who have achieved board certification in a medical 

specialty. As initially established by the Uniformed Services Health Professionals 

Special Pay Act of 1980, board certification pay was payable, on a monthly basis, 

in amounts ranging from $2,000 to $5,000 per year depending on an affected 

officer's years of creditable service, as follows: 

 

 Years of Annual Pay for 

 Creditable Service Board Certification 

 Less than 10 $2,000 

 10 but less than 12 2,500 

 12 but less than 14 3,000 

 H.R. 6982, 96th Congress, 2d Session (1980); and House Report No. 96-517 (Committee on Armed 

Services), p. 3, accompanying H.R. 5235, and Senate Report No. 96-507 (Committee on Armed Services), 

p. 2, accompanying S. 523, 96th Congress, 1st Session (1979). 

24 Under an amendment to 37 U.S.C. §302 effected by the Department of Defense Authorization Act, 1986, 

Public Law 99-145, §640(2), 99 Stat. 583, 652 (1985), a discharge in bankruptcy entered less than five 

years after the termination date of an agreement does not discharge the obligation in question. See House 

Report No. 99-81 (Committee on Armed Services), p. 233, accompanying H.R. 1872, 99th Congress, 1st

Session (1985). 

534
 14 but less than 18 4,000 

 Over 18 5,000 

Incentive special pay. Incentive special pay, the last of the special pays for 

medical officers of the Armed Forces authorized by the Uniformed Services 

Health Professionals Special Pay Act of 1980, was initially designed to be 

payable to medical officers of the Armed Forces not undergoing medical 

internship or initial residency training who were in critical medical specialties, 

who practiced in those specialties, and who executed written continuation 

agreements binding them to remain on active duty for a period of not less than 

one year. In connection with the requirement that an officer receiving incentive 

special pay be in a critical medical specialty, the Secretary of an affected officer's 

military department was required to certify that the officer was qualified in such a 

medical specialty. Officers meeting the various eligibility requirements were 

entitled to incentive special pay not to exceed $8,000 per year. As was true of 

additional special pay, incentive special pay was, and continues to be, payable 

annually in a lump sum at the beginning of the twelve-month period for which the 

payment is to be made. As initially enacted, the total amount of incentive special 

pay paid to all medical officers of the Armed Forces could not exceed six percent 

of the total amount of all special pays authorized for such officers under 37 

U.S.C. §302 generally. 

As reflected in the relevant Congressional Report, Congress intended that 

incentive special pay be used only "to provide additional incentive [sic] to 

physicians in specialties in critical supply."25 In addition, Congress indicated it 

was establishing such special pay authority "to test the effectiveness of similar 

 

25 House Report No. 96-904 (Committee on Armed Services), p. 6, accompanying H.R. 6982, 96th

Congress, 2d Session (1980). See Senate Report No. 96-749 (Committee on Armed Services), p. 3, 

accompanying S. 2460, 96th Congress, 2d Session (1980). 

535
forms of additional pay to address other shortages in the physician force."26

Congress also indicated that it expected the incentive special pay authority would 

not be used to alter the general structures of variable special pay by years of 

service.27

Only one amendment was made to the four special pay programs for medical 

officers of the Armed Forces before Congress extensively reconsidered the issue of 

medical officer retention in connection with its deliberations on the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, §§702 and 703, 

103 Stat. 1352, 1468-1471 (1989). In 1987, the incentive special pay program for medical 

officers of the Armed Forces was amended by the National Defense Authorization Act 

for Fiscal Years 1988 and 1989, Public Law 100-180, §716, 101 Stat. 1019, 1113 (1987), 

in two particulars. First, the act repealed the limitation of the total amount of incentive 

special pay to six percent of all special pays authorized for medical officers of the Armed 

Forces, and second, the act removed the $8,000 annual ceiling on the amount of incentive 

special pay payable to any one medical officer, provided that the only medical officers 

who could be paid more than $8,000 per year were medical officers determined by the 

Secretaries of their respective military departments to be qualified and serving in "health 

profession skill[s]" designated as "critically needed wartime skill[s]." In support of these 

two changes, the House Committee on Armed Services, which had proposed the changes 

in the first instance, noted that the six percent limitation and the $8,000 ceiling for 

incentive special pay, which had been "designed to provide a further incentive [in 

addition to variable special pay, additional special pay, and board certification pay] for 

hard-to-retain specialties," had been "established in 1980 and ... not changed since that 

time."28 The committee went on to state: 

 

26 House Report No. 96-904 (Committee on Armed Services), p. 6, accompanying H.R. 6982, 96th

Congress, 2d Session (1980). See Senate Report No. 96-749 (Comm ittee on Armed Services), p. 3, 

accompanying S. 2460, 96th Congress, 2d Session (1980). 

27 Senate Report No. 96-749 (Committee on Armed Services), p. 3, accompanying S. 2460, 96th Congress, 

2d Session (1980). 

28 House Report No. 100-58 (Committee on Armed Services), p.213, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

536
As a result of the improvements in the medical special pay structure 

enacted in [the Uniformed Services Health Professionals Special Pay Act of] 1980 

and the pipeline of medical school graduates provided by the Armed Forces 

Health Professions Scholarship Program and the Uniformed Services University 

of the Health Sciences, the [military] services are able to meet their active duty 

requirement for physicians in specialties like pediatrics, family practice, and 

internal medicine. This is not the case for a number of others, however, 

specifically those specialties that can command very high salaries in the civilian 

sector. These highly paid specialists, such as surgeons, are also the ones that will 

be in critically short supply in wartime, particularly in the early days of a 

mobilization. 

 The committee believes greater flexibility is needed in the incentive 

special pay program to permit larger amounts to be targeted at physicians with 

critical wartime skills, even though this may result in payment to a smaller 

number of physicians. As a result, ... the committee recommends removal of the 

$8,000 limit on individual payments and the six percent limit on funds available 

for this program. For fiscal year 1988, the committee recommends that any 

increase in this program be absorbed from within existing resources. In the future, 

however, the department would be able to request the Congress to approve a 

higher appropriation level for incentive special pay.29 30

Without amending any of the four special pay programs for medical officers of 

the Armed Forces set out at 37 U.S.C. §302, the National Defense Authorization Act, 

Fiscal Year 1989, Public Law 100-456, §612, 102 Stat. 1918, 1979-1981 (1988), 

established a new medical officer retention bonus as a provisional, uncodified program 

for dealing with "the retention of health care professionals."31 32 As the legislation was 

 

29 House Report No. 100-58 (Committee on Armed Services), p.214, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). Cf. House Report No. 100-446 (Committee of Conference), p. 649, 

accompanying H.R. 1748, 100th Congress, 1st Session (1987). 

30 As adopted, the amendments to the incentive special pay program did in fact require increased payments 

made during fiscal year 1988 to individual medical officers to be met out of existing funding requests made 

to Congress by the Department of Defense in its previous budget submissions. National Defense 

Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §716(b), 101 Stat. 1019, 1113 

(1987). 

31 House Report No. 100-753 (Committee of Conference), p. 405, accompanying H.R. 4264, and House 

Report No. 100-989 (Committee of Conference), p. 407, accompanying H.R. 4481, 100th Congress, 2d 

Session (1988). 

32 The text of the provisional, uncodified medical officer retention bonus program in issue is set out as a 

note under 37 U.S.C. §302. 

537
initially enacted, a qualified medical officer who executed a written agreement during the 

nine-month period starting January 1, 1989, and ending September 30, 1989, obligating 

him or her to remain on active duty for at least two years following the completion of any 

other active-duty obligation, was eligible for a "retention bonus" of "not more than 

$20,000 for each year covered by the agreement." Medical officers entitled to participate 

in the retention bonus program had to be medical officers of the Armed Forces in pay 

grades below pay grade O-7 with at least eight years of creditable service and also had to 

have completed any active-duty service commitments incurred for medical education or 

training before October 1, 1991. In determining the amount of a retention bonus payment 

in the case of a particular medical officer, the Secretary of Defense was required to 

"ensure that no officer receives pay under this section [i.e., the provision authorizing the 

medical officer retention bonus] which, when added to all other pay and allowances ... 

results in such officer receiving total compensation in an amount that exceeds the total 

compensation paid to comparable ... civilian physicians employed in the private sector in 

employment other than self-employment."33 Refunds were required from medical officers 

who signed up for the bonus but who did not complete their committed-to active-duty 

service obligation.34 An overall limitation on medical officer retention bonus obligational 

authority of $30,000,000 was established for fiscal year 1989. In addition to the specific 

provisions authorizing the medical officer retention bonus program generally, the 

Secretary of Defense was required to submit various reports to Congress, including a 

report "describing the manner in which the authority [for the bonus program] is to be 

used" and a report containing "[a]n analysis of current and projected requirements of the 

Armed Forces for health professionals by specialty and years of service," an "assessment 

of the adequacy of the existing compensation system for such health care professionals," 

and "recommendations for legislation as the Secretary considers necessary to attract and 

 

33 National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, §612(c), 102 Stat. 1918, 

1979-1980 (1988). See 37 U.S.C. §302 note. 

34 A discharge in bankruptcy entered less than five years after the termination date of an agreement was 

specifically provided not to discharge the refund obligation. National Defense Authorization Act, Fiscal 

Year 1989, Public Law 100-456, §612(e), 102 Stat. 1918, 1980 (1988). See 37 U.S.C. §302 note. 

538
retain on active duty the health care professionals needed to meet the needs of the Armed 

Forces."35

In support of the medical officer retention bonus program, the House-Senate 

Conference Committee noted: 

... The conferees recognize that the retention of health care professionals is 

difficult. While recognizing that compensation is not the only factor affecting 

retention, the conferees agree that it is a major consideration. The conference 

agreement directs the Secretary of Defense to submit a comprehensive report to 

the Committees on Armed Services of the Senate and House of Representatives 

evaluating the adequacy of the existing compensation package for health care 

professionals and any recommended changes to that structure. That report must 

include justification for future long-term specialty requirements, grade levels, 

training requirements, and levels of non-patient care physician positions.... 

 

 The conference agreement also requires that this long-term comprehensive 

report include a legislative proposal that provides for one of two approaches to an 

alternative compensation system for health care professionals linked to the compensation 

of private sector employed physicians.... 

Further, the conferees agree that while developing an adequate health 

professional compensation system is the long-term solution, short-term concerns 

need to be addressed as well. The conference agreement, therefore, authorizes $30 

million to establish a discretionary physicians' bonus to be implemented by the 

Secretary during fiscal year 1989. 

This temporary medical bonus program is to be provided to those 

physicians determined to be in short supply based either on specialty, years of 

experience, or other factors determined by the Secretary of Defense. This 

authority is granted only for those members who have more than eight years of 

creditable service, who have completed service obligations incurred as a result of 

education/or training, and whose total compensation currently falls below that of 

comparable physicians in private sector employment as determined by the 

Secretary of Defense. The conferees suggest that the salaries of physicians 

employed by Civilian Health Maintenance Organizations, or other similar 

organizations, may represent a good comparative benchmark. The Secretary 

would have authority to negotiate multi-year agreements with a minimum 

requirement for a two-year commitment period. The maximum bonus payable is 

 

35 National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, §612(g), 102 Stat. 1918, 

1980-1981 (1988). See 37 U.S.C. §302 note. 

539
$20,000 per year of commitment. However, the conferees generally expect that 

the total compensation that a military physician receives under this limited 

authority in any one year may not exceed a 48 percent increase in the total annual 

amount of variable special and additional special pays to which such a physician 

is entitled under [the special pays program for medical officers of the Armed 

Forces] during such year.36

 In extensive comments on its proposed changes in 1989 and 1990 to the special 

pays programs for medical officers of the Armed Forces--which are quoted here in 

extenso because of the comprehensive background to and analysis of the problem of 

medical officer retention in the Armed Forces--the House Committee on Armed Services 

noted: 

 Background 

The Uniformed Services Health Professionals Special Pay Act of 1980 

(Public Law 96-284) revised and updated the physician special pay system to 

assist in the recruitment and retention of medical officers in the Armed Forces. 

Coupled with the large October 1980 and October 1981 pay raises for all military 

personnel, the new physician special pay structure was an unqualified success in 

achieving that goal. Aggregate physician continuation rates climbed from 78 

percent in fiscal year 1977 to 90 percent in fiscal year 1983. Improved retention, 

combined with increased accessions, resulted in a 29 percent increase in 

active duty physicians from fiscal year 1980 through fiscal year 1987. 

As the value of the special pays has eroded over time, retention at the end 

of initial obligation has gradually declined. According to Congressional Budget 

Office data, DoD-wide end of initial obligation retention rates have dropped from 

a high of 60 percent in 1983 to 37 percent in fiscal year 1988. For those beyond 

initial obligation, the overall retention rate has declined from 89 percent to 85 

percent. 

The decreasing value of the medical special pays is one factor in the drop 

in retention rates. The committee notes that conditions of work--such as 

inadequate numbers of nurses and ancillary medical personnel, lack of clerical 

support personnel, aging facilities and equipment, and the inability to participate 

in continuing medical education--are of equal, and probably greater, importance. 

For example, far too often a military physician, after a long and busy day of 

seeing patients, supervising interns, and attending to a multitude of administrative 

 

36 House Report No. 100-753 (Committee of Conference), pp. 405-406, accompanying H.R. 4264, and 

House Report No. 100-989 (Committee of Conference), pp. 407-408, accompanying H.R. 4481, 100th

Congress, 2d Session (1988). See Senate Report No. 100-326 (Committee on Armed Services), pp. 94-95, 

accompanying S. 2355, 100th Congress, 2d Session (1988). 

540
or other duties, must spend several hours handwriting or typing patient medical 

records. Military physicians have on numerous occasions reported wheeling 

patients to radiology or the laboratory themselves because of the lack of a 

corpsman to do the job. Such conditions would be unthinkable in the civilian 

sector and, based on recent surveys of military doctors, are a major factor in 

declining physician retention rates. 

 

 Fiscal year 1989 action 

In order to stem the tide of physician losses before the problem became 

more serious, section 612 of the fiscal year 1989 Defense Authorization Act 

(Public Law 100-456) provided authority for an interim physician retention bonus 

for fiscal year 1989 and directed the Secretary of Defense to submit a 

comprehensive requirements-based analysis of military health care professionals, 

including the Secretary's recommendations for legislative change. The results of 

the reports provided by the Department have been disappointing at best. Much 

analysis remains to be done to satisfy the requirements of section 612(g) of 

Public Law 100-456. 

Of particular concern is the lack of a robust objective peacetime force, 

disaggregated by grade or years of service and by specialty. The committee notes 

that it expressed dissatisfaction with the lack of similar information in its report 

on the special pays for health professionals in 1979, and that the situation appears 

to have changed very little since that time. 

Unfortunately, the interim bonus authority, dubbed the Medical Officer 

Retention Bonus or MORB, proved to be divisive due to the way it was 

implemented by the Department of Defense. As submitted to Congress on 

November 15, 1988 the Department's plan for the MORB included a minimal 

bonus amount for primary care physicians--the doctors who comprise half the 

force and provide the bulk of the care to the beneficiary population. Subsequently, 

in late December primary care physicians were deleted from the program entirely. 

A storm of outrage ensued. The Department ultimately put the primary care 

physicians back in, following a congressional hearing in March. By that time, 

unfortunately, considerable damage had already been done. 

 Committee recommendation 

In devising a new physician special pay plan, the committee has attempted 

to avoid the pitfalls and divisiveness of the MORB exercise. There currently 

appears to be a plethora of new medical special pay plans making their way 

through the corridors of the Pentagon. The committee has opted instead to restore 

the buying power of the current physician special pay system which has served its 

purpose well until its buying power began to erode in recent years. 

541
 . . . 

 Incentive special pay 

Under the committee recommendation, the service Secretaries would, after 

coordination with the Secretary of Defense, be authorized to pay an incentive 

special pay in an amount determined by the Secretary concerned, not to exceed 

$20,000 per year. To be eligible for the payment, the officer would execute an 

agreement to remain on active duty for a period of twelve months. 

 The increases recommended in variable special pay, additional special 

pay, and board certification pay are intended to meet the need for a substantial, 

general increase in the level of special pay for physicians. The committee, 

therefore, does not intend incentive special pay to be paid to all specialty trained 

medical officers. Incentive special pay would instead continue to be authorized to 

address differential problems between specialties. 

 In determining the eligibility and the amount of incentive special pay, the 

Secretary concerned should consider specialty shortages relative to wartime 

requirements, retention rates affecting the Department's ability to provide costeffective peacetime health care, and service unique needs. Officers who receive 

special skill enhancement training to improve their cross-utilization in a wartime 

shortage specialty may be paid an incentive special pay. Incentive special pay 

should be paid by specialty and not by obligated status, or by length of service, 

except that some distinction may be made in the amount for officers with limited 

experience in specialty.37

 In a similar vein, the Senate Committee on Armed Services, "[r]ecognizing the 

necessity of action now," recommended increasing the value of variable, additional, and 

board certification special pays "by approximately 35 percent" in order to "roughly 

restore the value of these special pays to the percent of total compensation they were 

designed to represent when the system was implemented in 1980."38

 In conference, the House and Senate conferees, having agreed to extend the 

"medical officer retention bonus" program, changed the focus of the incentive special pay 

program to compensate for the planned phase-out of the bonus over time. As noted in the 

House-Senate Conference Report: 

 

37 House Report No. 101-121 (Committee on Armed Services), pp. 285-287, accompanying H.R. 2461, 

101st Congress, 1st Session (1989). 

38 Senate Report No. 101-81 (Committee on Armed Services), p. 178, accompanying S. 1352, 101st

Congress, 1st Session (1989). 

542
With regard to incentive special pay, the conferees capped maximum 

payment at $16,000 (the fiscal year1989 level) during fiscal year 1990; at $22,000 

during fiscal year 1991; at $29,000 during fiscal year 1992; and at $36,000 during 

fiscal year 1993. Physicians receiving a medical officer retention bonus payment 

for service during a 12-month period will continue to be eligible for incentive 

special pay during that period at the rates in effect during fiscal years 1989 and 

1990. When no longer eligible for a retention bonus payment, the physician will 

be eligible for the incentive special pay in effect at that time. 

Within the above constraints, the conferees intend that the incentive 

special pay program be managed in such a way as (1) to transition smoothly out 

of the medical officer retention bonus environment without significantly 

disadvantaging physicians who have signed bonus contracts, and (2) to avoid 

large reductions in total compensation for such individuals as the retention bonus 

payments cease. For example, the conferees expect that the incentive special pay 

to an obligated officer who takes the medical officer retention bonus to be 

regulated to ensure that there are no abrupt or marked changes in the flow of 

compensation to that officer at the point when medical officer retention bonus 

payments to that officer cease. 

Under these guidelines, the conferees intend that, beginning in fiscal year 

1991, the amount of incentive special pay for each specialty increase by an 

amount sufficient to ensure that by fiscal 1993 the amount of incentive special 

pay plus any additional amount available for a multi-year contract ... 

approximates, at a minimum, the total of fiscal year 1989 incentive special pay 

plus an annual four year medical officer retention bonus payment. To the greatest 

extent possible, incentive special pay should not vary by specialty among the 

military Services. 

Any increase in incentive special pay each year for each specialty, 

however, is contingent on the Services' ability to justify the need for improved 

retention.... Requirements are to be justified based on wartime needs, crossutilization capabilities contributing to a specialty's ability to satisfy wartime 

requirements, or requirements generated from a specialty's ability to provide costeffective peacetime health care in the direct care system based on the expected 

population to be supported. Incentive special pay for a specialty should not 

increase if the retention goals for that specialty have been met in the previous 

fiscal year or if the inventory for that specialty exceeds 110 percent of 

requirements.39

 

39 House Report No. 101-331 (Committee of Conference), pp. 594-595, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

543
 In its consideration of authorizations for fiscal year 1991, the House Committee on 

Armed Services proposed a prohibition on the payment of incentive special pay during 

fiscal year 1991 under the provisional medical officer retention bonus program 

established by the National Defense Authorization Act, Fiscal Year 1989, Public Law 

100-456, §612, 102 Stat. 1918, 1979-1981 (1988), as expanded and extended by the 

National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 

101-189, §703, 103 Stat. 1352, 1469-1471 (1989). H.R. 4739, §611, 101st Congress, 2d 

Session (1990). Stating that it did "not believe that the experience to date with the 

medical officer retention bonus program provides the requisite support to continue a 

multi-year contract plan of similar design at this time," the House Armed Services 

Committee noted that the Department of Defense "has yet to establish physician 

retention goals by specialty" and went on to question "the rationale for paying all 

specialties incentive special pay ... for multi-year contracts."40

 In conference, the House proposal to prohibit payments during fiscal year 

1991 under the medical officer retention bonus program was effectively turned on 

its head and a new "multiyear retention bonus" program was established to 

succeed the uncodified, provisional medical officer retention bonus program 

established by the National Defense Authorization Act, Fiscal Year 1989, Public 

Law 100-456, id. Under the "multiyear retention bonus" program adopted in the 

National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, 

§611(a)(1), 104 Stat. 1485, 1576 (1990), now codified at 37 U.S.C. §301d, 

medical officers of the Armed Forces in pay grades below pay grade O-7 who 

enter into written agreements to remain on active duty for two, three, or four 

years, and who have either eight years of creditable service or who have 

completed any active duty commitment they might have incurred for medical 

education and training, and who have completed any initial residency training 

before September 30th of the fiscal year in which they enter an agreement, were 

eligible for a "retention bonus" not to exceed $14,000 for each year of a four-year 

agreement, while some lesser amount, not specified in the act, was to be made 

available for each year of a two- or three-year agreement, "reduced to reflect the 

shorter service commitment." 37 U.S.C. §301d(a)(2). 

 In connection with implementation of the "multiyear retention bonus" 

program, the Secretary of Defense was required to submit within 90 days after 

adoption of the program a report to Congress describing "the process that will be 

used to reassess the assignment of medical specialties to the various categories of 

 

40 House Report No. 101-665 (Committee on Armed Forces), p. 287, accompanying H.R. 4739, 101st

Congress, 2d Session (1990). 

544
multiyear bonuses ... and the means for ensuring that substantial changes to the 

total compensation of medical officers of the Armed Forces will be minimized." 

National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, id., §611(c), 104 Stat. at 1577. Medical officers of the Armed Forces who 

had entered into written agreements under the medical officer retention bonus 

program adopted by the National Defense Authorization Act, Fiscal Year 1989, 

Public Law 100-456, id., were permitted to terminate those agreements in order to 

enter into agreements under the new "multiyear retention bonus" program. 

National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, 

id., §611(b)(1), 104 Stat. at 1576-1577. The National Defense Authorization Act 

for Fiscal Year 2003, Public Law 107-314, 116 Stat. 2568, increased the 

maximum annual bonus payment from $14,000 to $50,000. 

 In commenting on the new "multiyear retention bonus" program for medical 

officers of the Armed Forces, the House-Senate conference committee stated: 

Based on two years' experience with the medical officer retention bonus, 

the conferees are satisfied that a multi-year bonus is a cost effective approach to 

provide stability in managing the physician force. In conjunction with incentive 

special pay, a multi-year special pay can achieve desired retention goals and 

bring medical officer end strength by specialty more in line with requirements. 

 . . . 

The primary purpose of multi-year special pay is to align actual retention 

with desired retention. Because retention needs may vary by specialty, different 

levels of multi-year payment would be appropriate for different specialties. 

However, this desire for accuracy must be weighed against the need for 

simplicity. Consequently, the conferees believe that the multi-year special pay 

should consist of no more than three different levels. Specific specialists should 

not be identified directly with a level of multi-year special pay; rather, a specialty 

should be eligible to receive a particular level of multi-year special pay based on 

the need to meet and maintain end strength requirements for that specialty.41

Following these deliberations, sections 702 and 703 of the National 

Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, 

§§702 and 703, 103 Stat. 1352, 1468-1471 (1989), made a number of 

amendments to the variable special pay, the additional special pay, the board 

certification pay, and the incentive special pay programs of 37 U.S.C. §302. 

 

41House Report No. 101-923 (Committee of Conference), p. 612, accompanying H.R. 4739, 101st

Congress, 2d Session (1990). See id., pp. 611-613, generally. 

545
Section 702(a) of the National Defense Authorization Act for Fiscal Years 1990 

and 1991, Public Law 101-189, §§702(a), 103 Stat. 1352, 1468 (1989), as amended by 

the National Defense Authorization for Fiscal Year 1991, Public Law 101-510, §612, 104 

Stat. 1485, 1577 (1990), established new and generally higher rates of variable special 

pay for medical officers of the Armed Forces. (See Current Rates of Special Pay for 

Medical Officers of the Armed Forces, below.)

 

 With respect to additional special pay, Section 702(b) of the 1990/1991 National 

Defense Authorization Act, Public Law 101-189, id., §702(b), 103 Stat. at 1468, provided 

that all medical officers of the Armed Forces not undergoing medical internship or initial 

residency training are entitled to such pay at the rate of $15,000 per year, provided they 

execute the required continuation agreements. The distinction made in the original 

additional special pay program between officers with less than ten years of creditable 

service and those with more than ten years of creditable service was dropped. Section 

702(c) of the 1990/1991 National Defense Authorization Act, Public Law 101-189, id., 

§702(c), 103 Stat. at 1468, generally increased the rates of board certification pay. (See 

Current Rates of Special Pay for Medical Officers of the Armed Forces, below) 

 

Finally, Section 702(d) of the 1990/1991 National Defense Authorization Act, 

Public Law 101-189, id., §702(d), 103 Stat. at 1468, further amended the incentive 

special pay program to provide a ceiling on such pay of $16,000 for any twelve-month 

period beginning in fiscal year 1990, of $22,000 for any twelve-month period beginning 

in fiscal year 1991, of $29,000 for any twelve-month period beginning in fiscal year 

1992, and of $36,000 for any twelve-month period beginning after fiscal year 1992. The 

National Defense Authorization Act for Fiscal Year 2003, Public Law 107-314, 116 Stat. 

2458, increased this ceiling to $50,000. 

 Current rates of special pay for medical officers of the Armed Forces: Medical 

officers of the Armed Forces may receive as many as five different types of medical 

546
special pays in addition to any other pays and allowances to which they may otherwise be 

entitled: variable special pay, additional special pay, board-certification pay, incentive 

special pay, and multiyear retention bonus. 

Variable special pay. Generally speaking, the amount of variable special pay to 

which a medical officer of the Armed Forces is entitled depends on the officer's 

years of creditable service, as follows: 

 Years of Annual Variable 

 Creditable Service Special Pay Entitlement 

 

 Undergoing internship $1,200 

 Less than 6, not undergoing internship $5,000 

 6 but less than 8 $12,000 

 8 but less than 10 $11,500 

 10 but less than 12 $11,000 

 12 but less than 14 $10,000 

 14 but less than 18 $9,000 

 18 but less than 22 $8,000 

 Over 22 $7,000 

 

General and flag officers who are medical officers of the Armed Forces are 

entitled to $7,000 per year in variable special pay regardless of years of creditable 

service; medical officers undergoing medical internship training are entitled to 

$1,200 per year; and medical officers with less than six years of creditable service 

are entitled to $5,000 per year. An officer's years of creditable service include all 

periods spent in medical internship or residency training when the officer was not 

on active duty plus all the officer's years of active service as a medical officer of 

the Armed Forces. See 37 U.S.C. §302(g). 

Additional special pay. A medical officer of the Armed Forces entitled to variable 

special pay under 37 U.S.C. §302(a)(2) or (3) who is on active duty under an 

active-duty agreement entered into pursuant to 37 U.S.C. §302(c) is entitled to 

additional special pay of $15,000 per year when not undergoing medical 

 internship or initial residency training. 

Board-certification pay. A medical officer of the Armed Forces entitled to variable 

special pay under 37 U.S.C. §302(a)(2) or (3) who is board certified in a medical 

specialty is entitled to board-certification pay as follows: 

 

 

547
 Years of Annual Pay for 

 Creditable Service Board Certification

 

 Less than 10 $2,500 

 10 but less than 12 $3,500 

 12 but less than 14 $4,000 

 14 but less than 18 $5,000 

 Over 18 $6,000 

 

For the purpose of determining the amount of board-certification pay to which a 

particular medical officer of the Armed Forces is entitled, the officer's years of 

creditable service are computed in the same way as used in determining the 

officer's entitlement to variable special pay. 

Incentive special pay. A medical officer of the Armed Forces entitled to variable 

special pay under 37U.S.C. §302(a)(2) or (3) who is on active duty under an activeduty agreement executed pursuant to 37 U.S.C. §302(c) may be paid up to $50,000 

per year in incentive special pay year when not undergoing medical internship or 

initial residency training. 

Multiyear retention bonus. A medical officer of the Armed Forces in a pay grade 

below pay grade O-7 who has completed initial residency training and who has at 

least eight years of creditable service or who has completed any active-duty service 

obligation incurred for medical education and training is eligible for a 

multiyear retention bonus of up to $50,000 for each year of a four-year active-duty 

service commitment or, in the case of a two- or three-year active-duty service 

commitment, to a lesser amount "reduced to reflect the shorter service 

commitment". 

 

 Although the maximum possible payment for both the incentive special pay and the 

multiyear retention bonus is $50,000, the range of the maximum totals of the two pays for 

a single individual is from $27,000 to $75,000. 

 The special pay authority for medical officers of the Armed Forces is permanent 

under current law, with no cutoff date specified.42 

 

42The Defense Officer Personnel Management Act (DOPMA), Public Law 96-513, 94 Stat. 2835 (1980), 

enacted on December 12, 1980, some five and one-half months after the Uniformed Services Health 

Professionals Special Pay Act, Public Law 96-284, 94 Stat. 587 (1980), also affected the pay of certain 

health professionals in the uniformed services. Section 402(a)(3) of DOPMA, id., §402(a)(3), 94 Stat. at 

2904, repealed the previously existing "constructive service credits," codified at former 37 U.S.C. 

§205(a)(7) and (8), with which medical and dental officers of the uniformed services were credited for the 

purpose of determining, among other things, their basic pay entitlements, although Section 104(a) of 

DOPMA, id., §104(a), 94 Stat. at 2846-2848, effectively preserved such credits for certain other purposes, 

including the determination of initial grade as an officer, rank in grade, and service in grade for promotion 

548
Cost: For the cost of medical officers’ special pay from 1980 to 2004, see 

Tables II-24 of Military Compensation Statistics Tables, volume II of this edition. 

 eligibility. See new 10 U.S.C. §533, especially 10 U.S.C. §533(b)(1)(B), (C), (E), and (F), and (c); also see 

10 U.S.C. §532(b)(1). 

 (Notwithstanding the repeal of the constructive service credit for the purpose of determining an affected 

officer's basic pay entitlement, however, Section 625 of DOPMA, id., §625, 94 Stat. at 2951, enacted as a 

save-pay provision, preserved the credit for basic pay purposes, among others, for persons otherwise 

entitled to such credits on September 14, 1981, as well as for certain other classes of persons. See 10 U.S.C. 

§611 note for the text of Section 625 of DOPMA, id., §625, 94 Stat. at 2951.) 

549
Chapter II.E.1.b. 

 Special Pay for Dentists 

 (Dental Officers of the Armed Forces) 

 

Legislative Authority: 37 U.S.C. §§302b, 303a, and 303b. 

 

Purpose: To provide an additional pay to enable the Armed Forces to attract and 

retain a sufficient number of dental officers to meet health care needs of the services. 

Background: The history of today's special pay program for dental officers of the 

Armed Forces can be traced back to 1947. Before then, dental officers had not been 

entitled to special pay of any kind. Since then, there have been three different special pay 

programs for dental officers. This chapter sets out the legislative history of those 

programs and describes how the present day program, denominated "special pay for 

dental officers of the Armed Forces," came into being.1

Special Pay for Dental officers 

The Army-Navy-Public Health Service Medical Officer Procurement Act of 1947, 

ch. 494 [Public Law 365, 80th Congress], §101, 61 Stat. 776, 776-777 (1947), authorized 

a $100 special monthly pay for Regular officers who were then commissioned in the 

Medical or Dental Corps and for those who would be so commissioned thereafter but 

before September 1, 1952. The special pay was also authorized for reserve officers of the 

Medical or Dental Corps who, during the same period, volunteered and were accepted for 

extended active duty of one year or longer. The act stipulated that no officer could be 

paid a career total of special pay for medical or dental service in excess of $36,000. The 

announced purpose of the act was to assist the armed services (and the Public Health 

Service) in attracting and retaining an adequate number of physicians and dentists by 

offering the $100 monthly special pay as an inducement to continued service. However, 

 

1

 For an introductory statement on special pay programs for health professionals generally, see the 

"Background" section of Chapter II.E.1.a. hereof, "Special Pay for Physicians (Medical Officers of the 

Armed Forces)," at pages 379-380, above. 

550
the Senate Armed Services Committee also stated that "[a]ctually, the $36,000 additional 

salary which will be paid the medical and dental officer if the bill is enacted, merely 

compensates him for the additional expense of his education, and for the five years of lost 

earning power which result from his longer period of academic training."2

 In addition to 

providing this special pay, the act authorized original appointments in the Army or Navy 

Medical or Dental Corps in any permanent commissioned grade up to colonel in the 

Army or captain in the Navy. 

In 1948 the so-called Hook Commission made a comprehensive study3

 of the 

military pay system and recommended that the special pay programs for physicians and 

dentists be continued in essentially its existing form and amount, but that it not be paid to 

interns. In line with the commission's recommendations, the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §203, 63 Stat. 802, 809 (1949), restated 

the special pay authority and barred officers serving as medical or dental interns from 

entitlement. The Career Compensation Act of 1949, ch. 681, id., retained the September 

1, 1952, cutoff date originally established in the Army-Navy-Public Health Service 

Medical Officer Procurement Act of 1947, ch. 494 [Public Law 365, 80th Congress], 

§101, 61 Stat. 776, 776-777 (1947), so that the only persons who would be entitled to 

special pay for medical or dental service after September 1, 1952, would be officers who 

had initially entered on active duty before that date.4

The Act of September 9, 1950, ch. 939 [Public Law 779, 81st Congress], §1, 64 

Stat. 826, 826-827 (1950), established the so-called "doctor draft," which required males 

under age 50 qualified in medical, dental, or "allied specialist categories" to register 

 

2

 Senate Report No. 608 (Committee on Armed Services), p. 4, accompanying S. 1661, 80th Congress, 1st

Session (1947). 

3

 “Career Compensation for the Uniformed Services, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” December 1948. 

4

 The "cut-off" date for the special pay was not an "expiration" date; it created a bar against any new 

entitlement but did not terminate the special pay of any officer whose entitlement had been acquired prior 

to that time. 

551
under the Selective Service Act and made them subject to special induction calls.5

 It also 

extended the $100 special pay entitlement to reserve medical and dental officers 

involuntarily ordered to active duty, as well as to those volunteering for active duty. The 

main purpose of this provision was to encourage draft-liable doctors and dentists to 

accept reserve commissions and to perform their active duty in that status rather than 

actually being inducted as enlisted members. 

The Act of June 25, 1952, ch. 459 [Public Law 410, 82d Congress], §1, 66 Stat. 

156, 156-157 (1952), extended the special pay cut-off date from September 1, 1952, to 

July 1, 1953, and the Act of June 29, 1953, ch. 158 [Public Law 84, 83d Congress], §8, 

67 Stat. 86, 89 (1953), further extended it to July 1, 1955. The Act of June 30, 1955, ch. 

250 [Public Law 118, 84th Congress], §203, 69 Stat. 223, 225 (1955), extended the 

special pay cut-off date once again, this time to July 1, 1959. 

The Act of April 30, 1956, ch. 223 [Public Law 497, 84th Congress], §5, 70 Stat. 

119, 122 (1956), changed the rate of special pay for dental officers from a flat rate to a 

graduated scale based on length of active service: $100 a month during the first two years 

of active service; $150 during active service years two to six; $200 during years six to 

ten; and $250 thereafter. It also gave dental officers a four-year constructive service 

credit for promotion and pay purposes.6

 Act of April 30, 1956, ch. 223, id., §2(2), 70 Stat. 

at 121. See 37 U.S.C. §205(a)(7) as in effect before enactment of the Defense Officer 

Personnel Management Act (DOPMA), Public Law 96-513, §402, 94 Stat. 2835, 2904 

(1980). These constructive service credits, in combination with the higher originalappointment grade authorized by the Army-Navy-Public Health Service Medical Officer 

Procurement Act of 1947, ch. 494 [Public Law 365, 80th Congress], §101, 61 Stat. 776, 

776-777 (1947), were designed to bring about parity between officers who entered the 

 

5

 Veterinarians, optometrists, pharmacists, and osteopaths were specifically included in the "allied 

specialist categories" construct in the "Doctors Draft Act." Act of September 9, 1950, ch. 939 [Public Law 

779, 81st Congress], §6, 64 Stat. 826, 828 (1950). 

6 The Act of April 30, 1956, ch. 223 [Public Law 497, 84th Congress], §5, 70 Stat. 119, 122 (1956), also 

provided the same benefits for physicians. 

552
service after a delay caused by additional dental education and training and those who 

entered after receiving a bachelor degree.7

 Thus, for example, a dentist entering active 

duty immediately after dental school would be appointed to pay grade O-3 and entitled to 

the basic pay of that grade for over four years of service. In addition, such an officer 

would be eligible for promotion to pay grade O-4 about three years after entering upon 

active duty. In other words, the pay grade, basic pay, and promotion opportunity of an 

affected officer would at this point be the same as they would have been had the officer 

entered the service after completing four years of college. The purpose of the constructive 

service credit and increased special pay was to arrest and reverse the "staggering loss" of 

regular dental officers by providing them "a much more favorable income than that which 

they have heretofore experienced" and by placing them "in a somewhat more favorable 

position when their present income is compared with that of their counterparts serving as 

physicians or dentists under the civil service system or in the Veterans' Administration."8

The Act of March 23, 1959, Public Law 86-4, §5, 73 Stat. 13 (1959), extended the 

special pay cut-off date from July 1, 1959, to July 1, 1963, and the Act of April 2, 1963, 

Public Law 88-2, §5, 77 Stat. 4 (1963), further extended it to July 1, 1967. The 

Uniformed Services Pay Act of 1963, Public Law 88-132, §4, 77 Stat. 210, 212 (1963), 

raised the monthly rate of special pay for dental officers with between six and ten years 

of active service from $200 to $250 and the rate for those with ten or more years of active 

service from $250 to $350. These rate increases were added to the pay bill by the Senate 

Armed Services Committee, which explained its action as follows: 

Prior to 1956 special pay for physicians and dentists was authorized only in the 

amount of an additional $100 a month. The general military pay legislation of 1955 was 

not sufficient to retain physicians and dentists in the necessary numbers. In 1956 

Congress increased the special pay, now ranging from $100 to $250 a month, in order to 

meet this problem. Following the 1956 legislation the retention rate increased 

 

7 See text accompanying footnote 4 to Chapter II.E.1.a. hereof, "Special Pay for Physicians (Medical 

Officers of the Armed Forces).” 

8

 House Report No. 1806 (Committee on Armed Services), pp. 2, 4, 6, accompanying H.R. 9428, 84th

Congress, 2d Session (1956). 

553
considerably since, in terms of compensation, a career in the Armed Forces was made 

more attractive for physicians and dentists and the gap between military compensation for 

these groups was narrowed as compared to Government physician rates (civil service and 

Veterans' Administration) and the incomes of private physicians. Since 1956, even 

including the 1958 Military Pay Act, the gap has widened between the compensation of 

the military physicians and those in civilian Government and those in private practice. 

 The increase of $50 and $100 as provided in the bill, plus the increases in basic 

pay otherwise contained in the bill for the grades concerned, should serve to improve the 

now declining retention rate for those two groups.9

 The Act of June 30, 1967, Public Law 90-40, §5, 81 Stat. 100, 105 (1967), 

extended the special pay cut-off date from July 1, 1967, to July 1, 1971, and the Act of 

September 28, 1971, Public Law 92-129, §104, 85 Stat. 348, 355 (1971), further extended 

it to July 1, 1973. 

The Act of July 9, 1973, Public Law 93-64, §§201-203, 87 Stat. 147, 149 (1973), 

extended the special pay cut-off date from July 1, 1973, to July 1, 1975, on the grounds 

that 

it would be inequitable to cut off arbitrarily special pay for the health 

professionals in question who happen to have entered service after June 30, 1973, 

... however, in all probability, the entire matter of special pays and bonuses for 

health professionals will be given further consideration in the not too distant 

future.10

The Act of May 6, 1974, Public Law 93-274, §2, 88 Stat. 94, 96 (1974), extended 

the special pay cut-off date from July 1, 1975, to July 1, 1977. The purpose of the act was 

to remedy an "immediate and critical problem involving physicians," and its extension of 

the dentist cut-off date was not by deliberate design. 

The Act of September 30, 1977, Public Law 95-114, §1, 91 Stat. 1046 (1977), 

further extended the cut-off date for all health professionals, including dentists, this time 

to September 30, 1978. The extension for physicians and dentists was approved because 

 

9

 Senate Report No. 387 (Committee on Armed Services), pp. 24-25, accompanying H.R. 5555, 88th

Congress, 1st Session (1963). 

10 Senate Report No. 93-235 (Committee on Armed Services), p. 16, accompanying S. 1916, 93d Congress, 

1st Session (1973). 

554
of "a critical need to provide extra incentives ... to recruit adequate numbers of medical 

personnel".11 The cut-off dates for all health professionals were further extended by the 

Department of Defense Appropriation Authorization Act, 1979, Public Law 95-485, 

§801, 92 Stat. 1611, 1619 (1978), this time to September 30, 1980. As reflected in the 

relevant Congressional report, the extension was predicated on the need to continue the 

existing incentives for health professionals retention purposes while a detailed review of 

the entire question of special pay for such personnel was undertaken by Congress.12

The Uniformed Services Health Professionals Special Pay Act of 1980, Public 

Law 96-284, §4(c), 94 Stat. 587, 591 (1980), made permanent the special pay authority 

for dental officers and other health professionals. As reflected in the relevant 

Congressional reports, Congress was convinced of the need to restructure the existing 

system of special pays for health professionals other than medical officers,13 but its 

attempt to do so had met with a Presidential veto. In order to avoid another veto, 

Congress authorized the continuation of special pays for other health professionals at 

preexisting rates, subject to future review, but out of a desire to "alleviat[e] ... the 

uncertainty and concern among uniformed services health professionals that resulted 

from the President's veto ..., the committee included provisions ... that would make 

permanent the special pay authorized by current law for dentists, optometrists, and 

veterinarians of the military departments and for all health professionals of the 

commissioned corps of the Public Health Service."14 

 

11 Senate Report 95-400 (Committee on Armed Services), p. 2, accompanying S. 1731, 95th Congress, 1st

Session (1977). See House Report No. 95-479 (Committee on Armed Services), pp. 3-4, accompanying 

H.R. 8011, 95th Congress, 1st Session (1977). 

12 House Report No. 95-1118 (Committee on Armed Services), p. 113, accompanying H.R. 10929, 95th

Congress, 2d Session (1978). See House Report No. 95-1402 (Committee of Conference), p. 52, 

accompanying H.R. 10929, 95th Congress, 2d Session (1978). 

13 See House Report No. 96-904 (Committee on Armed Services), p. 4, accompanying H.R. 6982, and 

Senate Report No. 96-749 (Committee on Armed Services), p. 2, accompanying S. 2460, 96th Congress, 2d 

Session (1980). 

14 House Report No. 96-904 (Committee on Armed Services), p, 4, accompanying H.R. 6982, 96th

Congress, 2d Session (1980). 

555
From the time of enactment of the Uniformed Services Pay Act of 1963, Public 

Law 88-132, §4, 77 Stat. 210, 212 (1963), until enactment of the Department of Defense 

Authorization Act, 1986, Public Law 99-145, §639, 99 Stat. 583, 649-651 (1985), then, 

the rates of monthly special pay for dental officers were as follows: 

 Monthly Rate Applicable To 

 $100 Dentists with less than two years of active dental service. 

 $150 Dentists with between two and six years of active dental 

 service 

 $250 Dentists with between six and ten years of active dental 

 service 

 $350 Dentists with ten or more years of active dental service. 

As far as dental officers were concerned, the only change to any special pay 

program affecting them between 1963 and 1985 was the implementation of a special 

continuation pay program, covered immediately below. 

Special Continuation Pay for Dental Officers 

The Act of December 16, 1967 (Uniformed Services Pay Act of 1967), Public 

Law 90-207, §1(2)(A), 81 Stat. 649, 651 (1967), established a special continuation pay 

entitlement for dental officers, codified at former 37 U.S.C. §311.15 The act authorized, 

under regulations prescribed by the Secretary of Defense--or the Secretary of Health, 

Education, and Welfare (now the Secretary of Health and Human Services) for Public 

Health Service officers--payment of up to four months' additional basic pay for each year 

of an active duty agreement accepted by the Secretary concerned from a dental officer 

who (1) had a critical specialty, (2) had completed any definitive active duty obligation 

he had under law or regulation, and (3) had executed an agreement to remain on active 

duty for at least one additional year. Although the act authorized continuation pay for 

both medical and dental officers, the dental officer authority was not used until 1972. In 

its report on the Uniformed Services Pay Act of 1967, Public Law 90-207, id., the Senate 

Armed Services Committee made these observations with respect to continuation pay: 

 

15 Physicians were also covered by the special continuation pay program. 

556
The proposed continuation pay authority would be similar in form to the 

variable reenlistment bonus now authorized for the payment of first-term enlistees 

in critical skill areas. 

The Committee would emphasize that despite the fact that dental officers 

are within the scope of the authority authorizing continuation pay, it is not the 

intention of the Committee that this pay be made applicable to dental officers in 

view of the fact that the retention problem at the present time is in no way 

comparable to the present conditions of the Medical Corps. 

 . . . 

The Committee emphasizes that the proposed permissive system for 

continuation pay is an extraordinary method of meeting a serious retention 

problem. The proposed authority appears to be the best means however for 

dealing with a serious and deteriorating problem of the retention of certain career 

medical officers. The Committee observes, at the same time, however, that this 

system does not represent the ideal approach to the matter of military 

compensation and such authority should be used only in drastic situations. The 

Committee has therefore added language which would require annual reports 

from the Secretaries of Defense and Health, Education, and Welfare regarding the 

operation of this special pay program and the justification for its continuance.16

These observations, and the legislative history of the act in general, make it clear 

that although the income of private physicians was used for comparison purposes to 

determine how much, if any, extra pay was needed to counter the attraction of civilian 

practice and to induce military physicians to continue on active duty, the purpose of 

continuation pay was analogous to that of such retention incentives as the variable 

reenlistment bonus. The fact that the Department of Defense did not originally seek 

continuation pay authority for dental officers and did not use that authority until the 

dentist retention problem became acute in 1972 buttresses the supply-and-demand 

function of the pay. 

Defense representatives had indicated during the hearings on Uniformed Services 

Pay Act of 1967, Public Law 90-207, id., that entitlement to continuation pay "could 

begin after the end of the first obligated tour of duty." No member of Congress expressed 

a contrary view. However, after the law's enactment, the Comptroller General of the 

 

16 Senate Report No. 808 (Committee on Armed Services), pp. 10-11, accompanying H.R. 13510, 90th

Congress, 1st Session (1967). 

557
United States ruled that its actual language, which authorized payment to a medical or 

dental officer "who has completed any other definitive active duty obligation that he has 

under law or regulation," meant that any and all obligated active service must be paid 

back as a prerequisite for continuation pay entitlement. The Act of October 18, 1968, 

Public Law 90-603, 82 Stat. 1187 (1968), amended this language to make it clear that an 

officer, if otherwise eligible, could receive continuation pay after the completion of his 

initial active duty obligation. 

Before adoption of the Department of Defense Authorization Act, 1986, Public 

Law 99-145, 99 Stat. 583 (1985), Department of Defense regulations implementing 

former 37 U.S.C. §311 for dental officers limited continuation pay eligibility to dental 

officers in pay grades O-3 through O-8. The regulations also provided that to be eligible 

for continuation pay a dental officer must have (1) had a critical specialty, (2) completed 

three or more years of service including active dental service and non-active-duty periods 

spent in approved dental training beyond the basic degree or in qualifying to take the 

appropriate certifying examination, (3) completed the initial active duty obligation, and 

(4) have executed a written agreement to remain on active duty for at least one additional 

year. While the law provided for Secretarial discretion in paying continuation pay to 

officers in critical specialties, the Department of Defense as a matter of policy treated all 

dental specialties in all years of service classifications as "critical" for the purpose of 

continuation pay eligibility.17

As thus implemented, continuation pay could be paid in equal annual or semiannual installments beginning on the date the dental officer started service under an 

additional active duty agreement. The rates prescribed in the regulations for each year of 

service under an agreement were: 

 Pay Grade Continuation Pay Entitlement 

 O-8 2 months' basic pay 

 O-7 3 months' basic pay 

 O-3, O-4, O-5, O-6 4 months' basic pay 

 

17 At different times, Congress expressed its intent that continuation pay for dental officers be paid only to 

shortage specialties, and in the Act of October 12, 1984 (Continuing Appropriations, 1985), Public Law 

No. 98-473, §8091, 98 Stat. 1837, 1940 (1984), went so far as to stipulate that continuation pay be reduced 

by 50 percent for any dental specialty manned at 95 percent or higher of its authorized strength. 

558
The rates of monthly basic pay used in determining an affected officer's 

continuation pay were those in effect on April 1, 1980, see former 37 U.S.C. §311(a), 

except that any officer on active duty on September 30, 1979, who thereafter completed 

20 years of active service was, for so long as he remained on active duty, entitled to 

receive a total amount of basic pay plus special pay under former 37 U.S.C. §311 that 

was not less than the sum of the basic and special pay to which the officer would have 

been entitled had (1) the rates of basic pay in effect on October 1, 1979, continued in 

effect after that date and (2) the regulations of the Secretary of Defense implementing the 

continuation pay program remained as they were on September 30, 1979. See 10 U.S.C. 

§611 note. 

Special Pay for Dental Officers of the Armed Forces 

The special and continuation pay programs for dental officers of the Armed 

Forces was substantially amended by the Department of Defense Authorization Act, 

1986, Public Law 99-145, §639, 99 Stat. 583, 649-651 (1985). As indicated above, before 

enactment of the 1986 authorization act, dental officers received two forms of special 

pay: first, a "regular" special pay under the authority of former 37 U.S.C. §302b, and, 

second, a special "continuation pay" under the authority of former 37 U.S.C. §311. Under 

the amendment to the special pay program for dental officers that was effected by the 

Department of Defense Authorization Act, 1986, former sections 302b and 311 of Title 

37 were repealed in their entirety and a new Section 302b, patterned after the special pay 

program for physicians under current 37 U.S.C. §302, was adopted in their stead. The 

new special pay program for dental officers of the Armed Forces became effective 

October 1, 1985. 

Under the new system of special pay for dental officers of the Armed Forces, 

three different types of special pay, none of them subject to a statutory cutoff date, were 

established. The three types of special pay were: (1) variable special pay, codified at 37 

U.S.C. §302b(a)(2); (2) additional special pay for dental officers not undergoing dental 

internship or residency training, codified at 37 U.S.C. §302b(a)(4); and (3) special pay 

for board certification, codified at 37 U.S.C. §302b(a)(5). 

559
Under this system, variable special pay is payable to all "dental officers of the 

Armed Forces" on active duty under a call or order to active duty for a period not less 

than one year. Although established as an annual entitlement, variable special pay is 

payable to affected personnel monthly. Under the original pay schedule, general and flag 

officers received a flat $1,000 in variable special pay per year and persons serving an 

internship or having less than three years of creditable service received $1,200 per year. 

For others, the rates of pay ranged from $2,000 to $6,000 per year depending on years of 

creditable service. As established by the 1985 legislation, the rates of variable special pay 

for all "dental officers of the Armed Forces" other than general and flag officers and 

persons serving a dental internship or having fewer than three years of creditable service, 

were as follows: 

 Years of 

 Creditable Service Variable Special Pay

 3 but less than 6 $2,000 

 6 but less than 8 $4,000 

 10 but less than 14 $6,000 

 14 but less than 18 $4,000 

 18 or more $3,000

 Additional special pay of $6,000 per year was established for all "dental officers 

of the Armed Forces" with at least three but less than 14 years of creditable service who 

were not engaged in dental internship or residency training; affected personnel with at 

least 14 but less than 18 years of creditable service not engaged in such training were 

entitled to $8,000 per year in additional special pay; and dental officers with 18 or more 

years of creditable service were entitled to $10,000 per year in additional special pay. 

Entitlement to such "additional special pay" is conditioned on an affected officer's 

execution of a written agreement to remain on active duty for a period not less than one 

year. This pay is payable annually as a lump sum at the beginning of the 12-month period 

for which the payment is to be made. An officer who leaves active duty before the end of 

560
the 12-month period with respect to which such a payment was made is required to 

refund the "unearned" portion of the payment.18

Special pay for board certification is available to all "dental officers of the Armed 

Forces" who have achieved board certification in a dental specialty. This pay is payable, 

on a monthly basis, in amounts that at their original levels ranged from $2,000 to $4,000 

per year depending on an affected individual's years of creditable service: qualifying 

dental officers with less than 12 years of creditable service were entitled to $2,000 per 

year; those with at least 12 but less than 14 years of service, to $3,000 per year; and those 

with 14 or more years of service, to $4,000 per year. 

In explaining the new dental pay program, the House Armed Services Committee, 

which was responsible for it, stated: 

Under current law, military dental officers serving in a specialty designated as 

critical by the Secretary of Defense may be paid not more than four months basic pay 

(using the rates of basic pay in effect on April 1, 1980) in exchange of each additional 

year that they agree to continue on active duty. 

Dental Officer Continuation Pay has been subject to repeated criticism 

from the Committee on Appropriations because the services have paid 

continuation pay not only to shortage specialties but also to those that are fully or 

almost fully manned. As a result, section 839 of Public Law 98-473, making 

continuing appropriations for fiscal year 1985, provided that effective July 

1,1985, continuation pay would be reduced by 50 percent for any dental officer in 

a dental specialty manned at 95 percent or higher of its authorized strength. 

To prevent a drastic reduction in the income of military dentists, the 

committee recommends replacing the current Dental Officer Continuation Pay 

and monthly special pay for dental officers with a new dental officer special pay 

program patterned on the various special pays available to medical officers. 

Variable special pay would be paid on a monthly basis at the rate of 

$1,200 per year for a dental officer undergoing internship training. For those not 

in internship training, the rates would vary between $2,000 and $7,000 per year 

depending on the years of service with the exception of officers in pay grades 

above O-6 who would be entitled to variable special pay at the rate of $1,000 per 

 

18 Under 37 U.S.C. §302b(f), a discharge in bankruptcy entered less than five years after the termination 

date of an agreement does not discharge the obligation in question. 

561
year. In addition, dental officers not undergoing internship or residency training 

would be entitled to additional special pay of from $6,000 to $10,000 per year, 

depending on years of service, in exchange for an agreement to remain on active 

duty for a period of not less than one year. Finally, dental officers who were board 

certified would be entitled to additional special pay at the rate of $2,000 to $4,000 

per year, depending on years of service. Given the current concerns with respect 

to the quality of care provided in military facilities, the committee believes that 

board certification is an important professional stepping stone and, therefore, has 

tied this additional special pay to board certification rather than simply board 

qualification. 

An officer who voluntarily terminated service before the end of a period of 

service which he had agreed to serve in exchange for additional special pay would 

be obligated to refund to the United States an amount equal to the unserved 

portion of the service obligation. The committee recommends that a discharge in 

bankruptcy under Title 11, United States Code, would not release an individual 

from the obligation to reimburse the United States. 

The new dental special pays recommended by this section would become 

effective October 1, 1985. Payments under the current Dental Officer 

Continuation Program will be reduced for new service agreements entered into 

after July 1, 1985. To minimize the loss of income for affected dental officers, the 

committee recommends that those officers who enter into new service agreements 

between July 1 and September 30, 1985, be permitted to renegotiate those 

agreements as of October 1, 1985, for a minimum of one year's additional service 

under the terms of the new dental special pay program proposed by Section 634.19

The rates of special pay for dental officers of the Armed Forces proposed by the 

House were not agreed to by the Senate, and a House-Senate Conference Committee 

compromised on slightly lower rates of pay for some categories of service.20 In addition, 

special transitional provisions were added in conference to make sure no dental officer 

suffered any loss in dental pay as a result of the adoption of the new form of dental pay.21

 

19 House Report No. 99-81 (Committee on Armed Services), pp. 232-233, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). Cf. Senate Report No. 99-118 (Committee of Conference), p. 432, and House 

Report No. 99-235 (Committee of Conference), p. 432, accompanying S. 1160, 99th Congress, 1st Session 

(1985). 

20 See Senate Report No. 99-118 (Committee of Conference), p. 432, and House Report No. 99-235 

(Committee of Conference), p. 432, accompanying S. 1160, 99th Congress, 1st Session (1985). 

21 See Senate Report No. 99-118 (Committee of Conference), p. 432, and House Report No. 99-235 

(Committee of Conference), p. 432, accompanying S. 1160, 99th Congress, 1st Session (1985). 

562
The National Defense Authorization Acts for fiscal years 1997 and 1998 each 

raised the rates of variable special pay for certain officer categories. After completion of 

the 1998 legislation, the variable special pay rates for all dental officers had increased. 

The National Defense Authorization Act for Fiscal Year 1997, Public Law 104-201, 110 

Stat. 2545, increased the rates for dental officers in the most junior service categories, 

from status as a dental intern to ten years of creditable service. After those increases, the 

pay range in the affected categories was from $3,000 to $7,000 per year. The National 

Defense Authorization Act for Fiscal Year 1998, Public Law 105-85, 111 Stat. 1789, 

altered the creditable service schedule and increased pay for all categories that had not 

been affected by the authorization act for the previous year. Thus, the existing creditable 

service category of six to ten years became six to eight years, followed by a new 

category, eight to twelve years. The former category of ten to 14 years was modified to 

12 to 14 years, and the categories above 14 years remained the same. The pay range for 

these senior categories was from $7,000 for the six-to-eight year category to $12,000 for 

the eight-to-12-year category. As in the earlier version of this pay table, dental officers in 

the eight-to-12-year category were targeted in the new version; once past 12 years of 

creditable service, members’ variable special pay begins to decline, reaching $8,000 at 

the 18-year mark. 

The National Defense Authorization Act for Fiscal Year 1997 added one rate 

category for additional special pay for dental officers by prescribing that officers with 

less than three years of creditable service receive $4,000 per year of additional special 

pay. The National Defense Authorization Act for Fiscal Year 1998 reorganized the pay 

schedule for additional special pay for dental officers by establishing two categories of 

creditable service beyond the three-year mark, in place of the three categories that had 

existed previously: under that modification of 37 U.S.C.302b, dental officers with three 

to ten years of creditable service receive $6,000 per year of additional special pay, and 

those with more than ten years of creditable service receive $15,000 per year. 

The National Defense Authorization Act for Fiscal Year 1997 increased board 

certification pay for dental officers in all categories of creditable service and restructured 

the pay table by adding two new categories to the three that existed. Thus, instead of the 

563
categories “less than 12,” “12 to 14,” and “over 14,” the new table made breaks at the ten, 

12, 14, and 18-year levels of service, establishing a total of five pay categories. 

Current rates of special pay for dental officers of the Armed Forces: Dental 

officers of the Armed Forces may receive as many as three different types of dental 

special pays in addition to any other pays and allowances they may otherwise be entitled 

to--variable special pay, additional special pay, and board-certification pay. 

Variable special pay. The rates of variable special pay for all dental officers of the 

Armed Forces other than general and flag officers and persons serving a dental 

internship or having fewer than three years of creditable service are as follows: 

 Annual Years of 

 Creditable Service Variable Special Pay

 3 but less than 6 $7,000 

 6 but less than 8 $7,000 

 8 but less than 12 $12,000 

 12 but less than 14 $10,000 

 14 but less than 18 $9,000 

 18 or more $8,000

 General and flag officers who are dental officers of the Armed Forces 

are entitled to variable special pay at the rate of $7,000 per year regardless of 

years of creditable service; a dental officer of the Armed Forces who has less than 

three years of creditable service or who is undergoing dental internship training is 

entitled to variable special pay at the rate of $3,000 per year. An officer's years of 

creditable service include all periods spent in dental internship or residency 

training when the officer was not on active duty plus all the officer's years of 

active service as a dental officer of the Armed Forces. See 37 U.S.C. §302b(g). 

Additional special pay. A dental officer of the Armed Forces entitled to variable 

special pay under 37 U.S.C. §302b(a)(2) or (3) who is on active duty under an activeduty agreement entered into pursuant to 37 U.S.C. §302b(b) is entitled to additional 

special pay when not undergoing dental internship or residency training as follows: 

 

 Years of Annual Additional 

 Creditable Service Special Pay Entitlement

 Less than 3 $4,000 

 3 but less than 10 $6,000 

 Over 10 $15,000 

564
 For the purpose of determining the amount of additional special pay to 

which a particular dental officer of the Armed Forces is entitled, the officer's 

years of creditable service are computed in the same way as used in determining 

the officer's entitlement to variable special pay. 

Board-certification pay. A dental officer of the Armed Forces entitled to variable 

special pay under 37 U.S.C. §302b(a)(2) or (3) who is board certified in a dental 

specialty is entitled to board-certification pay as follows: 

 Years of Annual Pay for 

 Creditable Service Board Certification

 Less than 10 $2,500 

 10 but less than 12 $3,500 

 12 but less than 14 $4,000 

 14 but less than 18 $5,000 

 Over 18 $6,000

For the purpose of determining the amount of board-certification pay to which a 

particular dental officer of the Armed Forces is entitled, the officer's years of 

creditable service are computed in the same way as used in determining the officer's 

entitlement to variable special pay. 

 

Accession Pay and Retention Bonus. In 1996 and 1997, Congress took two courses of 

action to improve the supply of dentists in the Armed Forces and to retain dental 

officers qualified in certain specialties. The National Defense Authorization Act for 

Fiscal Year 1997 added a new subsection to §302 of 37 U.S.C. That subsection, 

§302h, established an accession bonus for graduates of accredited dental schools who 

execute a written agreement to remain on active duty as officers of the Armed Forces 

for a period of not less than four years. The amount of the bonus, technically to be 

determined by the relevant Secretary, is not to exceed $30,000. The National Defense 

Authorization Act for Fiscal Year 1998 added a new subsection to §301 of 37 

U.S.C., establishing a multiyear retention bonus similar to that in effect for medical 

doctors. According to the new §301e, certain officers who sign a written agreement 

to continue active duty for two, three, or four years after termination of at least eight 

years of creditable service as dental officers are eligible for a retention bonus not to 

exceed $14,000 per year. Automatically eligible for such a bonus are dental officers 

specializing in oral and maxillofacial surgery; the Armed Forces have the option of 

offering such agreements to dental officers who do not possess this specialty. 

The special pay authority for all health professionals, including dental officers of the 

Armed Forces, is permanent under current law, with no cutoff date specified.22 

 

22 The Defense Officer Personnel Management Act (DOPMA), Public Law 96-513, 94 Stat. 2835 (1980), 

enacted on December 12, 1980, some five and one-half months after the Uniformed Services Health 

Professionals Special Pay Act, Public Law 96-284, 94 Stat. 587 (1980), also affected the pay of certain 

565
Cost: For the cost of dental officers’ special pay from 1972 to 2004, see Tables II-25

of Military Compensation Statistics Tables, volume II of this edition. 

 health professionals in the uniformed services. Section 402(a)(3) of DOPMA, id., §402(a)(3), 94 Stat. at 

2904, repealed the previously existing "constructive service credits," codified at former 37 U.S.C. 

§205(a)(7) and (8), with which medical and dental officers of the uniformed services were credited for the 

purpose of determining, among other things, their basic pay entitlements, although Section 104(a) of 

DOPMA, id., §104(a), 94 Stat. at 2846-2848, effectively preserved such credits for certain other purposes, 

including the determination of initial grade as an officer, rank in grade, and service in grade for promotion 

eligibility. See new 10 U.S.C. §533, especially 10 U.S.C. §533(b)(1)(B), (C), (E), and (F), and (c); also see 

10 U.S.C. §532(b)(1). (Notwithstanding the repeal of the constructive service credit for the purpose of 

determining an affected officer's basic pay entitlement, however, Section 625 of DOPMA, id., §625, 94 

Stat. at 2951, enacted as a save-pay provision, preserved the credit for basic pay purposes, among others, 

for persons otherwise entitled to such credits on September 14, 1981, as well as for certain other classes of 

persons. 

See 10 U.S.C. §611 note for the text of Section 625 of DOPMA, id., §625, 94 Stat. at 2951.) 

566
Chapter II.E.1.c. 

 Special Pay for Veterinarians 

Legislative Authority: 37 U.S.C. §§303 and 303a. 

Purpose: To provide an additional pay to enable the Armed Forces to attract and 

retain a sufficient number of veterinarians to meet the needs of the services. 

Background: Special pay for veterinarians derives almost serendipitously from 

the interaction between preexisting special pay programs for medical and dental officers 

of the uniformed services and the "Doctors Draft Act," which made veterinarians subject 

to special induction orders along with doctors and dentists.1

The Army-Navy-Public Health Service Medical Officer Procurement Act of 1947, 

ch. 494 [Public Law 365, 80th Congress], §101, 61 Stat. 776, 776-777 (1947), authorized 

a $100 special monthly pay for regular officers who were then commissioned in the 

Medical or Dental Corps and for those who would be so commissioned thereafter but 

before September 1, 1952. The special pay was also authorized for reserve officers of the 

Medical or Dental Corps who, during the applicable period, volunteered and were 

accepted for extended active duty of one year or longer. 

The Act of September 9, 1950, ch. 939 [Public Law 779, 81st Congress], §1, 64 

Stat. 826, 826-827 (1950), frequently referred to as the Doctors Draft Act, amended the 

Selective Service Act of 1948, ch. 625 [Public Law 759, 80th Congress], 62 Stat. 604 

(1948), to require males under age 50 qualified in medical, dental, or "allied specialist 

categories" to register under the Selective Service Act and made them subject to special 

induction calls. Section 6 of the Act of September 9, 1950, ch. 939, id., §6, 64 Stat. at 

 

1

 For a more complete treatment of the early history of special pay programs for medical and dental 

officers, see Chapters II.E.1.a. and II.E.1.b., "Special Pay for Physicians (Medical Officers of the Armed 

Forces)" and "Special Pay for Dentists (Dental Officers of the Armed Forces)", respectively, above. See in 

particular the "Background" section of Chapter II.E.1.a. hereof, "Special Pay for Physicians (Medical 

Officers of the Armed Forces)," for an introductory statement on special pay programs for health 

professionals generally, at pages 379-380, above. 

567
828, defined "allied specialist categories" to include, among other specialties, 

veterinarians.2

The Act of June 25, 1952, ch. 459 [Public Law 410, 82d Congress], §1, 66 Stat. 

156, 156-157 (1952), extended the special pay cut-off date for medical and dental officers 

from September 1, 1952, to July 1, 1953, thereby permitting medical and dental officers 

who first went on active duty after September 1, 1952, and before July 1, 1953, to receive 

the same special pay as medical and dental officers who first went on active duty before 

September 1, 1952. 

The Act of June 29, 1953, ch. 158 [Public Law 84, 83d Congress], §8(1), 67 Stat. 

86, 89 (1953), further extended the special pay cut-off date for medical and dental 

officers to July 1, 1955. As a result of a provision added by the Senate Armed Services 

Committee, the Act of June 29, 1953, ch. 158, id., §8(3), 67 Stat. at 89-90, made 

veterinary officers eligible for special pay of $100 per month on the rationale that "since 

the veterinarians were subject to the Doctors Draft Act, they should also receive the extra 

pay which is extended to physicians and dentists."3

 The cut-off date for the special pay 

authorizations for medical and dental officers also applied to veterinarians. 

The cut-off date for the special pay programs for health professionals generally, 

including veterinarians, was subsequently extended on a number of occasions. The Act of 

June 30, 1955, ch. 250 [Public Law 118, 84th Congress], §203, 69 Stat. 223, 225 (1955), 

extended the special pay cut-off date to July 1, 1959. The Act of March 23, 1959, Public 

Law 86-4, §5, 73 Stat. 13 (1959), extended the special pay cut-off date from July 1, 1959, 

to July 1, 1963; the Act of April 2, 1963, Public Law 88-2, §5, 77 Stat. 4 (1963), 

extended it from July 1, 1963, to July 1, 1967; the Act of June 30, 1967, Public Law 90-

 

2 Also included were optometrists, pharmacists, and osteopaths. Act of September 9, 1950, ch. 939 [Public 

Law 779, 81st Congress], §6, 64 Stat. 826, 828 (1950). 

3 Senate Report No. 305 (Committee on Armed Services), p. 10, accompanying H.R. 4495, 83d Congress, 

1st Session (1953). 

568
40, §5, 81 Stat. 100, 105 (1967), from July 1, 1967, to July 1, 1971; and the Act of 

September 28, 1971, Public Law 92-129, §104, 85 Stat. 348, 355 (1971), from July 1, 

1971, to July 1, 1973. 

The Act of July 9, 1973, Public Law 93-64, §§201-203, 87 Stat. 147, 149 (1973), 

again extended the special pay cut-off date for health professionals generally, this time 

from July 1, 1973, to July 1, 1975, on the grounds that 

it would be inequitable to cut off arbitrarily special pay for the health 

professionals in question who happen to have entered service after June 30, 1973, 

... however, in all probability, the entire matter of special pays and bonuses for 

health professionals will be given further consideration in the not too distant 

future.4

The Act of May 6, 1974, Public Law 93-274, §2, 88 Stat. 94, 96 (1974), extended 

the special pay cut-off date from July 1, 1975, to July 1, 1977, for medical and dental 

officers but not for veterinarians. The failure to extend the cut-off date for veterinarians 

meant that all veterinarians on active duty before July 1, 1975, were eligible for special 

pay but those who first entered active duty after that date were not. 

 The Act of September 30, 1977, Public Law 95-114, §1, 91 Stat. 1046 (1977), 

further extended the cut-off date for physicians and dentists, this time to September 30, 

1978, and reinstituted special pay for veterinarians, at the rate of $100 a month, also 

subject to a cut-off date of September 30, 1978, id., §2(a), 91 Stat. at 1046. The 

reinstitution of special pay for veterinarians was intended to redress the "inequitable 

situation" under which affected personnel who first came on active duty after July 1, 

1975, were not eligible for special pay, but those on active duty before then were, and to 

improve retention.5

 

 

4 Senate Report No. 93-235 (Committee on Armed Services), p. 16, accompanying S. 1916, 93d Congress, 

1st Session (1973). 

5 House Report No. 95-479 (Committee on Armed Services), p. 4, accompanying H.R. 8011, 95th

Congress, 1st Session (1977). See Senate Report No. 95-400 (Committee on Armed Services), p. 3, 

accompanying S. 1731, 95th Congress, 1st Session (1977). 

569
The cut-off dates for all health professionals were further extended by the 

Department of Defense Appropriation Authorization Act, 1979, Public Law 95-485, 

§801, 92 Stat. 1611, 1619 (1978), this time to September 30, 1980. As reflected in the 

relevant Congressional report, the extension was predicated on the need to continue the 

existing incentives for health professionals retention purposes while a detailed review of 

the entire question of special pay for such personnel was undertaken by Congress.6

The Uniformed Services Health Professionals Special Pay Act of 1980, Public 

Law 96-284, §4(c), 94 Stat. 587, 591 (1980), made permanent the special pay authority 

for veterinarians. As reflected in the relevant Congressional reports, Congress was 

convinced of the need to restructure the existing system of special pays for health 

professionals other than medical officers,7

 but its attempt to do so had met with a 

Presidential veto. In order to avoid another veto, Congress authorized the continuation of 

special pays for other health professionals at preexisting rates, subject to future review, 

but out of a desire to "alleviat[e] ... the uncertainty and concern among uniformed 

services health professionals that resulted from the President's veto ..., the committee 

included provisions ... that would make permanent the special pay authorized by current 

law for dentists, optometrists, and veterinarians of the military departments and for all 

health professionals of the commissioned corps of the Public Health Service."8

 Under 37 USC 303(b), a commissioned officer eligible for special pay for 

veterinarians is entitled to additional special pay at the same rate as is provided under 

Section 302c(b) for psychologists and other nonphysician health care providers. The 

amount is determined by years of creditable service if the officer has been certified as a 

Diplomate in a specialty recognized by the American Veterinarian Medical Association. 

That award, paid in equal monthly amounts, is as follows: 

 

6 House Report No. 95-1118 (Committee on Armed Services), p. 113, accompanying H.R. 10929, 95th

Congress, 2d Session (1978). See House Report No. 95-1402 (Committee of Conference), p. 52, 

accompanying H.R. 10929, 95th Congress, 2d Session (1978). 

7

 See House Report No. 96-904 (Committee on Armed Services), p. 4, accompanying H.R. 6982, and 

Senate Report No. 96-749 (Committee on Armed Services), p. 2, accompanying S. 2460, 96th Congress, 2d 

Session (1980). 

8

 House Report No. 96-904 (Committee on Armed Services), p, 4, accompanying H.R. 6982, 96th Congress, 

2d Session (1980). 

570
 Years of 

Creditable Service Annual Payment

 Less than 10 $2,000 

 10 to 12 $2.500 

 12 to 14 $3,000 

 14 to 18 $4,000 

 18 or more $5,000 

 

Current rate of special pay for veterinarians: An officer in the Veterinary 

Corps of the Army or who is designated as a veterinary officer of the Army or Air Force 

is entitled to the basic amount of $100 per month as special pay for veterinary service. 

Cost: For the cost of veterinarian special pay from 1972 to 2004, see Table II-26

of Military Compensation Statistics Tables, volume II of this edition. 

571
Chapter II.E.1.d. 

 Special Pay for Optometrists 

Legislative Authority: 37 U.S.C. §§302a and 303a. 

Purpose: To provide an additional pay to enable the Armed Forces to attract and 

retain a sufficient number of optometrists to meet health care needs of the services. 

Background: The special pay program for optometrists derives ultimately from 

the interaction between the preexisting special pay programs for medical and dental 

officers1

 and the so-called Doctors Draft Act. Optometrists were first made eligible for 

special pay at the rate of $100 per month by the Act of September 28, 1971, Public Law 

92-129, §202(a), 85 Stat. 348, 357-358 (1971). The act's extension of special pay to 

optometrists was based in part on the recommendations of the Special Subcommittee on 

Supplemental Service Benefits of the House Armed Service Committee. The full 

Committee explained its action as follows: 

Of the major health professions subject to the doctor draft--medicine, dentistry, 

osteopathy, veterinary medicine and optometry2

--only one, optometry, does not now 

qualify for special pay. Since 1966 four special induction calls have been issued for 

optometrists to meet the needs of the various services. The last such call was in October 

1970, a calendar year in which optometrists were the only health-care professionals 

drafted. 

 

1

 For a more complete treatment of the early history of special pay programs for medical and dental 

officers, see Chapters II.E.1.a. and II.E.1.b., "Special Pay for Physicians (Medical Officers of the Armed 

Forces)" and "Special Pay for Dentists (Dental Officers of the Armed Forces)," respectively, above. See in 

particular the "Background" section of Chapter II.E.1.a. hereof, "Special Pay for Physicians (Medical 

Officers of the Armed Forces)," for an introductory statement on special pay programs for health 

professionals generally, at pages 379-380, above. 

2 Optometrists were made subject to draft by the Act of September 9, 1950, ch. 939 [Public Law 779, 81st

Congress], §1, 64 Stat. 826, 826-827 (1950), frequently referred to as the Doctors Draft Act, which 

amended the Selective Service Act of 1948, ch. 625 [Public Law 759, 80th Congress], 62 Stat. 604 (1948), 

to require males under age 50 qualified in medical, dental, or "allied specialist categories" to register under 

the Selective Service Act and made them subject to special induction calls. Section 6 of the Act of 

September 9, 1950, ch. 939, id., §6, 64 Stat. at 828, defined "allied specialist categories" to include, among 

other specialties, optometrists. (Also included within the "allied specialist categories" were veterinarians, 

pharmacists, and osteopaths. Act of September 9, 1950, ch. 939 [Public Law 779, 81st Congress], §6, 64 

Stat. 826, 828 (1950).) 

572
The inclusion of optometrists in a special pay category carries out the 

recommendations of the Committee's Special Subcommittee on Supplemental 

Service Benefits, which ... found great inconsistency in the staffing practices of 

the services and serious inadequacies in the eye care provided military personnel 

and their families in some instances. The subcommittee concluded that some of 

the services were understaffed with optometry officers and that improvement in 

the optometry staffing was necessary for improved eye care.... 

The Committee believes that when the educational investment and earning 

capacity of optometrists in the public sector are taken into account the pay rates 

provided here [the pay rates added by the committee were considerably higher 

than the $100 a month actually adopted] compare justly for those provided in the 

law for medical and dental officers and for veterinary officers.3

No testimony was given by defense witnesses either in favor of or in opposition to 

special pay for optometrists in connection with the 1971 act. However, a few months 

earlier Brigadier General George J. Hayes, staff director in the office of the assistant 

Secretary of Defense for health affairs, had stated to the Subcommittee on Supplemental 

Service Benefits that "at the present time we have taken the position that special pay for 

optometry has not been indicated as a retention measure. Until we see that there needs to 

be some need for this, we would hold to this position." 

As initially adopted, the special pay program for optometrists applied to all 

optometrists who first came on active duty before July 1, 1973. This meant that an 

optometrist who was on active duty on the date of enactment of the Act of September 28, 

1971, Public Law 92-129, 85 Stat. 348, 357-358 (1971), or who first came on active duty 

after the date of enactment but before July 1, 1973, would be entitled to the special pay 

indefinitely, but an optometrist who first came on active duty after June 30, 1973, would 

not. 

The Act of July 9, 1973, Public Law 93-64, §§201-203, 87 Stat. 147, 149 (1973), 

extended the special pay programs cut-off date for all health professionals from July 1, 

1973, to July 1, 1975, on the grounds that 

 

3

 House Report No. 92-82 (Committee on Armed Services), p. 19, accompanying H.R. 6531, 92d Congress, 

1st Session (1971). 

573
it would be inequitable to cut off arbitrarily special pay for the health 

professionals in question who happen to have entered service after June 30, 1973, 

... however, in all probability, the entire matter of special pays and bonuses for 

health professionals will be given further consideration in the not too distant 

future.4

The Act of May 6, 1974, Public Law 93-274, §2, 88 Stat. 94, 96 (1974), extended 

the special pay cut-off date from July 1, 1975, to July 1, 1977, for medical and dental 

officers but not for optometrists. The failure to extend the cut-off date for optometrists 

meant that all optometrists on active duty before July 1, 1975, were eligible for special 

pay but those who first entered active duty after June 30, 1975, were not. 

The Act of September 30, 1977, Public Law 95-114, §1, 91 Stat. 1046 (1977), 

extended the cut-off date for physicians and dentists, this time to September 30, 1978, 

and reinstituted special pay for optometrists, at the rate of $100 a month, also subject to a 

cut-off date of September 30, 1978, id., §2(a), 91 Stat. at 1046. The reinstitution of 

special pay for optometrists was intended to redress the "inequitable situation" under 

which affected personnel who first came on active duty after July 1, 1975, were not 

eligible for special pay, but those on active duty before then were, and to improve 

retention.5

 

The cut-off dates for all health professionals were further extended by the 

Department of Defense Appropriation Authorization Act, 1979, Public Law 95-485, 

§801, 92 Stat. 1611, 1619 (1978), this time to September 30, 1980. As reflected in the 

relevant congressional report, the extension was predicated on the need to continue the 

 

4 Senate Report No. 93-235 (Committee on Armed Services), p. 16, accompanying S. 1916, 93d Congress, 

1st Session (1973). 

5

 House Report No. 95-479 (Committee on Armed Services), p. 4, accompanying H.R. 8011, 95th

Congress, 1st Session (1977). See Senate Report No. 95-400 (Committee on Armed Services), p. 3, 

accompanying S. 1731, 95th Congress, 1st Session (1977). 

574
existing incentives for health professionals retention purposes while a detailed review of 

the entire question of special pay for such personnel was undertaken by Congress.6

The Uniformed Services Health Professionals Special Pay Act of 1980, Public 

Law 96-284, §4(c), 94 Stat. 587, 591 (1980), made permanent the special pay authority 

for optometrists. As reflected in the relevant Congressional reports, Congress was 

convinced of the need to restructure the existing system of special pays for health 

professionals other than medical officers,7

 but its attempt to do so had met with a 

Presidential veto. In order to avoid another veto, Congress authorized the continuation of 

special pays for other health professionals at preexisting rates, subject to future review, 

but out of a desire to "alleviat[e] ... the uncertainty and concern among uniformed 

services health professionals that resulted from the President's veto ..., the committee 

included provisions ... that would make permanent the special pay authorized by current 

law for dentists, optometrists, and veterinarians of the military departments and for all 

health professionals of the commissioned corps of the Public Health Service."8

Under amendments to the special pay program for optometrists made by the 

National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, §617(a), 

104 Stat. 1485, 1578-1579 (1990), optometrists became eligible for a special retention 

bonus of up to $6,000 per year in addition to regular special pay of $100 per month. 

Under the retention bonus program, an officer entitled to regular special pay as an 

optometrist who had completed any initial active-duty training obligation incurred for 

education and training, who had been determined by the Secretary of his military 

 

6

 House Report No. 95-1118 (Committee on Armed Services), p. 113, accompanying H.R. 10929, 95th

Congress, 2d Session (1978). See House Report No. 95-1402 (Committee of Conference), p. 52, 

accompanying H.R. 10929, 95th Congress, 2d Session (1978). 

7

 See House Report No. 96-904 (Committee on Armed Services), p. 4, accompanying H.R. 6982, and 

Senate Report No. 96-749 (Committee on Armed Services), p. 2, accompanying S. 2460, 96th Congress, 2d 

Session (1980). 

8

 House Report No. 96-904 (Committee on Armed Services), p, 4, accompanying H.R. 6982, 96th

Congress, 2d Session (1980). 

575
department to be qualified as an optometrist, and who executed a written agreement to 

remain on active duty as an optometrist for a period of not less than one year could be 

paid up to $6,000 for any twelve-month period in which he was not undergoing 

internship or initial residency training. Pursuant to Section 617(b) of the 1991 

Authorization Act, Public Law 101-510, id., §617(b), 104 Stat. At 1579, the Secretary of 

Defense was required to submit a written report to the House and Senate Armed Services 

Committees justifying the need to make retention bonus payments to optometrists and 

setting out how the retention-bonus authority would be implemented before permitting 

any payments to be made to optometrists under the augmented authority. Pursuant to 

further provisions of the act, codified at 37 U.S.C. §302a(b)(4), the eligibility of an 

optometrist receiving retention special pay under 37 U.S.C. §302a(b)(1) may be 

terminated at any time by the Secretary of the optometrist's military department. 

The special retention pay program for optometrists arose out of a proposal of the 

Senate Armed Services Committee to increase optometrists’ special pay from $100 per 

month to $350 per month beginning October 1, 1991.9

 The House Armed Services 

Committee objected to the Senate proposal, and the contingent retention bonus program 

was agreed to in conference in place of the Senate proposal.10 The National Defense 

Authorization Act for Fiscal Year 2003, Public Law 107-314, 116 Stat. 2458, increased 

the maximum annual amount of special retention pay for optometrists from $6,000 to 

$15,000; the eligibility requirements set out by the National Defense Authorization Act 

for Fiscal Year 1991 remained in effect. 

Current rates of special pay for optometrists: An officer designated as an 

optometry officer of the Army, Navy, or Air Force, or an officer formerly designated as 

an optometry officer of the Army or Air Force appointed as a general officer, is entitled 

 

9

 S. 2884, §612, 101st Congress, 2d Session (1990). See Senate Report No. 101-384 (Committee on Armed 

Services), p.172, accompanying S. 2884, 101st Congress, 2d Session (1990). 

10 House Report No. 101-923 (Committee of Conference), pp. 614-615, accompanying H.R. 4739, 101st

Congress, 2d Session (1990). 

576
to $100 per month as special pay for optometry service. An officer receiving special pay 

for optometry service under 37 U.S.C. §302a(a) who is qualified as an optometrist, who 

has completed any active-duty service commitment incurred for education and training, 

and who is on active duty under an active-duty agreement entered into pursuant to 37 

U.S.C. §302a(b)(3) may be entitled to retention special pay for optometry service of up to 

$15,000 per year. 

Cost: For the cost of optometrist special pay from 1972 to 2004, see Table 

II-27 of Military Compensation Statistics Tables, volume II of this edition. 

577
Chapter II.E.1.e. 

 Special Pay for Psychologists, Pharmacists, and 

 Other Nonphysician Health Care Providers 

Legislative Authority: 37 U.S.C. §302c.1

, §302i, and §302j 

Purpose: To provide a special incentive for highly qualified psychologists, 

pharmacists, and other nonphysician health care providers to enter and remain in military 

service, in part to overcome a perceived shortage of personnel with such qualifications in 

the Armed Forces and in part to relieve demands for even more hard-to-recruit-and-retain 

medical specialists, including psychiatrists, among others. 

Background: Special pay for psychologists was first authorized for psychologists 

in the Public Health Service by the Act of October 26, 1987, Public Law 100-140, §2(a), 

101 Stat. 830, 830-831 (1987), and was extended to psychologists in the Army, the Navy, 

and the Air Force by the National Defense Authorization Act for Fiscal Years 1990 and 

1991, Public Law 101-189, §704(a), 103 Stat. 1352, 1471 (1989), subject to justification 

by the Secretary of Defense of the need for such pay to the House and Senate Committees 

on Armed Services. Subject to this justification, the National Defense Authorization Act 

for Fiscal Years 1990 and 1991, Public Law 101-189, id., extended entitlement to special 

pay for psychologists to members of the Army, Navy, and Air Force who have been 

designated by their respective services as psychologists and have been board certified in 

psychology--in the words of the governing statute, to a member of the Army, Navy, or 

Air Force who has been "designated as a psychologist ... and ... been awarded a diploma 

as a Diplomate in Psychology by the American Board of Professional Psychology." To 

qualify for the special pay, members of the Army and Navy must be members of the 

Medical Service Corps of their respective services and members of the Air Force must be 

biomedical services officers. Extension of special pay to psychologists was first 

 

1

 The catchline for Section 302c, Title 37, United States Code, reads "Special pay: psychologists and 

nonphysician health care providers." The legislative history of Section 302c is inconsistent with respect to 

the spelling of the word, "nonphysician," sometimes spelling it "nonphysician" and sometimes spelling it 

"non-physician." The current chapter title adopts the spelling, "nonphysician," inasmuch as that is the 

spelling set out in the catchline to Section 302c, Title 37, United States Code. In quoting from relevant 

House and Senate reports, however, the current chapter preserves the spelling adopted in those reports. 

578
proposed in 1986. At that time, approximately one year before Congress in fact 

authorized special pay for psychologists in the Public Health Service in the Act of 

October 26, 1987, Public Law 100-140, id., the Senate Committee on Armed Services, in 

deliberations on the 1987 Senate defense authorization bill,2

 proposed authorizing special 

pay for military psychologists out of 

 ... concern that the Department of Defense and the military departments continue 

to resist the full utilization of non-physician providers in providing health care 

services, especially at this time when there are substantial shortages of physicians 

in all components of the armed forces. The committee also notes that continued 

practice of requiring physicians to perform many functions which can legally, 

ethically, and actually be performed by nonphysician providers creates 

unnecessary demand for physician services and produces low morale among nonphysician providers. 

 This problem is especially acute with respect to the utilization of 

psychologists by the armed forces. In order to attempt to bring about a rethinking 

of this problem, while at the same time encouraging well qualified psychologists 

to enter and remain on active duty, the committee recommends the creation of a 

special pay for the most highly qualified psychologists. 

 . . . 

 ... [T]he committee intends that this pay be viewed as an indication of 

its support for the greater utilization of well qualified psychologists by the Armed 

Forces and that more well qualified psychologists be recruited and retained to 

perform many of the functions now being performed by psychiatrists in the 

military medical services.3

Notwithstanding the Senate's justification of special pay for military 

psychologists, the House-Senate Conference Committee rejected the proposal, noting, 

however: 

The conferees note their displeasure with the continued failure of the 

Department of Defense to expand the use of non-physician [health services] 

providers. The conferees believe that non-physician providers like psychologists 

are a cost-effective way to significantly extend the capability of the Department of 

Defense to provide care to its beneficiary population. The conferees serve notice 

 

2 S. 2638, 99th Congress, 2d Session (1986). 

3 Senate Report No. 99-331 (Committee on Armed Services), pp. 233-234, accompanying S. 2638, 99th

Congress, 2d Session (1986). 

579
that, if the Department of Defense does not implement a plan for expanded use of 

non-physician providers, they intend to mandate such an expansion in the future. 

 Although the conferees are very sympathetic to the intent of the Senate 

special pay provision and believe that tying such special pay to a board 

certification requirement is an innovative way to encourage non-physician 

providers to enhance their professional credentials, they believe that the issue 

requires further study and have, therefore, deferred acceptance of the Senate 

provision.4

The same concerns expressed by the Senate Armed Services Committee and the 

House-Senate Conference Committee in 1986 evidently lay behind adoption of the Act of 

October 26, 1987, Public Law 100-140, id., which, as above noted, extended special pay 

to psychologists in the Public Health Service. The fact is, however, neither the Senate nor 

the House of Representatives ever formally expressed their reasons for adopting special 

pay for psychologists in 1987, as no report was ever issued on S. 1666, 100th Congress, 

1st Session (1987), the bill that, upon enactment, became the Act of October 26, 1987, 

Public Law 100-140, id.

Extension of special pay for psychologists to psychologists in the Army, Navy, 

and Air Force resulted from a floor amendment made by Senator Inouye to the Senate's 

1990/1991 defense authorization bill, S. 1352, 101st Congress, 1st Session (1989). In 

support of his amendment, Senator Inouye essentially justified special pay for military 

psychologists on the grounds that there was a shortage of military psychologists and a 

retention incentive was needed to keep qualified psychologists in the Armed Forces: 

 Mr. President, this amendment addresses the need for a pay bonus for 

military psychologists. Board certified physicians in the military receive an 

annual pay bonus currently ranging from $2,000 to $5,000, depending on their 

years of service, while board certified psychologists are not eligible for the pay 

bonus. My amendment would authorize the Department of Defense to pay board 

certified psychologists the same bonuses as those received by physicians. 

 To become a board certified psychologist requires extensive supervised 

training and passing a difficult national examination. Obviously, a board certified 

psychologist possesses impressive credentials. 

 

4 House Report No. 99-1001 (Committee of Conference), p. 483, accompanying S. 2638, 99th Congress, 2d 

Session (1986). 

580
 There is a shortage of psychologists in the military, and my amendment 

would provide a cost-effective retention tool--one that we should adopt.5

In commenting on Senator Inouye's floor amendment, the House-Senate 

Conferees merely noted that it had accepted 

... an amendment that would authorize the Secretary of Defense, at his discretion, 

to pay board certification pay to eligible military psychologists after the Secretary 

submits a report to the Committees on Armed Services of the Senate and House of 

Representatives justifying the need for this pay and describing the way in which 

the authority will be implemented.6

The National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, §618(a), 104 Stat. 1485, 1579 (1990), further extended the special pay program, this 

time to "nonphysician health care providers" who are officers in the Medical Service 

Corps of either the Army or the Navy or biomedical sciences officers in the Air Force, 

who are "health care provider[s] (other than ... psychologist[s])," who have 

"postbaccalaureate" degrees, and who are board certified. This extension resulted from a 

Senate proposal that would have extended the special pay program for psychologists to 

podiatrists, but only to podiatrists. In commenting on, and going beyond, the Senate 

proposal, the House-Senate Conference Committee noted: 

The [Senate] amendment would broaden the authority granted last year for 

board certification pay for psychologists to allow the Secretary of Defense to 

implement board certification special pays for nonphysician health care providers 

with a post-baccalaureate professional degree. The amendment would also require 

the Secretary of Defense to submit to the Committees on Armed Services of the 

Senate and House of Representatives, each time the Secretary decides to 

implement such pay, justification for the need for such pay and a description of 

how such pay will be implemented.7

 

5 135 Cong. Rec. S8758 (daily ed. July 26, 1989) (statement of Senator Inouye). 

6

 House Report No. 101-331 (Committee of Conference), p. 595, accompanying H.R. 2461, 101st Congress, 

1st Session (1989). 

7

 House Report No. 101-923 (Committee of Conference), p. 615, accompanying H.R. 4739, 101st Congress, 

2d Session (1990). Cf. Senate Report No. 101-384 (Committee on Armed Services), p. 172, accompanying 

S. 2884, 101st Congress, 2d Session (1990) ("The committee recommends a provision ... that would 

authorize special pay for podiatrists."). 

581
The National Defense Authorization Act for Fiscal Year 1993, Public Law 102-

484, §611, 106 Stat. 2315, 2420-2421 (1992), again extended the definition of 

"nonphysician health care providers," this time to include chiropractors within the class 

of persons authorized special pay under 37 U.S.C. §302c.8 9

 Similarly, nurses were 

included within the category of "nonphysician health care providers" by the National 

Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §61710, 110 Stat. 

186, 362 (1996), with the result that board-certified nurses with postbaccalaureate 

degrees who are health care providers are also entitled to special pay under 37 U.S.C. 

§302c.11 12

Current rates of pay authorized for psychologists and other nonphysician 

health care providers: 

 Years of Creditable Service Special Pay Authorized 

 Less than 10 $2,000 

 10 but less than 12 $2,500 

 

8 House Report No. 102-527 (Committee on Armed Services), p. 243, accompanying H.R. 5006, 102d 

Congress, 2d Session (1992); cf. House Report No. 102-966 (Committee of Conference), p. 713, 

accompanying H.R. 5006, 102d Congress, 2d Session (1992). 

9 A companion provision of the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-

484, §505, 106 Stat. 2315, 2404 (1992), authorized chiropractors to be appointed as commissioned officers 

in the Army (the Army Medical Specialist Corps), the Navy (the Medical Service Corps of the Navy), and 

the Air Force (as biomedical science officers). 

10 The catchline for Section 617 of the National Defense Authorization Act for Fiscal Year 1996, Public 

Law 104-106, id., read "Clarification of Authority to Provide Special Pay for Nurses." Also see the 

catchlines introducing discussion of the provision in the relevant Senate and House reports: Senate Report 

No. 104-112 (Committee on Armed Services), p. 255, accompanying S. 1026, 104th Congress, 1st Session 

(1995), House report No. 104-406 (Committee of Conference), p. 816, accompanying H.R. 1530, 104th

Congress, 1st Session (1995), and House report No. 104-406 (Committee of Conference), p. 806, 

accompanying S. 1124, 104th Congress, 2d Session (1996). 

11 See Senate Report No. 104-112 (Committee on Armed Services), p. 255, accompanying S. 1026, 104th

Congress, 1st Session (1995) ("The committee recommends a provision that would add military nurses to 

the health care professionals who may receive a special pay for being board certified in their specialty."). 

Cf. House report No. 104-406 (Committee of Conference), p. 816, accompanying H.R. 1530, 104th

Congress, 1st Session (1995), and House report No. 104-406 (Committee of Conference), p. 806, 

accompanying S. 1124, 104th Congress, 2d Session (1996). 

12 For other special pays to which nurses may be entitled, see Chapter II.E.1.f. hereof, "Special Pay for 

Nurse Anesthetists and Other Nurses and Accession Bonus for Registered Nurses," below. 

582
 12 but less than 14 $3,000 

 14 but less than 18 $4,000 

 18 or more $5,000 

Note: Creditable service is computed by adding all periods spent in internship or residency training while 

not on active duty to all periods of active duty as a health care provider. 

 

 The National Defense Authorization Act for Fiscal Year 2001, Public Law 106-

398, 114 Stat. 1654A-154, added a new category of health-related special pay, for 

pharmacists, for which the law created two new subsections of 37 U.S.C., §302i and 

§302j. In recommending such pay, the Senate Armed Services Committee referred to a 

perceived need for more pharmacy officers in the military: 

The recommended provision would provide the military departments...additional 

incentives to recruit and retain pharmacy officers.13

The new special pay applies to pharmacy officers at grade O-6 and below of the 

Medical Service Corps of the Army and Navy and in the Biomedical Sciences Corps of 

the Air Force. The same legislation provides for the payment of an accession bonus, not 

to exceed $30,000, for qualified pharmacists who execute a written agreement to accept a 

commission in the Armed Forces and to remain on active duty for at least four years. The 

duty assignments of such members are as a pharmacy officer in the Medical Service 

Corps of the Army or Navy or as a biomedical services officer in the Air Force. The pay 

schedule prescribed by the authorization act of 2001 was as follows: 

 Years of Creditable Service Pay Authorized

 Less than 3 $3,000 

 3 but less than 6 $7,000 

 6 but less than 8 $7,000 

 8 but less than 12 $12,000 

 12 but less than 14 $10,000 

 14 but less than 18 $9,000 

 more than 18 $8,000 

 

13 Senate Report No. 106-616 (Committee on Armed Services), accompanying S. 2549, 106th Congress, 2d 

Session. 

583
The National Defense Authorization Act for Fiscal Year 2003, Public Law 107-

314, 116 Stat. 2569, redesignated special pay for pharmacist officers as retention special 

pay for pharmacist officers and prescribed a maximum yearly payment of $15,000 for all 

recipients in place of the pay schedule established in 2001. 

Cost: For the cost of nonphysician provider special pay from 1995 to 1997, see 

Table II-28 of Military Compensation Statistics Tables, volume II of this edition. 

584
Chapter II.E.1.f. 

 Special Pay for Nurse Anesthetists 

 and Other Nurses and 

 Accession Bonus for Registered Nurses 

Legislative Authority: 37 U.S.C. §§302d and 302e; cf. 37 U.S.C. §302c(d).1

Purpose: To provide a special incentive for nurses to enter and remain in military 

service to insure adequate numbers of experienced nurses to meet military medical care 

needs in both peacetime and wartime settings. 

Background: The National Defense Authorization Act for Fiscal Years 1990 and 

1991, Public Law 101-189, §§705 and 706, 103 Stat. 1352, 1471-1474 (1989), 

established two new programs to overcome shortages of nurses generally and of certified 

registered nurse anesthetists (CRNAs) in particular. Both programs were initially 

established as two-year test programs. Under the first of the programs, adopted as Section 

705(a)(1) of the 1990/1991 National Defense Authorization Act, id., §705(a)(1), 103 Stat. 

at 1471-1472, a registered nurse who, during the period beginning November 29, 1989, 

and ending on September 30, 1991, executed a written agreement to accept a commission 

and be assigned to duty as an officer of the Nurse Corps of the Army or Navy or an 

officer of the Air Force designated as a nurse and to remain on active duty for a minimum 

of four years became entitled to an "accession bonus" not to exceed $5,000.2

 All 

registered nurses were eligible to participate in the "accession bonus" program except 

nurses who received financial assistance from the Department of Defense to pursue 

baccalaureate degree programs in exchange for agreements to accept appointments as 

officers and persons determined not to be qualified to become and remain licensed as 

registered nurses. The exact amount of the bonus was left to the determination of the 

 

1 In addition to being entitled to special pay under 37 U.S.C. §§302d and 302e as nurses per se, nurses may 

also be entitled to special pay as "nonphysician health care providers" under 37 U.S.C. §302c(d). See 

footnotes 19 and 20 and accompanying text to this chapter, below. Also see footnote 3 hereof, below. 

2 The program was also available to registered nurses executing written agreements under which they 

agreed to accept commissions as officers designated as nurses in the commissioned corps of the Public 

Health Service. 10 U.S.C. §302d(c). 

585
Secretaries of the military services, depending on the needs of each service. The nurse 

"accession bonus" program is codified at 37 U.S.C. §302d.3

In commenting on the need for an "accession bonus" for nurses, the House Armed 

Services Committee noted: 

The committee is aware that shortfalls in professional nurses now exist in 

both the active and reserve forces that, if not corrected, will have a major effect 

on the military medical care system's ability to perform both its wartime and 

peacetime missions. These shortfalls are the result, in part, of the national nursing 

shortage, the existence of which forces the military nurse corps to compete more 

effectively than ever before for the available supply of civilian sector nurses. 

 

3

 The National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, §707, 103 

Stat. 1352, 1474-1475 (1989), also established a financial assistance program, codified at 10 U.S.C. 

§2130a, for nurse officer candidates. The reason underlying adoption of the financial assistance program 

was the perceived "shortfalls in [the number of] professional nurses [that] now exist in both the active and 

reserve forces" that could adversely affect the "military medical care system's ability to perform both its 

wartime and peacetime missions." House Report No. 101-121 (Committee on Armed Services), p. 289, 

accompanying H.R. 2461, 101st Congress, 1stSession (1989); see Senate Report No. 101-81 (Committee on 

Armed Services), p.179, accompanying S. 1352, 101st Congress, 1st Session (1989), and House report No. 

101-331 (Committee of Conference), 595, accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

Under the initial funding levels of this program, a person who executes a "written agreement" to accept an 

appointment as a nurse officer could be paid up to $5,000 upon acceptance of the agreement, provided that 

the first installment could not exceed $2,500, and a stipend of up to $500 per month, for a maximum of 24 

months, for each month the person is "enrolled as a full-time student in an accredited baccalaureate degree 

program in nursing at a civilian educational institution...." The National Defense Authorization Act for 

Fiscal Year 2003, Public Law 107-314, 116 Stat. 2569, raised the limit of the total amount paid upon 

acceptance from $5,000 to $10,000 and the limit of the initial payment from $2,500 to $5,000. Under the 

"written agreement," an officer candidate is obligated to enlist in a reserve component of an armed force, to 

complete the nursing program, to accept appointment as a nurse officer upon completion of the program, 

and to serve on active duty as a nurse officer for either four or five years (four years in the case of a person 

whose agreement was accepted in that person's fourth year in a nursing program, five years in the case of a 

person whose agreement was accepted in that person's third year in a nursing program). As originally 

enacted, the financial assistance program was scheduled to terminate on September 30, 1991, but the 

program has since been extended a number of times--first, to September 30, 1992, by the National Defense 

Authorization Act for Fiscal Year 1991, Public Law 101-510, §613(c)(1), 104 Stat. 1485, 1577 (1990), and 

the National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §612(c)(1), 

105 Stat. 1290, 1376 (1991); second, to September 30, 1993, by the National Defense Authorization Act for 

Fiscal Year 1993, Public Law 102-484, §162(h), 106 Stat. 2315, 2421 (1992); third, to September 30, 1995, 

by the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §611(a), 107 Stat. 

1547, 1679 (1993); fourth, to September 30, 1996, by the National Defense Authorization Act for Fiscal 

Year 1995, Public Law 103-337, §612(a), 108 Stat. 2663, 2783 (1994); to September 30, 1997, by the 

National Defense Authorization Act for Fiscal Year 1996, Public law 104-106, §612(a), 110 Stat. 186, 359 

(1996); and through December 31, 2004 by the successive annual authorization legislation for each of the 

intervening years, the most recent of which was the National Defense Authorization Act for Fiscal Year 

2004, Public Law 108-136. The reasons for the different extensions of the financial assistance program 

parallel those for extending the special pay programs for nurses, for which see below in this chapter. 

586
The committee is especially concerned about the military services' failure 

to attain recruitment goals for nurses. Since fiscal year 1988 none of the services 

has been able to recruit sufficient numbers and types of nurses to fully perform 

mission requirements. Although health care research identifies numerous reasons 

for this phenomenon, the lack of adequate monetary incentives stands out as a 

major obstacle to the recruitment of military nurses.4

Under the second of the programs, adopted as Section 706(a)(1) of the 1990/1991 

National Defense Authorization Act, Public Law 101-189, id., §706(a)(1), 103 Stat. at 

1472-1473, an officer of the Nurse Corps of the Army or Navy or an officer of the Air 

Force designated as a nurse who was a qualified certified registered nurse anesthetist on 

active duty for a period of not less than one year and who, during the period beginning 

November 29, 1989, and ending on September 30, 1991, executed a written agreement to 

remain on active duty for a minimum of one year or more became entitled to "incentive 

special pay" not to exceed $6,000 per year.5

 The exact amount of the bonus was left to 

the determination of the Secretaries of the military services, depending on the needs of 

each service and the period of obligated service provided for in the written agreement. 

Incentive special pay for nurse anesthetists is codified at 37 U.S.C. §302e. 

With respect to the special incentive pay program for certified registered nurse 

anesthetists, the House Armed Services Committee was clearly concerned about staffing 

shortages: 

The committee is deeply concerned about the nation's wartime medical 

readiness, and believes that the level and adequacy of in-theater casualty care is 

directly related to the availability of highly skilled health care professionals. 

Critical among these are nurses, and specifically, certified registered nurse 

anesthetists (CRNAs). 

 . . . 

Since 1983 the number of programs available [for CRNAs] and the 

number of graduates in the civilian sector has declined. Likewise, the military 

nurse corps have experienced great difficulty in achieving recruiting goals. 

 

4

 House Report No. 101-121 (Committee on Armed Services), p. 289, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). cf. id., pp. 288-289, generally. Also see Senate Report No. 101-81 

(Committee on Armed Services), p. 178, accompanying S. 1352, 101st Congress, 1st Session (1989) ("The 

committee remains concerned about maintaining adequate staffing levels of nurses in the military medical 

care system."). 

5 The program was also available to registered nurses executing written agreements under which they 

agreed to accept commissions as officers designated as nurses in the commissioned corps of the Public 

Health Service. 37 U.S.C. §302e(b)(1). 

587
Despite the strengthening of in-service recruiting for specialty training, nurse 

anesthesia manpower shortages have been critical across the services since fiscal 

year 1988, with an average of 35 percent of all military treatment facilities 

undermanned.... 

The CRNA shortage is further exacerbated by the exodus of experienced 

military nurse anesthetists to the private sector, where, on average, they can earn 

salaries in excess of $35,000 above their military compensation....6

On the basis of experience with the nurse accession bonus program and the 

incentive special pay program for certified registered nurse anesthetists, Congress 

extended the termination date for both programs from September 30, 1991, to September 

30, 1992, in the National Defense Authorization Act for Fiscal Year 1991, Public Law 

101-510, §613(a) (accession bonus for registered nurses) and §612(b) (special pay for 

nurse anesthetists), 104 Stat. 1485, 1577 (1990). At the same time, Congress amended 37 

U.S.C. §302e to authorize special incentive pay for nursing specialties in addition to 

nurse anesthetists that are "designated by the Secretary [of Defense] as critical to meet 

requirements (whether such specialty is designated as critical to meet wartime or 

peacetime requirements)." National Defense Authorization Act for Fiscal Year 1991, id., 

§614(a)(3), 104 Stat. at 1577. Nursing specialties included in the expanded incentive 

special pay program were limited to specialties that require "post-baccalaureate education 

and training." 37 U.S.C. §302e(b)(2)(B). Before including any nursing specialty in the 

expanded incentive special pay program, the Secretary of Defense is required to submit a 

report to Congress justifying the need for inclusion of that specialty and describing how 

the program will be implemented for that specialty. National Defense Authorization Act 

for Fiscal Year 1991, id., §614(c), 104 Stat. at 1578. See 37 U.S.C. §302e note. 

 

6 House Report No. 101-121 (Committee on Armed Services), pp. 289-290, accompanying H.R. 2461, 

101st Congress, 1st Session (1989). Also see Senate Report No. 101-81 (Committee on Armed Services), p. 

179, accompanying S. 1352, 101st Congress, 1st Session (1989): 

The committee is aware that the Department of Defense is experiencing difficulty attracting and retaining 

qualified certified registered nurse anesthetists (CRNAs). In order to compete for these individuals and in 

recognition of their additional specialty training, the committee recommends ... a provision ... authorizing 

incentive pay of up to $6,000 per year for nurse anesthetists. The secretary of the military department 

concerned may, upon acceptance of the written agreement, pay an incentive pay to an eligible individual in 

an amount that shall not exceed 

 $6,000 per year for obligated individuals 

 $15,000 per year for unobligated individuals who sign a one-year contract 

 $20,000 per year for unobligated individuals who sign a two-year contract 

 $25,000 per year for unobligated individuals who sign a three-year contract 

588
Currently, no nursing specialties have been "designated ... as critical" under the expanded 

authority conferred by the 1991 National Defense Authorization Act, Public Law 101-

510, §612(b), id., and certified registered nurse anesthetists remain the only nursing 

specialty authorized to receive incentive special pay under 37 U.S.C. §302e. 

Extension of authority for incentive special pay to nursing specialties in addition 

to nurse anesthetists came about as a result of a Senate proposal to extend the incentive 

special pay program for nurse anesthetists to certified nurse-midwives and intensive care 

nurses.7

 In conference, the Senate proposal was broadened "to allow the Secretary of 

Defense to prescribe this incentive special pay for any other nursing specialty that 

requires post-baccalaureate education and training for which there is a critical shortage 

based on wartime or peacetime requirements."8

Since first extending the termination dates for both programs to September 30, 

1992, in the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, 104 Stat. 1485 (1990), Congress has further extended the termination date on four 

occasions--first, in the National Defense Authorization Act for Fiscal Year 1993, Public 

Law 102-484, §612(g) (accession bonus for registered nurses) and §612(i) (special pay 

for nurse anesthetists and other critical nursing specialties), 106 Stat. 2315, 2421 (1992), 

the termination dates for both programs were extended from September 30, 1992, to 

September 30, 1993; second, in the National Defense Authorization Act for Fiscal Year 

1994, Public Law 103-160, §611(b) (accession bonus for registered nurses) and §611(c) 

(special pay for nurse anesthetists and other critical nursing specialties), 107 Stat 1547, 

1669 (1993), the termination dates were extended from September 30, 1993, to 

September 30, 1995; third, in the National Defense Authorization Act for Fiscal Year 

1995, Public Law 103-337, §612(b) (accession bonus for registered nurses) and 

§612(c)(1) (special pay for nurse anesthetists and other critical nursing specialties), 108 

Stat. 2663, 2783 (1994), the termination dates were further extended from September 30, 

 

7

 S. 2884, §613, 101st Congress, 2d Session (1990). See Senate Report No. 101-384 (Committee on Armed 

Services), p. 172, accompanying S. 2884, and House Report No. 101-923 (Committee of Conference), p. 

614, accompanying H.R. 4739, 101st Congress, 2d Session (1990). 

8

 House Report No. 101-923 (Committee of Conference), p. 614, accompanying H.R. 4739, 101st Congress, 

2d Session (1990). 

589
1995, to September 30, 1996; in the National Defense Authorization Act for Fiscal Year 

1996, Public Law 104-106, §612(b) (accession bonus for registered nurses) and §612(c) 

(special pay for nurse anesthetists and other critical nursing specialties), 110 Stat. 186, 

359 (1996), and the termination dates were further extended from September 30, 1996, to 

September 30, 1997; finally, the termination dates have been extended through December 

31, 2004 by the successive annual authorization legislation for each of the intervening 

years, the most recent of which was the National Defense Authorization Act for Fiscal 

Year 2004, Public Law 108-136. 

In support of the extension of the termination dates for both programs from 

September 30, 1992, to September 30, 1993, the House and Senate Armed Services 

Committees contented themselves merely with indicating that they "recommend[ed]" the 

extensions in question.9

 With respect to the additional extension from September 30, 

1993, to September 30, 1995, the House Armed Services Committee reported out a bill, 

H.R. 2401, 103d Congress, 1st Session (1993), that provided permanent authority for 

incentive special pay for nurse anesthetists and other critical nursing specialties and 

accession bonuses for registered nurses, thereby doing away with the termination dates 

that had to be extended from year to year.10 The Senate bill, S. 1298, §612, 103d 

Congress, 1st Session (1993), however, merely provided for extending the termination 

date from September 30, 1993, to September 30, 1994.11 The Senate proposal was 

adopted in conference.12 In connection with the extension of the termination dates from 

September 30, 1995, to September 30, 1996, the Senate Armed Services Committee 

proposed increasing the incentive special pay for nurse anesthetists and other critical 

 

9

 House Report No. 102-527 (Committee on Armed Services), p. 244, accompanying H.R. 5006; and 

Senate Report No. 102-352 (Committee on Armed Services), p. 208, accompanying S. 3114, 102d 

Congress, 2d Session (1992). Cf. House Report No. 102-966 (Committee of Conference), p. 713, 

accompanying H.R. 5006, 102d Congress, 2d Session (1992). 

10 H.R. 2401, §611, 103d Congress, 1st Session (1992). See House Report No. 103-200 (Committee on 

Armed Services), p. 293, accompanying H.R. 2401, 103d Congress, 1st Session (1993). 

11 Senate Report No. 103-112 (Committee on Armed Services), p. 152, accompanying S. 1298, 103d 

Congress, 1st Session (1993). 

12 House Report No. 103-357 (Committee of Conference), p. 683, accompanying H.R. 2401, 103d 

Congress, 1st Session (1993). 

590
nursing specialties from a maximum of $6,000 per year to $15,000 per year while at the 

same time extending the program termination dates for both the incentive special pay 

program and the accession bonus for registered nurses to September 30, 1998,13 while the 

bill reported out by the House Armed Services Committee provided merely for increasing 

the incentive special pay for nurse anesthetists and other critical nursing specialties from 

a maximum of $6,000 per year to $15,000.14 In support of its proposal to increase the 

maximum amount of incentive special pay for nurse anesthetists and other critical nursing 

specialties from $6,000 to $15,000, the Senate Armed Services Committee noted: 

... At present, certified registered nurse anesthetists can earn far more as 

civilians than as military personnel, and the compensation gap continues to 

increase.15

Accordingly, the National Defense Authorization Act for Fiscal Year 1996, Public Law 

103-337, increased the proposal to increase the amount of incentive special pay from a 

maximum of $6,000 to $15,000 a year and extended the program termination dates from 

September 30, 1995, to September 30, 1996.16

In connection with the extension of the termination dates for both programs from 

September 30, 1996, to September 30, 1997, effected by the National Defense 

Authorization Act for Fiscal Year 1997, Public Law 104-201 §612(b) (accession bonus 

for registered nurses) and §612(c) (special pay for nurse anesthetists and other critical 

nursing specialties), 110 Stat. 2538 (1996), the House originally proposed a two-year 

 

13 S. 2182, §612, 103d Congress, 2d Session (1994). See Senate Report No. 103-282 (Committee on 

Armed Services), p. 194, accompanying S. 2182, 103d Congress, 2d Session (1994). 

14 H.R. 4301, §611, 103d Congress, 2d Session (1994). See House Report No. 103-499 (Committee on 

Armed Services), p. 251, accompanying H.R. 4301, 103d Congress, 2d Session (1994). 

15 Senate Report No. 103-282 (Committee on Armed Services), p. 194, accompanying S. 2182, 103d 

Congress, 2d Session (1994). 

16 House Report No. 103-701 (Committee of Conference), p. 713, accompanying S. 2182, 103d Congress, 

2d Session (1993). 

591
extension, to September 30, 1998, whereas the Senate proposed only a one-year 

extension.17 A one-year extension was agreed to in conference.18

In a related but slightly different context, nurses were specifically included within 

the category of persons entitled to special pay for nonphysician health care providers by 

the National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §617, 

110 Stat. 186, 362 (1996), provided they meet the other requirements of 37 U.S.C. 

§302c(d). 19 For a discussion of these other requirements and of the amount of pay 

authorized for nurses who qualify as nonphysician health care providers, see Chapter 

II.E.1.e., "Special Pay for Psychologists and Other Nonphysician Health Care Providers", 

immediately above.20

 The National Defense Authorization Act for Fiscal Year 2003, Public Law 107-

314, made substantial increases in the accession bonus for registered nurses and the 

incentive special pay for nurse anesthetists. The bonus rose from $5,000 to $30,000 and 

the incentive pay rose from $15,000 to $50,000. 

Current rates of pay authorized: The maximum accession bonus currently 

authorized for registered nurses is $30,000 and the maximum annual incentive special 

pay currently authorized for nurse anesthetists and other officers in critical nursing 

specialties is $50,000 per year. 

 Cost: For the cost of special pay for nurses from 1990 to 2004, see Tables II-29 of 

Military Compensation Statistics Tables, volume II of this edition. 

 

17 H.R. 1530, §612, and S. 1026, §612, 104th Congress, 1st Session (1995). See House Report No. 104-131 

(Committee on National Security), p. 230, accompanying H.R. 1530, and Senate Report No. 104-112 

(Committee on Armed Services), pp. 254-255, accompanying S. 1026, 104th Congress, 1st Session (1995); 

cf. House Report No. 104-406 (Committee of Conference), p. 815, accompanying H.R. 1530, 104th

Congress, 1st Session (1995), and House Report No. 104-450 (Committee of Conference), p. 805, 

accompanying S. 1124, 104th Congress, 2d Session (1996). 

18 House Report No. 104-406 (Committee of Conference), p. 815, accompanying H.R. 1530, 104th

Congress, 1st Session (1995), and House Report No. 104-450 (Committee of Conference), p. 805, 

accompanying S. 1124, 104th Congress, 2d Session (1996). 

19 See 37 U.S.C. §302c(d) as amended by the National Defense Authorization Act for Fiscal Year 1996, 

Public Law 104-106, §617, 110 Stat. 186, 362 (1996). 

20 See in particular footnotes 10 through 12 and accompanying text of Chapter II.E.1.e., "Special Pay for 

Psychologists and Other Nonphysician Health Care Providers," above. 

592
Chapter II.E.2.a. 

 Engineering and Scientific Career 

 Continuation Pay 

Legal Authority: 37 U.S.C. §315. 

Purpose: To provide an additional incentive for officers of the uniformed services 

with certain specially needed engineering and scientific skills to remain on active duty 

following completion of their initial active service obligations. 

Background: In the Uniformed Services Pay Act of 1981, Public Law 97-60, 

§120(a), 95 Stat. 989, 998-999 (1981), Congress established a new special pay program 

to induce officers in the Armed Forces with certain critically needed engineering and 

scientific skill specialties to remain on active duty, rather than returning to the civilian 

job market, after completion of their respective terms of obligated service. Under the 

provisions of the 1981 Pay Act, officers performing duties requiring an engineering or 

scientific degree in a skill specialty designated as of critical importance to the Armed 

Forces and in which there was a critical manning shortage were, subject to certain 

conditions set out below, eligible for engineering and scientific career continuation pay at 

rates ranging up to $3,000 per year. To be eligible for such pay, an officer was required to 

be in a pay grade below O-7, to hold an engineering or science degree from an accredited 

college or university, to be certified by the Secretary of his military department as having 

the technical qualifications for being detailed to engineering or scientific duty, to have 

completed at least three but less than 19 years of engineering or scientific duty as an 

officer, and to have executed a written agreement to remain on active duty for detail in an 

engineering or scientific capacity for at least one but not more than four years. Upon 

acceptance of such an agreement, an affected officer became eligible for the special 

continuation pay in an amount not to exceed $3,000 multiplied by the number of years, 

including fractions thereof, for which the officer agreed to remain on active duty. The pay 

could be paid either in a lump sum or in equal periodic installments, as determined by the 

Secretaries of the various military departments. 

593
In adopting this new entitlement, Congress noted generally that the United States 

was currently facing a growing shortage of engineers and that that shortage, coupled with 

increased demand for such personnel in the private sector, had driven starting salaries to 

the $19,000 to $24,000 range.1

 Congress then went on to note that, "[g]iven these 

circumstances, it is not surprising that the military services are experiencing difficulty in 

attracting and retaining officers skilled in certain engineering and scientific disciplines."2

To address this problem, the House of Representatives proposed an accession bonus of up 

to $15,000 for an initial four-year obligation and a continuation bonus of up to $3,000 per 

year for each year an officer with at least three but less than 19 years of service agreed to 

remain on active duty.3

 The Senate, agreeing to the special continuation pay, declined to 

adopt the accession bonus, and the latter was, in conference, deleted from the program.4

The legislative history of the engineering and scientific career continuation pay program 

adopted in the Uniformed Services Pay Act of 1981, Public Law 97-60, id., underlines 

Congress's intent that the pay not be authorized for military personnel already eligible for 

accession and continuation bonus payments under other provisions of law.5

 In addition, 

Congress suggested that the bonus be phased out in such a way as to prevent significant 

decreases in total annual compensation when an officer loses eligibility.6

 

1 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 8, accompanying H.R. 3380, 97th

Congress, 1st Session (1981). 

2 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 8, accompanying H.R. 3380, 97th

Congress, 1st Session (1981). 

3 H.R. 3380, §5, 97th Congress, 1st Session (1981). See House Report No. 97-109 (Part 1) (Committee on 

Armed Services), pp. 8, 20, and House Report No. 97-109 (Part 2) (Committee on Appropriations), p. 22, 

accompanying H.R. 3380, 97th Congress, 1st Session (1981). 

4 House Report No. 97-265 (Committee of Conference), p. 25, accompanying S. 1181, 97th Congress, 1st

Session (1981). cf. Senate Report No. 97-146 (Committee on Armed Services), accompanying S. 1181, 97th

Congress, 1st Session (1981). 

5

 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 8, accompanying H.R. 3380, and 

House Report No. 97-265 (Committee of Conference), p. 25, accompanying S. 1181, 97th Congress, 1st

Session (1981). 

6

 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 8, accompanying H.R. 3380, and 

House Report No. 97-265 (Committee of Conference), p. 25, accompanying S. 1181, 97th Congress, 1st

Session (1981). (While the House had suggested merely that the new pay be phased out so that officers 

with 19 years of service not experience a significant decrease in compensation, the Conference Committee 

594
In presentations to the House Armed Services Committee, the Air Force and the 

Navy indicated that, together, they planned to use the new authority to pay bonuses of 

$1,000 to 1,000 officers, $2,000 to 650 officers, and $3,000 to 234 officers to improve 

retention during fiscal year 1982; the Army and Marine Corps indicated they did not 

expect to pay any such bonuses at all.7

The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§637(a), 99 Stat. 583, 648-649 (1985), extended program eligibility to officers of the 

Public Health Service and the National Oceanic and Atmospheric Administration as well 

as officers in the Armed Forces. Under the provisions of current 37 U.S.C. §315, all the 

uniformed services are capable of implementing engineering and scientific career 

continuation pay. Thus, officers in the uniformed services performing duties requiring an 

engineering or scientific degree in a skill specialty designated as of critical importance to 

the uniformed services (as determined by the Secretary of the department concerned) and 

in which there is a critical manning shortage are eligible for engineering and scientific 

career continuation pay. 37 U.S.C. §315(a), as amended by the Department of Defense 

Authorization Act, 1986, Public Law 99-145, id. 

The legislative history of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., does not speak to the question of why program eligibility was 

extended to officers in the Public Health Service and the National Oceanic and 

Atmospheric Administration. The House and Senate Conference Reports merely state: 

 Currently, engineering and scientific career continuation pay may be 

paid to certain officers of the Armed Forces in critical shortage skills. 

 The Senate bill [S. 1160, 99th Congress, 1st Session (1985)] contained a 

provision ... that would also authorize the payment of this special pay to members 

 suggested the pay be phased out by the end of the 14th year of service. The law, however, only requires that 

it be phased out before the beginning of an officer's 19th year of service.) 

7

 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 20, and House Report No. 97-109 

(Part 2) (Committee or Appropriations), p. 22, accompanying H.R. 3380, 97th Congress, 1st Session (1981). 

595
of the National Oceanic and Atmospheric Administration and the Public Health 

Service. 

 The House amendment contained no similar provision. 

 The House recedes.8 9

In fact, the Fifth Quadrennial Review of Military Compensation,

10 in statutorily 

required reports to Congress, recommended extending engineering and scientific career 

 

8

 House Report No. 99-235 (Committee of Conference), p. 431, and Senate Report No. 99-118 (Committee 

of Conference), p. 431, both accompanying S. 1160, 99th Congress, 1st Session (1985). 

9

 In its consideration of authorizations for the Department of Defense for fiscal year 1986, the Senate 

Committee on Armed Services initially reported out S. 1029, which was accompanied by Senate Report 

No. 99-41, 99th Congress, 1st Session (1985). Before this bill was considered by the full Senate, the Senate 

Committee on Armed Services reported out a clean bill, S. 1160, but did not issue a report on the new bill. 

As explained by Senator Goldwater, Chairman of the Committee: 

... The Armed Services Committee reported S. 1029 to the Senate on April 29 of this year. The bill was 

accompanied by Senate Report No. 99-41. 

When the Armed Services Committee learned that the Senate would approve no real growth in the defense 

budget, it reconvened on Wednesday of this week [May 15, 1985] to make further program reductions to 

conform to the ceiling in the budget resolution. The Committee has reported a clean bill, S. 1160, reflecting 

these new budget levels.... 

Most of the Senate Report 99-41 continues to be applicable to this bill.... 

131 Cong. Rec. 12438, 12500 (1985) (daily ed., 131 Cong. Rec. S6415, S6475 (May 17, 1985)) (statement 

of Senator Goldwater). In "explanatory background information" on some of the differences between S. 

1029 and S. 1160, the following appears: 

The compensation and benefits provisions of the bill contain significant differences from those contained in 

S. 1029.... 

... In addition the Committee recommended increases or enhancements to a number of special and incentive 

pays.... 

Each of these benefit increases or enhancements are in addition to the modest improvements in benefits 

previously recommended in S. 1029. 

131 Cong. Rec. 12474 (1985) (daily ed., 131 Cong. Rec. S6450 (May 17, 1985)) (statement of Senator 

Goldwater). Neither Senate Report No. 99-41 nor the "explanatory background information" provided by 

Senator Goldwater specifically dealt with the "enhancements" to the engineering and scientific career 

continuation pay program contained in S. 1160 and subsequently adopted in the Department of Defense 

Authorization Act, 1986, Public Law 99-145, §637(a), 99 Stat. 583, 648-649 (1985). 

10 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system of 

596
continuation pay entitlements to officers in the Public Health Service and the National 

Oceanic and Atmospheric Administration as follows: 

Title 37 U.S.C. authorizes this pay [i.e., engineering and scientific career 

continuation pay] for the "Armed Forces." Public Health Service and the National 

Oceanic and Atmospheric Administration are "Uniformed Services" not 

authorized to use this bonus. Because there is no immediate critical need in these 

services, this should not preclude them from the authority to implement this 

incentive in the future if the need should arise. The statute should apply to all 

Uniformed Services.11

Congress may well have been persuaded by this reasoning. 

Because of the purpose of the special pay program for engineering and scientific 

duty officers--namely, "attracting and retaining officers skilled in certain engineering and 

scientific disciplines"12 on active duty13--engineering and scientific career continuation 

pay is not authorized for members of the reserve forces performing inactive-duty training.

Current rate of pay authorized: Engineering and scientific career continuation 

pay is currently authorized at a rate not to exceed $3,000 for each year of an active-duty 

agreement.14

Cost: For the cost of engineering and scientific career continuation pay from 1982 

to 1988, see Table II-30 of Military Compensation Statistics Tables, volume II of this 

edition. 

 the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in late 

2001. 

11 Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military Compensation, Volume 

III, p. 381, November 1983. Also see Special and Incentive Pays, Report of the Fifth Quadrennial Review 

of Military Compensation,” Volume III, pp. 16-17, November 1983, and Executive Summary, Report of the 

Fifth Quadrennial Review of Military Compensation, p. VI-8, January 1984. 

12 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 8, accompanying H.R. 3380, 97th

Congress, 1st Session (1981). 

13 Under 37 U.S.C. §315(b)(6), engineering and scientific career continuation pay is authorized only for 

officers executing agreements obligating them to remain on active duty. Also see text at footnotes 1, 2, and 

3 to this chapter above. 

14 A qualifying active-duty agreement must obligate an affected officer to remain on active duty for at least 

one but not more than four years. 

597
Chapter II.E.2.b. 

 Enlistment Bonus

Legislative Authority: 37 U.S.C. § 309. 

Purpose: To provide a monetary incentive to induce persons to enlist for and 

serve in military skill specialties experiencing critical personnel shortages. 

Introduction: Enlistment bonus authority pre-dates the formation of the United 

States. A 1776 resolution of the Continental Congress offered a cash bonus or "bounty" 

as a spur to enlistments. The enlistment "bounty" played a prominent part in raising 

United States military forces until after the Civil War (1861-1865). It then fell from 

favor, principally because it had proved ineffective and been subject to abuse during that 

war. Except for one year in the 1920s, it was not revived until 1971, when an enlistment 

bonus was again authorized as a corollary to the end of conscription and the move to a 

relatively large "all-volunteer" military force. The crucial difference between the original 

enlistment bonus program and the present day enlistment bonus program is that, whereas 

the original enlistment bonus, or “bounty,” was available to anyone enlisting in the 

precursor of today’s Army, present day enlistment bonus authority is applicable only to 

persons enlisting in military skill specialties designated as “critical.” Whereas the original 

enlistment bonus was payable only to persons enlisting in the Army, today's enlistment 

bonus authority extends to members of all branches of the Armed Forces. 

Background: The first congressional authority for an enlistment bonus--called a 

"bounty for enlistment" at the time--was the Act of March 3, 1791, ch. 28, §4, 1 Stat. 222 

(1791), which granted a $6 "bounty" to "each non-commissioned officer, private and 

musician, who has enlisted pursuant to [an earlier enactment], or who shall enlist 

pursuant to this act."1

 The Act of March 5, 1792, ch. 9, §5, 1 Stat. 241, 242 (1792), 

 

1

 The Act of March 3, 1791, ch. 28, §12, 1 Stat. 222, 224 (1791), also authorized a $3 "bounty" to be paid 

to "each of the non-commissioned officers, privates and musicians" raised as Presidential "levies" of the 

United States. The act further provided that "troops inlisted [sic] under the denomination of levies" and 

"non-commissioned officers, privates and musicians of the militia" were, when "call[ed] into service of the 

United States," entitled to "the same pay, rations and forage ... as the troops of the United States." Act of 

March 3, 1791, ch. 28, id., §10, 1 Stat. at 223. 

598
increased the "bounty" to $8 for every "recruit who shall be enlisted by virtue of this act" 

as well as to "the non-commissioned officers, privates and musicians now in service, who 

have enlisted for three years" under the authority of the same earlier enactment referred 

to in the Act of March 3, 1791, ch. 28, id. The Act of March 3, 1795, ch. 44, §6, 1 Stat. 

430 (1795), further increased the bounty payable "to each person not now in the army of 

the United States ... who shall hereafter enlist," this time to $14, $4 of which was to be 

"deferred until [the enlistee] shall have joined the corps in which he is to serve." The 

amount of the "bounty" authorized fluctuated in a fairly narrow range2

 until theAct of 

January 27, 1814, ch. 7, §1, 3 Stat. 94, 94-95 (1814), boosted it to the then-mammoth 

sum of $124. The $124 authorized was, however, a "bounty" with a string attached. An 

earlier law had created a separation payment equal to three months' pay. A recruit had to 

give up his right to the separation payment to qualify for the $124 enlistment bounty. 

The Mexican War (1846) brought the next change to the program. The Act of 

February 11, 1847, ch. 8, §9, 9 Stat. 123, 125-126 (1847), authorized a bounty of 160 

acres of public land or, alternatively, $100 in Treasury scrip to men enlisting in the Army 

for 12 months or longer. Those enlisting for less than a year were entitled to 40 acres or 

$25, again in scrip, provided they "marched to the seat of war." Use of the enlistment 

bounty waned during the period of peace that followed, but reached the height of its 

development after the Civil War broke out. 

The federal "bounty," or "premium," soared to a peak of $402 during the Civil 

War. Under the then-existing volunteer army system, states, counties, and municipalities 

also paid a bounty. Competition for volunteers was intense, causing local bounties to 

climb as high as $1,500. The practice of "bounty jumping" plagued the system: soldiers 

who had been paid a bounty deserted, enlisted in some other state, and collected another 

bounty. The process was frequently repeated several times. Bounty payments were 

 

2

e.g., under the Act of March 16, 1802, ch. 9, §12, 2 Stat. 132, 135 (1802), the "bounty" for "each ablebodied citizen, recruited ... to serve the term of five years" was set at $12--$2 less than the bounty 

authorized by the Act of March 3, 1795, ch. 9, id., §5, 1 Stat. at 242--$6 of which was "deferred until [the 

enlistee] shall be mustered and have joined the corps in which he is to serve." 

599
discontinued for enlistments entered into after April 30, 1865. The enlistment bounty 

never recovered completely from its unsavory Civil War reputation. It remained in virtual 

eclipse as a recruitment device for roughly the next 100 years until, upon reemergence, it 

was restructured and given a different name. The blunt language of Section 3 of the Act 

of May 18, 1917, ch. 15 [Public Law 12, 65th Congress], §3, 40 Stat. 76, 78 (1917), 

enacted shortly after the United States entered World War I, reflects the low repute in 

which the bounty and certain other Civil War recruitment practices were held: 

No bounty shall be paid to induce any person to enlist in the military 

service of the United States; and no person liable to military service shall 

hereafter be permitted or allowed to furnish a substitute for such service; nor shall 

any substitute be received, enlisted, or enrolled in the military service of the 

United States; and no such person shall be permitted to escape such service or to 

be discharged therefrom prior to the expiration of his term of service by the 

payment of money or any other valuable thing whatsoever as consideration for his 

release from military service or liability thereto. 

Indeed, to the present day 10 U.S.C. §514 provides: 

(a) No bounty may be paid to induce any person to enlist in an armed force. A 

clothing allowance or enlistment bonus authorized by law is not a bounty for the 

purposes of this subsection. 

 (b) No person liable for active duty in an armed force under this subtitle [10 

U.S.C. Subtitle A, "General Military Law"] may furnish a substitute for that 

active duty. No person may be enlisted or appointed in an armed force as a 

substitute for another person.3

Although bounties per se are still prohibited, enlistment bonuses are to be 

distinguished from bounties and have been authorized at different times over the years. 

Thus, the Act of June 4, 1920, ch. 227 [Public Law 242, 66th Congress], §27, 41 Stat. 

759, 775 (1920), granted a $90 bonus,4

 payable at the end of the term of enlistment, to 

persons enlisting in the Army for three years. This enlistment bonus was repealed the 

 

3 In this same connection, see also Selective Service Act of 1948, ch. 625 [Public Law 759, 80th Congress], 

§8, 62 Stat. 604, 614 (1948), which is the source of current 10 U.S.C. §514. Both provisions specifically 

state that clothing allowances and enlistment bonuses if "authorized by law" are not within the prohibitions 

on "bounties." (The catchline for 10 U.S.C. §514 is "Bounties prohibited; substitutes prohibited".) 

4

cf. Act of June 4, 1920, ch. 227 [Public Law 242, 66th Congress], §4, 41 Stat. 759, 761 (1920). 

600
following year in the Act of June 30, 1921 (Army Appropriation Act of 1922), ch. 33 

[Public Law 27, 67th Congress], §1, 42 Stat. 68, 74 (1921). 

The Act of September 28, 1971 (Military Selective Service Act Amendments of 

1971), Public Law 92-129, §203(a), 85 Stat. 348, 358 (1971), adding Section 308a to 

Title 37, United States Code,5

 allowed, until June 30, 1973, payment of an enlistment 

bonus of not more than $3,000 to persons who enlisted for three or more years in a 

combat element of an armed force or who extended their initial period of active duty in 

such an element to a total of at least three years. Use of the bonus began June 1, 1972, 

when the Army and Marine Corps were permitted to test the program by paying a $1,500 

bonus to persons enlisting for four years of service in an infantry, artillery, or armor 

career field. When draft calls stopped after December 1972, enlistments into the combat 

arms skills began to decline. On May 1, 1973, the amount of the combat arms bonus was 

increased to $2,500, and the Army extended the program to cover 12 new combat 

technical skills. Congress, however, believed the program should not be so extended, and, 

in the Act of July 9, 1973, Public Law 93-64, §204, 87 Stat. 147, 149 (1973), changed the 

controlling language to provide that the bonus was payable only for enlistments or 

extensions in the fields of infantry, artillery, or armor, while at the same time extending 

the basic authority to June 30, 1974. 

The Armed Forces Enlisted Personnel Bonus Revision Act of 1974, Public Law 

93-277, §2(2), 88 Stat. 119, 120-121 (1974), removed the "combat arms" limitation from 

the enlistment bonus program; permitted a bonus payment of up to $3,000 to persons 

enlisting for four or more years, or extending an initial enlistment for such a period, in 

any skill designated as "critical" for the purposes of the enlistment bonus program; and 

provided for the enlistment bonus authority to be extended through June 30, 1977. 

 

5 Recognizing the continuing prohibition on "bounties" found at 10 U.S.C. §514, Congress, in adopting the 

enlistment bonus provisions set out at 37 U.S.C. §308a, specifically provided that the prohibitions of 10 

U.S.C. §514(a) should not be applicable. 37 U.S.C. §308a(a) as added by the Act of September 28, 1971 

(Military Selective Service Act Amendments of 1971), Public Law 92-129, §203(a), 85 Stat. 348, 358 

(1971); see current 37 U.S.C. §308a(a) ("Notwithstanding section 514(a) of title 10 [United States Code] or 

any other law, . . ."). 

601
Between enactment of the Armed Forces Enlisted Personnel Bonus Revision Act 

of 1974, Public Law 93-277, id., and 1992, the basic authority for the payment of 

enlistment bonuses was extended eight times: first, from June 30, 1977, to September 30, 

1978, by the Act of June 29, 1977, Public Law 95-57, §2, 91 Stat. 253 (1977); second, to 

September 30, 1980, by the Department of Defense Appropriation Authorization Act, 

1979, Public Law 95-485, §802(b), 92 Stat. 1611, 1619 (1978); third, to September 30, 

1982, by the Department of Defense Authorization Act, 1981, Public Law 96-342, 

§804(b), 94 Stat. 1077, 1092 (1980); fourth, to December 17, 1982, by the Act of October 

2, 1982, Public Law 97-276, §131, 96 Stat. 1186, 1197 (1982); fifth, to March 31, 1983, 

by the Act of December 21, 1982, Public Law 97-377, §798, 96 Stat. 1830, 1865 (1982); 

sixth, to September 30, 1984, by the Act of March 30, 1983, Public Law 98-14, §1, 97 

Stat. 55 (1983); seventh, to September 30, 1987, by the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §621(a), 98 Stat. 2492, 2540 (1984);6

 and 

eighth, to September 30, 1992, by the National Defense Authorization Act for Fiscal 

Years 1988 and 1989, Public Law 100-180, §626(a), 101 Stat. 1019, 1104 (1987).7

 The 

 

6 In connection with congressional action on the Department of Defense Authorization Act, 1985, Public 

Law 98-525, §621(a), 98 Stat. 2492, 2540 (1984), the House Armed Services Committee recommended a 

five-year extension of enlistment bonus authority, to September 30, 1989, House Report No. 98-691 

(Committee on Armed Services), p. 257, accompanying H.R. 5167, 98th Congress, 2d Session (1984), but 

the Senate Armed Services Committee recommended only a two-year extension, Senate Report No. 98-500 

(Committee on Armed Services), p. 208, accompanying S.2723, 98th Congress, 2d Session (1984). A threeyear extension to September 30, 1987 was agreed to in conference. See House Report No. 98-1080 

(Committee of Conference), p. 297, accompanying H.R. 5167, 98th Congress, 2d Session (1984). 

7 With respect to the National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-

180, §626(a), 101 Stat. 1019, 1104 (1987), the House Armed Services Committee recommended a five-year 

extension of enlistment bonus authority, to September 30, 1992, House Report No. 100-446 (Committee of 

Conference), p. 644, accompanying H.R. 1748, and House Report No. 100-58 (Committee on Armed 

Services), p. 205, accompanying H.R. 1748, 100th Congress, 1st Session (1987), but the Senate Armed 

Services Committee recommended only a two-year extension, House Report No. 100-446 (Committee of 

Conference), p. 644, accompanying H.R. 1748, 100th Congress, 1st Session (1987). The five-year extension 

initially recommended by the House Armed Services Committee was agreed to in Conference. House 

Report No. 100-446 (Committee of Conference), p. 644, accompanying H.R. 1748, 100th Congress, 1st

Session (1987). As stated by the House Armed Services Committee: 

The enlistment and selective reenlistment [also covered by the extension] bonus programs have proven 

invaluable in recruiting and retaining high quality individuals for all components of the Total Force. The 

committee believes that these programs have permitted the services to selectively target their resources to 

meet service-unique accession and retention needs in a judicious and cost effective manner. 

602
need to attract additional personnel to military combat skill areas experiencing critical 

shortages underlay all these extensions.8

Since 1992, the program termination date has been extended annually by the 

national defense authorization acts for the respective years. The only exceptions were the 

National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, which 

mandated a two-year extension through September 30, 1995, and the National Defense 

Authorization Act for Fiscal Year 1999, which mandated a three-month extension to 

move the termination date from the end of the fiscal year, September 30, to the end of the 

calendar year, December 31. The National Defense Authorization Act for Fiscal Year 

2004, Public Law 108-136, extended the program through December 31, 2004. In all 

cases, the House and Senate Armed Services Committees simply noted that they 

recommended the extensions, with no additional comment. 

In addition to the extensions discussed above, four additional substantive changes 

to the basic legislation have been made since 1974. The Department of Defense 

Authorization Act, 1981, Public Law 96-342, §804(b), 94 Stat. 1077, 1092 (1980), 

increased the maximum amount of enlistment bonus payable with respect to any single 

enlistment from $3,000 to $5,000, and the Uniformed Services Pay Act of 1981, Public 

Law 97-60, §117(b)(1), 95 Stat. 989, 996 (1981), further increased the maximum from 

$5,000 to $8,000, while at the same time providing that the first installment of the bonus 

could not exceed $5,000, with the remainder to be paid in equal periodic installments 

payable not less frequently than once every three months. As reflected in relevant 

Congressional reports, these increases were adopted because of the "need to ensure that 

the active Armed Forces not only have the total number of persons required, but that 

those recruited ... have the ability to use and maintain the increasingly more sophisticated 

weapons with which those forces are being equipped" and in response to the conviction 

 House Report No. 100-58 (Committee on Armed Services), p. 205, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

8 See, e.g., House Report No. 100-446 (Committee of Conference), p. 644, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). 

603
that the "resources needed to attract the number and kinds of people required must be 

provided."9 10 The maximum amount of the bonus payable was again increased in 1989, 

this time from $8,000 to $12,000, with the first installment limited to a maximum of 

$7,000, by the National Defense Authorization Act for Fiscal Years 1990 and 1991, 

Public Law 101-189, §612(a)(1) and (2), 103 Stat. 1352, 1445-1446 (1989). This increase 

was authorized "to assist [especially the Army] in recruiting high quality personnel to fill 

critical skill requirements."11 As stated by the House Armed Services Committee, which 

had proposed the increase: 

Under current law, an individual who enlists in the Armed Forces in a 

critical skill may be paid an enlistment bonus of up to $8,000. The first 

installment of that bonus may not exceed $5,000. 

 Several of the services have begun to experience recruiting difficulties 

during the current fiscal year at a time when youth unemployment has declined 

markedly and private sector wages are on the rise. 

To assist the services in remaining competitive for high quality young 

men and women, [the bill] would increase the maximum bonus payable to 

$12,000, with the first installment not to exceed $7,000. 

 The committee expects the services to use this enhanced authority very 

judiciously, for only the most difficult-to-recruit skills, and anticipates that only 

the Army will exercise the authority during fiscal year 1990....12

Accordingly, between 1989 and 1999 the four-year enlistment bonus program authorized 

by 37 U.S.C. §308a offered a maximum bonus of $12,000 for a four-year enlistment, 

 

9 House Report No. 97-109 (Part 1) (Committee on Armed Services), p. 5, accompanying H.R. 3380, 97th

Congress, 1st Session (1981). See House Report No. 97-109 (Part 2) (Committee on Appropriations), pp. 8-

9, accompanying H.R. 3380, 97th Congress, 1st Session (1981); Senate Report No. 97-146 (Committee on 

Armed Services), p. 11, accompanying S.1181, 97th Congress, 1st Session (1981); and House Report No. 

97-265 (Committee of Conference), p. 24, accompanying S.1181, 97th Congress, 1st Session (1981). See 

also Senate Report No. 96-826 (Committee Armed Services), pp. 122-125, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). 

10 The $5,000 limit on the amount of the first installment of an enlistment bonus payment was adopted 

because of budgetary concerns. 

11 House Report No. 100-331 (Committee of Conference), p. 585, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

12 House Report No. 101-121 (Committee on Armed Services), p. 275, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

604
with a maximum payment of $7,000 authorized for the first installment. The National 

Defense Authorization Act for Fiscal Year 2000, Public Law 106-65, 113 Stat. 652, 

increased the maximum bonus from $12,000 to $20,000, with payments to be made either 

in a single lump sum or in installments. The Senate Armed Services Committee made this 

comment on the rationale for these changes: 

The committee believes [that] increasing the maximum amount of and 

paying the enlistment bonus in a lump-sum will serve as an incentive to enlistees 

to successfully complete their skill training.13

 The National Defense Authorization Act for Fiscal Year 2001, Public Law 106-

398, 114 Stat. 1654A-152 prescribed a single enlistment bonus of $20,000 for all 

enlistees with designated special skills (see below). 

In recognition of special recruiting problems confronting the Army, the 

Uniformed Services Pay Act of 1981, Public Law 97-60, §117(c)(1), 95 Stat. 989, 996 

(1981), also adopted a special provision, codified as 37 U.S.C. §308f, allowing the Army 

to pay an enlistment bonus, in the maximum amount of $4,000, to recruit high school 

graduates (or persons who have received equivalency certificates) who score at or above 

the fiftieth percentile on the Armed Forces Qualification Test (frequently referred to as 

the "AFQT") and who enlist for at least three years in a skill designated as critical. As 

previously indicated, the standard enlistment bonus payable under 37 U.S.C. §308a may 

be paid only to persons enlisting for four or more years, and Congress felt that, in light of 

the Army's special problems in attracting and retaining the "number and kinds of people 

required" to deal with the "increasingly more sophisticated weapons," a special recruiting 

tool was needed.14 For this reason, it authorized "a one-year test program" to determine 

whether a lower bonus for a three-year enlistment could produce an enlisted profile 

 

13 Senate Report 106-050 (Committee on Armed Services), accompanying S. 1059, 106th Congress, 1st

Session (1999). 

14 House Report No. 97-109 (Part 1) (Committee on Armed Services), pp. 5-7, accompanying H.R. 3380, 

97th Congress, 1st Session (1981). 

605
adequate to meet the specialized needs of the modern Army.15 The authority for what 

originally began as a "one year test program" has subsequently been extended six times: 

first, to September 30, 1984, by the Act of March 30, 1983, Public Law 98-14, §2, 97 

Stat. 55 (1983); second, to September 30, 1987, by the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §621(a), 98 Stat. 2492, 2540 (1984); third, 

to September 30, 1992, by the National Defense Authorization Act for Fiscal Years 1988 

and 1989, Public Law 100-180, §626(a), 101 Stat. 1019, 1104 (1987); 16 fourth, to 

September 30, 1995, by the National Defense Authorization Act for Fiscal Year 1994, 

Public Law 103-160, §613(e), 107 Stat 1547, 1681 (1993);17 fifth, to September 30, 1996, 

by the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, 

 

15 House Report No. 97-109 (Part 1) (Committee on Armed Services), pp. 5-7, accompanying H.R. 3380, 

97th Congress, 1st Session (1981). Also see House Report No. 97-265 (Committee of Conference), p. 24, 

accompanying S.1181, 97th Congress, 1st Session (1981). 

16 The same compromise concerning the length of the extension under the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §621(a), 98 Stat. 2492, 2540 (1984), and the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §626(a), 101 Stat. 1019, 

1104 (1987), was reached for the Section 308f enlistment bonus, 37 U.S.C. §308f, as was reached for the 

Section 308a, 37 U.S.C. §308a, enlistment bonus. See footnotes 7 and 8 to this chapter, above, respectively. 

17 When Congress extended the termination date for the critical-skills enlistment bonus program authorized 

by 37 U.S.C. §308a from September 30, 1992, to September 30, 1993, in the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, 106 Stat. 2315 (1992)--see text 

accompanying footnote 11 to this chapter, above--it did not make a comparable extension to the Army 

enlistment bonus program authorized by 37 U.S.C. §308f. Neither the House or Senate Armed Services 

Committees gave any reason for not extending the termination date for the Army bonus enlistment 

program. Indeed, neither even mentioned the Army enlistment bonus program. cf. House Report No. 102-

527 (Committee on Armed Services), pp. 243-244, accompanying H.R. 5006; Senate Report No. 102-352 

(Committee on Armed Services), p. 208, accompanying S. 3114; and House Report No. 102-966 

(Committee of Conference), p. 612, accompanying H.R. 5006, 102d Congress, 2d Session (1992). When in 

November of 1993 Congress again extended the termination date for the critical-skills enlistment bonus 

program of 37 U.S.C. §308a from September 30, 1993, to September 30, 1995, it at the same time extended 

the termination date for the Army enlistment bonus program from September 30, 1992, to September 30, 

1995. National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §613(e), 107 Stat 

1547, 1681 (1993). In so doing, it specifically made the extension applicable to any Army enlistments that 

occurred on or after September 30, 1992, National Defense Authorization Act for Fiscal Year 1994, id., 

§613(h)(3), 107 Stat. at 1682, thereby effectively filling in the period of lapsed authority. No separate 

reason was given for extending the Army enlistment bonus program after a 14-month period of lapsed 

authority. See House Report No. 103-200 (Committee on Armed Services), pp. 294-295, accompanying 

H.R. 2401; Senate Report No. 103-112 (Committee on Armed Services), p. 152, accompanying S. 1298; 

and House Report No. 103-357 (Committee of Conference), p. 683, accompanying H.R. 2401, 103d 

Congress, 1st Session (1994). Indeed, the fact that the Army enlistment bonus authority was not even 

separately mentioned together with the fact that the extension of the program was given retroactive effect 

could support the conclusion that the failure to extend the authority in the National Defense Authorization 

Act for Fiscal Year 1993, Public Law 102-484, 106 Stat. 2315 (1992), was inadvertent. 

606
§613(c), 108 Stat. 2663, 2783 (1994); and to September 30, 1997, by the National 

Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §613(c), 110 Stat. 

186, 359 (1996), and by 18 In support of the 1994 extension of the Army enlistment bonus 

authority almost a full year before it was otherwise due to expire, the Senate Armed 

Services Committee, which was the moving force behind the extension, merely noted that 

it "recommended" the extension for the critical-skills enlistment bonus program 

authorized by 37 U.S.C. §308a; no separate mention was made of the Army enlistment 

bonus program.19 The national defense authorization acts for fiscal years 1997 through 

2000 prescribed the same one-year extensions as had been the norm in most of the 

previous years. 

The National Defense Authorization Act for Fiscal Year 2001, Public Law 106-

398, 114 Stat. 1654A-152, made the $20,000 bonus applicable to individuals with critical 

skills who enlist for as little as two years. U.S.C. 37 §309, which was created by that 

legislation, consolidated the enlistment bonus programs under one set of conditions, 

repealing §§308a and 308f. Those sections had respectively prescribed enlistment 

bonuses for “skill[s] designated as critical” (a minimum four-year enlistment) and for 

enlistees with a critical skill but an education level of high school or its equivalent (a 

minimum two-year enlistment, which had been reduced from three years by the National 

Defense Authorization Act for Fiscal Year 2000, Public Law 106-65). Under 37U.S.C. 

§308f, the latter category had received a maximum bonus of $6,000. In the words of the 

House Armed Services Committee: 

 

18 The House bill, H.R. 1530, 104th Congress, 1st Session (1995), contained a provision--§613--that would 

have extended the 37 U.S.C. §308f authority for two years, whereas the Senate bill, S. 1026, 104th

Congress, 1st Session (1996), contained a provision--also §613--that would have extended the authority for 

only one year. A one-year extension was agreed to in conference. House Report No. 104-450 (Committee 

of Conference), pp. 805-806, accompanying S. 1124, 104th Congress, 2d Session (1996), and House Report 

No. 104-406 (Committee of Conference), pp. 815-816, accompanying H.R. 1530, 104th Congress, 1st

Session (1996); cf. House Report No. 104-131 (Committee on National Security), p. 231, accompanying 

H.R. 1530, 104th Congress, 1st Session (1995), and Senate Report No. 104-112 (Committee on Armed 

Services), pp. 254-255, accompanying S. 1026, 104th Congress, 1st Session (1995). 

19 Senate Report No. 103-282 (Committee on Armed Services), pp. 193-194, accompanying S. 2182, 103d 

Congress, 2d Session (1994); Cf. House Report No. 103-701 (Committee of Conference), p. 713, 

accompanying S. 2182, 103d Congress, 2d Session (1994). 

607
This section would consolidate existing enlistment bonus authorities and 

establish a maximum amount of $20,000 that may be paid to any enlistee.20

Thus the two enlistment bonus programs, whose coexistence had begun with the 

establishment of the three-year enlistment program by the Uniform Services Pay Act of 

1981, were combined with a single bonus maximum of $20,000. The repeal of 37 U.S.C. 

§308a and §308f effectively replaced those sections’ specific references to “a person who 

enlists in an armed force for a period of at least four years in a skill designated as critical” 

(§308a) and the specific educational requirements for two-year enlistees (§308f) with the 

more general description of potential recipients of the enlistment bonus in the new §309: 

“a person who enlists in an armed force for a period of at least 2 years.” 

The Air Force did not use the existing enlistment bonus authority before 1981 in 

its recruiting efforts, and the Navy temporarily suspended its use of the program in 1977 

and 1978. The Army and the Marine Corps are the only services that have consistently 

used the program. 

 ____________________________ 

To reiterate: notwithstanding statutory authority explicitly countenancing the use 

of enlistment bonuses for recruitment purposes, Section 514 of Title 10, United States 

Code, 10 U.S.C. §514, continues to prohibit the use of "bounties" for those purposes: 

(a) No bounty may be paid to induce any person to enlist in an armed force. A 

clothing allowance or enlistment bonus authorized by law is not a bounty for the 

purposes of this section. 

(b) No person liable for active duty in an armed force under this subtitle may 

furnish a substitute for that active duty. No person may be enlisted or appointed in 

an armed force as a substitute for another person. 

As made clear by subsection (a) of Section 514, an "enlistment bonus authorized 

by law" is not one of the prohibited "bounties," even when transparently made to induce a 

person to enlist in an armed force. Arguably, any other form of payment--whether 

involving present or deferred compensation--made to induce a person to enlist in an 

 

20 House Report 106-616 (Committee on Armed Services), accompanying H.R. 4205, 106th Congress, 2d 

Session (2000). 

608
armed force could be viewed as a prohibited "bounty," although any payment made 

pursuant to specific statutory authorization could always be argued to be an "enlistment 

bonus," even if not explicitly characterized as such. Clearly, however, any payment not 

authorized by law made to induce a person to enlist in an armed force runs the risk of 

being characterized as a "bounty"--and an unlawful "bounty" at that. 

Current rates of pay authorized: The maximum critical skills enlistment bonus 

currently authorized under 37 U.S.C. §309 is $20,000. The enlistment bonus may be paid 

in a lump sum or in equal periodic installments. 

Cost: For the cost of the enlistment bonus from 1972 to 2004, see Table II-31 of 

Military Compensation Statistics Tables, volume II of this edition. 

609
Chapter II.E.2.c. 

 Selective Reenlistment Bonus (SRB) 

Legislative Authority: 37 U.S.C. §308.1

Purpose: To provide a monetary incentive to encourage the reenlistment of 

sufficient numbers of qualified enlisted uniformed services personnel in critical skill 

specialties with high training costs or demonstrated retention shortfalls. 

Introduction: Unlike the enlistment bonus, which until recently was used chiefly 

as a device for raising military forces during a war or other national emergency,2

 the 

primary purpose of the reenlistment bonus has been to maintain an adequate level of 

experienced and qualified enlisted personnel in the peacetime forces of the uniformed 

services. Legislative authority for a reenlistment bonus of one form or another has existed 

continuously since shortly after the Revolutionary War under a number of different 

names: "bounty for reenlistment" (until the word "bounty" grew to have unfavorable 

connotations3

); honorable discharge gratuity; enlistment allowance; reenlistment 

allowance; reenlistment bonus; regular reenlistment bonus; variable reenlistment bonus; 

and selective reenlistment bonus. Even the longevity pay steps now included in basic pay 

rates were originally conceived as reenlistment incentives. Although the various 

reenlistment bonus programs have been drastically changed over time, one thread is 

common to all: in order to qualify for the bonus, a member must serve "continuously" or 

reenlist "immediately." This "now-or-never" arrangement, though integral to all the 

programs, has always been applied more flexibly than the ordinary meaning of the terms 

 

1 The present chapter also deals with the incentive special pay program authorized at 37 U.S.C. §312a for 

nuclear-trained and qualified enlisted members. See footnotes 29 and 30 to this chapter together with 

accompanying text, below. 

2 The Act of September 28, 1971 (Military Selective Service Act Amendments of 1971), Public Law 92-

129, §203(a), 85 Stat. 348, 358 (1971), which added Section 308a to Title 37, United States Code, was the 

first enlistment bonus authority that was targeted to filling vacancies in particular military skills as opposed 

to more wholesale and indiscriminate raising of troops. See text accompanying footnotes 1 through 6 of 

Chapter II.E.2.b., "Enlistment Bonus," above. 

3

 See discussion of "bounties" generally in text accompanying footnotes 4 through 6 in Chapter II.E.2.b., 

"Enlistment Bonus," above. 

610
"continuous" and "immediate" might suggest. Depending on the bonus involved, a nondisqualifying break in service of from 24 hours to three months has been allowed. 

Background: The Act of March 3, 1795, ch. 44, §6, 1 Stat. 430 (1795), provided 

the first authority for the payment of a "bounty" or bonus to persons reenlisting in the 

armed forces of the United States.4

 It established a "bounty of sixteen dollars" to "be 

allowed and paid to each soldier now in the service of the United States, or discharged 

therefrom subsequent to the third day of March last [1794], who shall re-enlist" in the 

service of the United States. The Act of March 2, 1833, ch. 68, §3, 4 Stat. 647 (1833), 

replaced the fixed-sum reenlistment "bounty" with an award of two months' pay. Since 

that same Act also prescribed enlisted pay rates that ranged from $6 to $16 a month, the 

change was not particularly significant in terms of bonus dollars. The Act of July 5, 1838, 

ch. 162, §29, 5 Stat. 256, 260 (1838), increased the bonus to three months' pay 

accompanied by a warrant for 160 acres of public land after ten years of service. 

However, for reasons obscured by time, the land warrant was repealed just two days later. 

All these bonus provisions applied only to members of the Army. 

The lump-sum reenlistment bonus was replaced in the Act of August 4, 1854, ch. 

247, §2, 10 Stat. 575 (1854), by a system under which Army enlisted personnel received 

a $2 monthly addition to their regular pay during their first continuous reenlistment and a 

further addition of $1 per month during each succeeding reenlistment. Since the length of 

Army enlistments and reenlistments was then fixed at five years, these additions to pay, 

referred to as "bounties for reenlistment," were distinguishable from five-year longevity 

pay steps only by the fact that they were based on continuous cumulative service rather 

than total cumulative service. The Act of August 5, 1854, ch. 268, §1, 10 Stat. 583, 586 

(1854), authorized the same additional pay for enlisted Marines. The Act of March 2, 

 

4 The first enlistment bonus, or "bounty," had been authorized by the Act of March 3, 1791, ch. 28, §4, 1 

Stat. 222 (1791). See text accompanying footnote 2 to Chapter II.E.2.b., "Enlistment Bonus," above. Since 

the normal enlistment period at that time was three years, persons who had enlisted in response to the 

inducements offered by the Act of March 3, 1791, ch. 28, id., had begun to finish their terms of obligated 

service in March of 1794 and following, and it was determined that incentives should be offered to 

persuade them to reenlist. 

611
1855, ch. 136, §2, 10 Stat. 627 (1855), established what was in effect a reenlistment 

bonus equal to three months' pay for Navy enlisted personnel who had been honorably 

discharged and who had reenlisted within three months of discharge. Referred to again as 

a "bounty for reenlistment," the "bounty" was in fact a lump-sum bonus that gave Navy 

enlisted personnel three months' additional pay for reenlisting no matter whether they 

reenlisted immediately after being honorably discharged or waited three months before 

reenlisting.5

Until 1908, the Navy remained the only service with lump-sum reenlistment 

bonus authority. The Act of March 3, 1899, ch. 413, §16, 30 Stat. 1004, 1008 (1899), 

however, modified the Navy's bonus provision by changing the length of reenlistment 

required for eligibility from three years to four years and by increasing the amount of the 

bonus from three months' to four months' pay. In addition, the Act of March 3, 1899, ch. 

413, id., established a Navy "continuous-service pay" that, conceptually, was the same as 

the Army and Marine Corps "bounty for reenlistment." The Navy item provided a $1.36 

monthly addition to regular pay for each continuous reenlistment. 

The Act of May 11, 1908 (Army Appropriation Act of 1909), ch. 163 [Public Law 

112, 60th Congress], 35 Stat. 106, 109-110 (1908), authorized a lump-sum bonus of three 

months' pay for Army privates, musicians, and trumpeters who entered a first 

reenlistment as well as a "continuous-service pay" increase. This authority was expanded 

by the Act of June 4, 1920 (National Defense Act Amendments of 1920), ch. 227 [Public 

Law 242, 66th Congress], §27, 41 Stat. 759, 775 (1920), which fixed the Army term of 

reenlistment at three years, removed the grade and first reenlistment restrictions applying 

to the bonus under the Act of May 11, 1908, ch. 163, id., and provided a lump-sum bonus 

of $90 for all reenlistments.6

 The National Defense Act Amendments of 1920, ch. 227, 

id., §4, 41 Stat. at 761, also repealed the "bounty for reenlistment" that had been in effect 

 

5

Although referred to as a "bounty for reenlistment," the payment could be analogized to a lump-sum leave 

payment—equal to three months' pay--that was payable only to honorably discharged Navy enlisted 

personnel who reenlisted within three months of being discharged. 

6

cf. Act of June 4, 1920 (National Defense Act Amendments of 1920), ch. 227 [Public Law 242, 66th

Congress], §4, 41 Stat. 759, 761 (1920). 

612
since 1854 and in its place established a "continuous-service pay" of 10 percent of 

enlisted base pay for each five years of consecutive service, up to a maximum of 40 

percent. This Army provision also applied to Marine Corps enlisted personnel because of 

a statute that linked the pay of those two services. 

A second Act of June 4, 1920 (Navy Appropriation Act of 1921), ch. 228 [Public 

Law 243, 66th Congress], §7, 41 Stat. 812, 836 (1920), fixed the term of reenlistment in 

the Navy and Marine Corps as two, three, or four years, and authorized a concomitant 

reenlistment bonus of two, three, or four months' pay, respectively. Because this law 

specifically covered the Marine Corps, the bonus provisions for that service were 

governed by it rather than by the general statute linking Army and Marine Corps pay. 

In summary, as of 1920 Navy personnel were entitled to a reenlistment bonus of 

two, three, or four months' pay and to "continuous-service pay" of $1.36 per month for 

each consecutive reenlistment; Army personnel were entitled to a reenlistment bonus of 

$90 and to "continuous-service pay" of 10 percent of base pay for each five years of 

consecutive service; and Marine Corps personnel were entitled to the Navy reenlistment 

bonus but the Army "continuous-service pay." 

The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 

[Public Law 235, 67th Congress], §9 (Army and Marine Corps) and §10 (Navy), 42 Stat. 

625, 629-630 (1922), brought a degree of order, but not uniformity, to this chaotic 

situation. It established a service-wide form of reenlistment bonus called, arguably 

misleadingly, an "enlistment allowance." The "enlistment allowance," though payable 

only upon reenlistment, was computed by multiplying the number of years served in the 

term of enlistment from which last discharged by $50 for members of the first three 

grades,7

 and by $25 for members of other grades.8 The Navy bonus could not exceed 

$200 for members of the first three grades, $100 for members of other grades, but no 

 

7 Present pay grades E-7, E-6, and E-5 

8 Present pay grades E-4, E-3, E-2, and E-1. 

613
ceiling was placed on Army or Marine Corps bonuses. Additional pay for consecutive 

service was displaced by additional pay based on length of service, without regard to 

continuity. Terminologically, "continuous service pay" was replaced by "permanent 

addition[s] to pay." Here, too, the Navy provision was slightly different from the other 

services. Navy enlisted personnel were entitled to an additional 10 percent of base pay 

upon completion of four years of service and to a further five percent for each subsequent 

four years of service, not to exceed a total of 25 percent. Army and Marine Corps enlisted 

personnel were entitled to a straight 5 percent addition for each four years of service, not 

to exceed 25 percent. The evolution of this pay from a "bounty for reenlistment," to a 

"continuous-service pay," to a "permanent addition to pay" completed its transformation 

from a special pay specifically intended as a reenlistment inducement to a regular pay 

that recognized and rewarded the value of experience. 

Payment of reenlistment bonuses was suspended during the depression years, 

from July 1, 1933, through June 30, 1939. The Pay Readjustment Act of 1942, ch. 413 

[Public Law 607, 77th Congress], §10, 56 Stat. 359, 364 (1942), effectively re-adopted the 

reenlistment bonus provisions of the Joint Service Pay Readjustment Act of 1922, ch. 

212, id., as applied to members of the Army and Marine Corps. Under the Pay 

Readjustment Act of 1942, ch. 413, id., §10, 56 Stat. at 364, enlisted personnel in the first 

three grades of all services who reenlisted were entitled to an "enlistment allowance" 

computed by multiplying $50 by the "number of years served in the enlistment period 

from which he has last been discharged," while enlisted personnel in other grades were 

entitled to an "enlistment allowance" computed by multiplying $25 by the "number of 

years served...." The Armed Forces Voluntary Recruitment Act of 1945, ch. 393 [Public 

Law 190, 79th Congress], §8, 59 Stat. 538, 541 (1945), provided that the bonus be 

computed for all grades by multiplying the number of years served in the term of 

enlistment from which last discharged by $50, instead of by $50 for the first three grades 

and $25 for the other four grades. There was, however, no fundamental change to the 

bonus system between 1922 and 1949. 

The Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§207, 63 Stat. 802, 811-812 (1949), restructured the reenlistment bonus so that it would 

614
more effectively serve the purpose for which it was intended by (1) tying the amount of 

the bonus to the number of years to be served rather than to service already performed, 

(2) increasing the bonus in proportion to the length of the reenlistment period so as to 

encourage longer reenlistments, and (3) placing a career dollar and number limit on 

bonuses so that no bonus would be payable for the last few years of service. Specifically, 

the Career Compensation Act of 1949, ch. 681, id., §207(a), 63 Stat. at 811, authorized a 

bonus of $40, $90, $160, $250, or $360 for a reenlistment of two, three, four, five, or six 

years, respectively. The bonus could not be paid for obligated service in excess of 30 

years and was limited to a cumulative career total of $1,440. No more than four bonuses 

could be paid to any one person.9

The reenlistment bonus provisions adopted in the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §207, 63 Stat. 802, 811-812 (1949), 

derived from recommendations made to the secretary of defense by the Advisory 

Commission on Service Pay, the so-called Hook Commission, which undertook the first 

comprehensive study of military compensation since 1908. In making its 

recommendation on reenlistment bonuses to the secretary of defense, which were later 

adopted essentially without change by Congress, the Hook Commission stated: 

Today, and for some time, a special payment has been offered to 

encourage men in the enlisted grades to renew their terms of service regularly and 

so build a career of continuing duty. The Commission favors the continuance of 

such an inducement. 

The present system, giving a man a bonus of $50 per year for the number 

of years of the preceding enlistment, does not adequately serve the purpose for 

which it was intended. True, it is some incentive to reenlist, but it is essentially 

based on the service performed, rather than on the service promised. The latter 

principle is clearly the more logical and should be incorporated to render the 

bonus more effective. 

 

9 The reenlistment bonus provisions of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 

81st Congress], §207, 63 Stat. 802, 811-812 (1949), were initially classified to 37 U.S.C. §239. See 37 

U.S.C. §239 (1952). Later, when Title 37 of the United States Code was enacted into positive law by the 

Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the reenlistment bonus provisions 

deriving from the Career Compensation Act of 1949, as amended, were codified at 37 U.S.C. §308. 

615
 To correct this situation, the Commission, concurring with the 

Services, suggests, first, that the bonus should be based on the number of years 

for which a man is reenlisting; second, it should be increased in proportion to the 

length of his reenlistment period; third, it should require a man's reenlistment 

within a reasonable time in order to insure continuous service; and fourth, the 

number of bonuses which a man may draw should be limited so that there will be 

no bonus for a reenlistment to complete the last few years of service.10

By 1954 Congress had, on the basis of experience with the reenlistment bonus 

program under the Career Compensation Act of 1949, ch. 681, id., come to question the 

efficacy of the program for the purposes intended and concluded that the effectiveness of 

the program could be improved by directing more of the available bonus dollars into firstterm reenlistments and progressively less into second and subsequent reenlistments. 

Accordingly, the Act of July 16, 1954, ch. 535 [Public Law 506, 83d Congress], §2, 68 

Stat. 488, 488-489 (1954), modified the program and authorized a bonus of one month's 

basic pay for each year of a first reenlistment; two-thirds of one month's basic pay for 

each year of a second reenlistment; one-third of one month's basic pay for each year of a 

third reenlistment; and one-sixth of one month's basic pay for each year of a fourth or 

subsequent reenlistment. It also provided that the bonus could not be paid for obligated 

service in excess of 20 years, although it did raise the cumulative career ceiling on 

bonuses from $1,440 to $2,000. This "regular" reenlistment bonus remained in full 

operation until the Armed Forces Enlisted Personnel Bonus Revision Act of 1974, Public 

Law 93-277, §2(1), 88 Stat. 119, 119-120 (1974), provided for its gradual elimination 

starting June 1, 1974.11 Members on active duty on June 1, 1974, who would have been 

eligible at the end of their current or subsequent enlistments for the bonus as it existed on 

May 31, 1974, continued to be eligible. 

The history of the current "selective reenlistment bonus" program can be traced to 

1965, when the military services began to experience increasing problems in first-term 

 

10 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” pp. 30-31, December 1948. 

11 See, e.g., Senate Report No. 93-659 (Committee on Armed Services), pp. 3, 11-12, accompanying S. 

2771, 93d Congress, 1st Session (1973); House Report No. 93-857 (Committee on Armed Services), pp. 3-

6, 12, accompanying S. 2771, 93d Congress, 2d Session (1974); and House Report No. 93-985 (Committee 

of Conference), pp. 3-4, accompanying S. 2771, 93d Congress, 2d Session (1974). 

616
retention and career manning in a number of technical, high-training-cost skills. In 

addressing the problem, the Department of Defense recommended the creation of a 

flexible reenlistment bonus program that could be tailored to fit particular skill retention 

requirements and that could be changed as those requirements changed. Congress 

responded favorably to the recommendation and established the "variable reenlistment 

bonus" (VRB) program in the Act of August 21, 1965, Public Law 89-132, §3, 79 Stat. 

545, 547 (1965). The regular reenlistment bonus authority was not disturbed; it continued 

side-by-side with the VRB program. The Act of August 21, 1965, Public Law 89-132, id., 

permitted the payment of an additional sum of not more than four times the amount of the 

regular reenlistment bonus to a member who was designated as having a critical military 

skill and who was reenlisting for the first time. In practice, four VRB award levels were 

designated based mainly on first-term training costs and career manning shortages in 

critical military skills. A qualified member having a skill at the highest level of criticality 

was authorized a VRB payment equal to four times the amount of his regular reenlistment 

bonus, in addition to the regular bonus; one having a skill at the next highest level was 

authorized a VRB of three times the amount of his regular bonus, in addition to the 

regular bonus; and so forth. Because of the $2,000 ceiling on regular bonuses, the largest 

potential VRB award was $8,000. The VRB program was terminated by the Armed 

Forces Enlisted Personnel Bonus Revision Act of 1974, Public Law 93-277, 88 Stat. 119 

(1974), covered more fully below. However, a member who had reenlisted under the 

program before June 1, 1974, retained eligibility for any unpaid VRB installments as they 

became due. 

Over the years, various deficiencies were noted in both the regular reenlistment 

bonus and VRB programs. The regular bonus had to be paid to any enlisted member 

accepted for reenlistment regardless of the criticality of his skill. It was estimated that, as 

a result, over $43 million was spent unnecessarily in fiscal years 1972 and 1973 to make 

payments to reenlistees serving in skills where sufficient retention would have been 

617
achieved without a monetary incentive to reenlist.12 VRB, on the other hand, was paid 

only for first reenlistments and was thus not responsive to retention problems occurring 

in critical skills at the second and later reenlistment points. To correct these deficiencies, 

the Department of Defense proposed the elimination of the regular bonus for new 

entrants and the expansion of VRB into a bonus that could be paid at any problem 

decision point during a member's first ten years of service. 

The essence of the Department of Defense proposal was adopted in the Armed 

Forces Enlisted Personnel Bonus Revision Act of 1974, Public Law 93-277, §2(1), 88 

Stat. 119, 119-120 (1974), the source of present "selective reenlistment bonus" (SRB) 

authority. The Act provided that SRB could be paid in an amount not to exceed $15,000 

to a member who had completed at least 21 months but not more than 10 years of active 

duty, who was designated as having a critical skill, and who reenlisted or extended his 

enlistment for at least three years. For computation purposes, the Act specified that 

obligated service in excess of 12 years could not be used in determining the amount of 

SRB payable for any enlistment that entailed obligated service extending beyond such 

period. SRB authority under the act was programmed to terminate June 30, 1977. This 

termination date was subsequently extended, first to September 30, 1978, by the Act of 

June 29, 1977, Public Law 95-57, §1(b), 91 Stat. 253 (1977), and then to September 30, 

1980, by the Department of Defense Appropriation Authorization Act, 1979, Public Law 

95-485, §802(b), 92 Stat. 1611, 1619 (1978). Retention and manning problems underlay 

both extensions. 

In 1980, the SRB eligibility criteria were broadened by the Department of 

Defense Authorization Act, 1981, Public Law 96-342, §804, 94 Stat. 1077, 1092 (1980), 

to allow members with up to 14 years of active service to participate. At the same time, 

the 1981 authorization act provided that obligated service in excess of 16 years could not 

be used in computing SRB payments under 37 U.S.C. §308. Concomitantly, the 

 

12 Increased Bonus and Special Pay for Military Physicians and Expansion of Enlistment Bonus and 

Revision of Reenlistment Bonus Authorities: Hearings on S. 2770 and S. 2771 before the Senate 

Committee on Armed Services, pp. 13-14, 93d Congress, 1st Session (1973) 

618
maximum bonus payable was increased from $15,000 to $20,000, although the House 

and Senate conferees directed that the $20,000 payment should be reserved for enlisted 

personnel in nuclear skills, whereas $16,000 was the maximum that should be available 

to other personnel.13 Finally, the termination date for the SRB program was extended to 

September 30, 1982. 

The Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, 

§3(f), 94 Stat. 3359, 3364 (1980), further amended 37 U.S.C. §308 to provide that an 

enlisted member who extended his obligated service, whether by actual reenlistment or 

by an extension of an existing enlistment, in order to retain eligibility for continuous 

submarine duty incentive pay, as adopted under the act, would not lose, or have adversely 

affected, his eligibility for a reenlistment bonus. In essence, under this amendment, an 

affected enlisted member could reenlist before the expiration of an existing term of 

obligated service and receive credit for such unexpired portion of service in computing 

the amount of any SRB entitlement. As explained in the relevant Congressional report, 

the reason for this special consideration for enlisted submariners was the "large shortfall 

in senior [Naval petty] officers" and the "requirement for a significantly large percentage 

of the submarine enlisted crew to be in these senior grades."14

The Uniformed Services Pay Act of 1981, Public Law 97-60, §117(a), 95 Stat. 

989, 996 (1981), further amended the SRB provisions to authorize any enlisted member 

to reenlist before the expiration of an extension of an existing enlistment and to use up to 

two years of the unexpired extension for which no bonus had been paid in determining 

his eligibility for, and the amount of, a reenlistment bonus under the SRB program.15

 

13 House Report No. 96-1222 (Committee of Conference), p. 96, accompanying H.R. 6974, 96th Congress, 

2d Session (1980). 

14 Senate Report No. 96-1051 (Committee on Armed Services), p.3, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). Also see id., p. 4. 

15 See House Report No. 97-109 (Committee on Armed Services), p. 12, accompanying H.R. 3380, and 

House Report No. 97-265 (Committee of Conference), pp. 23-24, accompanying S.1181, 97th Congress, 1st

Session (1981). 

619
The September 30, 1982, termination date for the SRB program has been 

extended a number of times: first, to December 17, 1982, by the Act of October 2, 1982, 

Public Law 97-276, §131, 96 Stat. 1186, 1197 (1982); second, to March 31, 1983, by the 

Act of December 21, 1982, Public Law 97-377, §798, 96 Stat. 1830, 1865 (1982); third, 

to September 30, 1984, by the Act of March 30, 1983, Public Law 98-14, §1, 97 Stat. 55 

(1983); fourth, to September 30, 1987, by the Department of Defense Authorization Act, 

1985, Public Law 98-525, §621(a), 98 Stat. 2492, 2540 (1984); fifth, to September 30, 

1992, by the National Defense Authorization Act for Fiscal Years 1988 and 1989, Public 

Law 100-180, §626(a), 101 Stat. 1019, 1104 (1987); 16 sixth, to September 30, 1993, by 

the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, 

§612(a), 106 Stat. 2315, 2421 (1992); seventh, to September 30, 1995, by the National 

Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §613(b), 107 Stat. 

1547, 1681 (1993); eighth, to September 30, 1996, by the National Defense Authorization 

Act for Fiscal Year 1995, Public Law 103-337, §613(b), 108 Stat. 2663, 2783 (1994); and 

to September 30, 1997, by the National Defense Authorization Act for Fiscal Year 1996, 

Public Law 104-106, §613(b), 110 Stat. 186, 359 (1996). The annual authorization acts 

for fiscal years 1997 through 2004 made similar one-year extensions in the program. 

Concern over retention and manning problems underlay these extensions, although in 

explanation of several recent extensions the House and Senate Armed Services 

Committees have merely noted that they were "recommend[ing]" an extension.17 As the 

 

16 The National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, 101 Stat. 

1019 (1987), was enacted on December 4, 1987, something over two months after the selective 

reenlistment bonus authority of the unamended 37 U.S.C. §308 had expired--namely, on October 1, 1987. 

Section 626(c) of the 1988/1989 Authorization Act, Public Law 100-180, id., §626(c), 101 Stat. at 1104, 

provided special coverage for persons who might have taken advantage of the selective reenlistment bonus 

program during the period of lapsed authority but for the fact that the authority had in fact expired. 

17 With respect to the Department of Defense Authorization Act, 1985, Public Law 98-525, §621(a), 98 

Stat. 2492, 2540 (1984), see House Report No. 98-691 (Committee on Armed Services), p. 257, 

accompanying H.R. 5167, 98th Congress, 2d Session (1984); Senate Report No. 98-500 (Committee on 

Armed Services), p. 208, accompanying S. 2723, 98th Congress, 2d Session (1984); and House Report No. 

98-1080 (Committee of Conference), p. 297, accompanying H.R. 5167, 98th Congress, 2d Session (1984). 

With respect to the National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-

180, §626(a), 101 Stat. 1019, 1104 (1987), see House Report No. 100-58 (Committee on Armed Services), 

p. 205, accompanying H.R. 1748, 100th Congress, 1st Session (1987); cf., House Report No. 100-446 

(Committee of Conference), p. 644, accompanying H.R. 1748, 100th Congress, 1st Session (1987). With 

respect to the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §612(a), 106 

Stat. 2315, 2421 (1992), see House Report No. 102-527 (Committee on Armed Services), p. 243, 

620
House Armed Services Committee noted in connection with the program extension 

authority made by the National Defense Authorization Act for Fiscal Years 1988 and 

1989, Public Law 100-180, 101 Stat. 1019 (1987): 

The enlistment [also covered by the extension] and selective reenlistment 

bonus programs have proven invaluable in recruiting and retaining high quality 

individuals for all components of the Total Force. The committee believes that 

these programs have permitted the services to selectively target their resources to 

meet service-unique accession and retention needs in a judicious and cost 

effective manner.18

In addition to extending the termination date for the SRB program to September 

30, 1987, as set out immediately above, the Department of Defense Authorization Act, 

1985, Public Law 98-525, §621(b), 98 Stat. 2492, 2540 (1984), also increased the 

maximum bonus payable under the program from $20,000 to $30,000, although it 

provided that not more than ten percent of the bonuses payable in any fiscal year could 

 accompanying H.R. 5006, and Senate Report No. 102-352 (Committee on Armed Services), p. 208, 

accompanying S. 3114, 102d Congress, 2d Session (1992); cf. House Report No. 102-966 (Committee of 

Conference), p. 713, accompanying H.R. 5006, 102d Congress, 2d Session (1992). With respect to the 

National Defense Authorization Act for Fiscal Year 1993, Public Law 103-160, §613(b), 107 Stat. 1547, 

1681 (1993), see House Report No. 103-200 (Committee on Armed Services), p. 294, accompanying H.R. 

2401, and Senate Report No. 103-112 (Committee on Armed Services), p. 152, accompanying S. 1298, 

103d Congress, 1st Session (1993); cf. House Report No. 103-357 (Committee of Conference), p. 683, 

accompanying H.R. 2401, 103d Congress, 1st Session (1994). With respect to the National Defense 

Authorization Act for Fiscal Year 1995, Public Law 103-337, §613(b), 108 Stat. 2663, 2783 (1994), see 

Senate Report No. 103-282 (Committee on Armed Services), p. 193, accompanying S. 2182, 103d 

Congress, 2d Session (1994); cf. House Report No. 103-701 (Committee of Conference), p. 713, 

accompanying S. 2182, 103d Congress, 2d Session (1994). With respect to the National Defense 

Authorization Act for Fiscal Year 1996, Public Law 104-106, §613(b), 110 Stat. 186, 359 (1996), see 

Senate Report No. 104-112 (Committee on Armed Services), p. 254, accompanying S. 1026, 104th

Congress, 1st Session (1995); cf. House report No. 104-131 (Committee on National Security), p. 231, 

accompanying H.R. 1530, 104th Congress, 1st Session (1995), House Report No. 104-406 (Committee of 

Conference), pp. 815-816, accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report 

No. 104-450 (Committee of Conference), pp. 805-806, accompanying S. 1124, 104th Congress, 2d Session 

(1996). 

18 House Report No. 100-58 (Committee on Armed Services), p. 205, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). (With respect to the National Defense Authorization Act for Fiscal Years 

1988 and 1989, Public Law 100-180, §626(a), 101 Stat. 1019, 1104 (1987), the House Armed Services 

Committee recommended a five-year extension of selective reenlistment bonus authority, to September 30, 

1992, House Report No. 100-446 (Committee of Conference), p. 644, accompanying H.R. 1748, 100th

Congress, 1st Session (1987), and House Report No. 100-58 (Committee on Armed Services), p. 205, 100th

Congress, 1st Session (1987), but the Senate Armed Services Committee recommended only a two-year 

extension, House Report No. 100-446 (Committee of Conference), p. 644, accompanying H.R. 1748, 100th

Congress, 1st Session (1987). The five-year extension initially recommended by the House Armed Services 

Committee was agreed to in Conference. House Report No. 100-446 (Committee of Conference), p. 644, 

accompanying H.R. 1748, 100th Congress, 1st Session (1987).) 

621
exceed $20,000. In explanation of the increase, the Committee of Conference19 stated as 

follows: 

The Senate amendment also contained a provision (§1028) that would 

remove the present statutory ceiling of $20,000 on the selective reenlistment 

bonus. However, under the Senate provision, no more than 10 percent of the 

selective reenlistment bonuses paid during any fiscal year could exceed $25,000. 

 The House bill contained no similar provision. 

 The House recedes with an amendment increasing the current $20,000 

ceiling for the selective reenlistment bonus to $30,000. However, no more than 10 

percent of the selective reenlistment bonuses paid during any fiscal year could 

exceed $20,000.20

In adopting the increase in the maximum SRB authorized, Congress was 

implicitly acceding to a portion of the recommendations of the Fifth Quadrennial Review

of Military Compensation.

21 In 1984, the Fifth Quadrennial Review recommended that 

the "dollar ceiling should be removed; ... eliminate bonus cap; ... lift pay cap."22 Although 

Congress did not completely remove the "dollar ceiling," it did raise the "ceiling" by 50 

percent. 

 

19 Although both the House and Senate Armed Services Committees issued reports on the Department of 

Defense Authorization Act, 1985, Public Law 98-525, §621(b), 98 Stat. 2492, 2540 (1984), neither the 

House Report (No. 98-691 (Committee on Armed Services), accompanying H.R. 5167, 98th Congress, 2d 

Session (1984)) nor the Senate Report (No. 98-500 (Committee on Armed Services), accompanying S. 

2723, 98th Congress, 2d Session (1984)) dealt with the increase in the maximum SRB payment authorized. 

(The provision effecting the increase came from a Senate floor amendment.) 

20 House Report No. 98-1080 (Committee of Conference), p. 297, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

21 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system. The 

Ninth Quadrennial Review of Military Compensation was convened in 1999, pursuant to Presidential 

directive, and its report and recommendations were submitted to Congress in late 2001. 

22 Executive Summary, Report of the Fifth Quadrennial Review of Military Compensation, p. VI-11, 

January 1984. See also Special and Incentive Pays, Report of the Fifth Quadrennial Review of Military 

Compensation, Volume III, pp. 688 (Finding No. 2) and 689 (Recommendation No. B.2), November 1983. 

622
In the Department of Defense Authorization Act, 1986, Public Law 99-145, §631, 

99 Stat. 583, 643 (1985), Congress further amended the SRB program to require that at 

least 75 percent of the bonus payable for reenlistment be paid "in a lump sum at the 

beginning of the period for which the bonus is paid, with any remaining amount paid in 

equal annual installments."23 In explanation of this requirement, the House Armed 

Services Committee noted: 

Currently, a service member eligible to receive a selective reenlistment 

bonus may receive a maximum of 50 percent of the selective reenlistment bonus 

upon reenlisting and the remaining 50 percent in installment payments during the 

reenlistment period. Although payment of the full bonus in a lump-sum is 

authorized, the Committee on Appropriations has limited the available funding to 

50 percent. In order to provide a greater up-front incentive to reenlist, the 

committee recommends providing 75 percent of the bonus upon reenlistment and 

the remaining 25 percent in installment payments during the reenlistment period. 

Providing a larger up-front monetary incentive to reenlist makes sense 

from the member's, as well as from the government's, standpoint. From the 

member's point of view, a larger cash payment at the beginning of the 

reenlistment period would provide a more attractive reason to reenlist as well as 

the means to place a down payment on a home, to pay tuition bills, or to make 

necessary family purchases. From the government's point of view, the initiative 

would increase the service's ability to retain high-quality individuals to fill critical 

specialties at no additional (and perhaps less) cost.24

The Department of Defense Authorization Act, 1986, Public Law 99-145, id., specified 

that the 75-percent-lump-sum requirement was to become effective October 1, 1986, the 

first day of fiscal year 1987.25

Notwithstanding the statutory requirement of 37 U.S.C. §308(b)(1) for 75 percent 

of a selective reenlistment bonus payment to be made in an up-front lump sum, the 

National Defense Authorization Act for 1987, Public Law 99-661, §663(a), 100 Stat. 

 

23 The amendment made to the SRB program by the Department of Defense Authorization Act, 1986, 

Public Law 99-145, §631, 99 Stat. 583, 643 (1985), is codified at 37 U.S.C. §308(b)(1). 

24 House Report No. 99-81 (Committee on Armed Services), pp. 229-230, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

25 Department of Defense Authorization Act, 1986, Public Law 99-145, §631(b), 99 Stat. 583, 643 (1985). 

See 37 U.S.C. §308 note. Also see House Report No. 99-235 (Committee of Conference), pp. 430-431, and 

Senate Report No. 99-118 (Committee of Conference), pp. 430-431, accompanying S. 1160, 99th Congress, 

1st Session (1985). 

623
3816, 3894 (1986), in a cost-reduction and -containment effort, limited the initial lump 

sum payment to 50 percent for fiscal year 1987. The National Defense Authorization Act 

for Fiscal Years 1988 and 1989, Public Law 100-180, §625(a), 101 Stat. 1019, 1104 

(1987), amended the 75 percent up-front lump-sum requirement to provide that the initial 

installment could not be less than 50 percent. As explained by the House Armed Services 

Committee: 

The fiscal year 1986 Defense Authorization Act ... provided that not less 

than 75 percent of a selective reenlistment bonus would be paid to an individual at 

the beginning of the period covered by the bonus. (The payment of the full bonus 

in a lump-sum was already authorized, but the Committee on Appropriations had 

limited the available funding to 50 percent.) Although Congress authorized this 

change in order to provide a greater up-front incentive for service members to 

reenlist, fiscal restraints prevented the implementation of the 75 percent lumpsum reenlistment bonus provision. 

 The committee continues to support the need for a greater up-front 

incentive to reenlist; however, current fiscal realities continue to make such bonus 

payments infeasible. Accordingly, the committee recommends prohibiting the 

payment of more than 50 percent up-front lump sum reenlistment bonus during 

fiscal years 1988 and 1989.26

As ultimately enacted, the National Defense Authorization Act for Fiscal Years 

1988 and 1989, Public Law 100-180, §625(a), 101 Stat. 1019, 1104 (1987), merely 

provided that the amount of an initial installment payment under the selective 

reenlistment bonus program could not be less than 50 percent of the amount of the total 

bonus--without any special additional restrictions for fiscal years 1988 and 1989.27

 

26 House Report No. 100-58 (Committee on Armed Services), pp. 206-207, accompanying H.R. 1748, 

100th Congress, 1st Session (1987). See Senate Report No. 100-57 (Committee on Armed Services), p. 147, 

accompanying S. 1174, 100th Congress, 1st Session (1987). cf., House Report No. 100-446 (Committee of 

Conference), p. 644, accompanying H.R. 1748, 100th Congress, 1st Session (1987).

27 The 50 percent upper limit on initial installments of selective reenlistment bonus payments has been 

effectively continued under successive appropriations acts--for fiscal year 1988, by the Act of December 

22, 1987 (Continuing Appropriations, 1988), Public Law 100-202, §8073, 101 Stat. 1329, 1329-74 (1987); 

for fiscal year 1989, by the Department of Defense Appropriations Act, 1989, Public Law 100-463, §8060, 

102 Stat. 2270, 2270-27 (1988); for fiscal year 1990, by the Department of Defense Appropriations Act, 

1990, Public Law 101-165, §9083, 103 Stat. 1121, 1147 (1989); for fiscal year 1991, by the Department of 

Defense Appropriations Act, 1991, Public Law 101-511, §8061, 104 Stat. 1856, 1888 (1990); for fiscal 

year 1992, by the Department of Defense Appropriations Act, 1992, Public Law 102-172, §8054, 105 Stat. 

1150, 1184 (1991); for fiscal year 1993, by the Department of Defense Appropriations Act, 1993, Public 

Law 102-396, §9052, 106 Stat. 1876, 1914 (1992); for fiscal year 1994, by the Department of Defense 

Appropriations Act, 1994, Public Law 103-139, §8039, 107 Stat. 1418, 1449 (1993); for fiscal year 1995, 

by the Department of Defense Appropriations Act, 1995, Public Law 103-335, §8035, 108 Stat. 2599, 2626 

624
The National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §611(a), 103 Stat. 1352, 1445 (1989), amended the preexisting selective 

reenlistment bonus program in two particulars. First, it increased the maximum selective 

reenlistment bonus payment from $30,000 to $45,000; second, it increased the multiplier 

used in determining the maximum amount of a bonus from six months of basic pay 

multiplied by the number of years of additional obligated service to ten months of basic 

pay multiplied by the number of years of additional obligated service. Under this 

amendment, the maximum amount of a selective reenlistment bonus payment was 10 

months of basic pay multiplied by the number of years of additional obligated service or 

$45,000, whichever is less. As indicated in the relevant Congressional report, the increase 

in the ceiling on selective reenlistment bonus payments and the change in the method for 

determining the amount of a particular payment was made at the urging of the 

Department of Defense: 

The Department of Defense requested authority to increase the ceiling on 

selective reenlistment bonuses for enlisted personnel. The current ceiling, 

provided for in section 308(a) of title 37, United States Code, is six months of 

basic pay multiplied by the number of years of additional obligated service, not to 

exceed six years or $30,000, whichever is less. The Department of Defense 

requested that the six months in the formula be increased to 10 months and the 

limit be increased to $45,000, whichever is less. 

 The committee recommends ... approval of the request. The committee 

expects this increased authority to be used only to improve the retention of 

enlisted nuclear personnel in the Navy.28

The National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, §615(a), 104 Stat. 1485, 1578 (1990), gave the secretary of defense authority to 

terminate selective reenlistment bonus installment payments to members who, without 

fault on their part, failed to complete enlistments for which they were continuing to 

receive SRB installment payments. 

 (1994); and for fiscal year 1996, by the Department of Defense Appropriations Act, 1996, Public Law 104-

61, §8030, 109 Stat. 636, 658 (1996). 

28 Senate Report No. 100-81 (Committee on Armed Services), p. 179, accompanying S. 1352, 101st

Congress, 1st Session (1989). The House, not having proposed any similar increase in the selective 

reenlistment bonus, acceded to the Senate recommendation in Conference. See, House Report No. 101-331 

(Committee of Conference), p. 585, accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

625
Preexisting law had effectively provided that members who voluntarily or because 

of misconduct did not complete enlistments for which they were receiving SRB payments 

or who were determined not to be technically qualified in the skill for which they were 

receiving SRB payments and who failed to complete enlistments for which they were 

receiving SRB payments were required to refund the percentage of the bonus that had, as 

of the date of their separation, been unearned. Members who were disqualified from the 

skill for which they were receiving or had received SRB payments because of injury, 

illness, or other impairment not the result of their own misconduct were exempted from 

the refund requirement. The National Defense Authorization Act for Fiscal Year 1991, 

Public Law 101-510, id., §615(a), 104 Stat. at 1578, thus gave the Department of Defense 

an option other than having to continue payments and require a refund: now, the 

Department of Defense may simply discontinue payments. The National Defense 

Authorization Act for Fiscal Year 2000, Public Law 106-65, 113 Stat. 652, raised the 

maximum payment from $45,000 to $60,000 and the multiplier used in determining the 

maximum bonus amount from ten months of basic pay to fifteen. 

The special pay for nuclear-trained-and-qualified enlisted members, codified at 37 

U.S.C. §312a, established by the Act of October 27, 1972, Public Law 92-581, §1(3), 86 

Stat. 1277, 1277-1278 (1972), falls into the reenlistment bonus category. By analogy to 

what the Senate Committee on Armed Services characterized as the "very successful" 

special continuation pay program for nuclear-trained-and-qualified officers,29 the Act of 

October 27, 1972, Public Law 92-581, id., authorized a payment of up to $15,000 to 

enlisted members "qualified for duty in connection with the supervision, operation, and 

 

29As noted by the Senate Committee on Armed Services in explanation of its adoption of the special pay 

for nuclear-trained-and-qualified enlisted members: 

The bill provides a special continuation pay for nuclear-qualified and experienced enlisted personnel who 

reenlist and continue to contribute their significant experience and technical expertise by serving on board 

the surface ships and submarines of the nuclear-powered fleet. It also would extend for 2 years the very 

successful officers continuation pay for officers serving in the nuclear submarine fleet and make that pay 

available to officers who are on active duty in connection with supervision, operation, and maintenance of 

naval nuclear power plants. 

Senate Report No. 92-1307 (Committee on Armed Services), p. 2, accompanying H.R. 16925, 92d 

Congress, 2d Session (1972). 

626
maintenance of naval nuclear propulsion plants" who reenlisted between their sixth and 

tenth year of active duty for at least two additional years. No payments were authorized 

under the program after June 30, 1975, 37 U.S.C. §312a(e) as added by the Act of 

October 27, 1972, Public Law 92-581, id., §1(3), although the statutory authority has 

never been repealed. Because the problem that led to the adoption of a special pay 

program for nuclear-trained-and-qualified enlisted personnel was so similar to the 

problems addressed by the selective reenlistment bonus program, discussed above, and 

because it was felt that the latter program could deal with the shortage of nuclear-trainedand-qualified enlisted personnel, the special pay program for such personnel has been 

effectively subsumed in the selective reenlistment bonus program.30 

A number of regulations have been adopted over the years by the secretary of 

defense for implementing SRB payment authority. First, three SRB eligibility "zones" 

were established: Zone A originally was comprised of reenlistments falling between 21 

months and six years of active duty, then the National Defense Authorization Act for 

Fiscal Year 2000, Public Law 106-65 reduced the minimum continuous service time to 

17 months; Zone B, of reenlistments falling between six and ten years of active duty; and 

Zone C, of reenlistments falling between ten and 14 years of active duty.31 Under these 

zones, a member completing between 17 months of continuous and six years of total 

active duty can qualify for a Zone A SRB; a member completing between six and ten 

years of continuous active duty can, whether or not he received a Zone A bonus, qualify 

for a Zone B SRB; and a member completing between ten and 14 years of continuous 

active duty can, whether or not he received a Zone A or B bonus, qualify for a Zone C 

 

30 Presumably, the authority for special pay for nuclear-trained-and-qualified enlisted personnel was not 

extended past June 30, 1975, because of the intervening adoption of selective reenlistment bonus authority 

in the Armed Forces Enlisted Personnel Bonus Revision Act of 1974, Public Law 93-277, §2(1), 88 Stat. 

119, 119-120 (1974), discussed above. 

31 Zone A - "at least 21 months of continuous active duty ... but not more than 6 years of active duty on the 

date of reenlistment or beginning of an extension of enlistment"; Zone B - "at least 6 but not more than 10 

years of active duty on the date ..."; and Zone C - "at least 10 but not more than 14 years of active duty on 

the date...." Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10911(b), (c), and (d), 

respectively. 

627
SRB.32 In order to qualify for an SRB payment for any zone, the member must possess a 

"critical" skill33 and reenlist or extend an existing enlistment for at least three years. In 

addition, for a Zone A SRB the reenlistment or extension must, when combined with the 

member's existing active service time, add up to at least six years of service; for Zone B, 

to at least 10 years of service; and for Zone C, to at least 14 years of service.34

Second, to be eligible for either a Zone A, a Zone B, or a Zone C SRB payment, a 

member must be in pay grade E-3 or higher35 and must reenlist (or extend an existing 

enlistment) within three months of discharge or release from active duty.36 With respect 

to the actual computation of SRB payments, six levels of skill criticality have been 

authorized for the military services.37 The bonus for any given member is computed by 

multiplying his designated skill criticality level, or "multiple," by his monthly basic pay, 

and multiplying that product by the number of his years, including fractional parts 

 

32 No enlisted member of an armed force may receive more than one SRB payment for an enlistment 

within any one zone. Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10911(b), (c), and (d). Also 

see id., at ¶10912(b)(4). 

33 That is, the member must be "qualified in a military specialty designated by the Secretary of the 

[member's] military department ... for award of the SRB." Department of Defense Financial Management 

Regulation, Military Pay: Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 

7000.14-R, ¶10911(a)(1). 

34 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10911(b)(2) [Zone A]; (c)(2) [Zone B]; and 

(d)(2) [Zone C]. 

35 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10911(a)(2). 

36 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10911(a)(3). 

37 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10912 and (b)(1). 

628
thereof, of additional active obligated service.38 Obligated service in excess of 16 years 

cannot be used in the computation.39

Current rate of pay authorized: The maximum selective reenlistment bonus that 

may currently be paid to qualifying enlisted members is $60,000. Subsection (b) of U.S. 

Code § 308 stipulates that the initial payment be not less than 50 percent of the total 

bonus amount, with the remainder to be paid in equal annual installments over the 

remainder of the reenlistment period. 

Cost: For the cost of reenlistment bonuses from 1975 to 2004, see Tables II-32 of 

Military Compensation Statistics Tables, volume II of this edition. 

 

38 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶10912(b)(1). 

39 That is, while the computation of the amount of an SRB payment is based, among other things, on the 

number of years involved in a reenlistment (or an extension of an existing enlistment), obligated service in 

excess of 16 years may not be taken into account in the computation. Department of Defense Financial 

Management Regulation, Military Pay: Policy and Procedures for Active Duty and Reserve Pay, Volume 

7A, DOD 7000.14-R, 10912(b)(2). 

629
Chapter II.E.2.d. 

 Critical Skills Retention Bonus 

 Legislative Authority: 37 U.S.C. §323. 

Purpose: To provide an incentive for qualified enlisted and officer personnel with 

skills designated as critical to remain on active duty, extending the availability of those 

skills for application in key positions. 

Background: In order to better ensure an ongoing, adequate number of personnel 

having skills critical to Armed Forces operations, Congress established the critical skills 

retention bonus in the National Defense Authorization Act for Fiscal Year 2001, Public 

Law 106-398, 114 Stat. 1654A-157. The skills for which such a bonus is paid are 

designated as critical by the Secretary of Defense or, in the case of the Coast Guard when 

it is not acting as a service of the Navy, the Secretary of Transportation. The critical skills 

retention bonus (CSRB), which applies to both enlisted and officer personnel, is offered 

to members with designated skills who reenlist, voluntarily extend enlistment, or agree to 

remain on active duty for a period of at least one year. In the case of officers, such a 

commitment is in the form of a written agreement to remain on duty for at least one year. 

Enlisted members reenlist or volunteer to extend their current enlistment for at least one 

year. The bonus under this provision can be received more than once, but the maximum 

total amount of the bonuses is $200,000. Members who have completed 25 or more years 

of active duty, or who would complete that amount of active duty before the end of the 

bonus period, are not eligible. The bonus may be received in conjunction with another 

type of incentive bonus. 

The CSRB has been applied differently by the services and by types of skill. The 

Navy has applied it only to surface warfare officers and submarine support officers. In 

2002 and 2003, the Air Force offered CSRB contracts of one to four years to officers in a 

variety of positions. However, since 2003 the Air Force has not applied the CSRB at all. 

The Army has expanded the range of enlisted skills designated for CSRB. In fiscal year 

2003, critical skills in the health professions were included temporarily in the CSRB 

630
program. However, when specific health profession bonuses were raised in 2004, critical 

skills in the health professions no longer were included under the CSRB program. The 

bonus authority has been extended annually from its inception in 2001 through 2004. 

631
Chapter II.E.2.e. 

 MOS Conversion Bonus 

 Legislative Authority: 37 U.S.C. §326. 

Purpose: To provide an incentive for the transition of enlisted members from 

well-supplied military occupational specialties into military occupational specialties 

experiencing a shortage of qualified personnel. 

Background: In order to improve the supply of personnel in designated military 

occupational specialties where shortages have occurred, the National Defense 

Authorization Act for Fiscal Year 2004, Public Law 108-136, 117 Stat. 1506, established 

a new paragraph in 37 U.S.C. Chapter 5. This provision authorizes an incentive bonus for 

enlisted personnel who convert their military occupational specialties into one of the 

designated categories. Members sign an agreement committing them to serve for not less 

than three years in the new specialty. Eligible personnel are those in grade E-6 with fewer 

than 10 years of active service and those in grade E-5 and below, regardless of time in 

service. Military occupational specialties from which members may transfer are those 

considered to be over-manned (having an inventory-to-authorization ratio greater than 

102 percent), and specialties are considered to have a shortage if that ratio is below 95 

percent. The lump-sum bonus is a maximum of $4,000, which is received in addition to 

any other bonuses. The initial legislative authority for the bonus extends through the end 

of calendar year 2006. 

Current Bonus Rate Authorized: A lump-sum payment not to exceed $4,000. 

632
Chapter II.E.2.f. 

 Reserve Affiliation, Enlistment 

 and Reenlistment Bonuses, 

 Special Unit Pay, and 

 Educational Assistance 

Legal Authority: 37 U.S.C. §§308b, 308c, 308d, 308e, 308g, 308h, and 308i and 

10 U.S.C. §§16131-16137. 

Purpose: To provide an incentive to induce persons not in the Armed Forces, or 

persons formerly in the Armed Forces, to join reserve components of the Armed Forces 

and to encourage persons already in reserve components to remain in such components. 

Background: As indicated elsewhere, enlistment and reenlistment bonuses have 

long been authorized for members of the active duty branches of the Armed Forces, as 

have educational assistance benefits. See Chapters II.E.2.c., II.E.2.b., IV.B.2., and V.B.2., 

"Selective Reenlistment Bonus," "Enlistment Bonus," "Voluntary Education and 

Training," and "Veterans' Educational Assistance," respectively. In the mid- to late1970s, manning and retention problems in the reserve components of the Armed Forces, 

and a felt need to maintain a pool of skilled, trained, and readily available personnel to 

augment active duty forces in times of national emergency, underlay a decision to extend 

similar bonus and educational assistance authority to the reserve components. Five of the 

more prominent provisions enacted in this connection are discussed below. 

 Reenlistment Bonuses for Members of the 

 Selected Reserve (37 U.S.C. §§308b and 308i) 

The Department of Defense Appropriation Authorization Act, 1978, Public Law 

95-79, §403(a)(1), 91 Stat. 323, 330-331 (1977), authorized, as a special pay, a 

reenlistment bonus for members of the Selected Reserve. As originally adopted, 

reenlistment bonuses were restricted to members of reserve components who had initially 

enlisted in such components,1

 had completed less than ten years of service as members of 

 

1 Members who had initially enlisted in a reserve component under the delayed enlistment program of the 

Armed Forces were specifically excluded from eligibility for the new bonuses. 

633
such components, and had reenlisted or voluntarily extended enlistments for a period of 

three or six years in either a designated military skill specialty or a designated unit in the 

Selected Reserve of the Ready Reserve of an armed force. Personnel meeting these 

entitlement criteria were eligible for an immediate bonus of either $450 or $900--for 

three- and six-year agreements, respectively--and for further payments of $150 at the end 

of each year of reserve service completed under such agreements. The total amount 

payable was thus $900 for a three-year reenlistment or extension and $1,800 for a sixyear agreement. The authority to pay such bonuses, adopted on July 30, 1977, and not 

programmed to become effective until October 1, 1977, was set to terminate on 

September 30, 1978. 

As explained in the relevant Congressional report, the reenlistment bonus 

authority was adopted as a one-year experimental program to test the effectiveness of 

such bonuses in "retain[ing] enlisted members in designated priority units in the Selected 

Reserve."2

 In this connection, Congress was particularly moved by the need to bring 

some measure of stability and order to the existing reserve enlistment program, noting 

that "[a]t present, after the initial six-year period of enlistment, individuals can reenlist 

for periods as short as one year which imposes a discontinuity in the program."3

 In order 

to overcome this "discontinuity," the bonus was designed to be "available only for 

reenlistment periods of three ... or six years."4

 Half of the bonus was programmed to be 

paid "at the time of reenlistment or extension" in order to "increase its attractiveness," 

 

2

 House Report No. 95-194 (Committee on Armed Services), p. 91, accompanying H.R. 5970, 95th

Congress, 1st Session (1977). Also see House Report No. 95-446 (Committee of Conference), p. 51, and 

Senate Report No. 95-282 (Committee of Conference), p. 51, accompanying H.R. 5970, 95th Congress, 1st

Session (1977). 

3 House Report No. 95-194 (Committee on Armed Services), p. 91, accompanying H.R. 5970, 95th

Congress, 1st Session (1977). 

4 House Report No. 95-194 (Committee on Armed Services), p. 91, accompanying H.R. 5970, 95th

Congress, 1st Session (1977). 

634
and hence its potential impact.5

 Congress specifically noted that the authority was 

restricted to personnel having completed less than ten years of service as members of 

reserve components because "retention has not been a major problem after the ninth or 

tenth year of service"6

--presumably because personnel completing that much service are 

motivated to continue in the reserve program in order to ultimately become eligible for 

retired pay for non-Regular service (see Chapter III.B.2., "Retired Pay for Non-Regular 

Service"). 

The Department of Defense Appropriation Authorization Act, 1979, Public Law 

95-485, §403, 92 Stat. 1611, 1614 (1978), amended the eligibility criteria for receipt of 

the reenlistment bonus, extended the authority for such payments through September 30, 

1980, and, in essence, provided a mechanism for potentially reducing the amount of the 

bonus to be paid to affected members. Under the amended reenlistment bonus authority, 

the bonus could be paid to enlisted members of reserve components who had completed 

less than ten years of total military service and who reenlisted or extended an existing 

enlistment for either three or six years, thus eliminating the restriction that eligible 

members must initially have enlisted in a reserve component.7

 On the other hand, to be 

eligible for the bonus a member was then required to have less than ten years of total 

military service, not just less than ten years of reserve service. The potential for payment 

of a lower reenlistment bonus derived from the provision that the amounts payable may 

"not ... exceed" the previously set amounts--i.e., $450 for a three-year agreement, $900 

for a six-year agreement, and $150 at the end of each year of completed service. 

As reflected in the House report dealing with the Department of Defense 

Appropriation Authorization Act, 1979, Public Law 95-485, 92 Stat. 1611 (1978), the 

 

5

 House Report No. 95-194 (Committee on Armed Services), p. 91, accompanying H.R. 5970, 95th

Congress, 1st Session (1977). 

6 House Report No. 95-194 (Committee on Armed Services), p. 91, accompanying H.R. 5970, 95th

Congress, 1st Session (1977). 

7

 Also eliminated was the restriction that eligible members could not have initially enlisted in a reserve 

component under the delayed enlistment program. 

635
category of personnel eligible for the reenlistment bonus was expanded to include 

individuals who joined the reserves following service in the active forces in response to 

certain "dissatisfaction [that had] resulted from eligibility for this bonus being limited to 

personnel who enlisted initially in the reserve components" and "to permit the resources 

available to be used in the most effective manner."8

 The authority to pay the bonus, on 

the other hand, was extended for two additional years in order to allow the test program 

to be completed and the results evaluated, although Congress did note that "preliminary 

indications are that the bonus will improve retention."9

 The Department of Defense was 

given authority to vary the amount of the bonus up to the limits previously authorized to 

provide "increased flexibility" in administering the program.10

The Department of Defense Authorization Act, 1981, Public Law 96-342, 

§805(b), 94 Stat. 1077, 1095 (1980), further extended the termination date for the reserve 

reenlistment bonus program--this time for five additional years, to September 30, 1985. 

The reason for the extension was continuing reserve manning shortfalls.11

The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§643(a), 99 Stat. 583, 652 (1985), again extended the Section 308b reenlistment bonus 

authority, this time to September 30, 1987. At the same time, the 1986 Authorization Act 

increased the maximum bonuses payable for reenlistment--from $450 to $1,250 for a 

three-year agreement and from $900 to $2,500 for a six-year agreement. The 1986 

Authorization Act also increased the year-end payment from $150 to a maximum of 

$416.66 for completion of each year of the period of reenlistment or extension. Here 

 

8

 House Report No. 95-1118 (Committee on Armed Services), p. 103, accompanying H.R. 10929, 95th

Congress, 2d Session (1978). See House Report 95-1402 (Committee of Conference), p. 50, accompanying 

H.R. 10929, 95th Congress, 2d Session (1978). 

9

 House Report No. 95-1118 (Committee on Armed Services), p. 102, accompanying H.R. 10929, 95th

Congress, 2d Session (1978). 

10 House Report No. 95-1118 (Committee on Armed Services), p. 103, accompanying H.R. 10929, 95th

Congress, 2d Session (1978). 

11 See, e.g., Senate Report No. 96-826 (Committee on Armed Services), pp. 140, 143, accompanying H.R. 

6974, 96th Congress, 2d Session (1980). 

636
again, the reason underlying the enhancement of the reserve reenlistment bonus program 

was a desire to improve upon what was characterized as a "[l]imited incentive ... to join 

the selected reserve."12

The Section 308b reserve reenlistment bonus authority has subsequently been 

extended in defense authorization acts covering all of the years between 1987 and 2004.13

The most recent extensions were mandated by the National Defense Authorization Act 

for Fiscal Year 1997, Public Law 104-201; the National Defense Authorization Act for 

Fiscal Year 1998, Public Law 105-85; the National Defense Authorization Act for Fiscal 

Year 1999, Public Law 105-261; the National Defense Authorization Act for Fiscal Year 

2000, Public Law 106-65; the National Defense Authorization Act for Fiscal Year 2001, 

Public Law 106-398; the National Defense Authorization Act for Fiscal Year 2002, 

Public Law 107-107, the National Defense Authorization Act for Fiscal Year 2003, 

Public Law 107-314, and the National Defense Authorization Act for Fiscal Year 2004, 

Public Law 108-136. 

 

12 House Report No. 99-81 (Committee on Armed Services), p. 234, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). Also see id., pp. 233-234, generally; Senate Report No. 99-41 (Committee on 

Armed Services), pp. 194-195, accompanying S. 1029, 99th Congress, 1st Session (1985); Senate Report 

No. 99-118 (Committee of Conference), pp. 432-433, accompanying S. 1160, 99th Congress, 1st Session 

(1985); and House Report No. 99-235 (Committee of Conference), pp. 432-433, accompanying S. 1160, 

99th Congress, 1st Session (1985). 

13 Earlier extensions were as follows: from September 30, 1987 to September 30, 1990 (the only three-year 

extension in the history of the bonus authority), in the National Defense Authorization Act for Fiscal Years 

1988 and 1989, P.L. 100-180. 101 Stat. 1019, 1104; from September 30, 1990 to September 30, 1992 (the 

first of two two-year extensions in the history of the bonus authority), in the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, P.L. 101-189, 103 Stat. 1352, 1446; from September 30, 

1992 to September 30, 1993, in the National Defense Authorization Act for Fiscal Year 1993, P.L. 102-

484, 106 Stat. 2315, 2421; from September 30, 1993 to September 30, 1994, in the National Defense 

Authorization Act for Fiscal Year 1995 (the second of two two-year extensions), P.L. 103-160, 107 Stat. 

1547, 1680; from September 30, 1995 to September 30, 1996, in the National Defense Authorization Act 

for Fiscal Year 1995, P.L. 103-337, 108 Stat. 22663, 2782; and from September 30, 1996 to September 30, 

1997, in the National Defense Authorization Act for Fiscal Year 1996, P.L. 104-106, 110 Stat. 186, 359. 

With respect to the unusual three-year extension for 1987-90, the House Armed Services Committee noted: 

Section 623 [of H.R. 1748, the House-sponsored Authorization Bill, and the predecessor 

of Section 626(b) of the National Defense Authorization Act for Fiscal Years 1988 and 1989, 

Public Law 100-180] would extend the authority to pay enlistment and reenlistment bonuses....to 

reserve component members until September 30, 1990. The Administration requested....a threeyear extension for reserve programs. The committee believes that extensions of....three years offer 

a reasonable balance between program continuity and congressional oversight. 

 

637
The extension provided by the National Defense Authorization Act for Fiscal 

Years 1990 and 1991, Public Law 101-189, id., was adopted with even less discussion,14

and there has been similarly little discussion of the reasons underlying the extensions 

made by the authorization acts for subsequent years. 

A like program was established by the Department of Defense Authorization Act, 

1986, Public Law 99-145, §644(a)(1), 99 Stat. 583, 652-653 (1985), for former enlisted 

members of an armed force who enlisted in the Selected Reserve of the Ready Reserve 

for a period of three or six years in a critical military skill specially designated by the 

Secretaries of the various military departments concerned. The program, codified at 37 

U.S.C. §308i, originally was available to persons who had completed their military 

service obligations but had less than four years of total military service, who had received 

an honorable discharge, who were not being released from active service for the purpose 

of enlisting in a reserve component, and who had not previously been paid a bonus for 

enlisting, reenlisting, or extending an enlistment in a reserve component. The National 

Defense Authorization Act for Fiscal Year 1998 extended eligibility for the bonus to 

members with less than 14 years of total military service. The bonuses payable to 

individuals with such qualifying prior service are exactly the same as those payable under 

37 U.S.C. §308b to members of a reserve component who reenlist or voluntarily extend 

an enlistment in such a component. Here also, the reason underlying the establishment of 

the new "prior service enlistment bonus" for former members of an armed force was a 

desire to improve upon what Congress characterized as a "[l]imited incentive ... to join 

the selected reserve."15

The original termination date for the Section 308i enlistment bonus authority was 

September 30, 1987, but that authority has since been extended by the same sections of 

the national defense authorization acts, covering all the years between 1987 and 2004, as 

those that extended the standard selected reserve reenlistment bonus. As was the case 

 

14 House Report No. 101-331 (Committee of Conference), p. 586, and House Report No. 101-121 

(Committee on Armed Services), p. 275, both accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

Senate Report No. 101-81 (Committee on Armed Services), accompanying S. 1352, 101st Congress, 1st

Session (1989), did not even mention the two-year extension proposed in Section 630 of the Senate bill. 

15 House Report No. 101-331 (Committee of Conference), p. 586, and House Report No. 101-121 

(Committee on Armed Services), p. 275, both accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

638
with the standard selected reserve reenlistment bonus, the authorization act for 1988 and 

1989 provided a three-year extension for the prior service bonus through September 30, 

1990. 

 Enlistment Bonus for Members of the Selected Reserve 

 (37 U.S.C. §308c) 

The Department of Defense Appropriation Authorization Act, 1979, Public Law 

95-485, §404(a), 92 Stat. 1611, 1614-1614 (1978), authorized, as a special pay, an 

enlistment bonus for individuals who enlist in the Selected Reserve of the Ready Reserve. 

Under this authority, any person who was a graduate of a secondary school, who had 

never previously served in an armed force, and who enlisted for not less than six years in 

the Selected Reserve of the Ready Reserve became eligible for an enlistment bonus not to 

exceed $2,000. Half of the bonus--i.e., up to $1,000--was to be payable upon an 

individual's completion of initial active duty for training, with the remainder to be paid 

either in periodic installments or in a lump sum, as determined by the Secretaries of the 

military departments concerned. The new enlistment bonus authority was adopted out of 

concern with continuing manning deficiencies in the reserve components of the Armed 

Forces.16 It was adopted as an experimental program to test how effective such bonuses 

might be in increasing enlistments and meeting recruiting goals. 

As initially adopted, authority for the enlistment bonus program was to terminate 

on September 30, 1980. Between the Department of Defense Authorization Act for 1981 

and the National Defense Authorization Act for Fiscal Year 2004, the program has been 

extended continuously by legislation through the years that followed. The earlier 

extensions--those made through the 1989 legislative session--were all made explicitly 

because of concern over continuing manning shortfalls.17 18 19

 

16 See, e.g., House Report No. 95-1118 (Committee on Armed Services), pp. 100-103, and House Report 

No. 95-1402 (Committee of Conference), p. 50, accompanying H.R. 10929, 95th Congress, 2d Session 

(1978). 

17 See, e.g., Senate Report No. 96-826 (Committee on Armed Services), pp. 140, 143, accompanying H.R. 

6974, 96th Congress, 2d Session (1980), concerning the first extension to September 30, 1995. 

639
In addition to extending the program termination date, the National Defense 

Authorization Act for Fiscal Year 1994, Public Law 103-160, §612(b)(1), 107 Stat. 1547, 

1680 (1993), increased the maximum amount of the enlistment bonus authorized from 

$2,000 to $5,000 and provided that not more than half the bonus could be paid upon 

completion of a person's initial active duty for training.20 The remainder of the bonus may 

be paid in periodic installments or in a lump sum as determined by the Secretaries of the 

different services. The National Defense Authorization Act for Fiscal Year 2000, Public 

Law 106-65, 113 Stat. 653, further increased the maximum amount of the bonus, from 

$5,000 to $8,000 and eliminated the requirement that an individual enlist for at least six 

years. 

Bonus for Selected Reserve Affiliation Agreement (37 U.S.C. §308e) 

The Department of Defense Authorization Act of 1981, Public Law 96-342, 

§805(a)(1), 94 Stat. 1077, 1093-1094 (1980), authorized, effective October 1, 1980, a 

bonus for Selected Reserve affiliation to persons who had served or were serving on 

active duty and who, upon release therefrom, had or would have a reserve service 

obligation under 10 U.S.C. §651 or 50 U.S.C. App. §456(d)(1). To be eligible for the 

bonus, a person must (i) be eligible for reenlistment or for an extension of active duty, (ii) 

have satisfactorily completed whatever prior enlistment or obligated active duty service 

he had to perform, (iii) be qualified in a military skill specialty specially designated by 

the Secretary of Defense for the purposes of the bonus provision, (iv) have a grade for 

which there is a vacancy in the reserve component of which the individual is to become a 

 18

e.g., House Report No. 99-81 (Committee on Armed Services), pp. 233-234, accompanying H.R. 1872, 

and Senate Report No. 99-41 (Committee on Armed Services), pp. 194-195, accompanying S. 1029, 99th

Congress, 1st Session (1985), concerning the extension to 1987. Also see Senate Report No. 99-118 

(Committee of Conference), pp. 432-433, and House Report No. 99-235 (Committee of Conference), pp. 

432-433, accompanying S. 1160, 99th Congress, 1st Session (1985). 

19 For the reasons underlying the six most recent extensions--to September 30, 1990, to September 30, 

1992, to September 30, 1993, to September 30, 1995, to September 30, 1996, and to September 30, 1997--

see footnotes 13, 14, and 15 and accompanying text, above. 

20 See House Report No. 103-200 (Committee on Armed Services), p. 294, and House Report No. 103-357 

(Committee of Conference), p. 683, accompanying H.R. 2401, 103d Congress, 1st Session (1993). Cf. 

Senate Report No. 103-112 (Committee on Armed Services), p. 152, accompanying S. 1298, 103d 

Congress, 1st Session (1993). 

640
member, (v) not be affiliating in a reserve component to become a reserve, an Army 

National Guard, or an Air National Guard technician, (vi) enter a written agreement to 

serve as a member of the Selected Reserve of the Ready Reserve of an armed force for 

the period of obligated reserve service such person has remaining or will have remaining 

at the time of his discharge or release from active duty, and (vii) meet all other 

requirements for becoming a member of the Selected Reserve of the Ready Reserve of 

the armed force with which the individual is affiliating. The amount of the bonus payable 

under the program was determined by multiplying $25 by the number of months of 

reserve obligation the member has remaining at the time he enters the agreement or 

which he will have remaining upon his release from active duty. The Selected Reserve 

affiliation bonus authority adopted in the Department of Defense Authorization Act of 

1981, Public Law 96-342, id., was set to terminate September 30, 1981. The program was 

adopted on a one-year experimental test basis "to encourage skilled prior active duty 

service personnel to affiliate early with Selected Reserve units"21 and thereby to improve 

the manning posture of the Selected Reserve.22 The termination date for the Selected 

Reserve affiliation bonus program was extended to September 30, 1985, by the 

Department of Defense Authorization Act, 1982, Public Law 97-86, §505, 95 Stat. 1099, 

1109 (1981).23 The termination date was again extended, this time to September 30, 

1987, by the Department of Defense Authorization Act, 1986, Public Law 99-145, 

§645(a)(2), 99 Stat. 583, 654 (1985). The 1986 Authorization Act, Public Law 99-145, 

id., §645(a)(1), 99 Stat. at 654, also increased the bonus payable under the program by 

providing that the maximum amount of the bonus was to be determined by multiplying 

 

21 Senate Report No. 96-826 (Committee on Armed Services), p. 142, accompanying H.R. 6974, 96th 

Congress, 2d Session (1980). See House Report No. 96-1222 (Committee of Conference), p. 92, 

accompanying H.R. 6974, 96th Congress, 2d Session (1980). 

22 For a discussion of the manning problems confronting the Selected Reserve, see House Report No. 96-

916 (Committee on Armed Services), pp. 130-132, and Senate Report No. 96-826 (Committee on Armed 

Services), pp. 139-142, accompanying H.R. 6974, 96th Congress, 2d Session (1980). 

23 See House Report No. 97-311 (Committee of Conference), pp. 113-114, accompanying S. 815, 97th

Congress, 1st Session (1981). 

641
$50 times the number of months of reserve obligation the member had remaining, or will 

have remaining when he is released from active duty.24

The termination date for the Section 308e Selected Reserve affiliation bonus 

authority has since been extended a number of times between the initial extension 

mandated by the National Defense Authorization Act for Fiscal Years 1988 and 1989, 

Public Law 100-180, §626(b), 101 Stat. 1019, 1104 (1987) and the extension prescribed 

by the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136. 

 Enlistment, Reenlistment, and Enlistment Extension Bonuses for 

 Members of the Ready Reserve (37 U.S.C. §§308g and 308h) 

The Department of Defense Authorization Act, 1981, Public Law 96-342, 

§805(a)(1), 94 Stat. 1077, 1092-1093 (1980), authorized the payment of a special bonus 

to any person who enlisted, reenlisted, or voluntarily extended an enlistment for a period 

of at least three years in any element of the Ready Reserve other than the Selected 

Reserve--in short, for enlistment, reenlistment, or extension in the Individual Ready 

Reserve. This provision was initially codified at 37 U.S.C. §308d. To be eligible for the 

reenlistment or extension portion of the bonus authorized, a person must have 

satisfactorily completed his original term of enlistment in the Armed Forces. The 

Secretary of Defense was expressly authorized to prescribe additional eligibility criteria 

under the provisions of former 37 U.S.C. §308d(c). The maximum amount of the bonus 

payable was set at $600, and the authority was programmed to terminate September 30, 

1981. The new authority was granted because the Individual Ready Reserve, "the primary 

source of trained individuals for replacement and augmentation in emergencies," was "up 

to 500,000 below mobilization requirements for the Army alone," and it was felt a special 

incentive would be helpful in reducing the noted shortages.25 To meet the most 

 

24 See House Report No. 99-81 (Committee on Armed Services), pp. 234-235, accompanying H.R. 1872, 

99th Congress, 1st Session (1985). Also see Senate Report No. 99-41 (Committee on Armed Services), pp. 

194-195, accompanying S. 1029, Senate Report No. 99-118 (Committee of Conference), p. 433, 

accompanying S. 1160, and House Report No. 99-235 (Committee of Conference), p. 433, accompanying 

S. 1160, 99th Congress, 1st Session (1985). 

25 Senate Report No. 96-826 (Committee on Armed Services), pp. 140-141, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). Also see House Report No. 96-916 (Committee on Armed Services), pp. 132-

642
significant shortage, Congress noted that the new authority, which was adopted on a oneyear experimental basis, should be used only for "individuals who have or will be trained 

in combat skills."26 The bonus authority of former 37 U.S.C. §308d for enlistments, 

reenlistments, and extensions in the Individual Ready Reserve was not extended and 

accordingly terminated on September 30, 1981.27

The enlistment and reenlistment bonus program for members of the Individual 

Ready Reserve as initially codified at 37 U.S.C. §308d was effectively revived by the 

Department of Defense Authorization Act, 1984, Public Law 98-94, 97 Stat. 614 (1983). 

In place of former 37 U.S.C. §308d,28 Congress, in the 1984 Authorization Act, 

established two different bonus programs. Under the first, codified at 37 U.S.C. §308g, 

Congress provided for bonuses in the maximum amount of $1,000 to be paid to an 

"eligible person" who "enlists in a combat or combat support skill" of an element of the 

Ready Reserve (other than the Selected Reserve) for a period of at least six years. 

Eligibility for participation in this program was limited to persons who have not 

previously served in an armed force. Department of Defense Authorization Act, 1984, 

Public Law 98-94, §1011(a), 97 Stat. at 663. Under the second of the programs, codified 

at 37 U.S.C. §308h, Congress provided for bonuses in the maximum amount of $900 to 

be paid to a person who is or has been a member of an armed force and who enlists, 

 133, and Senate Report No. 96-826 (Committee on Armed Services), pp. 140-142, accompanying H.R. 

6974, 96th Congress, 2d Session (1980), on the manning shortage in the Individual Ready Reserve. 

26 House Report No. 96-1222 (Committee of Conference), p. 92, accompanying H.R. 6974, 96th Congress, 

2d Session (1980); see also Senate Report No. 96-826 (Committee on Armed Services), p. 141, 

accompanying H.R. 6974, 96th Congress, 2d Session (1980). 

27 A new Section 308d of Title 37, United States Code, providing $10 special pay for attendance at 

inactive-duty training sessions to enlisted members of the Selected Reserve assigned to high priority units 

that have experienced or may reasonably be expected to experience critical personnel shortages, was added 

by the National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, 

§505(a)(1), 103 Stat. 1352, 1437-1438 (1989), but this provision was in no sense a follow-on to or 

derivative from former Section 308d. For a discussion of this 37 U.S.C. §308d special unit assignment pay 

program, see the heading "Special Assignment Pay for Enlisted Members of the Selected Reserve" in this 

chapter, below. 

28 In reviving enlistment and reenlistment bonuses for members of the Individual Ready Reserve, Congress 

in fact repealed former 37 U.S.C. §308d in the Department of Defense Authorization Act, 1984, Public 

Law 98-94, §1011(b)(1), 97 Stat. 614, 664 (1983). See footnote 30 to this chapter, above. 

643
reenlists, or extends an existing enlistment in a combat or combat support skill of an 

element of the Ready Reserve (other than the Selected Reserve) for a period of at least 

three years in addition to any other period the person was otherwise obligated to serve. 

Department of Defense Authorization Act, 1984, Public Law 98-94, §1011(a), 97 Stat. at 

663-664. Both programs were to be administered pursuant to regulations prescribed by 

the Secretary of Defense, and both programs had a termination authorization date of 

September 30, 1985. As explained by Congress, the purpose underlying adoption of the 

two programs was to "continue building the size of the pretrained manpower pool" 

available in periods of national emergency.29 In authorizing the bonuses in question, 

Congress underlined its intention that the bonuses be paid only to individuals enlisting in 

combat or combat support skills "where critical shortages exist."30

The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§646(a), 99 Stat. 583, 654 (1985), extended the program authorization date for both 

bonuses from September 30, 1985, to September 30, 1987. In addition, the 1986 

Authorization Act amended the Section 308h bonus authority by providing that a bonus 

of not more than $1,500 could be paid to a person qualified for the Section 308h program 

and who enlists, reenlists, or extends an existing enlistment for a period of six years and a 

bonus of not more than $750 could be paid to a person who enlists, reenlists, or extends 

for a period of three years. Congress also authorized the Secretaries of the various 

military departments to impose, as a condition of receipt of Section 308h bonuses, an 

agreement of an affected individual to participate in an "annual muster of the reserves, or 

inactive duty for training." The reason underlying these actions was, generally speaking, 

a concern with the effectiveness of these and other incentives in motivating individuals to 

perform reserve service.31

 

29 Senate Report No. 98-174 (Committee on Armed Services), p. 196, accompanying S. 675, 98th Congress, 

1st Session (1983). 

30 Senate Report No. 98-174 (Committee on Armed Services), p. 197, accompanying S. 675, 98th Congress, 

1st Session (1983). 

31

e.g., Senate Report No. 99-41 (Committee on Armed Services), pp. 194-195, accompanying S. 1029, and 

House Report No. 99-81 (Committee on Armed Services), p. 236, accompanying H.R. 1872, 99th Congress, 

1st Session (1985). See House Report No. 99-235 (Committee of Conference), pp. 433-434, and Senate 

644
The termination date for the Section 308g enlistment bonus program for members 

of the Ready Reserve was extended twice more--first, from September 30, 1987, to 

September 30, 1990, by the National Defense Authorization Act for Fiscal Years 1988 

and 1989, Public Law 100-180, §626(b), 101 Stat. 1019, 1104 (1987), and second, and 

most recently, from September 30, 1990, to September 30, 1992, by the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, §613, 103 Stat. 

1352, 1446 (1989).32 While the termination dates for other reserve bonus programs have 

since been extended, that for the Section 308g enlistment bonus program has not, with the 

result that this program has effectively been discontinued. 

The termination date for the Section 308h enlistment, reenlistment, and enlistment 

extension bonus programs for members of the Ready Reserve has since been extended by 

national defense authorization acts beginning in 1987 and continuing through 2004. The 

National Defense Authorization Act for 2002, Public Law 107-107, 115 Stat. 1137, 

changed the description of eligibility requirements for the bonus in 37 U.S.C. §308h. 

Prior to that legislation, the law had limited eligibility to individuals enlisting, reenlisting, 

or extending enlistment in a combat or combat support skill. The new legislation 

stipulated that such an individual must possess a skill or specialty “designated by the 

Secretary concerned as a critically short wartime skill or critically short wartime 

specialty.” The report of the Senate Armed Services Committee explained that this 

change expanded bonus eligibility to a new category of personnel: 

This [amendment] would authorize payment to service members serving 

in combat service support skills as well as combat and combat support skills.33

The 2002 legislation changed neither the amounts of the bonus nor the other terms 

of eligibility prescribed in 37 U.S.C. §308h. 

 Report No. 99-118 (Committee of Conference), pp. 433-434, accompanying S. 1160, 99th Congress, 1st

Session (1985). 

32 For the reasons underlying these extensions, see footnotes 13, 14, and 15 and associated text, above. 

33 Senate Report 107-062 (Armed Services Committee), accompanying S. 1416, 107th Congress, 1st Session 

(2001). 

645
Special Assignment Pay for Enlisted Members of the Selected Reserve 

 (37 U.S.C. §308d) 

The National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §505, 103 Stat. 1352, 1437-1438 (1989), added a new special pay 

program, codified at 37 U.S.C. §308d,34 for certain enlisted members of the Selected 

Reserve of the Ready Reserve assigned to certain high priority units. Under this new 

provision, an enlisted member who performs inactive-duty training for which he receives 

compensation under 37 U.S.C. §206 and who is assigned to a high priority unit, of the 

Selected Reserve, that has experienced or may reasonably be expected to experience a 

critical personnel shortage may be paid an additional amount, not to exceed $10, for each 

training period. As explained by the Senate Armed Services Committee: 

The Department of Defense requested authority for a two-year test 

program to pay a special unit assignment pay to enlisted members who are 

assigned to high priority units when they perform inactive duty for training. The 

pay may not exceed $10.00 for each period of training. This pay would be in 

addition to other pay or allowances to which a member would be entitled and is 

proposed as a test to determine if such payment would encourage higher 

participation of reservists in high priority units. The committee recommends ... 

approval of the request.35

The paragraph caption used as an introduction to the Senate proposal was "Naval 

Reserve Fleet Duty Incentive Pay Test."36 As administered, the Secretary of each military 

department designates units whose members will receive this special pay.37

 

34 As previously indicated, former 37 U.S.C. §308d was repealed by the Department of Defense 

Authorization Act, 1984, Public Law 98-94, §1011(b)(1), 97 Stat. 614, 664 (1983). See footnotes 30 and 31 

and accompanying text to this chapter, above. 

35 Senate Report No. 101-81 (Committee on Armed Services), p. 164, accompanying S. 1352, 101st

Congress, 1st Session (1989). Cf., House Report No. 101-331 (Committee of Conference), p. 580, 

accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

36 Senate Report No. 101-81 (Committee on Armed Services), p. 164, accompanying S. 1352, 101st

Congress, 1st Session (1989). Cf., House Report No. 101-331 (Committee of Conference), p. 580, 

accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

37 37 U.S.C. §308d(b). 

646
The original termination date for authority for the test program was September 30, 

1991, but the termination date for the program has been extended annually from 1992 

through 2004 by subsequent national defense authorization acts, the most recent of which 

was the National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136. 

 Educational Assistance for Members of the Selected Reserve 

 (10 U.S.C. §§16131-16137) 

The Department of Defense Appropriation Authorization Act, 1978, Public Law 

95-79, §402, 91 Stat. 323, 328-330 (1977), established what was in essence a targeted 

educational assistance program for enlisted members of the Selected Reserve. To be 

eligible for educational assistance under this program, an individual must have graduated 

from a secondary school, have enlisted for six years in the Selected Reserve of the Ready 

Reserve of an armed force, and have never served in an armed force before such 

enlistment. Educational assistance could be provided under this program to a member 

until the member completed a course of instruction required for the award of a 

baccalaureate degree, or the equivalent evidence of completion of study, by an accredited 

institution. As initially authorized, educational assistance could cover 50 percent of 

educational expenses (tuition, fees, books, laboratory and shop fees) not to exceed $500 

in any twelve-month period, or $2,000 in total. The 50 percent limitation on coverage of 

educational expenses was removed to allow 100 percent coverage by the Department of 

Defense Authorization Act, 1980, Public Law 96-107, §402, 93 Stat. 803, 808 (1979). 

The maximum amount of assistance for any twelve-month period was increased from 

$500 to $1,000, and the total amount of assistance from $2,000 to $4,000, by the 

Department of Defense Authorization Act, 1981, Public Law 96-342, §906(a)(1), 94 Stat. 

1077, 1117 (1980). 

As indicated in the statute itself, the purpose underlying provision of educational 

assistance through the new program was "[t]o encourage enlistments in the Selected 

Reserve of the Ready Reserve." Former 10 U.S.C. §2131(a) (redesignated 10 U.S.C. 

§16131(a)) by Section 402(a) of the Department of Defense Appropriation Authorization 

647
Act, 1978, Public Law 95-79, §402, 91 Stat. 323, 328-330 (1977).38 As explained in the 

relevant Congressional reports, the program was initially adopted as a test program "to 

determine the effectiveness of [the provision of educational benefits] in assisting 

recruiting and retention in the Ready Reserve."39 As a test program, the authority was 

originally scheduled to terminate September 30, 1978, but was later extended, first to 

September 30, 1980, by the Department of Defense Authorization Act, 1979, Public Law 

95-485, §402(a), 92 Stat. 1611, 1613 (1978), and later to September 30, 1985, by the 

Department of Defense Authorization Act, 1981, Public Law 96-342, §906(b), 94 Stat. 

1077, 1117 (1980). In the case of the latter extension, the House Committee on Armed 

Services noted that the program had achieved some success in terms of increased 

recruitment and retention, citing a six percent increase in the strength of Army Reserve 

units using the incentives as compared with a less-than-one-percent increase for units not 

using the incentives.40

The targeted educational assistance program established by the Department of 

Defense Appropriation Authorization Act, 1978, Public Law 95-79, §402, 91 Stat. 323, 

328-330 (1977), was substantially amended in 1984 by the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §705, 98 Stat. 2492, 2564-2567 (1984).41

Under the 1985 Authorization Act, the educational assistance program for reserve forces 

personnel became, in effect, an entitlement program. Eligibility was extended to reserve 

officers, in addition to enlisted personnel, who agreed to serve at least six years in 

 

38 The current text of 10 U.S.C. §16131(a) has been amended to indicate that the purpose is "[t]o encourage 

membership in units of the Selected Reserve of the Ready Reserve," and, indeed, eligibility to participate in 

the program has been extended to reserve officers who are members of the Selected Reserve. See text 

following footnote 45, below. 

39 House Report No. 95-446 (Committee of Conference), p. 51, and Senate Report No. 95-282 (Committee 

of Conference), p. 51, accompanying H.R. 5970, 95th Congress, 1st Session (1977). See House Report No. 

95-194 (Committee on Armed Services), p. 89- 91, accompanying H.R. 5970, 95th Congress, 1st Session 

(1977). 

40 House Report No. 96-916 (Committee on Armed Services), p. 131, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). 

41 Indeed, the prior program--incorporated in Title 10, United States Code, as Chapter 106--was 

discontinued effective July 1, 1985, although personnel in the program prior to its termination remain 

eligible for continued benefits. 10 U.S.C. §2138. 

648
addition to any other period of obligated service they may have had. In addition, the basis 

for payment of educational assistance was changed, so that a participant in the program 

was entitled to $140 for each month of "full time pursuit of a program of education," to 

$105 per month for "three-quarter-time pursuit of a program of education," to $70 per 

month for "half-time pursuit of a program of education," and to "an appropriately reduced 

rate" for "less than half-time pursuit of a program of education." A maximum of 36 

months of educational assistance is available under the program. Satisfactory 

participation in required training as a member of the Selected Reserve is stipulated as a 

condition of entitlement to educational assistance under the program, and various 

penalties and payback provisions have been added for failure to participate satisfactorily 

in such training. This program was established as a test program applicable from July 1, 

1985, through June 30, 1988. 

As explained by the House Armed Services Committee, the reasons for the 

enhanced program of educational assistance to reserve forces personnel was Congress's 

"particular concern" with the 

 ... recent downturn in recruiting experienced by the Army National 

Guard and the Army Reserve.... With the growing reliance on the reserve 

components envisioned by the committee, a special enlistment and reenlistment 

incentive for the reserve and guard is vital .... 

 The committee believes that an educational assistance program will 

help prevent the reoccurrence of recruiting problems and will assist in attracting 

high-quality personnel into the ... reserve forces, particularly the Army.42

Experience with the educational assistance program for members of the Selected 

Reserve generally proved favorable, and the authority was made permanent by the New 

GI Bill Continuation Act, Public Law 100-48, §4, 101 Stat. 331 (1987). In approving the 

permanent extension of authority for educational assistance to members of the Selected 

Reserve, the House Armed Services Committee summarized the purposes of and 

 

42 House Report No. 98-691 (Committee on Armed Services), p. 263, accompanying H.R. 5167, 98th

Congress, 2d Session (1984). See id., generally, at pp. 262-265. Also see House Report No. 99-1080 

(Committee of Conference), pp. 306-308, accompanying H.R. 5167, 98th Congress, 2d Session (1984). 

649
experience under the program, as well as with the similar program for active-duty forces, 

as follows: 

 PRIOR LEGISLATION 

In 1976 Congress approved legislation (Public Law 94-502) ending 

educational assistance under the Vietnam-era GI Bill for individuals entering 

military service on or after January 1, 1977. 

Those with post-Vietnam-era service were instead eligible for the 

Veterans' Educational Assistance Program (VEAP) which, unlike the Vietnam-era 

benefit, required a contribution by the service member. Under this contributory 

program, the Government matched the service member's contribution of up to 

$2,700 on a two-for-one basis (or a Government contribution of up to $5,400), for 

a maximum educational benefit of $8,100. To make the program more attractive, 

the Army decided to supplement the basic benefit with substantial "kickers" for 

enlistment in critical skills, principally the combat arms, under the Army College 

Fund. 

 With the exception of the Army College Fund which the Army 

advertised and marketed widely, VEAP was a dismal failure. Participation rates 

were low, and many who originally signed up subsequently decided to disenroll. 

Congress, therefore, decided to rethink the issue and subsequently in Title VII of 

the Department of Defense Authorization Act, 1985 (Public Law 98-525) 

approved a three-year test of a new educational assistance program, commonly 

called the New GI Bill.43 

 

 THE NEW GI BILL 

The New GI Bill was designed to use educational benefits as a way to 

attract and retain high quality young men and women in the Nation's Armed 

Forces--in both the active and reserve components. The structure of the program 

is as follows: 

 Active duty personnel: 

 Applicable to all new entrants onto active duty from July 1, 1985, 

through June 30, 1988. 

 

43 Title VII of the Department of Defense Authorization Act, 1985, Public Law 98-525, §§701-709, 98 

Stat. 2492, 2553-2572 (1984), which dealt with, among other things, the educational assistance program for 

members of the Selected Reserve and was originally titled "Veterans' Educational Assistance Act of 1984," 

was retitled "Montgomery GI Bill Act of 1984" by Section 2 of the New GI Bill Continuation Act, Public 

Law 100-48, §2, 101 Stat. 331 (1987). (While formally denominated the Veterans' Educational Assistance 

Act of 1984, Title VII of the Department of Defense Authorization Act, 1985, Public Law 98-525, §§701-

709, 98 Stat. 2492, 2553-2572 (1984), was generally referred to as the "New GI Bill," even before 

enactment of the New GI Bill Continuation Act.) 

650
 Basic benefit of $300 per month for 36 months in exchange for an 

enlistment of three years or longer (or $250 per month for 36 months for 

two-year enlistment). 

 Kicker authority up to $400 per month for critical skills. 

Basic benefit paid by the Veterans Administration on a pay-as-you-go 

basis.[48] 

Kickers (and Reserve program) funded by the Department of Defense 

on accrual basis. 

Participants' pay is reduced by $100 per month for first 12 months; 

service member is in program unless opts out. 

 Reserve and Guard personnel: 

 Applicable to all who enlist, reenlist, or extend and enlistment in a 

reserve component from July 1, 1985, to June 30, 1988. 

Entitlement of $140 per month for 36 months in exchange for a sixyear commitment in the Selected Reserve. 

 No member contribution required. 

 Funded by the Department of Defense on an accrual basis. 

Based on the information available to date, the committee is convinced the 

New GI Bill is a highly successful program. The committee will not restate the 

wealth of back-up data provided in Part I of the report on H.R. 1085 [which was 

enacted as the New GI Bill Continuation Act, Public Law 100-48, 101 Stat. 331 

(1987)] filed by the Committee on Veterans' Affairs. Participation rates by service 

members have far exceeded even the most optimistic predictions when this 

legislation was formulated two and half [sic] years ago. Witnesses before the 

committee have uniformly endorsed the continuation of the New GI Bill as a vital 

tool to maintaining the outstanding recruiting and retention results currently 

experienced by the services. 

The Army's success during fiscal year 1986, the first year of experience 

under the New GI Bill, illustrates the importance of a viable educational 

assistance program. In fiscal year 1986, the active Army--the service that has 

traditionally experienced the greatest difficulty in meeting its recruiting goals--

recruited 91 percent high school graduates, with only four percent in Mental 

Category IV, the lowest Mental Category eligible for enlistment. In the Army 

Reserve, Mental Category I-IIIA recruits, the cream of the crop in recruiting, 

increased 24 percent and six-year enlistments increased 28 percent during the first 

year of the New GI Bill in comparison to the previous year. 

The committee believes the test program has been an unqualified success 

and, therefore, recommends that the June 30, 1988, expiration date for the New 

GI Bill be eliminated, thus making the program permanent.44

 

44 House Report No. 100-22, Part 2 (Committee on Armed Services), pp. 2-3, accompanying H.R. 1085, 

100th Congress, 1st Session (1987). As indicated in the report of the House Committee on Armed Services, 

quoted above, a more extensive discussion of the purposes of the New GI Bill and the experience 

651
The National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §642, 103 Stat. 1352, 1456-1458 (1989), prospectively amended the 

Montgomery GI Bill (as the “New GI Bill" became designated), effective September 30, 

1990, to permit persons eligible to participate in the educational assistance program for 

members of the Selected Reserve to receive benefits for vocational and technical training. 

Before the amendment in question, members of the Selected Reserve had been eligible 

for educational benefits only for "pursuit of a program of education at an institution of 

higher learning," which had ruled out vocational-technical education and training. The 

House Committee on Armed Services, indicating that it "believe[d] ... that inclusion of 

vocational-technical training has considerable merit as a recruiting incentive" for 

membership in the Selected Reserve, recommended this expansion of the educational 

assistance program for reserves,45 and the Senate, in Conference, agreed to the House 

proposal.46 47

The Veterans' Benefits Act of 1992, Public Law 102-568, §301(b), 106 Stat. 

4320, 4326 (1992), amended the benefits rate structure so that a participant in the 

program was entitled to $190 for each month of "full time pursuit of a program of 

education," to $143 per month for "three-quarter-time pursuit of a program of education," 

 thereunder antedating enactment of the New GI Bill Continuation Act, Public Law 100-48, 101 Stat. 331 

(1987), is found in the report of the House Committee on Veterans' Affairs, House Report No. 100-22, Part 

1 (Committee on Veterans' Affairs), accompanying H.R. 1085, 100th Congress, 1st Session (1987). See, in 

particular, House Report No. 100-22, Part 1, id., pp. 2-11. 

45House Report No. 101-121 (Committee on Armed Services), p. 281, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

46House Report No. 101-331 (Committee of Conference), p. 589, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). 

47 At the same time as it included vocational-technical training benefits in the educational assistance 

program for members of the Selected Reserve, the National Defense Authorization Act for Fiscal Years 

1990 and 1991, Public Law 101-189, §644, 103 Stat. 1352, 1458 (1989), required the Secretary of Defense 

to submit a report to Congress "not later than March 15, 1990," on the "desirability and the practicability of 

requiring members of the reserve components, as a condition of participating in the educational assistance 

program ... [for members of the Selected Reserve], to sustain a reduction in pay in the same manner as 

applies to members of the Armed Forces on active duty who participate in the educational assistance 

program" under the Montgomery GI Bill Act of 1984. See text of House Report No. 100-22, Part 2 

(Committee on Armed Services), pp. 2-3, accompanying H.R. 1085, 100th Congress, 1st Session (1987), 

quoted in the text accompanying footnote 49, above, for a brief description of the "reduction in pay" 

members of the active-duty forces "sustain" to participate in the New GI Bill. 

652
to $95 per month for "half-time pursuit of a program of education," and to "an 

appropriately reduced rate" for "less than half-time pursuit of a program of education."48

Under earlier amendments to the program enacted in the Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, 

§337(b), 105 Stat. 75, 90-91 (1991), as itself subsequently amended by the Veterans 

Reconciliation Act of 1993, enacted as Title XII of the Omnibus Budget Reconciliation 

Act of 1993, Public Law 103-66, §12009(b), 107 Stat. 312, 416 (1993), the Secretary of 

the Department of Veterans Affairs is authorized to make annual cost-of-living 

adjustments to the basic benefits to keep pace with inflation. In 2003 the rate of full-time 

educational benefits authorized for members or former members entitled to benefits 

under the Montgomery GI Bill--Selected Reserve was $272 per month. 

The National Defense Authorization Act for Fiscal Year 1996, Public Law 104-

106, §1076, 110 Stat. 186, 450-451 (1996), provided authority to increase the educational 

assistance to members of the Selected Reserve having skills or specialties "in which there 

is a critical shortage of personnel or for which it is difficult to recruit or, in the case of 

critical units, retain personnel" by a maximum of $350 per month. As administered, the 

Secretaries of the military departments designate the skills, specialties, and units eligible 

for this higher rate of educational assistance.49

Cost: For the cost of the reserve bonuses, special pays, and assistance programs 

described in this chapter from the time of their establishment to 1995, see Tables II-33 of 

Military Compensation Statistics Tables, volume II of this edition. 

 

48 Codified at 10 U.S.C. §16131(b)(1)(D). 

49 Codified at 10 U.S.C. §16131(j). See House Report No. 104-131 (Committee on National Security), p. 

220, accompanying H.R. 1530, 104th Congress, 1st Session (1995); House Report No. 104-406 (Committee 

of Conference), p. 855, accompanying H.R. 1530, 104th Congress, 1st Session (1995); and House Report 

No. 104-450 (Committee of Conference), p. 845, accompanying S. 1124, 104th Congress, 2d Session 

(1996). 

653
Chapter II.E.2.g. 

 Special Duty Assignment Pay 

 and Proficiency Pay 

Legislative Authority: 37 U.S.C. §307. 

Purpose: To provide an additional monthly payment both as a retention incentive 

to enlisted personnel required to perform extremely demanding duties or duties 

demanding an unusual degree of responsibility and as an inducement to persuade 

qualified personnel to volunteer for such duties. 

Background: The practice of paying military personnel in different career fields 

differently is well established in the history of military compensation. The Navy long 

employed an occupational system of enlisted "ratings," each with its own rate of pay. 

Job-related "transient additions to pay" were also common. The Army paid "specialist 

pay" to enlisted personnel in selected skills until 1942. 

The Defense Advisory Committee on Professional and Technical Compensation 

(the so-called "Cordiner Committee") coined the term "proficiency pay," and its 1957 

recommendations led to the establishment of such a pay in the Act of May 20, 1958 

(Uniformed Services Pay Act of 1958), Public Law 85-422, §1(8), 72 Stat. 122, 125-126 

(1958). The Cordiner Committee's original recommendation concerning the structure of 

the proposed pay contemplated the advancement of an affected enlisted member of the 

Armed Forces to a higher pay grade without a concomitant promotion in military rank. 

While the 1958 Act permitted the Secretaries of the various military departments to 

choose such a "proficiency pay grade" method for compensating members "designated as 

... specially proficient in a military skill," it also permitted the Secretaries to make a 

special payment of as much as $150 a month to such members, this pay being in addition 

to any other pays and allowances to which affected members were entitled. The latter 

method was the method chosen by all the services, and for as long as the "proficiency 

pay" program formally existed, it was the only one of the two technically permitted 

methods officially sanctioned by the Department of Defense Military Pay and 

654
Allowances Entitlements Manual, the predecessor of the current Department of Defense 

Financial Management Regulation, Military Pay: Policy and Procedures for Active Duty 

and Reserve Pay, Volume 7A, DOD 7000.14-R. The proficiency pay grade method was 

in fact never used. 

Until enactment of the Department of Defense Authorization Act, 1985, Public 

Law 98-525, §623(b)(1), 98 Stat. 2492, 2541-2542 (1984), two different types of 

proficiency pay, each with its own objectives, were authorized: shortage specialty 

proficiency pay and special duty assignment proficiency pay.1

 The former was designed 

to retain personnel serving in critical military skill specialties experiencing retention 

problems; special duty assignment proficiency pay was designed to encourage qualified 

personnel to undertake duties, outside their normal career fields, requiring volunteers and 

for which there was a manning shortage. 

Shortage specialty pay was the most important category of the proficiency pay 

program until the Selective Reenlistment Bonus (SRB) was created and later proved to be 

an effective incentive for reenlistment and improved career force manning.2

 When the 

SRB program was initially implemented, the Secretary of Defense determined that, 

starting in fiscal year 1975, shortage specialty pay would be reduced to about one-quarter 

of the 1974 level. Except for residual termination payments, it was paid only to Navy 

personnel with nuclear power training and saturation diving specialties and to Air Force 

personnel in two medical technician skills. 

Until the proficiency pay program was altered by the 1985 authorization act, 

special duty assignment proficiency pay was the major proficiency pay sub-program, 

 

1

 A third type of proficiency pay--"Superior Performance (Proficiency Pay)"--was authorized until 1976. 

This pay was designed to reward personnel who demonstrated outstanding effectiveness in skills or duties 

that were not eligible for either shortage specialty or special duty assignment proficiency pay. Congress 

removed part of the superior performance pay funds from fiscal year 1975 service budgets, with the result 

that payments were curtailed. The superior performance pay subprogram was suspended completely after 

fiscal year 1975; no funds for it were requested in the fiscal year 1976 budget or at any time since. 

2 For a discussion of the Selective Reenlistment Bonus program, see Chapter II.E.2.c., "Selective 

Reenlistment Bonus," above. 

655
both in terms of the number of people involved and the cost. Special duty assignment 

proficiency pay was paid to personnel performing such voluntary duties as recruiters, 

drill instructors, or reenlistment NCOs, in amounts ranging from $30 to $150 a month. 

The Department of Defense Authorization Act, 1985, Public Law 98-525, 

§623(b)(1), 98 Stat. 2492, 2541-2542 (1984), replaced the existing proficiency pay 

authority with a new program specifically limited to special duty assignments. While 

effectively continuing the preceding "special duty assignment proficiency pay" program, 

the word "proficiency" was dropped from the program title. Under the revised "special 

duty assignment pay" program, an enlisted member could be paid "special duty 

assignment pay" at a "monthly rate not to exceed $275" when required to perform 

"extremely difficult" duties or duties "involving an unusual degree of responsibility in a 

military skill." The amended authority was administered by the Secretaries of the 

different military departments, and they were required to designate the skills for which 

the new pay was authorized and the criteria for determining which members were eligible 

for special duty assignment pay in each skill. Regulations relating to the administration of 

the program were specifically placed under the jurisdiction of the Secretary of Defense. 

The effect of thus restating the "special duty assignment pay" authority of the pre1985 authorization act era was to increase the amount of special pay that could be paid to 

an individual member. Nevertheless, the House-Senate Conference Committee noted that 

"these enhanced benefits [should] be accommodated within the amounts [already 

requested] for special pays for fiscal year 1985."3

The amendment to the existing "proficiency pay" program came about as a result 

of a floor amendment put forward by Senator Tower, which was added to the Senatesponsored version of the 1985 Defense Authorization Bill, S. 2723, 98th Congress, 2d 

Session (1984), and subsequently to the resulting authorization act. As Senator Tower 

stated the purpose of his amendment: 

 

3 House Report No. 98-1080 (Committee of Conference), p. 298, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). 

656
 ... I am offering an amendment to give the services increased authority 

to better target certain special pays for enlisted members.... 

 ... [M]y amendment would replace the existing authority of proficiency 

pay with a new authority for the services to pay special pay of up to $275 a month 

to enlisted members who are required to perform extremely demanding duties or 

duties demanding an unusual degree of responsibility. For example, the Navy 

assigns petty officers as surface nuclear propulsion plant operators. The 

responsibility placed upon these young men is tremendous and far exceeds that 

expected of most midlevel enlisted personnel. This new authority would permit 

the Secretaries of the military departments to discretely target limited manpower 

dollars to those people qualified to perform the unusually demanding duties, 

thereby increasing the likelihood of retaining these personnel on active duty. 

 ... It simply would permit the service more flexibility to target retention 

[to] the very, very critically needed personnel, particularly in the nuclear 

engineering field where it is very difficult to retain these people when the 

compensation they could get in the private sector would be enormously greater.4

The National Defense Authorization Act for Fiscal Year 1996, Public Law 104-

106, §619(a), 110 Stat. 186, 363 (1996), authorized an increase in the rate of special duty 

assignment pay for members serving as military recruiters to a maximum of $375 per 

month. This increase was authorized, effective January 1, 1996,5 6

 out of concern for the 

"financial hardships" experienced by members assigned to recruiting duties.7

 

4 130 Cong. Rec. 16138-16139 (1984) (daily ed., 130 Cong. Rec. S7143-S7144 (June 13, 1984)) (statement 

of Senator Tower). 

5 National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §619(b), 110 Stat. 186, 

363 (1996). See 10 U.S.C. §307 note. 

6 Although the increase was authorized by the 1996 Department of Defense Authorization Act for pay 

periods beginning January 1, 1996, the Department of Defense implemented the pay for all "production 

recruiters" beginning April 1, 1996. Memorandum of Assistant Secretary of Defense for Force 

Management Policy dated March 19, 1996; cf. DoD Instruction 1304.27. (The National Defense 

Authorization Act for Fiscal Year 1996, Public Law 104-106, 110 Stat. 186 (1996), was not enacted until 

February 10, 1996.) 

7 House Report No. 104-131 (Committee on National Security), p. 231, accompanying H.R. 1530, and 

Senate Report No. 104-112 (Committee on Armed Services), p. 256, accompanying S. 1026, 104th

Congress, 1st Session (1995). Cf. House Report No. 104-406 (Committee of Conference), pp. 816-817, 

accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report No. 104-450 (Committee 

of Conference), p. 807, accompanying S. 1124, 104th Congress, 2d Session (1996) 

657
The old "proficiency pay" program terminated and the new "special duty 

assignment pay" program became effective on October 1, 1984.8

 The National Defense 

Authorization Act for Fiscal Year 2001, Public Law 106-398, 114 Stat. 1654A-156, 

added an entitlement of enlisted National Guard and other reserves not on active duty to 

receive special duty assignment pay under this program when those individuals are 

performing duty that would qualify an active member for such pay. Under this provision, 

members of the reserve component entitled to compensation for inactive-duty training are 

authorized to receive additional compensation amounting to 1/30 of the monthly special 

pay prescribed for active-duty members for each drill period performed during a month. 

The same authorization act raised the maximum monthly amount of special duty 

assignment pay from $275, which had been the maximum since 1985, to $600. The 

legislation eliminated the special provision for a higher maximum for members serving as 

recruiters, effectively setting a uniform ceiling for all members. 

Current rates of pay authorized: Special duty assignment pay is authorized for 

enlisted members at a rate not to exceed $600 per month. 

Cost: For the cost of special duty assignment pay and proficiency pay from the 

time of their establishment to 2004, see Tables II-34 of Military Compensation Statistics 

Tables, volume II of this edition. 

 

8 Department of Defense Authorization Act, 1985, Public Law 98-525, §623(c), 98 Stat. 2492, 2542 

(1984). See 37 U.S.C. §307 note. 

658
Chapter II.E.2.h. 

 Assignment Incentive Pay 

Legislative Authority: 37 U.S.C. 307a. 

Purpose: To provide an additional monetary incentive in the assignment process 

to encourage members to volunteer for difficult-to-fill or less desirable assignments, 

assignment locations, or certain assignment periods. 

Background: Factors such as geographic location, type of job, and length of 

assignment make some assignments in the Armed Forces less desirable than others. The 

natural dynamics of the distribution process make certain assignments more difficult to 

fill, in spite of efforts to fill all assignments regardless of desirability. Monetary and other 

incentives sometimes have failed to achieve the needed redistribution. 

The National Defense Authorization Act for Fiscal Year 2003, Public Law 107-

314, 116 Stat. 2569, provided for a new type of special pay, called assignment incentive 

pay (AIP), to be offered to volunteers for duty in hard-to-fill positions specifically 

designated by the Secretary concerned. The amount of such pay is determined by the 

Secretary concerned and is specified in a written agreement between the individual and 

the Secretary. The agreement stipulates the amount, duty station, and length of 

assignment. The amount designated for a given position may change over time and may 

vary by assignment or assignment situation. The amount, which may not exceed $1,500 

per month, is payable in addition to any other pay and allowances to which the member is 

entitled. The initial legislation established a new subparagraph 307a in 37 USC. 

659
Chapter II.E.2.i. 

 Hardship Duty Pay 

Legislative Authority: 37 U.S.C. §305. 

Purpose: To provide additional pay to personnel for performing duty designated 

by the Secretary of Defense as hardship duty, regardless if outside the United States, in 

recognition of the greater-than-normal rigors of such designated duty. 

Background: The practice of paying something extra to military personnel 

serving outside the contiguous United States on account of such service originated in the 

extensive deployment of United States "beyond the seas" during the Spanish-American 

War. The Act of May 26, 1900, ch. 586, 31 Stat. 205, 211 (1900), provided for a special 

additional pay for Army personnel serving in Puerto Rico, Cuba, the Philippine Islands, 

Hawaii, or Alaska. Under the act, Army officers serving in any of the enumerated places 

became entitled to an additional 10 percent of their "pay proper," while Army enlisted 

personnel became entitled to an additional 20 percent. The Act of March 2, 1901, ch. 803, 

31 Stat. 895, 903 (1901), extended this foreign duty pay1

 entitlement for Army personnel 

to service anywhere outside the United States and contiguous territories. The Act of 

March 3, 1901, ch. 852, 31 Stat. 1107, 1108 (1901), authorized similar additional pay for 

Navy officers and Marine Corps personnel. Although Hawaii, Puerto Rico, Panama, and 

the Canal Zone were thereafter from time to time excluded as foreign duty pay localities, 

the basic structure of the pay remained unchanged until repealed by the Act of June 10, 

1922 (Joint Services Pay Readjustment Act of 1922), ch. 212 [Public Law 235, 67th

Congress], §15, 42 Stat. 625, 632 (1922).2

 Foreign duty pay was not authorized from 

1922 to 1942. 

 

1 Although denominated "special pay while on duty at certain places" under the law in effect immediately 

prior to enactment of the National Defense Authorization Act for Fiscal Year 1998, this special pay has 

been known by several different names over the years. To minimize the possibility of confusion, and to 

simplify the form of reference, it is referred to in this chapter by its most widely known name, "foreign 

duty pay" up to the discussion of the pay determined by the National Defense Authorization Act for Fiscal 

Year 1998. Thereafter, it is referred to by its current statutory nomenclature, hardship duty pay. 

2 Because "double time" was linked to service in certain foreign localities, it has sometimes been thought of 

as a foreign duty pay of sorts. In fact, it was no such thing. Under "double time," enlisted personnel were 

660
 The Act of March 7, 1942, ch. 166 [Public Law 490, 77th Congress], §18, 56 Stat. 

143, 148 (1942), revived foreign duty pay as a wartime measure and for the first time 

included Navy enlisted personnel within its scope. The act provided for commissioned 

officers to receive an additional 10 percent of base pay, and for warrant officers, enlisted 

personnel, and "nurses (female)" to receive an additional 20 percent, for service at any 

place outside the contiguous United States. A few months later, the Pay Readjustment 

Act of 1942, ch. 413 [Public Law 607, 77th Congress], §2, 56 Stat. 359, 360 (1942), 

enacted these foreign duty pay provisions into permanent law. 

In 1948, at the request of the Secretary of Defense, the Advisory Commission on 

Service Pay, sometimes referred to as the Hook Commission, undertook the first 

comprehensive study of military compensation since 1908. In reviewing military 

compensation generally, and foreign duty pay in particular, the Hook Commission 

recommended that this latter pay be abolished for officers but continued, albeit in a 

modified form, for enlisted personnel. In support of this recommendation, the 

Commission stated: 

The Commission has concluded that sea duty for naval personnel, as well 

as oversea duty for the Army and Air Force, although probably involving more 

inconvenience than military activity ashore or at home, is a part of their normal 

career. As such, it does not parallel the highly unusual foreign assignment in 

industry or the Federal Civil Service for which an incentive premium is offered. 

Even here, the top administrator receives relatively little extra pay for an oversea 

position. Officers, especially, do not deserve extra pay for this type of duty, since 

the pay recommended for them is apportioned to their relative responsibility as 

executives and administrators, regardless of their site of operation. Additional 

compensation is unnecessary and undesirable for work which should be 

expected as a normal incident in a chosen career. Unusual expenses incurred by 

virtue of foreign or sea duty may be reimbursable under the Post and Duty 

Allowance recommended by the Commission. 

 permitted to count for retirement purposes twice the actual length of service performed by them in Puerto 

Rico and Hawaii before April 23, 1904, and in China, Cuba, the Philippines, Guam, Alaska, and Panama 

before August 24, 1912. As such, "double time" did not involve payment of any additional monies to 

personnel serving in the affected localities; rather, "double time", as a pay construct, was used "in 

computing length of service for retirement." See, e.g., Act of May 26, 1900, ch. 586, 31 Stat. 205, 209 

(1900). 

661
 For enlisted personnel, the Commission proposes a flat rate increase, as in 

keeping with accepted industry practice for disagreeable or unpleasant work and 

as a morale factor. A percentage of pay increase for these duties bears no relation 

to the inconvenience felt by the individual nor is the unpleasantness in proportion 

to the grade or rating.3

Congress adopted the major portion of the Hook Commission's reasoning and 

recommendations concerning foreign duty pay in the Career Compensation Act of 1949, 

ch. 681 [Public Law 351, 81st Congress], §206, 63 Stat. 802, 811 (1949).4 5

 The Act 

eliminated foreign duty pay authorization for officers entirely. In addition, it changed the 

way the entitlement was computed for enlisted personnel, establishing rates ranging from 

$8 for the lowest enlisted grade to $22.50 for the top enlisted grade. When set in 1949, 

these rates approximated 10 percent of enlisted basic pay. Because rates were not 

adjusted for the ensuing 48 years, over time foreign duty pay acquired a pronounced 

"token" quality. In recommending adoption of the foreign duty pay provisions of the 

Career Compensation Act of 1949, ch. 681, id., the House Committee on Armed Services 

stated: 

 

3

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” pp. 28-29, December 1948. (In recommending 

against continuation of foreign duty pay for officers, the Commission noted, as indicated in the quoted 

material above, that "[u]nusual expenses incurred by virtue of foreign or sea duty may be reimbursable 

under the Post and Duty Allowance recommended by the Commission." id., p. 29. Cf. id., pp. 36-38 for the 

Commission's discussion and recommendation of a "Post and Duty Allowance." Despite the Hook 

Commission's recognition of the possibility of higher costs or expenses incurred by personnel assigned to 

sea or foreign duty, including officers, Congress, in acting on the Commission's recommendations, did not 

adopt any special allowance program--whether denominated a "Post and Duty Allowance" or otherwise--to 

assist affected personnel to defray such costs or expenses.) 

4

 But see the parenthetical to footnote 3 to this chapter, above. 

5 Section 206 of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §206, 63 

Stat. 802, 811 (1949), which dealt with foreign duty pay, also covered sea pay. After enactment of the 

Career Compensation Act of 1949, ch. 681, id., the sea and foreign duty pay provisions thereof were 

classified to 37 U.S.C. §237. See 37 U.S.C. §237 (1952). Later, when Title 37 of the United States Code 

was enacted into positive law by the Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the 

sea and foreign duty pay provisions were codified at 37 U.S.C. §305. The Department of Defense 

Appropriation Authorization Act, 1979, Public Law 95-485, §804, 92 Stat. 1611, 1620-1621 (1978), 

removed the sea pay provisions from 37 U.S.C. §305 and established a new "career sea pay" program, 

codified at 37 U.S.C. §305a. Under this latter program, special rates of pay were established for career sea 

duty, and these rates were substantially in excess of the rates applicable to foreign duty. For an explanation 

of the career sea pay program, and the reasons for its adoption, see Chapter II.D.3.d. hereof, "Special Pay 

for Career Sea Duty," above. 

662
The committee is in complete agreement with the Hook Commission that sea and 

foreign duty is part of the normal career of all members of the uniformed services. It 

especially recognizes that officers should not be compensated with special pay for 

overseas assignments which must be anticipated as part of an average career in the 

services. 

 On the other hand, the committee also agrees with the Hook 

Commission that some small remuneration should be granted to enlisted 

personnel who serve at sea or in foreign stations because of the morale factor 

involved. In view of the pay increases provided in the bill, the committee is of the 

opinion that the sums provided for sea and foreign duty for enlisted personnel are 

sufficient.6

In 1963 the Department of Defense proposed that foreign duty pay be eliminated--

along with sea duty pay, which was at the time also governed by 37 U.S.C. §305.7

 While 

Congress rejected the proposal, it did, in the Uniformed Services Pay Act of 1963, Public 

Law 88-132, §12(a), 77 Stat. 210, 217 (1963), change the structure of the pay. Under this 

restructuring, enlisted members serving outside the contiguous United States were not 

automatically entitled to foreign duty pay. Instead, the Secretary of Defense was to 

designate the areas for which the pay was authorized. Congress indicated that factors 

such as undesirable climate, lack of normal community facilities, and accessibility of 

location are criteria that should be used in making such designations. Because of 

differences in climate, amenities, or accessibility, some parts of a "foreign country" were 

commonly designated for foreign duty pay while other parts of the same country were 

not. The law specified that foreign duty pay was not to be paid to an individual for duty 

in a state, Puerto Rico, the Virgin Islands, a foreign country, or a possession of a foreign 

country of which that individual was a resident. The amounts payable to enlisted 

personnel for under the original legislation for foreign duty pay, which were retained 

until the passage of the National Defense Authorization Act for Fiscal Year 1998, were as 

follows: 

 

6 House Report No. 779 (Committee on Armed Services), p. 16, accompanying H.R. 5007, 81st Congress, 

1st Session (1949). Also see Senate Report No. 733 (Committee on Armed Services), p. 19, accompanying 

H.R. 5007, 81st Congress, 1st Session (1949). 

7 See footnote 5 to this chapter, above. 

663
 Pay Grade Foreign Duty Pay 

 E-9 $22.50 

 E-8 $22.50 

 E-7 $22.50 

 E-6 $20.00 

 E-5 $16.00 

 E-4 $13.00 

 E-3 $9.00 

 E-2 $8.00 

 E-1 $8.00 

 

 At the time the legislative authority for foreign duty pay was replaced by an 

expanded pay authority in the National Defense Authorization Act for Fiscal Year 1998, 

locations in the following countries, states, or regions were designated for foreign duty 

pay: Afghanistan, Alaska, Algeria, Bahamas, Antarctica, Ascension Island, Australia, 

Azores, Bahrain, Bangladesh, Belgium, Belize, Bolivia, Brazil, Bulgaria, Burkina Faso, 

Burma, Burundi, Cambodia, Cameroon, Canada, Cape Verde, Central African Republic, 

Ceylon, Chad, Chagos Archipelago, China, Colombia, Congo, Costa Rica, Crete, Cuba, 

Cyprus, Czechoslovakia, Djibouti, Dominican Republic, Ecuador, Egypt, Eleuthera 

Island, El Salvador, Eniwetok, Ethiopia, Finland, Gabon, the former German Democratic 

Republic, Ghana, Greece, Greenland, Grenada, Guam, Guatemala, Guinea, Haiti, 

Honduras, Hungary, Iceland, India, Indonesia, Iran, Iraq, Ireland, Israel, Italy, Jamaica, 

Japan, Johnston Island, Jordan, Kenya, Korea, Kosrae Island, Kuwait, Kwajalein, Laos, 

Lebanon, Liberia, Mahe Island, Malagasy Republic (Madagascar), Malawi, Malaysia, 

Mali, Malta, Mariana Islands, Mauritius, Mexico, Midway Islands, Morocco, 

Mozambique, Namibia, Nepal, Netherlands Antilles, Nicaragua, Niger, Nigeria, Norway, 

Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Phoenix Islands, Poland, Ponape, 

Puerto Rico, Qatar, Romania, Rwanda, Saipan, Sicily, Samoa, Sardinia, Saudi Arabia, 

Scotland, Senegal, Sierra Leone, Singapore, Somalia, Spain, Sudan, Suriname, Sweden, 

Syria, Taiwan, Tanzania, Thailand, Togo, Truk Atoll, Tunisia, Turkey, Turks and Caicos 

Islands, Uganda, United Arab Emirates, former U.S.S.R., Venezuela, Vietnam, Wake 

Island, Yemen, former Yugoslavia, Zaire, Zambia, and Zimbabwe. 

 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1789, made significant changes in the scope of 37 U.S.C. §305. The act 

664
eliminated the “token” quality of special payment for this type of duty by prescribing a 

maximum monthly payment of $300 for members on duty in places designated as 

hardship duty locations. No differentiation by grade was prescribed. The act eliminated 

the restriction of eligibility for such pay to enlisted members by applying the pay simply 

to “a member of the uniformed service who is entitled to basic pay,” and it lifted the 

prohibition on paying hardship duty location pay for duty in areas where the member was 

a resident and the prohibition on receiving this pay together with sea pay during the same 

service period. The legislation also changed the nomenclature of the special pay, 

replacing “foreign duty pay” with “hardship duty location pay,” in keeping with the new 

stipulation that designated duty locations could be either within or outside the United 

States. The National Defense Authorization Act for Fiscal Year 1999, Public Law 105-

261, 112 Stat. 2035, made another change of nomenclature, from “hardship duty location 

pay” to “hardship duty pay.” 

 As a result of the expanded statutory authority provided in the National Defense 

Authorization Acts for Fiscal Years 1998 and 1999, as of September 2004 hardship duty 

pay was paid to members of the uniformed services assigned to Joint Task Force Full 

Accounting, Central Identification Lab-Hawaii, and the Defense Prisoner of War/Missing 

Personnel Office, for performance of hardship duty in remote, isolated areas to 

investigate or recover the remains of U.S. service members lost in past wars. Hardship 

duty pay also is being authorized to members in countries and other jurisdictions of the 

world in designated hardship duty locations (places where living conditions are 

substantially below that which members generally experience in the United States. As of 

September 2004, hardship duty pay also was being paid to members whose service in 

Iraq was extended beyond 12 months. In 2004 these were the areas designated for 

hardship duty pay: 

 Afghanistan, Alaska (certain areas), Albania, Angola, Antarctica region, Antigua, 

Arctic Circle region, Armenia, Ascension Island, Australia, Azores, Bahamas, 

Bangladesh, Barbados, Belarus, Belize, Benin, Bolivia, Botswana, Brazil, Brunei, 

Bulgaria, Burkina Faso, Burma, Cambodia, Cameroon, Canada, Cape Verde, Central 

African Republic, Chad, Chagos Archipelago, China, Colombia, Congo, Cook Islands, 

Costa Rica, Cuba, Cyprus, Djibouti, Dominican Republic, East Timor, Ecuador, Egypt, 

665
El Salvador, Eritrea, Estonia, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana, Greece, 

Greenland, Grenada, Guatemala, Guinea, Guinea Bissau, Guyana, Haiti, Honduras, 

Hungary, Iceland, India, Indonesia, Iraq, Israel, Ivory Coast, Jamaica, Johnston Island, 

Jordan, Kazakhstan, Kenya, Korea, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lesotho, 

Mauritius, Mexico, Micronesia, Moldova, Mongolia, Mozambique, Namibia, Nepal, 

Paraguay, Peru, Philippines, Poland, Puerto Rico, Qatar, Romania, Russia, Samoa, Sao 

Tome and Principe, Saudi Arabia, Senegal, Sierra Leone, Soloman Islands, Spain, Sri 

Lanka, Suriname, Syria, Taiwan, Tajikistan, Tanzania, Thailand, Togo, Trinidad and 

Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, 

Uzbekistan, Venezuela, Vietnam, Western Sahara, Yemen, Zambia, and Zimbabwe. 

 

Cost: For the cost of foreign duty/hardship pay from 1972 to 1998, see Table II35 of Military Compensation Statistics Tables, volume II of this edition. 

666
Chapter II.E.2.j. 

 Overseas Duty Extension Pay 

Legislative Authority: 37 U.S.C. §314. 

Purpose: To provide an incentive for enlisted personnel in certain critical skill 

classifications to extend tours of duty overseas for the convenience of the government. 

Background: The Military Pay and Allowances Benefits Act of 1980, Public Law 

96-579, §5(a)(1) and (b)(1), 94 Stat. 3359, 3366-3367 (1980), added two new provisions 

to deal with critical skills shortage problems the a were experiencing with certain enlisted 

members assigned to tours of duty overseas. The first of the two provisions, which 

authorized a special pay for enlisted members of the Armed Forces in certain critical skill 

specialties who agreed to extend tours of duty overseas for at least a year, is codified, as 

amended, at 37 U.S.C. §314.1 2

 The second, which authorized certain "rest and 

recuperative absence" benefits (more fully described below), is codified at 10 U.S.C. 

§705.3 4

 The provisions in question were adopted to provide incentives to "assist in 

alleviating a problem of manning skills in which the majority of the skill requirements are 

in overseas areas."5

 Congress went on to note that the skill shortages were significant 

enough "[i]n many instances ... [to] result ... in members being required to be reassigned 

overseas after less than 24 months in the United States" and that this increased frequency 

 

1

 Though denominated "Special pay: qualified enlisted members extending duty at designated locations 

overseas," the pay is referred to herein as "overseas duty extension pay." 

2

 While most of the provisions of Title 37, United States Code, apply generally to members of the 

uniformed services, the overseas duty extension pay provisions of 37 U.S.C. §314 apply only to members 

of the Armed Forces, and even then, only to enlisted members. 

3

 The short-form reference to the benefits made available in 10 U.S.C. §705--in short, the section heading--

is "Rest and recuperative absence for qualified enlisted members extending duty at designated locations 

overseas". 

4 As was true with respect to overseas duty extension pay, the rest and recuperative absence provisions of 

10 U.S.C. §705 apply only to enlisted members of the Armed Forces. See footnote 2 to this chapter, above. 

5 House Report No. 96-1230 (Committee on Armed Services), pp. 6-7, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

667
of overseas assignment was "cited by many NCOs as their reason for leaving the 

service."6

To address this problem, the Military Pay and Allowances Benefits Act of 1980, 

Public Law 96-579, id., §5(a)(1), 94 Stat. at 3366, authorized the payment of overseas 

duty extension pay, at a rate not to exceed $50 per month "for duty performed during the 

period of the extension," to enlisted members of the Armed Forces who, after completion 

of tours of duty overseas in certain critical skill specialties,7

 agreed to extend such tours 

for at least one full year. The "rest and recuperative absence" provisions of the Military 

Pay and Allowances Benefits Act, Public Law 96-579, id., §5(b)(1), 94 Stat. at 3366-

3367, incorporated the same eligibility criteria and authorized one of two "benefits" to 

eligible members--either a period of "rest and recuperative absence" of not more than 30 

days or a similar absence not to exceed 15 days but with the provision of round-trip 

transportation, at government expense, between the overseas duty station involved and 

the "nearest port" in the United States.8

 A person granted rest and recuperation under 10 

U.S.C. §705 with respect to a given overseas duty extension agreement could not receive 

overseas duty extension pay under 37 U.S.C. §314 for the same extension. On the other 

hand, if a given member were granted a request for rest and recuperation under 10 U.S.C. 

§705, any period of absence within the amount allowed by the provision in question was 

not to be charged against leave the member would otherwise be entitled to. Before 

granting a member's request for "rest and recuperative absence," the Secretary of the 

 

6 House Report No. 96-1230 (Committee on Armed Services), p. 7, accompanying H.R. 7626, 96th 

Congress, 2d Session (1980). Also see Senate Report No. 96-1051 (Committee on Armed Services), pp. 5-

6, accompanying H.R. 7626, 96th Congress, 2d Session (1980). 

7

 The skills affected are to be specially designated by the Secretaries of the various Armed Forces in 

keeping with the purposes underlying the authorization of the special pay. 

8 As initially proposed, the "rest and recuperative absence" provisions would have allowed a third 

alternative benefit--namely, the provision of round-trip transportation, again at Government expense, 

between a member's duty station and the United States for both the affected member and his dependents, 

but with no additional leave authorized. This benefit was deleted, however, because of the Senate's concern 

that, if anything, it would provide an incentive for enlisted personnel to take their dependents on overseas 

tours of duty, whereas there was, in fact, at least in the contemplation of the Senate, a "need for positive 

incentives to reduce the large number of dependents overseas." Senate Report No. 96-1051 (Committee on 

Armed Services), p. 6, accompanying H.R. 7626, 96th Congress, 2d Session (1980). 

668
appropriate department is required to make a special determination that the member's 

absence under the program will "not adversely affect combat or unit readiness." 

As reflected in Congressional Budget Office estimates, the provision of the 

overseas duty extension incentives in question was expected to result in a net cost saving 

to the government of $21.6 million in fiscal year 1981, resulting mainly from lower costs 

associated with fewer permanent change of station (PCS) moves, leave, and travel that 

year, but would have a positive cost of $3.0 million in fiscal year 1982, resulting from the 

delayed PCS costs of personnel ending tour extensions.9

 Positive costs were anticipated 

for years following fiscal year 1982.10

The overseas duty extension pay provision of 37 U.S.C. §314 became effective, 

with respect to periods of extended overseas duty beginning before, on, or after the date 

of enactment of the Military Pay and Allowances Benefits Act, Public Law 96-579, id.,11

on January 1, 1981. Military Pay and Allowances Benefits Act of 1980, Public Law 96-

579, id., §5(c)(1), 94 Stat. at 3367. See 37 U.S.C. §314 note. The "rest and recuperative 

absence" provisions of 10 U.S.C. §705 became effective on the date of enactment but 

applied only to periods of extended duty beginning on or after such date.12 Military Pay 

and Allowances Benefits Act of 1980, Public Law 96-579, id., §5(c)(2). See 10 U.S.C. 

§705 note. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§641(a), 99 Stat. 583, 652 (1985), increased the maximum rate of special pay for enlisted 

 

9

 Senate Report No. 96-1051 (Committee on Armed Services), pp. 30-31, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). Also see House Report No. 96-1230 (Committee on Armed Services), pp. 42-

43, accompanying H.R. 7626, 96th Congress, 2d Session (1980). 

10 Senate Report No. 96-1051 (Committee on Armed Services), pp. 30-31, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). Also see House Report No. 96-1230 (Committee on Armed Services), pp. 42-

43, accompanying H.R. 7626, 96th Congress, 2d Session (1980). 

11 The date of enactment was December 23, 1980. 

12 See footnote 11, above. 

669
personnel agreeing to extend tours of duty overseas from $50 per month to $80 per 

month. As explained by the House Committee on Armed Services: 

Qualified enlisted personnel currently are permitted to select either $50 

per month special pay during the period of extension, 30 days of nonchargeable 

leave, or 15 days of nonchargeable leave plus round trip transportation at 

government expense to and from the continental United States. 

 The Committee recommends increasing the monthly cash incentive for 

qualified enlisted personnel to extend their overseas tour from $50 per month to 

$80 per month as part of its emphasis on initiatives to reduce the number of 

PCS moves.13

The Committee went on to note its "belief that this extension program could and 

should be offered to more personnel serving overseas."14

 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1770, added an annual bonus, not to exceed $2,000, as an alternative to the 

existing monthly special pay of $80. The choice between the two forms of payment is at 

the discretion of the relevant Secretary. By agreement with the member, the bonus may 

be paid in a lump sum or in installments. 

Current rates of pay authorized: Qualified enlisted members who have agreed 

to extend their duty tours at designated locations overseas are entitled to special pay at a 

rate not to exceed $80 per month for each month of their extensions, or an annual bonus 

not to exceed $2,000. 

Cost: For the cost of overseas duty extension pay from 1981 to 2004, see Table 

II-36 of Military Compensation Statistics Tables, volume II of this edition. 

 

13 House Report No. 99-81 (Committee on Armed Services), p. 233, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

14 House Report No. 99-81 (Committee on Armed Services), p. 233, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

670
Chapter II.E.2.k. 

 Foreign Language Proficiency Pay 

Legislative Authority: 37 U.S.C. §316. Also see 37 U.S.C. §316a. 

Purpose: To provide a special incentive for members of the Armed Forces to 

become proficient, or to increase their proficiency, in foreign languages in order to 

enhance the foreign language capabilities of the Armed Forces generally. 

Background: The Department of Defense Authorization Act, 1987, Public Law 

99-661, §634(a), 100 Stat. 3816, 3884-3885 (1986), established a new special pay for a 

member of the Armed Forces "who has been certified by the Secretary concerned within 

the past 12 months to be proficient in a foreign language identified by the Secretary of 

Defense as being a language in which it is necessary to have personnel proficient because 

of national defense considerations."1

 The new special pay is payable, in amounts not to 

exceed $100 per month, as determined by "the Secretary concerned," to a member of an 

armed force who either (i) "is qualified in a military specialty requiring ... proficiency" in 

one of the identified foreign languages, or (ii) "received training ... designed to develop 

such proficiency," or (iii) "is assigned to military duties requiring such a proficiency," or 

(iv) "is proficient in a foreign language for which the Department of Defense may have a 

critical need...." 37 U.S.C. §316(a)(3)(A)-(D). Foreign language proficiency pay may be 

paid to a qualified member in addition to any other pay or allowance to which the 

member may be entitled. 

Entitlement to foreign language proficiency pay was specifically extended to 

members of Reserve components engaged in inactive-duty training in the Department of 

Defense Authorization Act, 1987, Public Law 99-661, §634(a), 100 Stat. 3816, 3884-

3885 (1986). 37 U.S.C. §316(c). Under 37 U.S.C. §316(c), members of reserve 

components of the Armed Forces engaged in such training are entitled to one-thirtieth of 

 

1

 The new pay, denominated "Foreign Language Proficiency Pay" in the Department of Defense 

Authorization Act, 1987, Public Law 99-661, §634(a), 100 Stat. 3816, 3884-3885 (1986), is payable only to 

members of the armed forces, not to members of other branches of the uniformed services. 

671
the rate of foreign language proficiency pay authorized by "the Secretary concerned" for 

active duty personnel for "each regular period of instruction, or appropriate duty" in 

which the member engages, as well as for "each period of performance of ... other 

equivalent training, instruction, duty, or appropriate duties." 

 As explained by the Senate Committee on Armed Services: 

The committee has been advised that there is an urgent need to enhance 

the foreign language capabilities of the Armed Forces. Currently, the Department 

of State, the National Security Agency and the Central Intelligence Agency each 

have a special pay program designed to motivate personnel to maintain and 

enhance foreign language proficiencies. The need for such proficiency in the 

Armed Forces is increasing because of the greater cooperation with allies required 

by our global commitments, because of the need for greater usage of special 

operations forces, and because of the increasing demands for military intelligence. 

 In order to meet this need, the committee recommends the 

authorization of a new special pay for foreign language proficiency....2

As noted in the Conference Report on the Department of Defense Authorization 

Act, 1987, Public Law 99-661, id.: 

 The conferees intend that this [foreign language proficiency pay] 

program be designed to -- 

(1) pay a stipend to those members who develop a proficiency in critical 

foreign language communication skills that test at or above a utility level 

established by the Department of Defense; and 

(2) encourage the development of critical foreign language skills by 

judiciously limiting the specialty pay to members who obtain reading, speaking, 

and listening skills as a second language.3

In a partial exception to the "certification" requirement of 37 U.S.C. §316, i.e., the 

requirement that, to be eligible for foreign language proficiency pay, an affected member 

have "been certified by the Secretary concerned within the past 12 months to be 

 

2 Senate Report No. 99-331 (Committee on Armed Services), p. 233, accompanying S. 638, 99th Congress, 

2d Session (1986). See House Report No. 99-1001 (Committee of Conference), p. 482, accompanying S. 

2638, 99th Congress, 2d Session (1986).

3 House Report No. 99-1001 (Committee of Conference), p. 482, accompanying S. 2638, 99th Congress, 2d 

Session (1986). 

672
proficient in a language identified ... as being a language in which it is necessary to have 

personnel proficient because of national defense considerations,"4

 the National Defense 

Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §636(a), 105 

Stat. 1290, 1382 (1991), provided that a member otherwise entitled to foreign language 

proficiency pay except for being unable to meet the annual certification requirement 

because he was "assigned to duty in connection with a contingency operation" could 

nevertheless continue to draw the incentive special pay during the period he was so 

assigned and would have an additional 180 days after being released from the "duty in 

connection with a contingency operation" to complete the required certification.5

 This 

provision was codified to Section 316a of Title 37, United States Code, 37 U.S.C. §316a. 

A similar exception had been made for members participating in Operation Desert 

Storm/Desert Shield by the Persian Gulf Conflict Supplemental Authorization and 

Personnel Benefits Act of 1991, Public Law 102-25, §306, 105 Stat. 75, 82 (1991), 6

 and 

 

4 See text accompanying footnote 1 to this chapter, above. 

5 The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §631, 105 

Stat. 1290, 1380 (1991), as itself subsequently amended, further amended Titles 10 and 37, United States 

Code, by providing a definition of the term "contingency operation", as follows: 

The term "contingency operation" means a military operation that-- 

(A) is designated by the Secretary of Defense as an operation in which members of the Armed Forces are or 

may become involved in military actions, operations, or hostilities against an enemy of the United States or 

against an opposing military force; or 

(B) results in the call or order to, or retention on, active duty of members of the uniformed services under 

section 688, 12301(a), 12302, 12304, 12305, or 12306 of this title [Title 10, United States Code], chapter 

15 of this title, or any other provision of law during a war or during a national emergency declared by the 

President or Congress. 

The subject provision is presently codified at 10 U.S.C. §101(a)(13), whereas the definition of 

"contingency operation" codified to Title 37, United States Code, merely provides that for the purposes of 

the latter title "[t]he term `contingency operation' has the meaning given that term in section 101 of title 

10". 37 U.S.C. §101(26). 

6 See House Report No. 102-16, Part 1 (Committee on Armed Services), p. 11, accompanying H.R. 1175, 

102d Congress. 1st Session (1991). 

673
the National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-

190, id., was intended to make that ad hoc exemption permanent.7

The National Defense Authorization Act for Fiscal Year 2000, Public Law 106-

65, 113 Stat. 654, increased the maximum amount of monthly foreign language 

proficiency pay from $100 to $300. In 2003 the House Armed Services Committee 

brought the value of this special pay into contemporary perspective with the following 

statement: 

The committee urges the Secretaries of the military departments to 

fully utilize the flexibility provided in the critical skills retention bonus to 

address the need to retain qualified foreign language speakers. The war on 

terrorism has highlighted the need to attract and retain foreign language 

speakers, including, but not limited to, critical languages such as Arabic, 

Korean, Mandarin Chinese, Persian-Farsi, and Russian.8

Current rate of pay authorized: Foreign language proficiency pay is currently 

authorized at a rate not to exceed $300 per month, as determined by the "Secretary 

concerned." 

Cost: For the cost of foreign language proficiency pay from 1987 to 2004, see 

Table II-37 of Military Compensation Statistical Tables, volume II of this edition. 

 

7 Senate Report No. 102-113 (Committee on Armed Services), p. 219, accompanying S. 1507, and House 

Report No. 102-311 (Committee of Conference), p. 552, accompanying H.R. 2100, 102d Congress, 1st

Session (1991). 

8

 House Report 107-436 (Committee on Armed Services), p. 317, accompanying H.R. 4546, 107th

Congress, 2d Session (2002). 

674
Chapter II.E.2.l. 

 Reserve Officers Pay for Administrative Duty 

Legislative Authority: Formerly, 37 U.S.C. §309. The legislative authority for 

this special pay was repealed by the Department of Defense Authorization Act, 1980, 

Public Law 96-107, §404(a)(1), 93 Stat. 803, 808 (1979). 

Purpose: To authorize commanding officers of reserve organizations to receive 

pay for the performance of certain administrative functions required of them in 

connection with reserve service. 

Background: The Act of June 4, 1920 (National Defense Act Amendments of 

1920), ch. 227 [Public Law 242, 66th Congress], §47, 41 Stat. 759, 783 (1920), provided 

the first legislative authority for administrative function pay for commanders of National 

Guard units. This authority, which amended Section 109 of the Act of June 3, 1916 

(National Defense Act of 1916), ch. 134 [Public Law 85, 64th Congress], §109, 39 Stat. 

166, 209 (1916), provided, among other things, as follows: 

 ... Captains commanding organizations shall receive $240 a year in 

addition to the drill pay herein prescribed. Officers above the grade of captain 

shall receive not more than $500 a year, and officers below the grade of major, 

not belonging to organizations, shall receive not more than four-thirtieths of the 

monthly base pay of their grades for satisfactory performance of their appropriate 

duties under such regulations as the Secretary of War may prescribe. 

This authority was extended to other officers by the Act of June 10, 1922 (Joint 

Service Pay Readjustment Act of 1922), ch. 212 [Public Law 235, 67th Congress], §14, 

42 Stat. 625, 631 (1922): 

 ... Hereafter, in addition to pay authorized in section 109, Act of June 3, 

1916 [National Defense Act of 1916], as amended by the Act of June 4, 1920, 

field officers and lieutenants of the National Guard commanding organizations 

less than a brigade, and having administrative functions, shall receive $240 per 

year for the faithful performance of the administrative duties connected therewith; 

and warrant officers of the National Guard shall receive not more than fourthirtieths of the monthly base pay of their grade for satisfactory performance of 

their appropriate duties, under such regulations as the Secretary of War may 

prescribe. 

675
The Act of June 3, 1924, ch. 244 [Public Law 186, 68th Congress], §3, 43 Stat. 

363, 364 (1924), again amended Section 109 of the Act of June 3, 1916 (National 

Defense Act of 1916), ch. 134 [Public Law 85, 64th Congress], §109, 39 Stat. 166, 

209 (1916), with respect to additional pay for administrative functions: 

 ... In addition to pay hereinbefore provided, officers commanding 

organizations less than a brigade and having administrative functions connected 

therewith, shall, whether or not such officers belong to such organizations, receive 

not more than $240 a year for the faithful performance of such administrative 

functions under such regulations as the Secretary of War may prescribe; and for 

the purpose of determining how much shall be paid to such officers so performing 

such functions, the Secretary of War may, from time to time, divide them into 

classes and fix the amount payable to the officers in each class. Pay under the 

provisions of this section shall not accrue to any officer during a period when he 

shall be entitled under any provisions of law to the full rate of his base pay 

prescribed in section 3 or section 9, as the case may be, of the Pay Readjustment 

Act of June 10, 1922 [Act of June 10, 1922, ch. 212 [Public Law 235, 67th

Congress], §§3 and 9, 42 Stat. 625, 627, 629-630 (1922)]. 

The Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], 

§14, 56 Stat. 359, 367 (1942), further amended the administrative duty provisions of the 

law: 

 ... In addition to pay herein provided, officers of the National Guard 

commanding organizations less than a brigade and having administrative 

functions connected therewith shall, whether or not such officers belong to such 

organizations, receive not more than $240 a year for the faithful performance of 

such administrative functions under such regulations as the Secretary of War may 

prescribe: Provided, That the provisions of this paragraph shall not apply when 

such persons are on active duty in the Federal service. 

In the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st

Congress], §501(c), 63 Stat. 802, 826 (1949), Congress, while adopting what was in 

many ways a new active duty pay system, again amended the administrative duty pay 

provisions, mainly in order to make them compatible with the new "career compensation" 

system: 

 In addition to pay provided in subsection (a) of this section [relating to 

inactive-duty training pay], officers of the National Guard, Air National Guard, 

National Guard of the United States, the Air National Guard of the United 

States, Organized Reserve Corps, Naval Reserve, Marine Corps Reserve, Coast 

676
Guard Reserve, and the Reserve Corps of the Public Health Service, commanding 

organizations having administrative functions connected therewith shall, whether 

or not such officers belong to such organizations, be entitled to receive not more 

than $240 a year for the faithful performance of such administrative functions 

under such regulations as the Secretary concerned may prescribe; and for the 

purpose of determining how much shall be paid to such officers so performing 

such functions, the Secretary concerned may, from time to time, divide them into 

classes and fix the amount payable to the officers in each class. 

In the Act of September 7, 1962, Public Law 87-649, §309, 76 Stat. 451, 468-469 

(1962), which enacted Title 37, United States Code, into positive law, Congress again 

amended the administrative duty pay provisions of the law, this time to provide: 

(a) Under regulations prescribed by the Secretary concerned, an officer of the 

National Guard or of a Reserve Component of a uniformed service who 

commands an organization, and has administrative functions connected with it, is 

entitled to not more than $240 a year for the faithful performance of those 

functions, in addition to pay to which he is entitled under section 206 of this title 

[relating to compensation for inactive-duty training]. 

(b) For the purpose of determining the amounts to be paid to officers 

performing the functions described in subsection (a) of this section, the Secretary 

concerned may, from time to time, divide those officers into classes and fix the 

amount payable to officers in each class. 

(c) This section does not apply to an officer who is entitled to basic pay under 

section 204 of this title [relating to members of the uniformed services on active 

duty or participating in full-time training, training duty with pay, or other fulltime duty]. 

The authority providing for administrative duty pay was repealed, at the urging of 

the Department of Defense, in the Department of Defense Authorization Act, 1980, 

Public Law 96-107, §404(a)(1), 93 Stat. 803, 808-809 (1979). In recommending repeal, 

the Department of Defense noted: 

 The purpose of this legislation is to repeal an antiquated section of Title 

37, United States Code. Additional pay for performance of administrative duty 

historically has been authorized for an officer of the National Guard or of a 

reserve component of a uniformed service who commands an organization and 

has administrative functions connected with the position of command. The 

additional pay provided in 37 U.S.C. §309 was first authorized in 1920. Over the 

years the administrative burden on officers commanding National Guard and 

reserve units has been reduced in several ways. First, administrative support is 

provided by a cadre of permanent active duty personnel. Second, civilian 

technicians now perform administrative functions. Finally, in some circumstances 

677
extra paid training periods are authorized. Consequently, it is the opinion of the 

Department of Defense that the additional pay authorized by 37 U.S.C. §309 no 

longer can be justified.1

In accepting the Department of Defense recommendations, Congress noted: 

 The committee bill includes a provision ... proposed by the Department 

of Defense which would repeal the authority for additional pay for Reserve and 

National Guard commanders for the performance of administrative duty. In 1916, 

the payment of administrative duty for administrative chores performed outside of 

the regular drill time began. The amounts vary from $10 to $20 per month, 

depending on the size of the unit commanded. For units with under 50 personnel, 

commanders receive $10 per month, for units with 50-99 personnel, they receive 

$15, and for units with over 100 personnel, they receive $20. 

 Since 1916 conditions have changed so that reserve units have more 

paid drills and therefore commanders can spend more paid drill time for 

administrative duty. The full-time reserve technician program has been 

established and increased, thus removing much administrative burden from unit 

commanders. Active duty assistance to the reserve components has been 

substantially increased. Given these changing conditions the committee saw fit to 

approve the administration proposal to repeal the authority for administrative duty 

pay. The committee provision is expected to save about $2 million annually.2

Current rates of pay authorized: None. The authority for reserve officers pay 

for administrative duty was repealed in 1979 by the Department of Defense Authorization 

Act, 1980, Public Law 96-107, §404(a)(1), 93 Stat. 803, 808-809 (1979). No provision 

was made for continued receipt of the special pay by persons receiving such pay at the 

time of repeal. 

Cost: For the cost of reserve officers’ pay for administrative duty from 1972 to 

1980, see Table II-38 of Military Compensation Statistical Tables, volume II of this 

edition. 

 

1 Senate Report No. 96-197 (Committee on Armed Services), p. 108, accompanying S. 428, 96th Congress, 

2d Session (1980). 

2

 Senate Report No. 96-197 (Committee on Armed Services), p. 107, accompanying S. 428, 96th Congress, 

2d Session (1980). 

678
Chapter II.E.2.m. 

High-Deployment Allowance 

 Legislative Authority: 10 U.S.C. §991, 37 U.S.C. §436. 

Purpose: To ensure that members who are deployed away from permanent duty 

stations for more than a stipulated number of days per year receive an allowance in 

recompense for the burden of such deployment. 

Background: The House Armed Services Committee report accompanying the 

National Defense Authorization Act for Fiscal Year 2000 noted that the Defense 

Department lacked a unified system to monitor and record where and when military 

personnel serve their assignments. (The distribution of assignments across the range of 

activities of the military branches is known as personnel tempo, PERSTEMPO.) In the 

1990s, this lack has affected particularly the ability to quantify deployments made to duty 

stations other than those to which members are permanently assigned. The report stated: 

It is difficult for DoD to determine the actual time that either military 

personnel or their units are deployed. This information is important to planning 

and managing contingency operations. Although all services now have systems to 

measure PERSTEMPO, each service has different (1) definitions of what 

constitutes a deployment, (2) policies or guidance for the length of time units or 

personnel should be deployed, and (3) systems for tracking deployments. 

The committee believes that a common definition is essential to present a 

more accurate evaluation and management of the PERSTEMPO and OPTEMPO 

problem.1

To remedy this situation, in 1999 Congress mandated that the Secretaries of the 

respective services manage more precisely the PERSTEMPO of active duty and reserve 

members. The National Defense Authorization Act for Fiscal Year 2000, Public Law 

106-65, 113 Stat. 637, added two sections to the United States Code addressing the 

deployment of members away from permanent duty stations. The first addition, 10 U.S.C. 

§991, established the responsibility of general and flag officers for ensuring that members 

under their command who are in “high deployment” status (those who have been 

 

1

 House Report No. 106-162 (Committee on Armed Services), p. 384, accompanying H.R. 1401, 106th

Congress, 1st Session (1999). (OPTEMPO is a corresponding measure of equipment usage in military 

operations.) 

679
deployed for a total of 182 or more days out of the previous 365) not remain deployed 

beyond the threshold number of 220 days out of the previous 365. Exceptions were to be 

made if such deployment were approved by a general or admiral in the member’s chain 

of command or if the relevant Secretary waived the law for reasons of national security. 

The law defined “deployment” as occurring when a member “is performing service in a 

training exercise or operation at a location or under circumstances that make it impossible 

or infeasible for the member to spend off-duty time in the housing in which the member 

resides when on garrison duty at the member’s permanent duty station.” The Secretary of 

the relevant department was charged with recording the deployment activity of each 

member for the purpose of determining possible high-deployment status. 

The second new section, 37 U.S.C. §435 (subsequently renumbered as §436), 

aimed specifically at improving retention and minimizing the deployment-related 

personal hardship of Armed Forces members. That section prescribed a per diem 

allowance of $100 for members deployed a total of more than 250 days out of the 

previous 365. The allowance was in addition to any other allowance or bonus received. 

The beginning date for computation of deployment days was October 1, 2000. 

The National Defense Authorization Act for Fiscal Year 2001, Public Law 106-

398, 114 Stat. 1654A-136, clarified the conditions under which a reserve member would 

be considered to be deployed. Such a member would fall into the deployed category if 

assigned at a location other than the permanently assigned duty site and at least 100 miles 

from the member’s permanent residence, or if assigned at a location other than the 

permanently assigned duty site and requiring more than three hours of travel to reach the 

member’s permanent residence. The National Defense Authorization Act for Fiscal Year 

2001, Public Law 107-107, 115 Stat. 1093, broadened the definition of a reserve 

member’s place of residence to include any housing customarily occupied in off-duty 

time when the member is at the permanent duty station. 

The National Defense Authorization Act for Fiscal Year 2004, Public Law 108-

136, 117 Stat. 1475, redefined the high-deployment thresholds and the configuration of 

the allowance. That legislation established one-year and two-year high-deployment 

thresholds beyond which the responsible officer may not allow a member’s deployment 

to extend. The one-year threshold is 220 days out of the previous 365, and the two-year 

680
threshold is 400 days out of the previous 730. The Secretary of Defense has the authority 

to lower those amounts. The 2004 law replaced the $100 per diem allowance with a 

monthly allowance of $1,000, payable for any month in which a member is beyond the 

high-deployment threshold by at least one day. The thresholds for this payment are not 

identical to the limits prescribed for managing deployment. To receive the highdeployment monthly allowance, a member must have been deployed for more than 190 

consecutive days within the previous 365 days, or for a total of more than 400 days 

within the previous 730 days. As in the case of the deployment management guidelines, 

the Secretary of Defense can reduce the threshold numbers at his discretion. In both 

cases, the law permits the Secretary to lower but not to raise the threshold. 

 Members of reserve units qualify for the allowance if they are called to active 

duty for a second deployment of more than 30 days within a calendar year, or if they are 

called for a second active-duty deployment exceeding 30 days in support of the same 

contingency operation, regardless of time elapsed since the first call. 

Current rate of pay: The current monthly allowance for members in highdeployment status is $1,000. 

681
Chapter III.A.1. 

 Overview of Retired and Retainer Pay, 

 Separation Payments, and Post-Service Benefits 

Broadly speaking, the individual chapters that comprise this Section III of 

Military Compensation Background Papers: Compensation Elements and Related 

Manpower Cost Items--Their Purposes and Legislative Backgrounds deal with the 

various items of pay and benefits that accrue to members of the Armed Forces when they 

retire or are otherwise separated from their respective services. There are a number of 

pays and benefits that apply specifically to persons who are separated from their services 

before they become eligible for retirement benefits, and these pays and benefits are set 

out under Subsection C of this Section III, "Separation Pays and Post-Service Benefits," 

below. A broader and more comprehensive set of pays and benefits accrues to members 

who retire from service, whether because of disability or otherwise. Retired and retainer 

pays are covered in Subsection B of this Section III, "Retirement and Retainer Pays," and 

benefits available to retired members and their dependents are set out in Subsection D, 

"Benefits Specially Applicable to Retired Personnel and Their Dependents." 

The purposes that underlie and inform the various pays and benefits covered in 

this Section III include: 

* The provision of a socially acceptable level of payments to members and former 

embers of the Armed Forces during their old age. 

* The provision of a retirement system that will enable the Armed Forces to remain 

generally competitive with private-sector employers and the Federal Civil Service. 

* The provision of a pool of experienced military manpower that can be called upon in 

time of war or national emergency to augment the active-duty forces of the United 

States, and the establishment of a mechanism whereby persons in this pool can move 

into and out of the active-duty force smoothly.1

 

1

 For the conditions under which retired members of the Armed Forces may be recalled to active duty, see 

text accompanying footnotes 48 and 49 to Chapter III.B.1. hereof, "Nondisability Retired and Retainer 

Pay", and text accompanying footnotes 15 and 16 to Chapter III.B.2., "Retired Pay for Non-Regular Service 

(Reserve Retirement)", below. 

682
* The provision of a socially acceptable means of keeping the military forces of the 

United States young and vigorous, thereby insuring promotion opportunities for 

younger members. 

As such, the principles and concepts of military compensation that are 

exemplified by the system of retired and retainer pays, separation pays, and post-service 

benefits covered in this Section III are focused on the overall effectiveness of the 

compensation system in both peace and war; on the achievement of substantial equity for 

members of the Armed Forces, especially in the sense of establishing a compensation 

system that is generally competitive with compensation in the private sector; on the 

interrelationship between the military manpower requirements of the United States and 

the compensation system considered as a whole; and on the motivation of members and 

potential members of the Armed Forces. 

It should be noted that, while there may be a superficial resemblance between the 

military retirement system and retirement systems that exist in the private sector, there 

are in fact substantial differences between the military retirement system and all other 

retirement systems, including that of federal civil servants. First, retired members of the 

Armed Forces are subject to recall to active duty; private sector employees and civil 

servants suffer under no such liabilities. Second, and in that same connection, regular 

retired members of the Armed Forces are fully subject to the Uniform Code of Military 

Justice,2

 thus providing sanctions for the enforcement of the recall authority. Third, 

entitlement to military retirement benefits is an all-or-nothing proposition, turning 

generally on the completion of a minimum of 20 years of satisfactory federal service; the 

military retirement system, in marked contrast to private-sector and Civil Service 

retirement systems, does not provide for the gradual vesting of retirement benefits. 

Cost: For the cost of retired and separation pays and benefits from 1972 to 2004,

see Table III-1 of Military Compensation Statistical Tables, volume II of this 

edition. 

 

2

 The Uniform Code of Military Justice is codified as Chapter 47 of Title 10, United States Code, 10 U.S.C. 

§§801-946. 

683
Chapter III.B.1. 

 Nondisability Retired and Retainer Pay 

Legislative Authority: Nondisability retirement and retired and retainer pay 

authority is set out in various provisions of Title 10, United States Code.1

Purpose: To establish a nondisability retirement system and authorize the 

payment of retired pay for service in the Armed Forces of the United States in order to 

insure that (1) the choice of career service in the Armed Forces is competitive with 

reasonably available alternatives, (2) promotion opportunities are kept open for young 

and able members, (3) some measure of economic security is made available to members 

after retirement from career military service, and (4) a pool of experienced personnel 

subject to recall to active duty during time of war or national emergency exists. 

Background: Except for an 1855 statute that provided for the compulsory 

retirement of certain Navy officers, there was no legislative authority before 1861 that 

provided for either the voluntary or the involuntary retirement of active-duty members of 

the Armed Forces from military service. The effect of this lack of authority was described 

many years later in a Congressional study of Army retirement: 

The unsatisfactory personnel conditions in the Regular Army which 

prompted these repeated recommendations of the War Department that Congress 

provide some form of retirement for the Regular Army were emphasized during 

the extended field service required over the period 1812-1861. While the law 

provided a pension of one-half pay for disabled officers, there existed no 

provision for compulsory separation from active service of old and disabled 

officers; there was no limit to active service save by dismissal or resignation of 

the officer. Thus, an officer could remain on active duty until death, despite 

incapacity due to old age, physical disability, etc. In consequence, many junior 

officers exercised commands in the field beyond their rank, the old and disabled 

officers who should have exercised these commands being left behind--often on 

leave--whenever field service was performed.2

 

1 Retired pay for non-regular, i.e., reserve, service is dealt with in Chapter III.B.2. hereof, "Retired Pay for 

Non-Regular Service (Reserve Retirement)". 

2

 “Promotion and Retirement: Hearings before the House Military Affairs Committee,” Part I, p. 207, 69th

Congress, 2d Session (1926). 

684
The Act of February 28, 1855, ch. 127, §1, 10 Stat. 616 (1855), while not a 

retirement statute as such, permitted the Secretary of the Navy to convene examining 

boards to determine the capability of officers for "performing promptly and efficiently all 

their duty both ashore and afloat" and to remove any officer determined not capable of 

performing such duty from the active list. Officers removed from active duty under this 

provision were to be placed on a "reserved list" with either leave-of-absence pay 

(approximately 75 percent of sea-duty pay) or furlough pay (50 percent of leave-ofabsence pay), unless it was also determined that the officer was himself to blame for the 

incapacity, in which case he was to be "dropped from the rolls" without pay. Though the 

main purpose of the Act of February 28, 1855, ch. 127, id., was to remove physically 

unfit officers from the active list, the following excerpt from a report of the examining 

board shows that it could also be used to separate officers for non-disability reasons: 

An officer may possess a strong mind and a robust frame, yet, if his moral 

perception of right or wrong be so blunted and debased as to render him unreliable, he 

could hardly be ranked as the capable officer.3

The Act of August 3, 1861, ch. 42, §15 (officers of the Army and Marine Corps) 

and §21 (officers of the Navy), 12 Stat. 287, 289, 290 (1961), authorized the voluntary 

retirement, at the discretion of the President, of regular officers of all branches of service 

after 40 years of duty. This retirement authority was broadened, first by the Act of 

December 21, 1861, ch. 1, §1, 12 Stat. 329 (1861), to provide for the involuntary 

nondisability retirement of Navy officers with 45 years of service or at age 62, and later 

by the Act of July 17, 1862, ch. 200, §12, 12 Stat. 594, 596 (1862), to provide for the 

similar retirement of Army and Marine Corps officers. While these laws authorized the 

Army, Navy, and Marine Corps to require the retirement of certain classes of officers, 

they did not mandate that the services exercise this authority: an officer could be forced 

to retire after reaching the specified age or length of service, but nothing required 

relevant authorities to insist that an officer meeting these criteria be retired. 

 

3 Appendix to the Secretary of the Navy's Annual Report to the President for 1855. 

685
Army and Marine Corps officers retired for age or length of service under the Act 

of July 17, 1862, ch. 200, §12, 12 Stat. 594, 596 (1862), were entitled to retired pay in an 

amount equal to their "pay proper" plus four "rations." These rations had a commuted 

cash value of $36 a month. The inclusion of rations as part of the retired pay entitlement 

derives from then-current active duty pay practices. The active duty pay scale of the time 

prescribed but one rate of pay, called "pay proper," for each officer grade. In addition to 

pay proper, however, each officer was entitled to from four to six rations, depending on 

his grade, and to one additional "longevity" ration for each five years of service. In other 

words, rations were an integral part of an officer's "pay" and were used instead of "pay 

proper" to effect longevity pay increases. The retired pay formula arbitrarily gave each 

retired officer four longevity rations, regardless of the number the officer was actually 

receiving as part of his active duty pay at the time of retirement. 

Since active duty Navy officers were not paid under the "pay-proper-plus-rations" 

system applicable to Army and Marine Corps officers, the Act of December 21, 1861, ch. 

1, §1, 12 Stat. 329 (1861), which provided involuntary retirement authority for Navy 

officers, stated their retired pay entitlement in terms of a specified dollar amount for each 

grade, plus "four rations per day to be commuted at 30 cents each ration." The specified 

dollar amount being slightly more than the "pay proper" of an Army officer of 

corresponding grade, a Navy officer's retired pay entitlement was slightly larger than that 

of his Army counterpart. 

The Appropriation Acts of 1871 for the Army and Navy (Act of July 15, 1870 

(Army Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870), and Act of 

July 15, 1870 (Navy Appropriation Act of 1871), ch. 295, §3, 16 Stat. 321, 330-332 

(1870)) created an active duty salary system for officers and did away with commutations 

for rations. Since the existing retired pay formula had been based in part on commuted 

rations, it had to be changed also. Retired pay based on age or years of service was fixed 

686
as 75 percent of base and longevity pay for Army and Marine Corps4

 officers, Act of July 

15, 1870 (Army Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870), and 

as 50 percent of sea duty pay for Navy officers, Act of July 15, 1870 (Navy 

Appropriation Act of 1871), ch. 295, §5, 16 Stat. 321, 333 (1870). The Act of March 13, 

1873, ch. 230, §1, 7 Stat. 547 (1873), raised retired pay for Navy officers to 75 percent of 

sea duty pay. In addition to changing the retired pay formula, the Act of July 15, 1870 

(Army Appropriation Act of 1871), ch. 294, §4, 16 Stat. 315, 317 (1870), authorized the 

voluntary retirement, again at the discretion of the President, of Army and Marine Corps5

officers after 30 years of service. 

The Act of June 30, 1882, ch. 254, 22 Stat. 117, 118 (1882), made retirement 

mandatory at age 64 for officers of all branches of service. The existing authority for 

involuntary but non-mandatory retirement of officers with 45 years of service or at age 62 

was not disturbed. The Act of June 30, 1882, ch. 254, id., also gave officers an absolute 

right to voluntary retirement after 40 years of service. Earlier laws had authorized 

voluntary retirement at this service point, but had given the President the power to grant 

or deny such retirement. 

The Act of March 3, 1899, ch. 413, §8, 30 Stat. 1004, 1006 (1899), introduced an 

unusual retirement program for Navy officers, the main purpose of which evidently was 

to improve promotion opportunities. It permitted officers in the grades of lieutenant 

commander through captain--today's pay grades O-4 through O-6--to request voluntary 

retirement regardless of age or length of service. Officers making such requests were 

placed on a list of "applicants for voluntary retirement." If a specified number of 

promotion vacancies did not occur through "normal" attrition--death, resignation, age or 

service retirement, disability retirement--during a fiscal year, the applicants were retired 

in order of seniority in a number sufficient to create the desired number of vacancies. If 

 

4

 Although the Act of July 15, 1870 (Army Appropriation Act of 1871), ch. 294, 16 Stat. 315 (1870), dealt 

only with the Army, Marine Corps officers received the same treatment as Army officers by virtue of a 

special linkage provision. 

5 See footnote 4 to this chapter, above. 

687
voluntary retirements failed to achieve the specified vacancy level for any grade, the 

additional numbers needed to meet the requirement were obtained through involuntary 

retirements. This "promotion flow" retirement program remained in effect until 1915. The 

Act of May 13, 1908 (Naval Service Appropriation Act of 1909), ch. 166 [Public Law 

115, 60th Congress], 35 Stat. 127, 128 (1908), authorized the voluntary retirement of 

Navy officers after 30 years of service. 

The Act of August 29, 1916 (Naval Service Appropriation Act of 1917), ch. 417 

[Public Law 241, 64th Congress], 39 Stat. 556, 578-579 (1916), brought two new 

principles to the non-disability retirement system. First, it established a retirement 

program integrated with an up-or-out selective promotion plan, and second, it initiated 

use of the formula that was, until 1980, the basis for determining retired pay entitlements-

-namely, 2.5 percent of final monthly basic pay for each year of service up to 30, or a 

maximum of 75 percent of basic pay.6

 The Naval Service Appropriation Act of 1917, ch. 

417, id., also introduced the practice of rounding years of service in the computation of 

retired pay entitlements, under which a partial year of six months or more was counted as 

a whole year, and a partial year of less than six months was not counted. The act 

permitted the Secretary of the Navy to convene annual selection boards to select officers 

for promotion to the grades of rear admiral, captain, and commander. A captain who 

reached age 56 without having been selected for promotion to the next higher grade 

became ineligible for further consideration for promotion and had to be retired; the 

corresponding ages for commanders and lieutenant commanders were 50 and 45, 

respectively. An officer so retired was entitled to retired pay of 2.5 percent of the shore 

duty pay7

 of his grade for each year of service, not to exceed 75 percent of such pay. 

 

6 This formula is still the formula used to determine monthly retired and retainer pay entitlements for all 

persons who first became members of the uniformed services before September 8, 1980. See discussion of 

the Department of Defense Authorization Act, 1981, Public Law 96-342, 94 Stat. 1077 (1980), in this 

chapter, below. (The 2.5 percent times years-of-service formula is subject to adjustment, in the case of 

enlisted members of the Armed Forces, for "extraordinary heroism." See footnote 51 to this chapter, 

below.) 

7 See Chapter II.D.3.d., "Special Pay for Career Sea Duty," above, for a discussion of sea and shore duty 

pay for Navy personnel. 

688
The Act of June 4, 1920 (National Defense Act Amendments of 1920), ch. 227 

[Public Law 242, 66th Congress], §24, 41 Stat. 759, 773-774 (1920), adding a new 

Section 24b to the Act of June 3, 1916 (National Defense Act of 1916), ch. 134 [Public 

Law 85, 64th Congress], 39 Stat. 166 (1916), provided for the evaluation of Army officers 

and their separation into two classes-- Classes A and B. An officer identified as 

"inefficient" was placed in Class B and further evaluated; all officers not so identified 

were deemed Class A officers. A Class B officer was retired if he had at least 10 years of 

commissioned service and the evaluation board affirmed his "B" classification and found 

that it was not due to his own "neglect, misconduct, or avoidable habits." Unless he had 

been appointed at age 46 or older, a retired Class B officer was entitled to retired pay of 

2.5 percent for each of his years of commissioned service, not to exceed 75 percent; if he 

had been appointed at age 46 or older, he was entitled, in a rare departure from the 2.5 

percent-per-year principle, to a 4-percent-per-year multiple in computing retired pay, 

though the 75 percent ceiling continued to apply. Class A officers were continued in 

service, subject to future reclassification. 

The Act of June 30, 1922 (War Department Appropriation Act of 1923), ch. 253 

[Public Law 259, 67th Congress], 42 Stat. 716, 721-722 (1922), required a reduction in 

the strength of the Army, and the retirement system was used to help effect the reduction. 

The act provided for a "plucking" board to eliminate officers from the active list. Those 

chosen for elimination could be retired if they had at least 10 years of commissioned 

service. Officers "plucked" for retirement after more than 20 years of commissioned 

service were entitled to retired pay of three percent for each year of such service, not to 

exceed 75 percent; those retired with between 10 and 20 years of commissioned service 

had the same entitlement, except that their multiple was 2.5 instead of three percent. The 

act also authorized retirement in the rank of warrant officer for eliminated officers with 

less than 10 years of commissioned service but at least 20 years of total service. Affected 

officers were entitled to two percent of the pay of such rank for each year of service. 

While the act did not place a 75 percent ceiling on this computation, it appears doubtful 

that any officer retired under this provision would have had the 38 or more years of 

service needed to attain a retired pay entitlement in excess of 75 percent. 

689
The Act of June 22, 1926, ch. 649 [Public Law 412, 69th Congress], 44 Stat. 761 

(1926), replaced the Navy's age-in-grade promotion program with one based on servicein-grade. Under this act, a captain who had completed 35 years of service without being 

selected for promotion became ineligible for further consideration and had to be retired; 

the break points for commanders and lieutenant commanders were 28 years and 21 years, 

respectively. The Act of May 29, 1934, ch. 367 [Public Law 263, 73d Congress], §1, 48 

Stat. 811, 811-812 (1934), provided that the promotion and retirement systems for 

commissioned officers of the Navy--including those "hereafter enacted"--should 

thenceforth apply to commissioned officers of the Marine Corps. A second law enacted 

the same day altered the promotion and retirement provisions affecting Navy junior 

officers. The Act of May 29, 1934, ch. 368 [Public Law 264, 73d Congress], §4, 48 Stat. 

814 (1934), amending the promotion provisions of the Act of March 3, 1931, ch. 397 

[Public Law 784, 71st Congress], §3, 46 Stat. 1482, 1483 (1931), extended the selection 

program for promotion to the grades of lieutenant commander and lieutenant and 

provided that a lieutenant who had not been selected for promotion after 14 years of 

service, or a lieutenant (junior grade) who had not been selected after seven years, had to 

be retired. The Act of July 22, 1935, ch. 402 [Public Law 212, 74th Congress], §3, 49 

Stat. 487, 488 (1935), amended this feature by stipulating that lieutenants or lieutenants 

(junior grade) who had not been selected for promotion by the 14- or 7-year points, 

respectively, could be retained on the active list as additional numbers in grade until they 

completed 21 or 14 years of service, respectively, and then retired. Retired pay under all 

these laws was computed at the standard rate of 2.5 percent per year of service, up to a 75 

percent ceiling. The 7-year retirement provision of the Act of May 29, 1934, ch. 368 

[Public Law 263, 73d Congress], §1, 48 Stat. 811, 811-812 (1934), is notable as 

representing the shortest length of service ever fixed for non-disability retired pay 

eligibility. 

The Act of July 31, 1935, ch. 422 [Public Law 225, 74th Congress], §5, 49 Stat. 

505, 507 (1935), authorized the voluntary retirement of Army officers after 15 years of 

service, with retired pay of 2.5 percent for each year of service up to a ceiling of 75 

percent. This 15-year authority was intended as a temporary measure to help relieve an 

690
officer "hump" created by a large influx of World War I officers into the Regular Army. 

Notwithstanding its temporary purpose, the 15-year authority, though it was suspended 

during World War II, remained in effect until 1948. 

The Act of June 23, 1938, ch. 598 [Public Law 703, 75th Congress], 52 Stat. 944 

(1938), revised the Navy's officer selection and retirement processes to provide a "merit 

system for promotion" that became the model for the present promotion and retirement 

system. The act required that captains, commanders, and lieutenant commanders who had 

twice failed of selection for promotion to the next higher grade be retired after 

completion of 30, 28, and 26 years of commissioned service, respectively. Act of June 

23, 1938, ch. 598, id., §12(d), 52 Stat. at 949. The act also authorized the voluntary 

retirement of Navy officers after 20 years of commissioned service. Act of June 23, 1938, 

ch. 598, id., §12(e), 52 Stat. at 950. The "standard" retired pay formula --2.5 percent per 

year of service--was used for both voluntary and involuntary retirements under the act. 

Act of June 23, 1938, ch. 598, id., §12(b) and (e), 52 Stat. at 949, 950. 

The Act of February 21, 1946, ch. 34 [Public Law 305, 79th Congress], §3, 60 

Stat. 26, 27 (1946), authorized the Secretary of the Navy to convene boards to consider 

and recommend officers in the grades of captain or below, in the case of the Navy, or 

colonel or below, in the case of the Marine Corps, for involuntary retirement or 

elimination. It also lowered the statutory retirement age for Navy and Marine Corps 

officers from 64 to 62, Act of February 21, 1946, ch. 34, id., §9, 60 Stat. at 28-29, and 

permitted voluntary retirement after 20 years of active service at least 10 years of which 

consisted of commissioned service, Act of February 21, 1946, ch. 34, id., §6, 60 Stat. at 

27, with retired pay to be computed under the "standard" 2.5 percent per year formula, 

Act of February 21, 1946, ch. 34, id., §7, 60 Stat. at 27. The purpose of the act was to 

provide a means to break up the officer logjam that had arisen out of the large number of 

World War II accessions who could no longer be effectively employed. The act's 

"plucking" board authority expired June 30, 1949, but its other retirement provisions 

became permanent law. 

691
The Army and Air Force Vitalization and Retirement Equalization Act of 1948, 

ch. 708 [Public Law 810, 80th Congress], §202, 62 Stat. 1081, 1084 (1948), authorized 

the voluntary retirement of Army and Air Force officers after 20 years of active service at 

least 10 years of which consisted of commissioned service, with retired pay computed by 

the standard 2.5 percent formula. This law resulted, for the first time in history, in 

uniform voluntary retirement authority among the officers of all branches of service. 

The Officer Personnel Act of 1947, ch. 512 [Public Law 381, 80th Congress], 61 

Stat. 795 (1947), as amended by the Officer Grade Limitation Act of 1954, ch. 180 

[Public Law 349, 83d Congress], 68 Stat. 85 (1954), was for nearly 35 years the main 

authority for the officer promotion and involuntary retirement systems for the Armed 

Forces. Although it incorporated all the systems in one piece of legislation, the act was a 

product of separate service planning and policies and its Army and Air Force program 

was different from that of the Navy and Marine Corps. The principal involuntary 

retirement provisions of the Officer Personnel Act of 1947, ch. 512, id., were: 

 Pay Grade Army and Air Force Navy and Marine Corps 

 O-10, O-9 Retired after 5 years in grade or 35 Retired after 5 years in grade 

 years of service, but retirement and 35 years of service, unless 

 could be deferred to age 64. selected for continuation. 

 

 O-8 Retired after 5 years in grade or 35 Retired after 5 years in grade 

 years of service, but retirement and 35 years of service, unless 

 could be deferred to age 60. selected for continuation. 

 

 O-7 Retired after 5 years in grade or 30 Rear Admiral (lower half)-- 

 years of service, but retirement retired after 5 years in grade 

 could be deferred to age 60. and 35 years of service unless 

 selected for continuation; 

 Brigadier General USMC— 

 retired after second failure of 

 selection for promotion. 

 

 O-6 Retired after 5 years in grade or 30 Retired after 30 years of service 

 years of service. if twice failed of selection for 

 promotion or after 31 years if 

 not twice failed. 

692
 O-5 Retired after 28 years of service. Retired after 26 years of service 

 if twice failed of selection for 

 promotion. 

 O-4, O-3 When twice passed over for Retired after 20 years of service if 

 promotion: Retired if with 20 or twice failed of selection for 

 more years of service; retained to promotion; other grades 

 complete 20 years and then retired eliminated with severance pay 

 if within 2 years of 20-year point; if twice failed of selection for 

 eliminated with severence pay if promotion. 

 less than 18 years of service. 

 

In the Defense Officer Personnel Management Act (DOPMA), adopted December 

12, 1980, Public Law 96-513, 94 Stat. 2835 (1980), Congress, after some 30 years of 

experience with these involuntary retirement and force management provisions, and 

believing that the apparent differences in the treatment accorded officers in different 

branches of service did not in fact reflect "actual management needs," set out to provide 

unified retirement authority in an effort to make the career expectations of members more 

"clearly defined and uniform ... across the services."8

 The principal provisions of 

DOPMA relating to involuntary retirement or release from active duty of officers in 

different pay grades are set out below: 

Pay Grade Retirement Provisions 

O-10, O-9 Retired at age 62 unless selected by the President for continuation on 

 active duty, in which case retirement could be deferred, but not past 

 age 64. 

O-8 Unless specially selected for continuation, retired after five years in 

 grade or upon completion of 35 years of active commissioned 

 service, whichever was later. 

 O-7 Unless specially selected for continuation or upon a list of officers 

 recommended for promotion, retired after five years in grade or upon 

 completion of 30 years of active commissioned service, whichever 

 was later. 

 O-6 Unless specially selected for continuation or upon a list of officers 

 recommended for promotion, retired after 30 years of active 

 commissioned service. 

 

8

 House Report No. 96-1462 (Committee on Armed Services), p. 53, accompanying S. 1918, 96th Congress, 

2d Session (1980); also see id., pp. 48 and 52. 

693
 O-5 Unless specially selected for continuation or upon a list of officers 

 recommended for promotion, retired after 28 years of active 

 commissioned service. 

 O-4, O-3 If eligible for retirement, retired after having twice failed of selection 

 for promotion to the next higher grade, unless specially selected for 

 continuation on active duty. If not eligible for retirement, continued 

 on active duty if within two years of becoming eligible for retirement 

 and retired when eligible; otherwise, discharged with entitlement to 

 separation pay if eligible therefor, unless specially selected for 

 continuation on active duty. An officer in pay grade O-4 who was 

 selected for continuation could not be continued on active duty 

 beyond completion of 24 years of active commissioned service unless 

 promoted to the next higher grade; a similar officer in pay grade O-3 

 could not be continued beyond completion of 20 years of active 

 commissioned service unless promoted to the next higher grade. 

 O-2 If eligible for retirement, retired after having twice failed of selection 

 for promotion to the next higher pay grade; if not eligible for 

 retirement, continued on active duty if within two years of becoming 

 eligible for retirement and retired when eligible, otherwise discharged 

 with entitlement to separation pay if eligible therefor. 

 O-1 Could at any time be discharged if less than five years of active 

 commissioned service or if found not qualified for promotion to the 

 next higher pay grade.

In addition to the above, officers in pay grades O-8, O-7, and O-6 who had at least 

four years in grade and were not on a list recommended for promotion, together with 

officers in pay grade O-5 who twice failed of selection for promotion to the next higher 

pay grade, could be considered for selective early retirement and, if selected, were to be 

retired either immediately or as soon as they became eligible.9

 Officers in pay grades O-8 

through O-5 who were selected for continuation on active duty could not be so continued 

for more than five years or beyond the time they reached age 62, whichever occurred 

first.10

 

9

 In adopting this provision, Congress indicated the selective retirement authority was "to be used sparingly 

and ... primarily as a means of reducing the number of officers in [the affected] grades when necessary to 

accommodate to such actions as a reduction in officer personnel strengths. These provisions are not 

intended to be used solely for the purpose of maintaining or improving promotion opportunity or timing." 

Senate Report No. 96-375 (Committee on Armed Services), p. 7, accompanying S. 1918, 96th Congress, 1st

Session (1979). Also see House Report No. 96-1462 (Committee on Armed Services), p. 53, accompanying 

S. 1918, 96th Congress, 2d Session (1980). 

10 In addition to the changes to the retirement system outlined above, the Defense Officer Personnel 

Management Act, Public Law 96-513, §112, 94 Stat. 2835, 2876 (1980), established, subject to waiver only 

694
The Warrant Officer Act of 1954, ch. 249 [Public Law 379, 83d Congress], §14, 

68 Stat. 157, 162-163 (1954), established separate retirement rules for warrant officers, 

including commissioned warrant officers. Under the act a warrant officer could be retired 

at his own request after 20 years of active service and was required to be retired at age 62 

or upon completion of 30 years of active service, whichever occurred first. Retired pay 

for warrant officers under the act was computed at the standard rate of 2.5 percent times 

years of service, not to exceed 75 percent. 

The legislative authority for non-disability retirement for enlisted personnel is of 

more recent vintage than that for officers. This is in large part due to the fact that the 

reasons underlying the development and establishment of the earliest forms of nondisability retirement authority were to provide for involuntary retirement of 

superannuated officers--in order to promote efficiency, to obtain a youthful and vigorous 

officer force, and to improve promotion opportunities for younger officers--whereas the 

same objectives could be met, in the case of the enlisted force, by a judicious policy of 

non-acceptance of applications for reenlistment. It was only after officers obtained 

voluntary retirement authority--in order to make the choice of career service in the 

Armed Forces competitive with reasonably available non-military alternatives, to provide 

a measure of economic security for retired Armed Forces personnel, and to provide a 

pool of experienced personnel who could be called on in time of war or national 

emergency to augment the active-duty forces on short notice--that the question of 

retirement authority for enlisted personnel came to the fore. 

The Act of February 14, 1885, ch. 67, 23 Stat. 305 (1885), provided the first 

enlisted non-disability retirement authority. It authorized the voluntary retirement, at the 

discretion of the Secretary concerned, of Army and Marine Corps enlisted personnel after 

30 years of service. Retired pay for such personnel was fixed at 75 percent of the active 

duty pay of an affected member, plus an allowance in lieu of quarters, fuel, and light. The 

 by the President, a three year time-in-grade requirement for voluntary retirement; it also explicitly provided 

that retired members of Regular components of the Armed Forces could be recalled to active duty at any 

time, DOPMA, Public Law 96-513, id., §106, 94 Stat. at 2868, which added 10 U.S.C. §688. 

695
30-year retirement privilege was extended to enlisted personnel of the Navy by the Act of 

March 3, 1899, ch. 413, §17, 30 Stat. 1004, 1008 (1899). The Act of March 2, 1907, ch. 

2515 [Public Law 174, 59th Congress], §1, 34 Stat. 1217, 1217-1218 (1907), consolidated 

the 30-year voluntary retirement authority for the enlisted personnel of all branches of 

service. 

The Act of August 29, 1916 (Naval Service Appropriation Act of 1917), ch. 417 

[Public Law 241, 64th Congress], 39 Stat. 556, 587, 589-591 (1916), created the Fleet 

Naval Reserve to provide a pool of experienced personnel who could be recalled to active 

duty on short notice in time of war or emergency. While there are technical differences 

between the Fleet Naval Reserve, now divided into separate entities named the Fleet 

Reserve and the Fleet Marine Corps Reserve, and the retired list, and though the pay 

received by Fleet Reserve members is known as "retainer" rather than "retired" pay, 

transfers to the Fleet Reserve are for practical purposes the same as retirements. The Act 

of August 29, 1916, ch. 417, id., permitted enlisted personnel of the Navy and Marine 

Corps to voluntarily transfer to the Fleet Reserve or the Fleet Marine Corps Reserve after 

16 or more years of active service. Those with between 16 and 20 years of service were 

entitled to retainer pay equal to one-third of their base and longevity pay. Those with 20 

or more years of service were entitled to one-half their base and longevity pay. 

The Act of February 28, 1925 (Naval Reserve Act of 1925), ch. 374 [Public Law 

512, 68th Congress], §23, 43 Stat. 1080, 1087 (1925), fixed the minimum length of active 

service required for transfer to the Fleet Reserve or Fleet Marine Corps Reserve at 20 

years.

11 12 The retainer pay formula for 20-year transferees was continued as one-half of 

base and longevity pay. The Naval Reserve Act of 1938, ch. 690 [Public Law 732, 75th

Congress], §203, 52 Stat. 1175, 1178 (1938), authorized a 10 percent increase in retainer 

 

11 In a saving provision, the 16-year retirement authority for personnel on active duty on July 1, 1925, was 

preserved. Act of February 28, 1925 (Naval Reserve Act of 1925), ch. 374 [Public Law 512, 68th

Congress], §24, 43 Stat. 1080, 1087 (1925). 

12 For parallel provisions affecting the Fleet Marine Corps Reserve, see Act of February 28, 1925 (Naval 

Reserve Act of 1925), ch. 374 [Public Law 512, 68th Congress], §2, 43 Stat. 1080, 1080-1081 (1925). 

696
pay for personnel whose conduct marks had averaged 95 percent during their terms of 

active service or who had been credited with extraordinary heroism in the line of duty. 

The Act of August 10, 1946, ch. 952 [Public Law 720, 79th Congress], §3, 60 Stat. 993, 

994 (1946), again changed the retainer pay formula to the standard rate of 2.5 percent 

times years of service, now up to a maximum of 75 percent, and eliminated the extra 10 

percent for good conduct, but not for extraordinary heroism. 

The Act of October 6, 1945, ch. 393 [Public Law 190, 79th Congress], §4, 59 Stat. 

538, 539 (1945), authorized the voluntary retirement and transfer to the reserve of Army 

enlisted personnel with at least 20 but not more than 29 years of active service, with 

monthly retired pay to be computed at 2.5 percent of the last six month's average monthly 

pay times the number of years of service, up to a maximum of 29 years. As is readily 

apparent, this formula deviated from the "standard" in two ways--it used an average pay 

rather than terminal pay as its base, and the highest multiple it allowed was 72.5 percent 

instead of 75 percent (since only 29 years of service could be used in the computation). 

The Act of August 10, 1946, ch. 952 [Public Law 952, 79th Congress], §6, 60 Stat. 993, 

995-996 (1946), rectified this situation by permitting retirements up to the 30-year point 

and by providing for the computation of retired pay under the standard formula. It also 

provided a 10 percent increase in retired pay for extraordinary heroism. 

Before adoption of the Military Personnel and Compensation Amendments of 

1980, Public Law 96-343, 94 Stat. 1123 (1980), only regular enlisted members of the 

Army and Air Force could retire, after completion of 20 or more years of active service, 

with immediate entitlement to retired pay. While Army and Air Force Reserve enlisted 

members could in fact retire upon completion of 20 years of active service, they were not, 

under preexisting law, eligible to receive retired pay until they reached 60 years of age, in 

contrast to retired enlisted members of the Navy and Marine Corps Reserve components, 

who could retire after 20 years of active service with immediate entitlement to retired 

pay. To remedy this disparity in treatment, and to insure that there were no unnecessary 

disincentives to enlisted service in the Army and Air Force Reserve, Congress, in the 

Military Personnel and Compensation Amendments of 1980, Public Law 96-343, 

697
§9(a)(1) (Army) and (b)(1) (Air Force), 94 Stat. 1123, 1128-1129 (1980), authorized 

twenty-year retirement, with immediate entitlement to retired pay, for Army and Air 

Force Reserve enlisted members.13 14 15

The Department of Defense Authorization Act of 1981, Public Law 96-342, 

§813(a)(1) and (b)(3)(A), 94 Stat. 1077, 1100-1103 (1981), effected the first major 

change in the computation of retired or retainer pay entitlements since uniform voluntary 

retirement authority was adopted for officers of all branches of service in the Army and 

Air Force Vitalization and Retirement Equalization Act of 1948. Under the 1981 

Authorization Act, the retired or retainer pay of any member of an armed force who first 

became a member on or after the date of enactment of the act16 is computed on the basis 

of the member's "monthly retired pay base," or "monthly retainer pay base," as 

applicable, instead of on the basis of the member's terminal basic pay. In practice, a 

member's monthly retired or retainer pay base is, in turn, an average of the member's 

highest three years of basic pay. As noted in the relevant Congressional Report: 

 The committee recommends this change because of the high and 

increasing costs of military retired pay and because of the need to increase pay for 

military personnel while they serve on active duty instead of after their active 

duty careers are finished. The use of the highest three years pay instead of just 

terminal basic pay is the same computation used for Federal Civil Service 

retirement and has been endorsed by the Interagency Committee, the Defense 

 

13 See, e.g., Senate Report No. 96-424 (Committee on Armed Services), pp. 24-26, accompanying H.R. 

5168, 96th Congress, 1st Session (1979). 

14 The 20-year retirement authority here in issue for enlisted members of the Army and Air Force Reserve 

is different from the 20-years-of-satisfactory-federal-service retirement authority for members performing 

non-Regular service: the present 20-year retirement authority relates to 20 years of active-duty service by 

enlisted members of the Army and Air Force Reserve. See discussion of retirement authority for members 

of the Armed Forces performing non-Regular service in Chapter III.B.2., "Retired Pay for Non-Regular 

Service," immediately following the present chapter. 

15A regular enlisted member of the Army or Air Force who retires under this authority with less than 30 

years of active service becomes a member of the Army or Air Force Reserve, with "such active duty 

[requirements] as may be prescribed by law," until the total of the member's active and Reserve service 

equals 30 years. 

16 The Department of Defense Authorization Act, 1981, Public Law 96-342, 94 Stat. 1077 (1980), was 

enacted September 8, 1980. 

698
Manpower Commission, and the President's Commission on Military 

Compensation.17 18

Persons who were members of the Armed Forces before the date of enactment 

were excluded from the new computational method for determining retired or retainer 

pay entitlements in order to avoid changing the rules after they might have made career 

decisions on the basis of the preexisting retirement rules and out of concern that such a 

change could have an adverse effect on the retention of certain critical classes of 

personnel. 

Having adopted a "high three-year average" in an attempt to contain what was 

generally perceived as rapidly mounting military retirement cost liabilities, Congress next 

took affirmative steps to get better and more complete information on the future 

retirement costs associated with the current active duty force. In the Department of 

Defense Authorization Act, 1984, Public Law 98-94, §925, 97 Stat. 614, 644-648 (1983), 

Congress established an accrual accounting system for retired pay. This system--

implemented as the Department of Defense Military Retirement Fund--gives Congress 

and the Department of Defense direct and immediate information on the future retirement 

costs associated with current manpower decisions.19 Under the accrual accounting 

system, an additional percentage of the annual appropriation for basic pay for members of 

the Armed Forces--amounting in 1986 to approximately 51 percent of the basic pay 

 

17 Senate Report No. 96-826 (Committee on Armed Services), p. 130, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). Also see House Report No. 96-1222 (Committee of Conference), p. 98, and 

Senate Report No. 96-895 (Committee of Conference), p. 94, accompanying H.R. 6974, 96th Congress, 2d 

Session (1980). 

18 In accordance with Congress's declared intent "to increase pay for military personnel while they serve on 

active duty instead of after their active duty careers are finished," the Department of Defense Authorization 

Act, 1981, Public Law 96-342, §801(b)(1), 94 Stat. 1077, 1090-1091 (1980), also provided an 11.7 percent 

increase for the cash elements of regular military compensation--namely, basic pay, basic allowance for 

quarters, and basic allowance for subsistence--effective October 1, 1980, and the Uniformed Services Pay 

Act of 1981, Public Law 97-60, §101(b)(1)-(3), 95 Stat. 989, 989-992 (1981), provided a further 14.3 

percent increase to those same cash elements of military compensation, this time with an effective date of 

October 1, 1981. 

19 The background and reasons for adoption of the Department of Defense Military Retirement Fund, 

codified as Chapter 74 of Subtitle A, Part I, Title 10, United States Code, "Armed Forces," 10 U.S.C. 

§§1461-1467, are discussed in more detail in Appendix I, below. 

699
account for all members of the Armed Forces20--is separately appropriated for the 

Department of Defense Military Retirement Fund in order to defray the future costs of 

retirement benefits earned during the year covered by the appropriation. 

In addition to establishing an accrual accounting system for military retired and 

retainer pay entitlements, the Department of Defense Authorization Act, 1984, made 

three other changes to the retirement system that were also expressly intended to contain 

military retirement costs. The first of the changes, adopted as Section 921 of the 1984 

Authorization Act, Public Law 98-94, id., §921, 97 Stat. at 640-641, repealed the oneyear “look-back" provision of prior law. Under the one-year "look-back" rule, military 

retirees were permitted to base their retired or retainer pay either on the pay scale in 

effect on the date of their retirement or on the immediately preceding pay scale as 

adjusted for changes in the cost of living pursuant to 10 U.S.C. §1401a, whichever was 

greater. The 1984 Authorization Act eliminated the latter option, basically because of 

budgetary concerns.21

The second change, adopted as Section 922 of the 1984 Authorization Act, Public 

Law 98-94, id., §922, 97 Stat. at 641-642, required that monthly retired or retainer pay 

entitlements, both as initially computed and as subsequently adjusted pursuant to 10 

U.S.C. §1401a, be rounded down to the next lower full dollar. As explained by the Senate 

Committee on Armed Services: 

The Committee proposal to round down monthly retired [and retainer] pay 

to the next lower dollar is consistent with the provisions of the Omnibus 

Reconciliation Acts of 1981 and 1982 which rounded down monthly Social 

Security benefits and civil service annuities, respectively. Although each 

[military] retiree would only lose from $.12 to $11.88 per year, the Department of 

 

20 See, e.g., Senate Report No. 99-292 (Committee on Armed Services), p. 3, accompanying S. 2395, 99th

Congress, 2d Session (1986) (relating to the legislative proposal ultimately enacted as the Military 

Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986), but discussing the Department 

of Defense Military Retirement Fund). 

21 See, e.g., House Report 98-352 (Committee of Conference), p. 227, Senate Report No. 99-213 

(Committee of Conference), p. 227, and Senate Report No. 98-174 (Committee on Armed Services), pp. 

219-220, accompanying S. 675, 98th Congress, 1st Session (1983). 

700
Defense estimates that rounding down would save an estimated $9 million 

annually through fiscal year 1987.22

The third of the changes, adopted as Section 923 of the 1984 Authorization Act, 

Public Law 98-94, id., §923, 97 Stat. at 642-644, terminated the so-called "six-month 

rounding rule" for computing retired and retainer pay entitlements. Under the "six-month 

rounding rule," members of the Armed Forces who were eligible to retire and had 

fractional years of service could, in computing retired or retainer pay entitlements, round 

their years of service to the next highest whole year for the purpose of computing 

retirement multipliers if they had six or more months of fractional years of service, 

whereas members with less than six months of fractional years of service were required 

to round their years of service down to the next lowest whole year. For several years prior 

to adoption of the 1984 Authorization Act, Public Law 98-94, id., however, budget 

constraints, as reflected in the Department of Defense Appropriation Acts for 1982 and 

1983, had required members with six or more months of fractional years of service to 

round down to the next lowest whole month, while members with less than six months of 

fractional years of service lost all credit for any fractional years of service. The 1984 

Authorization Act required all members to round to the next lowest whole month for the 

purpose of determining retirement pay multipliers.23

Armed with information gained from the new accrual accounting system, 

Congress next took action to require a $2.9 billion reduction in non-disability retirement 

cost accruals for fiscal year 1986. In the Department of Defense Authorization Act, 1986, 

Public Law 99-145, §667, 99 Stat. 583, 659-661 (1985), Congress required the 

Department of Defense to produce a report and draft legislation "proposing two separate 

 

22 Senate Report No. 98-174 (Committee on Armed Services), p. 219, accompanying S. 675, 98th Congress, 

1st Session (1983). Also see House Report No. 98-352 (Committee of Conference), p. 227, and Senate 

Report No. 98-213 (Committee of Conference), p. 227, accompanying S. 675, 98th Congress, 1st Session 

(1983). 

23 See House Report No. 98-107 (Committee on Armed Services), p. 213, accompanying H.R. 2969, 98th

Congress, 1st Session (1983). Also see House Report No. 98-352 (Committee of Conference), p. 227, 

Senate Report No. 98-213 (Committee of Conference), p. 227, accompanying S. 675, 98th Congress, 1st

Session (1983). 

701
sets of changes" to effect the desired reduction. According to Congressional direction 

contained in the 1986 Authorization Act, the "proposed changes" should "apply only to 

individuals who initially become members of the Armed Forces after the effective date of 

such changes" and should also, "to the maximum extent possible and consistent with 

military requirements, encourage members who are eligible for retirement to remain on 

active duty beyond 20 years of service."24 In response to this mandate, the Secretary of 

Defense submitted a report and draft legislation to Congress in November 1985.25

After reviewing the report and draft legislation submitted by the Secretary of 

Defense, Congress, in the Military Retirement Reform Act of 1986, Public Law 99-348, 

100 Stat. 682 (1986), made certain structural changes to the military retirement system. 

As Congress stated: 

The uniformed services retirement system has existed essentially 

unchanged for the last 50 years, and its basic form was established over a century 

ago. During the past two decades, the uniformed services retirement system has 

come under increasing scrutiny and attack. By recommending the [current] 

changes ..., the conferees are attempting to put the issue of structural reform of the 

uniformed services retirement system to rest for the foreseeable future. The 

conferees believe that, as a result of these changes, the criticism of the uniformed 

services retirement system will subside and the concerns of service members 

regarding the uncertainty of retirement benefits can be assuaged. 

The conferees emphasize that the changes to the uniformed services 

retirement system included in this conference report would apply only to those 

who first become members of a uniformed service on or after August 1, 1986. 

No member who had joined a uniformed service before that date--much less any 

current retiree of a uniformed service--would be affected. 

 

24 See, e.g., House Report No. 99-235 (Committee of Conference), pp. 437-438, and Senate Report No. 99-

118 (Committee of Conference), pp. 437-438, accompanying S. 1160, 99th Congress, 1st Session (1985). 

Also see, e.g., House Report No. 99-81 (Committee on Armed Services), pp. 245-250, accompanying H.R. 

1872, 99th Congress, 1st Session (1985). 

25 The "report" submitted by the Secretary of Defense in response to the requirement of Section 667 of the 

Department of Defense Authorization Act, 1986, Public Law 99-145, §667, 99 Stat. 583, 659-661 (1985), 

is set out in full in House Report No. 99-513 (Committee on Armed Services), pp. 91-126, accompanying 

H.R. 4420, and in Senate Report No. 99-292 (Committee on Armed Services), pp. 27-62, accompanying S. 

2395, 99th Congress, 2d Session (1986). 

702
 Most of the features of the current uniformed services retirement 

system are well known. 

(1) An immediate annuity is available to a service member who completes 20 

years of service; no benefit is available to a service member who does not 

complete 20 years of service. 

(2) Retired pay equals high-3 average basic pay times a multiplier. (For those 

becoming members of a uniformed service for the first time before September 7, 

1980, [sic]

26 retired pay is based on final basic pay instead of high-3 average basic 

pay.) The multiplier equals 2 1/2 percent times years of service and ranges from 

50 percent at 20 years of service to 75 percent at 30 or more years of service. 

(3) Retired pay is adjusted annually by the increase in the cost of living as 

measured by the consumer price index (CPI). 

 The uniformed services retirement system is non-contributory. 

However, the service member contributes, while on active duty, to the social 

security system and, thereby, earns eligibility for a social security retirement 

benefit. The receipt of uniformed services retired pay has no effect on social 

security retirement benefits and vice versa. 

 The conferees agreed to change the uniformed services nondisability 

retirement system as follows: 

(1) The formula for the multiplier would remain unchanged--2.5 percent for 

each year of service up to 30 years of service. However, for members who retire 

with less than 30 years of service, the multiplier would be reduced by 1 

percentage point [from what it otherwise would have been] for each year of 

service the member retired [with] less than 30 [years of service]. The reduction 

would be eliminated when the member reached age 62. 

(2) The cost-of-living adjustment mechanism would be changed to provide 

CPI minus 1 for life with a one time restoral in the purchasing power of the 

annuity at age 62. 

 With regard to the multiplier, the formula would provide a two-tiered 

retirement annuity: a reduced annuity between the time the member retires from 

the uniformed service and the normal retirement age and an unreduced annuity 

thereafter. 

 For example, a member who retires with twenty years of service would 

receive retired pay based on a multiplier of 40 percent from retirement until age 

62 and retired pay based on a multiplier of 50 percent thereafter. For a member 

 

26 Should read "before September 8, 1980." See, e.g., 10 U.S.C. §1406. 

703
who retires with 30 years of service, no reduction in the multiplier would be made 

and retired pay would be based on the maximum multiplier of 75 percent.27

Thus, under the “Redux” system of uniformed services retirement effected by the 

Military Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986), new 

and generally lower percentage multipliers are used in determining the initial retired or 

retainer pay entitlement of persons who first became members of the uniformed services 

on or after August 1, 1986--except for members who do not retire until they reach age 62 

or who retire with 30 or more years of creditable service. As indicated in the language of 

the House-Senate Conference Report previously quoted, the new percentage multipliers 

in the Redux system are determined by taking the product of a member's years of 

"creditable service" times two and one-half percent and reducing that factor, stated as a 

percentage, by one percentage point for each full year of service by which the member 

retires with less than thirty years of "creditable service," and reducing by a further onetwelfth of a percentage point for each month by which the member's years of "creditable 

service" are less than a full year.28 Thus, for example, a member less than 62 years of age 

who retired with twenty-five years and four months of "creditable service" would have a 

percentage multiplier of fifty-eight and two-thirds percent--determined by multiplying 

twenty-five and four-twelfths by two and one-half percent and subtracting from that total, 

stated as a percentage, four and eight-twelfths percentage points. The percentage 

multiplier, as thus determined for a particular individual, is then applied to the member's 

"monthly retired or retainer pay base" to determine the member's initial retired or retainer 

pay entitlement.29 When the member reaches age 62, the percentage multiplier is then 

 

27 House Report No. 99-659 (Committee of Conference), pp. 29-31, accompanying H.R. 4420, 99th

Congress, 2d Session (1986). For a discussion of the concerns that led to the above-highlighted 

amendments to the uniformed services retirement system, see Senate Report No. 99-292 (Committee on 

Armed Services), pp. 2-5, accompanying S. 2395, 99th Congress, 2d Session (1986). Also see House Report 

No. 99-513 (Committee on Armed Services), pp. 21-27, accompanying H.R. 4420, 99th Congress, 2d 

Session (1986). 

28 For the purpose of making the computation in question, the phrase "creditable service" refers to the 

number of years of service creditable to a member in computing the member's retired or retainer pay. 

29 As is true for members of the uniformed services who first became members before August 1, 1986, the 

initial retired or retainer pay entitlement of an individual who first became a member of a uniformed 

service on or after August 1, 1986, is adjusted from time to time to compensate for the effects of increases 

in the general consumer price level, although the adjustment mechanism that applies to such a member is 

704
adjusted back to what it would have been but for the reduction--in the case of the above 

example, back to sixty-three and one-third percent--to determine the member's final or 

permanent retired pay entitlement.30 As is true for persons who first became members of 

a uniformed service before August 1, 1986, persons who first became members on or 

after that date may under no circumstances have a percentage multiplier that exceeds 

seventy-five percent. 

The following table shows the different percentage multipliers that would be 

applied under the Redux system to the "monthly retired or retainer pay base" of a member 

of a uniformed service who first became a member of such a service on or after August 1, 

1986, in order to determine the member's initial retired or retainer pay entitlement:31

 New Multiplier

Years of Service Old Multiplier Before Age 62 After Age 62 

 

 20 50.0 40.0 50.0 

 21 52.5 43.5 52.5 

 22 55.0 47.0 55.0 

 23 57.5 50.5 57.5 

 24 60.0 54.0 60.0 

 25 62.5 57.5 62.5 

 26 65.0 61.0 65.0 

 different from, and lower than, that applicable to an individual who first became a member of a uniformed 

service before the critical date. See Chapter III.B.4. hereof, below, "Adjustments to Retired and Retainer 

Pay.” 

30 Subject, of course, to future adjustments under 10 U.S.C. §1401a for changes in the consumer price 

level. See Chapter III.B.4., "Adjustments to Retired and Retainer Pay," below. 

31 The multipliers in question apply only to a member of a uniformed service who first became a member 

of such a service on or after August 1, 1986, and who subsequently becomes, or will become, entitled to 

non-disability retired or retainer pay. The multipliers have no application to a member of a uniformed 

service who first became a member of such a service on or after August 1, 1986, and who subsequently 

becomes, or will become, entitled to disability retired pay. See Chapter III.B.3., "Disability Retired Pay," 

below. The only way in which a member of the uniformed service who first became a member of such a 

service on or after August 1, 1986, and who subsequently becomes, or will become, entitled either to 

disability retired pay or to retired pay for non-Regular (Reserve) service is affected is through the process 

by which disability retired pay and retired pay for non-Regular service is adjusted to compensate for the 

effects of inflation due to increases in the Consumer Price Index. See Chapter III.B.4., "Adjustments to 

Retired and Retainer Pay," below. (Multipliers are shown only for integral numbers of 

years of creditable service. Further adjustments are required to determine multipliers applicable to persons 

who retire with partial years of creditable service.) 

705
 27 67.5 64.5 67.5 

 28 70.0 68.0 70.0 

 29 72.5 71.5 72.5 

 30 75.0 75.0 75.0 

The relationship between the establishment of the Department of Defense Military 

Retirement Fund and the proposal and adoption of the Military Retirement Reform Act of 

1986, Public Law 99-348, 100 Stat. 682 (1986), was explained by Congress as follows: 

In the past [prior to adoption of the accrual accounting system for military 

retired and retainer pay in the Department of Defense Military Retirement Fund], 

appropriations were paid each year to cover the military retired pay actually paid 

to retirees in that year. 

Consequently, when structural changes to the retirement system were 

proposed, assuming that changes would not apply to individuals already retired 

(whose retired pay accounted for almost the entire retired pay budget in the 

near term) and would apply only marginally to those on active duty or who were 

nearing retirement, no significant change in the cost of the system would be 

achieved for 10 or 20 years in the future. Any offsetting improvements, such as 

earlier vesting or a lump sum early withdrawal option, would, in fact, result in 

higher costs in the near term, thus further reducing the prospects for action on 

systematic reforms. 

 Beginning in fiscal year 1985, however, a revised accounting system 

for military retirement was implemented; a new retirement fund was established 

outside of the defense budget. The Department of Defense is required to set 

aside in the fund a percentage of its military payroll sufficient to pay for the 

projected retirement benefits earned in that year based on the benefits for the 

group of individuals who join the military that year (but who will retire in the 

future). 

In other words, until fiscal year 1985, the Department of Defense had to 

pay for retirement benefits earned in the past but due in the present; now the 

department must pay for retirement benefits as they are earned. The new method 

of budgeting for military retirement is similar to the "normal cost" calculations 

made by private sector employers. 

 . . . 

A permanent change to the military retirement system carries with it a 

change to the accrual charge. In other words, a reduction in future benefits means 

that less money needs to be set aside to pay for benefits for those affected by the 

change. . . . 

706
In summary, under the accrual accounting system, a change to the military 

retirement system that decreased the value of military retired pay for new entrants 

would immediately decrease budget authority and outlays; such a change would 

also decrease federal budget authority but would have no effect on overall federal 

outlays (or the deficit). The only changes that would affect federal outlays in the 

near-term were changes in the structure of military retirement annuities for those 

members already retired (including changes in the cost-of-living adjustment), and, 

to a substantially lesser extent, changes in the structure of benefits for those on 

active duty who are near retirement at the time of the change.32

In other words, adoption of the accrual accounting system for military retired and 

retainer pay in the Department of Defense Military Retirement Fund made it possible for 

Congress to reduce apparent defense appropriations for the current year without affecting 

the retired or retainer pay entitlements of any current retiree or any member of the Armed 

Forces who had first become a member before August 1, 1986--the effective date of the 

retirement reform provisions contained in the Military Retirement Reform Act of 1986, 

Public Law 99-348, 100 Stat. 682 (1986). Given the imperatives to reduce the federal 

budget deficit in general and Department of Defense appropriations in particular, 

Congress achieved such reductions by the relatively painless expedient of changing the 

military retirement system in a way that would affect only persons who first became 

members of a uniformed service on or after August 1, 1986: the reduction in 

appropriations was immediate, but the effect of such reductions insofar as the nondisability retired or retainer pay entitlements of particular individuals are concerned 

would not be felt until the year 2006. 

Despite the immediate budgetary benefit of the new system of retirement 

calculation, in the 1990s Congress concluded that the system had a negative effect on 

recruitment and retention. A Naval Reserve report summarized the situation thus: 

The perception of an inadequate retirement program consistently surfaces 

as a primary cause of our recruiting and retention problems. Survey results, 

combined with feedback gathered by leaders from all the Services, convinced 

Congress.... that long-term retention is not well served by the REDUX retirement 

plan.33 

 

32 House Report No. 99-513 (Committee on Armed Services), pp. 25-27, accompanying H.R. 4420 

(subsequently enacted as the Military Retirement Reform Act of 1986), 99th Congress, 2d Session (1986)).

33 Naval Reserve Facility, Marquette, Wisconsin, “The Importance of DIEMS Date in Determining Your 

Military Retirement System and Eligibility for the $30K.” 

707
In response, in 1999 the Senate Armed Services Committee made the following 

recommendation: 

The committee recommends a provision that would afford service 

members who entered the uniformed services on or after August 1, 1986 the 

option to elect to retire under the pre-1986 military retirement plan or to accept a 

one-time $30,000 lump sum bonus and to remain under the “Redux” retirement 

plan. Service members would be permitted to select between the two retirement 

programs within 180 days of completing 15 years of service. Service members 

who elect to accept the lump sum bonus would be obligated to serve the 

remaining five years to become retirement eligible. Those who do not complete 

the required service would be required to repay a prorated amount based on the 

unserved amount of the obligation.... The committee believes that the provision 

fulfills the request of the Joint Chiefs by permitting those subject to the `Redux' 

retirement system to transfer to the pre-1986 retirement plan. However, those who 

would prefer to receive a cash bonus may elect to remain under the `Redux' 

retirement system. The committee believes these options are both cost effective 

and provide the necessary incentives for mid-career personnel to remain on active 

duty. 34

Accordingly, the National Defense Authorization Act for Fiscal Year 2000 

provided a set of expanded retirement options for members completing 15 years of active 

duty. Upon reaching the 15-year service anniversary, a member can choose to have 

retirement calculated according to the “high-three” formula previously used only for 

members who entered service between 1980 and 1986. Alternatively, the member can 

enter the Redux retirement system designated for those entering active service after 

August 1, 1986. The lower multipliers of that system are counterbalanced by a Career 

Status Bonus of $30,000, payable to those who execute a written agreement to complete 

their eligibility for retirement by remaining on continuous active duty for at least five 

more years. Having gone into effect in 2001, the Career Status Bonus provision makes 

the choice of retirement systems available to all members who have entered service after 

August 1, 1986 when those members reach their 15-year service anniversary. 

The National Defense Authorization Act for Fiscal Year 1993, Public Law 102-

484, §4403, 106 Stat. 2315, 2702-2704 (1992), adopted early retirement authority--for 

members with between 15 and 20 years of service--as a "temporary additional force 

 <http://www.cnsrf.navy.mil/marquette/30k15yearstatusbonus.htm> 

34 Senate Report 106-050 (Armed Services Committee), accompanying S. 1059, 106th Congress, 1st

Session (1999). 

708
management tool with which to effect the drawdown of military forces through 1995." 

National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, id., 

§4403(a), 106 Stat. at 2702.35 Under the subject authority, the secretaries of the military 

departments are authorized to accept applications of members of the Army, the Navy, the 

Marine Corps, and the Air Force having at least 15 but less than 20 years of service for 

voluntary early retirement.36 This early retirement authority is applicable during the 

"active force drawdown period," which as originally enacted, was defined to be the 

period beginning on the date of enactment of the National Defense Authorization Act for 

Fiscal Year 1993, Public Law 102-484, id., i.e., October 23, 1992, and ending on October 

1, 1995.37 The National Defense Authorization Act for Fiscal Year 1994, Public Law 

103-160, §561(a), 107 Stat. 1547, 1667 (1993), subsequently extended the termination 

date for the "active force drawdown period" to October 1, 1999. A member whose 

application for early retirement is accepted is entitled to retired or retainer pay effectively 

computed by multiplying the member's "retired or retainer pay base" by an adjusted 

"retired or retainer pay multiplier."38 The adjusted "retired or retainer pay multiplier" of a 

member seeking early retirement is determined by multiplying 2.5 percent times the 

member's years and months of creditable service (counting 1/12th of a year for each 

month of creditable service in excess of the number of whole years of service) and then 

subtracting from that result, stated as a percentage, 1/12th of one percent for each full 

 

35 See 10 U.S.C. §1293 note for the full text of the early retirement authority adopted by the National 

Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 

(1992). 

36 As initially enacted, the early retirement authority did not extend to members of the Coast Guard or to 

the commissioned officer corps of the National Oceanic and Atmospheric Administration or the Public 

Health Service. Early retirement authority was, however, subsequently extended to members of the Coast 

Guard with at least 15 but less than 20 years of service by the National Defense Authorization Act for 

Fiscal Year 1995, Public Law 103-337, §542(d), 108 Stat. 2663, 2769 (1994), and to members of the 

commissioned officer corps of the National Oceanic and Atmospheric Administration by the National 

Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §566(c), 110 Stat. 186, 328 (1996). 

37 National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403(i), 106 Stat. 

2315, 2704 (1992). See 10 U.S.C. §1293 note. 

38 National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403(e), 106 Stat. 

2315, 2703 (1992). See 10 U.S.C. §1293 note. 

709
month by which the member's total months of active service at retirement are less than 

240.39

In support of the early retirement authority granted by the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 

2702-2704 (1992),40 the Senate Armed Services Committee, which sponsored the 

proposal, noted: 

The committee anticipates that the active component strength levels of 

some of the military services in the current DOD Base Force Plan, which total to 

an active duty strength level of 1,626,300 by the end of fiscal year 1997, are likely 

to be reduced substantially. The committee expects such a reduction will result 

from the Defense Department's own revisions to its current Base Force Plan as a 

result of budget decisions, a more efficient allocation of roles and missions among 

the military services, a more efficient active/reserve force mix, and other 

economies and efficiencies that are discussed elsewhere in this report.41

 In order to cope with the active duty strength reductions that are 

currently planned by the DOD, the Congress provided authorities to the military 

services to assist them in implementing the planned reductions prudently. These 

authorities included separation benefits that the military services could offer to 

career personnel to induce them to voluntarily separate from active duty. 

 

39 A member's normal, or unadjusted, "retired or retainer pay multiplier" is determined under 10 U.S.C. 

§1409 in one of two ways, depending on when the member first became a member of the Armed Forces. If 

the member first became a member before August 1, 1986, the "retired or retainer pay multiplier" is 

determined by multiplying the member's years and months of creditable service (with each full month of 

creditable service in excess of a full year counted as 1/12th of a year) by 2.5, with that result being stated as 

a percentage figure, whereas if the member first became a member after July 31, 1986, the "retired or 

retainer pay multiplier" is computed as above but one percentage point is subtracted for each full year that 

the member's years of creditable service are less than 30 (plus 1/12th of a percentage point for each month 

that the member's months of service in addition to his years of service are less than 12). See text 

accompanying footnotes 28-31 hereof, above. Since the "active force drawdown period," as extended by 

the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §561(a), 107 Stat. 

1547, 1667 (1993), ends on October 1, 1999, all members seeking to take advantage of the early voluntary 

nondisability retirement authority provisions of the National Defense Authorization Act for Fiscal Year 

1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 (1992), see 10 U.S.C. §1293 note, are 

necessarily members who first came on active duty before August 1, 1986, and would accordingly have 

their "retired or retainer pay multipliers" determined as set out above. For a member retiring with exactly 

15 years of creditable service, for example, the member's retired or retainer pay entitlement would then be 

five percent less than what it otherwise would have been but for the adjustment required by National 

Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403(e), 106 Stat. 2315, 2703 

(1992). See 10 U.S.C. §1293 note. 

40 See 10 U.S.C. §1293 note. 

41 Senate Report No. 102-352 (Committee on Armed Services), accompanying S. 3114, 102d Congress, 2d 

Session (1992). 

710
 The committee notes that these authorities have been effective in 

helping the military services reduce strength in the six to 15-years-of-service 

element of the career inventory. At the same time, the committee notes that the 

military services do not have an effective tool to reduce active duty strength in the 

15 to 20-year element of the career inventory. 

 In view of the committee's expectation that the active duty strengths in 

the current Base Force Plan will be reduced substantially, and in view of the 

absence of an effective tool that the military services can use to reduce the 15 to 

20-year element of the personnel inventory, the committee believes that existing 

transition provisions should be augmented.... 

 Therefore the committee recommends... 

Section 534 [of the Senate bill, S. 3114, 102d Congress, 2d Session 

(1992)] would authorize active duty personnel who have 15 but less than 20 years 

of service to apply for and be approved for early retirement. The committee 

expects the military services to use this authority selectively to trim surpluses in 

the 15 to 20-year element of the personnel inventory.42

The Senate proposal was amended in conference, with the Conference Committee 

noting: 

The amendment would clarify that the purpose in providing this authority 

is to give the Department of Defense a temporary, additional force management 

tool to effect the reduction in military personnel through fiscal year 1995. The 

amendment would clarify that the Secretaries of the military departments may 

prescribe appropriate regulations or policies regarding the criteria for eligibility 

and approval of applications under this section [H.R. 5006, §4403, 102d 

Congress, 2d Session (1992)]. These criteria may include, but are not limited to, 

such factors as grade, skill, and years of service. The amendment would provide 

that the retired pay of a member who retires under this section would be reduced 

by one percent for each year of service less than 20 years.43

In extending the "active force drawdown period" from October 1, 1995, to 

October 1, 1999, the House-Senate Conference Committee noted as follows: 

The Senate amendment contained a provision ... that would extend 

through fiscal year 1998 certain temporary authorities which provide tools to the 

military services for managing personnel reductions, and which provide a 

 

42 Senate Report No. 102-352 (Committee on Armed Services), pp. 201-202, accompanying S. 3114, 102d 

Congress, 2d Session (1992). 

43 House Report No. 102-966 (Committee of Conference), p. 886, accompanying H.R. 5006, 102d 

Congress, 2d Session (1992). 

711
safety net of benefits for separating military personnel during the defense 

drawdown. 

... 

The House ... [proposes to] extend these transition authorities through 

1999. The conferees believe that by providing the Department of Defense with 

these authorities for the foreseeable length of the drawdown, they will encourage 

DOD to develop and implement coherent, integrated, long-term drawdown plans 

that will minimize the uncertainties and personnel turbulence associated with such 

a drawdown.44

 * * * * * 

In summary, as of the date of publication of this sixth edition of the Military 

Compensation Background Papers, three basically similar but slightly different nondisability, active-duty retirement systems were in effect for members of the uniformed 

services. The retirement system that applies to a particular individual depends on when 

that individual first became a member of a uniformed service and, for members who 

joined after August 1, 1986, on the acceptance or rejection of the Career Status Bonus 

upon completion of 15 years of active service. The three systems are similar in that the 

retired or retainer pay entitlements of members of the uniformed services are, under each 

of the three systems, determined by applying a percentage multiplier to a number that is 

in some way related to a member's basic pay at the time of retirement. The percentage 

multiplier for a particular member of a uniformed service is, in turn, determined by 

reference to the number of years of service with which the member may be credited in 

computing retired or retainer pay. 

 

44 House Report No. 103-357 (Committee of Conference), p. 678, accompanying H.R. 2401, 103d 

Congress, 1st Session (1993). (In support of its original proposal to extend the temporary retirement 

authority through 1998, the Senate Armed Services Committee had noted: 

The committee believes that these authorities [including the temporary retirement authority adopted in the 

National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 

2702-2704 (1992), see 10 U.S.C. §1293 note], which have been used effectively by the military services to 

make reductions in personnel strength on a prudent, humane basis since they were enacted, will continue to 

be required as further personnel strength reductions are made over the next several years. 

Senate Report No. 103-112 (Committee on Armed Services), p. 145, accompanying S. 1298, 103d 

Congress, 1st Session (1993)). 

712
Under the first system, which applies to persons who first became members of a 

uniformed service before September 8, 1980, a member’s initial retired or retainer pay 

entitlement is determined by multiplying that member's terminal basic pay by a 

percentage factor computed as the product of the number of years of service with which 

the member may be credited for computing retired or retainer pay multiplied by 2 1/2 

percent. The second of the three systems applies to all members of the uniformed services 

who first became members after September 7, 1980, but before August 1, 1986 and to 

those who have become members after August 1, 1986 and have rejected the Career 

Status Bonus option upon completing their 15th year of active service. The second system 

determines the initial retired or retainer pay entitlement of a member by multiplying that 

member's "monthly retired or retainer pay base" by a percentage factor computed in the 

same fashion as applies in the case of the first retirement system. However, in this case 

the member's "monthly retired or retainer pay base" is equal to the member's "high three 

year" average monthly basic pay. The third of the retirement systems applies to members 

of the uniformed services who first became members on or after August 1, 1986 and have 

accepted the Career Status Bonus upon completion of their 15th year of active service. 

Under this system, the initial retired or retainer pay entitlement of a member is 

determined by multiplying that member's "monthly retired or retainer pay base" by a 

percentage factor computed as the product of the member's years of creditable service 

and 2 1/2 percent, stated as a percentage, and reduced by one percentage point for each 

full year of service by which the member retires with less than 30 years of creditable 

service, and by a further one-twelfth of a percentage point for each month by which the 

member's years of creditable service are less than a full year. After a member subject to 

this third system reaches age 62, the "percentage factor" is recomputed by simply 

eliminating the percentage-point reduction described in the preceding sentence. 

The three different retirement systems currently in effect for members of the 

Armed Forces may be conveniently summarized as follows: 

713
Short Form 

 Reference 

Final Basic Pay High-Three Year 

Average 

Military Retirement 

Reform Act of 1986 

 (Redux) 

Applies to: Persons in service 

before September 8, 

 1980 

Persons joining 

service from 

September 8, 1980, 

through July 31, 

1986 and persons 

joining after July 

31, 1986 opting not 

to accept 15-Year 

Career Status Bonus 

Persons joining 

service after July 

31, 1986 and 

accepting 15-Year 

Career Status Bonus 

with additional 5-

year service 

obligation 

Basis of 

Computation 

(Retired or 

Retainer Pay 

Base): 

Final rate of 

monthly basic pay 

Average monthly 

basic pay for highest 

36 months of basic 

pay 

Average monthly 

basic pay for highest 

36 months of basic 

pay 

Multiplier: 2.5 percent per 

year of service 

2.5 percent per year 

of service 

2.5 percent per year 

of service less 1.0 

percentage point for 

each year of service 

less than 30 

(restored at age 62) 

Cost-of-Living 

 Adjustment 

 Mechanism: 

Full CPI-W Full CPI-W CPI-W minus 1 

percent (one-time 

catch up at age 62) 

Additional Benefit $30,000 Career 

Status Bonus 

payable at 15-year 

anniversary upon 

assumption of 5-

year obligation to 

remain on 

continuous active 

duty 

 * * * * * 

The primary concern of the retirement legislation so far discussed has been with 

regular and reserve forces personnel who serve on active duty with the regular 

components of the Armed Forces for a minimum of 20 years. Title III of the Army and 

Air Force Vitalization and Retirement Equalization Act of 1948, ch. 708 [Public Law 

810, 80th Congress], §§301-313, 62 Stat. 1081, 1087-1091 (1948) (which, despite the 

714
limitations implicit in the name of the act, covered the reserve components of all 

branches of service) created a retirement system for reserve personnel who do not 

undertake a 20-year active duty career. This retirement authority was adopted in an 

attempt to provide incentives to induce reserve forces personnel to remain in reserve 

components of the Armed Forces for a minimum of 20 years of "satisfactory federal 

service."45 The reserve retirement system remains basically unchanged from the way it 

was enacted in 1948. 

To qualify for retired pay for non-regular service, a member must complete at 

least 20 years of "satisfactory federal service," the last eight years of which must be in a 

reserve component. Each one-year period in which the member earns 50 or more 

retirement credit "points" counts as a year of satisfactory federal service. Points are 

earned at the rate of 15 a year for reserve membership, plus an additional point for each 

day of active duty or active duty for training and for each attendance at a drill or 

prescribed period of equivalent instruction.46 Entitlement to retired pay for reserve 

service begins at age 60 under the act because that was, at the time of enactment, the 

minimum age at which federal civil service employees could voluntarily retire. Retired 

pay is computed by first converting the member's cumulative point total into service at 

the rate of one day for each point, subject to a maximum of 60 days' credit for inactiveduty training for any one year. The basic pay for the member's grade is then multiplied by 

2.5 percent of the years of service credited through the point conversion process, up to a 

ceiling of 75 percent. Years of service are not rounded in this computation; the 

percentage multiple reflects the precise number of the member's years, months, and days 

of service. The Department of Defense Authorization Act, 1981, Public Law 96-342, 94 

Stat. 1077 (1980), previously discussed in connection with retired or retainer pay for 

other than non-regular service, provides that retired pay for non-regular service will, for 

 

45 For a discussion of "satisfactory federal service" and how it differs from active duty service, see the 

immediately following paragraph as well as Chapter III.B.2., "Retired Pay for Non-Regular Service," 

below. 

46 A member's attendance at drills, periods of instruction or appropriate duty, or participation in other 

prescribed periods of equivalent training is commonly referred to as "inactive-duty training." See 10 U.S.C. 

§101(d)(7). Cf. 37 U.S.C. §206(a). 

715
personnel first joining an armed force after the date of enactment of that act,47 be based 

on the average basic pay for the member's retired grade using the pay tables in effect for 

the three years prior to the member's becoming eligible for retired pay at age 60, and not 

on actual pay received by the member.48

 * * * * * 

Until the beginning of fiscal year 1985, military retired pay was financed on a 

pay-as-you-go basis. Funds were appropriated by Congress each year to cover the costs 

of retired pay for the current retired population and charged to the Department of Defense 

operating budget. No "fund" existed from which retired pay obligations were met. It was 

long recognized that this procedure did not adequately recognize the future retired pay 

costs associated with the current active duty force and thus led at different times to 

various proposals for normal costing in management and budget processes and even to 

consideration of a funded retirement system. The Department of Defense Authorization 

Act, 1984, Public Law 98-94, §925, 97 Stat. 614, 644-648 (1983), dealt with this 

deficiency by establishing the Department of Defense Military Retirement Fund.49 As 

previously indicated, this fund, the details of which are discussed more fully in Appendix 

A hereto, established the underpinnings of an accrual accounting system for military 

retirement. Under this accrual accounting system, funds are appropriated for the 

Department of Defense every year by Congress and transferred to the Military Retirement 

Fund in an amount sufficient to defray the expected retirement costs associated with the 

current active duty force. By this expedient, Congress and the Department of Defense are 

fully apprised of the total costs--present as well as future--of manpower decisions made 

for each year. 

 * * * * * 

 

47 i.e., September 8, 1980;see footnote 16 to this chapter, above. 

48 The background and legislative history of retired pay for non-Regular (Reserve) service are set out in 

greater detail in Chapter III.B.2., "Retired Pay for Non-Regular Service," below. 

49See footnote 19 to this chapter, above. 

716
Members on the retired rolls of regular and reserve components of the Armed 

Forces who have completed at least 20 years of active service are explicitly subject to 

recall to active duty at any time in order to augment active duty forces. 10 U.S.C. 

§688(a). Under the Defense Officer Personnel Management Act, Public Law 96-513, 

§106, 94 Stat. 2835, 2868 (1980), effectively amending prior 10 U.S.C. §3504(a) and 

8504(a), such members may be ordered to active duty by the secretaries of the affected 

military departments under regulations prescribed by the Secretary of Defense and 

assigned to any duties deemed "necessary in the interests of national defense."50 While 

this new provision merely "restated" the existing authority with respect to Army and Air 

Force personnel, it specifically included Navy and Marine Corps personnel for the first 

time.51

 * * * * * 

Under the provisions of 38 U.S.C. §§5304-5305, a member or former member of 

the Armed Forces may receive a pension or compensation from the Department of 

Veterans Affairs for disabilities compensable by that department at the same time he 

receives retired or retainer pay, including disability retired pay, based on service as a 

member of the Armed Forces only if he files a "waiver" of that portion of his retired or 

retainer pay (including disability retired pay) entitlement equal to the amount of pension 

or compensation to which he is entitled from the Department of Veterans Affairs.52

 

50 See, e.g., Senate Report No. 96-375 (Committee on Armed Services), p. 26, and House Report No. 96-

1462 (Committee on Armed Services), pp. 80-81, accompanying S. 1918, 96th Congress, 2d Session (1980). 

51 See, e.g., Senate Report No. 96-375 (Committee on Armed Services), p. 26, and House Report No. 96-

1462 (Committee on Armed Services), pp. 80-81, accompanying S. 1918, 96th Congress, 2d Session (1980). 

52 This is significant primarily because of the preferential income tax treatment accorded receipt of pension 

or disability compensation from the Department of Veterans Affairs. See footnote 16 to Chapter III.B.3. 

hereof, below, "Disability Retired Pay," as well as the text of the paragraph to which it is appended. 

717
Summary: The more significant statutes relating to non-disability retirement and 

retired pay are displayed in capsulized form on the pages following the cost figures on 

the following page.53 54

SUMMARY OF SIGNIFICANT STATUTES RELATING TO 

NONDISABILITY RETIREMENT AND RETIRED PAY 

 

Enactment Action

Act of February 28, 1855, ch. 127, 10 Stat. 

616 (1855) 

Authorized involuntary removal of Navy 

officers due to disability and other reasons. 

Act of August 3, 1861, ch. 42, 12 Stat. 287 

(1861) 

Authorized voluntary retirement of all 

officers of all services after 40 years of 

service. 

Act of December 21, 1861, ch. 1, 12 Stat. 

329 (1861) 

Permitted involuntary retirement of Navy 

officers after 45 years of service or at age 

62. 

Act of July 17, 1862, ch. 200, 12 Stat. 594 

(1862) 

Permitted involuntary retirement of Army 

and Marine Corps officers after 45 years of 

service or at age 62. 

Act of July 15, 1870, ch. 294, 16 Stat. 315 

(1870) 

Authorized voluntary retirement of Army 

and Marine Corps officers after 30 years of 

service. 

Act of June 30, 1882, ch. 254, 22 Stat. 118 

(1882) 

Made retirement mandatory at age 64 for 

officers of all services. 

Act of February 14, 1885, ch. 67, 23 Stat. 

305 (1885) 

Authorized voluntary retirement of Army 

and Marine Corps enlisted personnel after 

30 years of service. 

 

53 Under special provisions of Title 10, United States Code, the retired or retainer pay of an enlisted 

member of an armed force credited with extraordinary heroism in the line of duty by the Secretary of his or 

her military department may be increased an additional 10 percent over what it would otherwise have been, 

subject to a maximum of 75 percent of the member's retired or retainer pay base. 10 U.S.C. §3991(a)(2) 

(Army), §6330(c)(3) (Navy and Marine Corps), and §8991(a)(2) (Air Force). An enlisted member of the 

Coast Guard who has been cited for extraordinary heroism in the line of duty is similarly entitled to an 

increase of 10 percent in retired pay. 

54 Although not a retirement provision per se, 38 U.S.C. §§1560-1562 provide that members or former 

members of the Armed Forces whose names are enrolled on the "Army, Navy, Air Force, and Coast Guard 

Medal of Honor Roll" as a result of having "served on active duty in the Armed Forces of the United States 

and ... [having] been awarded a medal of honor for distinguishing such person conspicuously by gallantry 

and intrepidity at the risk of such person's life above and beyond the call of duty while so serving" is 

entitled to a "special pension" administered by the Department of Veterans Affairs in the amount of $600 

per month "in addition to all other payments [to which the person may be entitled] under laws of the United 

States." See in particular 38 U.S.C. §1562(a) and (b). 

718
Act of March 3, 1899, ch. 413, 30 Stat. 

1004 (1899) 

Authorized voluntary retirement of Navy 

enlisted personnel after 30 years of service. 

Act of May 13, 1908, ch. 166 [Public Law 

115, 60th Congress], 35 Stat. 501 (1908) 

Authorized voluntary retirement of Navy 

officers after 30 years of service. 

Act of August 29, 1916, ch. 417 [Public 

Law 241, 64th Congress], 39 Stat. 556, 558 

(1916) 

Created Fleet Naval Reserve; authorized 

voluntary transfer of Navy and Marine 

Corps enlisted personnel to Fleet Reserve 

after 16 years of active service. 

Act of August 29, 1916, ch. 417 [Public 

Law 241, 64th Congress], 39 Stat. 556, 579 

(1916) 

Established "up-or-out" promotion system 

based on age-in-grade and integrated 

involuntary retirement system; first to use 

"standard" retired pay formula of 2.5 

percent times years of service, up to 

maximum of 75 percent. 

Act of June 4, 1920, ch. 227 [Public Law 

242, 66th Congress], 41 Stat. 773 (1920) 

Provided for classification of Army officers 

and authorized involuntary retirement of 

those designated "Class B". 

Act of June 30, 1922, ch. 253 [Public Law 

259, 67th Congress], 42 Stat. 716, 721 

(1922) 

Authorized involuntary retirement of Army 

officers chosen for elimination from active 

list by board of officers. 

Act of February 28, 1925, ch. 374 [Public 

Law 512, 68th Congress], 43 Stat. 1080 

(1925) 

Raised from 16 to 20 years minimum 

length of active service required by Navy 

and Marine Corps enlisted personnel for 

eligibility for transfer to Fleet Reserve. 

Act of June 22, 1926, ch. 649 [Public Law 

412, 69th Congress], 44 Stat. 761 (1926) 

Changed integrated Navy officer promotion

/involuntary retirement system from age-in 

-grade to service-in- grade program. 

Act of May 29, 1934, ch. 367 [Public Law 

263, 73d Congress], 48 Stat. 811 (1934) 

Made Marine Corps officers subject to 

Navy rather than Army retirement laws; 

brought them under Navy's promotion/ 

involuntary retirement system. 

Act of July 31, 1935, ch. 422 [Public Law 

225, 74th Congress], 49 Stat. 505 (1935) 

Authorized voluntary retirement of Army 

officers after 15 years of active service. 

Armed Forces Retirement Act of 1945, ch. 

393 [Public Law 190, 79th Congress], 59 

Stat. 53 (1945) 

Authorized voluntary retirement of Army 

enlisted personnel after 20 years of active 

service. 

Act of February 21, 1946, ch. 34 [Public 

Law 305, 79th Congress], 60 Stat. 26, 27 

(1946). 

Authorized voluntary retirement of Navy 

and Marine Corps officers after 20 years of 

active service including 10 years of 

commissioned service; lowered from 64 to 

62 mandatory retirement age for such 

officers; temporarily authorized their 

involuntary retirement if chosen for 

elimination from active list by board of 

officers. 

719
National Security Act of 1947, ch. 343 

[Public Law 253, 80th Congress], 61 Stat. 

495 (1947) 

Created Department of the Air Force; made 

Army retirement laws applicable to Air 

Force personnel. 

Officer Personnel Act of 1947, ch. 512 

[Public Law 381, 80th Congress], 61 Stat, 

795 (1947) 

Established integrated promotion/ 

involuntary retirement system for officers 

of all services. 

Army and Air Force Vitalization and 

Retirement Equalization Act of 1948, ch 

708 [Public Law 810, 80th Congress], 62 

Stat. 1081 (1948) 

Established retirement system for career 

personnel of Reserve and National Guard; 

authorized voluntary retirement of Army 

and Air Force officers after 20 years of 

active service, including 10 years of 

commissioned service; repealed 15-year 

voluntary retirement authority. 

Warrant Officer Act of 1954, ch. 249 

[Public Law 379, 83d Congress], 68 Stat. 

157 (1954) 

Established specific retirement system for 

warrant officers of all services. 

Act of May 20, 1958 (Armed Forces Pay 

Act of 1958), Public Law 85-422, 72 Stat. 

122 (1958) 

Suspended "recomputation" method that 

by-and-large had been used to make postretirement adjustments to retired pay since 

origin of military retirement system. 

Uniformed Services Pay Act of 1963, 

Public Law 88-132, 77 Stat. 210 (1963) 

Replaced recomputation method of retired 

pay adjustments with an adjustment 

procedure based on increases in cost of 

living. 

Department of Defense Authorization Act, 

1981, Public Law 96-342, 94 Stat. 1077, 

1100 (1980) 

Replaced use of terminal basic pay with 

monthly retired or retainer pay base 

(average of highest three years of basic 

pay) for determining retired or retainer pay 

entitlements. 

Department of Defense Authorization Act, 

1984, Public Law 98-94, 97 Stat. 614, 644-

648 (1983) 

Established Department of Defense 

Military Retirement Fund, under which 

military retirement costs were placed on an 

accrual accounting basis. 

Military Retirement Reform Act of 1986, 

Public Law 99-348, 100 Stat. 682 (1986) 

Established new--and lower--retired pay 

multipliers for persons who first became 

members of the uniformed services after 

July 31, 1986. (The lower multipliers apply 

to all such retirees until they reach age 

62, at which time the normal 2 1/2 percent 

per year multiplier for each year of 

qualifying service is restored.) Changed 

method for making adjustments to retired 

pay for persons who first became members 

of the uniformed services after July 31, 

1986. 

720
National Defense Authorization Act for 

Fiscal Year 2000, Public Law 106-65, 113 

Stat. 662 

Established a retirement system option for 

members who joined after August 1, 1986 

and reach 15 years of active service: accept 

the lower retired pay multipliers of the 

post-1986 Redux system with a one-time 

Career Status Bonus of $30,000 and an 

additional 5-year service obligation, or be 

covered by the “high-three” system in 

effect for members who joined between 

1981 and 1986. 

 

Cost: For the cost of nondisability retired and retainer pay from 1972 to 2004,

see Table III-2 of Military Compensation Statistical Tables, volume II of this 

edition. 

721
Chapter III.B.2. 

 Retired Pay for Non-Regular Service 

 (Reserve Retirement) 

Legislative Authority: Chapter 1223, Title 10, United States Code, 10 U.S.C. 

§§12731-12739. 

Purpose: To establish a non-disability retirement system and authorize the 

payment of retired pay for service in the reserve components of the Armed Forces in 

order to provide an incentive for qualified personnel to retain membership and continue 

training in such components and thereby to provide a pool of skilled, trained, and readily 

available manpower to augment active duty forces in times of national emergency. 

Background: Title III of the Army and Air Force Vitalization and Retirement 

Equalization Act of 1948, ch. 708 [Public Law 810, 80th Congress], Title III, §§301-313, 

62 Stat. 1081, 1087-1091 (1948), created a non-disability retirement program for reserve 

personnel. The House Armed Services Committee outlined the purpose of the program in 

these terms: 

The underlying purpose in writing this policy as to Reserve components 

into law is that the retirement benefits will furnish an incentive that will hold men 

in the Reserve components for a longer period of time. Almost every witness who 

testified on this feature of the bill stressed that the most desirable type of Reserve 

was a reserve of men with accumulated training. It was also pointed out that the 

direct monetary emoluments payable to Reserve officers and men were so small 

that in many instances as the men grew older, became married, and took on family 

obligations, unless an additional incentive were offered them, they would drop 

their Reserve training. The reason for this policy is that we now realize that in the 

chaotic, explosive, and small world in which we live we must have a relatively 

large group of Reserves, well trained, and able to render help at once in the event 

of an emergency. We are hoping that the provisions offered in this bill, which to 

many of us seem liberal, will be an incentive well worth working for. The result 

should be longer periods of service by Reserves and a larger and better-trained 

force on M-day, should we be so unfortunate as to have another M-day.1

 

1 House Report No. 816 (Committee on Armed Services), p. 11, accompanying H.R. 2744, 80th Congress, 

1st Session (1947). 

722
Until 1993, the reserve retirement system remained basically unchanged from that 

enacted in 1948.2

 To qualify for retired pay under the system, a person3 had to complete 

at least 20 years of "satisfactory Federal service" as a member of the Armed Forces, the 

last eight years of which had to be in a reserve component. Each anniversary year in 

which a member earns 50 or more retirement credit points constitutes a year of 

satisfactory federal service. Retirement credit points are, in effect, divided into two 

classes. One "active duty" point is earned for each day of active duty or active duty 

training;4

 one "inactive-duty" point is earned for attendance at a unit training assembly. 

Section 206 of title 37, United States Code, specifies that compensation for each regular 

period of instruction or period of appropriate duty shall be a minimum of at least 2 hours. 

However, Department of Defense policy5

 specifies that for periods of inactive duty that 

are performed with pay, the minimum period of duty shall be 4 hours. If the inactive duty 

is performed without pay, the minimum period of duty shall be 2 hours. Within these 

restrictions, a member may perform two drills, or unit training assemblies or periods of 

equivalent instruction or training in a single calendar day, with two points awarded for 

the performance of "multiple drills." Additionally, 15 inactive duty points per year are 

awarded for reserve membership. Inactive duty points may also be earned for completion 

of accredited correspondence courses. 

There is no limit, other than the calendar, on the number of active duty 

points that may be earned in a year. However, there is a limit on the number of 

inactive duty points that may be credited in a year for computing retired pay. Prior 

to enactment of the National Defense Authorization Act for Fiscal Year 1997, 

Public Law 104-201, 110 Stat. 2517, more than 60 inactive-duty points could be 

credited for computing reserve retired pay. The National Defense Authorization 

Act for Fiscal Year 1997 increased the maximum number of points per year. For 

 

2 Subtitle C of the Reserve Officer Personnel Management Act, adopted as Title XVI of the National 

Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, Title XVI, 108 Stat. 2663, 2921 et 

seq. (1994), substantially reorganized the provisions of prior law relating to reserve retirement but did little 

substantively to the structure of the reserve retirement system considered as a whole. 

3 Unlike entitlement to other military retired pay, the holding of a military status is not a condition of 

eligibility for reserve retired pay. 

4 Normally, members of a troop program unit attend at least 15 days of annual training each fiscal year. 

5 DoD Instruction 1215.19, “Uniform Reserve, Training and Retirement Category Administration,” 

December 12, 2000. 

723
each anniversary year that closed before September 23, 1996, the maximum 

number of creditable inactive duty points remained sixty, but for anniversary 

years that closed on or after September 23, 1996 the maximum number of points 

that could be credited in computing retired pay was increased to 75. The National 

Defense Authorization Act for Fiscal Year 2001, Public Law 106-398, 114 Stat. 

1654A-163, again increased the maximum number of points that could be credited 

in computing retired pay. For anniversary dates that close on or after October 30, 

2000, the maximum number of inactive duty points that may be credited for 

computing retired pay is 90. The law does not require an actual point accounting 

for service prior to July 1, 1949; each year of membership in a reserve component 

before that date automatically counts as a year of satisfactory federal service, and 

members are arbitrarily awarded 50 inactive-duty points for each such year in the 

computation of creditable service for retirement purposes. 

For persons who first became members of an armed force before September 8, 

1980 (the effective date of the Department of Defense Authorization Act, 1981, Public 

Law 96-342, §813(a)(1), 94 Stat. 1077, 1100-1101 (1980)),6

 reserve retired pay for any 

particular member is computed by (1) dividing the member's cumulative active and 

inactive point total by 360 to convert the points into years of service and any fraction 

thereof; (2) taking the monthly basic pay rate for the member's grade and length of 

service at the time he becomes entitled to retired pay at age 60; (3) multiplying that rate 

by 2.5 percent of the years of service credited to him through the point conversion 

process; and (4) subtracting any excess over 75 percent. As compared with retired pay for 

other than reserve service, this formula produces one year of service credit for each 360 

points. Hence, a reserve member who serves on active duty for an entire year, and 

therefore earns 365 or 366 points on a day-for-day basis, receives slightly more than one 

year of service credit for that year. Also, reserve members who perform the maximum 

permissible two drill periods during one day may earn a point for each drill. The monthly 

basic pay rate used in the formula allows longevity credit for all service that may be 

counted for basic pay purposes, including years of reserve membership where the 

"satisfactory Federal service" standard is not met, and all service on the reserve retired 

list before retired pay entitlement commences. Years of service are not rounded in the 

 

6 The Department of Defense Authorization Act, 1981, Public Law 96-342, 94 Stat. 1077 (1980), was 

enacted and became effective on September 8, 1980. 

724
reserve retired pay calculation: the percentage multiple reflects the precise amount of a 

member's years, months, and days of service. 

For a person who first became a member of an armed force on or after September 

8, 1980,7

 the formula is essentially the same, but instead of using the monthly basic pay 

of the member's grade and length of service at the time the member became eligible for 

retired pay at age 60, the 1981 Authorization Act, Public Law 96-342, id., requires the 

use of an average of the monthly basic pay to which the member would have been 

entitled had he been on active duty for the last three years he was a member of a reserve 

component of an armed force.8

 10 U.S.C. §1407(b) and (d)(1);9 see 10 U.S.C. §12739. 

Neither pay received for active duty training nor reserve compensation received under 

Section 206 of Title 37, United States Code, 37 U.S.C. §206, is relevant in determining 

Reserve retired pay entitlements. 

Entitlement to reserve retired pay begins at age 60. 10 U.S.C. 

§12731(a)(1). Entitlement evidently was set at this age because, at the time the 

pay was established by the Army and Air Force Vitalization and Retirement 

Equalization Act of 1948, ch. 708 [Public Law 810, 80th Congress], 62 Stat. 1081 

(1948), age 60 was the minimum age at which federal civil service employees 

could voluntarily retire, although there is no explicit expression of Congressional 

intent in this regard. Indeed, the only reference in the legislative history to the 

issue of when retired pay for reserve service should commence is in a colloquy 

between a member of the House Armed Services Committee and Mr. Melvin J. 

Maas, the then-President of the Federation of Reserve Officer Associations: 

 

7 See footnote 5 to this chapter, above. 

8 That is, in computing reserve retired pay under the Department of Defense Authorization Act, 1981, 

Public Law 96-342, 94 Stat. 1077 (1980), not only is the use of an average of monthly basic pay required, 

but the basic pay rates to be averaged for a specific individual are the pay rates in effect for the last three 

years the individual in question was a member of an armed force. This contrasts with the prior practice 

under which the reserve retired pay of a particular individual was calculated on the basis of the pay rates in 

effect at the time the individual became entitled to retired pay. See, e.g., footnote 2 to Formula 3 of 10 

U.S.C. §1401. (The practical effect of this change is to freeze the reserve retired pay entitlement of any 

affected member who will separate from a reserve component of an armed force before reaching age 60.) 

9

 See, e.g., Senate Report No. 96-826 (Committee on Armed Services), p. 130; House Report No. 96-1222 

(Committee of Conference), p. 98 and Senate Report No. 96-895 (Committee of Conference), p. 94, 

accompanying H.R. 6974, 96th Congress, 2d Session (1980). 

725
Mr. VAN ZANDT: Colonel, why is it that you establish the age of 60 and 

the retirement of 20 years? 

 Mr. MAAS: Well, that was put in by the services, and I think I 

understand their reason. As some of you gentlemen know, I introduced similar 

legislation several times when I was a Member of this body. I had no age 

restriction in it. However, I believe that there must be a minimum age limit, and I 

do not disagree with 60. Otherwise, the Reservist could qualify by the time he was 

40 or 41 for retirement and he would get maybe $50, $60, or $75 a month. We 

would in effect be subsidizing him as against others in civil employment, and I 

don't think it would be desirable. Furthermore, the cost would be prohibitive. 

 All we are seeking really to do is to partially compensate this 

individual in his later years for the great sacrifices he made during his earning 

capacity. I think 60 is a reasonable age. There are many who feel that it ought to 

be 55. If and when civil service is brought down to 55 or a straight 30 years, then 

I think this should be. In the meantime, I have no quarrel with the age 60 in it. 

 Mr. VAN ZANDT: How would the suggestion of 55 years of age and 

30 years of service be? What is your reaction to that? 

 Mr. MAAS: The question is a good one, because in the Navy you can 

retire now with your Regular emoluments after 20 years regardless of any age. 

There is no restriction on the age at which a Regular in the Navy can retire, and I 

assume there won't be in the Army if title I and title II of this bill are approved 

and the bill is passed. At the present time I see no great question of moment in it. I 

think we would probably prefer 55 because it might take more people out of 

active competition for employment. If a reservist had a modest retirement from 

this source, plus what he might have accumulated, he might be willing to quit 

active competitive employment at 55 and make a few more jobs for younger men, 

when the time comes, which we certainly will face.10

In addition to completing 20 years of satisfactory federal service and reaching age 

60, the Army and Air Force Vitalization and Retirement Equalization Act of 1948, ch. 

708, id., required that each person who was a member of a reserve component before 

August 16, 1945, must have served on active duty for some period between April 6, 

1917, and November 11, 1918, or between September 9, 1940, and January 1, 1947, to 

 

10 Subcommittee Hearings on H.R. 2744 to Provide for the Selection for Elimination and Retirement of 

Officers of the Regular Army, for the Equalization of Retirement Benefits for Members of the Army of the 

United States, and for Other Purposes: Hearings on H.R. 2744 before Subcommittee No. 7, Retirement, 

House Committee on Armed Services, printed in Hearings before the Committee on Armed Services of the 

House of Representatives on Sundry Legislation Affecting the Naval and Military Establishments, p. 3363, 

80th Congress, 1st Session (1947). 

726
qualify for reserve retired pay. This requirement reflected the Congressional view that a 

person who was a reservist during World War I or II should have performed active duty 

during the period if his reserve membership were to carry out its intended purpose. 

There have been a number of modifications to the reserve retirement system since 

1948, but the purpose of these modifications has been more remedial than substantive. 

The first of the amendatory actions, the Act of August 21, 1958, Public Law 85-704, 72 

Stat. 702 (1958), allowed a person who was a member of the reserve before August 16, 

1945, to fulfill the active-duty-in-time-of-war reserve retired pay eligibility requirement 

through active service during the Korean conflict, from June 27, 1950, through July 27, 

1953. 

The Act of August 25, 1959, Public Law 86-197, 73 Stat. 425 (1959), allowed 

credit in the reserve retired pay system for continuous service in the federally recognized 

National Guard between June 15, 1933, and the date of a member's appointment or 

enlistment in the National Guard of the United States.11 The Army and Air Force 

Vitalization and Retirement Equalization Act of 1948, ch. 708 [Public Law 810, 80th

Congress], Title III, §§301-313, 62 Stat. 1081, 1087-1091 (1948), authorized credit for 

National Guard service before the date of enactment but, on the theory that membership 

in the National Guard constituted "state" service, whereas membership in the National 

Guard of the United States represented "federal" service once the new reserve component 

had been established, allowed credit only for service in the National Guard of the United 

States after June 14, 1933. There had, however, been an administrative delay in enrolling 

members of the National Guard into the National Guard of the United States, and the 

effect of the Army and Air Force Vitalization and Retirement Equalization Act of 1948, 

ch. 708, id., was to penalize members whose enrollments had been delayed through no 

fault of their own. The Act of August 25, 1959, Public Law 86-197, id., effectively made 

sure that members whose enrollments had been delayed did not suffer as a result. 

 

11 The National Guard of the United States was created as a reserve component of the Army on June 15, 

1933. 

727
The Act of August 25, 1959, Public Law 86-197, 73 Stat. 425 (1959), also 

authorized credit for service as a naval aviation cadet between 1935 and 1942. The Army 

and Air Force Vitalization and Retirement Equalization Act of 1948, ch. 708 [Public Law 

810, 80th Congress], Title III, 62 Stat. 1081, 1087-1091 (1948), defined creditable service 

as that performed "in the status of a commissioned officer, warrant officer, flight officer, 

or enlisted personnel." Under the Navy's aviation cadet law of 1935, until it was amended 

in 1942, naval aviation cadets did not fit into any of these categories. They remained 

designated as aviation cadets for three years following flight training, after which they 

became eligible for appointment as commissioned officers. The Act of August 25, 1959, 

Public Law 86-197, 73 Stat. 425 (1959), thus remedied the—presumably unintentional--

omission of Naval aviation cadets from the category of persons entitled to credit for 

periods of active service between 1935 and 1942. 

The Act of October 14, 1966, Public Law 89-652, §1, 80 Stat. 902 (1966), 

recognized the complexity and error-prone nature of the reserve retirement point system 

by requiring that each person who completed 20 years of satisfactory federal service be 

notified of his or her retired pay eligibility within one year after completing that service. 

Once such notification was given, or after retired pay was awarded, the person's 

eligibility could not be revoked on the basis of error, miscalculation, misinformation, or 

administrative determination of years of service, unless such eligibility determination had 

been based on fraud or misrepresentation of the person concerned. (The amount of the 

pay may be adjusted on the basis of corrected information, but retired pay eligibility 

remains in force even if the person would not otherwise be eligible.) 

The Act of August 13, 1968, Public Law 90-485, §2, 82 Stat. 751, 754 (1968), 

makes the uniform retirement date rule inapplicable to reserve retired pay. The Uniform 

Retirement Date Act, 5 U.S.C. §8301 as added by Section 8301 of the Act of September 

6, 1966, Public Law 89-554, §1 (§8301), 80 Stat. 378, 557 (1966), provides generally that 

retirement authorized by statute is not effective until the first day of the month following 

the month in which retirement would otherwise occur. Thus, until reserve retired pay was 

exempted from the rule, a person who reached age 60 and was otherwise qualified to 

728
receive such pay was subject to a delay of up to 30 days before he actually became 

entitled to pay. The loss of a few days of retired pay was not a particularly serious matter, 

but if, as had happened, an affected person died between his 60th birthday and the first of 

the next month, his family was not eligible for military survivor benefits, including the 

Retired Serviceman's Family Protection Plan and the Survivor Benefit Plan. See Chapter 

IV.C.2., "Survivor Benefit Plan," below. The Act of August 13, 1968, Public Law 90-

485, id., by making the Uniform Retirement Date Act inapplicable to reserve retirements, 

remedied this and similar anomalies. 

The Uniformed Services Survivors' Benefits Amendments of 1978, Public Law 

95-397, §202, 92 Stat. 843, 844-845 (1978), extended coverage under the Survivor 

Benefit Plan to members of reserve components who would be eligible for reserve retired 

pay except for being under 60 years of age.12 Under prior law, the survivors of a member 

of a reserve component who died after having become eligible for reserve retired pay 

through having completed twenty years of satisfactory service but before becoming 

entitled to such pay at age 60 were not eligible for any benefits under the Survivor 

Benefit Plan, and Congress felt such survivors should be eligible for the same protection 

available to members entitled to retired or retainer pay for other than non-Regular 

service.13

Effective October 1, 1984, appropriations are made every year to fund future 

retired pay entitlements of reserve forces personnel in the Ready Reserve. Such 

appropriations are paid into the Department of Defense Military Retirement Fund 

pursuant to provisions of the Department of Defense Authorization Act, 1984, Public 

Law 98-94, §925(a)(1), 97 Stat. 614, 644-648 (1983). Apart from providing an accrual 

accounting system for reserve retirement and establishing a fund to defray future 

 

12 Survivor Benefit Plan--frequently referred to as SBP--coverage is optional for members of reserve 

components. For reservists electing coverage, the reserve retired pay to which they would otherwise be 

entitled at age 60 is actuarially reduced so that they bear a portion of the cost of the coverage. (For a 

description of the SBP program, see Chapter IV.C.2., "Survivor Benefit Plan," below.) 

13

e.g., Senate Report No. 95-1138 (Committee on Armed Services), pp. 3-6, accompanying H.R. 3702, 

95th Congress, 2d Session (1978). 

729
retirement costs associated with service in the Ready Reserve, neither the Military 

Retirement Fund per se nor its establishment has any effect on retirement entitlements of 

reserve forces personnel or on how reserve forces personnel accumulate retirement credit. 

See discussion of the Department of Defense Military Retirement Fund in Appendix I 

hereof. Also see 10 U.S.C. §§1461-1467 (codifying provisions relating to the Department 

of Defense Military Retirement Fund) generally and 10 U.S.C. §1466(a)(2) in particular 

(relating to the amount required to be paid into the Military Retirement Fund on account 

of compensation paid to reserves). 

The National Defense Authorization Act for Fiscal Year 1993, Public Law 102-

484, 106 Stat. 2315 (1992), adopted two provisions intended as inducements to members 

of the Selected Reserves of the Armed Forces to apply for transfer to the retired reserve. 

Section 4416(b) of the National Defense Authorization Act for Fiscal Year 1993, Public 

Law 102-484, id., §4416(b), 106 Stat. at 2715, provided that a member of the Selected 

Reserve less than 60 years of age but with 20 or more years of reserve-retirementcreditable service who applied for transfer to the retired reserve would be eligible for an 

annual payment for a period up to five years14 computed by multiplying the product of 12 

and the monthly basic pay the member would be entitled to if serving on active duty by a 

percentage factor computed by adding five percent plus one-half of one percent for each 

year of retirement-creditable service, up to a maximum of ten percent. Section 4417(a) of 

the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, id., 

§4417(a), 106 Stat. at 2716, added new temporary special retirement authority--originally 

codified at 10 U.S.C. §1331a (since redesignated as 10 U.S.C. §12731a)--under which a 

member of the Selected Reserve of an armed force with more than 15 but less than 20 

years of reserve-retirement-creditable service could be transferred to the retired reserve 

with entitlement to retired pay for non-regular service to commence when the member 

reached age 60. 

 

14 Or until the member reached 60 years of age, whichever first occurred. 

730
In support of the special retirement authorities adopted by the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, id., the Senate Armed 

Services noted as follows: 

The Defense Department has proposed reducing National Guard and 

Reserve personnel strength by over 250,000 by the end of fiscal year 1995.... 

[T]he committee notes that DOD had made no plans for the transition of 

personnel who would be affected by the proposed reduction.... The committee 

believes that such a plan is essential. 

 . . . 

 [One provision of the Senate bill] would allow Selected Reservists who 

have 20 years of credit for reserve retirement and who are in a Selected Reserve 

unit to apply for reassignment from the Selected Reserve to the Retired Reserve in 

order to draw an immediate, reduced retirement annuity. 

 Under current rules, Selected Reservists who have completed at least 

20 years of service creditable for reserve retirement are eligible to draw their 

reserve retirement annuity at age 60. This rule tends to entice Selected 

Reservists to remain in the Selected Reserve well after they accumulate 20 years 

of credit for reserve retirement. Consequently, there is a relatively rich supply of 

these individuals in the Selected Reserve. This provision would provide an 

incentive for some of these people to voluntarily leave the Selected Reserve and 

reduce the pressure on involuntary removals as the reserve components build 

down. 

 The reduced retirement annuity under this provision would be paid 

over a five-year period or up until an individual reaches age 60, whichever is 

shorter. The annuity would be five percent plus .5 percent for each full year of 

service past 20 years that an individual has completed multiplied by the annual 

basic pay to which the individual would be entitled if on active duty. The percent 

multiplier would be capped at 10 percent. 

 . . . 

 [The second provision] would allow Selected Reservists who have at 

least 15 but less than 20 years of credit for reserve retirement to apply for 

assignment from the Selected Reserve to the Retired Reserve. Such personnel 

would be eligible for reserve retirement pay at age 60 based on the number of 

years of reserve retirement credit they have accrued.... As in the Selected Reserve 

population with over 20 years of service for reserve retirement, there is a rich 

supply of personnel with 15 to 20 years of credit for reserve retirement. 

 The retirement provisions (an immediate annuity for those with over 20 

years, and the 15 year retirement authority) will aid the National Guard and 

reserve components in encouraging the voluntary retirement of Selected 

731
Reservists who become surplus to requirements, and facilitate the realignment of 

personnel among remaining billets as Guard and reserve units are downsized to 

maintain a better balance between youth and experience.15

As originally enacted, both programs were to be applicable from the time of 

enactment of the National Defense Authorization Act for Fiscal Year 1993, Public Law 

102-484, id., until October 1, 1995, but that date was subsequently extended to October 1, 

1999, by the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-

160, §561(f)(2)(A)(ii) (special five-year annuity authority) and §561(f)(4) (early 

retirement authority), 107 Stat. 1547, 1667-1668 (1993). 

The National Defense Authorization Act for Fiscal Year 1995, P.L. 103-337, 

§517 (108 §tat. 2754), October 5, 1994, added a new temporary authority to facilitate the 

reduction of the Selected Reserve. This provision amended 10 U.S.C. §12731a(c) (since 

redesignated as 10 U.S.C. §12731a(c)) to provide early qualification for retired pay for a 

member who had completed 15 or more years of qualifying service as computed under 10 

U.S.C. §1331 (since redesignated as 10 U.S.C. §12731) and no longer meets the 

qualifications for membership in the Selected Reserve solely because the member is unfit 

because of a physical disability. However, notification of eligibility for retired pay may 

not be made if the disability is the result of the member’s intentional misconduct, willful 

neglect, willful failure to comply with standards and qualifications for retention, or was 

incurred during a period of unauthorized absence. 

The National Defense Authorization Act for Fiscal Year 1995, P.L. 103-337, 

§636 (108 §tat. 279) added a second temporary authority to facilitate the reduction of the 

Selected Reserve by amending 10 U.S.C. §1331 (since redesignated as 10 U.S.C. 

§12731) to temporarily reduce the minimum required reserve service for eligibility for 

retired pay for non-regular service from eight years to six years. 

 

15 Senate Report No. 102-352 (Committee on Armed Services), pp. 203-204, accompanying S. 3114, 102d 

Congress, 2d Session (1992). See House Report No. 102-966 (Committee of Conference), pp. 889-890, 

accompanying H.R. 5006, 102d Congress, 2d Session (1992). 

732
All of these temporary authorities were again extended until to October 1, 2001, 

by the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999, Public 

Law 105-261, §561, 112 Stat. 2025 (1998). 

The National Defense Authorization Act for Fiscal Year 2000, Public Law 

106-65, §653(b)(1), 113 Stat. 666, added 10 U.S.C. §12731b to make permanent 

the authority to provide early notification of eligibility for retired pay for 

members who no longer meet the qualifications for membership in the Selected 

Reserve solely because of physical disability. Like the temporary provision, this 

new provision requires that the member have completed at least fifteen years of 

qualifying service as computed under 10 U.S.C. 12731. This provision also 

precludes providing notification to the member if the disability is the result of the 

member’s intentional misconduct, willful neglect, willful failure to comply with 

standards and qualifications for retention, or was incurred during a period of 

unauthorized absence. 

The National Defense Authorization Act for Fiscal Year 2003, Public Law 107-

314, §631, 116 Stat. 2571, amended 10 U.S.C. §12731 to permanently reduce the years of 

reserve service required for eligibility for retired pay for non-regular service from eight 

years to six years except in the case of members who completed at least 20 years of 

qualifying service as computed under 10 U.S.C. 12732 before October 5, 1994. In which 

case the reserve service requirement remained eight years. 

The requirement to perform a minimum number of years of reserve service to 

become eligible for retired pay for non-regular service was repealed by the Ronald W. 

Reagan National Defense Authorization Act for Fiscal Year 2005, Public Law 108-375, 

§501 (f), for members who complete 20 years of qualifying service (as computed under 

10 U.S.C. 12732) 180 days on or after the date of enactment of the Act. 

The National Defense Authorization Act for Fiscal Year 2002, Public Law 107-

107, §517, 115 Stat. 1094, amended 10 U.S.C. §10154, §14513, §14514, §14515 and 

added §12244 and §12108 to permit reserve component members who have reached the 

maximum years of service or age and have qualified for a reserve retirement to be 

transferred to the retired reserve without the requirement for formal application or 

request. The member has the option of requesting that he or she not be transferred to the 

733
retired reserve, but rather transferred to another appropriate reserve status as provided in 

law or discharged. 

The National Defense Authorization Act for Fiscal Year 2003, Public Law 107-

314, §632, 116 Stat. 2572, amended 10 U.S.C. §12739 to authorize a 10 percent increase 

in reserve retired pay, but not to exceed 75 percent, for a enlisted member who has been 

credited with extraordinary heroism in the line of duty as determined by the Secretary 

concerned. To qualify for the increase in retired pay, the highest grade satisfactorily held 

in the armed forces by the person at any time was an enlisted grade. 

Like members on the retired rolls of regular components of the Armed Forces, 

reserves who have completed at least 20 years of active service are explicitly subject to 

recall to active duty at any time in order to augment active duty forces. 10 U.S.C. 

§688(a). Under the Defense Officer Personnel Management Act, Public Law 96-513, 

§106, 94 Stat. 2835, 2868 (1980), such members may be ordered to active duty by the 

Secretaries of the affected military departments under regulations prescribed by the 

Secretary of Defense and assigned to any duties deemed "necessary in the interests of 

national defense."16 While this new provision merely "restated" the existing authority 

with respect to Army and Air Force personnel, it specifically included Navy and Marine 

Corps personnel for the first time.17

The National Defense Authorization Act for Fiscal Year 2001, Public Law 

106-398, 114 Stat. 1654A-164, provided for a member to elect a reserve 

retirement at age sixty after becoming entitled to retired pay under chapters 65, 

367, 571, or 867 of title 10, United States Code, for regular service. To be eligible 

for conversion from regular retirement to retirement from active reserve service, 

the member must have served in active status in a reserve component after having 

become entitled to retired pay for active duty service. If the member qualifies, 

entitlement to regular retired or retainer pay ceases and the member is transferred 

to the appropriate reserve retirement category. The effective date of the election is 

 

16 See, e.g., Senate Report No. 96-375 (Committee on Armed Services), p. 26, and House Report No. 96-

1462 (Committee on Armed Services), pp. 80-81, accompanying S. 1918, 96th Congress, 2d Session (1980). 

17 See, e.g., Senate Report No. 96-375 (Committee on Armed Services), p. 26, and House Report No. 96-

1462 (Committee on Armed Services), pp. 80-81, accompanying S. 1918, 96th Congress, 2d Session (1980). 

734
the date on which the person reaches sixty years of age or later, depending on the 

date the Secretary concerned receives the request from the member. 

Cost: For the cost of retired pay for non-regular service from 1972 to 1995, see 

Table III-3 of Military Compensation Statistical Tables, volume II of this edition. 

735
Chapter III.B.3. 

 Disability Retired Pay 

Legislative Authority: Chapter 61, Title 10, United States Code, 10 U.S.C. 

§§1201-1221. 

Purpose: To authorize a continuing payment to members separated from active 

service in the uniformed services of the United States because of physical disability, both 

in order to assure such members that, if they are ever disabled in the service of their 

country, they will not be left to cope with the effects of such disabilities on their own and 

in recognition of the need to provide some measure of economic security for personnel 

whose duties necessarily expose them to the hazards of wartime and career military 

service. 

Background: The practice of providing for special compensation to be paid to 

persons disabled while performing military service can be traced to some of the earliest 

enactments of the Federal Congress.1

 The Act of April 30, 1790, ch. 10, §11, 1 Stat. 119, 

121 (1790), for example, allowed the placement of disabled military personnel on "the 

list of the invalids of the United States." While on this "invalid," or pension, list, officers 

could receive up to one-half their "pay," and enlisted personnel could receive up to $5 a 

month for life. 

This system continued to be the sole means by which disabled military personnel 

who left active service could be compensated until 1855. The Act of February 28, 1855, 

ch. 127, §1, 10 Stat. 616 (1855), was the first law to grant any service involuntary 

separation authority. It permitted the Secretary of the Navy to convene examining boards 

to determine the capability of officers for "performing promptly and efficiently all their 

duty both ashore and afloat" and to remove any officer determined not capable of such 

 

1 This chapter is concerned mainly with special compensation for members of the Armed Forces separated 

from active military service upon being found physically unable to perform the duties of their office or 

grade. As such, it does not address the complementary body of law administered by the Department of 

Veterans’ Affairs providing compensation and other benefits to veterans who suffer a disability as the result 

of performing military service. 

736
performance. Officers removed from active duty under this authority were to be placed 

on a "reserved list" with either leave-of-absence pay (approximately 75 percent of sea 

duty pay) or furlough pay (50 percent of leave-of-absence pay), unless it was also 

determined that the officer was himself to blame for the incapacity, in which event he 

was to be dropped from the rolls without pay. The Act of February 28, 1855, ch. 127, id., 

was not limited to separation for physical disability, as this excerpt from a report of the 

examining board makes clear: 

An officer may possess a strong mind and a robust frame, yet, if his moral 

perception of right or wrong be so blunted and debased as to render him 

unreliable, he could hardly be ranked as the capable officer.2

At the outbreak of the Civil War, the Navy thus had--at least formally--removal 

authority, but it was rarely exercised. The Army and Marine Corps, on the other hand, 

had no such authority at all. While disabled members did have some financial security, 

the military services needed more forceful authority to purge their active lists of 

physically unfit members: the choice of staying or leaving rested with the individual. The 

effect on the military services of this effective lack of removal authority was pointedly 

described shortly after the outbreak of the Civil War in a Senate debate on a military 

retirement bill: 

 Mr. GRIMES: Mr. President, I think the Senate and the country have 

been taught a lesson within the past few months on this subject.... [T]he immense 

destruction of public property at Norfolk was occasioned more on account of the 

age and the weakness and the inability of the commanding officer, who was upon 

your active list, to discharge the duties of his position properly, than from any 

other reason; not that he has not been one of the most gallant and efficient officers 

of our [naval] service, but the time for his service has passed by, and the 

Government ought to have furnished a retired list on which he could have retired 

years ago, reputably and safely to himself and the country....3

 . . . 

 Mr. WILSON: ... Why, sir, take the four regiments of artillery, the most 

important part of the Army. Four of those colonels ought to be retired. Not one of 

those colonels to-day, owing to their age or infirmities, or other causes, will be 

ordered into the field. Two of the four lieutenant colonels are in the same 

 

2

 Appendix to the Secretary of the Navy's Annual Report to the President for 1855. 

3 Congressional Globe, 37th Congress, 1st Session 158 (1861) (statement of Senator Grimes). 

737
condition, and some of the majors. Go to your other regiments and you will find 

worn out, sick, or disabled officers in high positions. They cannot go into the field 

at the call of their country. You have to pay them where they are. Age adds to 

their receipts. They render no service whatever; and the younger officers who are 

called into the field, captains to command regiments, are to receive the pay of 

captains to fight the battles of the country, and have no promotion. The truth is, 

and if you take the Army Register, and examine it carefully, you will find it so, 

that as you approach towards the head of the Army, your officers are paralyzed by 

age.4

In response to these and similar concerns, Congress, in the Act of August 3, 1861, 

ch. 42, §16, 12 Stat. 287, 289 (1861), established a military disability retirement system 

that covered regular officers of all branches of service. The basic principles of this system 

continued to govern disability retirements until a substantially revised system was 

introduced in the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st

Congress], §402, 63 Stat. 802, 816-820 (1949). The Act of August 3, 1861, ch. 42, id., 

permitted a board of officers, with powers analogous to a court of inquiry or courtmartial, to be convened to determine "the facts as to the nature and occasion of the 

disability of such officers as appear disabled" and to report whether "the said incapacity 

result from long and faithful service, from wounds or injury received in the line of duty, 

from sickness or exposure therein, or from any other incident of service." Act of August 

3, 1861, ch. 42, id., §17, 12 Stat. at 290. 

Army and Marine Corps officers retired for disability under the Act of August 3, 

1861, ch. 42, id., §22, 12 Stat. at 291, were entitled to retired pay in an amount equal to 

their "pay proper" plus four "rations." The four "rations" had a commuted cash value of 

$36 a month.5

 The reason for inclusion of "rations" as part of the disability retired pay 

entitlement derives from the way active duty pay was administered at the time. The active 

duty pay scale prescribed but one rate, called "pay proper," for each officer grade. In 

addition to "pay proper," however, each officer was entitled to from four to six "rations," 

depending on grade, and to one additional "longevity" ration for each five years of 

 

4 Congressional Globe, 37th Congress, 1st Session 162 (1861) (statement of Senator Wilson). 

5 Four rations per day at 30¢ per ration, 30 days per month. 

738
service. "Rations" were thus an integral part of an officer's "pay" and were used instead 

of pay proper to effect longevity pay increases. Under the retirement bill passed by the 

House, a retired officer would have received his pay proper and his longevity pay 

("rations"), but not the four to six "rations" allowed for his grade. The Senate amended 

the bill by completely eliminating "rations" from the retired pay formula and fixing it as 

"pay proper" alone. A compromise was reached that arbitrarily gave each retired officer 

four longevity "rations," regardless of the number he was actually receiving as part of his 

active duty pay at the time of retirement for disability. A result was that all members of 

the same grade were entitled to the same amount of disability retired pay. But, in terms of 

percentage of active duty "pay," disability retired pay became progressively less as length 

of service increased. The entitlement of a colonel, for example, was $131 a month ($95 

pay proper plus $36 for rations). This was approximately 70 percent of the active duty 

"pay" of a colonel with 20 years of service, 67.5 percent of the "pay" of a colonel with 25 

years of service, and 65 percent of the "pay" of a colonel with 30 years of service. An 

Army or Marine Corps officer retired for a disability that did not result from military 

service was entitled, at the discretion of the Secretary concerned, to either pay proper 

alone, or to longevity "rations" alone, or he could be "wholly retired" (separated) with 

one year's pay and allowances. 

Since active duty Navy officers were not under the "pay-proper-plus-rations" 

system, the Act of August 3, 1861, ch. 42, id., stated their disability retired pay 

entitlement in terms of a specified dollar amount for each grade, plus "four rations per 

day to be commuted at 30 cents each ration." As of the effective date of the 1861 act, the 

specified dollar amount for a Navy officer was slightly more than the pay proper of an 

Army officer of corresponding grade; thus, the retired pay entitlement of a Navy officer 

was slightly larger than that of his Army counterpart. A Navy officer retired for a 

disability that did not result from military service was entitled to "furlough" pay--that is, 

to one-half the leave-of-absence pay of his grade, or he could be "wholly retired" with 

one year's pay and allowances. 

739
The Army's ability to make full use of the disability retirement system was 

hampered by a provision of the Act of August 3, 1861, ch. 42, id., that limited the number 

of officers on its retired list to seven percent of those on active duty. No limit was ever 

placed on Navy or Marine Corps retired lists. The seven percent limit was changed to a 

numerical ceiling of 300 by the Act of July 15, 1870, ch. 294, §5, 16 Stat. 315, 317 

(1870), and raised to 400 by the Act of June 18, 1878, ch. 263, §7, 20 Stat. 145, 150 

(1878). The Act of March 3, 1883, ch. 93, §1, 22 Stat. 456 (1883), divided the Army 

retired list into "unlimited" and "limited" categories. But only those retired because they 

had reached the mandatory retirement age of 64 could be assigned to the unlimited list. 

Disability retirees, along with those retiring voluntarily, had to go on the limited list and 

remained subject to the 400-man ceiling. The Act of February 16, 1891, ch. 238, 20 Stat. 

763 (1891), reduced the limited list ceiling to 350 but permitted the transfer of disability 

retirees from the limited to the unlimited list when they reached age 64. The retired list 

ceiling continued to restrict disability retirements until, under the crushing weight of 

World War I casualties, the Act of September 17, 1919, ch. 61 [Public Law 49, 66th

Congress], 41 Stat. 286, 286-287 (1919), allowed the placement of disability retirees on 

the unlimited retired list. 

The Act of March 2, 1867, ch. 174, §6, 14 Stat. 515, 516 (1867), was the first law 

to authorize disability retirement for enlisted personnel. It provided that a disabled 

enlisted member of the Navy or Marine Corps with at least 20 years of service could be 

paid one-half his active duty pay "in lieu of being provided with a home in the naval 

asylum." Those with at least 10 years of honorable service were eligible for a pension in 

"a suitable amount for his relief, and for a specified time" at the discretion of the 

Secretary of the Navy.6

The Appropriation Acts of 1871 for the Army and Navy (Act of July 15, 1870 

(Army Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870), and Act of 

July 15, 1870 (Navy Appropriation Act of 1871), ch. 295, §3, 16 Stat. 321, 330-332 

 

6

 This 10-year pension authority for disabled enlisted members of the Navy and Marine Corps survives in 

current law. 10 U.S.C. §6160. 

740
(1870)) created an active duty salary system for officers and did away with commutations 

for rations. Since the existing retired pay formula was based in part on commuted rations, 

it had to be changed also. Disability retired pay was fixed as 75 percent of base and 

longevity pay for Army and Marine Corps7

 officers, Act of July 15, 1870 (Army 

Appropriation Act of 1871), ch. 294, §24, 16 Stat. 315, 320 (1870), and as 50 percent of 

sea duty pay for Navy officers, Act of July 15, 1870 (Navy Appropriation Act of 1871), 

ch. 295, §5, 16 Stat. 321, 333 (1870). The Act of March 13, 1873, ch. 230, §1, 7 Stat. 547 

(1873), raised retired pay for Navy officers to 75 percent of sea duty pay. 

The next substantive change in the disability retirement system occurred in the 

Act of June 4, 1920, ch. 228 [Public Law 243, 66th Congress], §2, 41 Stat. 812, 834 

(1920), which made officers of the naval reserve eligible for disability retirement on the 

same basis as regular officers. This provision, though it was repealed the following year, 

embodied a new principle. Until then, disabled non-regular officers had been 

compensated through the veterans' pension system rather than the military retirement 

system. Paradoxically, the Act of June 4, 1920 (National Defense Act Amendments of 

1920), ch. 227 [Public Law 242, 66th Congress], §32, 41 Stat. 759, 778 (1920), enacted 

the same day as the Navy Act, provided for the integration of non-regular World War I 

officers into the regular Army but expressly specified that, if they became disabled, 

officers so appointed would be eligible only for a pension and not for disability 

retirement or retired pay. The Act of May 19, 1926, ch. 333 [Public Law 246, 69th

Congress], 44 Stat. 564 (1926), amended the Act of June 3, 1916 (National Defense Act 

of 1916), ch. 134 [Public Law 85, 64th Congress], 39 Stat. 166 (1916), to eliminate this 

difference in treatment, with the result that non-regular officers who had been integrated 

into the regular Army became entitled to the same military disability retirement benefits 

as regular officers. 

 

7

 Although the Act of July 15, 1870 (Army Appropriation Act of 1871), ch. 294, 16 Stat. 315 (1870), dealt 

only with the Army, Marine Corps officers received the same treatment as Army officers by virtue of a 

special linkage provision. 

741
The short-lived Navy Act of 1920 (Act of June 4, 1920, ch. 228 [Public Law 243, 

66th Congress], §2, 41 Stat. 812, 834 (1920), supra) had been a tentative step in the 

direction of placing non-regular officers under the military disability retirement system. 

The Act of May 24, 1928 (Emergency Officers' Retirement Act of 1928), ch. 735 [Public 

Law 506, 70th Congress], §1, 45 Stat. 735 (1928), took another step in the same direction. 

It required the establishment of an "emergency officers' retired list" in the Army, Navy, 

and Marine Corps comprised of officers disabled during World War I, defined under the 

Act as the period from April 6, 1917, to July 2, 1921. Emergency Officers' Retirement 

Act of 1928, ch. 735, id., §2, 45 Stat. at 736. Officers placed on the list with a disability 

rating of 30 percent or more were entitled to "retirement" pay of 75 percent of their 

terminal active duty base and longevity pay. The "emergency officers' retired list" 

program was a mixture of military retirement and veterans' pension systems. The military 

services had to make disability determinations and place officers on the emergency 

retired list. Moreover, the "retirement" pay entitlement of such officers was the same as 

the "retired" pay entitlement of corresponding regular officers, rather than the disability 

rate fixed under the pension system. On the other hand, once an officer had been placed 

on the list, he was certified to the Veterans' Bureau8

 and paid from funds appropriated for 

that agency. Furthermore, an officer on the emergency officers' retired list did not hold a 

"retired status"--that is, he was not subject to recall nor eligible for such benefits as 

medical care or commissary and exchange privileges. Over half the officers on the list 

lost their eligibility and were removed as a result of depression measures, particularly the 

Act of March 20, 1933, ch. 3 [Public Law 2, 73d Congress], §10, 48 Stat. 9, 10 (1933),9

which designated November 11, 1918, in place of July 2, 1921, as the end of the World 

War I eligibility period. 

The Emergency Officers' Retirement Act of 1928, ch. 735, id., covered only a 

specific class of non-regular officers, those disabled in World War I. Other disabled nonregular officers remained wholly under the veterans' pension system until a state of 

 

8 The predecessor organization of the Veterans' Administration, now the Department of Veterans Affairs. 

See footnote 10 to this chapter, below. 

9

 Although untitled, the Act of March 20, 1933, ch. 3 [Public Law 2, 73d Congress], 48 Stat. 9 (1933), 

carried the catchline, "An Act to Maintain the Credit of the United States". 

742
national emergency was declared and a buildup of military forces was begun preceding 

the entry of the United States into World War II. The Act of April 3, 1939, ch. 35 [Public 

Law 18, 76th Congress], §5, 53 Stat. 555, 557 (1939), provided that the same disability 

benefits as were available to members of the regular Army would be available to nonregular members. Executive Order No. 8099 of April 28, 1939, assigned responsibility 

for the administration and payment of such benefits to the Veterans' Administration.10

Accordingly, non-regular officers who were retired for disability under the 1939 act were 

not placed on the Army retired list nor given a "retired status"; rather, they were handled 

exactly like "emergency" officers. This procedure continued until the enactment of the 

Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 

(1949). 

The Naval Aviation Personnel Act of 1940, ch. 694 [Public Law 775, 76th

Congress], §4, 54 Stat. 864 (1940), entitled disabled non-regular Navy and Marine Corps 

officers to the same disability benefits provided for regular officers. Despite the similarity 

of this provision to that of the Act of April 3, 1939, ch. 35 [Public Law 18, 76th

Congress], §5, 53 Stat. 555, 557 (1939), for non-regular members of the Army, no 

executive order was issued assigning responsibility for it to the Veterans' Administration, 

as had been the case with the Army provision. Hence, disabled reserve officers of the 

Navy and Marine Corps were retired and placed on the retired list in the same manner as 

regular officers. They had the status of retired officers, remained subject to recall to 

active duty, and were paid from Navy and Marine Corps appropriations. 

 

10 The Veterans' Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, 102 Stat. 2635 (1988). Pursuant to that act, from and after 

March 15, 1989, all references in any federal law, executive order, rule, regulation, delegation of authority, 

or any document of or pertaining to the Veterans' Administration is statutorily deemed to refer to the 

Department of Veterans’ Affairs. Department of Veterans’ Affairs Act, Public Law 100-527, §10, 102 Stat. 

at 2640-2641; also see 38 U.S.C. §201 note. (Some references to the "Veterans' Administration," the "VA," 

and the "Veterans' Bureau" have been retained in the present chapter, largely for historical reasons. It 

should be understood, however, that the federal agency currently charged with authority for administering 

the laws and regulations formerly administered by the Veterans' Administration is the Department of 

Veterans’ Affairs.) 

743
The Act of June 30, 1941, ch. 263 [Public Law 140, 77th Congress], §2, 55 Stat. 

394 (1941), was the first legislation to extend disability retirement to Army enlisted 

personnel. The Act of June 30, 1941, ch. 263, id., §3, 55 Stat. at 394-395, allowed 

soldiers with 20 or more years of service to be retired for disability, with pay equal to 75 

percent of their average monthly pay for the six months immediately prior to retirement. 

(The six-months' average pay base for computing this form of disability retired pay is 

worthy of note: as far as can be determined, Army enlisted personnel were the only 

category of military personnel to whom an average-pay formula was ever applied for the 

purpose of determining any kind of retired or retainer pay entitlements before enactment 

of the Department of Defense Authorization Act, 1981, Public Law 96-342, §813, 94 

Stat. 1077, 1100-1110 (1980), which adopted a three-year average of monthly basic pay 

as the "monthly retired or retainer pay base" used in making retired or retainer pay 

entitlement computations for individual service members.)11

The 1941 law was the last significant modification to the disability retirement 

system before its 1949 revision. At this point, the compensation authorized for disabled 

military personnel had evolved into the systems set out below: 

 

Categories of Personnel Army and Air Force Navy and Marine Corps

Regular Officers Military Disability Retired 

Pay - 75% of Base and 

Longevity Pay 

Military Disability Retired 

Pay--75% of Base and 

Longevity Pay 

Non-Regular Officers Veteran's Administration 

"Retirement" Pay--75% of 

6-months' Average Base 

and Longevity Pay 

Same as Regular Officers 

 Enlisted Personnel, 20 or 

more years' of service 

Military Disability Retired 

Pay - 75% of 6 months' 

Average Base and 

Longevity Pay 

Military Disability Retired 

Pay--50% of Base and 

Longevity Pay 

 

11 See discussion of "military retired pay base" and "military retainer pay base" in Chapter III.B.1., 

"Nondisability Retired and Retainer Pay," above. 

744
Enlisted Personnel, less 

than 20 years' service 

Veteran's Administration 

Disability Compensation 

 based on degree of 

disability 

Veteran's Administration 

Disability Compensation 

based on degree of 

disability 

Note: Any member entitled to military retired pay could waive all or part of such pay and elect in 

its place any VA disability compensation based on degree of disability to which the member was 

entitled. 

 Allegations of unfairness, inequity, and inefficiency in the existing disability 

retirement system became so extensive following World War II that a special 

subcommittee of the House Armed Services Committee, chaired by Representative 

Elston of Ohio, was impaneled to investigate them.12 The principal complaints against the 

system were: 

(1) the award of wholly tax-exempt retired pay of 75 percent of active duty pay to 

any officer retired for disability, regardless of its severity, was unduly generous 

and costly; 

(2) the system, especially the Army "emergency officer" procedure, discriminated 

against non-regular officers as compared with regulars; 

(3) the system discriminated against enlisted personnel as compared with officers; 

and 

(4) the fact that retirement authority was limited to permanent disability tended to 

burden the active list with personnel retained solely for medical observation and 

evaluation of the permanency of a disability. 

The recommendations of the Elston Committee and the Advisory Commission on 

Service Pay (the so-called Hook Commission), which met at about the same time, led to 

the revised disability retirement system adopted under the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §402, 63 Stat. 802, 816-820 (1949), in 

which most of the criticized features of the previous system were changed. Under the 

new system, all disabilities had to be rated under the standard schedule of rating 

disabilities in use by the Veterans' Administration, and the resultant ratings became a 

 

12 Investigation of Disability Retirement Systems in the Armed Services: Hearings before the Legal 

Subcommittee of the House Armed Services Committee Pursuant to H. Res. 141 and H. Res. 447, 80th

Congress, 2d Session (1948). 

745
factor in the determination of actual disability retired pay entitlements and their 

taxability. The new system covered officer and enlisted personnel of both the regular and 

reserve components, and it authorized temporary as well as permanent disability 

retirements. The disability retirement system in effect today remains basically unchanged 

from that adopted in 1949.13

The present system provides that a member with at least eight years of service 

who is unfit to perform the duties of his office or grade because of a permanent disability 

that is stable in degree may be retired (1) if the disability is not the result of intentional 

misconduct or willful neglect and was not incurred during a period of unauthorized 

absence and (2) the disability is rated at 30 percent or more or the member has at least 20 

years of service. For personnel with less than eight years of service, the disability retired 

pay eligibility criteria appear to be somewhat more complex but in fact are not. For such 

personnel, the law provides that, to be eligible for disability retired pay, their disability 

must have been either (i) "the proximate result of performing active duty," (ii) "incurred 

in line of duty in time of war or national emergency," or (iii) "incurred in line of duty 

after September 14, 1978." Since "a state of national emergency" existed from 1950 until 

September 14, 1978, when all such "states of national emergency" were "terminated" 

pursuant to the National Emergencies Act, Public Law 94-412, §101, 90 Stat. 1255 

(1976), the only effective requirements prior to September 15, 1978, for military 

personnel with less than eight years of service--in addition to the permanency of 

 

13 Among the few changes made to the military disability retirement system since 1949 is a change that 

affects mainly members of the reserve components of the Armed Forces. Before enactment of the National 

Defense Authorization Act for Fiscal Year 1987, Public Law 99-661, §604(d), 100 Stat. 3816, 3876 (1986), 

members of the Armed Forces on active duty for 30 days or less--primarily members of reserve 

components of the Armed Forces--were entitled to disability retired pay benefits only for disabilities 

resulting from injuries. The 1987 Authorization Act eliminated the requirement that members on active 

duty for 30 days or less have been disabled by injury as a condition of entitlement to disability retired pay, 

so that affected persons disabled by illness or disease are now entitled to disability retired pay as well as 

persons disabled by injury. As explained by Congress, this action was taken in furtherance of efforts begun 

with the Department of Defense Authorization Act, 1984, Public Law 98-94, §924, 97 Stat. 614, 644 

(1983), "to remove the statutory distinctions between members of the active and reserve components who 

are disabled or killed as a result of injury, illness, or disease in the performance of their military duties or 

while traveling to or from those military duties." House Report No. 99-718 (Committee on Armed 

Services), p. 203, accompanying H.R. 4428, 99th Congress, 2d Session (1986). Cf. Senate Report No. 99-

331 (Committee on Armed Services), pp. 239-240, and House Report No. 99-1001 (Committee of 

Conference), p. 477, accompanying S. 2638, 99th Congress, 2d Session (1986). 

746
disability and non-misconduct/non-negligence requirements--were that the disability 

must have been either the "proximate result of performing active duty" or have been 

"incurred in line of duty." For disabilities incurred after September 14, 1978, the law 

itself, as amended by the Defense Officer Personnel Management Act (DOPMA), Public 

Law 96-513, §117, 94 Stat. 2835, 2878 (1980), provides that, to come within the 

disability retired pay entitlement provisions, the disability need only have been "incurred 

in line of duty."14 See generally, 10 U.S.C. §1201. Thus, the system at present operates, 

and has since 1950, in exactly the same manner for members with eight or more years of 

service as it does for those with less service. 

As to the amount of disability retired pay to which a disabled member may 

become entitled, a person who first became a member of a uniformed service on or before 

September 7, 1980, who is permanently retired for disability is entitled, at his election, to 

retired pay computed by multiplying his terminal monthly basic pay by either his 

percentage of disability or by 2.5 percent of the number of his years of service, up to a 75 

percent ceiling, whereas the retired pay of a person who first became a member after that 

date is determined by the use of the member's "retired pay base" or "retainer pay base," as 

defined in 10 U.S.C. §1407(b), in place of terminal monthly basic pay. See 10 U.S.C. 

 

14 In taking into account the National Emergencies Act, Public Law 94-412, §101, 90 Stat. 1255 (1976), 

Congress originally provided, in the Act of September 19, 1978, Public Law 95-377, §3, 92 Stat. 719 

(1978), that so as long as a member with less than eight years of service incurred a disability in the line of 

duty between September 15, 1978, and September 30, 1979, he would be eligible for disability retired pay. 

Shortly before the expiration of this period, the Department of Defense recommended that such authority 

be made permanent for personnel with less than eight years of service, in order not to "worsen ... the 

competitive position of the Armed Forces in attracting and retaining the numbers and quality of members 

essential to the proper functioning of the forces" in the context of an "All Volunteer" service. Departmental 

recommendation, as printed in Senate Report No. 96-424 (Committee on Armed Services), p. 7, 

accompanying H.R. 5168, 96th Congress, 1st Session (1979). In response to this recommendation, Congress, 

on September 8, 1980, in the Military Personnel and Compensation Amendments of 1980, Public Law 96-

343, §10(c), 94 Stat. 1123, 1129 (1980), extended the authority to September 30, 1982, conditioned on the 

President's promulgation of an executive order making such extension effective. Thus, despite the lapse of 

the authority on September 30, 1979, military personnel disabled in line of duty any time after September 

15, 1978, and before October 1, 1982, were, under the Military Personnel and Compensation Amendments 

of 1980, Public Law 96-343, id., entitled to disability retired pay if otherwise eligible therefor. In the 

Defense Officer Personnel Management Act, Public Law 96-513, §117, 94 Stat. 2835, 2878 (1980), 

adopted December 12, 1980, Congress made the authority permanent by extending disability retired pay 

authority to members whose disability was incurred in line of duty at any time after September 14, 1978. 

747
§1401(a) (Formula No. 1 (relating to the computation of disability retired pay 

entitlements)).15

For persons who were members of the Armed Forces on September 24, 1975, or 

who were receiving disability retired pay on or before that date, or who at any time 

thereafter receive such pay because of a combat-related injury (including conditions 

simulating combat), or who would be entitled to receive disability compensation from the 

Department of Veterans Affairs upon application for such pay, retired pay computed on 

the basis of percentage of disability is wholly exempt from federal income taxation. See 

Section 104(a)(4) and (b) of the Internal Revenue code of 1986, 26 U.S.C. §104(a)(4) and 

(b), and Section 1.104-1(e)(1) of the Internal Revenue Service's Income Tax Regulations 

adopted thereunder, 26 C.F.R. §1.104-1(e)(1). Disability retired pay computed on the 

basis of years of service for such a person is, however, subject to federal income taxation 

to the extent that it exceeds the pay such person would have received had his pay been 

computed only on the basis of percentage of disability. See, e.g., Section 104(a)(4) of the 

Internal Revenue Code of 1986, 26 U.S.C. §104(a)(4), and Sections 1.104-1(e)(1) and 

1.105-4(a)(3)(i)(A) of the Income Tax Regulations thereunder, 26 C.F.R. §§1.104-1(e)(1) 

and 1.105-4(a)(3)(i)(A). For persons not covered by the previously specified eligibility 

criteria--that is, primarily persons who became members of the Armed Forces after 

September 24, 1975, and who do not receive disability retired pay because of a combatrelated injury or who are not eligible for disability compensation administered by the 

Department of Veterans Affairs--amounts received as disability retired pay are, under 

amendments to the Internal Revenue Code of 1954 made by the Tax Reform Act of 1976, 

Public Law 94-455, §505(b), 90 Stat. 1520, 1567 (1976), fully subject to federal income 

taxation. See Section 104(b) of the Internal Revenue Code of 1986, 26 U.S.C. §104(b), 

for a fuller explication of the applicable rules for excluding disability retired pay from 

 

15 Abstracting from some minor complicating factors, a member's "retired" or "retainer pay base" equals 

average basic pay for the 36 month period the member earned the highest rate of monthly basic pay. See 

discussion of "military retired pay base" and "military retainer pay base" in Chapter III.B.1., "Nondisability 

Retired and Retainer Pay," above, for a fuller explanation of the niceties of "retired" and "retainer pay 

bases." 

748
income subject to taxation.16 17 A disabled member with less than 30 percent disability 

and less than 20 years' service is entitled to disability severance pay, instead of disability 

retired pay, with the entitlement computed as the product of two months' basic pay and 

the member's years of service, up to a maximum of 12 years. 10 U.S.C. §§1203 and 

1212.18

A member whose qualification for permanent disability retirement is prevented 

only because the degree of his disability cannot be positively determined can, if accepted 

medical principles indicate that the disability may be permanent, be placed on the 

temporary disability retired list ("TDRL") pursuant to the provisions of 10 U.S.C. 

§1202.19 A member on TDRL has the same retired pay entitlement as a member 

 

16 That is, before 1975, all Department of Defense disability retired pay was tax exempt, and the same was 

true for Veterans' Administration disability compensation. In 1975, because of what was perceived as 

abuses of the tax-exemption provisions relating to military disability retired pay--including allegations that 

retirees were regularly determined to have some form of disability whether in fact they had any disability or 

not--the Department of Defense rule was changed so that only the percentage of disability retired pay that is 

attributable to "combat-related injuries" (defined to include injuries or sickness caused by an 

“instrumentality of war" and incurred (i) as a direct result of armed conflict, or (ii) while engaged in 

"extrahazardous" service, or (iii) under conditions simulating war) or that a member could have obtained as 

disability compensation from the Department of Veterans Affairs is exempt from taxation. Disability 

compensation awarded by the Department of Veterans Affairs remains wholly tax exempt. (In a related 

vein, once the Department of Defense determines the percentage of disability for disability retired pay 

purposes, that percentage is fixed for ever. As far as disability compensation administered by the 

Department of Veterans Affairs is concerned, however, the percentage of disability determination is not 

final but may be changed as a veteran's physical condition either improves or deteriorates over time.) 

17 See, e.g., House Report No. 94-658 (Committee on Ways and Means), pp. 152-153, and Senate Report 

No. 94-938 (Committee on Finance), pp. 138-140, accompanying H.R. 10612, 94th Congress, 2d Session 

(1976). 

18 For a more complete discussion of disability severance pay, see Chapter III.C.2., "Disability Severance 

Pay," below. 

19 Before 1985, a member who had a disability that was determined to be permanent even though the 

degree of disability could not be determined because it was not stable in nature was nevertheless required to 

be placed on permanent disability retired status. The Department of Defense Authorization Act, 1986, 

Public Law 99-145, §513, 99 Stat. 583, 627-628 (1985), changed this result to "permit a permanently 

disabled service member to be placed on the temporary disability retired list if the disability, though 

permanent in character, were not stable in degree." House Report No. 99-81 (Committee on Armed 

Services), p. 211, accompanying H.R. 1872, 99th Congress, 1st Session (1985) (emphasis in original). As 

explained in the House Report, "[l]iterally construed, current law would not permit the same result." id. 

(The 1986 Authorization Act also changed preexisting law to "permit retirement or separation of a service 

member directly from the temporary disability retired list without the administrative fiction--required by 

current law--of reappointment or reenlistment on active duty" before retirement or separation. id.) Also see 

House Report No. 99-235 (Committee of Conference), p. 422, and Senate Report No. 99-118 (Committee 

749
permanently retired for disability, except that there is a 50 percent floor as well as a 75 

percent ceiling on temporary disability retired pay. A member on the TDRL must be 

physically examined at least once every 18 months to determine whether there has been a 

change in his disability and whether the disability is permanent in nature. A final 

determination on permanency must be made within five years of the member's placement 

on TDRL. If a periodic or final physical examination shows that a member's disability is 

permanent and stable and is rated as 30 percent or more, or if he has at least 20 years of 

service,20 the member is permanently retired in a disability status. If it is determined that 

the member's disability is permanent but is rated as less than 30 percent and he has less 

than 20 years of service,21 the member is removed from TDRL, separated from the 

service, and given disability severance pay.22 If it is determined that he is physically fit to 

perform his duties, the member must be removed from TDRL, with a concomitant 

cessation of disability retired pay, after which, with his consent, he may be reappointed or 

reenlisted on the active list or permanently separated without entitlement to either 

disability, retired, or severance pays. 

Until 2004, under the provisions of 38 U.S.C. §§5304-5305 a member or 

former member of the Armed Forces could receive a disability-based pension or 

 of Conference), p. 422, accompanying S. 1160, 99th Congress, 1st Session (1985). See 10 U.S.C. §1202 

concerning the "temporary disability retired list." 

20 Section 1201(3) of Title 10, United States Code, 10 U.S.C. §1201(3), specifically requires that a member 

have either 20 years of service or a disability rating of at least 30 percent to be eligible for disability retired 

pay. The 20-year requirement would appear to rule out the possibility that members of the Armed Forces 

with at least 15 but less than 20 years of service who have a disability rating of less than 30 percent may be 

eligible for disability retirement pursuant to the provisions of Section 4403 of the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 (1992), as 

amended by the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §561(a), 

107 Stat. 1547, 1667 (1993), set out as a note under 10 U.S.C. §1293, which provides temporary early 

retirement authority during the "active force drawdown period," i.e., October 23, 1992, to October 1, 1999, 

for members of the Armed Forces with at least 15 but less than 20 years of service. As a practical matter, 

however, the Secretaries of the military departments would appear to have sufficient discretionary authority 

under the early retirement program authorized by Section 4403 of the National Defense Authorization Act 

for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 (1992), as amended, see 

Section 4403(d) of the act in particular, to grant regular retirement to members with at least 15 but less than 

20 years of service who have a disability rating of less than 30 percent. 

21 But see the last sentence of footnote 20 hereof, above. 

22 See footnote 19, above. 

750
compensation from the Department of Veterans Affairs at the same time he 

received retired or retainer pay based on service as a member of the Armed 

Forces, only if he filed a "waiver" of that portion of his retired or retainer pay 

(including disability retired pay) entitlement equal to the amount of pension or 

compensation to which he was entitled from the Department of Veterans 

Affairs.23 The provision of this “offset” effectively banned the concurrent receipt 

of disability retired pay and veterans compensation for the same disability. 

In the late 1990s, the fairness of this limitation on concurrent receipt came under 

close scrutiny by Congress, and abolition of the limitation gained strong political support. 

The National Defense Authorization Act for Fiscal Year 2000 added a new section to 

Chapter 71 of 10 U.S.C., providing for special retirement compensation from the Defense 

Department to retirees with disabilities rated at 70 percent or higher. The National 

Defense Authorization Act for 2002 reduced the minimum disability rating of this 

provision from 70 to 60 percent. Under both laws, compensation was computed on a 

sliding scale commensurate with the Department of Veterans’ Affairs scale that awarded 

higher payments to individuals with greater rates of disability. The authorization act for 

2002 also provided authority for concurrent receipt, but that authority was contingent on 

passage of legislation that would provide means to offset the additional expenditure that 

concurrent receipt would entail over the ensuing ten years. Because no such legislation 

was forthcoming, the special compensations prescribed in legislation beginning in 2000 

left most disabled veterans substantially short of concurrent receipt, for which strong 

advocacy continued. In 2003 Senator Nelson of Nebraska expressed the rationale for 

advocacy of full concurrent receipt: 

Military retirement pay and VA [Department of Veterans’ Affairs] 

disability compensation were earned and awarded for different purposes. The 

military retired pay is awarded for a career of service in the armed services. 

Disability compensation is awarded to veterans to compensate for a disability 

incurred in the line of military duty.... Each year for several years legislation has 

been introduced in both the House and the Senate to repeal this inequitable 

prohibition.24

 

 

23 See footnote 16, above, as well as the text of the paragraph to which it is appended. 

24 U.S. Senate Armed Services Committee, Subcommittee on Personnel, hearing on disabled veterans, 

March 27, 2003. 

751
 Despite strong support for this position in Congress and among veterans’ groups, 

the Bush Administration opposed the removal of the concurrent receipt restrictions 

because of the additional expenditures that such a change would entail. President Bush 

threatened to veto the National Defense Authorization Act for Fiscal Year 2003 if the 

House-Senate conference adopted the Senate’s proposed application of concurrent receipt 

to virtually all disabled retirees. In a compromise response, the National Defense 

Authorization Act for Fiscal Year 2003 limited the application of concurrent receipt to a 

narrower category, the “combat-related disabled uniformed services retiree.” Individuals 

determined to fall into that category (which required at least a 60 percent disability 

rating) became eligible to receive special compensation from the Defense Department in 

the amounts stipulated as disabled veterans’ benefits in Chapter 11 of U.S.C. 38. This 

provision would normally mean restitution of the entire “waived” portion of the 

individual’s retirement entitlement, which the legislation in fact stipulates as the 

maximum amount that can be received as special compensation (combat-related special 

compensation, CRSC) by the combat-related disabled uniform services retiree. 

The National Defense Authorization Act for Fiscal Year 2004 extended the scope 

of concurrent receipt in both eligibility and benefits. Section 641 of that legislation 

provided for all disabled retirees with disability ratings of 50 percent or more to have 

their offsets (the amount subtracted from military retirement because of disability 

benefits) reduced gradually between 2004 and 2013, reaching zero at the end date. Purple 

Heart recipients became eligible immediately for full military retirement and disability 

benefits. Section 642 of the 2004 authorization bill also extended to all retirees with 

combat-related disabilities the combat-related special compensation for which retirees 

with more than 60 percent combat-related disability had become eligible in 2003. That 

legislation also clarified eligibility between the two most recent programs: individuals 

receiving compensation based on combat-related disabilities are ineligible for the tenyear gradual reduction of offsets, and individuals receiving reduced offsets are ineligible 

for combat-related disability compensation. 

The following table shows the amounts of additional monthly compensation to be 

received by disability retirees in 2004, the starting point of phased-in concurrent receipt 

752
for retirees with 50 percent or greater disability. In each of the succeeding years through 

2013, the amount of the monthly offset will decrease (hence monthly retirement 

compensation will increase) by an additional 10 percent of the difference between the 

previous year’s monthly offset decrease and the individual’s original monthly offset 

amount. For example, a retiree with 50 percent disability, nominal retirement eligibility 

of $2,000, and an offset of $1,000 would receive $100 of additional retired pay per month 

in 2004 by virtue of the $100 offset reduction stipulated for individuals in the 50 percent 

category. Thus the individual’s total monthly retirement payment would increase from 

$1,000 to $1,100. In 2005, that amount would increase by $90, which is 10 percent of 

$900 (the difference between the total offset monthly amount, $1,000, and the previous 

year’s monthly offset decrease, $100), reducing the pre-2004 monthly offset amount by 

$190 and yielding a total retirement payment of $1,190. In 2006, the monthly payment 

would increase by 20 percent of the difference between $1,000 and $190, or $162, 

reducing the original monthly offset by $190 plus $162, or $352, and yielding a monthly 

retirement payment of $1,352. In 2007 the $352 figure would increase by 30 percent of 

the difference between $1,000 and $352, and so on. In the final year, 2014, the monthly 

payment would increase by 100 percent of the difference between $1,000 and the 

monthly payment for 2012, bringing the individual to full concurrent receipt on 

December 31, 2013. 

Disability 

Rating 

50% 60% 70% 80% 90% 100% 

2004 

additional 

monthly 

retirement 

payment* 

$100 $125 $250 $350 $500 $750 

* i.e., reduction of monthly offset 

Summary: The more significant statutes relating to disability retirement and 

retired pay are displayed in capsulized form below. 

753
 Summary of Significant Statutes Relating to 

 Disability Retirement and Retired Pay 

Enactment Action

Act of February 28, 1855, ch. 127, 10 Stat. 

616 (1855) 

Authorized involuntary removal of Navy 

officers from active list for disability and 

other reasons.

Act of August 3, 1861, ch. 42, 12 Stat. 287 

(1961) 

Established disability retirement system 

for regular officers of all services.

Act of March 2, 1867, ch. 174, 14 Stat. 

515, 516 (1867)

Established disability retirement system 

for Navy and Marine Corps enlisted 

personnel with 20 or more years of 

service.

 Act of July 15, 1870, ch. 294, 16 Stat. 315 

(1870) 

Fixed disability retired pay for Army and 

Marine Corps officers at 75 percent of 

active duty pay, a formula that continued 

until 1949.

Act of March 3, 1873, ch. 230, 17 Stat. 547 

(1873) 

Made 75 percent disability retired pay 

formula applicable to Navy officers.

Act of June 4, 1920, ch. 228 [Public Law 

243, 66th Congress], 41 Stat. 812, 834 

(1920) 

Temporarily made officers of naval 

reserve eligible for disability retirement 

on same basis as regular officers.

Act of May 24, 1928, ch. 735 [Public Law 

506, 70th Congress], 45 Stat. 735 (1928) 

Created "emergency officers' retired list"; 

made non-regular officers of all services 

disabled during World War I eligible for 

"retirement" pay from VA. "Retirement" 

pay equivalent of "retired" pay of 

corresponding regular officers.

Naval Aviation Personnel Act of 1940, ch. 

694 [Public Law 775, 76th Congress], 54 

Stat. 864 (1940) 

Made non-regular Navy and Marine Corps 

officers eligible for same disability 

retirement benefits as regulars. Such nonregulars handled same as regular officers.

Act of June 30, 1941, ch. 263 [Public Law 

140, 77th Congress], 55 Stat. 394 (1941) 

Established disability retirement system 

for Army enlisted personnel with 20 or 

more years of service.

Career Compensation Act of 1949, ch. 681 

[Public Law 351, 81st Congress], 63 Stat. 

802 (1949) 

Revised disability retirement system; 

applicable equally to officer and enlisted 

personnel of both regular and reserve 

components; disabilities rated by degree 

and resultant ratings factor in retired 

pay entitlement and taxability; temporary 

as well as permanent disabilities provided 

for. 

754
National Defense Authorization Act for 

Fiscal Year 2000, Public Law 106-65, 113 

Stat. 644 

Initiated special compensation for rated at 

higher than 70 percent disability 

National Defense Authorization Act for 

Fiscal Year 2002, Public Law 107-107, 115 

Stat. 1128 

Provided for authority for concurrent 

receipt of military retired pay and 

veterans’ disability compensation, 

contingent on enactment of legislation to 

offset expenditures; reduced minimum 

disability rating to 60 percent for receipt 

of special compensation for severely 

disabled retirees. 

National Defense Authorization Act for 

Fiscal Year 2003, Public Law 107-314, 116 

Stat. 2458 

Provided for concurrent receipt of military 

retired pay and veterans’ disability for 

veterans categorized as combat-related 

disabled uniformed services retirees, if 

their disability rating was 60 percent or 

higher. 

National Defense Authorization Act for 

Fiscal Year 2004, Public Law 108-136, 

108th Congress 

Provided for phase-in over a ten-year 

period (through 2013) of full concurrent 

receipt of military retired pay and 

veterans’ disability compensation for 

military retirees with greater than 50 

percent disability. Extended eligibility for 

combat-related disability special 

compensation to all retirees with combatrelated disabilities, regardless of disability 

rating. 

 Cost: For the cost of disability retired pay from 1972 to 2004, see Tables III-4

of Military Compensation Statistics Tables, volume II of this edition. 

755
Chapter III.B.4. 

 Adjustments to Retired 

 and Retainer Pay 

Legislative Authority: 10 U.S.C. §1401a. 

Purpose: To provide a mechanism for adjusting the retired and retainer pay 

entitlements of members of the uniformed services to offset or compensate for the effects 

of inflation in order to protect the initial value of that pay and to insure that persons who 

make a career of the uniformed services and become entitled to retired or retainer pay do 

not have the purchasing power of that pay eroded by inflation. 

Background: The subject of post-retirement adjustments to retired and retainer 

pay is an issue with major budgetary implications and has received considerable attention 

in recent years. The history of such adjustments dates to 1870. The Army and Navy 

Appropriation Acts for 1871 (Act of July 15, 1870 (Army Appropriation Act of 1871), 

ch. 294, §24, 16 Stat. 315, 320 (1870), and Act of July 15, 1870 (Navy Appropriation Act 

of 1871), ch. 295, §3, 16 Stat. 321, 330-332 (1870)), enacted nine years after the first 

military retirement system had been created, included a pay raise for officers on the 

active list. The Acts also provided for an adjustment in the retired pay of officers who 

were already retired based on the new active duty rates. Army Appropriation Act of 1871, 

ch. 294, §24, 16 Stat. 315, 320 (1870), and Navy Appropriation Act of 1871, ch. 295, §5, 

16 Stat. 321, 333 (1870). The Navy Act was especially clear in this regard, stating that 

"the pay of all officers of the navy now on or hereafter placed on the retired list" was to 

be based on "the highest pay prescribed by this act for officers on the active list whose 

grade corresponds to the grade held by such retired officers."1

 The adjustment of retired 

and retainer pay on the basis of new active duty pay rates became known as 

"recomputation" of retired pay, inasmuch as retired and retainer pay entitlements of 

 

1

 The Act of July 15, 1870 (Navy Appropriation Act of 1871), ch. 295, §5, 16 Stat. 321, 333 (1870), 

provided that the actual retired pay of any particular officer was to be computed as "one half" of "the 

highest pay prescribed by this act for officers on the active list whose grade corresponds to the grade held 

by such retired officers." 

756
retired members were "recomputed" every time there was an increase in pay rates for 

members of the active force. 

The Act of August 5, 1882 (Navy Appropriation Act of 1883), ch. 391, §1, 22 

Stat. 284, 286 (1882), though it made no change in active duty pay rates, discontinued 

recomputation for retired Navy officers: "Hereafter there shall be no promotion or 

increase of pay in the retired list of the Navy but the rank and pay of officers on the 

retired list shall be the same that they are when such officers shall be retired." This 

provision was aimed primarily at preventing post-retirement promotions with attendant 

pay increases, but its language also had the effect of barring recomputation. Army and 

Marine Corps officers were not affected by the bar, nor were the enlisted personnel of 

any service, including the Navy. 

The Act of March 3, 1899 (Navy and Marine Corps Reorganization Act of 1899), 

ch. 413, §13, 30 Stat. 1004, 1007 (1899), resulted in an increase in the active duty pay of 

Navy officers. The pay of retired Navy officers was not adjusted on the basis of these 

new rates, however, both because of the bar on recomputation contained in the Navy 

Appropriation Act of 1883 and because of the express provision that "nothing in this Act 

shall operate to increase or reduce the pay of any officer now on the retired list of the 

Navy." 

Recomputation was restored to retired Navy officers by the next Navy pay bill, 

the Act of May 13, 1908 (Navy Appropriation Act of 1909), ch. 165 [Public Law 115, 

60th Congress], 35 Stat. 127, 128 (1908). This Act provided that "the pay of all 

commissioned, warrant and appointed officers, and enlisted men of the Navy now on the 

retired list shall be based on the pay, herein provided for, of ... officers and enlisted men 

of corresponding rank and service on the active list." 

The Act of May 18, 1920, ch 190 [Public Law 210, 66th Congress], §§1-6, 8, 11, 

13, 41 Stat. 601, 601-604 (1920), authorized a temporary increase in the active duty pay 

of all personnel "until the close of the fiscal year ending June 30, 1922, unless sooner 

757
amended or repealed," while at the same time providing that such "increases ... shall not 

enter into the computation of the retired pay of officers or enlisted men who may be 

retired prior to July 1, 1922." Act of May 18, 1920, ch. 190, id., §13, 41 Stat. at 604. 

Thus, not only did the act bar recomputation on the basis of the new rates for personnel 

already on the retired list, it prohibited personnel retiring after the effective date of the 

Act but before July 1, 1922, from computing their retired pay on the basis of the higher 

rates--and this despite the fact that such personnel had actually received the higher rates 

while on active duty. These prohibitions were presumably due to the stop-gap nature of 

the 1920 pay legislation, evidenced by a provision calling for the creation of a special 

committee of Congress to "make an investigation and report recommendations to their 

respective Houses not later than the first Monday in January, 1922, relative to the 

readjustment of the pay and allowances of the commissioned and enlisted personnel of 

the several services." Act of May 18, 1920, ch. 190, id., §13, 41 Stat. at 604. 

The recommendations of the special Congressional committee were reflected in 

the Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 [Public 

Law 235, 67th Congress], §§1 and 9, 42 Stat. 625, 625-627 (1922), which authorized 

permanent increases in active duty pay rates. Enlisted personnel on the retired list were 

allowed to recompute their retired pay on the basis of the new rates, but officers were 

expressly prohibited from doing so. Joint Service Pay Readjustment Act of 1922, ch. 212, 

id., §1 (commissioned officers) and §9 (warrant officers), 42 Stat. at 625-627 and 629-

630. This prohibition was removed by the Act of May 8, 1926 (Pay Equalization Act of 

1926), ch. 274 [Public Law 204, 69th Congress], 44 Stat. 417 (1926), which permitted 

officers retired before July 1, 1922, to prospectively recompute their retired pay on the 

basis of the active duty pay rates that had been prescribed effective that date; such 

officers were not, however, permitted to retroactively reclaim the benefits of 

recomputation for the period 1922-1926. 

The recomputation principle was followed for both officer and enlisted personnel 

in each of the active duty pay raises that occurred between 1922 and 1949. The Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §511, 63 Stat. 802, 

758
829-830 (1949), permitted the pay of any retired member to be recomputed under the 

higher basic pay rates it established, but it also gave personnel retired before October 1, 

1949, an option that resulted in an election by many such members, particularly officers 

retired for disability, to forego recomputation. Officers were entitled to disability retired 

pay of 75 percent of their active duty pay until the disability retirement system was 

revised by the Career Compensation Act of 1949, ch. 681, id. Under the revised system, 

they were entitled to retired pay computed by multiplying the basic pay of their grade by 

either their percentage of disability or their years of active service, up to a ceiling of 75 

percent. Those retired before October 1, 1949, could choose to have their retired pay 

recomputed under the "new" pay rates using the revised method of computation, or to 

continue to receive 75 percent of the "old" rates. Members with a 50 percent disability 

and 20 years of service, for example, had a choice between 50 percent of the new rates or 

75 percent of the old rates. As it worked out, 60 percent of the new rates was as a general 

rule slightly greater than 75 percent of the old rates. Thus, it took a disability rating of 60 

percent or higher or a minimum of 24 years of service to make recomputation 

advantageous. Many retired members had neither this degree of disability nor length of 

service; hence, they elected to remain under the pre-October 1949 pay rates and method 

of computation. Personnel who made such an election were prohibited from having their 

retired pay recomputed under the subsequent military pay raises of 1952 and 1955, even 

though recomputation was authorized generally under those pay bills. 

The Act of May 20, 1958 (Armed Forces Pay Act of 1958), Public Law 85-422, 

72 Stat. 122 (1958), increased active duty basic pay rates, §1(1), 72 Stat. at 122, but 

prohibited recomputation of retired pay on the basis of the new rates, §3(a), 72 Stat. at 

128. It provided for a six percent cost-of-living increase in retired pay instead. It is clear 

from the legislative history of the Act that Congress had not at this point made up its 

mind whether recomputation should be abandoned permanently or whether it should 

merely be suspended for this particular piece of legislation. The added cost of 

recomputation played a major part in its prohibition in the 1958 Act. As explained by the 

House Armed Services Committee: 

759
A major departure from the Department of Defense proposal lies in the 

treatment of retired personnel. The Cordiner Group recommended that pay of all 

retired personnel should be recomputed on the basis of the new pay scales. The 

Department of Defense proposal, H.R. 9979, recommended that retired personnel 

should receive no increase in retired pay. The Committee on Armed Services has 

taken the middle ground. The cost factor involved, approximately $65 million, 

precluded the adoption of the Cordiner Committee recommendation. On the other 

hand, the Committee felt strongly that the advance in the cost of living has created 

conditions of hardship which require some measure of relief. Therefore, H.R. 

11470 includes an increase of 6 percent to all personnel retired prior to the 

effective date of the proposed legislation at a cost of a little over $35 million.2

The Chairman of the Senate Armed Services Subcommittee that handled the pay 

legislation sounded a similar theme when he introduced the bill in the Senate: 

 The only reason for changing the present system of including all retired 

personnel, at whatever increase was applied to the corresponding rank in the 

active service, was the question of where to put the money so that it would do the 

most good, and also the question of the future soundness of the retirement 

program.3

The Uniformed Services Pay Act of 1963, Public Law 88-132, §5(g), 77 Stat. 210, 

213-214 (1963), replaced the recomputation system in permanent law with a method of 

retired pay adjustment based on increases in the cost of living as measured by the 

Consumer Price Index (CPI). The permanent shift from a recomputation to a cost-ofliving method of adjustment was explained in these terms: 

The Committee on Armed Services recognizes the tradition that has 

attached itself in the past to the method of recomputing retired pay whenever the 

rates of basic pay for members on active duty are changed. It was not easy in 

1958, and it is not easy now, to recommend this break with tradition. 

Nevertheless, the break with tradition was made in 1958 when recomputation of 

retired pay based on changes in active duty pay rates was not authorized. 

 The Committee on Armed Services fully realizes the obligation we 

have to those now retired who have served their Nation. But the committee also 

recognizes its obligation to those now serving on active duty and those who 

will enter on active duty in the future. 

 

2 House Report No. 1538 (Committee on Armed Services), p. 47, accompanying H.R. 11470, 85th

Congress, 2d Session (1958). 

3 104 Cong. Rec. 7612 (1958). 

760
 The committee cannot disregard the already heavy costs involved in 

military retirement or the substantial added costs which would result if 

recomputation were to be retained as a part of the military retirement system.4

The adjustment method adopted in the Uniformed Services Pay Act of 1963, 

Public Law 88-132, §5(g), 77 Stat. 210, 213-214 (1963), required a determination in 

January of each year of the percentage increase in the CPI, as measured by the annual 

average of that index for the year. If the increase was three percent or more, retired pay 

was to be increased by that percent on the first of April. 

Despite the creation of the CPI adjustment mechanism and the formal 

abandonment of recomputation, the Act in fact authorized recomputation for two specific 

groups of retired personnel. Those retired before June 1, 1958, were permitted to 

recompute their retired pay on the basis of the active duty pay rates prescribed in 1958; 

and those retired between April 1 and October 1, 1963, were allowed to recompute on the 

basis of the new active duty pay rates that took effect October 1, 1963. 

No retired pay adjustments resulted from the formula adopted in the Uniformed 

Services Pay Act of 1963, Public Law 88-132, §5(g), 77 Stat. 210, 213-214 (1963). The 

Act of August 21, 1965, Public Law 89-132, §5, 79 Stat. 545, 547 (1965), changed the 

adjustment mechanism to require a monthly determination of the percentage by which the 

CPI had increased over the base index used for the most recent adjustment of retired pay. 

When the CPI had increased by at least 3 percent over the base index and held at 3 

percent or more for three consecutive months, retired pay was to be increased on the first 

day of the third month following the consecutive three-month period by the highest 

percent of the increase plus 1 percent. The one percent add-on was incorporated into the 

adjustment mechanism, starting with the November 1, 1969, cost-of-living increase, by 

the Act of December 30, 1969, Public Law 91-179, 83 Stat. 837 (1969), for the purpose 

of compensating for the loss of purchasing power during the time the CPI was building 

up to the three percent level and before the increase in the cost of living was actually 

reflected in higher retired pay. The Civil Service Retirement Amendments of 1969, 

 

4

 House Report No. 208 (Committee on Armed Services), p. 19, accompanying H.R. 5555, 88th Congress, 

1st Session (1963). 

761
Public Law 91-93, 83 Stat. 136, 139 (1969), had authorized a similar 1 percent add-on in 

Federal civil service annuities, and the add-on had been in effect for the cost-of-living 

increase that occurred in civil service annuities on November 1, 1969. The Department of 

Defense Appropriation Authorization Act, 1977, Public Law 94-361, §801(a), 90 Stat. 

923, 929 (1976), eliminated the one percent add-on to military retired pay, contingent on 

repeal of the similar 1 percent add-on for civil service retirees. The Legislative Branch 

Appropriation Act, 1977, Public Law 94-440, §1306(d), 90 Stat. 1439, 1462-1463 (1976), 

amended the preexisting adjustment mechanism by providing that retired and retainer pay 

was to be adjusted twice yearly--on March 1 and September 1--by the percentage 

increase in the index, rounded to the nearest one-tenth of 1 percent, on the preceding 

January 1 and July 1, respectively. In 1980, Congress, in the Department of Defense 

Authorization Act, 1981, Public Law 96-342, §812, 94 Stat. 1077, 1098-1099 (1980), 

further amended the adjustment mechanism by deferring the adjustment that would 

otherwise have taken place in September 1980 and by providing, in effect, that future 

adjustments should be made only once a year, at the same time Civil Service retirement 

annuities were adjusted pursuant to 5 U.S.C. § 8340(b), and by the same percentage. 

The Department of Defense Authorization Act, 1984, Public Law 98-94, §§921 

and 922, 97 Stat. 614, 640-642 (1983), made two amendments to the provisions affecting 

the mechanism for adjusting retired and retainer pay under 10 U.S.C. §1401a. The first of 

the changes, adopted as Section 921 of the 1984 Authorization Act, Public Law 98-94, 

id., §921, 97 Stat. at 640-641, repealed the so-called "one-year `look-back'" provision of 

prior law. Under the one-year "look-back" rule, military retirees were permitted to base 

their retired or retainer pay either on the pay scale in effect on the date of their retirement 

or on the immediately preceding pay scale as adjusted for changes in the cost of living 

pursuant to 10 U.S.C. §1401a, whichever was greater. The 1984 Authorization Act 

eliminated the latter option--basically because of budgetary concerns.5

 The second 

change, adopted as Section 922 of the 1984 Authorization Act, Public Law 98-94, id., 

 

5 See, e.g., House Report 98-352 (Committee of Conference), p. 227, Senate Report No. 99-213 

(Committee of Conference), p. 227, and Senate Report No. 98-174 (Committee on Armed Services), pp. 

219-220, accompanying S. 675, 98th Congress, 1st Session (1983). 

762
§922, 97 Stat. at 641-642, required that monthly retired or retainer pay entitlements, both 

as initially computed and as subsequently adjusted pursuant to 10 U.S.C. §1401a, be 

rounded down to the next lower full dollar. At bottom, budgetary concerns were 

responsible for this change as well. As explained by the Senate Committee on Armed 

Services: 

The Committee proposal to round down monthly retired [and retainer] pay 

to the next lower dollar is consistent with the provisions of the Omnibus 

Reconciliation Acts of 1981 and 1982 which rounded down monthly Social 

Security benefits and civil service annuities, respectively. Although each 

[military] retiree would only lose from $.12 to $11.88 per year, the Department of 

Defense estimates that rounding down would save an estimated $9 million 

annually through fiscal year 1987.6

The Military Retirement Reform Act of 1986, Public Law 99-348, §§102 and 103, 

100 Stat. 682, 683-686 (1986), made further changes to the mechanism by which retired 

and retainer pay is adjusted to compensate for increases in the general price level. As 

previously indicated,7

 the basic thrust of the Military Retirement Reform Act of 1986, 

Public Law 99-348, id., was to create a new, and less expensive, retirement system for 

members of the uniformed services who first became members on or after August 1, 

1986. To this end, the Military Retirement Reform Act of 1986, Public Law 99-348, id., 

made two fundamental changes in the retirement system as applied to such members. The 

first of the changes, discussed in Chapter III.B.1. hereof, above, "Nondisability Retired 

and Retainer Pay," created new, and lower, percentage multipliers to be applied to 

affected members' "monthly retired or retainer pay bases" to determine initial retired or 

retainer pay entitlements. The second of the changes established a new mechanism for 

adjusting retired or retainer pay entitlements of affected members. 

Before enactment of the Military Retirement Reform Act of 1986, Public Law 99-

348, 100 Stat. 682 (1986), all retired members or former members of the uniformed 

 

6 Senate Report No. 98-174 (Committee on Armed Services), p. 219, accompanying S. 675, 98th Congress, 

1st Session (1983). Also see House Report No. 98-352 (Committee of Conference), p. 227, and Senate 

Report No. 98-213 (Committee of Conference), p. 227, accompanying S. 675, 98th Congress, 1st Session 

(1983). 

7

 See Chapter III.B.1. hereof, above, "Nondisability Retired and Retainer Pay." 

763
services had their retired or retainer pay entitlements adjusted annually at the same time 

and by the same percentage as Civil Service retired pay to reflect changes in the 

Consumer Price Index.8

 The mechanism for effecting such adjustments, as previously 

indicated, sought to protect the full purchasing power of the initial retired or retainer pay 

entitlement of a particular member of a uniformed service by increasing the entitlement, 

at stated intervals, by the percentage by which the Consumer Price Index had increased 

since the last adjustment. 9

 Under the Military Retirement Reform Act of 1986, Public 

Law 99-348, id., the linkage with Civil Service retired pay adjustments is broken for 

members of the uniformed services who first became members on or after August 1, 

1986, and the adjustment mechanism that is to be applied to the retired or retainer pay of 

such members no longer protects the full purchasing power of their initial retired or 

retainer pay entitlements. Rather, the adjustment mechanism for all members of the 

uniformed services who first became members on or after August 1, 1986, provides that, 

between the time a member retires and the time the member reaches age 62, the member's 

retired or retainer pay entitlement is to be adjusted, at the same time adjustments are 

made for pre-August 1, 1986, accessions, by the percentage by which the Consumer Price 

Index had increased since the last adjustment less one percentage point. Then, when the 

member reaches age 62, and at the same time as the member's retirement percentage 

multiplier is increased,10 a one-time "catch-up" adjustment is made to the Consumer Price 

Index adjustment mechanism. In short, when a member reaches age 62, two adjustments 

are made to the member's retired or retainer pay entitlement. The first adjustment 

effectively results in a recomputation of the member's initial retired or retainer pay 

 

8 For purposes of this chapter, references to "members" in connection with the discussion of adjustments to 

retired or retainer pay should be understood to include former members as well. 

9 This adjustment process was, in practice, slightly more complicated than indicated for members of the 

uniformed services who had retired since the time the last previous adjustment had been made. 

10 As previously indicated, see Chapter III.B.1., "Nondisability Retired and Retainer Pay," the percentage 

multiplier applied to a member's monthly retired or retainer pay base to determine the initial retired or 

retainer pay entitlement is, under the provisions of the Military Retirement Reform Act of 1986, depressed 

until the member reaches age 62. When the member reaches age 62, the amount by which the percentage 

multiplier was depressed under the Retirement Reform Act is restored, so that an affected member then has 

a percentage multiplier that is the same as that applicable to pre-August 1, 1986, accessions. 

764
entitlement by application of what for most affected individuals11 will amount to a new 

and higher percentage multiplier to be applied to the member's monthly retired or retainer 

pay base. The second adjustment effectively escalates this recomputed monthly retired or 

retainer pay base to compensate for the full increase in the Consumer Price Index 

between the time the member retired and the time the member reached age 62.12 After 

these two adjustments to a member's retired or retainer pay entitlement are made when 

the member reaches age 62, future adjustments to the member's retired or retainer pay to 

compensate for increases in the general price level revert to the CPI-minus-1 formula. 

 As explained by Congress: 

The uniformed services retirement system has existed essentially 

unchanged for the last 50 years, and its basic form was established over a century 

ago. During the past two decades, the uniformed services retirement system has 

come under increasing scrutiny and attack. By recommending the [current] 

changes ..., the conferees are attempting to put the issue of structural reform of the 

uniformed services retirement system to rest for the foreseeable future. The 

conferees believe that, as a result of these changes, the criticism of the uniformed 

services retirement system will subside and the concerns of service members 

regarding the uncertainty of retirement benefits can be assuaged. 

The conferees emphasize that the changes to the uniformed services 

retirement system included in this conference report [and the Act] would apply 

only to those who first become members of a uniformed service on or after 

August 1, 1986. No member who had joined a uniformed service before that date-

-much less any current retiree of a uniformed service--would be affected. 

 Most of the features of the current uniformed services retirement system 

are well known. 

(1) An immediate annuity is available to a service member who completes 20 

years of service; no benefit is available to a service member who does not 

complete 20 years of service. 

 

11 The percentage multiplier will in fact be higher for all retirees who first became members of a uniformed 

service on or after August 1, 1986, except for members who retired with 30 or more years of "creditable 

service," who are in any event entitled to a percentage multiplier of 75 percent. See Chapter III.B.1., 

"Nondisability Retired and Retainer Pay." (For this purpose, the term "creditable service" refers to the 

number of years of service with which a member is credited for determining the member's retired or 

retainer pay entitlement.) 

12 This second adjustment will result in an increase in the retired or retainer pay entitlements of all persons 

who retired before reaching age 62--even for those individuals who retired before reaching age 62 with 30 

or more years of "creditable service." 

765
(2) Retired pay equals high-3 average basic pay times a multiplier. (For those 

becoming members of a uniformed service for the first time before September 7, 

1980, [sic]

13 retired pay is based on final basic pay instead of high-3 average basic 

pay.) The multiplier equals 2 1/2 percent times years of service and ranges from 

50 percent at 20 years of service to 75 percent at 30 or more years of service. 

(3) Retired pay is adjusted annually by the increase in the cost of living as 

measured by the consumer price index (CPI). 

The uniformed services retirement system is noncontributory. However, 

the service member contributes, while on active duty, to the social security system 

and, thereby, earns eligibility for a social security retirement benefit. The receipt 

of uniformed services retired pay has no effect on social security retirement 

benefits and vice versa. 

The conferees agreed to change the uniformed services nondisability retirement 

system as follows: 

(1) The formula for the multiplier would remain unchanged--2.5 percent for 

each year of service up to 30 years of service. However, for members who retire 

with less than 30 years of service, the multiplier would be reduced by 1 

percentage point [from what it otherwise would have been] for each year of 

service the member retired [with] less than 30 [years of service]. The reduction 

would be eliminated when the member reached age 62. 

(2) The cost-of-living adjustment mechanism would be changed to provide 

CPI minus 1 for life with a one time restoral in the purchasing power of the 

annuity at age 62. 

 With regard to the multiplier, the formula would provide a two-tiered 

retirement annuity: a reduced annuity between the time the member retires from 

the uniformed service and the normal retirement age and an unreduced annuity 

thereafter. 

 For example, a member who retires with twenty years of service would 

receive retired pay based on a multiplier of 40 percent from retirement until age 

62 and retired pay based on a multiplier of 50 percent thereafter. For a member 

who retires with 30 years of service, no reduction in the multiplier would be made 

and retired pay would be based on the maximum multiplier of 75 percent.14

 

13 Should read "before September 8, 1980." See, e.g., 10 U.S.C. §1406. 

14 House Report No. 99-659 (Committee of Conference), pp. 29-31, accompanying H.R. 4420, 99th

Congress, 2d Session (1986). For a discussion of the various concerns that led to the above-highlighted 

amendments to the uniformed services retirement system, see Senate Report No. 99-292 (Committee on 

Armed Services), pp. 2-5, accompanying S. 2395, 99th Congress, 2d Session (1986). Also see House Report 

766
The different methods for adjusting the retired or retainer pay entitlements of 

members and former members of the uniformed services apply to all forms of retired and 

retainer pay--including disability retired pay as well as retired pay for non-regular (i.e., 

reserve) service. Thus, for example, a person who first became a member of a uniformed 

service on or after August 1, 1986, and who subsequently became entitled to disability 

retired pay would have his or her disability retired pay entitlement adjusted in the same 

way as a non-disability retiree who first became a member of a uniformed service on or 

after August 1, 1986. That is, such a person's disability retired pay would be adjusted on a 

CPI-minus-1 basis until the member reached age 62, at which time there would be a onetime "catch-up" for full CPI, with subsequent adjustments based on CPI-minus-1 for the 

remainder of the retiree's period of entitlement to disability retired pay. Pre-August 1, 

1986, accessions who become entitled to disability retired pay or to retired pay for nonregular service will continue to have their retired pay entitlements adjusted on a full-CPI 

basis. 

The three different retirement systems currently in effect for members of the 

Armed Forces may be conveniently summarized as follows: 

Short Form 

Reference

Final Basic Pay High-Three Year 

Average 

Military Retirement 

Reform Act of 

1986 (Redux) 

Applies to: Persons in service 

before September 8, 

1980 

Persons joining 

service from 

September 8, 1980, 

through July 31, 

1986 and persons 

joining after that 

date and refusing 

Career Service 

Bonus upon 

completion of 15 

years of active 

service 

Persons joining 

service after July 

31, 1986, accepting 

Career Service 

Bonus upon 

completion of 15 

years of active 

service, and 

incurring additional 

5-year active service 

obligation 

No. 99-513 (Committee on Armed Services), pp. 21-27, accompanying H.R. 4420, 99th Congress, 2d 

Session (1986). 

767
Basis of 

Computation 

(Retired or 

Retainer Pay Base): 

Final rate of 

monthly basic pay 

Average monthly 

basic pay for highest 

36 months of basic 

pay 

Average monthly 

basic pay for highest 

36 months of basic 

pay 

Multiplier: 2.5 percent per year 

of service 

2.5 percent per year 

of service 

2.5 percent per year 

of service less 1.0 

percentage point for 

each year of service 

less than 30 

(restored at age 62) 

Cost-of-Living 

Adjustment 

Mechanism: 

 Full CPI-W Full CPI-W CPI-W minus 1 

percent (one-time 

catch up at age 62) 

 

Cost: For the cost of temporary and permanent disability retired pay from 1958 to 

2004, see Tables III-5 of Military Compensation Statistics Tables, volume II of this 

edition. 

768
Summary of Methods for Making Adjustments to 

 Retired and Retainer Pay Entitlements of 

 Members and Former Members of the Uniformed 

 Services 10 U.S.C. §1401a 

Background: (1) Before June 1, 1958, each time military basic pay was 

increased, retired pay of persons on the retired roles was, subject to the exceptions set out 

above, recomputed on the basis of those newly established pay rates. That practice was 

discontinued on June 1, 1958, and the pay of retired personnel was increased by six 

percent, which approximated the increase in the cost of living since 1955, when retired 

pay had last been increased. In 1963, a permanent system of increasing retired pay, based 

on a formula geared to increases in the cost of living, was adopted. That same essential 

system remains in effect at present, except that the formula is slightly different for 

persons who first became members of a uniformed service after July 31, 1986. (2) Under 

the current system for adjusting retired or retainer pay entitlements of retired members or 

former members of the Armed Forces, retired or retainer pay is increased in December of 

each year based on the percentage by which the average Consumer Price Index (CPI) for 

the preceding July-September quarter increased over the average CPI for the same quarter 

one year before.1 2

 (3) For persons who first became members of a uniformed service on 

 

1

 The Consumer Price Index (CPI), which is designed to measure the average change in prices paid by 

urban consumers for a specified set of goods and services, is a numerical index produced and updated 

regularly by the United States Department of Labor's Bureau of Labor Statistics. Two different indexes are 

maintained--the index for urban wage earners and clerical workers (CPI-W) and the index for all urban 

consumers (CPI-U). CPI-U represents the buying habits of approximately 87 percent of the noninstitutional 

population of the United States, whereas the older CPI-W represents the buying habits of only 

approximately 32 percent of the same population. "The Consumer Price Index," Chapter 17 of the BLS 

Handbook of Methods, United States Department of Labor, Bureau of Labor Statistics, Washington, D.C. 

CPI-W is the index actually used to make adjustments in retired and retainer pay. 

2

 The Omnibus Budget Reconciliation Act of 1993, Public Law 103-66, §2001, 107 Stat. 312, 335 (1993), 

amended 10 U.S.C. §1401a by suspending for fiscal years 1994 through 1998 the normal rule under which 

retired or retainer pay increases for a given fiscal year were to go into effect on December 1 of that fiscal 

year. Under the Omnibus Budget Reconciliation Act of 1993, Public Law 103-66, §2001, id., the effective 

date for the increase in retired or retainer pay that was scheduled to have gone into effect on December 1, 

1993, for fiscal year 1994 was postponed to March 1994, and the effective dates for the increases scheduled 

to have gone into effect on December 1, 1994, December 1, 1995, December 1, 1996, and December 1, 

1997, for fiscal years 1995, 1996, 1997, and 1998, respectively, were postponed, to September 1, 1995, 

September 1, 1996, September 1, 1997, and September 1, 1998, respectively (except for disability retirees, 

whose date for receiving retired pay increases remained fixed at December 1). The amendment effected by 

the Omnibus Budget Reconciliation Act of 1993, Public Law 103-66, §2001, id., was itself amended by the 

National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §1182, 107 Stat. 1547, 

1773 (1993), without substantively changing the result. The Department of Defense Appropriations Act, 

769
 1995, Public Law 103-335, §8114A, 108 Stat. 2599, 2648 (1994), made an exception to the September 1, 

1995, effective date for the fiscal year 1995 cost-of-living adjustment by providing that the increase would 

be effective on March 1, 1995. cf. National Defense Authorization Act for Fiscal Year 1995, Public Law 

103-337, §631, 108 Stat. 2663, 2785-2786 (1994). Similarly, the National Defense Authorization Act for 

Fiscal Year 1996, Public Law 104-106, §631(a), 110 Stat. 186, 364 (1996), provided that the increase in 

retired pay that became effective December 1, 1995, for fiscal year 1996 would be first payable on March 

1, 1996, and that the increase that will become effective on December 1, 1997, for fiscal year 1998 would 

be first payable on September 1, 1998, provided, however, that the increase in military retired pay for fiscal 

year 1998 may not become effective at a date later than the date on which a retired pay adjustment becomes 

effective for retired civil service personnel. Budget considerations underlay the original postponement 

provided in the Omnibus Budget Reconciliation Act of 1993, Public Law 103-66, §2001, id. House Report 

No. 103-111 (Budget Committee), pp. 72-73, accompanying H.R. 2264, 103d Congress, 1st Session (1993); 

cf. House Report No. 103-213 (Committee of Conference), pp. 435-436, accompanying H.R. 2264, 103d 

Congress, 1st Session (1993). Considerations of basic fairness and equity as between the effective date of 

cost-of-living increases for military and civilian retirees underlay the change from September 1, 1995, to 

March 1, 1995, as made clear by the following sense-of-Congress statement incorporated as Section 632 of 

the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §632, 108 Stat. 2663, 

2786 (1994): 

 (a) FINDINGS.—Congress makes the following findings: 

 (1) Congress, in the Omnibus Budget Reconciliation Act of 1993, changed the effective date 

for future cost-of-living adjustments for military retired pay and for Federal civilian retirement 

annuities, which (before that Act) were provided by law to be made effective on December 1 

each year. 

 (2) The timing, and the percentage of increase, of military and Federal civilian retirees' costof-living adjustments have been linked for decades. 

 (3) The effect of the enactment of the Omnibus Budget Reconciliation Act of 1993 was to 

abandon the longstanding congressional practice of treating military and Federal civilian 

retirees identically in matters related to cost-of-living adjustments. 

 (b) SENSE OF CONGRESS.—In light of the findings in subsection (a), it is the sense of 

Congress that— 

 1) as a matter of simple equity and fairness, it is imperative that cost-of-living 

adjustments in retirement benefits for military and Federal civilian retirees be returned to an 

identical schedule as soon as possible, but not later than January 1, 1999; 

 2) if after October 1, 1998, there is, by law, a difference between the date on which a cost-ofliving adjustment for Federal civilian retirees takes effect and the date on which a cost-ofliving adjustment for military retirees takes effect, then the difference in those effective dates 

should be eliminated by requiring that cost-of-living adjustments for both classes of retirees 

become effective on the earlier of the two dates; and 

 3) if after October 1, 1998, there is, by law, a difference between the first month for which a 

cost-of-living adjustment for civilian retirees is payable and the first month for which a costof-living adjustment for military retirees is payable, then the difference in the months for 

which those adjustments are first payable should be eliminated by requiring that the cost-ofliving adjustments for both classes of retirees first become effective for the earlier of the two 

months. 

In this same connection, see House Report No. 103-499 (Committee on Armed Services), pp. 252-253, 

accompanying H.R. 4301, and House Report No. 103-701 (Committee of Conference), pp. 714-715, 

accompanying S. 2182, 103d Congress, 2d Session (1994). With respect to the specification of the effective 

dates for military retired and retainer pay COLAs for fiscal years 1996 and 1998, Congress was particularly 

concerned to eliminate any disparity in treatment as between military and civil service retirees. See House 

Report No. 104-131 (Committee on national Security), pp. 232-233, accompanying H.R. 1530, Senate 

Report No. 104-112 (Committee on Armed Services), p. 257, accompanying S. 1026, and House Report 

No. 104-406 (Committee of Conference), pp. 817-818, accompanying H.R. 1530, 104th Congress, 1st

770
or after August 1, 1986, the adjustment is based on the same percentage figure as 

determined under Paragraph 2 immediately above less one percentage point, provided 

that there may not under any circumstances be a reduction in retired or retainer pay after 

applying the adjustment mechanism. If an adjustment that would otherwise have been 

made for a particular year is eliminated under a budget reconciliation provision, for 

example, or some other non-permanent reduction mechanism, the next time a cost-ofliving adjustment is made each member's retired or retainer pay entitlement will be 

increased to the same level it would have been at if the adjustment had not been 

eliminated in the first instance.3

 (4) The first CPI adjustment given after a person retires 

differs from the procedure set out under Paragraphs 2 and 3 immediately above. For a 

member who first became a member of a uniformed service on or after August 1, 1986, 

the first adjustment to retired or retainer pay is determined by taking the percentage 

increase in average CPI for the preceding July-September quarter over the average CPI 

for the quarter (July-September, October-December, January-March, April-June) 

preceding the member's retirement. For all other members, the first adjustment is 

determined by taking the percentage increase in average CPI for the preceding JulySeptember quarter over the average CPI for the quarter (July-September, OctoberDecember, January-March, April-June) preceding the last increase in basic pay, and this 

adjustment is made at the time of retirement if the last general retired pay adjustment 

came between the last increase in basic pay and the time of retirement. 

 

 

 Session (1995); and House report No. 104-450 (Committee of Conference), p. 808, accompanying S. 1124, 

104th Congress, 2d Session (1996). 

3

 10 U.S.C. §1401a(b)(4) as added by Section 1(a)(2) of the Act of December 30, 1987 (Technical 

Corrections to Military Retirement Reform Act of 1986), Public Law 100-224, §1(a)(2), 101 Stat. 1536 

(1987). See House Report No. 100-231 (Committee on Armed Services), p. 2, accompanying H.R. 2974, 

100th Congress, 1st Session (1987). 

771
RETIRED PAY INCREASES SINCE 1 JUNE 1958 

 Date of Percentage Cumulative 

Scheduled Increase Increase Increase

 Jun 1, 1958 6.0 6.0 

 Oct 1, 1963 5.0 11.3 

 Sep 1, 1965 3.5 16.2 

 Dec 1, 1966 3.7 20.5 

 Apr 1, 1968 3.9 25.2 

 Feb 1, 1969 4.0 30.2 

 Nov 1, 1969 5.3 37.1 

 Aug 1, 1970 5.6 44.8 

 Jun 1, 1971 4.5 51.3 

 Jul 1, 1972 4.8 58.6 

 Jul 1, 1973 6.1 68.2 

 Jan 1, 1974 5.5 77.5 

 Jul 1, 1974 6.3 88.7 

 Jan 1, 1975 7.3 102.4 

 Aug 1, 1975 5.1 112.8 

 Mar 1, 1976 5.4 124.3 

 Mar 1, 1977 4.8 135.0 

 Sep 1, 1977 4.3 145.1 

 Mar 1, 1978 2.4 151.0 

 Sep 1, 1978 4.9 163.3 

 Mar 1, 1979 3.9 173.6 

 Sep 1, 1979 6.9 192.4 

 Mar 1, 1980 6.0 210.0 

 Sep 1, 1980 7.7 233.9 

 Mar 1, 1981 4.4 248.6 

 Mar 1, 1982 8.7 278.9 

 Apr 1, 1983 3.9 (See note 2) 293.7 

 Dec 1, 1984 3.5 305.1 

 Dec 1, 1985 0.0 305.1 

 Dec 1, 1986 1.3 310.3 

 Dec 1, 1987 4.2 327.6 

 Dec 1, 1988 4.0 344.7 

 Dec 1, 1989 4.7 365.6 

 Dec 1, 1990 5.4 390.7 

 Dec 1, 1991 3.7 408.9 

 Dec 1, 1992 3.0 424.2 

 Dec 1, 1993 2.6 437.8 

 Dec 1, 1994 2.8 452.8 

 Dec 1, 1995 2.6 467.2 

 Dec 1, 1996 2.9 483.7 

 Dec 1, 1997 2.1 496.0 

772
 Dec 1, 1998 1.3 503.7 

 Dec 1, 1999 2.4 518.2 

 Dec 1, 2000 3.5 539.8 

 Dec 1, 2001 2.6 556.4 

 Dec 1, 2002 1.4 565.6 

 Dec 1, 2003 2.1 579.6 

 

Notes: 

(1) For non-disability retirees, the increases scheduled to have gone into effect on December 1, 1993, 

December 1, 1994, and December 1, 1995, were effective March 1 of the following calendar year. 

 (2) The 1983 adjustment to retired and retainer pay differed as between persons 62 years of age or 

older and persons under 62 years of age, with persons 62 or over receiving a 3.9% increase as against a 

3.3% increase for persons under 62 years of age. 

773
Chapter III.B.5. 

 Imputed Contribution for 

 Retirement Benefits 

Legislative Authority: None: The "retirement system" for members of the Armed 

Forces is "noncontributory." 

Purpose: The standard reasons favoring explicit contributions by individual 

employees to retirement funds may be summarized as: 

 * Lower direct costs to the employer. 

 * The possibility of higher employee retirement benefits. 

 * Greater understanding and appreciation of the retirement plan by the employee. 

 * The belief that contributions give an employee a "contractual right" to a pension.1

Background: The military retirement system has been "noncontributory" since its 

inception. Three major studies in the last half century have explored the issue of whether 

it should remain noncontributory. The so-called Hook Commission, whose 1948 report 

and recommendations led to the introduction and enactment of the Career Compensation 

Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), recommended 

that the military retirement program be noncontributory.2

 A research group at the 

University of Michigan concluded in 1961 that Congress should not adopt a contributory 

plan.3

 In 1967 the First Quadrennial Review of Military Compensation4 recommended 

 

1

 “A Study of the Military Retired Pay System and Certain Related Subjects, Report to the Senate Armed 

Services Committee by the Study Committee of the University of Michigan,” Committee Print, pp. 65-66, 

87th Congress, 1st Session (1961). 

2

 “Career Compensation For the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” pp. 39-41, December 1948. 

3

 “A Study of the Military Retired Pay System and Certain Related Subjects, Report to the Senate Armed 

Services Committee by the Study Committee of the University of Michigan,” Committee Print, p. 68, 87th

Congress, 1st Session (1961). 

4

 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

774
that a 6.5 percent retirement contribution be collected from the full military salaries of 

career members.5

 In 1970 the Gates Commission supported the First Quadrennial 

Review's recommendation6

 but did not address the subject in any detail. 

The Hook Commission's reasons for recommending against establishment of a 

contributory military retirement system were as follows: 

 A noncontributory plan of retirement is traditional with the military and 

particularly suited to a Government agency. Private industry, lacking the taxing 

power and the security of perpetual existence, wisely accumulates in advance 

the funds from which to pay retirement benefits, even though the employer's 

corporate existence should end. The Government has no need to accumulate such 

a fund as long as the power to tax exists. Other such Government funds are in 

reality only bookkeeping entries and the receipts of funds are in fact merged into 

the general funds of the Treasury and used as such for current expenses. They 

cannot be set aside years in advance to serve a particular purpose and be 

productive unless the Government is to move into ownership of the tools of 

production. Thus, with the fund itself serving no useful purpose, to establish a 

contributory plan or a funded noncontributory plan would only create a large extra 

expense to the Government in providing the administrative and clerical 

personnel necessary to deduct and record the contributions, real or fictitious, and 

to administer the so-called fund.7

In recommending against a contributory retirement system, the University of 

Michigan, on the other hand, noted (1) employee contributions represent only a small 

fraction of retirement benefit costs under any retirement system; (2) even in civilian 

plans, when a contributory pension plan is first implemented, a general pay raise covering 

all or part of the contribution is often necessary to compensate for the reduction in takehome pay that would otherwise occur; and (3) under a contributory military retirement 

program, the administrative costs associated with running an enormous savings bank with 

 of such review together with any recommendations ... proposing changes" to the compensation system of 

the uniformed services. The Ninth Quadrennial Review of Military Compensation was convened in 1999, 

pursuant to Presidential directive, and its report and recommendations were submitted to Congress in 2001. 

5

 “Modernizing Military Pay, Report of the First Quadrennial Review of Military Compensation,” Volume 

I, p. 56, November 1967. 

6

 “The Report of the President's Commission on an All-Volunteer Armed Force,” p. 62, February 1970. 

7

 “Career Compensation for the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” pp. 40-41, December 1948. 

775
some 2 1/2 million accounts--1961 figures--having a heavy customer turnover would 

offset--possibly overwhelm--any savings. For these reasons, the Michigan research group 

concluded that any government cost savings resulting from a retirement contribution by 

military personnel would be small at best--possibly non-existent--and recommended 

against a contributory plan. 

By 1967, when the Pay Report8

 of the First Quadrennial Review was released, the 

House Armed Services Committee stated that military basic pay rates were lower by 6.5 

percent than they otherwise would have been if members of the Armed Forces were 

required to make a retirement contribution. The First Quadrennial Review concluded that 

this imputed retirement contribution was inequitable to members who realized no value 

from it because they did not serve to retirement. Accordingly, a 6.5 percent retirement 

contribution--vested so that the survivor or survivors, if any, of a member who died 

before becoming eligible for retired pay could collect the amount contributed--was 

recommended. This contribution was to be collected only from so-called "career" 

members, defined in the Pay Report as officers, enlisted members in pay grades E-6 

through E-9, and members in pay grades E-4 or E-5 with four or more years of service or 

with between two and four years of service plus a commitment to serve at least six years. 

The retirement contribution recommendation was fused with a further recommendation 

that the elements of basic pay, quarters, subsistence, federal income tax advantage, and 

imputed retirement contribution be combined into a full military salary for career 

members. 

A 1975 Wyatt Company study of the retirement plans of the 50 largest industrial 

companies and the 50 states also bears on the choice between contributory and 

noncontributory retirement systems.9

 This study concluded that the trend in the private 

sector continued to be toward noncontributory coverage, with 29 of the top-50 salaried 

 

8

 “Modernizing Military Pay, Report of the First Quadrennial Review of Military Compensation,” 

November 1967. 

9

 “Retirement Trends in Industrial and Public Pension Systems, a Study Conducted by the Wyatt Company 

for the Department of Defense,” 30 April 1975. 

776
pension plans being noncontributory, and with at least five major corporations having 

eliminated employee contributions in the preceding five years. In addition, and bolstering 

its own conclusions, the Wyatt study cited a 1975 Bankers Trust study of corporate 

pension plans as confirming that the majority of such plans were noncontributory and that 

the trend was toward noncontributory plans. The study also indicated, however, that most 

non-federal public plans were contributory and that the trend for such plans was toward 

increased rates of contribution, although a limited number of states had reduced or 

eliminated employee contributions. 

Quite apart from the controversy surrounding contributory and noncontributory 

retirement plans, it is clear that members of the uniformed services have never made 

explicit retirement contributions out of their active duty pay to fund future military retired 

and retainer pay.10 Whether active duty pay has in fact been reduced from the level at 

which it would otherwise have been established on account of an implicit, or imputed, 

retirement contribution is less clear. 

In 1963 the Department of Defense proposed military pay levels that it estimated 

would achieve comparability between military compensation and civil service salaries. 

With one major exception, the House Armed Services Committee accepted the proposed 

pay levels. The committee did not accept that part of the Department of Defense proposal 

that would have increased basic pay rates for personnel with less than two years of 

service. The Senate Armed Services Committee materially amended the House bill by (1) 

providing "under-2" increases for officers and for enlisted members in pay grades E-4 

and E-5, (2) enlarging the bill's increases for pay grades O-1 through O-4 and E-4 

through E-7, and (3) deleting all subsistence increases. Except for the "under-2" 

increases, the Senate amendment prevailed. Neither the Department of Defense nor the 

House or Senate Armed Services Committees ever indicated that the pay levels thus 

adopted--and enacted as the Uniformed Services Pay Act of 1963, Public Law 88-132, 77 

 

10 Nor, for that matter, have members of the reserve components of the Armed Forces made retirement 

contributions based on compensation they have received under Section 206 of Title 37, United States Code, 

for inactive-duty training. 

777
Stat. 210 (1963)--had been depressed by any percentage for an imputed military 

retirement contribution. 

The 1964 military pay legislation, adopted as the Act of August 12, 1964, Public 

Law 88-422, 78 Stat. 395 (1964), was enacted to maintain a reasonable compensation 

trend for military personnel in relation to civil service employees. It provided an 8.5 

percent basic pay increase for officers with less than two years of service and a 2.5 

percent basic pay increase for all personnel with more than two years of service; it did not 

address the question of an imputed retirement contribution. 

In 1965, the Department of Defense proposed a five percent increase in military 

pay for personnel with over two years of service "to maintain the 1963 relationship 

between military and civilian pay" and a 2.7 percent cost-of-living increase for personnel 

with less than two years of service. Rejecting the Department of Defense proposal, the 

House Armed Services Committee conducted its own study and concluded "beyond a 

reasonable doubt" that military pay increases had lagged behind those for civil service 

employees by 10 to 11 percent (after "shredding out" under-2 personnel) between 1952 

and 1964. It accordingly reported out a bill that increased basic pay rates by an average of 

10.7 percent, or more than double the percentage proposed by DoD. In connection with 

its bill, the committee stated: 

After determination was made of the level of pay (including allowances) 

considered appropriate for each military grade, account was taken of an imputed 6 

1/2-percent contribution to retirement on basic pay (except for enlisted 

personnel with less than 2 years' service).... The importance of this step is that it 

would set out "in the record" the actual amounts by which military pay scales are 

lowered because of the military "noncontributory" retirement system and the taxfree status of the basic allowances for quarters and subsistence. In the history of 

all previous military pay legislation, no documentation of such adjustment has 

been provided for the record.11

The Senate Armed Services Committee did not accept the pay levels incorporated 

in the House bill but instead reported out its own bill that would have increased basic pay 

rates by a flat six percent for officers with over two years of service and by 11 percent for 

 

11 House Report No. 549 (Committee on Armed Services), p.24, accompanying H.R. 9075, 89th Congress, 

1st Session (1965). 

778
enlisted personnel with over two years of service. The Senate committee emphasized that 

the House proposal was incompatible with the then-current structure of the military 

compensation system and that, for its part, it did not want any structural change in that 

system. The Senate's flat-percentage-increase pay levels--with its concomitant nostructural-change point of view--was incorporated in the military pay legislation for 1965, 

the Act of August 21, 1965, Public Law 89-132, §1, 79 Stat. 545, 545-546 (1965). 

Based on the evolution of the 1965 military pay legislation, it would seem that the 

imputed retirement contribution theory embraced in the House Armed Services 

Committee Report applied only to the pay bill it had reported out, that the committee had 

effectively abandoned the theory when it agreed to the revisions incorporated in the 

Senate bill, and that, accordingly, as of 1965 there was no Congressional finding that 

military pay levels had in fact been depressed for imputed retirement contributions. 

The 1965 situation was continued in the military pay legislation for 1966, the Act 

of July 13 1966, Public Law 89-501, §301, 80 Stat. 275, 276-278 (1966), which gave an 

across-the-board pay increase of 3.2 percent. 

The military pay legislation for 1967, enacted as the Act of December 16, 1967, 

Public Law 90-207, §1(1), 81 Stat. 649, 649-650 (1967), further increased basic pay rates 

by 5.6 percent across-the-board. This increase in basic pay was equivalent to a 4.5 

percent increase in regular military compensation (RMC),12 and its purpose was to 

maintain the comparable relationship between RMC and General Schedule salaries of 

federal civilian employees. There was no suggestion by either the Department of Defense 

 

12 Under 37 U.S.C. §101(25) as added by the Act of September 19, 1974, Public Law 93-419, §1, 88 Stat. 

1152 (1974), regular military compensation was defined as the total of the basic pay, basic allowance for 

subsistence, basic allowance for quarters, and the tax advantage attributed to members of the Armed Forces 

because of the non-taxable status of the allowances that a member receives, directly or indirectly, on 

account of military service. See Chapter II.B.1., "Basic Pay," and Chapter II.B.4., "Federal Income Tax 

Advantage," above. (This definition was subsequently amended by the Military Pay and Allowances 

Benefits Act of 1980, Public Law 96-579, §11, 94 Stat. 3359, 3368-3369 (1980), to include variable and 

station housing allowances, if any, within the RMC construct. See Chapter II.B.2., “Housing Allowances,” 

above, for a discussion of the reasons underlying this amendment.) 

779
or Congress that the military pay levels established in 1967 had been reduced for an 

imputed retirement contribution. 

In addition to providing a basic pay increase in 1967, the Act of December 16, 

1967, Public Law 90-207, §8, 81 Stat. 649, 654-655 (1967), also provided that whenever 

in the future the General Schedule salaries of federal employees were increased a 

comparable increase was to be made in the basic pay of members of the uniformed 

services. Under this authority, military pay increases between 1967 and 1971 were made 

by executive order. These increases had no bearing on an imputed retirement 

contribution; they simply maintained the preexisting relationship between RMC and civil 

service salaries. 

In January 1971 the Department of Defense submitted a fiscal year 1972 proposal 

to Congress to increase basic pay rates for personnel with less than two years of service 

and to increase quarters allowances for personnel in pay grades E-1 through E-4 (four or 

fewer years of service) by an average of 36 percent over January 1971 levels. It was 

indicated that a second step was planned for fiscal year 1973 when recommendations 

would be forwarded that would make military pay fully competitive with civilian pay. At 

the request of the House Armed Services Committee, the fiscal year 1973 program was 

developed and furnished to the committee in February. The Department of Defense's 

fiscal year 1973 proposal would have increased basic pay rates for personnel with less 

than two years of service by an average of 68.6 percent over January 1971 levels, raised 

basic allowance for quarters rates for all personnel to 100 percent of the FHA median of 

housing expenses for comparable income groups, and increased basic allowance for 

subsistence rates to the level of the Department of Defense food cost index. In support of 

this recommendation, the Assistant Secretary of Defense for Manpower and Reserve 

Affairs testified as follows concerning the imputed retirement contribution question: 

I said that the increases recommended for fiscal year 1973 would bring 

regular military compensation to competitive levels, or what we call the military 

pay standard. The military pay standard has been established over a period of 

years by comparisons made between the job content of military positions and 

780
civilian positions. The civilian positions are within the civil service or 

governmental structure.... 

 The military pay standard is constructed so that it recognizes that 

military pay does not include a retirement contribution; instead the competitive 

level of compensation which would be appropriate under a contributory 

retirement system is depressed by 7 percent as an imputed contribution toward the 

member's retirement.13

The House did not accept the Department of Defense recommendation that 

military pay levels be increased in two steps but instead reported out a bill that 

incorporated the proposed fiscal year 1973 pay rates and provided that, instead of 

becoming effective in fiscal year 1973, the rates would become effective upon enactment. 

In its report on the bill, the House Armed Service Committee stated: 

The Congress in Public Law 90-207 defined Regular Military 

Compensation (RMC) as consisting of the following elements that service 

members receive in cash or in kind every payday: basic pay, quarters allowances, 

subsistence allowance and tax advantage (received because the quarters and 

subsistence allowances are not subject to Federal income tax). 

It is the Regular Military Compensation that is used to establish 

competitive military pay levels which bear a reasonable relationship to civilian 

wages for equivalent levels of work. The RMC is based on a military pay 

standard so constructed that it recognizes that RMC does not include a specific 

retirement contribution. In other words, the military compensation is depressed by 

7 percent to reflect an imputed contribution towards the member's retirement.14

The House bill was substantively amended by the Senate, which reported out a 

bill containing only the Department of Defense's original fiscal year 1972 proposal. In its 

report on this latter bill, the Senate Armed Services Committee commented on the 

imputed retirement contribution issue in these terms: 

Finally, it should be pointed out that since there is no accepted 

comparability system linking the various military and civilian pay grades it cannot 

 

13 “Extension of the Draft and Bills Related to the Voluntary Force Concept and Authorization of Strength 

Levels: Hearings before the House Armed Services Committee,” H.A.S.C. Document 92-2, p. 179, 92d 

Congress, 1st Session (1971). 

14 House Report No. 92-82 (Committee on Armed Services), pp. 24-25, accompanying H.R. 6531, 92d 

Congress, 1st Session (1971). 

781
therefore be reasonably said that military basic pay is being depressed by any 

percentage as an imputed contribution toward reducing military retired costs.15

Upon passage, the divergent bills of the House and Senate were referred to a joint 

House-Senate conference, where the differences were resolved. The resultant military pay 

levels were lower than those of the House bill (the Department of Defense's fiscal year 

1973 proposal) but higher than those of the Senate bill (DoD's fiscal year 1972 proposal). 

The House bill's average 68.6 percent basic pay increase for personnel with less than two 

years of service was agreed to, its BAQ increase to 100 percent of the FHA standard was 

scaled down to 85 percent of the standard, and its BAS increase was deleted. The 

compromise pay levels were enacted as part of the Act of September 28, 1971 (Military 

Selective Service Act Amendments of 1971), Public Law 92-129, §201, 85 Stat. 348, 

355-357 (1971), and became effective in November 1971. 

As this chronological analysis of pay legislation shows, military pay levels were 

not depressed for an imputed retirement contribution prior to 1971. Military pay increases 

from 1972 through 1979 were made by executive order under authority of the Act of 

December 16, 1967, Public Law 90-207, §8, 81 Stat. 649, 654-655 (1967), and the Act of 

September 19, 1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-1153 (1974).16 These 

increases simply maintained the relative position of military pay and civil service 

salaries; they had no bearing on an imputed retirement contribution. Pay increases for 

1980 and 1981 were made by the Department of Defense Authorization Act, 1981, Public 

Law 96-342, §801, 94 Stat. 1077, 1090-1092 (1980), and the Uniformed Services Pay 

Act of 1981, Public Law 97-60, §101(b), 95 Stat. 989, 989-992 (1981), respectively. The 

 

15 Senate Report No. 92-93 (Committee on Armed Services), p. 31, accompanying H.R. 6531, 92d 

Congress, 1st Session (1971). 

16 The Act of September 19, 1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-1153 (1974), adopted a new 

pay adjustment mechanism, codified at 37 U.S.C. §1009, under which the entire increase in military 

compensation was no longer incorporated solely in basic pay. Instead, whenever general schedule, i.e., civil 

service, salaries were increased, military compensation was also to be increased, with raises distributed to 

all three cash elements of RMC--basic pay, basic allowance for quarters, and basic allowance for 

subsistence--each of which was to be increased by the same percentage as general schedule salaries. 37 

U.S.C. §1009. See Chapter II.B.1., "Basic Pay," hereof, above, for a more complete description of the 

annual pay adjustment mechanism adopted for members of the uniformed services by the Act of September 

19, 1974, Public Law 93-419, §4, 88 Stat. 1152, 1152-1153 (1974). 

782
pay increases authorized by these latter two pieces of legislation exceeded the pay raises 

awarded General Schedule civilian employees--but there was no indication that the 

reason for the more generous treatment accorded members of the uniformed services had 

anything to do with a retirement contribution, whether imputed or not. Indeed, the issue 

was never raised at all. Instead, the relatively greater increases for members of the 

uniformed services stemmed from a felt need to improve manning and retention levels in 

the various services and was, if anything, a rather straight-forward response to a 

perceived supply-demand imbalance.17 Nor is there any suggestion in any subsequent 

legislation relating to military pay that an imputed retirement contribution was to be 

taken into account in connection with pay increases.18 If regular military compensation is 

currently depressed for an imputed retirement contribution, the imputed contribution 

could only have been created in 1971 by the Act of September 28, 1971, Public Law 92-

129, 85 Stat. 348 (1971). 

If there were in fact an imputed retirement contribution, logically it would seem it 

should be deducted primarily or wholly from basic pay, since that is the only element of 

RMC used in the computation of retired pay. The Act of September 28, 1971, Public Law 

92-129, 85 Stat. 348 (1971), did not demonstrably depress basic pay rates, because it left 

basic pay rates for personnel with more than two years of service unchanged (except for 

small increases in some grades to prevent "under-two" raises from causing an undue 

compression). As to the depression of RMC as a whole for this purpose, it must be 

recognized that Congress did not specifically accept the "military pay standard" used by 

the Department of Defense as the basis for its fiscal year 1973 proposal as a legitimate 

benchmark for comparing military and civil service pay levels. Moreover, even had it 

expressly approved the proposition that the increases recommended for fiscal year 1973 

would establish a competitive level of military compensation equal to 93 percent of the 

level that would be appropriate under a contributory retirement system, the fact that the 

 

17 See generally Chapter II.B.1., "Basic Pay," above. In particular, see text accompanying footnotes 32 to 

39 of Chapter II.B.1. 

18 In this connection, see discussion of the establishment of the Department of Defense Military 

Retirement Fund in Appendix I hereto, below. 

783
RMC level adopted in the Act of September 28, 1971, Public Law 92-129, id., was 

different from the RMC level proposed by the Department of Defense for fiscal year 

1973 produced an inevitable distortion in the original calculations. 

These circumstances compel a conclusion that military basic pay rates are not 

currently depressed for an imputed retirement contribution. The level of RMC as a whole 

may be lower by some percentage than it otherwise would have been under a contributory 

military retirement system; however, in the absence of an accepted military pay standard, 

neither the proposition that RMC is depressed by seven percent, or any other exact 

percentage, nor the premise that any such reduction—assuming there is one--resulted 

from an imputed retirement contribution, is demonstrable. 

A separate but related issue involves the establishment of the Department of 

Defense Military Retirement Fund. The Department of Defense Authorization Act, 1984, 

Public Law 98-94, §925(a)(1), 97 Stat. 614, 644-648 (1983), established an accrual 

accounting system for military retired and retainer pay, including retired pay for members 

and former members of the Reserve components of the Armed Forces. This system, 

called the Department of Defense Military Retirement Fund, is codified as Chapter 74 of 

Title 10, United States Code, 10 U.S.C. §§1461-1467. Under the accrual accounting 

system, funds are appropriated every year to defray future retirement cost liabilities. The 

appropriated funds are charged to the Department of Defense manpower budget and are 

transferred to a special fund known as the Department of Defense Military Retirement 

Fund, which is administered by the Department of the Treasury. 

The establishment of the Military Retirement Fund in no way affected the basic 

nature of the military retirement system. The system is still noncontributory, and 

Congress, in establishing the fund, in no way indicated that military pay was artificially 

depressed because of payments into the fund. Congress's expressed purpose in 

establishing the fund was to provide funding for military retirement obligations at the 

time those obligations are incurred. As stated by the House Armed Services Committee: 

784
... From the Federal government's perspective, the issue of funding is 

primarily a matter of timing. Should funds be raised by taxing and borrowing 

when the obligation becomes due, or should funds be set aside through taxing and 

borrowing when the obligation is incurred?19

The establishment of the Department of Defense Military Retirement Fund 

provided an answer to the question--funding of future military retirement 

liabilities should be made when the obligation is incurred.20 

 

19 House Report No. 98-107 (Committee on Armed Services), p. 225, accompanying H.R. 2969, 98th

Congress, 1st Session (1983). See House Report No. 98-352 (Committee of Conference), p. 228, and Senate 

Report No. 98-213 (Committee of Conference), p. 228, accompanying S. 675, 98th Congress, 1st Session 

(1983). 

20 For more background on the Department of Defense Military Retirement Fund, see Appendix I, 

"Department of Defense Military Retirement Fund," hereof, below. For a discussion of the relationship 

between the accrual accounting system established in the Department of Defense Authorization Act, 1984, 

Public Law 98-94, 97 Stat. 614 (1983), and modifications to the military retirement system effected by the 

Military Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986), see Chapter III.B.1. 

hereof, "Nondisability Retired and Retainer Pay," above. 

785
Chapter III.C.1. 

 Non-disability Separation Pay 

Legislative Authority: 10 U.S.C. §1174. (Separation authority is found in 

Chapters 34, 59, and 60 of Title 10, United States Code, as well as at 10 U.S.C. §580 and 

§6383 and various parts of Title VI of the Defense Officer Personnel Management Act, 

Public Law 96-513, 94 Stat. 2835 (1980).) 

Purpose: To provide a lump-sum payment to regular and reserve officers 

involuntarily discharged short of retirement eligibility, either because of failure of 

selection for promotion, substandard performance of duty, misconduct, or moral or 

professional dereliction, or because the retention of such officers is not consistent with 

the interests of national security, and to reserve enlisted personnel involuntarily 

discharged or released from active duty or not accepted for an additional tour of duty for 

which they have volunteered, in order to assist such personnel in readjusting to civilian 

life. 

Background: Non-disability separation pay has a long legislative history in one 

form or another. At times, it has been awarded only to personnel forced out of service 

against their wishes. The Act of May 14, 1800, ch. 69, §§2 and 3, 2 Stat. 85, 86 (1800), is 

an early example of such legislation. It empowered the President to discharge by June 15, 

1800, any Army "officers, non-commissioned officers and privates ... except the 

engineers, inspector of artillery, and inspector of fortifications," and authorized three 

months' additional pay for personnel discharged under that authority. At other times, 

separation pay—also called "severance pay"--has been paid without regard to the 

voluntary or involuntary nature of the separation on which it was predicated. The Act of 

December 24, 1811, ch. 10, §2, 2 Stat. 669, 669-670 (1811), for example, awarded a 

"bounty" of three months' pay and 160 acres of public land to all former enlisted 

personnel who had "faithfully performed their duty whilst in service." Until recently, 

under applicable provisions of Title 10, United States Code, as amended by the Defense 

Officer Personnel Management Act of 1980, Public Law 96-513, 94 Stat. 2835 (1980), 

786
non-disability separation pay was authorized only for officers in military service--both 

commissioned and warrant officers, regular and reserve--and reserve enlisted personnel 

involuntarily discharged, released, or otherwise not continued in military service after at 

least five years of continuous active duty. Currently, under further amendments to the 

non-disability separation pay program made by the National Defense Authorization Act 

for Fiscal Year 1991, Public Law 101-510, §501(a)-(d), 104 Stat. 1485, 1549-1550 

(1990), non-disability separation pay is authorized for all members of the Armed Forces--

officers and enlisted personnel, regular and reserve. It is, however, available only to 

persons involuntarily separated from service. 

The Officer Personnel Act of 1947, ch. 512 [Public Law 381, 80th Congress], 61 

Stat. 795 (1947), required, as part of its "up-or-out" promotion system, the involuntary 

discharge of regular officers of any branch of service who failed of selection for 

promotion and who were not eligible for retirement. Persons discharged under that 

authority were entitled to severance pay computed at the rate of two months' basic pay for 

each year of commissioned service, not to exceed the lesser of two years' basic pay or 

$15,000. 

The Officer Personnel Act, ch. 512, id., also required Navy and Marine Corps 

selection boards to report the names of officers with less than 20 years of service who 

were considered to have performed unsatisfactorily in their current respective grades. An 

individual officer so reported was involuntarily discharged with the same severance pay 

entitlement as officers who failed of selection for promotion--that is, with two months' 

basic pay for each year of commissioned service, not to exceed the lesser of two years' 

basic pay or $15,000. This "unsatisfactory performance" authority eliminated only a 

handful of officers. The legislative history of the act does not explain why officers 

discharged for unsatisfactory performance had the same entitlement as those discharged 

merely because it was determined that they were less qualified for promotion than some 

of their contemporaries. 

787
The Officer Personnel Act, ch. 512, id., contained no "unsatisfactorily 

performance" separation provisions for Army and Air Force officers. However, the Army 

and Air Force Vitalization and Retirement Equalization Act of 1948, ch. 708 [Public Law 

810, 80th Congress], 62 Stat. 1081 (1948), required the Secretaries of the Army and Air 

Force to convene annual boards to review the records of regular officers and to require 

any officer whose performance of duty was "substandard" to "show cause" why he should 

be retained on the active list. Officers removed under the "show cause" process who were 

not eligible for retirement were to be discharged with severance pay computed at the rate 

of one month's basic pay for each year of commissioned service, not to exceed one year's 

basic pay. Like its Navy and Marine Corps counterpart, the Army and Air Force "show 

cause" procedure in practice eliminated only a handful of officers. 

The severance pay formula of the Army and Air Force Vitalization and 

Retirement Equalization Act, ch. 708, id., was, on the surface, significantly different 

from, and less favorable than, the formula for Navy and Marine Corps officers discharged 

under roughly similar circumstances, and for any officer discharged for failure of 

selection for promotion. However, increases in basic pay rates between the time the 

Army and Air Force Vitalization and Retirement Equalization Act became law in 1948 

and 1980 significantly distorted the relationship between the two formulas. For example, 

in 1980, prior to enactment of the Defense Officer Personnel Management Act 

(DOPMA), Public Law 96-513, 94 Stat. 2835 (1980), an Army or Air Force major 

discharged after 12 years of service for substandard performance was entitled under the 

"less favorable" formula--which had no absolute dollar ceiling--to severance pay of one 

year's basic pay, or $24,580.80. The entitlement of a Navy or Marine Corps officer in the 

same pay grade discharged for unsatisfactory performance, or of a similar officer of any 

service discharged for failure of promotion, was limited to $15,000 under the "more 

favorable" formula of two months' basic pay times years of service, not to exceed the 

lesser of two years' basic pay or $15,000. 

The Act of July 9, 1956, ch. 676 [Public Law 676, 84th Congress], 70 Stat. 517 

(1956), established the first specific severance pay program for reserve personnel. It 

788
added a provision to the Armed Forces Reserve Act of 1952, ch. 608 [Public Law 476, 

82d Congress], 66 Stat. 481 (1956), that allowed payment of "readjustment pay" to 

reserve members--both officer and enlisted--who, after five or more years of continuous 

active duty, were involuntarily released from service or who were released at the end of 

their tour after having volunteered, but not been accepted, for an additional tour. 

From 1956 to 1962 readjustment pay was computed at the rate of one-half 

month's basic pay for each year of active service, not to exceed nine months' basic pay. 

The Act of June 28, 1962, Public Law 87-509, §1, 76 Stat. 120 (1962), changed the 

formula to generally equalize levels of readjustment pay for Reservists with severance 

pay for regulars. The act provided for the computation of readjustment pay at the rate of 

two months' basic pay for each year of active service, not to exceed the lesser of two 

years' basic pay or $15,000. It also provided reduced readjustment pay for members 

released because of substandard performance. The entitlement in this circumstance was 

one-half month's basic pay for each year of active service. The act also prohibited service 

performed in time of war or national emergency declared by Congress after June 28, 

1962, from being counted in computing readjustment pay entitlements. Although the act 

made both officer and enlisted personnel eligible for readjustment pay, few if any enlisted 

members ever qualified in practice. 

In 1980, Congress, in the Defense Officer Personnel Management Act (DOPMA), 

Public Law 96-513, 94 Stat. 2835 (1980), substantially changed the ground rules for 

separation pay. In addition to unifying the separation pay authority in one provision of 

Title 10--namely, 10 U.S.C. §1174--DOPMA generally increased the maximum amount 

of such pay to which affected personnel might be entitled. It also made the computation 

of separation pay entitlements dependent on years of active service for all affected 

personnel, whereas under the preexisting "severance pay" program for regular officers, 

the computation had been predicated on years of commissioned service. 

In unifying the separation pay provisions of Title 10, DOPMA, Public Law 96-

513, id., referred specifically to three different categories of involuntary separation or 

789
discharge that could invoke separation pay entitlements. First, an officer of a regular 

component of an armed force with more than five but less than 20 years of active service 

who was discharged or separated for having twice failed of selection for promotion was 

entitled to separation pay computed as 10 percent of the product of the officer's years of 

active service1

 and 12 times terminal monthly basic pay, subject to a $30,000 maximum.2

Second, similar regular officers discharged for substandard performance of duty, or 

because of misconduct or moral or professional dereliction, or because their retention was 

not "clearly consistent with the interests of national security," were entitled either to the 

product of 10 percent of the product of their years of active service and 12 times terminal 

monthly basic pay, subject to a $30,000 maximum, or half that amount, subject to a 

$15,000 maximum, as the Secretary of the military department concerned may determine, 

unless the Secretary further determined that the conditions under which the officer was 

discharged or separated did not warrant any separation pay at all. Third, and finally, 

members of non-regular components of the Armed Forces who were discharged or 

released from active duty with more than five but less than 20 years of active service, or 

who were not accepted for an additional tour of duty for which they volunteered, were 

 

1

 In determining the number of years of service on which a separation payment was to be based, the 

Defense Officer Personnel Management Act originally specified that a part of a year that was six months or 

more was to be counted as a whole year, and a part of a year that was less than six months was to be 

disregarded. This rule derived directly from provisions used in determining years of service for computing 

military retired pay. In 1982, however, Congress changed the rule for retired pay purposes--but not for 

separation pay purposes--to require that years of service be computed by considering any full month of an 

uncompleted year as one-twelfth of a year if the member had six months or more of an uncompleted year, 

whereas members with less than six months of a completed year received no credit for any such extra 

months. The reasons for this restriction were basically budgetary in nature. cf. House Report No. 98-107 

(Committee on Armed Services), p. 213, accompanying H.R. 2969, House Report No. 98-352 (Committee 

of Conference), p. 227, accompanying S. 675, and Senate Report No. 98-213 (Committee of Conference), 

p. 227, accompanying S. 675, 98th Congress, 1st Session (1983). This disparity of treatment was justified 

on the grounds that personnel with less than six months of service--in addition to however many years of 

service they had--were unaffected by the change. The Department of Defense Authorization Act, 1984, 

Public Law 98-94, §923, 97 Stat. 614, 642-644 (1983), changed the rule again--not only for retired pay 

purposes but for separation pay purposes as well--to require that each full month of service in addition to 

the number of years of service with which a member is credited be counted as one-twelfth of a year and any 

additional fractional part of a month be disregarded, no matter whether the member had more or less than 

six additional months of service. See House and Senate Reports at pages cited above. 

2

 As set out in 10 U.S.C. §1174, officers eligible for such pay include all regular officers discharged under 

the authority of Chapter 36 of Title 10, United States Code, relating to regular officers, or Sections 580 or 

6383 of Title 10, relating to warrant and Navy limited duty officers, respectively, for having twice failed of 

selection for promotion. 

790
entitled to separation pay as computed for the regular officers discussed immediately 

above, as determined by the Secretaries of the various military departments.3

 Members 

who were discharged or released from active duty at their own request, who were 

released from active duty for training, or who were, upon discharge or release, 

immediately eligible for retired or retainer pay were not treated as having been 

involuntarily released from active duty, with the result that they were not eligible for 

separation pay under 10 U.S.C. §1174. A member receiving separation pay under 10 

U.S.C. §1174--or "severance" or "readjustment" pay under former provisions of Title 10 

repealed by the Defense Officer Personnel Management Act--who, subsequent to the 

adoption of DOPMA, became entitled to retired or retainer pay had his or her retirement 

or retainer pay reduced by excluding from the computation of that pay the number of 

years of service on which the member's separation pay was determined, until the amount 

of the separation payment was recovered. Under special savings provisions, a member on 

active duty on or before September 14, 1981,4

 was entitled to the new "separation" pay or 

to the old "severance" or "readjustment" pay, whichever was more advantageous.5

As explained in the Report of the House Committee on Armed Services dealing 

with the new separation pay authority, 

 The committee did not wish the new continuation procedures and 

implementation of the all-regular career force permitted under S. 1918 [96th

Congress, 2d Session (1980), ultimately adopted as DOPMA, Public Law 96-513, 

94 Stat. 2835 (1980)] to go into effect without providing adequate separation pay 

for officers who might be forced off active duty as a result of this legislation at an 

 

3

 Section 911 of the Department of Defense Authorization Act, 1984, Public Law 98-94, §911, 99 Stat. 

614, 639-640 (1983), provided a "clarification" to the non-disability separation pay authority affecting 

members of non-regular components of the Armed Forces. Under the 1984 Authorization Act, 10 U.S.C. 

§1174(c) was amended to specify that, in order to be eligible for non-disability separation pay, a "member 

of an armed force other than a regular member" must have "completed at least five years of continuous 

active duty immediately before ... discharge or release." (For these purposes, a term of active duty is 

"continuous" if "not interrupted by a break in service of more than 30 days.") 

4 The effective date of the provisions in issue was September 15, 1981, although the Defense Officer 

Personnel Management Act was enacted December 12, 1980. 

5 See Sections 607 and 631 of the Defense Officer Personnel Management Act, Public Law 96-513, §§607 

and 631, 94 Stat. 2835, 2943, 2954 (1980), as amended by the Department of Defense Authorization Act, 

1985, Public Law 98-525, §531, 98 Stat. 2492, 2527 (1984), reproduced, as amended, at 10 U.S.C. §611 

note. 

791
earlier time than would have been likely under present law and short of eligibility 

for retirement. The committee has, therefore, significantly revised the officer 

separation-pay procedures in current law and provided for a ceiling of $30,000 for 

such payment. 

 The separation pay is a contingency payment for an officer who is 

career committed but to whom a full military career may be denied. It is designed 

to encourage him to pursue his service ambition, knowing that if he is denied a 

full career under the competitive system, he can count on an adequate 

readjustment pay to ease his reentry into civilian life. 

 Under present law officers separated with more than five, but less than 

twenty, years of service receive severance pay if they are regular officers, or 

readjustment pay if they are reserve officers, equal to two months' basic pay for 

each year of service up to a maximum of $15,000. Under current pay conditions 

the maximum is received by all officers separated involuntarily with five or more 

years of service. 

 In creating a revised payment procedure for those involuntarily 

separated, the committee has provided for "separation pay" that would be equal to 

ten percent of annual basic pay for each year of service up to a maximum of 

$30,000. The committee put a ceiling of $30,000 on separation pay in line with 

the past practice of Congress in placing monetary ceilings on such payments. 

 Under S. 1918 all of the separation-pay procedures would be provided 

for in a single proposed new section. The new section would provide for payment 

of separation pay on the basis of "years of active service" as in present law for 

readjustment pay for reserve officers. Current law for regular officers is based on 

commissioned service. The section would provide that should a separated member 

later become eligible for retired pay, the retired pay would be reduced by 

excluding from the computation of that retired pay the years upon which the 

separation pay is based--until the separation pay had been recouped. 

 The committee believes the revised separation-pay formula in the bill 

would be more appropriate than the current readjustment- or severance-pay that, 

in some cases, provides inadequate compensation for those who are separated.6

As further explained by the Senate Committee on Armed Services, the new 

separation pay provision substantially restated the "readjustment pay" provisions 

 

6

 House Report No. 96-1462 (Committee on Armed Services), pp. 30-31, accompanying S. 1918, 96th

Congress, 2d Session (1980). 

792
applicable to reserve personnel under former 10 U.S.C. §6877

 and extended those 

provisions, as restated, to regular officers. For those officers not able to choose between 

the new and old systems--that is, for all officers who came on active duty after September 

14, 1981, the effective date of the provisions in question --it was estimated that the new 

separation pay provisions would be less generous for persons with less than ten years of 

service but more generous for those with more than ten years of service.8

The National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, §501(a)-(d), 104 Stat. 1485, 1549-1550 (1990), made several further changes to the 

separation pay program. First, the 1991 National Defense Authorization Act, id., 

§501(a)(3), 104 Stat. at 1549, made regular enlisted personnel with six or more but less 

than 20 years of active service eligible for separation pay. See 10 U.S.C. §1174(b). 

Before enactment of the 1991 National Defense Authorization Act, an enlisted member 

denied the opportunity to reenlist or otherwise terminated during the course of an 

enlistment had no right to any separation pay whatsoever. 

Second, the 1991 National Defense Authorization Act, id., §501(c), 104 Stat. at 

1550, repealed the preexisting limitations on the amount of separation pay to which an 

individual might be entitled. As previously indicated, the maximum amount of separation 

pay to which an individual might become entitled before enactment of the 1991 

National Defense Authorization Act was either $30,000 or $15,000, depending on the 

reasons the individual was separated.9

 With enactment of the 1991 National Defense 

Authorization Act, there is no longer any limitation on the amount of separation pay to 

which a separated individual--whether an enlisted member or an officer--is entitled. 

Rather, the amount of separation pay to which a separated member is now entitled is 

 

7

 Former 10 U.S.C. §687--which provided "readjustment pay" authority for non-regular officer and enlisted 

personnel--was repealed by Section 109(a) of the Defense Officer Personnel Management Act, Public Law 

96-513, §109(a), 94 Stat. 2835, 2870 (1980). But see text accompanying footnote 4 to this chapter, above. 

8

 Senate Report No. 96-375 (Committee on Armed Services), pp. 7-8, accompanying S. 1918, 96th

Congress, 1st Session (1979). 

9

 See text accompanying footnote 2 to this chapter and following. 

793
computed as either ten percent of the product of the member's years of active service and 

12 times terminal monthly basic pay or 50 percent of that amount,10 as determined by the 

Secretary of the member's military department, provided that, in the case of an officer, 

the Secretary may determine that the separated officer is, depending on "the conditions 

under which the officer is discharged," not entitled to any separation pay at all. 

Third, the 1991 National Defense Authorization Act, id., §501(b), 104 Stat. at 

1549-1550, increased from five to six the number of years of continuous active service 

required immediately before discharge or separation for reserves to be entitled to 

separation pay after involuntary discharge or release from active duty.11 10 U.S.C. 

§1174(c)(1). The same increase was made applicable to regular officers discharged with 

less than five years of active commissioned service, officers found not qualified for 

promotion to pay grade O-2 (first lieutenant or lieutenant (junior grade)), chaplains who 

have lost their professional qualifications, officers separated for substandard performance 

of duty or for certain other similar reasons, and warrant officers separated during the 

 

10 Regular officers separated for failure of promotion under Chapter 36 of Title 10, United States Code, are 

entitled to the full ten percent of the member's years of service multiplied by 12 times terminal monthly 

basic pay, 10 U.S.C. §1174(a)(1), whereas officers discharged with less than five years of active 

commissioned service, officers found not qualified for promotion to pay grade O-2 (first lieutenant or 

lieutenant (junior grade)), chaplains who have lost their professional qualifications, officers separated for 

substandard performance of duty or for certain other similar reasons, and warrant officers separated during 

the three-year probationary period immediately following their appointment as warrant officers may, at the 

discretion of the "Secretary concerned," be separated either with the full amount computed as above, with 

50 percent of that amount, or with no separation pay whatsoever, 10 U.S.C. §1174(a)(2). Enlisted members 

involuntarily separated or otherwise released from active duty are normally entitled to the full ten percent 

of the member's years of service multiplied by 12 times terminal monthly basic pay, although members 

discharged "under criteria prescribed by the Secretary of Defense" are entitled to only 50 percent of that 

amount, provided that the "Secretary concerned" may determine that a member is, because of the 

conditions under which he or she is discharged or otherwise separated, not entitled to any separation pay at 

all. The amount of separation pay to which reserves are entitled upon involuntary separation or nonacceptance for an additional tour of duty for which they have volunteered is determined the same way as 

for regular officers involuntarily separated or otherwise released from active duty. 

11 Reserves with more than five years of continuous active service on November 5, 1990, the date of 

enactment of the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, 104 Stat. 

1485 (1990), are exempted from the increase from five to six years of continuous active service as a 

condition of entitlement to separation pay, as are officers discharged with less than five years of active 

commissioned service, officers found not qualified for promotion to pay grade O-2 (first lieutenant or 

lieutenant (junior grade)), chaplains who have lost their professional qualifications, officers separated for 

substandard performance of duty or for certain other similar reasons, and warrant officers separated during 

the three-year probationary period immediately following their appointment as warrant officers. National 

Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, id., §501(e)(2), 104 Stat. at 1550. 

794
three-year probationary period immediately following their appointment as warrant 

officers. 10 U.S.C. §1174(a)(2). Regular enlisted members are also required to have six 

years of continuous active service for entitlement to separation pay. 10 U.S.C. 

§1174(b)(1). These changes left regular officers involuntarily discharged or released from 

active duty for failure of promotion--other than those referred to earlier in this paragraph-

-as the only officers needing only five years of continuous active service immediately 

before separation to be entitled to separation pay. See 10 U.S.C. §1174(a)(1) as in effect 

before enactment of the National Defense Authorization Act for Fiscal Year 1994, Public 

Law 103-160, §501, 107 Stat. 1547, 1644 (1993). 

Fourth, and perhaps the biggest change to the separation pay program, the 1991 

National Defense Authorization Act, Public Law 101-510, id., §501(d), 104 Stat. at 1550, 

provided that, "[a]s a condition of receiving separation pay," a member otherwise eligible 

for that pay under 10 U.S.C. §1174 must "enter into a written agreement with the 

Secretary concerned to serve in the Ready Reserve of a reserve component for a period of 

not less than three years following the person's discharge or release from active duty."12

10 U.S.C. §1174(e). 

The amendments to the separation pay program were adopted in response to 

Congress's perception that there would be substantial "reductions in [military] force over 

the next 5 years"13 and that "[a] principal component of the package of transition 

assistance benefits necessary in a force drawdown environment is a modification of 

existing law with respect to the payment of separation pay."14 As the House Armed 

Services Committee went on to note: 

 

12 The three-year obligation is in addition to any other obligated service an affected member has. 

13 Senate Report No. 101-384 (Committee on Armed Services), p. 173, accompanying S. 2884, 101st

Congress, 2d Session (1990). 

14 House Report No. 101-665 (Committee on Armed Services), p. 269, accompanying H.R. 4739, 101st

Congress, 2d Session (1990). 

795
... Currently, separation pay is authorized for regular and reserve officers 

and reserve enlisted members with five or more, but fewer than 20, years of active 

service who are involuntarily separated or discharged from active duty (or who 

are not accepted for an additional tour of active duty for which they have 

volunteered in the case of reserve members). Regular enlisted members are the 

only element of the regular and reserve components serving on active duty who 

are not eligible for separation pay upon involuntary separation. It is important that 

this inequity be redressed because the potential exists that regular enlisted 

members may be involuntarily separated as the size of the force is reduced. 

Moreover, because the present value of separation pay under current 

computational limits has been eroded over time, other changes to the separation 

pay mechanism have become necessary. 

 ... [These changes are] consistent with the notion that separation pay 

is designed to compensate career oriented service members who have been denied 

a career opportunity because of circumstances beyond their control.15

 The National Defense Authorization Act for Fiscal Year 1994, Public Law 103-

160, §501(a), 107 Stat. 1547, 1644 (1993), increased from five to six the number of years 

of active service that all regular officers involuntarily discharged or released from active 

duty for failure of promotion must have before being eligible for separation pay. As 

explained by the Senate Armed Services Committee, the change was made "to 

standardize the eligibility point for separation pay for all service members ... [at] six 

years."16 17 10 U.S.C. §1174(a). 

 Current rate of payment authorized: In the normal case, the amount of 

separation pay to which a qualified member is entitled upon discharge is ten percent of 

 

15 House Report No. 101-665 (Committee on Armed Services), p. 269, accompanying H.R. 4739, 101st 

Congress, 2d Session (1990). See Senate Report No. 101-384 (Committee on Armed Services), p. 173, 

accompanying S. 2884, 101st Congress, 2d Session (1990): 

 ... The committee believes these [proposed separation pay] provisions provide a safety net to personnel 

who had planned on a career in the military but who may be required to leave active duty before they 

become eligible to retire. cf. House Report No. 101-923 (Committee of Conference), p. 603, accompanying 

H.R. 4739, 101st Congress, 2d Session (1990). 

16 Senate Report No. 103-112 (Committee on Armed Services), p. 153, accompanying S. 1298, 103d 

Congress, 1st Session (1993). See House Report No. 103-200 (Committee on Armed Services), p. 275, 

accompanying H.R. 2401, 103d Congress, 1st Session (1993). Cf. House Report No. 103-357 (Committee 

of Conference), pp. 669-670, accompanying H.R. 2401, 103d Congress, 1st Session (1993). 

17 See paragraph text accompanying footnote 11 to this chapter, above, concerning the disparity in 

treatment of different classes of personnel before adoption of the National Defense Authorization Act for 

Fiscal Year 1994, Public Law 103-160, §501(a), 107 Stat. 1547, 1644 (1993). 

796
the product of the member's years of active service and 12 times terminal monthly basic 

pay.18

Cost: For the cost of non-disability separation pay from 1972 to 2004, see Table 

III-6 of Military Compensation Statistics Tables, volume II of this edition. 

 

18 See footnote 10 hereof, above, together with associated text for exceptions to the general rule. 

797
Chapter III.C.2. 

 Disability Severance Pay 

Legislative Authority: 10 U.S.C. §1212. 

Purpose: To authorize a special lump-sum payment to be made to members of the 

Armed Forces separated from active military service because of minor physical 

disabilities that, while substantial enough to adversely affect their abilities to perform the 

military duties of their respective offices or grades, are not so severe as to seriously 

impair their civilian earnings capacities, in order to assist such personnel in their 

transitions back to civilian life. Disability severance pay stands in contrast to disability 

retired pay, which is authorized for more severe physical disabilities. 

Background: The practice of awarding compensation through a veterans' pension 

system to persons disabled by military service spans the existence of the United States as 

a nation. The veterans' pension system has since 1861 been complemented by a military 

disability retirement system. Until 1949, the military system by and large covered only 

regular officers and career enlisted personnel. The Career Compensation Act of 1949, ch. 

681 [Public Law 351, 81st Congress], §403, 63 Stat. 802, 820-821 (1949), revised and 

broadened the military disability retirement system so as in general to place all military 

personnel--career and non-career, officer and enlisted, regular and reserve--within its 

scope. In view of this expansion in the disability retirement system, it was considered 

necessary to draw a dividing line between "real" or "substantial" disabilities warranting 

lifetime disability retired pay and less substantial, "minor" disabilities not warranting 

such pay. The Career Compensation Act of 1949, ch. 681, id., established the dividing 

line at 30 percent disability. 

Though the justification for non-disability severance pay authority in the Career 

Compensation Act of 1949, ch. 681, id., was that lifetime retired pay was not warranted 

in the case of personnel separated with disabilities deemed to be "minor" in nature, 

Congress recognized that such separations are nevertheless involuntary, that affected 

personnel are forced to reintegrate themselves into the mainstream of civilian life, and 

798
that fair and considerate treatment of such personnel was thus required, at least in part in 

order to assure individual members of the Armed Forces that, if they are ever disabled in 

the service of their country, they will not be left to cope with their resulting separations 

from the service on their own. Accordingly, the Career Compensation Act of 1949, as 

amended over time, permitted a lump-sum severance payment to personnel with less than 

20 years of active service who were separated from active service because of serviceconnected disabilities that, though rated as less than 30 percent, made them physically 

unable to perform the military duties of their respective offices or grades.1 2

 Disabled 

personnel with 20 or more years of service qualify for disability retired pay3 even if their 

degree of disability is less than 30 percent, on the theory that, because of their length of 

service, they would in any event be eligible for voluntary retirement.4

Disability severance pay is computed at the rate of two months' basic pay for each 

year of active service, not to exceed two years' basic pay.5

 To prevent a double benefit to 

 

1 See 10 U.S.C. §§1203 and 1206 generally for an explication of the conditions of entitlement to disability 

severance pay. 

2 Section 1201(3) of Title 10, United States Code, 10 U.S.C. §1201(3), specifically requires that a member 

have either 20 years of service or a disability rating of at least 30 percent to be eligible for disability retired 

pay. The 20-year requirement would appear to rule out the possibility that members of the Armed Forces 

with at least 15 but less than 20 years of service who have a disability rating of less than 30 percent may be 

eligible for disability retirement pursuant to the provisions of Section 4403 of the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 (1992), as 

amended by the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §561(a), 

107 Stat. 1547, 1667 (1993), set out as a note under 10 U.S.C. §1293, which provides temporary early 

retirement authority during the "active force drawdown period", i.e., October 23, 1992, to October 1, 1999, 

for members of the Armed Forces with at least 15 but less than 20 years of service. As a practical matter, 

however, the Secretaries of the military departments would appear to have sufficient discretionary authority 

under the early retirement program authorized by Section 4403 of the National Defense Authorization Act 

for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 (1992), as amended, see 

Section 4403(d) of the 1993 Authorization Act in particular, to grant regular retirement to members with at 

least 15 but less than 20 years of service who have a disability rating of less than 30 percent. Thus, there is 

a possibility that some disabled members of the Armed Forces with less than 20 years of service and a 

disability rating of less than 30 percent may nevertheless be eligible for retirement pay rather than having to 

make do with disability severance pay. 

3 See, e.g., 10 U.S.C. §§1201(3)(A) and 1204(4)(A). 

4 See Chapter III.B.3., "Disability Retired Pay," above. 

5 10 U.S.C. §1212(a). 

799
any given individual, the Department of Veterans Affairs6

 is required to deduct an 

amount equal to the disability severance payment made to that individual from any 

veterans' disability compensation to which the individual may later become entitled for 

the same disabilities.7

Cost: For the cost of disability severance pay from 1972 to 2004, see Table III-7

of Military Compensation Statistics Tables, volume II of this edition. 

 

6 The Veterans' Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, 102 Stat. 2635 (1988). Pursuant to that act, from and after 

March 15, 1989, all references in any Federal law, Executive Order, rule, regulation, delegation of 

authority, or any document of or pertaining to the Veterans' Administration is statutorily deemed to refer to 

the Department of Veterans Affairs. Veterans Affairs Act, Public Law 100-527, id., §10, 102 Stat. at 2640-

2641; see 38 U.S.C.A. §201 note. 

7 10 U.S.C. §1212(c). 

800
Chapter III.C.3. 

 Unemployment Compensation 

Legislative Authority: 5 U.S.C. §§8521-8523, 8525.1

Purpose: To provide members of the uniformed services with unemployment 

insurance protection similar to that for which they would have been eligible in the private 

sector had they not entered federal service. 

Background: The provision of unemployment insurance protection as a matter of 

law is of relatively recent origin in the United States. The first measure providing a form 

of such protection was adopted by Wisconsin in 1932. The present "federal-state" 

unemployment compensation system--which actually is not a "system" but a collection of 

systems that parallel one another only in their basic concept--came into being as a result 

of the Social Security Act of 1935, ch. 531 [Public Law 271, 74th Congress], 49 Stat. 620 

(1935). The Social Security Act did not directly provide for the payment of 

unemployment compensation; it was designed to persuade the states2

 to adopt laws of 

their own providing for unemployment "insurance." To this end, the act imposed a three 

percent federal unemployment tax on the first $3,000 earned by employees each year. 

While the tax was paid by employers, each employer was permitted to offset up to 90 

percent of federal unemployment tax liability for amounts paid to an approved state 

unemployment compensation program. Thus, the states could establish programs and 

levy taxes up to 2.7 percent of taxable payrolls without any additional tax burden on 

employers. The federal tax achieved its objective: every state had an unemployment 

compensation law within two years after it was imposed. 

 

1 Unemployment compensation for civilian and military members of the Federal Government is dealt with 

generally at 5 U.S.C. §§8501-8525. Unemployment compensation for "ex-servicemen" is dealt with 

specifically at 5 U.S.C. §§8521-8525. (The federal program dealing with unemployment compensation for 

ex-service members is overseen by the United States Department of Labor and is administratively referred 

to as the "UCX" program.) 

2 For the purposes of this chapter, the term "states" includes the District of Columbia, Puerto Rico, and the 

Virgin Islands, as well as the 50 states. 

801
The actual administration of the "federal-state" unemployment compensation 

system remains a state function. Subject to meeting the minimum standards needed to 

qualify its program for the federal unemployment tax credit, each state determines 

eligibility conditions, sets the level and duration of benefits, and makes all payments. The 

federal unemployment tax on employers is 6.2 percent of the first $7,000 earned by each 

employee during a year. Against this tax, an employer gets a tax credit for "contributions 

paid by him into an unemployment fund maintained ... under the unemployment 

compensation law of a State which is certified" as meeting specified federal standards,3

but the credit is limited to 5.4 percent of taxable wages. The portion of the federal tax 

actually collected by the Federal Government--0.8 percent of taxable wages for most 

states—pays the cost of administering federal and state unemployment programs and 

employment services, as well as half of the benefits paid under the Federal-State 

Extended Benefits program. Some funds collected by the Federal Government are put in 

a special loan account from which states may get advances. 

The "federal-state" system covers only workers for whom an employer pays the 

unemployment tax. Since the Federal Government does not have to pay the tax, its 

employees were not covered by the system until 1954. At that time, Congress determined 

that "the Federal Government should not be in the position of providing less favorable 

conditions of employment than are required of private employers."4

 The Social Security 

Act amendments of 1954, ch. 1206 [Public Law 761, 83d Congress], 68 Stat. 1052 

(1954), accordingly created a program under which a former federal civilian employee 

was eligible for state unemployment compensation in the same amount, on the same 

terms, and under the same conditions as would apply if the employee's federal service 

and wages had been included as employment and wages under the law of the state of the 

employee's last official duty station. The United States pays each state the additional cost 

 

3 Section 3301(a)(1) of the Internal Revenue Code of 1986, 26 U.S.C. §3301(a)(1). 

4 Senate Report No. 1794 (Committee on Finance), p. 6, accompanying H.R. 9709, 83d Congress, 2d 

Session (1954). 

802
resulting from the payment of unemployment compensation under the program for 

former federal civilian employees. 

As is the case with civilian employees, the United States does not have to pay 

unemployment tax for military personnel. Since the program created by the Social 

Security Act amendments of 1954, ch. 1206, id., covered only civilian employees, 

military members remained unprotected by unemployment insurance. The Servicemen's 

Readjustment Act of 1944, ch. 268 [Public Law 346, 78th Congress], §900, 58 Stat. 284, 

297 (1944), had authorized a special benefit of $20 a week for up to 52 weeks to 

unemployed veterans of World War II, and the Veterans' Readjustment Assistance Act of 

1952, ch. 875 [Public Law 550, 82d Congress], §401(b), 66 Stat. 663, 684 (1952), had 

authorized the payment of $26 a week for up to 26 weeks to unemployed veterans of the 

Korean conflict. Even though these allowances had served the same purpose as 

unemployment compensation, they were primarily intended to aid former members of the 

armed services in readjusting to civilian life. In any event, except for some residual 

application, neither program was in operation after February 1, 1955, when the end of the 

Korean conflict was proclaimed. 

Congress recognized in 1958 that the lack of unemployment insurance protection 

for military personnel did not square with its policy that the Federal Government should 

not provide less favorable conditions of employment than are required of private 

employers. To remedy this situation, the Ex-Servicemen's Unemployment Compensation 

Act of 1958, Public Law 85-848, §3, 72 Stat. 1087, 1087-1088 (1958), created a program 

of Unemployment Compensation for Ex-Servicemen (UCX) that is very similar to the 

program for federal civilian employees. Congress described the purpose of the UCX 

program in these terms: 

Such a provision does not constitute a special reward for military service, 

but merely accords the individual a protection he most likely would have had if he 

had not entered military service.5

 

5 Senate Report No. 2375 (Committee on Finance), p. 2, accompanying H.R. 11630, 85th Congress, 2d 

Session (1958). 

803
The Ex-Servicemen's Unemployment Compensation Act of 1958, Public Law 85-

848, id., provided that a former service member was eligible for state unemployment 

compensation in the same amount, on the same terms, and under the same conditions as 

would apply if the member's active military service and pay and allowances had been 

included as employment and wages under the law of the State in which the former 

member first filed a claim. Notwithstanding this "same terms" and "same conditions" 

language, until recently the UCX program differed in one respect from state programs. 

When a person voluntarily quits his job, he is disqualified in whole or in part for 

unemployment benefits under all state laws. Until 1981 the "voluntariness" factor was not 

material under the UCX program--a former servicemember remained eligible for 

unemployment benefits even if he could have kept his job--that is, even if he could have 

continued on active duty, whether by reenlisting, extending an enlistment, or whatever--

had he chosen to do so. The Omnibus Budget Reconciliation Act of 1981, Public Law 97-

35, §2405, 95 Stat. 357, 876 (1981), changed this preexisting rule by adding, as an 

eligibility requirement for ex-servicemen, a provision that an individual seeking 

unemployment benefits "did not resign or voluntarily leave the service."6

This new, "non-voluntary" termination restriction on the entitlement of 

unemployed ex-servicemen to unemployment compensation soon proved to be overly 

restrictive, and Congress in the Miscellaneous Revenue Act of 1982, Public Law 97-362, 

§201, 96 Stat. 1726, 1732 (1982), effectively deleted it. Under law in effect before 

enactment of the Emergency Unemployment Compensation Act of 1991, Public Law 

102-164, 105 Stat. 1049 (1991), an unemployed ex-service member was entitled to 

unemployment compensation (UCX) if unemployed for the requisite period of time and, 

while in the Armed Forces, had active service (not including active duty in a reserve 

 

6 For eligibility, an individual was required to have had 365 or more days of continuous service (unless that 

service was terminated because of a "service-incurred injury or disability"), he must have been released or 

discharged from the service under honorable conditions, he could not have resigned or voluntarily left the 

service, and he could not have been released or discharged for cause. See 5 U.S.C. §8521(a)(1) as in 

existence before amendments effected by the Miscellaneous Revenue Act of 1982, Public Law 97-362, 

§201, 96 Stat. 1726, 1732 (1982), discussed in text below. 

804
status unless for a continuous period of 180 days or more) in the Armed Forces ... if with 

respect to that service— 

(A) the individual was discharged or released under honorable conditions (and, if an 

officer, did not resign for the good of the service); and 

(B)(i) the individual was discharged or released after completing his first full term of 

active service which the individual initially agreed to serve, or 

(ii) the individual was discharged or released before completing such term of active 

service— 

 (I) for the convenience of the Government under an early release program, 

(II) because of medical disqualification, pregnancy, parenthood, or any serviceincurred injury or disability, 

(III) because of hardship, or 

(IV) because of personality disorders or ineptitude but only if the service was 

continuous for 365 days or more; .... 

5 U.S.C. §8521(a)(1) as in effect prior to enactment of the Emergency Unemployment 

Compensation Act of 1991, Public Law 102-164, 105 Stat. 1049 (1991). 

The House Committee on Ways and Means detailed the history of the UCX 

program for unemployed ex-service members as follows: 

 Prior to enactment of the Omnibus Budget Reconciliation Act of 1981 

[Public Law 97-35, 95 Stat. 357 (1981)], Federally funded unemployment 

benefits were provided to former military personnel upon their separation from 

military service under the Unemployment Compensation for Ex-Servicemembers 

(UCX) program, if the ex-servicemember met the eligibility requirements of the 

State in which he or she applied for unemployment compensation. The military 

service of an individual qualified as wages or employment in the determination of 

eligibility for UCX benefits only if the person had (1) served 365 or more 

continuous days of active duty (unless separated after a shorter period because of 

a service-incurred injury or disability) and (2) was separated under other than 

dishonorable conditions. Leaving the military at the end of a term of enlistment, 

even if the person was eligible to reenlist, was not considered a "voluntary quit" 

under State law in the determination of eligibility for UCX benefits. 

 Section 2405 of the Budget Reconciliation bill ... established new 

requirements for entitlement to benefits under the UCX program. Effective for 

separations from military service occurring on or after July 1, 1981, individuals: 

805
(1) must have been discharged or released under honorable conditions: (2) must 

not have resigned or voluntarily left the service, which means they must not have 

been able to reenlist; and 3) must not have been released or discharged "for cause" 

as defined by the Department of Defense. These new requirements apply to 

individuals who left federal military service on or after July 1, 1981, but only for 

weeks of unemployment that began on or after August 13, 1981, the date of 

enactment of the Reconciliation bill. Preliminary estimates indicate that some 

35,000 individuals will be denied UCX benefits in fiscal 1981 and over 110,000 

individuals will be denied benefits in fiscal 1982 as a result of these new 

requirements. 

 The new requirements subject ex-servicemembers to stricter 

unemployment eligibility standards than civilians and, as a result, inappropriately 

and unnecessarily prevent a significant number of ex-servicemembers who cannot 

find civilian jobs immediately after leaving the service from receiving 

unemployment benefits. Furthermore, the new requirements, by providing UCX 

benefits only to those who are not acceptable for reenlistment, penalize those 

individuals who satisfactorily fulfill their military obligation and are therefore 

offered the opportunity to reenlist but choose to leave the service. 

 Section 204 [of the Miscellaneous Revenue Act of 1982, Public Law 

97-362, id.] repeals the new requirements enacted as part of the Budget 

Reconciliation Act and replaces them with eligibility requirements based on prior 

law but modified so as to address concerns and criticisms that have been 

expressed with regard to the UCX program.... 

 The provisions in this section, while significantly reducing Federal 

expenditures for unemployment benefits paid to ex-service members under the 

UCX program, will provide unemployment assistance to those who complete their 

term of duty satisfactorily, and therefore have the opportunity to reenlist, under 

the same terms and conditions as those who are not acceptable for reenlistment.7

The Miscellaneous Revenue Act of 1982, Public Law 97-362, id., §201(c), 96 

Stat. at 1732, also changed the unemployment compensation standards for the enlarged 

population of former service members eligible for unemployment compensation. Under 

the standards adopted by that act, unemployed ex-service members were required to wait 

four weeks, rather than the one week required for unemployed civilians, before they 

became eligible to collect unemployment benefits. The reason given was the assumed 

availability of severance pay and other separation benefits for ex-service members. In 

 

7

 House Report No. 97-404 (Committee on Ways and Means), pp. 30-31, accompanying H.R. 4961, 97th

Congress, 1st Session (1981) (emphasis and punctuation as in House Report No. 97-404). cf. House Report 

No. 97-929 (Committee of Conference), p. 48, accompanying H.R. 4717, 97th Congress, 2d Session (1982). 

806
addition, unemployment benefits were authorized for ex-service members for a maximum 

of 13 weeks, as opposed to the 26 weeks authorized for unemployed civilians. No reason 

was articulated for this difference in treatment, but the discussion of the high cost of the 

program during hearings on the legislation presumably influenced this decision. 

The Emergency Unemployment Compensation Act of 1991, Public Law 102-164, 

§301, 105 Stat. 1049, 1059 (1991), amended prior provisions of law in two regards. 

Section 301(b) of the act, 105 Stat. at 1059, decreased the active-service requirement for 

receipt of unemployment benefits by unemployed ex-service members from 180 days to 

90 days; and Section 301(a), 105 Stat. at 1059, repealed 5 U.S.C. §8521(c), which 

provided that unemployed ex-service members could not receive unemployment benefits 

before the expiration of the four-week period following separation and limited the period 

for which benefits to ex-service members were authorized to 13 weeks. With the latter 

change, unemployed ex-service members and unemployed civilians are now treated the 

same with respect to the time they have to wait before becoming eligible for 

unemployment benefits and the period for which such benefits are authorized.8

 The 

reasons for the changes to the unemployment compensation program for ex-service 

members had to do both with anticipated drawdowns in military strength and a felt need 

to assist in the transition of ex-service members who had served in Operation Desert 

Storm back into the civilian economy. As explained by the House Ways and Means 

Committee: 

 The provisions restoring ex-servicemembers' benefits to their pre-1981 

levels when ex-military personnel were treated the same as civilians probably 

helps close to 50,000 ex-military personnel in 1992. As under present law [as of 

October 1991], those who leave the military who have an opportunity to reenlist 

are eligible for benefits when they return home. The Committee believes that 

leaving the military after a period of enlistment is not equivalent to quitting a 

civilian job, and therefore, these ex-military personnel should get unemployment 

benefits to aid them while they look for civilian work. In addition, the bill [H.R. 

 

8

 The same changes were adopted in an earlier enactment also titled Emergency Unemployment 

Compensation Act of 1991, Public Law 102-107, §8, 105 Stat. 541, 546 (1991), but none of the provisions 

of that act ever became effective because of conditions on effectiveness of the entire Act incorporated as 

Section 10(b) of the Act, id., 105 Stat. at 548. 

807
3575, 102d Congress, 1st Session (1991), ultimately adopted as Public Law 102-

164] would reduce the number of continuous days of service required of 

activated reservists from 180 to 90 days, which would help some returning 

veterans of Operation Desert Storm to receive unemployment benefits. 

House Report No.102-273 (Committee on Ways and Means), p. 4, accompanying 

H.R. 3575, 102d Congress, 1st Session (1991).9

 

While the amount of unemployment compensation differs among states, all states 

employ basically the same method of calculating the weekly unemployment 

compensation amount. It is computed as a fraction, or percentage, of the wages earned by 

the unemployed person during base period employment, with the amount so computed 

being raised if it is less than a specified minimum figure or lowered if it is more than a 

specified maximum figure. But the fractions, percentages, base periods, minimums, and 

maximums used in the calculations vary considerably among the states and are frequently 

changed by state law. 

The "wages" now used to calculate the unemployment compensation of former 

service members under the UCX program are "all pay and allowances, in cash and in 

kind, for Federal military service, computed on the basis of the pay and allowances for 

the pay grade of the individual at the time of his latest discharge or release from Federal 

 

9 Much the same point was made by the Senate Armed Services Committee in its report on the National 

Defense Authorization Act for Fiscal Years 1992 and 1993: 

During its debate on the National Defense Authorization Act for Fiscal Year 1991, the Senate passed a 

provision to provide separating military personnel the same unemployment compensation coverage that is 

provided for civilian personnel. Currently, separating military personnel are authorized 13 weeks of 

unemployment benefits after four weeks of unemployment. Civilians are authorized 26 weeks of 

unemployment compensation after one week of unemployment. 

The Senate-passed provision was not enacted last year, because the committee agreed to a request by the 

Senate Finance Committee and the House Ways and Means Committee to defer the provision for 

consideration by these two committees as a matter falling under their jurisdiction. The committee notes that 

the Senate Finance Committee has since held a hearing on this matter. The committee urges the Senate 

Finance Committee to take favorable action in concert with the House Ways and Means Committee to 

correct the unemployment compensation disparity this year. Military personnel and their families deserve 

the same safety net as civilian personnel and their families, especially during this period of substantial 

reductions in military strength. 

Senate Report No. 102-113 (Committee on Armed Services), p. 227, 102d Congress, 1st Session (1991). 

808
service,"10 averaged by length of service and dependency status for each pay grade. The 

United States Department of Labor annually updates the amount of these "wages" in the 

Federal Register--in a table referred to as Schedule of Remuneration for the UCX 

Program--for use by state employment offices in determining the amount of 

unemployment compensation to which an unemployed ex-service member is entitled.11

Thus, for an unemployed ex-service member who left service in, for example, pay grade 

E-5, the amount of "wages" on which an unemployment compensation calculation would 

be based are the "wages" set out for pay grade E-5 in the Schedule of Remuneration for 

the UCX Program and not on the actual wages the member received. The Federal 

Government pays each state the additional cost resulting from the payment of 

unemployment compensation under the UCX program. 

The UCX program for ex-servicemen is also affected by the way different states 

treat unused leave payments, retired and retainer pay, and severance pay. Unused leave 

payments are considered as current wages and, as such, bar the receipt of or cause a 

reduction in unemployment compensation in a number of states; other states treat such 

payments as payments for past services and thus as having no effect on unemployment 

compensation. Retired or retainer pay, on the other hand, is treated as current wages in 

some states, thereby reducing--in some cases, eliminating--unemployment compensation 

benefits, and as payment for past services in others. There is a similar disparity of 

treatment as regards severance pay, with some states treating such pay as current wages 

and others as payment for past services.12 

Cost: For the cost of unemployment compensation from 1971 to 2004, see Table 

III-8 of Military Compensation Statistics Tables, volume II of this edition. 

 

10 5 U.S.C. §8521(a)(2). 

11 The Schedule of Remuneration for the UCX Program is found at 20 Code of Federal Regulations 614.12. 

Under the Schedule of Remuneration for the UCX Program current in early 2004, the monthly pay and 

allowances on which unemployment compensation would be based for an individual member applying for 

compensation range from a high of $14,857 for an officer in pay grade O-10 to $2,245 for an enlisted 

member in pay grade E-1. 

12 The reader is referred to the unemployment compensation laws of the different states. 

809
Chapter III.C.4. 

 Temporary 

 Voluntary Separation Incentives 

Legislative Authority: 10 U.S.C. §§1174a and 1175 and Section 4403 of the 

National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 

106 Stat. 2315, 2702-2704 (1992), as amended, set out as a note under 10 U.S.C. §1293. 

Purpose: To provide special incentives for members of the Armed Forces to 

voluntarily agree to separate from active duty components. 

Background: In the aftermath of the Cold War, and in light of the expected 

consequent drawdown in active duty strength levels, the National Defense Authorization 

Act for Fiscal Years 1992 and 1993, Public Law 102-190, 105 Stat. 1290 (1991), 

established two programs to encourage members of the active duty forces--both regular 

and reserve components—to voluntarily separate from active duty. One of the programs—

adopted by Section 662(a) of the National Defense Authorization Act for Fiscal Years 

1992 and 1993, Public Law 102-190, id., §662(a), 105 Stat. at 1396-1398, codified at 10 

U.S.C. §1175, and generally referred to the "voluntary separation incentive" program, or 

"VSI"--provides a temporary, variable-length annuity to members separating from the 

active duty forces and affiliating with reserve components. The second program--adopted 

by Section 661(a) of the National Defense Authorization Act for Fiscal Years 1992 and 

1993, Public Law 102-190, id., §661(a), 105 Stat. at 1394-1395, codified at 10 U.S.C. 

§1174a, and generally referred to as the "special separation benefit" program, or "SSB"—

provides enhanced separation pay benefits for members of the active duty services 

voluntarily agreeing to terminate all connection with the Armed Forces. The National 

Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 

2315, 2702-2704 (1992), as amended,1

 established a third program of separation 

incentives that authorized early retirement for members of the Armed Forces with at least 

15 but less than 20 years of service who agreed to retire before October 1, 1999. 

 

1 Set out as a note under 10 U.S.C. §1293. 

810
Under the voluntary separation incentive program or VSI--the program aimed at 

providing incentives to members of the active duty services to separate from active duty 

and affiliate with reserve components--the National Defense Authorization Act for Fiscal 

Years 1992 and 1993, Public Law 102-190, id., §662(a), 105 Stat. at 1396-1398, 

authorized the Secretary of Defense to "provide a financial incentive to members of the 

Armed Forces ... for voluntary appointment, enlistment, or transfer to a Reserve 

component ... for the period of time the member serves in a reserve component." As 

originally enacted, the amount of the annual VSI payment authorized was to be computed 

by multiplying the product of the member's terminal monthly basic pay and 12 by the 

product of the member's number of years of service at separation and 2.5 percent, and 

subtracting from that amount the sum of any basic pay the member subsequently received 

for active or reserve service as a member of a reserve component and any compensation 

the member received for inactive duty training during the year. A member entitled to an 

annual VSI payment computed as above was to be paid that amount for twice the 

member's years of service at separation so as long as the member maintained membership 

in a reserve component. A member of the active duty force was eligible to participate in 

the VSI program if the member had served on active duty for at least six but less than 20 

years, had served at least five years of continuous active duty immediately before the date 

of separation, and met such other requirements as the Secretary of Defense might 

provide. A member participating in the VSI program who subsequently became entitled 

to retired or retainer pay was to have his retired or retainer pay entitlement reduced by an 

amount based on the service for which he received the VSI until the total amount 

deducted equaled the total VSI the member received. 

Under the special separation benefit program, or SSB--the program aimed at 

providing incentives to members of the active duty services to terminate all connection 

with the Armed Forces--the National Defense Authorization Act for Fiscal Years 1992 

and 1993, Public Law 102-190, id., §661(a), 105 Stat. at 1394-1395, directed the 

Secretaries of each of the military departments to develop "special separation benefits 

program[s]" under which an "eligible member" could request separation and, upon 

approval of the request, be "released from active duty or discharged." For the purpose of 

811
each departmental "special separation benefit program," a member of that department's 

armed force on active duty was eligible for the program only if the member had served on 

active duty for more than six but less than 20 years as of the date of enactment of the 

1992/1993 authorization act, had served on continuous active duty for at least five years 

immediately before the member's separation from active duty under the program, had not 

been approved for "payment of a voluntary separation incentive," and met such other 

requirements as the Secretary of Defense might provide.2

 In addition, an enlisted member 

of a regular component was required to enter into a written agreement not to request 

reenlistment in a regular component any time in the future. An eligible member whose 

request for separation under the SSB program was approved was entitled to a SSB 

payment computed by multiplying the product of the member's terminal monthly basic 

pay and 12 by the product of the member's years of active service and 15 percent. 

Various non-monetary benefits were also extended to members separated under the SSB 

program. 

In explanation of these programs, the House/Senate Conference Committee noted: 

 The ... [programs would] ... provide temporary authority to the 

Secretaries of the military departments to: (1) offer involuntary separation pay 

and transition benefits to active duty personnel who elect to voluntarily separate 

in order to avoid the possibility of facing selection for involuntary separation or 

denial of reenlistment; and (2) offer a voluntary separation incentive in the form 

of an annuity to active duty personnel who elect to voluntarily separate in order to 

avoid the possibility of facing selection for involuntary separation or denial of 

reenlistment. 

 The conferees take this action because of their concern over the effect 

of strength reductions during the next few years on our men and women in 

uniform and their families. The conferees especially recognize that this drawdown 

in strength is different from previous drawdowns because it affects people who 

are a product of an all volunteer force. Therefore, the conferees would provide 

these temporary authorities as tools to assist the military Services in selectively 

reducing, on a voluntary basis, that portion of the career personnel inventory that 

is not retirement eligible. The conferees believe that these authorities would give 

a reasonable, fair choice to personnel who would otherwise have no option but to 

 

2

 The National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, §542(b) and (c), 106 

Stat. 2663, 2768-2769 (1994), extended both the VSI and SSB programs to members of the Coast Guard. 

812
face selection for involuntary separation, and to risk being separated at a point 

not of their own choosing. 

 With regard to the first of the two provisions [SSB], the conferees 

agree that the "voluntary" separation pay benefit would be calculated at 15 

percent of basic pay multiplied by the number of years of service of the 

separating member. Current involuntary separation pay is calculated on 10 

percent of basic pay multiplied by the number of years of service of the separating 

member. The conferees believe that this enhancement will provide an equitable, 

up-front incentive for personnel to choose in lieu of facing the prospect of 

involuntary separation. The enhanced separation benefit would be in addition to 

employment assistance, medical care, commissary and exchange shopping, 

housing, relocation assistance, and leave and travel benefits provided by Congress 

in section 502 of the National Defense Authorization Act for Fiscal Year 1991 

(Public Law 101-510). 

 With regard to the second provision [VSI], the conferees recommend 

the voluntary separation incentive plan proposed by the Secretary of Defense 

[Cheney]....3

As previously indicated, the annual payment to a participating member in the VSI 

program as originally enacted was to be computed by multiplying the product of the 

member's terminal monthly basic pay and 12 by the product of the member's number of 

years of service at separation and 2.5 percent, and subtracting from that mount the sum of 

any basic pay the member received for subsequent active or reserve service as a member 

of a reserve component and any compensation the member received for inactive duty 

training during the year. The National Defense Authorization Act for Fiscal Year 1993, 

Public Law 102-484, §4406(a)(1), 106 Stat. 2315, 2706-2707 (1992), changed the basis 

for computing the annual VSI payment by making the subtraction optional and by 

providing that, in the case of a member choosing to have the subtraction made, the 

amount of any subtraction would be used as an offset against any future reduction in 

retired or retainer pay that would otherwise have been required under the VSI program as 

originally adopted. The National Defense Authorization Act for Fiscal Year 1993, Public 

Law 102-484, §4405(b), 106 Stat. 2315, 2706 (1992), also extended to a participant in the 

 

3 House Report No. 102-311 (Committee of Conference), pp. 555-556, accompanying H.R. 2100, 102d 

Congress, 1st Session (1991). 

813
VSI program the same non-monetary benefits that had been extended to members 

separated under the SSB program.4

As originally enacted, active duty members of the Armed Forces had to take 

advantage of both the SSB and VSI programs by September 30, 1995. The National 

Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §561(g) and (h), 

107 Stat. 1547, 1668 (1993), extended both program authorization dates through 

September 30, 1999. The program authorization dates were extended to "encourage DOD 

to develop and implement coherent, integrated, long-term drawdown plans that will 

minimize the uncertainties and personnel turbulence associated with such a drawdown."5

With respect to the third of the voluntary separation incentive programs, the 

National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 

106 Stat. 2315, 2702-2704 (1992), adopted early retirement authority--for members with 

between 15 and 20 years of service--as a "temporary additional force management tool 

with which to effect the drawdown of military forces through 1995." National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, id., §4403(a), 106 Stat. at 

2702.6

 Under the subject authority, the Secretaries of the military departments were 

 

4

 House Report No. 102-966 (Committee of Conference), p. 887, accompanying H.R. 5006, 102d 

Congress, 2d Session (1992). Cf. Senate Report No. 102-352 (Committee on Armed Services), p. 203, 

accompanying S. 3114, and House Report No. 102-527 (Committee on Armed Services), p. 252, 

accompanying H.R. 5006, 102d Congress, 2d Session (1992). 

5 House Report No. 103-357 (Committee of Conference), p. 678, accompanying H.R. 2401, 103d 

Congress, 1st Session (1994). To the same effect, see Senate Report No. 103-112 (Committee on Armed 

Services), p. 145, accompanying S. 1298, 103d Congress, 1st Session (1993): 

 The committee recommends a provision ... that would extend through fiscal year 1998, certain 

temporary authorities which provide tools to the military services for managing personnel reductions, and 

which provide a safety net of benefits for separating military personnel during the defense drawdown. 

 The committee believes that these authorities, which have been used effectively by the military services 

to make reductions in personnel strength on a prudent, humane basis since they were enacted, will continue 

to be required as further personnel strength reductions are made over the next several years. 

6 See 10 U.S.C. §1293 note for the full text of the early retirement authority adopted by the National 

Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 2702-2704 

(1992). 

814
authorized to accept applications of members of the Army, the Navy, the Marine Corps, 

and the Air Force having at least 15 but less than 20 years of service for voluntary early 

retirement.7

 This early retirement authority was applicable during the "active force 

drawdown period," which as originally enacted, was defined to be the period beginning 

on the date of enactment of the National Defense Authorization Act for Fiscal Year 1993, 

Public Law 102-484, id., i.e., October 23, 1992, and ending on October 1, 1995.8

 The 

National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §561(a), 

107 Stat. 1547, 1667 (1993), subsequently extended the termination date for the "active 

force drawdown period" to October 1, 1999. Acceptance of an application for early 

retirement entitled a member to retired or retainer pay effectively computed by 

multiplying the member's "retired or retainer pay base" by an adjusted "retired or retainer 

pay multiplier."9

 The member's adjusted "retired or retainer pay multiplier" is determined 

by multiplying 2.5 percent times the member's years and months of creditable service 

(counting 1/12th of a year for each month of creditable service in excess of the number of 

whole years of service) and then subtracting from that result, stated as a percentage, 

1/12th of one percent for each full month by which the member's total months of active 

service at retirement are less than 240.10 

 

7 As initially enacted, the early retirement authority did not extend to members of the Coast Guard or to the 

commissioned officer corps of the National Oceanic and Atmospheric Administration or the Public Health 

Service. Early retirement authority was, however, subsequently extended to members of the Coast Guard 

with at least 15 but less than 20 years of service by the National Defense Authorization Act for Fiscal Year 

1995, Public Law 103-337, §542(d), 108 Stat. 2663, 2769 (1994), and to members of the commissioned 

officer corps of the National Oceanic and Atmospheric Administration by the National Defense 

Authorization Act for Fiscal Year 1996, Public Law 104-106, §566(c), 110 Stat. 186, 328 (1996). 

8 National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403(i), 106 Stat. 2315, 

2704 (1992). See 10 U.S.C. §1293 note. 

9 National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403(e), 106 Stat. 2315, 

2703 (1992). See 10 U.S.C. §1293 note. 

10 A member's normal, or unadjusted, "retired or retainer pay multiplier" is determined under 37 U.S.C. 

§1409 in one of two ways, depending on when the member first became a member of the Armed Forces 

and on what kind of retirement program the member chooses after completing 15 years of active duty. If 

the member first entered the Armed Forces before August 1, 1986, the "retired or retainer pay multiplier" is 

determined by multiplying the member's years and months of creditable service (with each full month of 

creditable service in excess of a full year counted as 1/12th of a year) by 2.5, with that result being stated as 

a percentage figure. As described in Chapter IIIB1, Nondisability Retired and Retainer Pay, members who 

entered active service after July 31, 1986 and chose the Career Service Bonus upon completion of 15 years 

of active duty have their retirement pay computed differently. However, because receipt of the Career 

815
In support of the early retirement authority granted by the National Defense 

Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 

2702-2704 (1992),11 the Senate Armed Services Committee, which sponsored the 

proposal, noted: 

The committee anticipates that the active component strength levels of 

some of the military services in the current DOD Base Force Plan, which total to 

an active duty strength level of 1,626,300 by the end of fiscal year 1997, are likely 

to be reduced substantially. The committee expects such a reduction will result 

from the Defense Department's own revisions to its current Base Force Plan as a 

result of budget decisions, a more efficient allocation of roles and missions among 

the military services, a more efficient active/reserve force mix, and other 

economies and efficiencies that are discussed elsewhere in this report.12

 In order to cope with the active duty strength reductions that are 

currently planned by the DOD, the Congress provided authorities to the military 

services to assist them in implementing the planned reductions prudently. These 

authorities included separation benefits that the military services could offer to 

career personnel to induce them to voluntarily separate from active duty. 

 The committee notes that these authorities have been effective in 

helping the military services reduce strength in the six to 15-years-of-service 

element of the career inventory. At the same time, the committee notes that the 

military services do not have an effective tool to reduce active duty strength in the 

15 to 20-year element of the career inventory. 

 In view of the committee's expectation that the active duty strengths in 

the current Base Force Plan will be reduced substantially, and in view of the 

absence of an effective tool that the military services can use to reduce the 15 to 

20-year element of the personnel inventory, the committee believes that existing 

transition provisions should be augmented.... 

 Therefore the committee recommends... 

 Service Bonus also requires a commitment of five additional years of active service, no members in that 

category have been eligible to retire before completing 20 years This means that all members taking 

advantage of the early voluntary retirement authority provisions have had their "retired or retainer pay 

multipliers" determined by the formula set out above. For a member retiring with exactly 15 years of 

creditable service, for example, the retired or retainer pay entitlement is then five percent less than what it 

otherwise would have been but for the adjustment required by National Defense Authorization Act for 

Fiscal Year 1993, Public Law 102-484, §4403(e), 106 Stat. 2315, 2703 (1992). See 10 U.S.C. §1293 note. 

11 See 10 U.S.C. §1293 note. 

12 Senate Report No. 102-352 (Committee on Armed Services), accompanying S. 3114, 102d Congress, 2d 

Session (1992). 

816
Section 534 [of the Senate bill, S. 3114, 102d Congress, 2d Session (1992)] 

would authorize active duty personnel who have 15 but less than 20 years of 

service to apply for and be approved for early retirement. The committee 

expects the military services to use this authority selectively to trim surpluses 

in the 15 to 20-year element of the personnel inventory.13

The Senate proposal was amended in conference, with the conference committee 

noting: 

The amendment would clarify that the purpose in providing this authority 

is to give the Department of Defense a temporary, additional force management 

tool to effect the reduction in military personnel through fiscal year 1995. The 

amendment would clarify that the Secretaries of the military departments may 

prescribe appropriate regulations or policies regarding the criteria for eligibility 

and approval of applications under this section [H.R. 5006, §4403, 102d 

Congress, 2d Session (1992)]. These criteria may include, but are not limited to, 

such factors as grade, skill, and years of service. The amendment would provide 

that the retired pay of a member who retires under this section would be reduced 

by one percent for each year of service less than 20 years.14

In extending the "active force drawdown period" for the purposes of early 

retirement from October 1, 1995, to October 1, 1999, the House-Senate conference 

committee noted as follows: 

. . . 

The Senate amendment contained a provision ... that would extend 

through fiscal year 1998 certain temporary authorities which provide tools to the 

military services for managing personnel reductions, and which provide a 

safety net of benefits for separating military personnel during the defense 

drawdown. 

The House ... [proposes to] extend these transition authorities through 

1999. The conferees believe that by providing the Department of Defense with 

these authorities for the foreseeable length of the drawdown, they will 

encourage DOD to develop and implement coherent, integrated, long-term 

 

13 Senate Report No. 102-352 (Committee on Armed Services), pp. 201-202, accompanying S. 3114, 102d 

Congress, 2d Session (1992). 

14 House Report No. 102-966 (Committee of Conference), p. 886, accompanying H.R. 5006, 102d 

Congress, 2d Session (1992). 

817
drawdown plans that will minimize the uncertainties and personnel turbulence 

associated with such a drawdown.15 

Subsequent legislation extended the drawdown-related early retirement authority 

from October 1, 1999 through September 1, 2002, in three stages. The National Defense 

Authorization Act for Fiscal Year 1999, Public Law 105-261, extended the authority by 

two years, through October 1, 2001. The National Defense Authorization Act for Fiscal 

Year 2001, Public Law 106-398, extended the authority through December 31, 2001, the 

end of that calendar year. The National Defense Authorization Act for Fiscal Year 2003, 

Public Law 107-314, further extended the date through September 1, 2002. 

Current authorized rates of special voluntary separation incentives vary 

depending on pay grade and length of service. 

 

15 House Report No. 103-357 (Committee of Conference), p. 678, accompanying H.R. 2401, 103d 

Congress, 1st Session (1993). (In support of its original proposal to extend the temporary retirement 

authority through 1998, the Senate Armed Services Committee had noted: 

 The committee believes that these authorities [including the temporary retirement authority adopted in 

the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4403, 106 Stat. 2315, 

2702-2704 (1992), see 10 U.S.C. §1293 note], which have been used effectively by the military services to 

make reductions in personnel strength on a prudent, humane basis since they were enacted, will continue to 

be required as further personnel strength reductions are made over the next several years. 

Senate Report No. 103-112 (Committee on Armed Services), p. 145, accompanying S. 1298, 103d 

Congress, 1st Session (1993).) 

818
Chapter III.D.1. 

 Retired Members Medical Care 

Legislative Authority: 10 U.S.C. §§1074, 1077, 1078, 1079, 1086, 1086a, 1987, 

1092, 1097, 1098, and 1099. 

Purpose: The purpose of the medical care program for retirees is threefold: To 

provide incentives for Armed Forces personnel to undertake military service and remain 

in that service for a full career; to help ensure the availability of physically acceptable 

and experienced personnel in time of national emergency; and to provide military 

physicians and dentists exposure to the total spectrum of demographically diverse 

morbidity, an experience that is necessary to support professional training programs and 

ensure professional satisfaction for a medical service career. 

Background: There was no legislative or administrative authority for medical 

care to be provided to military retirees and their dependents prior to World War I. At that 

time administrative directives established that "supernumeraries" might be admitted to 

military hospitals under certain circumstances. The term "supernumeraries" was 

construed to include retired personnel. 

During World War II severe restrictions were placed on the provision of care to 

retirees in military medical facilities. These restrictions affected all consumers of military 

medical care other than active-duty members. 

With adoption of the Dependents' Medical Care Act, ch. 374 [Public Law 569, 

84th Congress], §301(b) and (c), 70 Stat. 250, 253 (1956), military retirees and their 

dependents were given a contingent right to care in military medical—including dental--

facilities based upon the "availability of space and facilities and the capabilities of the 

medical and dental staff." 10 U.S.C. §1074(b) (retirees) and §1076(b) (dependents or 

survivors of retired members). As thus formulated, medical care for retirees in military 

medical facilities has always been, and to this day remains, a privilege--not an absolute 

819
right, as has been assumed by many. The impact of this limitation was not fully apparent 

until the 1960s when the numbers of retirees increased at an unprecedented rate and their 

demands for care began to exceed the capabilities of military medical facilities and their 

staffs. 

The Dependents' Medical Care Act, ch. 374, id., also led to the establishment of a 

beneficiary priority system for determining how care would be provided when there were 

limited capabilities. First priority for care was given to active-duty members; the second, 

to dependents and survivors of active-duty members; and, the third, and last, to retirees 

and their dependents and survivors. As the total beneficiary population increased and 

medical demands began to exceed capabilities, the first to be affected were retirees. 

Recognizing that demand for military medical care was exceeding the capabilities 

of the services in general, Congress in 1966 amended the provisions of Title 10 dealing 

with health care for members, former members, and their dependents and survivors, 

creating authority to contract for the provision of civilian health care to retired members 

and their dependents as well as the survivors of certain former members, among others. 

The Department of Defense subsequently exercised this authority through creation of a 

program that came to be known as the Civilian Health and Medical Program of the 

Uniformed Services, popularly referred to as CHAMPUS. This program, adopted as part 

of the Military Medical Benefits Amendments of 1966, Public Law 89-614, §2(7), 80 

Stat. 862, 865 (1966) (amending Title 10, United States Code, by adding a new section, 

10 U.S.C. §1086, "Contracts for health benefits for certain members, former members, 

and their dependents"), guaranteed retirees who are not entitled to Medicare benefits 

access to authorized health services from civilian sources as an alternative to medical 

care from military facilities.1

 

1

 In general, persons entitled to hospital and related insurance benefits under Part A ("Hospital Insurance 

Benefits for the Aged and Disabled") of Title XVIII of the Social Security Act, ch. 531 [Public Law 271, 

74th Congress], 49 Stat. 620 (1935), as amended, 42 U.S.C. §1395c et seq., are not eligible for CHAMPUS 

benefits. 10 U.S.C. §1086(d)(1). Thus, when retirees and their dependents become entitled to hospital 

insurance benefits under the Social Security Act of 1935, as amended, they lose eligibility for CHAMPUS 

benefits. 

820
By law, CHAMPUS was a cost-sharing program with the retiree responsible, in 

the case of outpatient services, for a deductible of $150 for a single individual, or $300 

for a family, each fiscal year, together with 25 percent of all subsequent allowed charges. 

For hospitalization, the retiree was required to pay 25 percent of all allowed charges for 

"inpatient care." The government paid the balance of the allowed charges for authorized 

care, i.e., 75 percent of the allowed charges, provided that a retiree or a retiree's family 

group of two or more persons could not be required to pay a total of more than $7,500 for 

health care received under CHAMPUS during any fiscal year.2

 10 U.S.C. §1086(b)(4). 

In an attempt to improve the quality of health care for, among others, retirees and 

their dependents while at the same time controlling health care program costs, Congress, 

in the National Defense Authorization Act for Fiscal Year 1987, Public Law 99-661, 

§§701-702, 100 Stat. 3816,3894-3900 (1986), added a number of new provisions to 

Chapter 55 of Title 10, United States Code, dealing with medical and dental care. First, 

Section 702 of the 1987 Authorization Act, Public Law 99-661, id., §702, 100 Stat. at 

3899-3900, requires the Secretary of Defense, as a part of the so-called CHAMPUS 

Reform Initiative, to conduct a demonstration project (i) to improve competition among 

civilian providers of health care services to the Department of Defense beneficiaries, (ii) 

 

2

 The National Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §721(b), 

101 Stat. 1019, 1115 (1987), provided for a $10,000 annual limit on deductibles and copayments for 

retirees and their families to serve as a protection or "cap" against "catastrophic loss," House Report No. 

100-446 (Committee of Conference), p. 650, 100th Congress, 1st Session (1987), and to prevent "the 

potential of wiping-out a family financially," House Report No. 100-58 (Committee on Armed Services), p. 

217, 100th Congress, 1st Session (1987). See 10 U.S.C. §1086(b)(4) as in effect before enactment of the 

National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §703(a), 106 Stat. 2315, 

2432 (1992). cf. Senate Report No. 100-57 (Committee on Armed Services), p.150, 100th Congress, 1st

Session (1987), which dealt only with placing a "limitation on out-of-pocket expenses for co-payments and 

deductibles" for members of the active-duty force. (The 1988/1989 Defense Authorization Act, Public Law 

100-180, id., §721(a), 101 Stat. at 1115, amending 10 U.S.C. §1079(b) (dealing with medical care for 

dependents of members of the active duty forces), established a $1,000 "cap" on out-of-pocket expenses for 

medical care for members of the active-duty forces and their dependents. 10 U.S.C. §1079(b)(5). See 

Chapter IV.B.4., "Medical Care (Servicemembers and Dependents)," below. The House-Senate conferees 

expressed regret at having to adopt a $10,000 "catastrophic cap for retiree families, due to budget 

constraints" and indicated an intention to "address this level of catastrophic loss protection again in the 

future." House Report No. 100-446 (Committee of Conference), p. 650, 100th Congress, 1st Session (1987).) 

The National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §703(a), 106 Stat. 

2315, 2432 (1992), reduced the $10,000 annual cap on copayments and deductibles to $7,500. See Senate 

Report No. 102-352 (Committee on Armed Services), p. 213), accompanying S. 3114, and House Report 

No. 102-966 (Committee of Conference), p. 718, accompanying H.R. 5006, 102d Congress, 2d Session 

(1992). 10 U.S.C. §1086(b)(4). 

821
to test the relative merits of having beneficiaries of the military health care system use a 

voucher system or fee schedule for the provision of health care services, and (iii) to 

insure that community hospitals are given equal consideration with other health care 

providers for the provision of health care services under contracts with the Department of 

Defense. As set out in Section 702(a) of the 1987 Authorization Act, Public Law 99-661, 

id., §702(a), 100 Stat. at 3899, the purpose of the demonstration project was to improve 

the effectiveness of the CHAMPUS health care payment system through the competitive 

selection of health care contractors in the civilian sector of the economy who would be 

financially responsible for the delivery of defined health care services to former members 

of the Armed Forces and their dependents (as well as to dependents of members). The 

demonstration project was required to be limited to one-third of the overall CHAMPUS 

program.3

Second, insofar as military retirees, their dependents, and survivors were specially 

concerned, the act permitted the Secretary of Defense to contract with a variety of health 

care providers and insurers for the provision of basic health care services. Included within 

the scope of permitted contractors were health maintenance organizations, preferred 

provider organizations, individual providers, individual medical facilities, insurers, and 

consortiums of all such providers, facilities, and insurers. In addition, the act specifically 

authorized the Secretary of Defense to prescribe premiums, deductible amounts, 

copayment percentages or amounts, and other health care charges for affected 

beneficiaries. 

Third, while authorizing the Secretary of Defense to prescribe premiums, 

deductibles, copayments and the like, the 1987 Authorization Act, Public Law 99-661, 

id., §701(a), 100 Stat. at 3895 (adding 10 U.S.C. §1098, "Incentives for participation in 

 

3

 See, e.g., House Report No. 99-1001 (Committee of Conference), pp. 489-490, accompanying S. 2638, 

99th Congress, 2d Session (1986). Also see House Report No. 99-718 (Committee on Armed Services), p. 

238, accompanying H.R. 4428, 99th Congress, 2d Session (1986), in which the House Committee on Armed 

Services expressed special concern about how the Department of Defense Project Imprint would affect the 

delivery of health care services to military retirees and their dependents; cf. id. at pp. 234-242 generally for 

a discussion of the military health care delivery system. 

822
cost-effective health care plans"), also specifically authorized the Secretary to waive 

beneficiary financial liabilities that would otherwise apply to, among others, military 

retirees and their dependents under 10 U.S.C. §1086(b). The Secretary was permitted to 

waive such payments as an inducement to beneficiaries of the military health care system 

to enroll in alternative health care programs that, while being no more costly to the 

government, would provide equal or better services. In addition to being permitted to 

waive various beneficiary liabilities, the Secretary was also permitted to waive limitations 

on the kinds of health care services that could be provided as a part of the inducement to 

beneficiaries to enroll in more cost-effective health care plans. 

Fourth, the 1987 Authorization Act, Public Law 99-661, id., §701(a), 100 Stat. at 

3896, required the Secretary of Defense to establish a health care enrollment system for 

beneficiaries of the military health care program. Under the enrollment system, codified 

at 10 U.S.C. §1099, beneficiaries are permitted to choose a health care plan from a 

number of alternative plans designated by the Secretary of Defense. Eligible health care 

plans include health care facilities of the uniformed services, CHAMPUS providers, all 

health care plans contracted for by the Secretary of Defense, together with any 

combination of such plans. An exception to the freedom to choose enrollment could 

apply where it was deemed necessary to assign beneficiaries to health care facilities of 

the uniformed services in order to ensure full use of such facilities in a particular 

geographic area. The Secretary's authority to waive certain beneficiary payments and to 

depart from limitations on the types of health care services that could be provided to 

beneficiaries could be used as inducements for beneficiaries to enroll in the alternative 

health care plans contracted for by the Secretary. 

In addition to the changes described, the Secretary of Defense was authorized to 

prescribe regulations to implement the various provisions, including certain other 

administrative changes to the system that do not directly affect health care for 

beneficiaries, including military retirees, their dependents, and survivors. 

823
The CHAMPUS Reform Initiative was amended by the National Defense 

Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §732(a) and (b), 

101 Stat. 1019, 1119-1121 (1987), (i) to require the Secretary of Defense to develop a 

methodology for evaluating the demonstration project and (ii) to provide that no more 

than one contract could be accepted from any one contractor under the demonstration 

phase of the reform initiative, among other things. 

In 1994 the Department of Defense embarked on a new program, known as 

TRICARE, to improve the quality, cost, and accessibility of services for its beneficiaries. 

Because of the size and complexity of the military health services system (MHSS), 

TRICARE implementation was phased in over a period of several years. The principal 

mechanisms for the implementation of TRICARE were the designation of the 

commanders of selected Military Medical Treatment Facilities (MTFs) as lead agents for 

12 TRICARE regions across the country, operational enhancements to the MHSS, and 

the procurement of managed care support contracts for the provision of civilian health 

care services within those regions. 

A major feature of TRICARE is the establishment of a triple option benefit. 

CHAMPUS-eligible beneficiaries are offered three options: they may elect to receive 

health care through (1) an HMO-type program called "TRICARE Prime", (2) the 

preferred provider network on a case-by-case basis under "TRICARE Extra", or (3) nonnetwork providers under "TRICARE Standard". (TRICARE Standard, the program that 

replaced the standard CHAMPUS, maintains the same deductible and in-patient charges 

as those outlined above for the CHAMPUS program.) Enrollees in TRICARE Prime 

obtain most of their care within the network and pay substantially reduced CHAMPUS 

cost shares when they receive care from civilian network providers. Enrollees in 

TRICARE Prime retain freedom to use non-network civilian providers, but they have to 

pay cost sharing considerably higher than TRICARE Standard if they do so. Beneficiaries 

who choose not to enroll in TRICARE Prime will preserve their freedom of choice of 

provider for the most part by remaining in TRICARE Standard. These beneficiaries face 

standard CHAMPUS cost sharing requirements, except that their coinsurance percentage 

824
is lower when they opt to use the preferred provider network under TRICARE Extra. All 

beneficiaries continue to be eligible to receive care in MTFs, but active duty family 

members who enroll in TRICARE Prime have priority over all other beneficiaries. 

TRICARE Prime incorporates the "Uniform HMO Benefit Option," which was 

mandated by Section 731 of the National Defense Authorization Act for Fiscal Year 

1994, Public Law 103-160, §731, 107 Stat. 1547, 1696 (1993). It required the 

establishment of a Uniform HMO Benefit Option, which was required "to the maximum 

extent practicable" to be included "in all future managed health care initiatives 

undertaken by" the Department of Defense. This option is to provide "reduced out-ofpocket costs and a benefit structure that is as uniform as possible throughout the United 

States". The 1994 Authorization Act further requires a determination that, in the managed 

care initiative that includes the Uniform HMO Benefit Option, Department of Defense 

costs are to be "no greater than the costs that would otherwise be incurred to provide 

health care to the covered beneficiaries who enroll in the option." 

In addition to this provision of the 1994 Authorization Act, a similar requirement 

was established by Section 8025 of the Department of Defense Appropriations Act, 1994, 

Public Law 103-139, §8025, 107 Stat. 1418, 1443-1444 (1993). As part of an initiative 

"to implement a nationwide managed health care program for the MHSS", the 

Department of Defense was required to establish "a uniform, stabilized benefit structure 

characterized by a triple option health benefit feature". The Uniform HMO Benefit also 

implements this requirement of law. It offers reduced cost sharing to CHAMPUS-eligible 

beneficiaries who enroll in TRICARE Prime. 

TRICARE/CHAMPUS supports both the active-duty and retired communities. 

For a more detailed description of the TRICARE/CHAMPUS system considered as a 

whole, the reasons for its adoption in the first instance, and how it is administered, see 

Appendix IX, "TRICARE/CHAMPUS," hereof, below. 

825
Current status of medical care for retired members and their dependents: 

The primary form of health care authorized for military retirees and their dependents and 

survivors before they become eligible for hospital insurance benefits under the Social 

Security Act, as amended, is TRICARE, which integrates the entitlement to CHAMPUS 

with the services available to retirees, their dependents, and survivors in military medical 

facilities depending on "availability of space and facilities and the capabilities of the 

medical and dental staff." 10 U.S.C. §1074(b) (retirees) and §1076(b) (dependents or 

survivors of retired members). Even after they become eligible for Social Security 

hospital insurance benefits, retirees, their dependents, and survivors may receive 

treatment at military medical facilities on a space-available basis.4

Because of the down-sizing of the active-duty forces as a result of the end of the 

Cold War and the increasing number of retirees who performed the majority of their 

active service during that period, retirees and their dependents and survivors comprise by 

far the largest class of persons presently eligible for military medical care. Taking into 

account dependents of active-duty personnel, non-active duty beneficiaries comprise 

more than 80 percent of all persons eligible for military medical care. For information on 

how the number of persons eligible for military medical care, by category, i.e., active 

duty personnel and their dependents as opposed to retirees and their dependents and 

survivors, have changed over time, and are expected to change in the future, see the chart 

on the following page, "Number of Military Medical Eligible Beneficiaries". 

Cost: For the cost of retired member medical care from 1978 to 1995, see 

Table III-9 of Military Compensation Statistics Tables, volume II of this edition. 

 

4

 The service regulations that establish priorities for medical care for service members and their dependents 

and survivors and retirees and their dependents and survivors are as follows: for the Army, AR 40-3, 

chapter 4; for the Navy, NAVMED 6320.33; and for the Air Force, AFR 168-6, chapter 1. 

826
Chapter III.D.2. 

 Servicemen's Group Life Insurance 

 Veterans' Group Life Insurance 

Legislative Authority: 38 U.S.C. §§1965-1980. 

Purpose: To make life insurance protection available to members of the 

uniformed services at a reasonable cost. 

Background: The practice of insuring the lives of members of the Armed Forces 

is of relatively recent origin. During the early wars to which the United States was a 

party, the general public, as well as members of the Armed Forces, had a low regard for 

life insurance, and the fact that life insurance was not used to provide financial protection 

for the families of members of the Armed Forces was evidently not looked upon as 

unusual. By the time the United States became involved in World War I, however, the 

situation had changed, and it was generally recognized that some means was needed to 

provide protection for the families of members of the Armed Forces fighting for their 

country. Commercial insurance companies were not used for this purpose, as the 

companies refused these risks outright, avoided them through a war clause, or charged 

prohibitive premiums for waiving the clause. 

To fill the gap, the Act of October 6, 1917 (War Risk Insurance Act of 1917), ch. 

105 [Public Law 90, 65th Congress], §§400-405, 40 Stat. 398, 409-410 (1917), created a 

program of United States Government Life Insurance (USGLI) that permitted service 

members to buy yearly renewable term life insurance in multiples of $500, with 

minimum coverage of $1,000 and maximum coverage of $10,000. The War Risk 

Insurance Act, adopted well before the end of the war, specified that the term insurance 

would expire if not converted to permanent insurance within five years after the war 

ended, but successive extensions of the cut-off date effectively nullified this provision. In 

practice, conversion from term to permanent insurance, although allowed, was never 

required. The government was the USGLI insurer and assumed the cost of the "extra 

hazard" involved in insuring members of the Armed Forces. The USGLI program was 

827
modified and liberalized many times over the course of the years.1

 All persons who 

served on active duty at any time between October 6, 1917, and October 8, 1940, 

ultimately became eligible for USGLI coverage. The program remained available to 

qualified personnel until April 24, 1951. 

The National Service Life Insurance Act of 1940, enacted as Title VI, Part I, of 

the Second Revenue Act of 1940, ch. 757 [Public Law 801, 76th Congress], §§601-618, 

54 Stat. 974, 1008-1014 (1940), substituted National Service Life Insurance (NSLI) for 

USGLI for persons who entered service on or after that date. Persons in service both 

before and after October 8, 1940, could choose either NSLI or USGLI or a combination 

of the two, but they could not carry a combined face value amount of insurance in excess 

of $10,000. NSLI was five-year renewable term insurance, issued in multiples of $500, 

with a minimum coverage of $1,000 and a maximum coverage of $10,000 and 

convertible to permanent insurance after it had been in force for one year. As was the 

case with USGLI, the government was the NSLI insurer and bore the excess cost 

resulting from the hazards of military service. Premium rates and reserves were based on 

a three percent interest rate rather than the 3 1/2 percent rate applicable to USGLI. This 

resulted in slightly higher premiums and lower death benefits, when paid on an income 

basis, for NSLI than for USGLI. The Veterans' Administration,2

 as the federal agency 

charged with authority for administering the NSLI and USGLI programs, traditionally 

followed a conservative policy in setting premium rates, so that premiums charged were 

usually more than would be justified by reference to the mortality experience of the 

 

1

 e.g , World War Veterans' Act, 1924, ch. 320 [Public Law 242, 68th Congress], Title III, §§300-307, 43 

Stat. 607, 624-627 (1924). 

2

 The Veterans Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, §2, 102 Stat. 2635. Pursuant to that act, from and after March 

15, 1989, all references in any federal law, executive order, rule, regulation, delegation of authority, or any 

document of or pertaining to the Veterans Administration is statutorily deemed to refer to the Department 

of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 102 Stat. at 2640-

2641; also see 38 U.S.C.A. §301 note. (Some references to the "Veterans' Administration" or "VA" have 

been retained in the present chapter, largely for historical reasons. It should be understood, however, that 

the federal agency currently charged with authority for administering the laws and regulations formerly 

administered by the Veterans' Administration is the Department of Veterans Affairs.) 

828
insured population. As a result, annual dividends have been paid to NSLI and USGLI 

policyholders throughout the years. NSLI was closed to new issues on April 25, 1951. 

The Servicemen's Indemnity Act of 1951, enacted as Part I of the Act of April 25, 

1951, ch. 39 [Public Law 23, 82d Congress], §§1-9, 65 Stat. 33, 33-35 (1951), terminated 

new issues of NSLI and USGLI and replaced them with a $10,000 gratuitous indemnity 

payable to the survivors of a member dying while serving on active duty or within 120 

days after a period of active duty. The indemnity was to be paid in 120 monthly 

installments of $92.90 each. Thus, over the full 10-year period, payments of principal and 

interest totaled $11,148. The amount of the indemnity was reduced by the face value of 

any NSLI or USGLI policy in force. This requirement in effect negated the insurance risk 

for which in-service NSLI and USGLI policyholders were paying premiums. 

Accordingly, such personnel were permitted to surrender permanent policies for cash 

value or to waive that part of the premium representing pure insurance risk. In-service 

personnel holding term policies could waive all premiums. The policies were 

nonparticipating--i.e., non-dividend paying--during the waiver period. 

Since the Servicemen's Indemnity Act of 1951, ch. 39, id., terminated new issues 

of NSLI and USGLI, it also established a Veterans' Special Term Life Insurance (VSLI) 

program to provide low-cost insurance during the transition from military to civilian life. 

Insurance Act of 1951, enacted as Part II of the Act of April 25, 1951, ch. 39 [Public Law 

23, 82d Congress], §§10-13, 65 Stat. 33, 36-38 (1951). VSLI was five-year renewable 

term insurance issued in multiples of $500, with minimum coverage of $1,000 and 

maximum coverage of $10,000, to veterans who applied within 120 days after release 

from active duty. It was at first nonconvertible and nonparticipating, but it was made 

convertible in 1959 and participating in 1974. VSLI was issued from April 1951 through 

December 1956. 

Both of the government insurance programs described above and the 

Servicemen's Indemnity Act gratuity, guaranteed the payment of a fixed sum of money 

on the death of a covered individual. Neither was designed as a permanent income 

829
replacement plan for dependent survivors of military personnel. The Servicemen's and 

Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 84th Congress], §§201-210, 70 

Stat. 857, 862-868 (1956), created the Dependency and Indemnity Compensation (DIC) 

program as a partial income replacement program, to take effect January 1, 1957. It also 

placed military personnel under the Social Security system effective January 1, 1957, and 

thus made their dependents eligible for survivor benefits under that system. The 

Servicemen's and Veterans' Survivor Benefits Act concurrently abolished the $10,000 

Servicemen's Indemnity Act gratuity and ended the VSLI program. The DIC and Social 

Security programs are outside the "insurance" mainstream treated in this chapter.3

Beginning January 1, 1957, no government life insurance program was generally 

available to members or former members of any of the uniformed services for the first 

time in 40 years. This situation continued until the Act of September 29, 1965, Public 

Law 89-214, 79 Stat. 880 (1965), established the Servicemen's Group Life Insurance 

(SGLI) program, as new Subchapter III of Chapter 19, Title 38, United States Code. 

The SGLI program has been modified several times since its inception, but most 

of its fundamentals have remained intact. SGLI is term insurance: it has no cash, loan, 

paid-up, or extended insurance values. Neither does it provide accidental death or 

disability benefits. SGLI coverage is in addition to any coverage a member may have 

under any other government policy. A member eligible for SGLI is insured in the 

maximum authorized amount unless he declines in writing to be insured or elects in 

writing less-than-maximum coverage. This "automatic" feature is a departure from the 

earlier programs under which an individual was required to take affirmative action to be 

insured in any amount. SGLI also differs from the previous programs in that the 

government is not the insurer. The Prudential Insurance Company is the primary SGLI 

insurer under a contract with the Department of Veterans Affairs, the federal agency 

charged with supervisory responsibility for the program. Several hundred other private 

insurance companies participate in the program as reinsurers. SGLI premiums are 

 

3 See Chapter III.D.4., "Dependency and Indemnity Compensation," and Chapter IV.C.1., "Government 

Contribution to Social Security," hereof, below. 

830
collected by the services from their members, normally by payroll deduction, and are 

remitted monthly to the Department of Veterans Affairs. Any extra hazard costs of SGLI 

attributable to military service are determined by the Department of Veterans Affairs on 

an actuarial basis and paid to that agency by each of the services from appropriated funds. 

The SGLI authorized by the Act of September 29, 1965, Public Law 89-214, §1, 

79 Stat. 880, 880-881 (1965), adding then new 38 U.S.C. §767 (current 38 U.S.C. 

§1967), was in the maximum amount of $10,000. All personnel on active duty for more 

than 30 days were insured, in the absence of an individual election to the contrary. 

Coverage continued for 120 days after separation, with the cost of such extended 

coverage being included in the premiums paid while on active duty. Up to the end of this 

120-day period, the insured had the right to purchase an individual policy of permanent 

insurance in an amount equal to his SGLI coverage from any of the companies in the 

program. Participating companies had to agree to issue such policies upon application 

and payment of required premiums, at standard rates and without a medical examination, 

as a condition of admission into the program. 

The Act of June 25, 1970, Public Law 91-291, §2, 84 Stat. 326, 327 (1970), 

amending then 38 U.S.C. §767 (current 38 U.S.C. §1967), raised the SGLI maximum 

from $10,000 to $15,000 in addition to authorizing "part-time" coverage for certain 

reservists. Reserve members on active duty for less than 31 days or performing inactiveduty training scheduled in advance were, absent an election not to be covered, insured 

against death during such duty and while proceeding directly to and returning directly 

from the place of duty. SGLI was also payable if the reserve member incurred a disability 

during a period of coverage, and death resulted from the disability within 90 days. If the 

disability did not result in death within 90 days but did cause the member to be 

uninsurable at standard rates, he had the right to purchase an individual policy of 

permanent commercial insurance, under the same rules applicable to "full-time" SGLI, at 

the end of the 90 days. 

831
The Act of June 20, 1972, Public Law 92-315, 86 Stat. 227 (1972), extended 

SGLI coverage to cadets or midshipmen of the United States Military, Naval, Air Force, 

and Coast Guard Academies. 

The Veterans' Insurance Act of 1974, Public Law 93-289, §4(1), 88 Stat. 165, 166 

(1974), further amending then 38 U.S.C. §767 (current 38 U.S.C. §1967), increased the 

SGLI maximum from $15,000 to $20,000. It also (1) extended "full-time" coverage to 

Ready Reserve members assigned to a unit or position in which they might be required to 

perform active duty and in which they would each year be scheduled for at least 12 

periods of inactive-duty training, and to reserve members under age 61 with at least 20 

years of satisfactory service as defined in 10 U.S.C. §13324

 who were members of, or 

eligible for, assignment to the Retired Reserve but who were not receiving retired pay; 

(2) changed the disability-extension period for "part-time" reserve coverage from 90 to 

120 days; (3) revoked the right to exchange SGLI for an individual commercial policy; 

and (4) created a new program of Veterans' Group Life Insurance (VGLI). 

The Veterans' Disability Compensation, Housing, and Memorial Benefits 

Amendments Act of 1981, Public Law 97-66, §401, 95 Stat. 1026, 1030-1031 (1981), 

increased the SGLI maximum to $35,000. The Veterans' Administration Health-Care 

Amendments of 1985, Public Law 99-166, §401, 99 Stat. 941, 956-957 (1985), further 

increased the SGLI maximum, this time to $50,000 and provided that amounts of less 

than $50,000 would be issued in increments of $10,000. The Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, 

§336(a)(1), 105 Stat. 75, 89-90 (1991), further increased the SGLI maximum, this time to 

$100,000. The Veterans' Benefits Act of 1992, Public Law 102-568, §201, 106 Stat. 

4320, 4324 (1992), again increased the SGLI maximum, this time to $200,000. The 

National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §646, 

110 Stat. 186, 369-370 (1996), slightly modified the SGLI program by providing for 

automatic coverage for all service members in the amount of $200,000 except for 

members who specifically request in writing not to be insured at all or to be insured for 

 

4

 Now 10 U.S.C. §12732. 

832
some lesser amount than $200,000 that is evenly divisible by $10,000. Persons eligible 

for such coverage include all members of the uniformed services on active duty, active 

duty for training, or inactive-duty training, as well as members of the Retired Reserve of 

any service and persons who, upon application, would be eligible for assignment to the 

Retired Reserve.5

 

The Veterans Benefits Enhancement Act of 1998, Public Law 105-368, 

established an accelerated benefit option for terminally ill holders of SGLI policies, 

providing a lump-sum payment at the face value of the insurance. Effective in 2001, the 

Veterans Benefits and Health Care Improvement Act of 2000, Public Law 106-419, 

increased the maximum amount of SGLI coverage from $200,000 to $250,000 and 

granted SGLI eligibility to members of the Individual Ready Reserve who are subject to 

involuntary callup. Family SGLI coverage was added by the Veterans Survivor Benefits 

Improvement Act of 2001, Public Law 107-14, for the spouses and dependent children of 

SGLI-eligible members. The legislation established maximum SGLI coverage of 

$100,000 for spouses (not to exceed the coverage amount of the member) and automatic 

coverage of $10,000 for each dependent child. 

SGLI coverage normally ends for an active duty member on the 120th day after 

separation from active duty, and for a member of the Ready Reserve on the 120th day 

after separation from a full-time-coverage status. If, however, the member is totally 

disabled on the date of separation, the coverage ends on the date total disability ceases or 

one year from the date of separation, whichever is earlier, but in no event sooner than 120 

days after separation. SGLI coverage for a Retired Reserve ends when he receives retired 

pay or on his 61st birthday, whichever occurs first. Part-time reserve coverage stops after 

each period of qualifying duty, including travel time, and resumes at the start of the next 

period. If a part-time member is disabled during one of the intermittent coverage periods, 

coverage may be extended for up to 120 days. 

 

5

 Retired reserve SGLI is unique in that coverage is not "automatic"; to obtain coverage, a person normally 

must apply and pay an initial premium within 120 days after becoming qualified. 

833
Veterans' Group Life Insurance, or VGLI, is a program of post-separation 

insurance that provides for the conversion of SGLI to an indefinitely renewable five-year 

term policy. Former members of the active duty force may elect to continue group 

coverage under the VGLI program. An electing member may choose any amount 

available under the VGLI program so long as the amount chosen does not exceed the 

member's SGLI coverage. Members of the Ready Reserves under full-time SGLI may 

continue group coverage only if they are uninsurable at standard rates as a result of a 

disability incurred during a period of active duty or inactive-duty training. Members 

under part-time SGLI may continue group coverage only at the end of a 120-day period 

during which their SGLI was continued in force as a result of a disability incurred during 

a period of active duty or inactive-duty training. Retired Reserve members cannot 

continue group coverage under VGLI. 

Like SGLI, VGLI is available in $10,000 increments up to a maximum of 

$250,000. 38 U.S.C. §§1977(a) and 1967(a), as amended by the Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, 

§336(b), 105 Stat. 75, 90 (1991), and the Veterans' Benefits Act of 1992, Public Law 

102-568, §202, 106 Stat. 4320, 4324 (1992), the Veterans Programs Enhancement Act of 

1998, Public Law 105-368, and the Veterans Benefits and Health Care Improvement Act 

of 2000, Public Law 106-419. To obtain VGLI, an individual must apply for it and pay an 

initial premium within the period of his extended SGLI coverage--i.e., normally, within 

120 days after separation. VGLI takes effect on the day following the expiration of SGLI 

coverage. Premiums have to be paid by the insured directly to the office designated by 

the insurer to administer the program. An insured person whose VGLI is in force at the 

end of any five-year period following initial coverage has an enforceable right to renew 

his VGLI coverage for another five-year term or to purchase an individual policy of 

permanent insurance in an amount equal to his VGLI coverage, without a medical 

examination, at standard rates, regardless of health, from any private insurance company 

participating in the program. Pursuant to amendments to the VGLI program made by the 

Veterans' Administration Health-Care Amendments of 1985, Public Law 99-166, 

834
§401(b)(2), 99 Stat. 941, 957 (1985), VGLI coverage is available to members of the 

Individual Ready Reserve (IRR) and the Inactive National Guard (ING). 

No person may carry combined SGLI and VGLI coverage in excess of $250,000 

at the same time. 

Cost: For the cost of SGLI benefits from 1972 to 1975, see Table III-10 of Military 

Compensation Statistics Tables, volume II of this edition. 

835
Chapter III.D.3. 

 Death Gratuity 

Legislative Authority: 10 U.S.C. §§1475-1480. 

Purpose: To provide an immediate cash payment to assist survivors of deceased 

members of the Armed Forces to meet their financial needs during the period 

immediately following a member's death and before other survivor benefits, if any, 

become available. 

Program Description: In broad outline, the death gratuity program provides for a 

special payment of $12,0001

 to the "eligible survivors" 2 of members of the Armed 

Forces--including members of the reserve components of the Armed Forces—who die 

while on active duty, while performing authorized travel to or from active duty, while on 

inactive-duty training, or while performing authorized travel directly to or from active 

duty for training or inactive-duty training, as well as to members of reserve officers' 

training programs who die while performing annual training duty under orders for a 

period of more than 13 days or while performing authorized travel to or from that duty, to 

applicants for membership in a reserve officers' training corps who die while attending 

field training or a practice cruise or while performing authorized travel to or from the 

place where such training or cruise is conducted, and to persons who die while traveling 

to or from, or while at, a place of acceptance for entry upon active duty who have been 

ordered or directed to go to that place and have been provisionally accepted for that duty 

or selected for service under the Military Selective Service Act.3

Background: A death gratuity equal to six months pay was first authorized for 

survivors of Regular Army personnel in the Act of May 11, 1908 (Army Appropriation 

Act, 1909), ch. 163 [Public Law 112, 60th Congress], 35 Stat. 106, 108 (1908), and for 

 

1 10 U.S.C. §1478(a). 

2 10 U.S.C. §1477 catchline. 

3 10 U.S.C. §1475(a)(1)-(5). 

836
survivors of Regular Navy and Marine Corps personnel in the Act of May 13, 1908 

(Naval Service Appropriation Act, 1909), ch. 166 [Public Law 115, 60th Congress], 35 

Stat. 127, 128 (1908). A government life insurance program did not exist at the time, and 

because of the hazards of service, war clause exemptions in commercial insurance, and 

the relatively low level of military pay, career personnel often could not obtain or afford 

adequate commercial life insurance. The original purpose of the death gratuity was to 

help fill the financial gap resulting from this lack of life insurance protection. The Act of 

October 6, 1917 (War Risk Insurance Act of 1917), ch. 105 [Public Law 90, 65th

Congress], §312, 40 Stat. 398, 408 (1917), repealed the Army, Navy, and Marine Corps 

death gratuity laws while establishing a government life insurance program, id., §§400-

405, 40 Stat. at 409-410, and the predecessor of today's dependency and indemnity 

compensation program, id., §§300-314, 40 Stat. at 405-408. 

Early in 1919, a bill to reinstate the Army's death gratuity program was reported 

to the floor of the House, where it touched off a spirited debate. The arguments advanced 

by the bill's proponents focused almost exclusively on the quasi-contractual nature of the 

original death gratuity law and on the government's alleged breach of good faith in 

repealing it. Since the death gratuity had been created as a life insurance substitute, and 

since the 1917 government life insurance program was still in effect at the time, these 

arguments did not address the question of the ultimate aim to be served by reinstating the 

death gratuity. Opponents of the bill argued that existing government life insurance and 

death compensation programs made the death gratuity unnecessary. Controversy also 

arose over whether, if the program were reinstated, it should be limited to the survivors of 

regular personnel or extended to non-regular components, and whether the gratuity 

should be pay-related or paid in the same amount to all survivors. Supporters of 

reinstatement prevailed, and the Act of December 17, 1919, ch. 6 [Public Law 99, 66th

Congress], §1, 41 Stat. 367 (1919), reestablished a death gratuity equal to six months' pay 

for the survivors of Regular Army personnel. The Act of June 4, 1920 (Naval Service 

Appropriation Act, 1921), ch. 228 [Public Law 243, 66th Congress], 41 Stat. 812, 824 

(1920), reinstated the Navy and Marine Corps death gratuity programs. 

837
The Act of June 20, 1949, ch. 225 [Public Law 108, 81st Congress], §§1-3, 63 

Stat. 201, 201-202 (1949), extended death gratuity payments to survivors of reserve and 

National Guard members who died during a period of active duty or inactive-duty 

training. This provision was part of a larger package entitling members of reserve 

components of the Armed Forces to the same benefits in general as members of regular 

components. In view of the fact that the death gratuity for members of regular 

components of the Armed Forces had been reinstated in 1919-1920 primarily because it 

had been held to represent a contract-like understanding between the government and 

such personnel, the rationale for extending similar benefits to members of reserve 

components must have been somewhat different. Whatever the case, there was not a 

murmur of dissent to the 1949 act's expansion of the program to reservists. 

Congress also looked closely at the death gratuity in its deliberations on H.R. 

7089, 84th Congress, 2d Session (1956), ultimately adopted as the Servicemen's and 

Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 84th Congress], §§301-304, 70 

Stat. 857, 868-869 (1956). Under this reexamination of the basic concept of the death 

gratuity, Congress advanced the notion of its purpose as an "emergency fund" intended to 

tide survivors over the period immediately following the death of a service member while 

payment of dependency and indemnity compensation, Social Security survivor benefits, 

and life insurance proceeds, as applicable, was pending. To this end, the act specified that 

the gratuity be paid "immediately," and implementing regulations require payment, if 

possible, within 24 hours of death where eligible beneficiaries can be properly 

determined. 

The evolution of the bill in Congress emphasizes the emergency-fund function of 

the death gratuity and demonstrates the importance Congress attached to having it paid to 

eligible survivors immediately. The first version of the revised death gratuity law 

provided that payment be made only to dependent relatives. While dependency would 

have been presumed for a surviving widow or minor children, other relatives would have 

had to prove it. Because the requirement to prove dependency would in certain cases 

inevitably have slowed up the payment process, the bill ultimately adopted allowed 

838
payment to be made to non-minor children, parents, and brothers and sisters, as well as to 

spouses and minor children, without regard to their dependency status.4

When H.R. 7089, 84th Congress, 2d Session (1956), was under consideration, the 

amount of death gratuity payable on the death of a service member was still equal to "six 

months' pay."5

 Because of the items of compensation included within the "pay" on which 

death gratuity entitlements were to be determined, the actual amount of death gratuity 

payable could have ranged from a low of $468, for a member in pay grade E-1 "under 2" 

with no special or incentive pays, to a quite larger amount for senior officers with special 

and incentive pays. (Six months' basic pay for the most senior officer grade amounted to 

$8,648 in 1956.) The committee concluded that the amounts payable were too small to 

adequately serve an emergency-fund purpose for the survivors of lower-pay-grade 

personnel and so large as to be excessive in the case of survivors of personnel nearer the 

top of the pay scale. Accordingly, the Servicemen's and Veterans' Survivor Benefits Act, 

ch. 837, id., though it retained the general principle of a death gratuity equal to six 

months pay, placed an $800 floor and a $3,000 ceiling on payments. Imposing a 

minimum and a maximum on entitlements blurred the pay-related distinctions resident in 

the gratuity program. Inflation long since had completely eliminated the original 

distinctions. The effect of the combination of increasing pay rates and the $3,000 ceiling 

so warped the "six months' pay" principle of death gratuity as to make any coupling of 

those two terms misleading. 

Congress again examined the question of the basis and appropriate level of the 

death gratuity in connection with its consideration of the National Defense Authorization 

Act for Fiscal Year 1987, Public Law 99-661, 100 Stat. 3816 (1986). In Senate Bill S. 

2638, 99th Congress, 2d Session (1986), the Senate proposed changing the basis for 

 

4 The order of precedence among survivors for death gratuity payments is specified at 10 U.S.C. §1477(a). 

5

 For the purpose of determining the amount of death gratuity payable under 10 U.S.C. §1478 when the 

amount was computed as a multiple of monthly basic pay--it no longer is, see below--the term "pay" was 

defined in 10 U.S.C. §101(27), the predecessor of present 10 U.S.C. §101(a)(15), to include "basic pay, 

special pay, ... incentive pay, ... and equivalent pay, but ... not ... allowances". 

839
computing death gratuity benefits so as to give survivors three months of basic pay, basic 

allowance for subsistence, and basic allowance for quarters, with a minimum payment of 

$3,000 and a maximum payment of $9,000. In support of this proposal, the Senate Armed 

Services Committee noted: 

The death gratuity, originally instituted in 1908, is designed to provide 

immediate funds to the family of deceased military members to meet immediate 

expenses. The rates of the death gratuity have not changed since 1956. Under 

present law, this payment is equal to six month's basic pay (plus any special and 

incentive pays) with a minimum of $800 and a maximum of $3,000. Because of 

increases in pay rates since 1956, the death gratuity for all personnel is $3,000. 

The President's Fifth Quadrennial Review of Military Compensation

recommended that the death gratuity be updated to better meet the needs of 

survivors of military personnel. The committee agrees that this benefit should 

be updated....6

The Senate proposal was rejected in conference, with the following explanation: 

Currently, the death gratuity is equal to six months of basic pay with a 

minimum payment of $800 and a maximum payment of $3,000. 

 The Senate bill contained a provision ... that would change the death 

gratuity computation to three months of basic pay, basic allowance for 

subsistence, and basic allowance for quarters with a minimum payment of $3,000 

and a maximum payment of $9,000. 

 . . . 

 The conferees note that, although the death gratuity was established in 

1908, the military estate program has been expanded to include social security 

benefits, dependency and indemnity compensation, and Serviceman's [sic] Group 

Life Insurance (SGLI). The maximum SGLI payment was recently increased to 

$50,000.7 8

 

6 Senate Report No. 99-331 (Committee on Armed Services), p.234, accompanying S. 2638, 99th Congress, 

2d Session (1986). 

7 House Report No. 99-1001 (Committee of Conference), p. 484, accompanying S. 2638, 99th Congress, 2d 

Session (1986). 

8

 The maximum SGLI insurance amount has since been increased three times--first, to $100,000 by the 

Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, 

§336(a), 105 Stat. 75, 89-90 (1991); second, to $200,000 by the Veterans' Benefits Act of 1992, Public Law 

102-568, §201, 106 Stat. 4320, 4324 (1992); and to $250,000 by the Veterans Benefits and Health Care 

Improvement Act of 2000, Public Law 106-419. See Chapter III.D.2., "Servicemen's Group Life Insurance, 

Veterans' Group Life Insurance," hereof, above. 

840
In thus rejecting the Senate proposal to increase the amount of the death gratuity 

payable upon the death of a member, Congress apparently determined that the total 

amount of money payable on the death of a member was in some sense adequate but 

notably failed to make any findings on the adequacy of the "emergency fund" made 

available to survivors under the death gratuity program. 

Under the pay raise effected by the National Defense Authorization Act for Fiscal 

Year 1991, Public Law 101-510, §601(b), 104 Stat. 1485, 1575 (1990), the lowest rate of 

basic pay for any member of the Armed Forces--specifically, a member in pay grade E-1 

with less than four months of service--was $697.20 per month,9

 so that the death gratuity 

for all members was $3,000, and no distinction was made on the basis of the "pay" 

received by a deceased member immediately before the member's death. The prescribed 

$800 minimum was then, and had long been, totally without effect. No matter how "pay" 

was viewed--whether as regular military compensation (RMC) under 37 U.S.C. §101(25 

or as "pay" under 10 U.S.C. §101(a)(15)10--no survivor, regardless of the pay grade of the 

deceased member, received a death gratuity equal to the member's "pay" for six months. 

Indeed, no survivor received a death gratuity as great as six months' basic pay of the 

deceased member. 

The Persian Gulf Conflict Supplemental Authorization and Personnel Benefits 

Act of 1991, Public Law 102-25, §307, 105 Stat. 75, 82-83 (1991), temporarily increased 

the amount of the death gratuity payable under 10 U.S.C. §1478(a) from $3,000 to 

"$6,000 for a death resulting from any injury or illness incurred during the Persian Gulf 

 

9 See Executive Order 12736 of December 12, 1990, Schedule 8, 55 Fed. Reg. 51385, set out at 5 U.S.C.A. 

§5332 note. Also see p. 67 of Chapter II.B.1., "Basic Pay," above. 

10 See footnote 5 to this chapter, above. 

841
conflict or during the 180-day period beginning at the end of the Persian Gulf Conflict."11

12

The temporary increase in the amount of the death gratuity from $3,000 to $6,000 

made by the Persian Gulf Conflict Supplemental Authorization and Personnel Benefits 

Act of 1991, Public Law 102-25, §307, 105 Stat. 75, 82-83 (1991), was made permanent 

later that same year by the National Defense Authorization Act for Fiscal Years 1992 and 

1993, Public Law 102-190, §652, 105 Stat. 1290, 1387-1388 (1991).13 This amendment 

to 10 U.S.C. §1478(a) was made retroactive to August 2, 1990, the beginning of the 

Persian Gulf conflict. The Military Family Tax Relief Act, Public Law 108-121, 117 Stat. 

1337 (2003), increased the death gratuity from $6,000 to $12,000 and made the increased 

allowance retroactive to deaths occurring on or after September 11, 2001. The National 

Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, 117 Stat. 1520, 

enacted the same provisions. Public Law 108-121 also exempted the full amount of the 

death gratuity from federal taxation; previously, one-half of the amount had been taxable. 

The Servicemen's and Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 

84th Congress], §§301-304, 70 Stat. 857, 868-869 (1956), as amended by the National 

Defense Authorization Act for Fiscal Year 1987, Public Law 99-661, §604(e), 100 Stat. 

3816, 3877 (1986), made the survivors of a member who died within 120 days after 

release from active duty or inactive-duty training, eligible for a death gratuity, but only if 

the Veterans' Administration14 determined that the death resulted from disease or injury 

 

11 Pursuant to the Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991, 

Public Law 102-25, §3(2), 105 Stat. 75, 77 (1991), the term "Persian Gulf conflict" was defined to mean 

"the period beginning on August 2, 1990, and ending thereafter on the date prescribed by Presidential 

proclamation or by law." 

12 See House Report No. 102-16, Part 1 (Committee on Armed Services), p. 11, accompanying H.R. 1175, 

102d Congress, 1st Session (1991). 

13 See House Report No. 102-60 (Committee on Armed Services), p.251, accompanying H.R. 2100; Senate 

Report No. 102-113 (Committee on Armed Services), p. 226, accompanying S. 1507; and House Report 

No. 102-311 (Committee of Conference), p. 554, 102d Congress, 1st Session (1991), all recommending that 

the temporary increase be made permanent. No consideration was given to the question of whether the 

amount of the gratuity paid to a survivor should or should not be in any way related to the rate of pay 

earned by the decedent at the time of death. 

14 The Veterans Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, §2, 102 Stat. 2635. Pursuant to that act, from and after March 

842
incurred or aggravated during such duty. As administered, this provision is inconsistent 

with the death-gratuity-as-an-immediate-emergency-fund theory of the rest of the 

program. Before a gratuity can be paid in this situation, the Department of Veterans 

Affairs, after being notified, must obtain information concerning the circumstances of the 

death and details from the individual's service medical history, compare and evaluate 

those data, make its service-connection determination, and advise the military service in 

which the member was serving of the result. A lapse of several months is normal to this 

procedure. 

Current amount of death gratuity authorized: The current amount of death 

gratuity authorized under 10 U.S.C. §1478(a) is $12,000. 

Cost: For the cost of death gratuity payments from 1972 to 2004, see Table III-11

of Military Compensation Statistics Tables, volume II of this edition. 

 15, 1989, all references in any federal law, executive order, rule, regulation, delegation of authority, or any 

document of or pertaining to the Veterans Administration is statutorily deemed to refer to the Department 

of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 102 Stat. at 2640-

2641; also see 38 U.S.C.A. §201 note. (Some references to the "Veterans' Administration" or "VA" have 

been retained in the present chapter, largely for historical reasons. It should be understood, however, that 

the federal agency currently charged with authority for administering the laws and regulations formerly 

administered by the Veterans' Administration is the Department of Veterans Affairs.) 

843
Chapter III.D.4. 

 Dependency and Indemnity Compensation (DIC) 

Legislative Authority: Chapter 13 of Title 38, United States Code, 38 U.S.C. 

§§1301-1323. 

Purpose: To authorize a payment to the surviving dependents of a deceased 

military member partially in order to replace family income lost due to the member's 

death and partially to serve as reparation for the death. 

Background: Compensation for the dependent survivors of United States military 

personnel was first provided by a 1780 resolution of the Continental Congress that 

granted the widow and children of any officer who died as a result of Revolutionary War 

service half the officer's pay for seven years. No provision was made, however, for the 

survivors of enlisted personnel or for anyone else who died as a result of military service 

other than during the Revolutionary War. After expiration of the authority contained in 

the 1780 resolution, the Act of April 30, 1790, ch. 10, §11, Stat. 119, 121 (1790), 

established a disability compensation program that covered both officer and enlisted 

personnel but made no provision for compensation for their survivors. Peacetime death 

compensation of half pay for five years was, however, authorized for the survivors of 

officers by the Act of March 16, 1802, ch. 2, §15, 2 Stat. 132, 135 (1802). The widows 

and children of deceased enlisted personnel--together with officers--were made eligible 

for the five-year half-pay death compensation by the Act of March 19, 1836, ch. 44, §5, 5 

Stat. 7 (1836). The time for which death compensation was paid was subsequently 

extended for additional five-year periods and finally for life or until the surviving spouse 

remarried. These "peacetime" death compensation provisions covered persons who 

served in the War of 1812 and the Mexican War. 

The preexisting death compensation system was substantially revised during, and 

as a result of, the Civil War. In 1862, Congress, in the "general law" of the Act of July 

14, 1862, ch. 166, 12 Stat. 566 (1862), established a disability compensation program for 

844
members and a related new death compensation program for survivors, the substance of 

which remained in effect until after the United States entered World War I. The "generallaw" provided for disability compensation based on a member's grade and degree of 

disability, with survivors being authorized the same death compensation as would have 

been allowed if the member, instead of having died, had been alive but totally disabled. 

Act of July 14, 1862, ch. 166, id., §§2, 3, 12 Stat. at 567. 

The Act of October 6, 1917 (War Risk Insurance Act of 1917), ch. 105 [Public 

Law 90, 65th Congress], §301, 40 Stat. 398, 405-406 (1917), eliminated grade and degree 

of disability as factors determinative of survivor compensation. It provided instead a 

single rate for all widows plus a fixed additional sum for each child. The act also 

permitted military members to buy up to $10,000 of low-cost government life insurance 

to supplement the death compensation otherwise due their survivors under law. Act of 

October 6, 1917, ch. 105, id., §400, 40 Stat. at 409. The act's separate death 

compensation and life insurance programs amounted to the first legislative recognition 

that the government had an obligation to aid the survivors of persons killed in service 

with both "dependency" compensation, intended partially to replace the loss of income 

resulting from the member's death, and a damages-like "indemnity" payment, intended to 

serve in some sense as reparation for the death, to the extent a price could be set on 

human life. 

The system of providing survivors both income maintenance through death 

compensation and reparation through Government life insurance continued until the 

Insurance Act of 1951, §10, enacted as Part II of the Act of April 25, 1951, ch. 39 [Public 

Law 23, 82d Congress], §10, 65 Stat. 33, 36-38 (1951), terminated new issues of 

government life insurance. This act strengthened, however, rather than weakened, the 

practice of providing different-purpose "dependency" and "indemnity" payments to 

survivors: another provision substituted a blanket $10,000 indemnity payment for the 

optional life insurance that was terminated. Servicemen's Indemnity Act of 1951, §2, 

enacted as Part I of the Act of April 25, 1951, ch. 39 [Public Law 23, 82d Congress], §2, 

65 Stat. 33, 33-34 (1951). Thus, instead of being automatically eligible for death 

845
compensation and contingently eligible for government life insurance if the member had 

purchased such insurance and kept his premium payments current, survivors of activeduty members became eligible for both death compensation and the $10,000 servicemen's 

indemnity payment without any affirmative action on the member's part and without cost 

to him. 

The Servicemen's and Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 

84th Congress], Title II, §§201-210, 70 Stat. 857, 862-868 (1956), replaced the 

preexisting death compensation program and the $10,000 Servicemen's Indemnity Act 

payment by Dependency and Indemnity Compensation (DIC). The House Select 

Committee on Survivor Benefits explained its reasons for this action as follows: 

 During the past 4 years a constant criticism of the $10,000 gratuitous 

indemnity has been that payments suddenly come to an end at a time when the 

needs of the recipient survivor remained unmitigated. In an effort to overcome 

this objection there was considerable testimony before the committee that the 

amount of the indemnity should be reduced, paid for a longer period certain, and 

in some cases payments continued for the life of the recipient. 

 After careful analysis on this subject and lengthy deliberations, the 

committee concluded that this benefit should be terminated and payments 

formerly made under this program integrated with the existing Veterans' 

Administration compensation program by increasing significantly current 

compensation programs so as to reflect an indemnity increment therein. Thus 

these two separate and distinct survivor benefit programs administered by the 

Veterans' Administration would become one. To this limited extent one of the 

objectives of the committee, greater simplicity, would be accomplished and the 

long-term interest and equity of survivors protected. 

 The committee feels that the upward adjustments of benefit payments 

which are set forth in this bill adequately and fully compensate future survivors 

and that there remains no necessity for any indemnity or Government insurance 

program to supplement the dependency and indemnity compensation rates....1

Although Congress intended that the DIC program provide survivors with both 

"dependency" and "indemnity" benefits, and though it believed at the time the program 

would make supplementary government life insurance unnecessary, in retrospect the 

 

1 House Report No. 993 (Part 1) (Select Committee on Survivor Benefits), pp. 5-6, accompanying H.R. 

7089, 84th Congress, 1st Session (1955). 

846
General Counsel of the then Veterans' Administration, now the Department of Veterans' 

Affairs,2

 seems prescient when he testified: 

 ... [R]egardless of the fact that the new form of compensation will be 

termed dependency and indemnity compensation, it is quite likely that it will not 

be widely accepted or understood as something materially different from the 

existing death compensation. Accordingly, it may be expected that as time moves 

on there will be demands for reinstatement of an in-service insurance program or 

an indemnity program additional to the compensation benefit. This possibility is 

emphasized by the fact that insurance, followed by indemnity, has been a 

distinct part of the system of benefits for survivors for nearly 40 years.3

The Servicemen's and Veterans' Survivor Benefits Act of 1956, ch. 837 [Public 

Law 881, 84th Congress], §202(a), 70 Stat. 858, 862 (1956), established a monthly DIC 

rate for widows of $112 plus 12 percent of the basic pay prescribed for the deceased 

member's pay grade and length of service. It was generally assumed, though never 

explicitly stated, that the $112 represented the "indemnity" element of the compensation 

and the 12 percent of basic pay the "dependency" element. The $112 base figure was 

raised to $120 in 1963. Act of October 5, 1963, Public Law 88-134, §1, 77 Stat. 223 

(1963). The amount of DIC produced by the 12-percent-of-basic-pay side of the formula 

increased each time basic pay rates were increased. Eight such basic pay raises occurred 

during the period the formula was in effect.4

The Act of October 27, 1969, Public Law 91-96, §3, 83 Stat. 144, 144-145 

(1969), discontinued the preexisting DIC formula in favor of a system prescribing flat 

rates by pay grade. This change was not related to the split "dependency" and 

"indemnity" concept; it stemmed from dissatisfaction with the linkage between basic pay 

 

2

The Veterans' Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, 102 Stat. 2635 (1988). Pursuant to that Act, from and after 

March 15, 1989, all references in any Federal law, Executive Order, rule, regulation, delegation of 

authority, or any document of or pertaining to the Veterans' Administration is statutorily deemed to refer to 

the Department of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 

102 Stat. at 2640-2641; see 38 U.S.C.A. §201 note. 

3

 Survivor Benefit Act: Hearings on H.R. 7089 before the Senate Committee on Finance, p. 136, 84th

ongress, 2d Session (1956) (statement of Guy H. Birdsall, General Counsel, Veterans' Administration). 

4 See the tables showing increases in basic pay rates (by pay grade) subsequent to 1956 in Chapter II.B.1., 

"Basic Pay,"above. 

847
and DIC. Junior personnel had benefited less from the eight basic pay raises than other 

personnel. Because of the partial tie-in between basic pay and DIC rates, their survivors 

had thus gained lesser DIC increases than other survivors. 

As was predicted in 1956 during the hearings on the bill that established DIC, a 

program of in-service life insurance was reinstated some nine years later. Under 38 

U.S.C. §1967(a), as most recently amended by the National Defense Authorization Act 

for Fiscal Year 1996, Public Law 104-106, §646, 110 Stat. 186, 369-370 (1996), military 

members are permitted to purchase up to $250,000 of low-cost Servicemen's Group Life 

Insurance. See Chapter III.D.2. hereof, "Servicemen's Group Life Insurance, Veterans' 

Group Life Insurance," above. 

The Dependency and Indemnity Compensation Reform Act of 1992, enacted as 

Title I of the Veterans' Benefits Act of 1992, Public Law 102-568, Title I, §102, 106 Stat. 

4320, 4321-4322 (1992), changed the basis for determining the amount of DIC to be paid 

to a survivor of a deceased veteran. Under the new program, the amount of DIC to be 

paid to a survivor is not dependent on the pay grade of the deceased member. Rather, the 

1992 law prescribed that DIC be paid to all surviving spouses at the rate of $750 per 

month, independently of the pay grade of the member.5

 An additional $165 per month 

was authorized for the surviving spouse of a veteran who, at the time of death, had been 

eligible to receive compensation for a service-connected disability that had been rated 

totally disabling for at least eight continuous years before the veteran's death, provided 

the surviving spouse had been married to the veteran at least eight years immediately 

before the veteran's death.6

 Additional amounts are authorized for a surviving spouse 

with minor children, the additional amount depending on how many minor children the 

surviving spouse has.7

 

 

5

 The $750 rate established under the Dependency and Indemnity Compensation Reform Act of 1992 has 

since been adjusted upward for cost-of-living increases that have occurred since 1992. Beginning 

December 1, 1995, the basic DIC rate for a surviving spouse of a member or former member dying after 

December 31, 1995, is $810 per month. 61 Fed. Reg. 5836-5837 (1996). 

6 Codified at 38 U.S.C. §1311(a)(2). 

7

 As enacted, a surviving spouse with minor children was entitled to an additional $100 per month per child 

during fiscal year 1993, $150 per child during fiscal year 1994, and $200 per child during fiscal year 1995. 

848
As of 2004, the standard monthly rate of DIC for the survivor of a deceased 

veteran was $967, following the increase from $948 prescribed in the Veterans 

Compensation Cost-of-Living Adjustment Act of 2003, Public Law 108-147, 117 Stat. 

1885, effective December 1, 2003. That act also increased the allotment for surviving 

spouses of veterans who had received a service-connected rating of totally disability to 

$208 and the allotment for each minor child of such surviving spouses to $242. The new 

DIC program applies to veterans whose deaths occurred after December 31, 1992. DIC 

paid with respect to deceased veterans whose deaths occurred before January 1, 1993, is 

to be paid under the rates in existence before enactment of the Dependency and 

Indemnity Compensation Reform Act of 1992 or under the rates adopted by the act, both 

as adjusted from time to time for cost-of-living increases, whichever are higher.8 9

 

As explained by Congress, the impetus for change in the DIC program was basic 

dissatisfaction with reliance on the member's or former member's military rank while on 

active duty as the primary determinant of the amount of DIC payable to survivors. During 

hearings, the point of view was frequently expressed that a new and "more equitable" 

payment system should be established "to better provide for ... survivors of individuals in 

the lower ranks who die while in service or as a result of a service-connected 

disability."10 The Department of Veterans Affairs, in particular, voiced its support for 

changing the method for determining the amount of DIC payments to survivors: 

 38 U.S.C. §1311(b). With the cost-of-living adjustments effected by the Veterans' Compensation Cost-ofLiving Adjustment Act of 1995, Public Law 104-57, §2(a) and (b)(8), 109 Stat. 555 (1995), as implemented 

by the Department of Veterans Affairs, a surviving spouse with minor children is entitled to an additional 

$205 per child beginning December 1, 1995. 

8 38 U.S.C. §1311(a)(3). 

9 As indicated in the table of DIC rates for surviving spouses of veterans who died before January 1, 1993, 

below, surviving spouses of veterans in pay grade E-6 and below are better off under the new DIC 

program, whereas surviving spouses of veterans in pay grade E-7 and above are better off under the old 

DIC program. This situation should continue over time, as identical cost-of-living increases have 

historically been made, and will most likely continue to be made, to the DIC rates under both programs. 

10 House Report No. 753, Part I (Committee on Veterans' Affairs), p. 10, accompanying H.R. 5008, 102d 

Congress, 2d Session (1992); cf. House Report No. 753, Part II (Conference on Ways and Means), pp. 5-6, 

accompanying H.R. 5008, 102d Congress, 2d Session (1992). 

849
 The large majority of DIC recipients are awarded the benefit following 

post-service deaths, many occurring several decades after separation from service. 

In those cases, the military rank attained by the deceased is not related to his or 

her income prior to death. 

 . . . 

 We find the inequity of payments made to spouses under the current 

program troublesome. DIC payments to a few spouses are in some cases three 

times those paid to other surviving spouses. Quite frankly, we are just not 

prepared to conclude that one family's loss from a service-connected death is 

somehow greater than another's, merely because their loved one attained a higher 

service rank.11 

In response to these and other similar concerns, Congress amended the method for 

determining the amount of DIC payable to "establish parity among all surviving 

spouses."12

Numerous cost-of-living increases in the DIC schedule followed the 1969 and 

1992 revisions--in 1971, annually from 1974 to 1982, twice in 1984, again in 1986, 1987, 

1988, 1989, and annually since 1991. The most recent DIC cost-of-living increases were 

authorized by the Veterans Compensation Cost-of-Living Adjustment Act of 2003, 

Public Law 108-147, 117 Stat. 1885. The following table shows, by pay grade, current 

DIC rates for surviving spouses of veterans deceased before January 1, 1993. A more 

complete description of the DIC program as currently effective and administered by the 

Department of Veterans Affairs13 follows the table. 

 

11 House Report No. 753, Part I (Committee on Veterans' Affairs), pp. 28-29, accompanying H.R. 5008, 

102d Congress, 2d Session (1992). 

12 House Report No. 753, Part I (Committee on Veterans' Affairs), p. 11, accompanying H.R. 5008, 102d 

Congress, 2d Session (1992). 

13 See footnote 2 to this chapter, above. 

850
 DIC Rates by Pay Grade 

 (Applicable to Survivors of Veterans Who Died before January 1, 1993) 

Pay Grade Monthly Surviving 

Spouse’s DIC 

(2004 Rates) 

Chief of Staff (Note 2) $2,211 

O-10 2,061 

O-9 1,880 

O-8 1,756 

O-7 1,601 

O-6 1,482 

O-5 1,315 

O-4 1,194 

O-3 1,129 

O-2 1,056 

O-1 1,021 

W-4 1,157 

W-3 1,083 

W-2 1,063 

W-1 1,021 

Senior Enlisted (Note 3) 1,188 

E-9 1,092 

E-8 1,056 

E-7 1,000 

E-6 967 

E-5 967 

E-4 967 

E-3 967 

E-2 967 

E-1 967 

Note 1: In addition to the amount set out in the column titled "Monthly Surviving Spouse's DIC," an 

additional $242 per month is authorized for each dependent child under age 18. A special additional 

amount is also authorized if the surviving spouse either is a patient in a nursing home or is helpless or 

blind, or so nearly helpless or blind as to need regular aid and attendance by a third person, or if the 

surviving spouse, although not completely helpless or blind, is disabled and permanently housebound. In 

the case of a helpless or blind surviving spouse, or a surviving spouse who is a patient in a nursing home, 

the additional amount authorized is $242 per month; in the case of a disabled and permanently housebound 

surviving spouse, the amount is $115 per month. 38 U.S.C. §1311(b), (c), and (d). Notwithstanding the 

amounts set out in the table above, the minimum spousal DIC benefit is $1,175 in the case of a deceased 

veteran rated totally disabled for a period of eight continuous years immediately before the veteran’s death 

if the surviving spouse was married to the veteran for those same eight years. 61 Fed. Reg. 5836-5837 

(1996). 

851
Note 2: The surviving spouse of a member or former member of one of the Armed Forces who served as 

Chairman or Vice Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army, Chief of Naval 

Operations, Chief of Staff of the Air Force, Commandant of the Marine Corps, or Commandant of the 

Coast Guard is entitled to $2,211 per month as Dependency and Indemnity Compensation. Note 2 to the 

table set out at 38 U.S.C. §1311(a)(3). 

Note 3: The surviving spouse of a member or former member of one of the Armed Forces who served as 

Sergeant Major of the Army, Senior Enlisted Advisor of the Navy, Chief Master Sergeant of the Air Force, 

Sergeant Major of the Marine Corps, or Master Chief Petty Officer of the Coast Guard is entitled to $1,188 

per month as Dependency and Indemnity Compensation. 

DIC--PROGRAM DESCRIPTION 

Dependency and indemnity compensation (DIC) was established by the 

Servicemen's and Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 84th

Congress], Title II, §§201-210, 70 Stat. 857, 862-868 (1956), and became effective 

January 1, 1957. It was designed to provide indemnification to certain survivors of 

veterans who died during military service as well as to survivors of veterans who died 

after military service as a result of service-connected disabilities. It was also designed to 

provide partial compensation to survivors for economic losses attributable to veterans' 

deaths. In 1982, the Veterans' Compensation, Education, and Employment Amendments 

of 1982, Public Law 97-306, §112(a), 96 Stat. 1429, 1432 (1982), extended DIC 

eligibility to survivors of certain veterans who were totally disabled as a result of serviceconnected conditions at the time of death but whose deaths were determined not to be 

service-related. 

The rate of DIC payable to a surviving spouse of a veteran who died before 

January 1, 1993, is based on the decedent veteran's pay grade while on active duty or on 

the rate established by the Dependency and Indemnity Compensation Reform Act of 

1992 (as thereafter adjusted for cost-of-living increases14), enacted as Title I of the 

Veterans' Benefits Act of 1992, Public Law 102-568, §102, 106 Stat. 4320, 4321-4322 

(1992), whichever is higher. The rate of DIC payable to a surviving spouse of a veteran 

who died after December 31, 1992, is based on the rate established by the Dependency 

 

14 The most recent adjustments to DIC rates were effected by the Veterans' Compensation Cost-of-Living 

Adjustment Act of 1995, Public Law 104-57, §2(a) and (b)(4) through (8), 109 Stat. 555 (1995). The 

adjustments were effective December 1, 1995. 

852
and Indemnity Compensation Reform Act of 1992 (as thereafter adjusted for cost-ofliving increases15), enacted as Title I of the Veterans' Benefits Act of 1992, Public Law 

102-568, §102, 106 Stat. 4320, 4321-4322 (1992). If a veteran died while on active duty 

before January 1, 1993, the pay grade on which the survivors' DIC payments are based is 

generally the veteran's pay grade on the date of death; if a veteran died after service, the 

pay grade on which DIC payments are based is generally the veteran's pay grade at the 

time of separation from service. 

Income and need are not factors in determining a surviving spouse's entitlement to 

DIC, but if a surviving spouse is also entitled to Survivor Benefit Plan payments (SBP)16

under Subchapter II or Subchapter III of Chapter 73 of Title 10, United States Code, 10 

U.S.C. §§1447-1460b, SBP payments must be offset by the amount of DIC the surviving 

spouse receives. Surviving spouses who are themselves so severely disabled that they are 

housebound or need the regular aid and attendance of another person may be entitled to a 

special allowance in addition to basic DIC. 

A surviving spouse entitled to DIC may receive additional benefits on behalf of 

unmarried children under the age of 18. Benefits payable on behalf of an unmarried child 

end when the child reaches age 18. The child may then claim DIC benefits in his or her 

own right so long as the child is attending school, although school-related benefits are not 

payable after the child reaches age 23. Under another provision of law, a child who 

became permanently incapable of self-support before reaching age 18 due to mental or 

physical disability is entitled to DIC benefits for as long as the mental or physical 

disability exists. A child under age 18 may receive DIC benefits in his or her own right 

only if there is no surviving spouse who is entitled to DIC benefits. DIC benefits payable 

to eligible dependent children and other persons who became eligible during childhood 

are set out at 38 U.S.C. §§1313 and 1314, as amended pursuant to the Veterans' Benefits 

of 2003, Public Law 107-330, 116 Stat. 2820 (2002).

 

15 See preceding footnote. 

16 See Chapter IV.C.2., "Survivor Benefit Plan," below. 

853
A surviving parent or parents may in some cases also be entitled to DIC. While a 

parent's basic entitlement depends on the service-connected death of the parent's veteran 

son or daughter, the DIC payable to a surviving parent depends on the parent's income 

and marital status. No DIC entitlement exists if a parent's income exceeds a statutorily 

prescribed limit. A parent who is in need of the regular aid and attendance of another 

person may be entitled to a special allowance in addition to whatever DIC payment has 

been awarded.17 

The DIC program is administered by the Department of Veterans Affairs.18 

Cost: For the cost of dependency and indemnity compensation from 1972 to 

2004, see Table III-12 of Military Compensation Statistics Tables, volume II of this 

edition. 

 

17 DIC benefits payable to eligible surviving parents are set out at: 

 http://www.vba.va.gov/bln/21/Rates/comp04.htm 

18 See footnote 2 to this chapter, above. 

854
Chapter IV.A. 

 Overview of Supporting Benefits

The military compensation system incorporates a number of benefits that have 

over the years grown to have special importance for the morale of members of the Armed 

Forces and their dependents.1 Some of these benefits directly support the active- and 

inactive-duty military forces of the United States; others support both active- and 

inactive-duty forces as well as retired members and their dependents. This Section IV of 

Military Compensation Background Papers: Compensation Elements and Related 

Manpower Cost Items--Their Purposes and Legislative Backgrounds covers two major 

groupings of benefits. Those groupings are military benefits that are applicable to activeduty and reserve forces personnel and their dependents, on the one hand, and benefits that 

are applicable to both active-duty and retired members and their dependents, on the other 

hand.2

 The first group of these benefits is covered in Subsection B of this Section IV; the 

second, in Subsection C. 

Some of the benefits covered in this Section IV of Military Compensation 

Background Papers have analogues or counterparts in civilian compensation benefit 

systems; others--such as commissaries and exchanges--do not. Even in the first case, 

however, the military benefits are specially tailored to take into account the distinctive 

conditions of military service. Thus, while civilian compensation benefit systems 

typically incorporate health care insurance benefits, military health care benefits are 

disproportionately oriented to the provision of in-kind health care to members of the 

Armed Forces and their dependents. Similar but different distinctions apply to all of the 

 

1

 For a discussion of the importance of military benefits to morale of members of the Armed Forces and 

their dependents, see the 1976 Report of the Defense Manpower Commission, which refers to the most 

important of these as "institutional benefits." 

2 Post-service and death benefits--also important to members of the Armed Forces--are covered in 

Subsections C and D of Section III of Military Compensation Background Papers (Subsection C covers 

separation pays and related post-service benefits, whereas Subsection D covers benefits specially applicable 

to retired personnel and their dependents). 

855
benefits covered by this Section IV that have some counterpart in civilian compensation 

benefit systems--except for government contributions to Social Security. 

The principles and concepts of military compensation that are exemplified by the 

system of supporting benefits covered in this Section IV of Military Compensation 

Background Papers are focused on the overall effectiveness of the compensation system, 

in both peace and war; on the achievement of substantial equity for members of the 

Armed Forces, especially in the sense of establishing a compensation system that is 

generally competitive with compensation in the private sector; on the interrelationship 

between the military manpower requirements of the United States and the compensation 

system considered as a whole; and on motivation of members and potential members of 

the Armed Forces. 

856
Chapter IV.B.1. 

 Annual Leave 

 Accrued Leave Payments 

 Leave Lost 

Legislative Authority: Annual Leave--10 U.S.C. §§701-704. Accrued Leave 

Payments--37 U.S.C. §501. 

Purpose: To authorize members of the uniformed services to take a specified 

number of days of leave of absence, or vacation, for rest and relaxation away from their 

respective duty stations; to allow the accumulation for later use of earned leave that 

cannot be currently used because of military, or other, exigencies; and to authorize cash 

payments as reimbursement for accrued leave remaining unused at the expiration of a 

member's term of service. 

Background: The background and legislative history of the Armed Forces Leave 

Act of 1946, ch. 931 [Public Law 704, 79th Congress], 60 Stat. 963 (1946), the basic 

source of the current military leave system, are discussed in detail following the summary 

discussion immediately below. 

Summary: Under the present statutory leave system, members of the uniformed 

services earn leave at the rate of 2 1/2 days per month of active service. Such members 

may accumulate no more than 60 days of leave as of the end of a fiscal year. Exceptions 

to this standard occur when a member enters a missing status, serves in a hostile fire pay 

area for 120 days or longer, or is assigned to a type of duty designated by the Secretaries 

of the military departments and approved by the Secretary of Defense as duty in which 

the member is unlikely to be able to use annual leave. Unused accrued leave in excess of 

60 days is lost at the end of the fiscal year. 

857
Data submitted by the Army and Air Force for fiscal years 1973 and 1974 indicate 

leave usage by military personnel averaging 22.2 days per man-year.1

 At that same time, 

an average of 7.2 days of leave was accumulated to be used later or, if not used or lost, to 

be reimbursed in cash when the member's term of service expired. In the process of 

reducing leave balances to 60 days at the end of each fiscal year, members lost an overall 

average of 0.6 days per year. 

In percentage terms, as of 1974 uniformed services personnel used approximately 

74 percent of their annual leave entitlement on a current basis, accumulated 24 percent, 

and lost two percent. The loss of leave has not, however, always been evenly spread 

across the force. Before 1976, enlisted personnel typically lost very little leave because 

they could be reimbursed for unused leave at the end of each enlistment. Career officers, 

on the other hand, have typically lost an average of six to 22 days per year. An officer 

loses leave when his leave balance at the start of the fiscal year, plus the 30 days earned 

and minus the number of days taken during the year, exceeds 60 days at the end of the 

fiscal year. Leave lost by military personnel in fiscal year 1974 had an estimated lumpsum reimbursement value of about $28 million, most of the burden of which fell on 

officers. 

Members discharged, retired, or released from active duty under honorable 

conditions, or their survivors in the case of deceased members, are entitled to 

reimbursement, in a lump-sum cash payment, for not more than 60 days of unused 

accrued leave. The 60-day ceiling does not apply to payments made to or on behalf of 

personnel in a missing status. A member's unused leave payment is computed on the 

basis of the basic pay to which he was entitled on the date of separation. An enlisted 

member is eligible for an unused accrued leave payment each time he is discharged at the 

expiration of his enlistment or on the effective date of a first extension of an existing 

enlistment, even if he has no break in service, although, as covered more fully below, he 

 

1

 In using leave, members of the uniformed services are required to take leave for Saturdays, Sundays, and 

holidays--i.e., for days that, in the civilian work force, are regarded as normal days off--as well as for days 

that, in the civilian work force, are regarded as normal workdays. 

858
is limited to a maximum of 60 days accrued leave pay during his military career. Payment 

of unused accrued leave is subject to taxation, just as is the basic pay on the basis of 

which such payments are computed. 

Before enactment of the Department of Defense Appropriation Authorization Act, 

1977, Public Law 94-361, §304, 90 Stat. 923, 925-926 (1976), payment for unused 

accrued leave was based on basic pay, basic allowance for quarters, and basic allowance 

for subsistence for both officer and enlisted personnel, as well as personal money 

allowance for certain senior officers. Under amendments to the accrued leave program 

made by the 1977 Appropriation Authorization Act, Public Law 94-361, id., payment for 

unused accrued leave is now made taking only basic pay into account, 37 U.S.C. 

§501(b)(1),2

 although payment for leave accrued before July 14, 1976, is computed 

taking basic pay, basic allowance for quarters, basic allowance for subsistence, and 

personal money allowance, if any, into account, 37 U.S.C. §501 note.3

Congress’s purpose in amending the military unused-accrued-leave payment 

system to exclude all items of pay other than basic pay was explained as follows: 

 Section 304 of the Senate amendment to the House bill would ... limit 

to 60 days the reimbursement for unused leave during a military member's career. 

This amendment would delete authority for payment of quarters and 

subsistence allowances as a part of this reimbursement for leave accrued after the 

enactment of this legislation.... 

 The House vigorously opposed the portion of this amendment deleting 

subsistence and quarters allowances from leave payments. However, the Senate 

was adamant. 

 The conferees agreed that the purpose of authorizing leave is to provide 

personnel rest and respite from the arduous duties of military service and not to 

encourage the accumulation of unused leave for additional pay. The Senate 

conferees argued that the provision, and particularly the elimination of the 

 

2 Department of Defense Appropriation Authorization Act, 1977, Public Law 94-361, §304(c), 90 Stat. 

923, 925 (1976). 

3 Department of Defense Appropriation Authorization Act, 1977, Public Law 94-361, §304(h), 90 Stat. 

923, 926 (1976). 

859
payment for quarters and subsistence in payments for unused leave, would 

encourage military members to take leave rather than accumulate it. 

 Under current law, officers and enlisted personnel are treated 

differently in the payment of quarters and subsistence for unused leave. By 

eliminating such payments, the Senate provision would treat all recipients of 

unused leave payments in the same manner.4

In thus attempting to discourage members from accumulating leave, Congress did 

not address the fact that unused leave accumulation may result more from military 

necessity than member choice. In an effort to alleviate the most serious of such problems, 

Congress, in the Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, 

§10, 94 Stat. 3359, 3368 (1980), provided that a member "assigned to a deployable ship, 

mobile unit, or to other duty designated for the purpose of this section"—i.e., 10 U.S.C. 

§701, relating to entitlement to and accumulation of leave—could accumulate up to 90 

days of leave, but also required that any leave so accumulated in excess of 60 days had to 

be used by the member before the end of the fiscal year after the fiscal year in which the 

qualifying service ended. As reflected in the relevant Congressional report, Congress was 

mainly concerned about leave lost because of operational exigencies: 

 Under current law, military personnel may not accumulate more than 

60 days leave, except for members receiving hostile fire pay for at least 120 days, 

who may accumulate 90 days. The additional 30 days for these individuals 

must be used within a year after the end of the assignment. 

 The extended length of the Indian Ocean deployments have resulted in 

personnel losing leave to which they are entitled because they cannot leave their 

ship. The committee recommendation includes a provision to allow the Service 

Secretary to extend the benefit of accumulating leave to Service members on 

ships or at other locations on long deployments.5

In an amendment to the Military Pay and Allowances Benefits Act of 1980, Public Law 

96-579, id., effected by the Department of Defense Supplemental Authorization Act, 

1981, Public Law 97-39, §702, 95 Stat. 939, 943 (1981), the provisions in question were 

 

4 House Report No. 94-1305 (Committee of Conference), p. 45, accompanying H.R. 12438, 94th Congress, 

2d Session (1976). 

5 Senate Report No. 96-1051 (Committee on Armed Services), pp. 6-7, accompanying H.R. 7626, 96th

Congress, 2d Session (1980). 

860
made retroactively applicable to personnel assigned to qualifying duty after September 

30, 1979. 

In a further amendment to the unused-accrued leave program, the Department of 

Defense Authorization Act, 1984, Public Law 98-94, §1031(a), 97 Stat. 614, 671 (1983), 

extended the period within which unused leave accrued as a result of lengthy 

deployments and other "military exigencies"6

 could be taken. Before passage of the 1984 

Authorization Act, leave accrued as a result of "military exigencies" had to be taken 

before the end of the fiscal year following the fiscal year in which the leave was accrued; 

under the amendment to 10 U.S.C. §701(f) effected by the 1984 Authorization Act, an 

affected member is permitted to use such leave any time before the end of the third fiscal 

year after the fiscal year the leave was accrued. A companion provision7

 made this 

change in the unused-accrued-leave program retroactively applicable to leave 

accumulated as a result of "military exigencies" after September 30, 1980. See 10 U.S.C. 

§701 note. In support of these changes, the Senate Armed Services Committee noted: 

 Primarily in response to extensive Indian Ocean naval deployments, the 

Congress [in the Military Pay and Allowances Benefits Act of 1980, Public Law 

96-579, id.] authorized certain members to carry forward up to 90 days leave 

(rather than 60 days) under certain circumstances. This provision has been used 

effectively by the services not only for long naval deployments but also for the 

augmentation of military air traffic controllers to the Federal Aviation 

Administration (FAA). However, that law requires that the leave accrued in 

excess of 60 days must be used before the end of the fiscal year following the 

fiscal year in which the excess leave was accrued. For example, excess leave 

accrued during a deployment in fiscal year 1980 had to be used before the end of 

fiscal year 1981 or be lost. In fact, some members were unable, due to military 

exigencies, to use the accrued excess leave they had carried over, and therefore, 

they actually lost leave. 

 As a result of this unintended penalty to the member and to enhance 

personnel management, the Committee recommends extending by two years the 

date by which excess accrued leave must be used or lost by those eligible to carry 

forward excess leave. This extension will grant appropriate relief to deserving 

 

6 Senate Report No. 98-174 (Committee on Armed Services), p. 231, accompanying S. 675, 98th Congress, 

1st Session (1983). 

7 Department of Defense Authorization Act, 1984, Public Law 98-94, §1031(b)(1) and (2), 97 Stat. 614, 

671 (1983). 

861
members who serve on long, arduous deployments or who are not otherwise able 

to use their leave because of unique, operational requirements such as the FAA 

augmentation. Also, to redress the penalty already imposed on members who 

wrongly lost leave as a result of this provision, the Committee intends this change 

to be retroactive to leave accrued during fiscal years 1980, 1981 and 1982 and 

thereafter so that the lost leave can be reinstated.8

In a similar vein, various ad hoc exceptions to the 60-day career limitation on 

payments for unused accrued leave have been adopted from time to time. See, e.g., 

National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, §1115, 

104 Stat. 1485, 1636-1637 (1990), as amended by Persian Gulf Conflict Supplemental 

Authorization and Personnel Benefits Act of 1991, Public Law 102-25, §314, 105 Stat. 

75, 86 (1991) (60-day career limitation not applicable to leave accrued during the Persian 

Gulf conflict by members serving on active duty in connection with Operation Desert 

Storm), and Persian Gulf Conflict Supplemental Authorization and Personnel Benefits 

Act of 1991, Public Law 102-25, §309, 105 Stat. 75, 83 (1991) (60-day limitation not 

applicable to leave payments to survivors of a member of the uniformed services who 

died as a result of an injury or illness incurred while serving on active duty in the Persian 

Gulf conflict with respect to leave accrued during fiscal years 1990 and 1991).9

Given the not infrequent need for making such ad hoc exceptions to the 

prohibitions on excess leave accumulation, the National Defense Authorization Act for 

Fiscal Years 1992 and 1993, Public Law 102-190, §638, 105 Stat. 1290, 1384 (1991), 

added a provision to permanent law pursuant to which "a member of an armed force who 

serves on active duty ... in support of a contingency operation" 10 may accrue up to 90 

 

8

 Senate Report. No. 98-174 (Committee on Armed Services), pp. 231-232, accompanying S. 675, 98th

Congress, 1st Session (1983). See House Report No. 98-213 (Committee of Conference), pp. 239-240, 

accompanying S. 675, 98th Congress, 1st Session (1983). 

9

 For the purposes of these provisions, the term "Persian Gulf conflict" was defined as the "period 

beginning on August 2, 1990, and ending thereafter on the date prescribed by Presidential proclamation or 

by law." Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991, Public 

Law 102-25, §3(3), 105 Stat. 75, 77 (1991). 

10 The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, §631, 

105 Stat. 1290, 1380 (1991), further amended Titles 10 and 37, United States Code, by providing a 

definition of the term "contingency operation," as follows: 

862
days of leave in the fiscal year in which he was involved in such an operation or the 

following fiscal year if the member would otherwise lose accumulated leave in excess of 

60 days, provided that the leave in excess of 60 days must be used before the end of the 

following or next following fiscal year, respectively.11 A similar exception was made to 

the provision that limits the amount of accrued leave for which a member may receive 

payment to include the survivors of service members who die while on duty in support of 

a contingency operation, as well as reserve and retired members serving on active duty in 

support of such an operation. National Defense Authorization Act for Fiscal Years 1992 

and 1993, Public Law 102-190, §637, 105 Stat. 1290, 1383-1384 (1991). As indicated in 

the relevant House and Senate reports, these provisions were adopted to "make 

permanent the temporary authority provided in the National Defense Authorization Act 

for Fiscal Year 1991 [Public Law 101-510, §1115, 104 Stat. 1485, 1636-1637 (1990)], to 

allow military personnel serving in support of a contingency operation to accrue up to 90 

days of leave."12 The National Defense Authorization Act for Fiscal Year 2002, Public 

Law 107-107, 115 Stat. 1152, provided for payment for unused leave in excess of 60 days 

for a new category of personnel: members of reserve components on duty for less than 

one full year, without the stipulation that such members have been on active duty in 

support of a contingency operation. This category includes reserve personnel on active 

 

 The term "contingency operation" means a military operation that— (A) is designated by the Secretary of Defense as an operation in which members of the 

Armed Forces are or may become involved in military actions, operations, or hostilities against an 

enemy of the United States or against an opposing military force; or 

 (B) results in the call or order to, or retention on, active duty of members of the uniformed 

services under section 672(a), 673, 673b, 673c, 688, 3500, or 8500 of this title [Title 10, United 

States Code], chapter 15 of this title, or any other provision of law during a war or during a national 

emergency declared by the President or Congress. 

The subject provision is codified at 10 U.S.C. §101(a)(13), whereas the definition of "contingency 

operation" codified to Title 37, United States Code, merely provides that for the purposes of the latter title 

"[t]he term `contingency operation' has the meaning given that term in section 101 of title 10." 37 U.S.C. 

§101(26). 

11 Codified at 10 U.S.C. §701(f)(2). 

12 Senate Report No. 102-113 (Committee on Armed Services), p. 225, accompanying s. 1507, 102d 

Congress, 1st Session (1991). See House Report No. 102-60 (Committee on Armed Services), p.250, and 

House Report No. 102-311 (Committee of Conference), pp. 552-553, accompanying H.R. 2100, 102d 

Congress, 1st Session (1991). 

863
duty, full-time National Guard duty, and active duty for training for more than 30 but 

fewer than 365 days. 

 The National Defense Authorization Act for Fiscal Year 2004, Public Law 108-

136, 117 Stat. 1478, further adjusted the rules governing accrual of more than 60 days of 

leave. This provision allowed members who serve for 120 continuous days either in an 

area eligible for special pay under 37 U.S.C. §310(a) or is assigned to a deployable ship, 

mobile unit, or other duty comparable to that specified in that section, to accumulate up 

to 120 days of accrued leave. These members may retain that leave until the end of the 

third year in which the qualifying duty was performed. 

The sixty- and ninety-day limitations on unused accrued leave accumulations do 

not apply to payments to survivors of members who die while on active duty13 or to 

members in a missing status.14 10 U.S.C. §701(g). Under the provisions of 37 U.S.C. 

§501(h), leave accumulated by a member while in a missing status may not be taken by 

the member after the member is removed from such status but must be paid for. 

 Cost: For the cost of unused accrued leave payments from 1972 to 2004,

see Table IV-1 of Military Compensation Statistics Tables, volume II of this edition. 

 

13 37 U.S.C. §501(d)(1) and (2) as amended by the National Defense Authorization Act for Fiscal Year 

1996, §641(a), 110 Stat. 186, 368 (1996). See Senate Report No. 104-112 (Committee on Armed Services), 

p. 258, accompanying S. 1026, 104th Congress, 1st Session (1995); cf. House Report No. 104-406 

(Committee of Conference), p. 819, accompanying H.R. 1530, 104th Congress, 1st Session (1995), and 

House Report No. 104-450 (Committee of Conference), p. 809, accompanying S. 1124, 104th Congress, 2d 

Session (1996). 

14 See 37 U.S.C. §551(2) concerning the circumstances under which a member is deemed to be in a 

"missing status." Also see that portion of Appendix VII, "Special Pay and Other Benefits for Missing 

Persons, Prisoners of War (POWs), and Victims of Terrorism," titled "Missing Persons," below. 

864
Chapter IV.B.2. 

 Voluntary Education and Training 

Legislative Authority: 10 U.S.C. §§2005 and 2007; 38 U.S.C. §§3001-3036 and 

3451-3485. 

Purpose: (1) To aid in the recruitment and retention of members of the Armed 

Forces and to upgrade the skills of such members; and (2) to provide financial assistance 

to military personnel to enable them to develop educationally and professionally while in 

service and to encourage them to continue their education after leaving service. 

Background: Voluntary education and training, although they may serve as an 

attraction and retention incentive and benefit the military services by contributing to more 

effective performance, primarily benefits the individual members who take advantage of 

them. The principal types of voluntary education and training are (1) the tuition 

assistance program for off-duty education at civilian educational institutions, (2) the 

Predischarge Education Program, and (3) the Educational Assistance Program of the GI 

Bill. The latter programs are designed for "veterans," a category that by definition 

includes in-service military personnel who have served on active duty for more than 180 

days. These programs are under the jurisdiction of the Department of Veterans Affairs 1

and are funded by that agency. 

The tuition assistance program was started immediately after World War II. There 

is no permanent statutory authority for tuition assistance; rather, such assistance is based 

on authority flowing from the appropriation of funds for the program in annual 

appropriations acts. Congress deleted funds earmarked for the Army officer program 

from the Department of Defense Appropriation Act, 1953, ch. 630 [Public Law 488, 82d 

 

1 The Veterans' Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, 102 Stat. 2635 (1988). Pursuant to that Act, from and after 

March 15, 1989, all references in any federal law, executive order, rule, regulation, delegation of authority, 

or any document of or pertaining to the Veterans' Administration is statutorily deemed to refer to the 

Department of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 102 

Stat. at 2640-2641; see 38 U.S.C.A. §301 note. 

865
Congress], 66 Stat. 517 (1952). The Department of Defense Appropriation Act, 1954, ch. 

305 [Public Law 179, 83d Congress], §641, 67 Stat. 336, 356 (1953), prohibited the use 

of appropriated funds for the payment of tuition assistance for officers of any branch of 

service above pay grade O-2. At that time, the Air Force was paying 75 per cent of tuition 

costs for approved off-duty education for both officer and enlisted personnel. The Army 

was paying 50 percent of tuition costs for enlisted personnel and had, until funds for the 

purpose were denied in fiscal year 1953, also been paying 50 percent of the costs for 

officers. The Navy and Marine Corps had paid 75 percent of such costs from 1949 

through 1952, but in fiscal year 1953 such assistance was terminated for officers and 

reduced to 50 percent for enlisted personnel.2

 

The Department of Defense Appropriation Act, 1955, ch. 432 [Public Law 458, 

83d Congress], §730, 68 Stat. 337, 355-356 (1954), removed the restriction on payment 

of tuition costs for officers above pay grade O-2 but stipulated that funds appropriated in 

the act be available only to commissioned personnel who agreed to remain on active duty 

for two years after completion of the training for which funds were received. Similar 

limiting language was included in later annual appropriation acts until an active-duty 

obligation was incorporated into permanent law in 1980. Under current 10 U.S.C. §2005, 

as added by the Act of September 24, 1980, Public Law 96-357, §2(a), 94 Stat. 1178, 

1180-1182 (1980), and as later amended by the Department of Defense Authorization 

Act, 1984, Public Law 98-94, §1003(b)(1), 97 Stat. 614, 656-657 (1983), the Secretaries 

of the military departments may require as a condition of providing educational 

assistance that a person agree to remain on active duty for a specified period. 

The Department of Defense Appropriation Act, 1955, ch. 432, id., also limited 

payments to not more than 75 percent of charges of educational institutions for tuition 

and expenses of off-duty training of military personnel. In general, similar limitations 

have been incorporated in the appropriations acts from 1955 to the present. 

 

2 Hearings on H.R. 5969 before the Subcommittee of the Senate Committee on Appropriations, July 10, 

1953, pp. 2055-2057, 83d Congress, 1st Session (1953). 

866
It is Department of Defense policy that the services fund the tuition assistance 

program to the maximum extent consistent with current legislation for both officer and 

enlisted personnel. There is no legal restriction on the courses of study that may be 

pursued under the program; a course may lead to an associate, baccalaureate, or higher 

degree, or to a high school diploma, or it may comprise technical/occupational study. 

However, emphasis is placed on courses that enhance a member's competence in his 

military career field. 

The Veterans' Readjustment Benefits Act of 1966, Public Law 89-358, 80 Stat. 12 

(1966), is one of the series of laws popularly and collectively known as the "GI Bill." As 

relates to voluntary education and training, the act authorizes the payment by the 

Department of Veterans Affairs3

 of an educational assistance allowance to veterans who 

have served on active duty for more than 180 days without a break in service and who are 

enrolled in an approved college, graduate or undergraduate, professional, trade or 

technical, high school, elementary school, or correspondence course conducted by a 

civilian educational or training institution. The benefits available under this GI-Bill 

program are included within the present treatment of voluntary education and training 

because members of the Armed Forces who are still on active duty are within the class of 

eligible beneficiaries. Generally speaking, the benefits provided under the Veterans' 

Readjustment Benefits Act of 1966 must be used by an eligible veteran within the tenyear period commencing on the date of the veteran's last discharge or release from active 

duty after January 31, 1955. 

As of October 2003, the VA educational assistance allowance for active duty 

members was equal to the cost of tuition, fees, books, and supplies peculiar to the course 

being pursued, limited to a maximum of $985 a month. Entitlement to the allowance is 

computed on the basis of 1 1/2 months (or the equivalent in part-time educational 

assistance) for each month of active service performed after January 31, 1955. The 

allowance entitlement period may not exceed 36 months, except that it may be extended 

 

3 House Report No. 96-498 (Committee on Veterans' Affairs), p. 19, accompanying H.R. 5288, 96th

Congress, 1st Session (1979). 

867
to the end of the term, quarter, or semester when it would otherwise end, or, in schools 

not operated on one of those systems, to the end of the course or for 12 weeks, whichever 

is less, when the period of entitlement ends after more than half the course has been 

completed. The 36-month limit on the GI Bill educational assistance allowance applies to 

all veterans, and any period of entitlement used during active service is charged against 

this limit. 

The Veterans' Educational Assistance Act of 1987, enacted as Title VII of the 

Department of Defense Authorization Act, 1985, Public Law 98-525, Title VII, §§701-

709, 98 Stat. 2492, 2553-2572 (1984), added a Chapter 30 to Title 38, United States 

Code, establishing the All-Volunteer Force Educational Assistance Program. In addition 

to being intended to aid members of the Armed Forces in their readjustment to civilian 

life after separation from military service, the Education Assistance Act was intended to 

promote and assist the all-volunteer force program by establishing a new educational 

assistance program to aid in recruitment and retention of highly qualified personnel in the 

active and reserve components of the Armed Forces and to give special emphasis to 

providing education assistance benefits to aid in the retention of personnel in the Armed 

Forces. See 38 U.S.C. §3001 (stating purposes of the "All-Volunteer Force Educational 

Assistance Program") as added by Section 702 (a)(1) of the Veterans' Educational 

Assistance Act of 1984, enacted as part of Title VII of the Department of Defense 

Authorization Act, 1985, Public Law 98-525, id., §702(a)(1), 98 Stat. at 2553-2554. The 

All-Volunteer Force Educational Assistance Program, which applies to persons who first 

became members of the Armed Forces or first entered on active duty as members of the 

Armed Forces after June 30, 1985, is administered mainly by the Department of Veterans 

Affairs and is, for that reason, treated in Chapter V.B.2. of the Military Compensation 

Background Papers, "Veterans' Educational Assistance (GI Bill)." Persons on active duty 

as well as veterans may take advantage of the All-Volunteer Force Educational 

Assistance Program, commonly known as the "Montgomery GI Bill." 

The Veterans Education and Training Amendments Act of 1970, Public Law 91-

219, §204(a)(4), 84 Stat. 76, 80-81 (1970), established the Predischarge Education 

868
Program ("PREP"). The program's chief aim was to enhance the schooling of 

educationally deficient service members in order to encourage them to take advantage of 

the GI Bill after separation from active duty. To this end, the act permitted the payment 

of a VA educational assistance allowance equal to cost of tuition, fees, books, and 

supplies peculiar to the course, but not more than $270 a month, to individuals who had 

completed more than 180 days of active service and who were enrolled in an elementary, 

secondary, preparatory, refresher, remedial, deficiency, or special educational assistance 

course conducted by an approved civilian educational or training institution. 

Although PREP was designed primarily as a pre-separation program, PREP 

courses also could be taken after release from active duty by veterans who were separated 

without a secondary school diploma or equivalency certificate, or who needed the PREP 

course or courses for a program of education for which they would be eligible but for 

such course or courses. No charge was made against an individual's period of entitlement 

to educational assistance under the GI Bill because of enrollment in PREP courses, either 

while in service or after discharge. 

The legislative authority for PREP was repealed by the Veterans' Rehabilitation 

and Education Amendments of 1980, Public Law 96-466, §601(a)(1), 94 Stat. 2171, 2208 

(1980), because the "continued need for this program ... no longer is apparent" and the 

benefits available under the program were also "available in the military service."4

Cost: For the cost of voluntary education and training benefits from 1972 to 1976, 

see Table IV-2 of Military Compensation Statistics Tables, volume II of this edition. 

 

4

 Includes base level education centers; general educational development programs; tuition assistance; 

other off-duty education; and Predischarge Education Program (VA funded). 

869
Chapter IV.B.3. 

 Mortgage Insurance Premiums 

Legislative Authority: 12 U.S.C. §1715m (Section 222 of the National Housing 

Act, ch. 847 [Public Law 479, 73d Congress], 48 Stat. 1246 (1934), as added by the 

Housing Act of 1954, ch. 649 [Public Law 560, 83d Congress], Title I, §124, 68 Stat. 

590, 603-605 (1954)). 

Purpose: To authorize the Department of Defense to pay FHA mortgage 

premiums that individual service members would otherwise have to pay in order to make 

more uniform the federal housing assistance programs for such personnel and for 

veterans. 

Background: The National Housing Act, ch. 847 [Public Law 479, 73d 

Congress], 48 Stat. 1246 (1934), created the Federal Housing Administration (FHA) and 

established a program under which that agency insures the payment of mortgages on 

family dwellings to encourage commercial lenders to make home loans to private 

individuals. The law requires that the FHA charge a premium, which is based on the loan 

principal, on all mortgages it insures. The charge is levied on the mortgagee but passed 

on to the borrower; in practice, it is normally added to the borrower's mortgage payments. 

The reason for the charge is to establish a reserve against which the FHA can draw to 

cover the costs of meeting obligations on defaulted loans. 

The Servicemen's Readjustment Act of 1944, ch. 268 [Public Law 346, 78th

Congress], Title III, §§501-503, 58 Stat. 284, 291-291 (1944), commonly called the GI 

Bill, created a home loan guarantee program for veterans.1

 The GI Bill is a loan 

guarantee, rather than a mortgage insurance program, under which the Government 

absorbs any losses resulting from defaulted loans. Persons covered by the GI Bill thus do 

not have to pay a recurring charge similar to the FHA mortgage premium. 

 

1 See Chapter V.B.3., "GI Bill (Home Loan Assistance)," below. 

870
 Neither the National Housing Act nor the GI Bill was of much value with respect 

to the home-buying needs of career service personnel. Lacking community roots, such 

personnel typically found it difficult to obtain private financing for a home, even with 

FHA mortgage insurance backing. In addition, they often could not qualify for a GI loan 

guarantee because, originally, such a guarantee was available only to personnel separated 

from active service, and not to those who remained on active duty. 

 The Servicemen's Housing Mortgage Insurance program ("SMI") was created by 

the Housing Act of 1954, ch. 649 [Public Law 560, 83d Congress], Title I, §124, 68 Stat. 

590, 603-605 (1954), to help overcome these problems. The SMI was designed to 

provide, within the framework of the National Housing Act, home-financing assistance 

similar to that authorized for veterans under the GI Bill to in-service personnel with more 

than two years of active service. Because SMI is part of the National Housing Act, rather 

than the Servicemen's Readjustment Act, an FHA premium had to be paid on each 

insured mortgage. Since a veteran did not have to pay a similar charge under the GI Bill, 

however, the SMI program required that the military services pay the premium for their 

in-service members (and for the surviving spouse of a member who dies on active duty, 

for up to two years after the member's death) from funds appropriated for the Department 

of Defense family housing management account. When the SMI program was set up in 

1954, Congress indicated that the FHA mortgage premiums of in-service personnel were 

subsidized because no charges were imposed under the GI Bill for which SMI was 

supposed to be an in-service substitute. This subsidy was not discontinued, even though 

the later extension of GI Bill eligibility to in-service personnel removed the original 

reason for it. 

 Until Department of Defense participation in the program was administratively 

discontinued, in-service personnel were eligible for FHA mortgage insurance on a singlefamily dwelling or a one-family unit in a condominium project under the SMI program 

without regard to the size of the mortgage. The amount of the mortgage insured, 

however, could not exceed a maximum loan-to-value ratio of 97 percent of the first 

$25,000 of the FHA appraised value of the property, plus 95 percent of the appraised 

871
value above $25,000, in the case of mortgages covering dwellings that (i) were appraised 

for mortgage insurance before the beginning of construction, (ii) were approved for 

guaranty, insurance, or a direct loan by the then-Veterans Administration2

 before the 

beginning of construction, (iii) were completed more than one year before the date of the 

application for mortgage insurance, or (iv) were covered by a consumer protection or 

warranty plan acceptable to the Secretary of Defense, in the case of members of the 

Army, Navy, Air Force, or Marine Corps, the Secretary of Transportation, in the case of 

members of the Coast Guard, or the Secretary of Commerce, in the case of members of 

the United States National Oceanic and Atmospheric Administration; or in the case of 

any dwelling not so approved, 90 percent of the appraised value, subject to further 

limitations on the maximum mortgage insurance exposure of the Federal government. 

At present, only the Coast Guard and the National Oceanic and Atmospheric 

Administration pay FHA premiums on behalf of their members. 

Cost: For the cost of mortgage insurance premiums from 1972 to 1985, see Table 

IV-3 of Military Compensation Statistics Tables, volume II of this edition. (Data for 

Armed Forces personnel after 1985 are not available.) 

 

2 The Veterans' Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, 102 Stat. 2635 (1988). Pursuant to that act, from and after 

March 15, 1989, all references in any federal law, executive order, rule, regulation, delegation of authority, 

or any document of or pertaining to the Veterans' Administration is statutorily deemed to refer to the 

Department of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 102 

Stat. at 2640-2641; see 38 U.S.C.A. §201 note. 

872
Chapter IV.B.4. 

 Medical Care 

 (Service Members and Dependents) 

Current Legislative Authority: Chapter 55 of Title 10, United States Code, 10 

U.S.C. §§1071-1110. 

Purpose: To make medical care available to members of the uniformed services 

and their dependents in order to help ensure the availability of physically acceptable and 

experienced personnel in time of national emergency; to provide incentives for Armed 

Forces personnel to undertake military service and remain in that service for a full career; 

and to provide military physicians and dentists exposure to the total spectrum of 

demographically diverse morbidity necessary to support professional training programs 

and ensure professional satisfaction for a medical service career. 

Background: The Armed Forces have traditionally provided medical care for 

active duty personnel as an integral part of their primary mission. The Armed Forces 

must not only be prepared to care for casualties in the event of conflict, they must also 

maintain the health of active duty members in peacetime so that affected personnel are 

ready to respond promptly to whatever military demands may arise. Having medical 

facilities and personnel necessary to meet their primary mission within legislative 

constraints imposed by Congress, the Armed Forces have also provided medical care to 

dependents of active duty personnel when it has been possible to do so without adversely 

affecting their ability to provide medical care to active duty personnel. 

Before 1956, the statutory basis for dependent medical care in military treatment 

facilities was fragmentary, with resulting disparities in the types of care provided, in the 

categories of dependents eligible for care, and in access to care. Dependents without 

access to medical facilities of the uniformed services had to pay the full cost of any care 

they received from civilian sources. Consequently, dependents with access to military 

medical care facilities had a significant advantage over those in areas with no such 

873
facilities or in areas where there were too few facilities to meet the joint needs of the 

active duty and dependent populations. 

The Dependents' Medical Care Act of June 7, 1956, ch. 374 [Public Law 569, 84th

Congress], 70 Stat. 250 (1956), provided a statutory basis for furnishing medical care to 

members and certain former members of the uniformed services and their dependents by 

setting forth categories of dependents eligible for medical care and the types of care to be 

provided in facilities of the uniformed services.1

 The principal new feature of the law, 

however, was the authority given the Secretary of Defense to contract with civilian 

sources for the medical care of spouses and children of members of the uniformed 

services on active duty. As indicated in the relevant Congressional report, an improved 

system of dependent medical care was needed as part of a program to make military 

careers more attractive and to meet the competition offered by private industry, which 

frequently extended liberal medical care benefits.2

Except for an amendment eliminating a statutory requirement that the parent 

military department of a beneficiary receiving care in a medical facility of another 

military department reimburse the other military department for the care given, the 

medical care provisions remained unchanged until 1966. 

The Military Medical Benefits Amendments of 1966, Public Law 89-614, §2(6), 

80 Stat. 862, 863-865 (1966), established far broader authority for the military 

departments to contract for health care for beneficiaries to supplement the care provided 

by military treatment facilities. The implementation of this authority as a government 

self-insured program became known as the Civilian Health and Medical Program of the 

 

1 The provisions covering members and former members are currently codified at 10 U.S.C. §1074; the 

provisions setting forth the categories of dependents eligible for medical care, at 10 U.S.C. §1076; and the 

types of medical and dental care that may be given to dependents, at 10 U.S.C. §§1077 and 1076a, 

respectively. Dependents of a member of the uniformed services are eligible for medical and dental care at 

"facilities of the uniformed services, subject to the availability of space and facilities and the capabilities of 

the medical and dental staff." 10 U.S.C. §1076(a). 

2 Senate Report No. 1878 (Committee on Armed Services), p. 2, accompanying H.R. 9429, 84th Congress, 

2d Session (1956). 

874
Uniformed Services, popularly called CHAMPUS. The CHAMPUS legislation came 

about in response to changed practices in the civilian sector of the economy by which 

civilian health care plans added outpatient care to the traditional inpatient care coverage 

for both employees and their dependents. Except for limited access to military treatment 

facilities, there was no government-supported program for outpatient care for dependents 

of active duty personnel or for retirees and their dependents prior to this legislation. The 

principal features of the legislation, which used the Blue Cross-Blue Shield High Option 

Plan of the Federal Employees' Health Benefits Program as a model, established partial 

government payment for new and expanded inpatient and outpatient care provided by 

civilian sources to designated beneficiaries. The act also slightly expanded the types of 

care that military facilities were authorized to provide. The benefits payable under 

CHAMPUS were not quite as extensive as those authorized in military medical facilities, 

and some beneficiaries eligible for care in military facilities--primarily parents and 

parents-in-law of active duty members--were not eligible for care under CHAMPUS. 

The legislation required the dependents of active duty members to share in the 

cost of the authorized care provided under CHAMPUS at a level less than that specified 

for retired members and their dependents. For dependents of active duty members, the act 

required them to pay the greater of $25 for each hospital admission or the same nominal 

daily fee imposed for inpatient care in military medical facilities. For outpatient care, 

dependents had to meet a fiscal year deductible of $50 per individual, with a $100 family 

limit, and 20 percent of the allowed charges for care after the deductible had been met, 

provided that a member or a member's family group of two or more persons may not be 

required to pay a total of more than $1,000 for health care received under CHAMPUS 

during any fiscal year.3

 

3 The $1,000 annual limit on deductibles and copayments for members and their families was added to the 

CHAMPUS program, at 10 U.S.C. §1079(b)(5), by the National Defense Authorization Act for Fiscal 

Years 1988 and 1989, Public Law 100-180, §721(a), 101 Stat. 1019, 1115-1116 (1987), to serve as a 

protection or "cap" against "catastrophic loss," House Report No. 100-446 (Committee of Conference), p. 

650, accompanying H.R. 1748, 100th Congress, 1st Session (1987), and to prevent "the potential of wipingout a family financially," House Report No. 100-58 (Committee on Armed Services), p. 217, 

accompanying H.R. 1748, 100th Congress, 1st Session (1987). 10 U.S.C.A. §1079(b)(5). cf. Senate Report 

No. 100-57 (Committee on Armed Services), p.150, accompanying S. 1174, 100th Congress, 1st Session 

(1987), which dealt only with placing a "limitation on out-of-pocket expenses for co-payments and 

875
Among the differences between CHAMPUS and the Federal Employees' Health 

Benefits Program was that civilians had to pay a part of the monthly premium but could 

choose from a variety of plans with different annual benefit structures, while dependents 

of active duty personnel did not have to pay a premium but also had no choice. 

CHAMPUS is also unlike the different Federal Employees' Plans in that, under 

CHAMPUS, beneficiaries are generally required to obtain non-emergency inpatient care 

from nearby military medical facilities if such care is available there. Thus, CHAMPUS 

provides only a part of the medical care its beneficiaries receive, and CHAMPUS is not, 

on that account, directly comparable to the various plans available to participants in the 

Federal Employees' Health Benefits Program, which provide for complete medical care 

to beneficiaries. 

The Military Medical Benefits Amendments of 1966, Public Law 89-614, §2(6), 

80 Stat. 862, 863-865 (1966), also established a specialized program of financial 

assistance for active duty members with spouses or children who were either moderately 

or severely mentally retarded or seriously physically handicapped. Known as the Program 

for the Handicapped, it has no known counterpart in other federal or civilian health care 

plans. In 1971, eligibility for this program was extended to dependents of active duty 

members who died while eligible for hostile fire pay—formerly known as combat pay—

or who died from a disease or injury incurred while eligible for such pay. 

The Military Medical Benefits Amendments of 1966, Public Law 89-614, §2(4), 

80 Stat. 862, 863 (1966), allowed only extremely limited dental care under CHAMPUS: 

only that care necessary as an adjunct to medical or surgical treatment of other than a 

 deductibles" for members of the active-duty force. (The 1988/1989 Defense Authorization Act, Public Law 

100-180, id., §721(b), 101 Stat. at 1115, established a $10,000 "cap" on out-of-pocket expenses for medical 

care for retirees and their families. 10 U.S.C.A. §1086(b)(4). See Chapter III.D.1., "Retired Members 

Medical Care," above. The House-Senate conferees expressed regret at having to adopt a $10,000 

"catastrophic cap for retiree families, due to budget constraints" and indicated an intention to "address this 

level of catastrophic loss protection again in the future." House Report No. 100-446 (Committee of 

Conference), p. 650, accompanying H.R. 1748, 100th Congress, 1st Session (1987). No similar concern was 

expressed over the $1,000 cap on deductibles and copayments for members of the active-duty forces and 

their families. The $10,000 cap for retirees and their families was reduced to $7,500 by the National 

Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §703(a), 106 Stat. 2315, 2432 

(1992). See Chapter III.D.1., "Retired Members Medical Care," above.) 

876
dental condition. In military dental facilities, a broad range of dental services could be 

provided at overseas locations on a space-available basis, but in the United States only 

emergency dental care and dental care as an adjunct to medical and surgical care were 

generally available. An exception to this United States limitation was in areas where 

adequate civilian dental care was not available, such as at remote duty stations, but even 

there, only on a space-available basis. 

This situation changed with the Department of Defense Authorization Act, 1985, 

Public Law 98-525, §633, 98 Stat. 2492, 2544 (1984), which authorized broad-based 

dental care in all military dental facilities to the degree that space for such care was 

available, effective July 1, 1985.4

 However, uniformed services dental facilities and 

dental manpower remained relatively limited, so that dental care access for dependents in 

most locations continued to be quite limited. 

As explained by Congress, the reason for extending such care to dependents of 

active duty personnel was related to two factors. First, the Senate had earlier noted that, 

while "an increasing number of civilian firms ... [had] added dental programs as part of 

their health care benefits, dental care insurance programs are not available to most 

dependents of active duty personnel ... [and] the cost of private dental care is prohibitive 

for many families, especially those of junior enlisted personnel."5

 Second, the Senate also 

noted that, because of "fiscal constraints," it was "unlikely that the Congress will 

authorize a dental insurance program for active duty dependents along the lines of the 

current CHAMPUS program."6

 

4 See 10 U.S.C. §1077(a)(10). 

5 Senate Report No. 98-174 (Committee on Armed Services), p. 230, accompanying S. 675 (relating to the 

Department of Defense Authorization Act, 1984, Public Law No. 98-94), 98th Congress, 1st Session (1983). 

See Senate Report No. 98-500 (Committee on Armed Services), pp. 224-225, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

6

 Senate Report No. 98-500 (Committee on Armed Services), p. 224, accompanying S. 2723, 98th

Congress, 2d Session (1984). See Senate Report No. 98-174 (Committee on Armed Services), p. 230, 

accompanying S. 675 (relating to the Department of Defense Authorization Act, 1984, Public Law No. 98-

94), 98th Congress, 1st Session (1983). cf. House Report No. 98-1080 (Committee of Conference), pp. 299-

300, accompanying H.R. 5167, 98th Congress, 2d Session (1984). 

877
Despite the Senate's 1984 expression of the opinion that enactment of a program 

for dental care from civilian sources was unlikely, the Congress authorized just such a 

program the following year. The Department of Defense Authorization Act, 1986, Public 

Law 99-145, §651, 99 Stat. 583, 655-656 (1985), provided for a voluntary enrollment 

basic dental benefit for dependents of active duty members, with enrollees sharing in the 

costs of monthly premiums through payroll deductions. Rather than as an extension of 

CHAMPUS, the authorization was for a competitively awarded, fixed-price contract with 

a contractor. The authorization also provided that no dental contract could be entered 

before September 30, 1986.7

 See 10 U.S.C. §1076a. In authorizing the dental program, 

Congress appears to have been concerned that even though it had broadened the dental 

care that might be provided in military facilities, there would be only limited access to 

such care: 

... Given the dental care requirements of the active duty force, ... the 

amount of care available to dependents on a space-available basis will remain 

very limited.8

Congress also indicated that the program was related in part to the need to be competitive 

with what was happening in the civilian employment sector: 

Although dental care was not a common component of private sector 

health plans when the Civilian Health and Medical Program of the Uniformed 

Services was revised and expanded in 1966, it has become increasingly so in 

recent years.... [R]outine dental care has become increasingly common in larger 

industries.... In order to remain competitive with private industry employers who 

direct recruiting efforts at skilled, mid-career military personnel, the committee 

believes that the services need a dependent dental care benefit as a component of 

the compensation package. A recent survey of the military medical care system 

beneficiary population indicated that dental care for active duty dependents was a 

priority item.9

 

7 Department of Defense Authorization Act, 1986, Public Law 99-145, §651(c), 99 Stat. 583, 656 (1985); 

see 10 U.S.C. §1076a note. 

8 House Report No. 99-81 (Committee on Armed Services), p. 238, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

9

 House Report No. 99-81 (Committee on Armed Services), p. 238, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). cf. House Report No. 99-235 (Committee of Conference), p. 435, 

accompanying S. 1160, 99th Congress, 1st Session (1985). 

878
Benefits under the new dental program extend to preventive, diagnostic, and 

emergency services, for which enrollees have no liability for allowed charges, and to 

fillings, dental appliance repairs, and stainless steel crowns for children's primary teeth, 

for which the enrollee's charge is 20 percent of allowed charges. Thus, the benefit is 

relatively limited in that it does not cover the generally more costly dental procedures 

such as orthodontia, treatment of gum disease, root canal therapy, adult crowns, or dental 

bridges. 

The National Defense Authorization Act for Fiscal Year 1987, Public Law 99-

661, §707(a), 100 Stat. 3816, 3905 (1986), amended the dependents' dental program by 

providing that the maximum monthly premium that could be charged for enrollment of a 

member and the member's dependents in the program was $10. The amendment was 

offered--in substitution for a provision that required the Secretary of Defense to set 

premium levels--to clarify the original intent of Congress in adopting the dependents' 

dental program in the first instance.10

In the most extensive revisions to the military medical care provisions of Title 10, 

United States Code, since enactment of the Military Medical Benefits Amendments of 

1966, Public Law 89-614, 80 Stat. 862 (1966), Congress, in the National Defense 

Authorization Act for Fiscal Year 1987, Public Law 99-661, §§701-702, 100 Stat. 3816, 

3894-3900 (1986), supported Department of Defense initiative to change the CHAMPUS 

program by enactment of a number of additions and changes to Chapter 55 of Title 10, 

United States Code. First, Section 702 of the 1987 Authorization Act required the 

Secretary of Defense, as a part of the so-called CHAMPUS Reform Initiative, to conduct 

a demonstration project (i) to improve competition among civilian providers of health 

care services to the Department of Defense beneficiaries, (ii) to test the relative merits of 

having beneficiaries of the military health care system use a voucher system or fee 

schedule for the provision of health care services, and (iii) to insure that community 

hospitals are given equal consideration with other health care providers for the provision 

 

10 Senate Report No. 99-331 (Committee on Armed Services), p. 247, accompanying S. 2638, 99th

Congress, 2d Session (1986). 

879
of health care services under contracts with the Department of Defense. As set out in 

Section 702(a) of the act itself, the purpose of the demonstration project was to improve 

the effectiveness of the CHAMPUS health care payment system through the competitive 

selection of health care contractors in the civilian sector of the economy who would be 

financially responsible for the delivery of defined health care services to former members 

of the Armed Forces and their dependents (as well as to dependents of members). The 

demonstration project was required to be limited to one-third of the overall CHAMPUS 

program.

11

Second, insofar as military retirees, their dependents, and survivors were specially 

concerned, the 1987 Authorization Act, Public Law 99-661, id., permitted the Secretary 

of Defense to contract with a variety of health care providers and insurers for the 

provision of basic health care services. Included within the scope of permitted contractors 

were health maintenance organizations, preferred provider organizations, individual 

providers, individual medical facilities, insurers, and consortiums of all such providers, 

facilities, and insurers. In addition, the act specifically authorized the Secretary of 

Defense to prescribe premiums, deductible amounts, copayment percentages or amounts, 

and other health care charges for affected beneficiaries. 

Third, while authorizing the Secretary of Defense to prescribe premiums, 

deductibles, copayments and the like, the 1987 Authorization Act, Public Law 99-661, 

id., also specifically authorized the Secretary to waive beneficiary financial liabilities. 

The Secretary was permitted to waive such payments as an inducement to beneficiaries of 

the military health care system to enroll in alternative health care programs that, while 

being no more costly to the government, would provide equal or better services. In 

addition to being permitted to waive various beneficiary liabilities, the Secretary was also 

permitted to waive limitations on the kinds of health care services that could be provided 

 

11 See, e.g., House Report No. 99-1001 (Committee of Conference), pp. 489-490, accompanying S. 2638, 

99th Congress, 2d Session (1986). Also see House Report No. 99-718 (Committee on Armed Services), p. 

238, accompanying H.R. 4428, 99th Congress, 2d Session (1986), in which the House Committee on Armed 

Services expressed special concern about how the Department of Defense Project Imprint would affect the 

delivery of health care services to military retirees and their dependents. cf. House Report No. 99-718 

(Committee on Armed Services), pp. 234-243, accompanying H.R. 4428, 99th Congress, 2d Session (1986), 

generally, for a discussion of the military health care delivery system. 

880
as a part of the inducement to beneficiaries to enroll in more cost-effective health care 

plans. 

Fourth, the 1987 Authorization Act, Public Law 99-661, id., required the 

Secretary of Defense to establish a health care enrollment system for beneficiaries of the 

military health care program. Under the enrollment system, beneficiaries would be 

permitted to choose a health care plan from a number of alternative plans designated by 

the Secretary of Defense. Eligible health care plans would include health care facilities of 

the uniformed services, CHAMPUS providers, and all health care plans contracted for by 

the Secretary of Defense, together with any combination of such plans. An exception to 

the freedom to choose enrollment could apply where it was deemed necessary to assign 

beneficiaries to health care facilities of the uniformed services in order to ensure full use 

of such facilities in a particular geographic area. The Secretary's authority to waive 

certain beneficiary payments and to depart from limitations on the types of health care 

services that could be provided to beneficiaries could be used as inducements for 

beneficiaries to enroll in the alternative health care plans contracted for by the Secretary. 

In addition to the changes described, the Secretary of Defense was authorized to 

prescribe regulations to implement the various provisions, including certain other 

administrative changes to the system that do not directly affect health care for 

beneficiaries. 

In 1994 the Department of Defense embarked on a new program, known as 

TRICARE, to improve the quality, cost, and accessibility of services for its beneficiaries. 

Because of the size and complexity of the military health services system (MHSS), 

TRICARE implementation was phased in over a period of several years. The principal 

mechanisms for the implementation of TRICARE were the designation of the 

commanders of selected Military Medical Treatment Facilities (MTFs) as lead agents for 

12 TRICARE regions across the country, operational enhancements to the MHSS, and 

the procurement of managed care support contracts for the provision of civilian health 

care services within those regions. The first region (Washington and Oregon) went into 

operation in 1995, and the twelfth and last region (Northeastern United States) went into 

operation in 1998. 

881
Many of the fundamental rules and standards of the CHAMPUS system, such as 

deductible amounts and eligibility standards, remain in the basic structure of TRICARE. 

A major feature of TRICARE is the establishment of a triple option benefit. CHAMPUSeligible beneficiaries are offered three options: they may elect to receive health care 

through (1) an HMO-type program called "TRICARE Prime", (2) the preferred provider 

network on a case-by-case basis under "TRICARE Extra", or (3) non-network providers 

under "TRICARE Standard". (TRICARE Standard, the program that replaced the 

standard CHAMPUS, maintains the same deductible and in-patient charges as those 

outlined above for the CHAMPUS program.) Enrollees in TRICARE Prime obtain most 

of their care within the network and pay substantially reduced CHAMPUS cost shares 

when they receive care from civilian network providers. Enrollees in TRICARE Prime 

retain freedom to use non-network civilian providers, but they have to pay cost sharing 

considerably higher than TRICARE Standard if they do so. Beneficiaries who choose not 

to enroll in TRICARE Prime will preserve their freedom of choice of provider for the 

most part by remaining in TRICARE Standard. These beneficiaries face standard 

CHAMPUS cost sharing requirements, except that their coinsurance percentage is lower 

when they opt to use the preferred provider network under TRICARE Extra. All 

beneficiaries continue to be eligible to receive care in MTFs, but active duty family 

members who enroll in TRICARE Prime have priority over all other beneficiaries. 

TRICARE Prime incorporates the "Uniform HMO Benefit Option," which was 

mandated by Section 731 of the National Defense Authorization Act for Fiscal Year 

1994, Public Law 103-160, §731, 107 Stat. 1547, 1696 (1993). It required the 

establishment of a Uniform HMO Benefit Option, which was required "to the maximum 

extent practicable" to be included "in all future managed health care initiatives 

undertaken by" the Department of Defense. This option is to provide "reduced out-ofpocket costs and a benefit structure that is as uniform as possible throughout the United 

States". The 1994 Authorization Act further requires a determination that, in the managed 

care initiative that includes the Uniform HMO Benefit Option, Department of Defense 

costs are to be "no greater than the costs that would otherwise be incurred to provide 

health care to the covered beneficiaries who enroll in the option." 

882
In addition to this provision of the 1994 Authorization Act, a similar requirement 

was established by Section 8025 of the Department of Defense Appropriations Act, 1994, 

Public Law 103-139, §8025, 107 Stat. 1418, 1443-1444 (1993). As part of an initiative 

"to implement a nationwide managed health care program for the MHSS," the 

Department of Defense was required to establish "a uniform, stabilized benefit structure 

characterized by a triple option health benefit feature." The Uniform HMO Benefit also 

implements this requirement of law. It offers reduced cost sharing to CHAMPUS-eligible 

beneficiaries who enroll in TRICARE Prime. 

TRICARE/CHAMPUS supports both the active-duty and retired communities. 

For a more detailed description of the TRICARE/CHAMPUS system considered as a 

whole, the reasons for its adoption in the first instance, and how it is administered, see 

Appendix X of this volume, "CHAMPUS AND TRICARE." 

Current status of medical care for members and their dependents: Military 

personnel are entitled to medical and dental care at military medical facilities or medical 

facilities of any of the uniformed services. 10 U.S.C. §1074(a). The primary form of 

health care authorized for dependents or survivors of active-duty military personnel is 

TRICARE/CHAMPUS12, although dependents or survivors may be treated at military 

medical facilities depending on "availability of space and facilities and the capabilities of 

the medical and dental staff." 10 U.S.C. §1076(b) (dependents or survivors of 

members).13 For additional information about the TRICARE/CHAMPUS system, see the 

TRICARE website at http://www.tricare.osd.mil. 

Cost: For the cost of medical care for active-duty personnel and their dependents 

from 1978 to 1995, see Table IV-4 of Military Compensation Statistics Tables, volume II 

of this edition. 

 

12 But see footnote 1 to Chapter III.D.1. hereof, "Retired Members Medical Care," above. 

13 The service regulations that establish priorities for medical care for service members and their 

dependents and survivors are as follows: for the Army, AR 40-3, chapter 4; for the Navy, NAVMED 

6320.33; and for the Air Force, AFR 168-6, chapter 1. 

883
Chapter IV.C.1. 

 Government Contribution to Social Security 

Legislative Authority: Sections 3101, 3111, and 3121 of the Internal Revenue 

Code of 1986, 26 U.S.C. §§3101, 3111, and 3121, respectively. 

Purpose: To require employees and employers—in the present case, members of 

the uniformed services and the Federal Government, respectively—to jointly finance a 

Federal Old-Age, Survivors, Disability, and Health Insurance (OASDHI) program in 

order to provide pre- and post-retirement income and security to covered employees and 

their families. 

Background: Section 3101 of the Internal Revenue Code of 1986,1

 26 U.S.C. 

§3101, as amended, imposes certain taxes on "wages" received by "employees" in certain 

types of "employment". Matching taxes are imposed on the "employers" of covered 

employees by Section 3111 of the Code, 26 U.S.C. §3111. Since the short title of the 

chapter of the Internal Revenue Code that imposes such taxes is the "Federal Insurance 

Contributions Act," the taxes themselves are sometimes referred to by the acronym 

"FICA," although in common parlance they are more frequently referred to as "Social 

Security taxes." Employment of an individual in the uniformed services qualifies as 

"employment" for purposes of the Social Security Act of 1935, ch. 531 [Public Law 271, 

74th Congress], 49 Stat. 620 (1936), with the result that "wages" paid to members of the 

uniformed services are subject to Social Security taxes. See, e.g., IRC §3121(m) and (n), 

26 U.S.C. §3121(m) and (n). 

Section 3101 of the Internal Revenue Code effectively imposes two different 

types of Social Security, or FICA, taxes. Section 3101(a) of the Code, 26 U.S.C. 

 

1

 The Internal Revenue Code of 1954 was redesignated as the Internal Revenue Code of 1986 by Section 

2(a) of the Tax Reform Act of 1986, Public Law 99-514, §2(a), 100 Stat. 2085, 2095 (1986). As 

redesignated, the Internal Revenue Code of 1986 is classified to Title 26, United States Code. The Internal 

Revenue Code of 1986, as amended, is hereinafter variously referred to as the "Internal Revenue Code" or, 

more simply, the "Code". 

884
§3101(a), imposes a tax on the "wages" of "employees" for the benefit of the "Old-Age, 

Survivors, and Disability Insurance" fund (OASDI), from which Social Security 

retirement benefits are paid; Section 3101(b) of the Code, 26 U.S.C. §3101(b), imposes a 

tax on the "wages" of "employees" for the benefit of the "Hospital Insurance" fund (HI), 

from which Social Security "Medicare" benefits are paid. The amount of the OASDI 

portion of Social Security taxes is equal to 6.2 percent of an individual's "wages," up to 

the "contribution and benefit base," which was $87,900 in 2004.2

 The amount of the HI 

portion of Social Security taxes is equal to 1.45 percent of an individual's total "wages"--

with no ceiling on the amount of wages subject to the tax. Under Section 3121(i)(2) of 

the Code, 26 U.S.C. §3121(i)(2), the "wages" paid to a member of the uniformed services 

that are subject to Social Security taxes are limited to the basic pay received by the 

member, in the case of a member on active duty, or to the "compensation" received by a 

member for inactive-duty training, in the case of a member entitled to compensation for 

inactive-duty training under 37 U.S.C. §206(a).3

The Social Security, or FICA, tax increased as additional coverage, such as 

Medicare, was added. The increases have occurred in both the tax rate and in the annual 

wage base ceiling on which the tax is imposed. This chapter contains a schedule of 

annual wage base ceilings, tax rates, and maximum contributions for the years 1937 

through 2004. As previously indicated, only the basic pay of a member of the active-duty 

components of the uniformed services constitutes "wages" for FICA purposes. Section 

3121(i)(2) of the Internal Revenue Code, 26 U.S.C. §3121(i)(2). Also see Section 

3121(m) and (n) of the Internal Revenue Code, 26 U.S.C. §3121(m) and (n), for various 

definitions applicable to military service. Highlights of the OASDHI program follow the 

schedule of FICA wage base ceilings, tax rates, etc., referred to above. 

 

2

 The "contribution and benefit base" is referred to hereinafter as the "wage base". 

3

 "Compensation" paid under 37 U.S.C. §206 to members of the reserve components of the Armed Forces 

performing inactive-duty training also--pursuant to amendments to the Internal Revenue Code made by the 

Omnibus Budget Reconciliation Act of 1987--constitute "wages" for FICA purposes. Section 3121(i)(2) of 

the Internal Revenue Code of 1986, 37 U.S.C. §3121(i)(2), as amended by the Omnibus Budget 

Reconciliation Act of 1987, Public Law 100-203, §9001(b)(2), 101 Stat. 1330, 1330-286 (1987). 

885
The Social Security Act: The Social Security Act of 1935, ch. 531 [Public Law 

271, 74th Congress], 49 Stat. 620 (1936), created a federal system of old-age benefits for 

retired workers who had been employed in industry or commerce. In 1939 Congress 

changed the concept of the system from an old-age security program to a family security 

program by providing benefits for a worker's dependents and survivors. The system has 

evolved into a set of old-age, retirement, and disability benefits for the principal; survivor 

benefits for the principal's widow or widower and dependent children; and health 

insurance (Medicare) benefits for those over age 65 and those disabled before age 65. 

Additionally, matching federal grants are provided to the states under the Social 

Security Act, ch. 531, id., for public assistance programs such as old-age assistance, aid 

to families with dependent children, aid to the blind, and aid to the permanently and 

totally disabled. The act also authorizes federal tax offsets to employers and grants to 

states to induce them to enact employment insurance laws. The grants to the states are 

financed from general revenues and not from employee and employer contributions to the 

OASDHI program. 

Beginning in 1946, Congress enacted a series of amendments to the Social 

Security Act, ch. 531, id., that extended some benefits to military personnel and their 

survivors. The theory underlying the extension of Social Security benefits to this class of 

persons was that service in the Armed Forces of the United States would not, by its very 

nature, be a life-time career for the vast majority in service at any one time but should 

instead be seen as interrupting, or taking the place of, a portion of a member's civilian 

career that would be resumed upon release from active military service. Accordingly, 

OASDHI benefits were extended to cover military service so that affected personnel 

would have full--rather than interrupted, or partial--coverage, thus leaving such personnel 

in the same position they would have otherwise been in had they not entered the Armed 

Forces. 

The Servicemen's and Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 

84th Congress], §401, 70 Stat. 857, 869-870 (1956), brought members of the uniformed 

886
services on active duty into the contributory Social Security system effective January 1, 

1957.4

 The Social Security provision was but one part of the act, the primary purpose of 

which was to overhaul and integrate the benefit programs for survivors of deceased 

military personnel that, as described by Congressional spokesmen, were then a "complete 

hodgepodge" and a "jumble of laws." The financial integrity of the Social Security 

System was also a factor in making military personnel full-fledged members, although 

such considerations were stated to be secondary. The "gratuitous" benefits that, starting in 

1946, had been authorized for military personnel and their survivors were causing a drain 

on the Social Security trust fund. This drain was being reimbursed out of the general fund 

of the United States Treasury. It was thought that it would be more economical to the 

government to make contributions to the trust fund as the employer of military personnel 

than to reimburse the fund for "free" benefits to such personnel. 

As full participants in the Social Security system, military personnel are in 

general entitled to the same benefits and are subject to the same eligibility criteria and 

rules as other employees. As of October 1, 2001, TRICARE became a second-payer to 

Medicare for retirees over age 64.5

 Beneficiaries pay no enrollment fees, co-pays, or 

deductibles. Eligibility continues for medical care in military facilities on a spaceavailable basis. One feature of OASDHI unique to military personnel grants a 

noncontributory wage credit of (i) $300 for each quarter between 1956 and 1978 in which 

such personnel received military "wages" and (ii) up to $1,200 per year ($100 of credit 

for each $300 of "wages" up to a maximum credit of $1,200 for years after 1977 through 

2002). The purpose of this credit is to take into account elements of compensation such as 

quarters and subsistence not included in the "wages" with respect to which Social 

Security benefit payments are determined once a person achieves eligibility for benefits. 

 

4 In bringing members of the uniformed services on active duty into the Social Security system, Section 

401 of the Servicemen's and Veterans' Survivor Benefits Act, ch. 837 [Public Law 881, 84th Congress], 

§401, 70 Stat. 857, 869-870 (1956), provided, inter alia, ... in the case of an individual performing service, 

as a member of a uniformed service ... the term "wages" shall ... include as such individual's remuneration 

for such service only his basic pay.... 

This rule is perpetuated in the Internal Revenue Code of 1986 at Section 3121(i)(2)(A), 26 U.S.C. 

§3121(i)(2)(A). See IRC §3121(i)(2)(A), 26 U.S.C. §3121(i)(2)(A). 

5

 For a discussion of this medical care system, see Chapter IVB4, “Medical Care for Active Duty Personnel 

and Their Dependents,” and Appendix X, “CHAMPUS AND TRICARE.” 

887
The Social Security trust funds are reimbursed from Federal general revenues for the 

additional cost of benefits resulting from the noncontributory wage credit. 

A description of how the Social Security program works in practice is set out 

under the heading, "The OASDHI Program," following the cost and financing data set 

out on the two following pages. 

 Schedule of Annual Wage Base Ceilings and Maximum Contributions, 

 1937-1992 

Calendar Year Annual Wage Base Ceiling Maximum Employer and 

Employee Contribution (each) 

 1937-1949 $3,000 $30.00 

 1950 $3,000 $45.00 

 1951-1953 1) $3,600 $54.00 

 1954 $3,600 $72.00 

 1955-1956 $4,200 $84.00 

 1957-1958 2) $4,200 $94.50 

1959 $4,800 $120.00 

 1960-1961 $4,800 $144.00 

1962 $4,800 $150.00 

 1963-1965 $4,800 $174.00 

 1966 $6,600 $277.20 

 1967 $6,600 $290.40 

 1968 $7,800 $343.20 

 1969-1970 $7,800 $374.40 

1971 $7,800 $405.60 

1972 $9,000 $468.00 

1973 $10,800 $631.80 

1974 $13,200 $772.20 

1975 $14,100 $824.85 

1976 $15,300 $895.05 

1977 $16,500 $965.25 

1978 $17,700 $1,070.85 

1979 $22,900 $1,403.77 

1980 $25,900 $1,587.67 

1981 $29,700 $1,975.05 

1982 $32,400 $2,170.80 

1983 $35,700 $2,391.90 

1984 $37,800 $2,646.00 

1985 $39,600 $2,791.80 

1986 $42,000 $3,003.00 

1987 $43,800 $3,131.70 

1988 $45,000 $3,379.50 

1989 $48,000 $3,604.80 

1990 $51,300 $3,924.45 

1991 $53,400 $4,075.10 

1992 $55,500 $4,245.75 

888
 Schedule of Tax Rates, 1937-1992 

Calendar Year Employer and 

Employee Tax Rate 

(each), OASDI 3) 

Employer and 

Employee Tax Rate 

(each), HI 

Employer and 

Employee Tax Rate 

(each), Total 

 1937-1949 1.00% 

1950 1.50% 

 1951-1953 1) 1.50% 

1954 2.00% 

 1955-1956 2.00% 

 1957-1958 2) 2.25% 

1959 2.50% 

 1960-1961 3.00% 

1962 3.125% 

 1963-1965 3.625% 

1966 3.85% 0.35% 4.20% 

1967 3.90% 0.50% 4.40% 

1968 3.80% 0.60% 4.40% 

 1969-1970 4.20% 0.60% 4.80% 

1971 4.60% 0.60% 5.20% 

1972 4.60% 0.60% 5.20% 

1973 4.85% 1.00% 5.85% 

1974 4.95% 0.90% 5.85% 

1975 4.95% 0.90% 5.85% 

1976 4.95% 0.90% 5.85% 

1977 4.95% 0.90% 5.85% 

1978 5.05% 1.00% 6.05% 

1979 5.08% 1.05% 6.13% 

1980 5.08% 1.05% 6.13% 

1981 5.35% 1.30% 6.65% 

1982 5.40% 1.30% 6.70% 

1983 5.40% 1.30% 6.70% 

1984 5.70% 1.30% 7.00% 

1985 5.70% 1.35% 7.05% 

1986 5.70% 1.45% 7.15% 

1987 5.70% 1.45% 7.15% 

1988 6.06% 1.45% 7.51% 

1989 6.06% 1.45% 7.51% 

1990 6.20% 1.45% 7.65% 

1991 6.20% 1.45% 7.65% 

1992 6.20% 1.45% 7.65% 

1. 1951-1956 military personnel were given a "free" credit of coverage at an annual earning level of $1,920. 

2. Between 1956 and 1978, military personnel earnings less than the Wage Base Ceiling amount were 

given a "free" credit of up to $300 per quarter to the extent their basic pay was less than the Ceiling; after 

1977, they were given a credit of up to $1,200 a year ($100 for each $300 of covered wages). 

3. The Hospital Insurance program, popularly referred to as Medicare, started in 1966; hence, there is no 

breakout between OASDI and HI for years before 1966. 

 

889
 Schedule of Annual Wage Base Ceilings, Tax Rates, and 

 Maximum Contributions for Years 1993-2004 

Calendar year Program Tax Rate Maximum 

Wages 

Taxable 

Maximum 

Annual 

Contribution 

(each) 

1993 OASDI 6.2 % $53,400 $3,310.80 

HI 1.45 % $125,000 1,812.50 

OASDI+HI 5, 023.30 

1994 OASDI 6.2% $60,600 3,757.20 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

1995 OASDI 6.2% $61,200 $3,794.40 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

1996 OASDI 6.2% $62,700 $3,887.40 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

1997 OASDI 6.2% $65,400 $4,054.80 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

1998 OASDI 6.2% $68,400 $4,240.80 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

1999 OASDI 6.2% $72,600 $4,501.20 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

2000 OASDI 6.2% $76,200 $4,724.40 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

2001 OASDI 6.2% $80,400 $4,984.80 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

2002 OASDI 6.2% $84,900 $5,263.80 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

2003 OASDI 6.2% $87,000 $5,394.00 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

2004 OASDI 6.2% $87,900 $5,449.80 

HI 1.45% Unlimited Unlimited 

OASDI+HI Unlimited 

 

890
 The OASDHI Program 

 Insured Status 

Eligibility for OASDHI benefits is established by the length of an individual's 

covered employment, measured in "quarters of coverage." A person who received 

covered wages of $50 or more in any calendar quarter (January-March, April-June, etc.) 

after 1936 but before 1978 is credited with a quarter of coverage; after 1977, the amount 

of wages required to receive a quarter of coverage has been systematically increased 

every year pursuant to a formula in the Social Security Act of 1935, ch. 531 [Public Law 

271, 74th Congress], 49 Stat. 620 (1936), as amended. In 1978, a person needed $250 of 

wages to secure a quarter of coverage; following regular increases in the interim years, in 

2004, the amount necessary to secure a quarter of coverage was $900. 

A member of the Armed Forces on active duty for more than 90 days between 

September 16, 1940, and December 31, 1956, earned a quarter of coverage for each 

calendar quarter during any part of which such active duty was performed, even though 

active duty service in the Armed Forces was not at that time deemed to be "covered 

employment". As a general rule, these "free" military credits cannot be used by a member 

of an armed force retired by reason of length of service before January 2, 1957. A 

member retired for length of service after January 1, 1957, can use only those military 

credits earned from January 1, 1951, through December 31, 1956. 

Persons born in 1929 or later attain a "fully insured" status by acquiring 40 

quarters of coverage. Those born in 1913 through 1928 attain a fully-insured status by 

acquiring quarters of coverage equal to the number of years from 1951 to the year they 

reach age 62. Thus, a person born in 1920, for example, requires 31 (1982-1951) quarters 

of coverage. Men born in 1910 through 1912 need 24 quarters of coverage to have a fully 

insured status; those born before 1910 became fully insured when they acquired quarters 

of coverage equal to the number of years from 1951 to the year they reached age 65. 

Women born before 1913 became fully insured when they acquired quarters of coverage 

equal to the number of years from 1951 to the year they reached age 62. Once a person 

891
attains a fully insured status, that status exists for life, and no further employment is 

needed to maintain it. A person may be eligible for disability benefits even if not fully 

insured, just as the survivors of a decedent who had not attained a fully insured status 

may be eligible for survivors benefits. 

 Benefits in General 

Monthly Social Security benefits are now tied to the cost of living as measured by 

the Consumer Price Index and are increased automatically each year as the cost of living 

rises. Every year living costs are compared to those of the year before, and if living costs 

have increased over the previous year, benefits are increased by the same percentage. 

Increases in benefits become effective in January following the month cost-of-living 

determinations are made. 

The contribution and benefit base (also referred to as the annual wage base 

ceiling) --the maximum amount of annual earnings on which OASDI taxes are paid and 

that is creditable for benefits--is also affected by cost-of-living increases. Every time 

there is an increase in Social Security benefits, the commissioner of Social Security is 

required to determine by November 1 of that same year a new wage base ceiling for the 

following year. The wage base ceiling for 2004 was $87,900. 

 Retirement (Old-Age) Benefits 

From 1990 until 1999, persons retiring at the established “normal retirement age” 

of 65 received full, unreduced Social Security benefits 6

 Starting in the year 2000, 

however, the "normal retirement age"--the age at which full, unreduced benefits are 

payable--increased in gradual steps until it reached 67 years of age for individuals born in 

1960 or later (see table below). This increase in the "normal retirement age" affects only 

persons born in 1938 or later. Beginning in 2000, reduced benefits still were payable at 

 

6 Persons seeking Social Security retirement benefits at age 62 currently receive 80 percent of the amount 

of the benefit they would receive if they did not seek retirement benefits until age 65. 

892
age 62, but the reduction in benefits was even larger, as a percentage of the total benefits 

payable, than had been the case previously. 

According to what is referred to as the “retirement earnings test,” persons under 

the normal retirement age (NRA) have benefits reduced if their "retirement earnings" 

exceed certain stated amounts. The purpose of the earnings test is to assure that benefits 

are paid to a worker only when he has substantially retired and to his dependents and 

survivors only when they do not have substantial earnings from work. 

Beginning in 2000, the Social Security Administration used two annually adjusted 

earnings figures, called exemption amounts, to determine benefit reductions for persons 

who are below the NRA and receiving non-pension earnings. In this system, for every $2 

of annual earnings in excess of the lower exemption amount (set at $11,640 in 2004), 

Social Security benefits are reduced by $1 for individuals below the NRA. However, 

earnings that exceed a second benchmark, the higher exemption amount ($31,080 in 

2004), bring about a benefits reduction calculated at a different rate, $1 for every $3 

earned above that amount. Thus, in 2004 an individual who was born in 1940 (thus 

falling below the NRA) and earned $31,080 would have a benefit reduction for that year 

of $9,720 ($1 for each $2 in the $19,440 by which the person’s earnings exceed the lower 

exemption amount, $11,600). If the same individual earned $32,280 instead of $31,080, 

the benefits would be reduced by an additional $400, or $1 for every $3 in the $1,200 by 

which earnings exceeded the higher exemption amount. For this purpose, "earnings" 

means income such as wages, commissions, or bonuses produced as a result of work or 

effort.[5] Dividends or interest, retirement pay, insurance policy proceeds, rental income, 

and other similar sources of income are not deemed to be "earnings" for the purposes of 

the "retirement earnings test" and thus do not reduce Social Security benefits. 

 The following table shows "normal retirement age" by year of birth: 

Year of Birth Normal Retirement Age 

 1937 or earlier 65 Years 

 1938 65 Years 2 Months 

 1939 65 Years 4 Months 

 1940 65 Years 6 Months 

893
 1941 65 Years 8 Months 

 1942 65 Years 10 Months 

 1943 through 1954 66 Years 

 1955 66 Years 2 Months 

 1956 66 Years 4 Months 

 1957 66 Years 6 Months 

 1958 66 Years 8 Months 

 1959 66 Years 10 Months 

 1960 or later 67 Years 

A person who does not apply for Social Security benefits until sometime after 

reaching "normal retirement age" receives so-called "delayed retirement credits." These 

credits, which increase the amount of the retirement benefit the person will receive when 

he or she retires, apply until the month the individual reaches age 70. At that age, 

everyone is eligible to receive benefits without regard to the "retirement earnings test" 

referred to above, and no one should have any incentive to further delay receipt of Social 

Security retirement benefits. The following table shows the "delayed retirement credits" 

an individual will receive for each month past age 65 that the individual delays receiving 

retirement benefits: 

 Year in Which Monthly Yearly 

 Individual Percentage Percentage 

Attains Age 65 Credit Credit

 Before 1982 1/12 of 1% 1% 

 1982-1989 1/4 of 1% 3% 

 1990-1991 7/24 of 1% 3.5% 

 1992-1993 1/3 of 1% 4% 

 1994-1995 3/8 of 1% 4.5% 

 1996-1997 5/12 of 1% 5% 

 1998-1999 11/24 of 1% 5.5% 

 2000-2001 1/2 of 1% 6% 

 2002-2003 13/24 of 1% 6.5% 

 2004-2005 7/12 of 1% 7% 

 2006-2007 5/8 of 1% 7.5% 

 2008 or later 2/3 of 1% 8% 

 

Thus, for example a person reaching age 65 in the year 2000 who delays applying for 

Social Security retirement benefits until the month in which he or she reaches age 68 

would be eligible for an increase in his or her monthly retirement benefit of 3 times 6%, 

894
or 18%, over what that benefit would have been if the person had been 65 instead of 68 

when he or she first applied for retirement benefits. 

Anyone who is eligible and has applied for Social Security retirement benefits is 

entitled to a monthly payment that represents a portion of average Social Security 

earnings over a number of years. For a person born before 1930, average earnings are 

usually computed from 1951 to the year the person reaches age 62. For a person born in 

1930 or later, the average will be figured from the year the person became 22 to the year 

he or she became 62. Five years of zero or low earnings during the period may be 

disregarded in computing the average. Thus, for example, the retirement benefit of a 

person reaching age 62 in 1982 would be determined by averaging that person's earnings 

over 26 ((1982-1951)-5) years. Persons in active military service during the period from 

1951 through 1956 are deemed to have Social Security earnings of $1,920 a year ($160 a 

month) for this purpose. Years of high earnings after reaching 62 can be substituted for 

earlier years of low earnings, but the number of years used in the computation will not 

change.7

After average monthly Social Security earnings have been calculated, the 

retirement benefit payable at the "normal retirement age"--the primary insurance amount-

-is determined from a benefit formula prescribed by law. This formula is revised by the 

commissioner of Social Security whenever a cost-of-living increase in Social Security 

benefits occurs or when there is a change in the national average wage index for the 

United States. If a person elects to receive a retirement benefit between age 62 and 

"normal retirement age," the primary insurance amount is reduced by a certain percentage 

 

7 For this reason, in addition to the possibility of receiving higher Social Security retirement benefits 

because of the "delayed retirement credits" referred to above, an individual may also receive higher Social 

Security retirement benefits by delaying retirement past "normal retirement age," thereby receiving 

additional Social Security earnings, which may increase the individual's average annual Social Security 

earnings on which Social Security retirement benefits are determined. 

895
for each month the person is under "normal retirement age" in order to compensate--

actuarially--for the longer expected benefits-receipt period. 8

The spouse of a person receiving a retirement benefit is eligible for a "wife's or 

husband's benefit" equal to one-half the covered employee's benefit if the spouse is 

"caring for" the insured's dependent child who is eligible for child's benefits on the 

employee's earning record. For the purpose of the wife's or husband's benefit, the term 

"dependent child" includes children under 16 as well as those disabled. A child under 18, 

or a child 18 to 19 if a full-time elementary or secondary school student, or a child 

disabled before age 22, of a person receiving an old-age benefit, is eligible, while 

unmarried, for a separate child's benefit equal to one-half the beneficiary's benefit if the 

beneficiary is alive or to three-quarters of the beneficiary's benefit if the beneficiary is 

dead. 

Even though a retiree may be eligible for a retirement benefit and the retiree's 

spouse and children may additionally all be otherwise eligible for a percentage of such 

benefit, the total amount that may be paid on the beneficiary's Social Security account is 

limited by a ceiling (called the maximum family benefit). This ceiling varies with the 

amount of the retirement benefits. 

Where dependent children are not involved, the spouse of a person receiving an 

old-age benefit is entitled at the spouse's "normal retirement age" to a "wife's or 

husband's benefit" equal to one-half the primary beneficiary's benefit. The spouse may 

elect to receive this benefit as early as age 62, in which case the benefit is reduced by an 

actuarially determined percentage for each month the spouse is under "normal retirement 

 

8

 A person electing retirement benefits at age 62 will receive only 80 percent of the benefits a person 

retiring at the "normal retirement age" would receive. Persons retiring after age 62 but before age 65 

receive retirement benefits greater than the 80 percent applicable to persons retiring at age 62 but less than 

the full benefit applicable to persons retiring at the "normal retirement age.” 

896
age."9

 A spouse who is eligible for a Social Security benefit on his or her own earnings 

and who is also eligible for a wife's or husband's benefit draws her or his own benefit plus 

the excess, if any, of the wife's or husband's benefit over his or her own. In effect, the 

spouse receives the larger of the two. Benefits are payable to a divorced spouse who was 

married to an entitled service member for at least 10 years. Divorced spouse benefits are 

payable even if the service member is not yet receiving benefits. In addition to the 

requirement that a marriage last at least 10 years for a divorced spouse to be entitled to 

benefits on the service member's record, the service member must be age 62 or older, 

fully insured, and divorced for at least two continuous years. 

 Survivor Benefits 

The surviving spouse, and the divorced surviving spouse, of a person with a fullyinsured or currently-insured status is eligible for a "mother's" or "father's" benefit equal to 

three-fourths of the insured's primary insurance amount while the survivor is "caring for" 

the deceased's entitled children, provided that, in the case of a divorced surviving spouse, 

any children on whose behalf a benefit is payable must be the divorced surviving spouse's 

natural or legally adopted children. For the purpose of this benefit, a dependent child 

includes one who is under 16 or one disabled before age 22, but does not include a 

student age 16 through 21. A child under 18, or a child 18 to 19 if a full-time elementary 

or secondary school student, or a child disabled before age 22, of a person who was fully 

insured or currently insured at the time of death, is eligible, while unmarried, for a child's 

benefit equal to three-fourths of the individual's primary insurance amount. However, the 

total payments that can be made to a surviving spouse and children are limited by the 

maximum family benefit ceiling. 

 

9 The "normal retirement age" for a spouse born before 1938 is 65; for spouses born after 1937, the 

"normal retirement age" is the same as that set out for retirees under the "Retirement Benefits" heading, 

above. 

897
Where dependent children are not involved, the surviving spouse of a person with 

a fully-insured status is eligible at "normal retirement age" for a widow's or widower's 

benefit equal to 100 percent of the insured's primary insurance amount, unless the insured 

was receiving a retirement benefit at the time of death. If the insured was receiving a 

reduced retirement benefit at the time of death, the widow's or widower's basic benefit 

cannot be more than the insured would be getting if still alive, except that the benefit 

amount cannot be reduced to less than 82 1/2 percent of the insured's primary insurance 

amount. The surviving spouse may elect to receive the widow's or widower's benefit 

between age 60 and "normal retirement age," in which case the surviving spouse's basic 

benefit is reduced by an actuarially determined percentage for each month the spouse is 

under "normal retirement age." A disabled widow or widower or a disabled surviving 

divorced spouse may be eligible for reduced benefits at age 50. 

When an insured person with a fully-insured or currently-insured status dies, that 

person's widow or widower is also entitled to a lump-sum payment of $255 if the two 

were "living together," to use as the surviving spouse sees fit. If there is no "living with" 

surviving spouse, the lump sum is paid to a surviving spouse who was eligible for or 

entitled to benefits on the service member's record for the month of death. If there is no 

such surviving spouse, the lump-sum benefit is payable to the surviving child or children 

of the service member who was eligible for or entitled to a benefit on the service 

member's record for the month of death. 

 Disability Benefits 

To qualify for disability benefits, a person must have a fully-insured status and, if 

31 or older at the onset of the disability, have acquired at least 20 quarters of coverage in 

the 40 calendar quarters ending with the quarter in which disabled. A person disabled 

before age 31 must have been covered for one-half the quarters after age 21 up to the date 

of disability. 

A qualified person who is disabled within the meaning of the Social Security Act 

of 1935, ch. 531, id., as amended, is entitled, after being disabled for 5 full consecutive 

898
months, to a disability benefit based on average Social Security earnings, with no 

actuarial reduction in the benefit regardless of age. For the purposes of the Social 

Security Act, the term "disability" is defined as the inability to engage in any substantial 

gainful activity because of any medically determinable physical or mental impairment 

that can be expected to result in death or that has lasted or can be expected to last for a 

continuous period of at least 12 months. For persons born before 1930, average earnings 

are usually computed from 1951 to the year of disability. For a person born in 1930 or 

later, the average earnings are computed from the year the person became 22. Different 

agencies have different standards, and a person might be rated 100 percent disabled by a 

military service or the Department of Veterans Affairs and not qualify for a Social 

Security disability benefit. Conversely, a person might qualify for a Social Security 

disability benefit even though not rated as disabled or rated as less than 100 percent 

disabled by another agency. A disability benefit converts to an old-age benefit when the 

beneficiary reaches age 65. 

Children's benefits and wife's and husband's benefits (including benefits payable 

to divorced former spouses) are payable on the Social Security account of a person 

receiving a disability benefit in the same percentages and under the same eligibility 

criteria as apply in the case of a person receiving an old-age benefit. 

Health Insurance for the Aged and Disabled (Medicare) 

In 1965 Congress amended the Social Security Act of 1935, ch. 531, id., as 

amended, by establishing two related contributory health insurance plans for virtually all 

persons aged 65 and over: a basic compulsory program of hospital insurance and a 

voluntary program of supplementary medical insurance. Effective July 1, 1973, such 

Medicare coverage was extended to certain severely disabled persons under 65, including 

disabled workers, disabled widows and widowers, and childhood disability beneficiaries. 

The employee and employer Hospital Insurance taxes paid while an individual is 

working are used to finance the basic compulsory plan that provides insurance against the 

899
costs of inpatient hospital services and related post-hospital extended care for individuals 

who are eligible for Social Security benefits when they reach age 65 (whether retired or 

not), and for disabled individuals (but not their dependents), regardless of age, who have 

been entitled to Social security benefits for at least two consecutive years. 

As of October 1, 2001, retired members of the uniformed services, their 

dependents, and dependents of deceased members no longer lose their inpatient and 

outpatient coverage under the TRICARE/CHAMPUS system when they become eligible 

for Medicare's basic hospital insurance program (even if they decline its supplementary 

medical insurance plan). TRICARE/CHAMPUS is a "last pay" health benefits program 

for these classes of persons, and they cannot choose between it and Medicare once they 

become eligible for the latter. However, such persons continue to be eligible, under DoD 

policy, for space-available health care in uniformed services facilities after achieving 

Medicare eligibility.10

Under the hospital insurance plan, after the patient pays a deductible, Medicare 

pays the remaining costs of hospital services, such as semiprivate accommodations, 

operating room, and laboratory tests and X-rays, for the first 60 days of hospitalization 

during each benefit period. A benefit period begins when the individual is admitted to a 

hospital and ends when he has not received inpatient hospital or skilled nursing facility 

services for 60 consecutive days. For each day of hospitalization from the 61st through 

the 90th, the patient pays a set "coinsurance" amount for hospital services and Medicare 

pays the balance. After 90 days of hospitalization in a benefit period, each beneficiary has 

a "lifetime reserve" of 60 days of hospital care for his optional use at a still higher 

"coinsurance" cost to him. 

Post-hospital extended care services in an institution or convalescent section of a 

hospital that qualifies as a skilled nursing facility are also authorized under the hospital 

insurance plan, after three or more days of hospitalization. This plan provides for up to 

 

10 See Chapter III.D.1. hereof, "Retired Members Medical Care," above. 

900
100 days of extended care in each benefit period. There is no cost to the patient for 

services during the first 20 days, but he pays a certain "coinsurance" amount per day for 

each of the remaining 80 days used. Additionally, the plan authorizes certain posthospital home health services following a stay of three or more days in a hospital or 

skilled nursing facility and before the beginning of a new benefit period. 

Persons eligible for the basic compulsory hospital insurance are automatically 

enrolled in the supplementary medical insurance program but have the option of 

declining such coverage. All persons covered by the supplementary medical insurance 

program pay a monthly premium for such coverage. The premium is deducted from the 

benefit payments of persons in receipt of cash payments. After the participant has paid an 

annual deductible, supplementary medical insurance covers 80 percent of the reasonable 

charges or costs for items such as physicians or surgeons or outpatient services, 

outpatient hospital services, and prosthetic lenses and devices other than dental. 

Cost: For the cost of the government contribution to Social Security from 1972 to 

2004, see Table IV-5 of Military Compensation Statistics Tables, volume II of this 

edition. 

901
Chapter IV.C.2. 

 Survivor Benefit Plan (SBP) 

Legislative Authority: 10 U.S.C. §§1447-1460b. 

Purpose: To establish a program to insure that the surviving dependents of 

military personnel who die in retirement or after becoming eligible for retirement will 

continue to have a reasonable level of income. 

Background: The survivors of a retired member of the Armed Forces who dies in 

retirement or after becoming eligible for retirement may or may not, depending on 

circumstances, be entitled to cash payments from one or more government benefit 

programs. Government benefits could, for example, include Social Security payments to 

a surviving spouse--if the spouse had children in his or her care or was at least 60 years of 

age. They could include VA dependency and indemnity compensation--if the member's 

death resulted from a disease or injury traceable to active service. Or they could include a 

VA non-service-connected death pension--if the survivor's or survivors' income is less 

than specified levels. But the Survivor Benefit Plan is the only means by which a retired 

member can insure that his or her immediate family will be provided with continued 

government income under any and all circumstances at a level dictated by the member, 

within established bounds, after the member's death. 

The Uniformed Services Contingency Option Act of 1953, ch. 393 [Public Law 

239, 89th Congress], §3, 67 Stat. 501, 502 (1953), was the first law to permit military 

members to receive reduced retired pay during their lifetime in return for insuring that 

their widows and eligible children would receive an annuity after their death. Under this 

act, retired members were in effect allowed to pass on part of their retired pay to future 

survivors. The act provided, however, that the mechanism for so doing had to be 

constructed on an actuarially self-supporting basis. Hence, a member's contribution costs, 

i.e., the amount of the reduction in the member's retired or retainer pay entitlement, were 

determined on the basis of the member's age and the age of the member's eligible 

dependents at the time of retirement, and by whether the member was retired for 

902
disability or nondisability. Under the original Contingency Option Plan, members could 

elect, before the completion of their 18th year of service, to leave their survivors an 

annuity of either one-half, one-fourth, or one-eighth of their initial retired pay, where the 

amount of such "retired pay" in the case of any particular individual was the amount of 

such pay as reduced by the amount of the contribution. 

The Contingency Option Plan did not prove attractive to most of the members 

eligible for it because it was quite expensive in terms of the reduction in current retired 

pay required to effect the election. For example, the cost per dollar of coverage was 22.8 

cents for a member who retired for other than disability at age 45 with a wife five years 

younger. In addition, contributions were subject to taxation, so that a participating retired 

member had to pay taxes on income he never in fact received. The requirement of an 

election by the end of the 18th year of service gave a pig-in-a-poke quality to what should 

have been an informed decision. A member had to commit himself at that point to buy an 

annuity based on a highly unknown quantity--namely, the amount of his retired pay 

entitlement some two to twelve years hence. And the future cost of the commitment was 

even more uncertain, because the cost per dollar as well as the dollar amount of the 

annuity was subject to change in the interval between election and retirement. 

Furthermore, since the survivor annuity was based on a member's initial retired pay and 

remained frozen at that level, inflation in the general cost of living could cause a decrease 

in the real purchasing power of the annuity. In practice, unchecked inflation rapidly 

eroded the real purchasing power of the annuity, and for this reason also, the plan never 

became truly successful. Subsequent legislation chipped away at some of these 

shortcomings, but neither the Contingency Option Plan, nor the Retired Serviceman's 

Family Protection Plan, as it was later renamed, achieved a participation rate of more 

than 15 percent at any time during their 19 years of existence. 

The Act of October 4, 1961, Public Law 87-381, §2, 75 Stat. 810 (1961), which 

changed the name of the Contingency Option Plan to the "Retired Serviceman's Family 

Protection Plan" (RSFPP), was designed to make the election procedures of the program 

more flexible. Originally, members could not enter the Contingency Option Plan unless 

903
they so elected before the start of their 18th year of service. An election made before the 

18th year could thereafter be changed or revoked, but the change or revocation was not 

effective unless the member remained on active duty for at least five years after making 

it. The Act of October 4, 1961, Public Law 87-381, id., permitted a member to elect to 

participate in RSFPP after the start of the member's 18th year of service, but the election 

was effective only if the member remained on active duty for at least three years after 

election. It also reduced from five to three years the period of subsequent active duty 

required to make a post-18-year change or revocation effective. The act further 

authorized the Secretaries of the military departments to permit a retired member to 

withdraw from RSFPP because of "extreme financial hardship." Though these changes 

brought more flexibility to the plan, they did not alter its self-supporting character, and 

the liberalization of the procedures had the effect of increasing the cost of the plan, and 

hence the cost to participating members. Thus, for example, a member who retired for 

other than disability at age 45, with a wife five years younger than he, paid 25.3 cents per 

dollar of coverage, as compared with the earlier 22.8 cents per dollar. 

The Act of March 8, 1966, Public Law 89-365, §1(1), 80 Stat. 32 (1966), made 

the amount by which retired pay was reduced because of RSFPP participation exempt 

from income taxation. Under this act, RSFPP was accorded the same income tax 

treatment as the federal civil service retirement program and other so-called "qualified 

pension plans." Under the Internal Revenue Code, one of the tests for favorable tax 

treatment for members participating in such a plan was whether the plan was funded. 

Since RSFPP was not "funded" within the meaning of the Internal Revenue Code, special 

legislation was needed to obtain the desired tax treatment. The favorable tax treatment 

given RSFPP under the Act of March 8, 1966, Public Law 89-365, id., was extended to 

the Survivor Benefit Plan when that plan subsequently replaced RSFPP. 

The Act of August 13, 1968, Public Law 90-485, 82 Stat. 751 (1968), further 

liberalized various provisions of RSFPP in an attempt to obtain greater participation. It 

permitted elections to become effective immediately if made before the start of the 19th 

rather than the 18th year of service. It reduced from three to two years the period of 

904
subsequent active duty required to make a post-19th-year election, change, or revocation 

effective. It allowed members to change or revoke their election between their 19th year 

of service and the date of retirement, without regard to the two-years-of-subsequentactive duty rule, if such a change or revocation resulted from "significantly changed 

family circumstances." It enabled retired members to withdraw from RSFPP or to reduce 

the amount of their respective annuities on their own applications, effective six months 

after the date of application. Previously, withdrawals had been authorized only for 

"extreme financial hardship," and reductions in the amount of an annuity had not been 

allowed. The act changed the annuity base from a member's reduced retired pay to full 

retired pay. Finally, instead of an election being limited to an annuity of either one-half, 

one-quarter, or one-eighth of a member's retired pay, the act authorized the election of an 

annuity in any amount specified by the member, provided the amount was not more than 

50 percent nor less than 12.5 percent of the member's retired pay. As was the case with 

the Act of October 4, 1961, Public Law 87-381, id., however, this liberalization further 

increased the costs to participating members. The cost to a member who retired for other 

than disability at age 45, to use the same example as above, with a wife five years 

younger soared to 42.9 cents per dollar of coverage. 

The Uniformed Services Survivors' Benefits Amendments of 1978, Public Law 

95-397, 92 Stat. 843 (1978), made several changes to RSFPP designed to improve the 

benefits available to persons already receiving annuities thereunder. First, and possibly 

most important, the act, id., §101(a)(3), 92 Stat. at 843, provided that RSFPP annuities 

payable to survivors of members who died before March 20, 1974, would thereafter be 

subject to adjustment for increases in the cost of living. Such adjustments to would take 

effect at the same time, and in the same percentage amount, as retired and retainer pay 

adjustments take effect under 10 U.S.C. §1401a.1 2

 Second, the act, id., §101(a)(1) and 

 

1

 Under the provision in question, the RSFPP annuities of survivors of members who had died on or before 

March 20, 1974, were adjusted on October 1, 1978, by the percentage by which retired and retainer pay had 

been increased since September 21, 1972. 

2

 RSFPP cost-of-living adjustments were authorized because, since RSFPP annuities had not theretofore 

been indexed, "inflation ha[d] seriously eroded the purchasing power of the fixed amount paid to RSFPP 

905
(2), 92 Stat. at 843, permitted RSFPP annuitants who remarried after age 60 to continue 

to receive RSFPP payments.3

A further perfecting change was made to RSFPP by the Department of Defense 

Authorization Act, 1985, Public Law 98-525, §642(a)(1)(B), 98 Stat. 2492, 2545-2546 

(1984). At the behest of the Senate Armed Services Committee, Congress amended 

RSFPP to permit the Secretaries of the various military departments to determine, under 

certain circumstances, that a missing person may be presumed dead, with the result that 

the person's RSFPP beneficiaries therefore became entitled to RSFPP payments. Under 

the amendment effected by the 1985 Authorization Act, a service Secretary may 

determine that a participant who is missing may be presumed dead for the purposes of 

RSFPP entitlements if the surrounding circumstances would reasonably indicate the 

person is in fact dead, provided the person has been missing for at least 30 days. As 

indicated by the Senate Armed Services Committee, the amendment was intended to cure 

a "deficiency" in the program--also in the Survivor Benefit Plan, see below--under which 

a retired person's survivors could neither get the missing person's retired or retainer pay 

entitlement or RSFPP payments.4 5

The Act of September 21, 1972, Public Law 92-425, §3, 86 Stat. 706, 711-712 

(1972), terminated RSFPP for members retired on or after that date. In its place, the act 

created the Survivor Benefit Plan (SBP), enacted as new Subchapter II of Chapter 73, 

Title 10, United States Code, id., §1(3), 86 Stat. at 706-711. SBP was not intended to be a 

 annuitants." Senate Report No. 95-1138 (Committee on Armed Services), p. 2, accompanying H.R. 3702, 

95th Congress, 2d Session (1978). 

3 As explained in the relevant Congressional reports, the reason for this change in RSFPP was to make it 

more compatible with the treatment accorded annuitants under the newer survivor benefit plan, which 

allowed SBP annuitants who remarried after age 60 to continue to receive their SBP annuities. See, e.g., 

Senate Report No. 95-1138 (Committee on Armed Services), p. 3, accompanying H.R. 3702, 95th Congress, 

2d Session (1978). 

4 See Senate Report No. 98-500 (Committee on Armed Services), pp. 219-220, accompanying S. 2723, 

98th Congress, 2d Session (1984). cf., House Report No. 98-1080 (Committee of Conference), pp. 300-301, 

accompanying H.R. 5167, 98th Congress, 2d Session (1984). 

5 The same amendment was made to the survivor benefit plan. 

906
self-supporting program: its costs were to be shared by the government and retired 

members. For this reason, it was much less expensive to the member in most cases than 

RSFPP had been. 

The purpose of changing the survivor benefits program from a self-supporting to a 

cost-sharing plan was described by a Congressional subcommittee in these terms: 

The lack of basic survivor protection, which is a standard feature of most 

employee fringe benefit programs, public and private, and which is of particular 

importance to the military man because of his long period of retirement, is a 

glaring weakness in the singularly outstanding benefits program of the Armed 

Forces. The lack of a survivor benefits program based solely on the man's retired 

pay at a cost comparable to other systems, such as the civil service system, calls 

into question the retiree's inherent legal interest in his retired pay. The 

subcommittee believes the concept of retired pay as an earned right in which the 

retiree has a legal interest should be beyond challenge. 

The subcommittee believes the Government, in recognition of these rights, 

has a moral obligation to join in providing income protection for his survivors. 

 . . . 

RSFPP has proved a failure insofar as it was designed to provide general 

survivor protection to the retired military population. The law has been amended 

seven times over the past 17 years in an attempt to liberalize its provisions and 

make it more attractive to military personnel. The efforts have not been successful 

because of fundamental shortcomings in the plan, and only 15 percent of eligible 

military retirees have participated since 1953. This means that the survivors of 85 

percent of deceased eligible retirees have no claim to any part of the member's 

military retired pay. 

 ... Most retirees find it too expensive to participate, and this is 

particularly true of the lower paid retiree who needs the protection the most. For 

example, only 10 percent of the enlisted retirees participate, compared to about 20 

percent of officer retirees. 

 . . . 

 The subcommittee study shows that many present widows of career 

military retirees are living in conditions of great economic deprivation, and this is 

true not just of widows of lower ranked personnel but of the widows of senior 

officers and senior enlisted men of long and outstanding service.6

 

6

 “Inquiry into Survivor Benefits, A Report by the Special Subcommittee on Survivor Benefits of the 

House Armed Services Committee,” H.A.S.C. Document No. 91-68, printed in “Hearing before and 

Special Reports Made by the House Committee on Armed Services on Subjects Affecting the Naval and 

Military Establishments,” 1970, pp. 9510, 9511, 9515, 91st Congress, 2d Session (1970). 

907
Under SBP, each member entitled to retired or retainer pay--whether on account 

of active-duty or non-regular service--with eligible dependents is entitled to participate in 

the program. A member who becomes entitled to retired or retainer pay on account of 

active-duty service is automatically enrolled in the program at the maximum authorized 

level of coverage unless he specifically elects before retirement not to be covered or to be 

covered at less than the maximum level, whereas a member who becomes entitled to 

retired pay on account of non-regular service but who has not reached the age of 60 must, 

within 90 days after notification that he has completed the number of years of service 

required for eligibility for retired pay, affirmatively elect coverage.7 8

 Under maximum 

coverage, the member's retired pay is the "base amount" on which the survivor annuity 

and member cost are computed.9

 Under less-than-maximum coverage, the base amount is 

any sum between $300 and a member's total retired pay, as specified by the member. 

Covered members whose monthly retired pay entitlement is $300 or less do not have a 

less-than-maximum option; their base amount has to be their whole retired pay--unless 

they opt out altogether. The maximum survivor annuity is 55 percent of the member's 

base amount. Prior to amendment of the Survivor Benefit Plan by the Military Survivor 

 

7

 Before enactment of the Uniformed Services Survivors' Benefits Amendments of 1978, Public Law 95-

397, 92 Stat. 843 (1978), members entitled to retired pay for non-regular service who died before reaching 

age 60, i.e., before they became eligible to actually receive such pay, were not able to protect their 

dependents under SBP. (In transitional provisions, the Uniformed Services Survivors' Benefits 

Amendments of 1978 provided that members entitled to retired pay for non-regular service who had not 

reached age 60 by the date of enactment (September 30, 1978) were given until January 1, 1980, to elect to 

participate in the plan, but that period was later extended to March 31, 1980, by the Department of Defense 

Authorization Act, 1980, Public Law 96-107, §816, 93 Stat. 803, 818 (1979).) 

8

 A member eligible for retired pay on account of non-regular service who affirmatively elects to 

participate in the plan must, at the time of election, also indicate whether, should he die before reaching 60 

years of age, the annuity provided should become effective on his death or on the 60th anniversary of his 

birth. This election becomes important, at least in part, because the "base amount" on which the annuity of 

the survivors of such a member is computed is determined by reference to what the member's basic pay 

would have been, had he been alive and entitled to such pay, on the date the annuity becomes effective. For 

a member electing immediate, on-death coverage, SBP annuities are adjusted between the time of a 

member's death and the time the member would have reached age 60 for changes in the cost of living, 

whereas increases in basic pay between the time of a member's death and the time the member would have 

reached age 60 are not necessarily determined by changes in the cost of living, sometimes being more, 

sometimes less. 

9

 In the case of a member eligible for retired pay for non-regular service who dies before reaching age 60, 

the "base amount" is the amount of retired pay to which the member would have been entitled, had he 

lived, on the date he elects for the SBP annuity to become effective. See footnote 8 to this chapter, above. 

908
Benefits Improvement Act of 1989, enacted as Title XIV of the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, §§1401-1407, 

103 Stat. 1352, 1577-1578 (1989), discussed more fully below, a member's cost for 

spouse's coverage was computed (1) at the rate of 2.5 percent of the first $300 of the 

member's base amount plus 10 percent of the remainder of the base amount in the case of 

retired members of Regular components or (2) by an amount prescribed by the Secretary 

of defense taking into account various actuarial considerations in the case of members 

entitled to retired pay for non-regular service. The cost for children's coverage is 

determined actuarially. When a cost-of-living increase occurs in retired pay, the amount 

of the annuity payable increases proportionately, as does an affected member's 

contribution. Annuities paid to survivors under the SBP program are increased in the 

same percentage amount, and at the same time, as increases in retired and retainer pay. 

According to official statistics, in 1998 the overall SBP participation rate was 79 percent 

for officer retirees and 55 percent for enlisted retirees10--a substantial increase over the 15 

percent participation rate for the RSFPP program, but still lower than the 85 percent 

participation rate targeted during the development of the SBP program.11

SBP has a number of other features that differ from RSFPP. A member who is not 

covered by the plan because he or she is without dependents at the time of retirement may 

elect to enter it if he or she marries or acquires a dependent child after retirement. A 

member without eligible dependents may also elect before retirement to provide an 

annuity to any nondependent person who has an insurable interest in his or her life. An 

insurable interest annuity may be canceled if the member acquires a spouse or dependent 

child after retirement and elects an annuity for them. 

The SBP program is integrated with the Social Security system and requires 

certain reductions in annuity payments in connection with Social Security benefit 

 

10 Department of Defense Statistical Report 1998, p 220, as of Sep 30, 1998. 

 

11This compares with an overall participation rate of 57 percent for fiscal year 1986 retirees, when 73 

percent of officers and 51 percent of enlisted personnel participated. 

909
eligibility. A widow without children is eligible for a Social Security benefit at age 62 

(she can receive an actuarially reduced benefit at age 60). Under integration, the SBP 

annuity of such a widow is reduced at age 62 by an amount equal to the lesser of the 

Social Security survivor benefit that would be paid based solely on the member's active 

military service after December 31, 1956, or 40 percent of the amount of the annuity that 

would otherwise be payable. A widow with one child in her care is eligible for a Social 

Security mother's benefit regardless of her age. Under the SBP program, the annuity of 

such a widow was once reduced by the amount of the mother's benefit payable based on 

the member's earnings record. A child is eligible for a separate Social Security benefit, 

which has no effect on SBP annuities. Different treatment is accorded a widow with more 

than one child in her care. Despite the fact that such a widow is also eligible for a Social 

Security mother's benefit regardless of her age, the Act does not require her SBP annuity 

to be reduced on account of any Social Security benefits she receives. Rather, Congress 

decided that the concurrent receipt of Social Security benefits and an unreduced SBP 

annuity was justified as a matter of equity where the burden of rearing a multi-child 

family fell wholly upon a widow. 

The survivor of a member who dies on active duty may be entitled to an SBP 

annuity as a supplement to any dependency and indemnity compensation ("DIC") the 

survivor receives from the Department of Veterans Affairs, if the member has become 

eligible to receive retired pay, has qualified for retired pay but not applied for or been 

granted that pay, or has completed 20 years of active service but has not completed the 10 

years of active service as an officer required for retirement as a commissioned officer. 

See Chapter III.D.4., "Dependency and Indemnity Compensation." A surviving spouse 

whose DIC entitlement is less than the maximum SBP annuity he or she would have 

received had the member been retired on the date of the member's death is entitled to an 

annuity in an amount sufficient to make up the difference. The SBP annuity also 

functions as a DIC supplement when a member dies in retirement of a service-connected 

cause and the surviving spouse is thus eligible for DIC. In this situation, the surviving 

spouse is similarly eligible for SBP payments only to the extent that the SBP entitlement 

exceeds the DIC entitlement. If no SBP annuity is payable because the DIC entitlement is 

910
equal or greater, all SBP contributions made by the retired member before death are 

refunded to the surviving spouse. If part of the SBP annuity is payable, the member's 

retired or retainer pay reductions are recalculated based on the lower annuity, and excess 

contributions, if any, are refunded to the surviving spouse. 

The Act of September 21, 1972, Public Law 92-425, §4, 86 Stat. 706, 712-713 

(1972), authorized a "gratuitous" annuity for certain "low-income" widows of retired 

personnel. To qualify for this special annuity, a widow must (1) have been entitled to a 

VA non-service-connected death pension; (2) have had less than $1,400 of annual 

income, subject to adjustments as specified in 10 U.S.C. §1448 note, from other sources; 

and (3) have been the widow of a retired member who retired before September 21, 1972, 

and died before September 20, 1973 without having been able to, or not having elected 

to, participate in the SBP program. (The Department of Defense Authorization Act for 

Fiscal Year 1984, Public Law 98-94, extended the latter date to March 20, 1974.) The 

annuity was payable in the amount needed to bring the widow's annual income from 

sources other than her VA death pension up to $1,400 or such greater amount as specified 

in 10 U.S.C. §1448 note. While this "income supplement" program remains in effect 

today, the $1,400 cut-off and income "target" referred to above twice were given specific 

increases--first to $2,100 by the Act of October 14, 1976, Public Law 94-496, §2(1), 90 

Stat. 2375 (1976), and later to $2,340 by the Uniformed Services Survivors' Benefits 

Amendments of 1978, Public Law 95-397, §209(1), 92 Stat. 843, 848 (1978). The 

National Defense Authorization Act for Fiscal Year 1997, Public Law 104-201, 110 Stat. 

2581, prescribed that the amount of this allowance be increased at the same time and by 

the same rate as increases were made in the Social Security old-age and survivor benefits 

prescribed in 42 U.S.Code §402. That law further stipulated that, effective July 1 1997, 

the allowance be paid by the Department of Veterans Affairs rather than by the 

Department of Defense.

All persons on the retired rolls on the day before September 21, 1972, the 

effective date of the SBP program, were given the opportunity to enter the program 

911
during the following 12-month period.12 Those who were in the RSFPP program had 

three choices. They were permitted to either (1) drop their RSFPP if they elected SBP 

coverage in an equal or greater amount; (2) continue their RSFPP and also enter the SBP 

program, provided the total of the two annuities did not exceed 100 percent of their 

retired pay; or (3) continue their RSFPP alone. Approximately 50 percent of the 

personnel on the retired rolls on September 20, 1972, elected to participate in the SBP 

program; the proportion of personnel who converted from RSFPP to SBP is not known. 

The Omnibus Budget Reconciliation Act of 1981, Public Law 97-35, §212, 95 

Stat. 357, 383 (1981), provided for an open season--from October 1, 1981, to September 

30, 1982--during which any "eligible member" who was (1) not already a participant in 

the SBP program could elect to be a participant or (2) already a participant could elect a 

higher coverage or change a beneficiary designation in favor of a spouse. For the purpose 

of this act, the term "eligible member" was defined as a member or former member who, 

on the date of enactment (August 13, 1981), was entitled to retired or retainer pay. 

The Department of Defense Authorization Act, 1984, Public Law 98-94, §941, 97 

Stat. 614, 652-654 (1983), amended the Survivor Benefit Plan to carry out Congressional 

intent underlying the Uniformed Services Former Spouses' Protection Act (USFPA), 

enacted as Title X of the Department of Defense Authorization Act, 1983, Public Law 

97-252, §§1001-1006, 96 Stat. 718, 730-738 (1982). The thrust of the USFPA was to 

return to the states the authority to treat military retired pay in accordance with individual 

state laws in divorce settlements and to provide a direct payment mechanism to ensure 

that valid state court orders were honored by military finance centers. See discussion of 

the USFPA at Appendix II, below. The USFPA also amended the Survivor Benefit Plan 

to permit a military member to designate a former spouse as a beneficiary of an SBP 

annuity. In thus amending the Survivor Benefit Plan, Congress had intended the option to 

elect SBP coverage to be available not only to those retiring in the future but also to those 

already retired. The Department of Defense, however, took the position that the option 

 

12 This 12-month period was subsequently extended to 18 months by the Department of Defense 

Appropriation Authorization Act, 1974, Public Law 93-155, §804, 87 Stat. 605, 615 (1973). 

912
was not open to persons already retired, and Congress accordingly amended the SBP 

program to permit such election. Under the amendment, an individual retired before 

enactment of the Uniformed Services Former Spouses' Protection Act may now designate 

a former spouse as an SBP beneficiary so long as the retiree had elected to participate in 

the SBP program at the time of retirement. The 1984 Authorization Act, Public Law 98-

94, id., also permitted individuals retired after enactment of the Uniformed Services 

Former Spouses' Protection Act to switch their then-current designation to a former 

spouse. The amendments made to the SBP program by the 1984 Authorization Act were 

characterized as "clarifications" of how SBP should apply in the case of former spouses 

and as having been implemented to carry out Congress's intentions in enacting the 

Uniformed Services Former Spouses' Protection Act.13

The Department of Defense Authorization Act, 1985, Public Law 98-525, §641, 

98 Stat. 2492, 2545 (1984), further amended the SBP program to eliminate the Social 

Security offset against SBP annuities in the case of a survivor who is receiving Social 

Security benefits based on his or her own earnings, rather than a widow's or widower's 

benefits based on the earnings of a deceased member-spouse. This provision was itself 

rendered ineffective, however, by the Department of Defense Authorization Act, 1986, 

Public Law No. 99-145, §711(b), 99 Stat. 583, 670 (1985). In the words of the Senate 

Armed Services Committee, the elimination of the Social Security offset was justified on 

the grounds that "an SBP annuitant who has earned and is receiving a Social Security 

retirement benefit based on his own work record should [not] be penalized by having 

their [sic] SBP annuity reduced."14

The Department of Defense Authorization Act, 1985, Public Law 98-525, 

§642(a)(1)(B), 98 Stat. 2492, 2545-2546 (1984), also amended the SBP program to 

 

13 See Senate Report No. 98-213 (Committee of Conference), p. 231, and House Report No. 98-352 

(Committee of Conference), p. 231, accompanying S. 675, 98th Congress, 1st Session (1983); and House 

Report No. 98-107 (Committee on Armed Services), pp. 222-223, accompanying H.R. 2969, 98th Congress, 

1st Session (1983). 

14 Senate Report No. 98-500 (Committee on Armed Services), p. 219, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

913
provide authority to initiate SBP annuity payments when the retired participant is 

missing. For the conditions attendant upon this authority, see the discussion of the same 

authority as applied to the Retired Serviceman's Family Protection Plan, above. 

Finally, the Department of Defense Authorization Act, 1985, Public Law 98-525, 

§644(2), 98 Stat. 2492, 2548 (1984), amended the provisions of the SBP program dealing 

with the designation of a former spouse as a beneficiary under the plan. The Uniformed 

Services Former Spouses' Protection Act, Public Law 97-252, §§1001-1006, 96 Stat. 718, 

730-738 (1982), specified that such a decision must be voluntary and could not be 

ordered by a court. The 1985 Authorization Act clarified the intent of Congress that those 

administering the SBP program be able to defer to a court order that incorporated, 

ratified, or approved a voluntary written agreement by the retiree to designate the spouse 

as an SBP beneficiary. The amendment was characterized as a "clarification" of 

Congress's initial intent.15

The Survivor Benefit Plan Amendments of 1985, enacted as Title VII of the 

Department of Defense Authorization Act, 1986, Public Law 99-145, §§701-732, 99 Stat. 

583, 666-678 (1985), effected a number of additional changes to the SBP program. As 

indicated in the relevant Congressional reports, the changes contained in the Survivor 

Benefit Plan Amendments of 1985 were intended to overcome the problem that SBP had 

become "too complex for service members and their families to understand," with the 

result of "simplify[ing] the plan, mak[ing] it more attractive, and eliminat[ing] certain 

problems."16 This theme was again stated in the House-Senate Conference Report: The 

Survivor Benefit Plan Amendments of 1985 were characterized as having been intended 

 

15 See, e.g., Senate Report No. 98-500 (Committee on Armed Services), pp. 221-222, accompanying S. 

2723, 98th Congress, 2d Session (1984), and House Report No. 98-1080 (Committee of Conference), p. 

301, accompanying H.R. 5167, 98th Congress, 2d Session (1984). (The catchline of Section 644 of the 1985 

Authorization Act, Public Law 98-525, id., §644, 98 Stat. at 2548, reads "Clarification of Authority to Elect 

Former Spouses as Beneficiaries Under the Survivor Benefit Plan".) 

16 House Report No. 99-81 (Committee on Armed Services), p. 250, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

914
to "improve and simplify the Survivor Benefit Plan as well as correct certain inequities 

associated with the program."17

In effecting changes to the SBP program, the Survivor Benefit Plan amendments 

of 1985 made both substantive and technical changes. The more important of the 

substantive changes are summarized below. 

First, and probably most important, the SBP amendments modified the Social 

Security offset provisions of the program. When the SBP program was first established, 

Congress's major goal was to insure that survivors of military retirees be provided 

"reasonable and continuous income replacement"18--a goal that Social Security could not 

meet because, for the vast majority of survivors, Social Security entitlement does not 

begin until the survivor reaches age 62. Because of this, the SBP program provided two 

different annuity levels for surviving beneficiaries--a level of benefits that applied before 

a survivor became eligible for Social Security, and another, lower level that applied 

thereafter. This reduction--known as the Social Security offset—was addressed in the 

Department of Defense Authorization Act, 1985, when Congress amended the SBP 

program to provide that there would be no Social Security offset against SBP annuities in 

the case of a survivor who was receiving Social Security benefits on the basis of his or 

her own earnings record, rather than a widow's or widower's benefit based on the 

earnings of a deceased member-spouse. As previously indicated, however, this provision 

was itself rendered ineffective--by the Survivor Benefit Plan Amendments of 1985, 

Public Law No. 99-145, Title VII, id.--on the grounds that Congress was going to address 

the whole Social Security offset problem in more detail and in another fashion.19

 

17 Senate Report No. 99-118 (Committee of Conference), p. 442, and House Report No. 99-235 

(Committee of Conference), p. 442, accompanying S. 1160, 99th Congress, 1st Session (1985). 

18 House Report No. 99-81 (Committee on Armed Services), p. 250, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). 

19 Section 641 of the 1985 Authorization Act, Public Law 98-525, id., §641, 98 Stat. at 2545, was formally 

repealed by Section 711(b) of the Survivor Benefit Plan Amendments of 1985, Title VII of the 1986 

Authorization Act, Public Law 99-145, id., §711(b), 99 Stat. at 670. 

915
Under the amendments to the SBP program effected by the Survivor Benefit Plan 

Amendments of 1985, Title VII of the Department of Defense Authorization Act, 1986, 

Public Law 99-145, id., §711(a), 99 Stat. at 666-670, Congress, in an "effort to simplify 

and make the plan [as it relates to the Social Security offset] more understandable,"20

eliminated the Social Security offset and established in its stead a "two-tier system under 

which the survivor would receive 55 percent of retired pay before age 62 and 35 percent 

thereafter in recognition of the entitlement to Social Security based on military service."21

As enacted, these provisions were applicable to all SBP beneficiaries. In a savings 

provision, however, the 1985 SBP amendments provided that current survivors and future 

survivors of current retired or retirement-eligible members could have their SBP benefits 

computed under the old Social Security offset system or under the new, 55/35, two-tier 

system, whichever provided a greater benefit for an SBP-eligible survivor. All other 

potential beneficiaries, i.e., eligible survivors of future retirees who are not presently 

retirement-eligible, would be subject to the new 55/35, two-tier, income-replacement 

annuity. The effective date of the amendment in question was March 1, 1986.22

Second, the 1985 SBP amendments, Title VII of the Department of Defense 

Authorization Act, 1986, Public Law 99-145, id., §714, 99 Stat. at 672-673, changed the 

way in which the cost of SBP coverage was calculated for participants. Under the 

contribution formula applied to participants, the member is permitted to select SBP 

coverage ranging from a minimum of $300 to a maximum of full retired pay. To 

participate, the member paid 2.5 percent of the first $300 for the "base amount" selected 

and 10 percent of the "base amount" above $300. With increases in basic pay over the 

years, members' retired pay entitlements increased, with the result that the 10 percent 

factor applied to a larger percentage of a participant's "base amount" of coverage. This 

 

20 Senate Report No. 99-118 (Committee of Conference), p. 442, and House Report No. 99-235 

(Committee of Conference), p. 442, accompanying S. 1160, 99th Congress, 1st Session (1985). 

21 Senate Report No. 99-118 (Committee of Conference), p. 442, and House Report No. 99-235 

(Committee of Conference), p. 442, accompanying S. 1160, 99th Congress, 1st Session (1985). 

22 Retirees who had elected to participate in the SBP program between October 19, 1984, and the date of 

enactment of the 1985 Authorization Act, Public Law 98-525, id., i.e., November 8, 1985, were given an 

option to withdraw from the SBP program any time before November 8, 1986. 

916
situation, in turn, had the effect of eroding the intended cost-sharing ratio of 60-40. As 

explained by the House Armed Services Committee, the cost-sharing ratio had changed 

from the intended 60-40 split to a 72-28 split--and this was at least in part due to the 

application of the 10 percent factor to an ever increasing portion of a participant's elected 

amount of coverage. To bring the cost split back closer to the intended 60-40 ratio, the 

1985 SBP amendments indexed the $300 amount to which the 2.5 percent charge was to 

be applied to future increases in basic pay. Thus, while a participant can still elect $300 

as "base amount" coverage, the lower 2.5 percent charge would be applied to an ever 

increasing amount.23

Third, a number of changes were made to the SBP program insofar as the rights of 

spouses and former spouses of plan participants were concerned. Under Section 721 of 

the 1985 SBP Amendments, Title VII of the Department of Defense Authorization Act, 

1986, Public Law 99-145, id., §721, 99 Stat. at 676-677, a married member who was 

eligible to provide a standard annuity under the plan could not, without the concurrence 

of the member's spouse, (1) elect not to participate in the plan; (2) elect less than the 

maximum level of SBP annuity; or (3) elect to provide an annuity for a dependent child 

but not for the spouse. As explained by the House Armed Services Committee, this 

change was intended to provide similar rights to spouses of members of the Armed 

Forces as were enjoyed by spouses of civil servants and private sector employees under 

recent Congressional enactments.24 Under Section 715 of the 1986 Authorization Act, a 

participant in the plan who did not have an eligible spouse beneficiary, either because of 

death or divorce, and who remarried was given an option not to provide coverage for the 

new spouse. If a participant opted not to participate in the plan with respect to the new 

spouse, or to provide an annuity for the spouse at less than the maximum level, or to 

provide an annuity for a dependent child but not the new spouse, the new spouse is to be 

 

23 The changes effected by this amendment apply only to persons who first participate in SBP on or after 

March 1, 1986. Section 714(b) of the Survivor Benefit Plan Amendments of 1985, Title VII of the 1986 

Authorization Act, Public Law 99-145, id., §§714(b) and 731(a), 99 Stat. at 673, 678; see 10 U.S.C. §1452 

note. 

24 See House Report No. 99-81 (Committee on Armed Services), pp. 252-253, accompanying H.R. 1872, 

99th Congress, 1st Session (1985). 

917
notified of the election. Thus, while plan coverage would be automatic upon remarriage 

unless an eligible retiree elected not to participate, the new spouse had no concurrence 

rights respecting coverage under the plan. Other changes were made also, but they can for 

the most part be characterized as "perfecting" or "technical" changes. 

The Military Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 

(1986), changed the way military retired and retainer pay entitlements would be 

calculated for members of the uniformed services who first became members on or after 

August 1, 1986. In brief, the "multipliers" to be applied to a member's "monthly retired or 

retainer pay base" in determining retired or retainer pay entitlements of affected 

personnel would be reduced from current levels until the member reaches age 62, at 

which time they would be restored to the same level as if the member had been eligible 

for retirement under the high-three formula. In addition, the Retirement Reform Act 

changed the way adjustments to retired or retainer pay are made for persons who first 

become members of a uniformed service on or after August 1, 1986. See Chapter III.B.1., 

"Nondisability Retired and Retainer Pay." 

Under the amended retirement system, the "multipliers" used in determining 

retired or retainer pay entitlements of affected personnel were generally reduced, by one 

percentage point from current percentage multipliers for each year by which a member’s 

term of service was less than 30 years.25 With the application of the percentage 

multipliers, an affected person's retired or retainer pay entitlement is less than that of a 

member whose retired or retainer pay is computed using unreduced percentage 

multipliers. The lower retired or retainer pay entitlements resulting from this altered way 

of computing entitlements could, without adjustment, affect survivor annuities under the 

Survivor Benefit Plan. In fact, given the underlying purpose of SBP to provide 

"reasonable income replacement"26 for survivors of deceased military retirees, Congress 

 

25 The multiplier for persons with 30 years of service--and more--is the same as under the former 

nondisability retirement system. 

26

e.g., Senate Report No. 99-118 (Committee of Conference), p. 442, and House Report No. 99-235 

(Committee of Conference), p. 442, accompanying S. 1160, 99th Congress, 1st Session (1985). 

918
determined that the lower percentage multipliers applied in determining the retired or 

retainer pay entitlement of a retiree-member should not result in a lower Survivor Benefit 

Plan annuity to a survivor of a deceased retiree.27 Accordingly, in Section 301 of the 

Military Retirement Reform Act of 1986, Public Law 99-348, id., §301, 100 Stat. at 702, 

Congress provided for Survivor Benefit Plan annuities to be computed using unreduced 

retired or retainer pay percentage multipliers. That is, the amount of the annuity is 

determined on the assumption that at the time of death the retiree was receiving retired or 

retainer pay computed on the basis of unreduced percentage multipliers--which, except 

for persons retiring with thirty or more years of creditable service, or persons selecting a 

"base amount" stated in dollars rather than a percentage of retired or retainer pay, would 

result in higher annuities than would otherwise have been the case.28

The National Defense Authorization Act for Fiscal Year 1987, Public Law 99-

661, §§641-646, 100 Stat. 3816, 3885-3887 (1986), made additional revisions to the SBP 

program. First, as a "matter of equity" and to come into closer conformity with practice 

under civil service, Central Intelligence Agency, and private sector survivor benefit 

plans,29 Congress amended the SBP program to permit state courts to order military 

service members to participate in the Survivor Benefit Plan and to designate a former 

 

27 See, e.g., House Report No. 99-659 (Committee of Conference), pp. 31-32, accompanying H.R. 4420, 

99th Congress, 2d Session (1986). 

28 As previously indicated, the Military Retirement Reform Act of 1986, Public Law 99-348, id., §102, 100 

Stat. at 683-685, also changed the way adjustments to retired pay were to be made for persons who first 

became members of a uniformed service on or after August 1, 1986. Generally speaking, adjustments to 

retired or retainer pay for such persons were to be made not on the basis of full cost-of-living changes (as 

measured by the Consumer Price Index) but on the basis of the percentage change in the Consumer Price 

Index less one percentage point. This new--and lower--adjustment mechanism was to apply in determining 

adjustments to SBP annuities for survivors of persons who first became members of a uniformed service on 

or after August 1, 1986. See 10 U.S.C. §1451(g)(1) as amended by Section 301(b) of the Military 

Retirement Reform Act of 1986, Public Law 99-348, id., §301(b), 100 Stat. at 702. (Under the Military 

Retirement Reform Act of 1986, affected members were to get a one-time restoral of full cost-of-living 

increases when they reached age 62, with subsequent adjustments based on the percentage increase in the 

Consumer Price Index less one percentage point. SBP annuitants were to get a similar one-time restoral--

when the decedent would have reached age 62--with subsequent adjustments based on the percentage 

increase in the Consumer Price Index less one percentage point for the remainder of the annuitant's period 

of eligibility for SBP.) 

29 House Report No. 99-718 (Committee on Armed Services), p. 209, accompanying H.R. 4428, 99th

Congress, 2d Session (1986). 

919
spouse as a beneficiary incident to a divorce agreement or decree. id., §641, 100 Stat. at 

3885-3886. 

Second, the 1987 Authorization Act, Public Law 99-661, id., §643, 100 Stat. at 

3886, changed the age at which a survivor-beneficiary could remarry without losing SBP 

benefits. Before the 1987 Authorization Act, the Survivor Benefit Plan provided that a 

surviving spouse/SBP annuitant who remarried before reaching age 60 lost entitlement to 

his or her SBP annuity based on the former marriage, but the entitlement could be 

reinstated if the remarriage ended in death or divorce. This provision tracked the survivor 

benefits available to survivors of civil service decedents until Congress reduced the 

remarriage age for civil service surviving spouses from 60 to 55. Congress, having 

concluded that "military surviving spouses should receive the same considerations as 

civil service surviving spouses,"30 lowered the age at which the former could remarry 

without losing their SBP annuities from 60 to 55. 

The 1987 Authorization Act, Public Law 99-661, id., §642, 100 Stat. at 3886, also 

amended the SBP program to authorize the payment of survivor benefits to the surviving 

dependent children of an active-duty, retirement-eligible member who died without a 

surviving spouse or if the surviving spouse also subsequently died. This amendment was 

intended to address an inadvertent oversight in the Survivor Benefit Plan Amendments of 

1985, as enacted by the 1986 Authorization Act. Under the 1986 Authorization Act, 

Public Law 99-145, id., survivor benefits under the SBP program were authorized for the 

surviving dependent children of a deceased, retirement-eligible active-duty member if the 

member and the member's spouse died as a result of a common accident. This 

authorization failed to address the case of a single, retirement-eligible member who died 

on active duty leaving a dependent child or children as well as the case of a retirementeligible member who died on active duty leaving a dependent child or children and a 

surviving spouse but whose surviving spouse subsequently died leaving the same 

 

30 House Report No. 99-718 (Committee on Armed Services), p. 211, accompanying H.R. 4428, 99th

Congress, 2d Session (1986). 

920
dependent child or children. The amendment in question was made because of Congress's 

"concerns about the orphan children of retirement-eligible active duty personnel" and its 

belief that, "in the absence of a spouse beneficiary, all orphan children of deceased 

retirement-eligible active duty personnel should be treated alike."31

Finally, and as previously indicated, the Survivor Benefit Plan Amendments of 

1985 eliminated the Social Security offset to the SBP program in effect before that time 

while at the same time establishing a "two-tier" system under which a survivor received a 

SBP annuity of 55 percent of retired pay until age 62 and 35 percent thereafter. In 

practice, the reduction from 55 percent to 35 percent at age 62 was intended to 

accomplish the same thing as the Social Security offset while simplifying the plan and 

making it more understandable to members of the uniformed services and their spouses 

who were making decisions about whether to become plan participants or not. Thus, 

when the surviving spouse reached age 62 and became eligible for a Social Security 

benefit on the basis of the earnings record of the deceased plan participant, the SBP 

annuity dropped to compensate for the availability of the Social Security benefit. An 

unintended effect of the amendment in question, however, was to reduce the combined 

SBP-Social Security entitlements of surviving disabled children of deceased plan 

participants. The fact is, surviving disabled children of deceased plan participants are not 

eligible for a Social Security benefit beginning at age 62 that is based on the decedent's 

earnings record--only a surviving spouse is. Accordingly, the 1987 Authorization Act, 

Public Law 99-661, id., §642(b), 100 Stat. at 3886, amended the reduction provision to 

provide that it should not apply to the incapacitated dependent children of deceased plan 

participants who are over age 62 and who are incapable of supporting themselves because 

of physical or mental impairments that existed before their eighteenth or, under some 

limited circumstances, their twenty-second birthday.32

 

31 House Report No. 99-718 (Committee on Armed Services), p. 210, accompanying H.R. 4428, 99th

Congress, 2d Session (1986). 

32 See House Report No. 99-718 (Committee on Armed Services), p. 210, accompanying H.R. 4428, 99th

Congress, 2d Session (1986). 

921
The National Defense Authorization Act for Fiscal Years 1988 and 1989, Public 

Law 100-180, §631, 101 Stat. 1019, 1104, 1106 (1987), amended the SBP program to 

provide specific authority for certain plan participants to withdraw from the plan with the 

consent of their spouses. Persons intended to benefit from the permissive withdrawal 

authority were those participants who had remarried in retirement and who were required 

to contribute to a plan from which their new spouse could never effectively benefit. 

Specifically, the permissive withdrawal authority was intended to enable a retiree who 

had, in retirement before March 1, 1986, remarried the widow of another military retiree 

whose SBP benefit based on her first husband's retirement income was larger than her 

SBP benefit based on her second husband's could ever be, to cease making contributions 

to a plan his spouse would logically never choose to take advantage of. In effect, this 

permissive withdrawal authority simply gave pre-March 1, 1986, retirees the same right 

as post-March 1, 1986, retirees had to withdraw from SBP participation.33 

A more comprehensive withdrawal procedure was added in 1998. The National 

Defense Authorization Act for Fiscal Year 1998, Public Law 105-85, 111 Stat. 1798, 

provided for a “discontinuation period” extending for one year from the second 

anniversary of the date on which the participant begins to receive retired pay. Such an 

election to withdraw from SBP must be accompanied by the concurrence of the spouse, 

except under exceptional circumstances that make the spouse “unavailable,” as that term 

is defined in 10 U.S. Code §1448(a)(3). 

The National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, 

§653, 102 Stat. 1918, 1991-1992 (1988), granted a gratuitous annuity of $165 a month--

to be adjusted over time for changes in the Consumer Price Index--to surviving spouses 

of members who had died before November 1, 1953, while entitled to retired or retainer 

pay. While not strictly a part of the SBP or RSFPP programs, the annuity was proposed, 

in the words of the Senate Committee on Armed Services, because the committee 

"recognizes that this category of so-called ‘forgotten widows’ had no access to a survivor 

benefit program because none was in effect for military retirees before November 1, 

 

33 See, e.g., House Report No. 100-58 (Committee on Armed Services), pp. 205-206, and Senate Report 

No. 100-57 (Committee on Armed Services), pp. 147-148, 100th Congress, 1st Session (1987). 

922
1953."34 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1800, extended the $165 monthly annuity to the surviving spouses of 

similarly qualified members who died before March 21, 1974, with the same provision 

for subsequent cost-of-living adjustments as were made in the original legislation that 

covered retirees deceased prior to 1953. The first such adjustment was made by the 

National Defense Authorization Act for Fiscal Year 2003, Public Law 107-314, 116 Stat. 

2573, which increased the monthly annuity to $185.58. 

Relatively major changes--at least in terms of the number of changes involved--

were made to the Survivor Benefit Plan by the Military Survivor Benefits Improvement 

Act of 1989, enacted as Title XIV of the National Defense Authorization Act for Fiscal 

Years 1990 and 1991, Public Law 101-189, Title XIV, §§1401-1407, 103 Stat. 1352, 

1577-1589 (1989). First, the basis for determining the cost--in terms of the reduction in a 

retiree's retired or retainer pay entitlement--to a member or former member of a 

uniformed service for participating in the Survivor Benefit Plan was changed from the 

old 2.5 percent of the first $30035] of the base amount of a member's prospective annuity 

plus 10 percent of the remainder of the base amount to a flat 6.5 percent of the base 

amount for all persons who first became members of a uniformed service on or after 

March 1, 1990. The method for determining the amount of the reduction in retired or 

retainer pay for SBP participation for pre-March 1, 1990, is either the new, flat 6.5 

percent of the base amount or the old 2.5 percent/10 percent formula, whichever is more 

advantageous to the retiree. As explained by the Senate Armed Services Committee, 

which had sponsored the changes incorporated in the Military Survivor Benefits 

Improvement Act of 1989, the 6.5 percent level cost was proposed "on the basis of a costbenefit review of SBP conducted by the Office of the Actuary of the Department of 

Defense," which "indicated the premium adjustment was appropriate to preserve the 

 

34 Senate Report No. 100-326 (Committee on Armed Services), p. 96, accompanying S. 2355, 100th

Congress, 2d Session (1988). 

35 Because of adjustments to the $300 amount made pursuant to the changes to the SBP program instituted 

by the survivor benefit plan amendments of 1985, Public Law 99-145, id., discussed in the text following 

footnote 22, above, the $300 figure of the original SBP formulation had grown to $337 by the time the 

Military Survivor Benefits Improvement Act of 1989, Public Law 101-189, Title XIV, id., was enacted. 

923
design balance between member contribution and government subsidy of SBP 

benefits."36 The Senate Armed Services Committee also noted: 

 ... The net effect of the changes will be to reduce the cost of SBP to 

participants, and hopefully to increase participation in the SBP program.37

Second, the Military Survivor Benefits Improvement Act of 1989, Public Law 

101-189, Title XIV, id., §1403, 103 Stat. at 1579, changed the basis for the computation 

of the SBP annuity to which the survivors of certain officers who die while on active duty 

after becoming eligible for retired or retainer pay are entitled. Under prior practice, the 

SBP annuity of an officer with enlisted service who first became a member of a 

uniformed service before September 8, 1980, and who died while on active duty after 

becoming eligible for retired or retainer pay but who did not have ten years of 

commissioned officer service, was determined on the basis of the basic pay of the 

officer's highest non-commissioned grade.38 The amendment to the SBP program made 

by the Military Survivor Benefits Improvement Act permits the SBP annuity for the 

survivors of such an officer to be determined on the basis of the grade the member held at 

the time of death, independently of whether the member would have been entitled to 

retired or retainer pay based on that grade at the time of death. The Senate Armed 

Services Committee characterized this amendment to the SBP program as a 

"clarification."39

 

36 Senate Report No. 101-81 (Committee on Armed Services), p. 180, accompanying S. 1352, 101st

Congress, 1st Session (1989). Cf. House Report No. 101-331 (Committee of Conference), p. 659, 

accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

37 Senate Report No. 101-81 (Committee on Armed Services), p. 180, accompanying S. 1352, 101st

Congress, 1st Session (1989). cf. House Report No. 101-331 (Committee of Conference), p. 659, 

accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

38 The retired or retainer pay entitlement of any member--including all officers, whether with prior enlisted 

service or not--who first became a member of a uniformed service on or after September 8, 1980, is 

determined, under 10 U.S.C. §§1401(a) and 1407, on the basis of the high-36-month-average-basic-pay of 

the member. 

39 Senate Report No. 101-81 (Committee on Armed Services), p. 181, accompanying S. 1352, 101st

Congress, 1st Session (1989). 

924
Finally, and substantively the most important of the amendments made to the SBP 

program by the Military Survivor Benefits Improvement Act of 1989, Public Law 101-

189, Title XIV, id., §1404, 103 Stat. at 1579-1586, was the prospective adoption--

effective October 1, 1991--of the Supplemental Survivor Benefit Plan, codified as 

Subchapter III of Chapter 73, Title 10, United States Code, 10 U.S.C. §§1456-1460b. 

Under the Supplemental Survivor Benefit Plan, participants in the normal Survivor 

Benefits Plan are entitled to provide a "supplemental annuity" for a spouse or former 

spouse "beginning when the participant dies or when the spouse or former spouse 

becomes 62 years of age, whichever is later, in order to offset the effects of the two-tier 

annuity computation under the Survivor Benefit Plan." 10 U.S.C. §1456, as added by the 

Military Survivor Benefits Improvement Act of 1989, Public Law 101-189, Title XIV, 

id., §1404, 103 Stat. 1580-1581. The supplemental annuity allows a participant in the 

SBP program to provide a level, 55 percent annuity to his or her surviving spouse, thus 

effectively overcoming the reduction of the normal SBP 55 percent annuity to 35 percent 

when the participant's surviving spouse becomes eligible for Social Security benefits. 

Thus, when a participant's surviving spouse became eligible for Social Security benefits, 

rather than having his or her SBP annuity reduced, any Social Security benefits received 

would be additions to the surviving spouse's level SBP annuity. 

 In support of its proposal, the Senate Committee on Armed Services noted: 

A recommended provision ... would also establish a supplemental option 

to the current SBP benefit structure. Currently, SBP recipients are entitled to 55 

percent of SBP designated retired pay until age 62, at which point the benefit is 

reduced to 35 percent of SBP designated retired pay beyond age 62. The 

supplemental option would allow participants to elect a level benefit of 55 percent 

of SBP designated retired pay after age 62.... The committee believes the 

supplemental option fills a need by certain SBP participants for additional 

coverage beyond age 62, the age at which Social Security benefits normally 

become available.40

The National Defense Authorization Act for Fiscal Year 1991, Public Law 101-

510, §631, 104 Stat. 1485, 1580 (1990), postponed the effective date of the Supplemental 

 

40 Senate Report No. 101-81 (Committee on Armed Services), pp. 180-181, accompanying S. 1352, 101st

Congress, 1st Session (1989). Cf. House Report No. 101-331 (Committee of Conference), pp. 660-661, 

accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

925
Survivor Benefit Plan from October 1, 1991, to April 1, 1992, in order to give the 

Department of Defense more time to prepare "an actuarially neutral" plan for the 

implementation of the Supplemental Survivor Benefit Plan.41 As it went into effect, the 

SSBP offers additional annuities amounting to 5, 10, 15, and 20 percent of a member’s 

retirement pay to survivors of members who had elected maximum SBP coverage. 

Premiums for SSBP, which varied according to the supplemental annuity percentage and 

the age of the member making the selection, were uniformly higher than the 6.5 percent 

paid for basic SBP coverage. For example, in 2004 the premium for a 50-year-old 

member selecting a maximum 20 percent annuity would be 12.26 percent. 

Despite the existence of a supplemental plan to balance the Social Security offset 

in the basic SBP, substantial pressure developed to further soften the effect of reducing 

SBP benefits when the recipient began receiving Social Security at age 62. In 2001 two 

bills, S145 and HR548, entitled the Survivor Benefits Plan Benefit Improvement Act, 

aimed to reform the two-tier Social Security provision. The bills authorized elimination 

of the Social Security-triggered reduction in stages between 2003 and 2011; at the end of 

that period, beneficiaries above age 62 would begin to receive a full 55 percent SBP 

annuity. An argument for such reform was the fact that survivors of workers who are 

covered by civilian federal government retirement plans and also qualify for Social 

Security do not incur as great a reduction in their total incomes when Social Security 

benefits begin at age 62. 

The 2001 bills also mandated a gradual phaseout of the supplemental SBP 

annuity. Between 2001 and 2004 the maximum available supplemental annuity would 

have been 15 rather than 20 percent; beginning in 2004, the maximum supplementary 

annuity would be 10 percent; then in 2011, the supplementary option would be eliminated 

entirely. Because premiums are higher for the supplementary annuity, members who had 

chosen the SSBP would save money by this consolidation of the annuity into the single 

55 percent of the less costly basic program. Although the 2001 bills did not pass, 

 

41

e.g., House Report No. 101-665 (Committee on Armed Services), pp. 282-289, accompanying H.R. 

4739, 101st Congress, 2d Session (1990). 

926
Congress continued to express concern about the equity of the program. In 2003 the 

House Armed Services Committee observed: 

Although Congress has enacted legislation designed to correct such 

inequalities, many similarly situated survivors continue to receive disparate 

treatment under SBP....The committee desires to correct such inequities. 

Accordingly, the committee directs the Secretary of Defense to review active duty 

SBP benefit levels awarded to survivors under different circumstances of death, 

the procedures used by the Department of Defense to operate the program....and 

to propose legislation to ensure equitable treatment for the survivors of all 

members....42

The Military Survivor Benefits Improvement Act of 1989 also incorporated an 

open enrollment period provision--effective for the one year period beginning October 1, 

1991--to allow current members of the uniformed services to become participants in the 

Survivor Benefit Plan, thereby "encourag[ing] higher participation in the SBP program," 

and to permit "those currently enrolled in the [regular SBP] program to take advantage of 

the new option [under the Supplemental Survivor Benefit Plan]."43 

The second and most recent open enrollment period, mandated by the National 

Defense Authorization Act for Fiscal Year 1999, Public Law 105-261, 112 Stat. 2046, 

extended from March 1, 1999 to February 29, 2000. 

 

42 House Report No. 108-106 (Committee on Armed Services), p. 329, accompanying HR 1588, 108th

Congress, 1st Session (2003). 

43 Senate Report No. 101-81 (Committee on Armed Services), p. 181, accompanying S. 1352, 101st

Congress, 1st Session (1989). 

927
Chapter IV.C.3. 

 Commissaries 

Legislative Authority: 10 U.S.C. §§2484, 2486, and 2685. See 10 U.S.C. §§1063 

(members of the reserve component), 4621 (Army), 7601 (Coast Guard), 7606 (Navy and 

Marine Corps), and 9621 (Air Force). 

Purpose: To allow items of convenience and necessity--especially items of 

subsistence--to be made available for purchase by military personnel1

 at convenient 

locations and reasonable prices. Historically, the existence of commissaries has been 

viewed as a supplemental institutional benefit for, and by, members of the Armed Forces. 

Reservists and National Guard members and their families were granted unlimited 

commissary privileges in 2003.2

Background: The sale of foodstuffs to service members originated with the 

"sutler system." Sutlers were peddlers who followed the Army from place to place at 

frontier posts, selling food, liquor, and general merchandise to the troops. For the purpose 

of making needed items available to members of the Armed Forces, this practice was far 

from ideal, since the sutlers were commonly understood to be more interested in making 

money than in providing honest service. Whiskey took up a disproportionately large 

percentage of sales, and many soldiers were perpetually in debt after having accepted 

credit offered by the sutlers. 

Sutlers continued to be the main provisioners of subsistence items to members of 

the Armed Forces until 1866, when Congress directed the Army to provide articles for 

sale to officers and enlisted men at cost. Since that time, Army commissary stores have 

provided foodstuffs and related grocery store items at cost to members of the Armed 

 

1

 When originally established, commissary stores were looked on as being primarily intended for the 

benefit of members of the Armed Forces and their dependents. Over time, however, other categories of 

personnel--including personnel in the non-military branches of the uniformed services and reserve forces 

personnel--became entitled to use them under varying circumstances. 

2 National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, 117 Stat. 1521. 

928
Forces and their dependents. The Marine Corps opened its first commissary store in 

1909; the Navy, in 1910; and the Air Force, in 1947. 

In 1949, Congressman Philip J. Philbin of the House Armed Services Committee 

held hearings on Department of Defense resale activities, including commissary stores. 

From these hearings, joint service regulations, currently classified as Department of 

Defense Regulation 1330.17-R, evolved to govern commissary store operations. Annual 

oversight hearings and a number of special hearings have been held since--e.g., in 1953, 

1957, 1970, 1972, and 1979--all of which reached the conclusion that the military resale 

system is a privilege that members of the Armed Forces and their families have come to 

expect and rely upon and that such personnel regard the system as an important benefit 

accruing to service membership. In 1972, a House Armed Services Committee special 

subcommittee on recruiting and retention came to the independent conclusion that 

commissary stores are a vital factor in the retention of military personnel and encourage 

enlistments. 

Until 1985, the general provisions of the annual Department of Defense 

appropriations acts contained language precluding the use of appropriated funds for 

certain commissary store operating expenses, including commercial transportation in the 

United States, utilities in the contiguous United States, operating equipment and supplies, 

and store losses through shrinkage, spoilage, and pilferage of merchandise. See, e.g., Act 

of October 12, 1984, Public Law 98-473, Title I, §101(h) [Title VIII, §8010], 98 Stat. 

1884, 1924-1925 (1984); Department of Defense Appropriations Act, 1984, Public Law 

98-212, Title VII, §713, 97 Stat. 1421, 1440 (1983); Act of December 21, 1982 (Further 

Continuing Appropriations, 1983), Public Law 97-377, Title I, §101(c) [Title VII, §714], 

96 Stat. 1830, 1852-1853 (1982); Department of Defense Appropriations Act, 1982, 

Public Law 97-114, Title VII, §714, 95 Stat. 1565, 1580-1581 (1981). 

In 1984, these prohibitions were codified at 10 U.S.C. §2484 by the Department 

of Defense Authorization Act, 1985, Public Law 98-525, §1401(i), 98 Stat. 2492, 2619-

2620 (1984). As thus codified, appropriated funds may not be used, in connection with 

929
the operation of any commissary, to pay for the purchase of items to be sold (including 

transportation of such items in the contiguous United States), the maintenance of 

operating equipment and supplies, utilities furnished by the government (in the 

contiguous United States), or for any costs incurred in redeeming discount coupons.3

 As 

explained in the House-Senate Conference Report,4

 the limitations were enacted in 

response to the requirement of Section 1267 of the Department of Defense Authorization 

Act, 1984, Public Law 98-94, §1267, 97 Stat. 614, 705 (1983), which required the 

Secretary of Defense to submit to the House and Senate committees on armed services 

proposed legislation 

for codification into appropriate titles of the United States Code, or for 

incorporation into other existing laws, those provisions of law that have been 

enacted during the past five years as a part of the annual Department of 

Defense Authorization Act or the annual Department of Defense Appropriation 

Act under the heading ‘General Provisions’ and that in the opinion of the 

Secretary should be so codified or incorporated. 

In establishing this requirement, the Senate Armed Services Committee noted: 

 The committee has observed that it has been the practice of the 

Department of Defense to submit the same proposed legislative provisions each 

year in the Department of Defense Authorization Act or the Department of 

Defense Appropriations Act. Many of these provisions which have been enacted 

on an annual basis are appropriate for codification in Title 10 of the United States 

Code or in other parts of Federal law. Accordingly, it is the committee's view that 

the Secretary of Defense should evaluate each general provision that has been 

enacted over the last five years as part of a Defense Authorization or 

Appropriation Acts and submit to the Congress a legislative proposal for the 

codification of those general provisions which the Secretary judges to be 

appropriate for incorporation in the United States Code. The Committee believes 

that the enactment of such a codification bill would be a far more efficient manner 

 

3 Under 10 U.S.C. §2484(b) as added by the Department of Defense Authorization Act, 1985, Public Law 

98-525, id., §1401(i), 98 Stat. at 2619-2620, appropriated funds may, subject to regulations, in fact be used 

to defray such costs if they are reimbursed to the Federal Government. (Under this provision, the Federal 

Government is in effect permitted to provide a revolving line of credit to commissaries to fund the 

prohibited categories of operating expenses pending cash generation by sale of commissary items.) 

4 House Report No. 98-1080 (Committee of Conference), p. 336, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). See Senate Report No. 98-500 (Committee on Armed Services), p. 265, accompanying 

S. 2723, 98th Congress, 2d Session (1984). 

930
of dealing with these legislative proposals than considering the same provisions 

every year.5

The Military Construction Authorization Act, 1975, Public Law 93-552, §611, 88 

Stat. 1745, 1765 (1974), amended Title 10 of the United States Code to authorize 

surcharges on prices charged by commissaries in order to provide funds for construction, 

renovation, and other improvements.6

 Appropriated funds may be used to replace or 

repair commissary facilities damaged or destroyed by fire, theft, explosion, enemy acts,7

or to construct new facilities or renovate existing facilities required by installation 

realignment or establishment.8

At the request of the chairman of the Morale, Welfare and Recreation Panel of the 

Subcommittee on Readiness of the House Armed Services Committee, on March 31, 

1989 a memorandum of the Deputy Assistant Secretary of Defense for Resource 

Management and Support directed the conduct of "a comprehensive, unrestrained study 

of the military commissary system" to "strive toward developing policies that move the 

system forward in an orderly and consistent manner" while examining "options for 

ensuring a viable commissary program."9

 In response to this direction, the DOD Study of 

 

5

 Senate Report No. 98-174 (Committee on Armed Services), p. 259, accompanying S. 675, 98th Congress, 

1st Session (1983). See House Report No. 98-352 (Committee of Conference), p. 262, accompanying S. 

675, 98th Congress, 1st Session (1983). 

6

 House Report No. 93-1545 (Committee of Conference), pp. 40-41, and Senate Report No. 93-1136 

(Committee on Armed Services), p. 58, both accompanying H.R. 16136, 93d Congress, 2d Session (1974). 

7

 10 U.S.C. §2854, Restoration or replacement of damaged or destroyed facilities. 

8 Department of Defense Instruction 7700.18, Commissary Surcharge, Nonappropriated Fund (NAF) and 

Privately Financed Construction Reporting Procedures, July 16, 2003, Enclosure 3, and Department of 

Defense Regulation 1330.17-R, Armed Services Commissary Regulations (ASCR), April 1987, para. 4-

404.4. 

9

 DOD Study of the Military Commissary System, Study Report, Volume II (Appendices), p. A-2, Office 

of the Assistant Secretary of Defense for Force Management and Personnel, Washington, D.C., December 

18, 1989. (The Department of Defense Study of Military Commissaries was conducted by a study group 

headed by a steering committee chaired by the then Deputy Assistant Secretary of Defense for Military 

Manpower and Personnel Policy, Lieutenant General Donald W. Jones. For this reason, the study group is 

known as the Jones Commission, and its report is frequently referred to as the Jones Commission Report.) 

931
the Military Commissary System, known as the Jones Commission Report),10 was 

submitted to Congress on December 18, 1989. As a result of the report and 

recommendations of the Jones Commission, Deputy Secretary of Defense Donald J. 

Atwood, by Department of Defense Directive dated November 9, 1990, established the 

Defense Commissary Agency to provide "an efficient and effective worldwide system of 

commissaries for the resale of groceries and household supplies at the lowest practical 

price (consistent with quality) to members of the Military Services, their families, and 

other authorized patrons" and "a peacetime training environment for food supply 

logisticians needed in wartime and ... subsistence support to military dining facilities 

consistent with Service needs."11 The Defense Commissary Agency was established as a 

Department of Defense agency to operate all commissary functions of the individual 

services to ensure uniform commissary practices and policies for the Armed Forces and 

to integrate the commissary system into the overall force management structure, 

specifically including "management of subsistence war readiness materiel in peacetime 

and wartime."12 

In November 1997, the Defense Reform Initiative devolved the day-to-day 

supervision of DeCA to the Military Departments. In May 1998, Defense Reform 

Initiative Directive #37 established the Commissary Operating Board to oversee day-today supervision of DeCA. In 1998, Congress amended sections 192 and 2482 of title 10, 

United States Code, authorizing a special exception to the law governing the operation of 

Defense Agencies with regard to the supervision of the Defense Commissary Agency.13 

Implementing those provisions, the DRID #37 was revised in May 1998, providing that, 

“...as a corporate body, will advise on the prudent operation of DeCA and the 

commissary system, and assist in its overall supervision....”14 

 

10 See footnote 7 to this chapter, above. 

11 Department of Defense Directive 5105.55, ¶C.1.a. and b., dated November 9, 1990. 

12 Department of Defense Directive 5105.55, ¶E.1.e., dated November 9, 1990. 

13 National Defense Authorization Act for Fiscal Year 1999, Public Law 105-261, 112 Stat. 1984. 

14 Defense Reform Initiative Directive #37 Revised: Oversight of the Defense Commissary Agency, 

December 23, 1998. 

932
In 2000, Congress revised 10 U.S.C. §2484, providing that the commissary 

system’s operating expenses should be paid for with appropriated funds and that 

surcharge funds should be reserved to pay for infrastructure expenses. The revision 

specifically allowed appropriated funds to be used to pay salaries, utilities, 

communications expenses, purchase operating supplies and services; pay second 

destination transportation costs within or outside the United States, and pay any costs 

relating to above-store-level management of the commissary system. At the same time, 

10 U.S.C. §2486 was amended to require the sales price of merchandise sold in, at or by a 

commissary to include only the cost of first destination transportation in the United States 

and the actual or estimated cost for shrinkage, spoilage, and pilferage.15 In 2003, 

Congress again expressed concern with the funding of the commissary benefit when the 

House Armed Services Committee specifically noted, “that the value of the commissary 

benefit to service members is derived from consistent appropriated funding support of 

commissary operations. Accordingly, this section would require the use of appropriated 

funding to support commissary operating expenses.”16 Consequently it amended 10 

U.S.C. §2484 making the use of appropriated funds for the payment of commissary 

expenses mandatory.17

An appropriated fund entity of the United States, commissary stores are exempt 

from sales taxes imposed by state and local governments. 

Cost: Although commissaries are operated primarily for the benefit of active-duty 

personnel and their families, it is in practice impossible to determine exactly who uses 

and benefits from the system most. Although cost savings average between 20 and 25 

percent as compared with commercial retail outlets, it is difficult to quantify how much 

commissary privileges are worth to the people who actually use the system. This is in part 

 

15 National Defense Authorization Act for Fiscal Year 2001, Public Law 106-398, 114 Stat. 1654A-59. The 

effective date of revision of 10 U.S.C. §§2484 and 2486 was October 1, 2001. 

16 H.R. Report 108-106, Report of the Committee on Armed Services, which accompanied H.R. 1588, the 

National Defense Authorization Act for Fiscal Year 2004, May 16, 2003. 

17 National Defense Authorization Act for Fiscal Year 2004, Public Law 108-136, 117 Stat. 1523. 

933
because of the great variety of types of people using the facilities, such as active and 

retired military personnel and their surviving spouses, 100 percent service-connected 

disabled veterans and their surviving spouses, certain reserve forces personnel, active 

duty and retired commissioned officers of the Public Health Service, retired 

commissioned officers, ships' officers and members of the crews of vessels of the 

National Oceanic and Atmospheric Administration, and certain civilian employees of the 

government serving overseas, among others. 

934
Chapter IV.C.4. 

 Military Exchanges 

 Legislative Authority: Legislative authority for establishment and operation of 

military exchanges is contained in 10 U.S.C. 2481. In addition, the Armed Services 

Exchange Regulations, first promulgated as a Department of Defense Directive in 1949, 

and currently issued with the approval of the House Committee on Armed Services, 

provide DoD-wide instructions governing exchange operations. 

Purpose: The Armed Forces exchange programs are vital to mission 

accomplishment and form an integral part of the non-pay compensation system for active 

duty personnel.1

 As a military resale and category C revenue-producing morale, welfare, 

and reaction (MWR) activity, the Armed Services exchanges have the dual mission of 

providing authorized patrons with articles of merchandise and services and generating 

nonappropriated fund (NAF) earnings. 

Background: During the Revolutionary War, provision was made in the 

American Army for the appointment and control of private entrepreneurs, known as 

sutlers, who supplied the troops with various daily necessities, including wine and liquor, 

to supplement regular Army rations. Army regulations provided that each post or 

regiment could appoint one sutler. Each month the post or regimental sutler was assessed 

a charge of 10 to 15 cents per man, which was paid out of profits. The money thus raised 

was used to establish a special post fund--now referred to as a NAF activity--for the 

benefit of the troops. The War Department, by regulations, and Congress, by its approval 

of several acts in 1806 and 1821, recognized that soldiers needed conveniently located, 

 

1

 When originally established, exchanges were primarily intended for the benefit of members of the Armed 

Forces and their dependents. Over time, however, other categories of personnel became entitled to use 

them: retired military personnel and their dependents; reserve component personnel and their dependents; 

active duty and retired commissioned officers of the Public Health Service and their dependents; active 

duty and retired National Oceanic and Atmospheric Administration (NOAA) wage marine personnel and 

their dependents; civilian employees of DoD and their dependents when serving overseas or living on DoD 

installations in the United States; and veterans with 100 percent service-connected disability and their 

surviving spouses. 

935
on-post facilities where they could purchase food, beverages, and merchandise and find 

amusement and recreation. 

Despite this more or less open recognition of the so-called sutler system, people 

were far from pleased with how it worked in practice. Because of the virtual monopoly 

sutlers enjoyed, they could sell shoddy merchandise at high prices without fear of losing 

customers. In addition, the sutlers' provision of credit for the purchase of goods 

frequently left the troops badly in debt, to the detriment of morale. After these and other 

abuses became particularly flagrant during the Civil War, in 1866 Congress passed a law 

abolishing the system. 

In 1895, Department of the Army General Order No. 46 directed the 

establishment of a post exchange at every post. These exchanges were under the 

operational control and management of the installation commander. The present 

exchange system, which evolved out of the former independent exchanges at each Army 

post, began in 1941 as the Army Exchange Service. The effectiveness of this system was 

tested during the years of combat in World War II. By and large, the Army Exchange 

Service proved itself equal to the task of providing for the needs of the troops. 

Following the establishment of the Department of the Air Force in 1947, it was 

decided to operate the exchanges of the Army and the Air Force on a joint basis, and the 

Army and Air Force Exchange Service (AAFES) was organized in 1948. On May 14, 

1949, the Secretary of Defense delegated to the Secretaries of the Army and Air Force 

functions, powers, and duties relating to exchange service activities and authorized the 

joint operation of these activities. 

The evolution of the present Navy Exchange System and the Marine Corps 

Exchanges paralleled in many ways that of the Army Exchange Service. So-called "bum 

boats" served Navy ships early in our nation's history, in much the same way sutlers 

served Army posts, providing convenience items to ship-based personnel. Navy ships' 

stores became full-fledged governmental activities in 1909 with the adoption of the 

936
precursor of present 10 U.S.C. chapter 651. Navy shore-based exchanges came under the 

governance of the Department of the Navy in 1923. Both systems were consolidated 

under the Navy Ships' Stores Office in 1946 and 1947. The first Marine Corps post 

exchange was established in 1897; in 1912 the last Marine post trader was replaced by an 

exchange. 

Military exchanges are nonappropriated fund instrumentalities (NAFIs) of the 

Department of Defense that contribute greatly to the morale of military personnel and 

their dependents. As instrumentalities of the Federal Government, they are entitled to the 

sovereign immunities and privileges of the United States, as provided in the Constitution, 

statutes, treaties, and agreements with foreign governments. Military exchanges receive 

selected appropriated fund support, but they generally are self-supporting with respect to 

the payment of civilian salaries, purchase of operating equipment and supplies, and 

maintenance of facilities and equipment. 

In 1949, Congressman Philip J. Philbin of the House Armed Services Committee 

held hearings on DoD resale activities. From these hearings, department-wide regulations 

for the governance of exchanges were developed. Known as the Armed Services 

Exchange Regulations, they are currently codified as DoD Directive 1330.9. Hearings 

were held again in 1953, 1957, 1970, 1972, and 1979, each time concluding that the 

exchange system represents a benefit of military service upon which members of the 

Armed Forces2

 and their families have come to rely and that the system should be 

continued. Indeed, exchange privileges are generally regarded as among the most 

important institutionalized benefits accruing to military personnel and their families. 

Cost: Except for salaries of a limited number of military personnel, costs of 

overseas transportation of exchange merchandise, and provision of utilities overseas, 

nearly all operating costs are covered by NAF. Although buildings built with 

appropriated funds are sometimes made available for exchange usage, new construction 

is, with minor exceptions, conducted with NAF. NAF are also used for facilities 

 

2

 See footnote 1, above. 

937
renovation, furniture, fixtures, and equipment, and interior maintenance and remodeling. 

When new facilities are constructed on government property with NAF, title to the 

building passes to the government immediately upon completion. 

Savings: According to recent price surveys, exchange patrons save approximately 

20 percent on overall purchases as compared with prices for the same merchandise in 

non-exchange stores. 

938
Chapter IV.C.5. 

 The Thrift Savings Plan 

 Legislative Authority: 37 U.S.C. §211, 5 U.S.C. Chapter 84. 

 Purpose: To provide active-duty and Ready Reserve members an additional 

source of financial stability during their time of service and an additional incentive for 

career commitment through long-term, tax-deferred savings. 

Background: The Thrift Savings Plan (TSP) was established for civilian 

government employees by the Federal Employees’ Retirement System Act of 1986, 

Public Law 99-335. The plan is administered by the Federal Retirement Thrift Investment 

Board, a small independent federal agency. The original purpose of the TSP was to 

provide a separate fund of retirement income for civilian government employees, similar 

to that provided employees of the private sector by plans commonly called “401k’s.” The 

pension systems of private enterprise and the retirement system of the Armed Forces are 

called “defined benefit programs” because participation is mandatory and benefits are 

determined strictly by a member’s level and length of service at the time of retirement. 

By contrast, the TSP is called a “defined contribution plan” because an individual who 

opts to participate can select a level of contribution that is financially most advantageous, 

and that level can be changed at any time. Another difference between the TSP and 

defined sources of retirement income is the growth factor: because growth is achieved by 

earnings on the investment of member contributions in a range of low-risk government 

bonds and higher-risk private-sector funds (five such choices were available in 2004), 

growth rates may vary substantially from year to year. The earnings from all such 

investments are non-taxable until after they are withdrawn. The minimum age to 

withdraw without penalty is 59 1⁄2. In 2004 employees had the option of contributing as 

much as 9 percent of their basic pay, a ceiling that was scheduled to increase to 10 

percent in 2005. 

939
In 1999 the Armed Services committees of both the House and the Senate voiced 

support for providing members of the Armed Forces a tax-deferred savings plan that 

would improve their long-term financial security. Thus the House committee stated: 

The committee believes that tax deferred savings plans offer the military 

services cost effective opportunities for enhancing retention that should be 

explored. Accordingly, the committee directs the Secretary of Defense, in 

coordination with the services of the military departments, to examine the 

potential for implementing a variety of options for tax deferred savings plans as 

supplements and alternatives to current military retirement systems. The Secretary 

should consider options that include government matching contributions, timedelayed vesting schemes, and plans designed to increase retention within select 

segments of the force, to include those members with more than 20 years of 

service.1

 The Senate Armed Services Committee made more specific recommendations on 

this subject: 

The committee recommends a provision that would, effective July 1, 

2000, authorize members of the uniformed services to participate in the Thrift 

Savings Plan now available to federal civil service employees....Participating in a 

Thrift Savings account would encourage personal savings and enhance the 

retirement income for service members, who currently do not have access to a 

401k savings plan....If enacted, military personnel would be able to join other 

federal workers in a savings plan that would enhance the value of their retirement 

system and permit them to improve quality of life. The committee believes this 

provision will be an important incentive for military personnel to remain on active 

duty or in the Ready Reserve.2

Following the committee recommendations, the National Defense Authorization 

Act for Fiscal Year 2000, Public Law 106-65, 113 Stat. 670, made military personnel in 

all branches, as well as the uniformed personnel of the National Oceanic and 

Atmospheric Administration and the Public Health Service, eligible to participate in the 

Thrift Savings Plan under essentially the same conditions as those governing the 

participation of civilian federal employees. Under the military system of participation, 

member contributions are not matched by the employing agency, as they are in the 

 

1

 House Report No. 106-162 (Committee on Armed Services), p. 364, accompanying H.R. 1401, 106th

Congress, 1st Session (1999). 

2

 Senate Report No. 106-50 (Committee on Armed Services), p. 323, accompanying S. 1059, 106th

Congress, 1st Session (1999). 

940
Federal Employees’ Retirement System, which is the newer of the two civil service 

retirement systems. In addition to contributing as much as 9 percent of their basic pay to 

a TSP account,3

 members of the Armed Forces also may contribute any percentage, from 

1 to 100, of any incentive or special pay that they receive, as long as such contributions 

do not exceed the monetary limits placed by the Internal Revenue Service (IRS) on total 

annual contributions. The 2004 IRS limit of $13,000 was scheduled to increase by $1,000 

in each of the two following years. 

Unlike retirement annuities, earnings from the TSP contributions of a member of 

the Armed Forces belong to the individual, no matter how long the term of service. Upon 

a member’s completion of service, TSP funds can be withdrawn in whole or in part, they 

can be converted into “401k” funds or conventional individual retirement accounts in the 

private sector, or they can be moved into a civilian TSP if the individual becomes a 

federal employee. If the member is married, approval of the spouse is required for most 

types of withdrawal. In 2004, participation in the uniformed services ranged from 34 

percent of Navy personnel to 16 percent of Army personnel.4

 

3

 The percentage limitation was scheduled to change at the same rate and at the same time as that for civil 

service employees. 

4

 Federal Retirement Thrift Investment Board, March, 2004. 

941
Chapter V.A. 

 

Overview of Manpower-Related Cost Items 

 In addition to the various pays, allowances, and other benefits set out under 

Sections II, III, and IV of this edition of Military Compensation Background Papers, 

military personnel also receive a number of other allowances or benefits that are related 

to and derive from the specialized needs and requirements of the military personnel 

system. In some cases, these allowances or benefits are intended to offset special 

expenses military personnel and their dependents are required to bear as a condition of 

service in the military forces of the United States, and in thus offsetting expenses military 

personnel in fact bear, there is little question but that a benefit of significant proportion is 

conferred on affected personnel. With respect to such allowances and benefits, the reason 

they are provided to military personnel and their dependents is to try to insure that there 

are no artificial disincentives to career military service. Among the allowances and 

benefits made available to military personnel for this and similar reasons are the various 

reimbursements set out under Subsection C of this Section V of this edition of Military 

Compensation Background Papers as well as a few of the benefits covered under 

Subsection B. 

Other benefits are provided to members and former members of the Armed Forces 

more for the convenience of the government or to assist former members in their 

transition back to productive employment in the civilian economy. These benefits are, in 

the main, covered under Subsection B of Section V of this edition of Military 

Compensation Background Papers. 

The principles and concepts of military compensation that are exemplified by the 

system of manpower-related cost items covered in this Section V of Military 

Compensation Background Papers are focused on the overall effectiveness of the 

compensation system in both peace and war; on the achievement of substantial equity for 

members of the Armed Forces, especially, in the case of reimbursements, in the sense of 

establishing a compensation system that is generally competitive with compensation in 

942
the private sector; on the interrelationship between the military manpower requirements 

of the United States and the compensation system considered as a whole; and on 

motivation of members and potential members of the Armed Forces. 

943
Chapter V.B.1. 

 Professional Education and Training 

Legislative Authority: 10 U.S.C. §153(a)(5)(c) and 37 U.S.C. §§203(c)(1) and 

209. Also miscellaneous provisions of Title 10, United States Code. 

Purpose: To educate and train military personnel in skills required by and for the 

primary benefit of the various military services and to prepare such personnel for the 

increasingly greater responsibilities they will be called upon to assume as they progress 

in their military careers. 

Background: Professional education and training, although it often may result in 

a collateral benefit to the individual service member who receives it, is intended primarily 

to benefit the military services of the United States, enabling them to meet national 

security objectives. In his State of the Union address to Congress in December 1796, 

President Washington expressed the following rationale for professional education and 

training in terms that have withstood the test of time: 

However pacific the general policy of a nation may be, it ought never to 

be without an adequate stock of military knowledge for emergencies.... In 

proportion as the observance of pacific maxims might exempt a nation from the 

necessity of practicing the rules of the military art ought to be its care in reserving 

and transmitting, by proper establishments, the knowledge of that art. Whatever 

arguments may be drawn from particular examples superficially viewed, a 

thorough examination of the subject will evince that the art of war is at once 

comprehensive and complicated, that it demands much previous study, and that 

the possession of it in its most improved and perfect state is always of great 

moment to the security of a nation.1

The Act of March 16, 1802, ch. 9, §§26 and 27, 2 Stat. 132, 137 (1802), 

recognized the need for a "stock of military knowledge" by providing for a corps of 

engineers in the U.S. Army and by specifying that "the said corps, when so organized, 

shall be stationed at West Point in the state of New York, and shall constitute a military 

 

1 James D. Richardson, ed., A Compilation of the Messages and Papers of the Presidents 1789-1897, v. 1, 

21-22 (Washington, D.C.: GPO, 1900). 

944
academy." The Act of April 29, 1812, ch. 72, 2 Stat. 720 (1812), expanded the military 

academy's teaching staff and established a four-year curriculum to include fields of study 

other than engineering. The Act of July 13, 1866, ch. 176, §6, 14 Stat. 90, 92 (1866), 

further reduced the academy's engineering emphasis by permitting the selection of a 

superintendent from any branch of the Army. 

A "Naval School" was established by Secretarial regulations in 1845, and the 

Naval Appropriation Act of August 10, 1846, ch. 176, §4, 9 Stat. 97, 100 (1846), 

supported this action by appropriating $28,200 "for repairs, improvements, and 

instruction at Fort Severn, Annapolis, Maryland." Revised regulations of 1850 renamed 

the school the "United States Naval Academy." During the first few years of the Naval 

Academy's existence, its student body was drawn from midshipmen on active duty, many 

of whom had completed several years of service. The Act of July 16, 1862, ch. 173, §11, 

12 Stat. 583, 585 (1862), even though it made no explicit change in the Naval Academy's 

status as a regulatory rather than a statutory entity, legislatively recognized its existence 

and title by enacting rules governing the admission, number, age limits, and dismissal of 

"students." The Act of May 21, 1864, ch. 93, §4, 13 Stat. 80, 85 (1864), provided the first 

statutory underpinning for the establishment of the Naval Academy. It followed a 

temporary relocation during the Civil War to Newport, Rhode Island, and provided that 

"the United States Naval Academy shall be returned to and established at the naval 

academy grounds in Annapolis...." The Act of March 3, 1873, ch. 230, §1, 17 Stat. 547, 

555 (1873), prescribed a six-year course of instruction for the academy, with the first four 

years to be spent in academic studies and the remaining two years at sea. The Act of 

March 7, 1912, ch. 53 [Public Law 98, 62d Congress], 37 Stat. 73 (1912), eliminated the 

two years' service-at-sea requirement and established a four-year course with summer 

cruises and practical instruction. 

The United States Air Force Academy was authorized by the Act of April 1, 1954, 

ch. 127 [Public Law 325, 83d Congress], §2, 68 Stat. 47 (1954); was officially activated 

at a temporary site at Lowry Air Force Base, Colorado, in August 1954; admitted its first 

945
class of cadets in July 1955; and moved to its permanent location near Colorado Springs 

in August 1958. 

Under 37 U.S.C. §203(c)(1), as amended by the National Defense Authorization 

Act for Fiscal Year 2001, Public Law 106-398, 114 Stat. 1654A-150, service academy 

cadets and midshipmen are entitled to monthly "cadet ... or midshipman pay" amounting 

to 35 percent of the basic pay received by an officer of grade O-1 with less than 2 years 

of service. In 2004, that amount was $792.54 per month. In 1977 a provision for pay 

levels of cadets and midshipmen was added to 37 U.S.C. §203 by Public Law 95-79. 

Between 1977 and 2001, this payment was prescribed as a specific amount rather than a 

percentage. The last two such amounts, set respectively by the authorization acts for 

fiscal years 1995 and 1999, were $558 and $600, prior to establishment of the percentage 

formula in 2001. Cadets and midshipmen are also entitled to rations in kind or commuted 

rations at all times.

The service academies are not the sole providers of undergraduate military 

education and training. Senior Reserve Officers’ Training Corps (ROTC) programs at 

civilian educational institutions play a prominent part in such education and training and 

now constitute the principal source of new officers for the services. 

With a few notable exceptions, such as Norwich University, the Military College 

of the Citadel, and the Virginia Military Institute, state and private colleges did not offer 

military training in the years before the Civil War. The virtual absence of such training, 

together with the resignation of many officers to serve with the Confederacy, resulted in a 

severe shortage of trained officers in the first years of the war, especially in the Union 

forces. The early Civil War experience was responsible for the inclusion of military 

instruction in the curricula of the colleges founded under the so-called "Morrill Act," the 

Act of July 2, 1862 (Land Grant Act of 1862), ch. 130, §4, 12 Stat. 503, 504 (1862). The 

Act awarded a grant of public lands to each state agreeing to use the funds from the sale 

of such land for "the endowment, support, and maintenance of at least one college where 

the leading object shall be, without excluding other scientific and classical studies, and 

946
including military tactics, to teach such branches of learning as are related to agriculture 

and the mechanic arts...." 

The Morrill Act did not make any provision for federal financial or other 

assistance to land-grant colleges in conducting military programs, nor did it make clear 

whether military training was compulsory or optional for students at the colleges. As a 

result, the quality of instruction at land-grant colleges was uneven. Some colleges made 

military instruction compulsory, others made it elective. Some made the instruction a 

four-year requirement, others fixed a shorter requirement. The number of hours devoted 

to military instruction each week varied from school to school, as did the status of 

professors of military science and tactics, the wearing of uniforms during instruction 

periods, and military course content. This situation was tolerated as long as the United 

States was not engaged in a major conflict, but the imminence of the nation's entry into 

World War I made a change imperative. 

The Act of June 3, 1916 (National Defense Act of 1916), ch. 134 [Public Law 85, 

64th Congress], §40, 39 Stat. 166, 191 (1916), abolished the land-grant-college system of 

undergraduate military education and replaced it with an ROTC structure, which, with 

modifications, continues to the present. The act authorized the formation of, and the 

furnishing of arms, equipment, and means of transportation to, ROTC units at civilian 

educational institutions, and provided for the assignment of Army officers to participating 

institutions as professors and assistant professors of military science and tactics. It 

specified that ROTC units be comprised of at least 100 students, required that an average 

of at least three hours a week be devoted to military instruction, allowed the 

establishment of both four-year and two-year ROTC programs, and permitted 

participating institutions to determine whether military courses would be compulsory or 

elective. It also authorized the payment of a monthly subsistence allowance during the 

last two years of the military course to ROTC cadets who had successfully completed the 

first two years. The Act of March 4, 1925, ch. 536 [Public Law 611, 68th Congress], §22, 

43 Stat. 1269, 1276 (1925), brought the Navy into the ROTC system on the same basis as 

the Army. 

947
The naval ROTC system was expanded to include a scholarship program by the 

Act of August 13, 1946, ch. 962 [Public Law 729, 79th Congress], §§3 and 4,60 Stat. 

1057, 1058-1059 (1946). This naval scholarship program--popularly known as the 

Holloway Plan from the name of the officer who headed the board that recommended it--

provided for financial assistance, including a monthly subsistence allowance and 

payment of tuition, books, fees, etc., to selected students in the four-year ROTC course. 

The Army did not seek, and was not granted, similar authority for its ROTC program. 

The Reserve Officers' Training Corps Vitalization Act of 1964, Public Law 88-647, 78 

Stat. 1063 (1964), established a uniform ROTC system for all military departments. In 

essence, it extended the naval ROTC program, including the Holloway Plan, to all three 

military departments. 

Members of the Senior Reserve Officer's Training Corps who have committed 

themselves to complete advanced training and make themselves eligible for commission 

as reserve officers at the end of that training receive a monthly subsistence allowance. 

Eligibility for the allowance begins the day advanced training begins, and it ends upon 

completion of that training. Barring an extension of training into an extra year, the 

maximum period of eligibility is 20 months; in no event can eligibility extend for more 

than 30 months. 

In recent years, Congress has mandated two increases in the amount of the 

allowance for senior ROTC trainees. The National Defense Authorization Act for Fiscal 

Year 2000, Public Law 106-65, raised the allowance from $150 per month (the level at 

which it had been for the previous five years) to $200 per month. The National Defense 

Authorization Act for 2001 then prescribed a range of payments between $250 and $674 

per month, to be specified by the Secretary of Defense as set forth in Chapter 59, volume 

7A of the DoD Financial Regulation. Within that range, in 2004 members in their first 

year of senior training received $350 per month and those in their second year received 

$400 per month. 

In addition to the service academies and the ROTC programs, pre-commissioning 

education and training is provided through a number of other officer procurement 

948
programs. These include (1) Navy Reserve Officer and Aviation Reserve Officer 

Candidate Programs and Marine Corps Platoon Leader Classes, participants in which are 

college students with training conducted off-campus; (2) officer candidate schools in all 

the services; (3) various health-professional acquisition programs; and (4) enlisted degree 

completion and commissioning programs at civilian institutions: the Naval Enlisted 

Scientific Education Program, the Marine Enlisted Commissioning Education Program, 

and the Air Force Airman Education and Commissioning Program. Enlisted personnel 

who complete the latter programs also attend the officer candidate school for their 

respective branches of service before being commissioned. Participants in Navy Reserve 

officer and Aviation Reserve officer candidate programs and Marine Corps platoon 

officer classes are entitled to the same monthly subsistence allowance as ROTC members 

in advanced training. All the pre-commissioning programs, including the service 

academies and ROTC, require a military obligation from participating students to "pay 

back" the government's investment in their professional education and training.2

The various pre-commissioning education and training programs are by and large 

designed to provide a broad general education and foundation of military knowledge. 

Hence, most newly commissioned officers also receive formal initial or specialized area 

training for the specific type of duty they will be performing. Ordinarily, such training is 

conducted by each officer's own branch of service. Military skill progression training 

normally follows after a period of practical experience and is designed to enable the 

officer to assume more advanced responsibilities. 

The next part of the officer education and training pattern is professional 

development education, the purpose of which is to prepare officers to cope with the 

different problems they may have to deal with over the course of a military career. The 

annual training report submitted to Congress by the Department of Defense divides the 

professional development service schools for officers into three educational levels--career 

 

2

 In most cases, the "military obligation" required for pre-commissioning programs is an active duty 

obligation, although some Army officers may serve their obligations in reserve components. 

949
officer professional schools, intermediate service schools, and senior service colleges.3

The Marine Corps Amphibious Warfare Course and the Air Force Squadron Officer 

School, which are service-wide in scope, constitute the greatest part of professional 

development service schools at the "career" level, although there are more narrowly 

directed, specialized skill training schools as well, such as the Navy Surface Warfare 

Officers Course and the Army's Armor Officer Advanced Course.4

The Command and Staff Colleges operated by each of the services and the Armed 

Forces Staff College are at the "intermediate" service school level. Their purpose is to 

prepare officers for command and staff duties at all echelons of their respective services 

and in joint or allied commands. Some of these schools have a long tradition. The Army 

Command and General Staff College, for example, was opened in 1881 as the School of 

Application for Infantry and Cavalry. Other schools at this level include the College of 

Naval Command and Staff, the Marine Corps Command and Staff College, and the Air 

Command and Staff College.5

Each military department operates a senior service school or "war college." Also 

at the senior professional development level is the National Defense University, 

consisting of two joint-service senior service schools, The National War College, and the 

Industrial College of the Armed Forces. Each of these schools is designed to prepare 

officers for senior command and staff positions at the highest levels in the national 

security establishment and the allied command structure. All integrate the study of 

economic, scientific, political, sociological, and other factors as they relate to national 

security, the unifying focus being the study of national goals and national security policy. 

The Industrial College of the Armed Forces emphasizes the use and management of 

 

3

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 59-64. 

4

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, p. 61. 

5

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 62-63. 

950
national resources. Most of these colleges, too, have a relatively long tradition. The Naval 

War College was established in 1884, the Army War College in 1901, and the National 

War College and the Industrial College of the Armed Forces in 1946.6

In addition to instruction and training provided by war colleges, command and 

staff colleges, and the like, professional development education may consist of postgraduate studies at the Naval Postgraduate School, the Air Force Institute of Technology, 

or at civilian institutions, depending on where the required education can best be 

obtained. The purpose of these programs is to fill essential and "validated" military 

positions requiring specialized advanced knowledge attainable only through graduatelevel education. Under these programs, military officers undergo graduate education on a 

full-time, fully funded basis. An active service payback obligation is required of all 

officers who enter any of the programs. Under current regulations, a minimum service 

payback obligation of three years for the first year of schooling and one year for each 

following year of schooling is required of all officers entering any of the graduate-level 

programs.7

Sprinkled throughout the professional education and training pattern are programs 

that permit selected members to work toward associate, baccalaureate, or advanced 

degrees. These programs are intended to enhance members' technical qualifications and 

improve their general educational attainments. They also serve as a recruiting and 

retention incentive, as reflected by the fact that most such programs carry an additional 

service obligation as a "payback" for the schooling provided. To the extent possible, 

personnel in advanced education programs are later used to satisfy "validated" service 

requirements, thereby reducing the required student load in graduate education for such 

billets. Other full-time professional education furnishes training in a variety of joboriented skills that can best be acquired through short-term courses, as well as training 

 

6

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 63-64. 

7

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 66-68. See also DoD Directive 1322.10 of August 31, 1990. 

951
courses to expand the skills of health professionals and provide them with up-to-date 

information on the latest techniques in their fields.8

The enlisted professional education and training pattern is notably different from 

the officer pattern. Enlisted personnel do not receive pre-entry military education; their 

training begins at the recruit depots after they have entered into their enlistments. Recruit 

training is designed to give new enlisted entrants the basic knowledge and general skills 

they will need to perform as members of military units, to provide an orderly transition 

from civilian to military life, and to motivate recruits to become dedicated and productive 

members of the Armed Forces. Following this "introductory" and "indoctrination" 

training, enlisted members are normally assigned to formal initial skill training or to onthe-job training leading toward a low-level military occupational specialty. On-the-job 

training once predominated in enlisted initial skill training, but the increasingly complex 

technological demands placed on service personnel have now made more formal 

instruction the principal method pursued at present. After their recruit and initial skill 

training, the further professional education and training of enlisted personnel is usually 

limited, during the initial enlistment at least, to on-the-job experience. The major 

exception is Navy training, conducted by fleet schools, in such shipboard duties as fire 

fighting and damage control.9

Enlisted members may be assigned to skill progression training upon 

reenlistment,10 but in most cases they progress in their skill areas through the acquisition 

of advanced practical knowledge gained on the job and without additional formal 

training. Furthermore, some enlisted personnel will attend NCO professional 

 

8

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 68-70. 

9

 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapters III and V, pp. 14-22, 33-41. 

10 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter V, pp. 39-41. 

952
development training programs to prepare them for increased supervisory and leadership 

responsibilities.11

Normally, few enlisted personnel attend regularly programmed specialized 

courses after mid-career; however, on occasion new equipment or systems are 

introduced, and senior enlisted personnel may be formally trained in operation and 

maintenance techniques. Selected senior enlisted personnel attend schools, such as the 

Army Sergeants Major Academy, which are, on the NCO level, similar in purpose to the 

intermediate and senior service schools in the officer education system.12

Cost: For the cost of professional education and training from 1972 to 1976, see 

Table V-1 of Military Compensation Statistics Tables, volume II of this edition.

 

11 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 64-66. 

12 “Military Manpower Training Report for FY 1997,” submitted to Congress pursuant to 10 U.S.C. 

§115a(f), June 1996, Chapter VII, pp. 64-66. 

953
Chapter V.B.2. 

 Veterans' Educational Assistance 

 (GI Bill) 

Current Legislative Authority: Chapters 30, 32, 34, and 35, Title 38, United 

States Code (38 U.S.C. §§3001-3036, 3201-3243, 3451-3493, and 3500-3566, 

respectively), Chapter 107, Title 10, United States Code (10 U.S.C. §§2141-2149), and 

Chapter 1606, Title 10, United States Code (10 U.S.C. §§16131-16137). 

Purpose: As set out in 38 U.S.C. §3451, in creating the Veterans' Educational 

Assistance Program, Congress intended to (1) enhance and make more attractive service 

in the Armed Forces, (2) extend the benefits of higher education to qualified and 

deserving young people who might not otherwise be able to afford it, (3) provide 

vocational readjustment and restore lost educational opportunities to those service men 

and women whose careers had been interrupted or impeded by active duty after January 

31, 1955, and (4) aid such persons in attaining the vocational and educational status they 

might normally have aspired to and attained had they not served their country. All of the 

educational assistance programs covered by this chapter share these purposes. 

Background: To assist the speedy and successful reintegration of returning 

veterans, particularly drafted veterans, into civilian life, Congress has over the years 

enacted a series of laws, popularly known as "GI Bills," covering veterans of World War 

II, the Korean conflict, the Post-Korean "Cold War" Period, and the period of Southeast 

Asia hostilities, respectively. A major aim of these "bills" was, and is, to provide 

education and training opportunities to affected personnel. 

The World War II educational benefit consisted of payments by the government 

on behalf of a veteran pursuing a course of education or training, for books, tuition, and 

customary fees, not to exceed $500 for an ordinary school year. In addition, a subsistence 

allowance was paid directly to the veteran. The period of entitlement to education 

benefits was determined by the length of the veteran's World War II service, with a four954
year maximum period of entitlement. With minor exceptions, this program ended July 25, 

1956. 

The education benefits made available to veterans of the Korean conflict, unlike 

the World War II program, did not permit payment to the educational institution for 

tuition, books, etc., but limited the benefit to the stipend paid directly to the veteran. The 

period of entitlement to educational benefits was determined by the length of the 

veteran's Korean conflict service, with the maximum period of entitlement generally 

being three years. For the purpose of this program, the "Korean Conflict" was considered 

to have started June 27, 1950, and to have ended January 31, 1955, except that, for 

persons on active duty on January 31, 1955, the ending date was postponed until the date 

of such person's first discharge or release from active duty after January 31, 1955. Under 

any circumstances, however, payment of educational assistance based on Korean-conflict 

service terminated January 31, 1965. About 2.4 million veterans were trained under this 

educational benefit program. 

 Education benefits were first provided to dependents of veterans with the 

enactment of what was referred to as the “War Orphans’ Educational Assistance Act of 

1956.” On September 2, 1958, Public Law 85-857 consolidated all of the laws 

administered by the Veterans’ Administration into one act. The consolidation of Title 38 

of the U.S.C., “Veterans’ Benefits”, established Chapter 35, the “War Orphans’ 

Educational Assistance Program.” PL 85-857 extended monthly education benefits 

($110 for full-time students) for a maximum of 36 months to the children 18 to 23 years 

of age of the veterans of World War I, World War II, and the Korean Conflict who died 

as a result of service connected activity. PL 85-857 also extended benefits to provide 

restorative training to overcome or lessen the effects of a physical or mental disability 

that interfered with educational attainment. PL 88-361 later extended education benefits 

of the program to children of living veterans rated permanently and totally disabled who 

sustained their disability as a result of service-connected activity. 

 The name of the program was changed to its current name, “Survivors’ and 

Dependents’ Educational Assistance Program (DEA),” on October 15, 1976, with the 

enactment of PL 94-502. This law increased the maximum entitlement from 36 to 45 

955
months. The law also extended the period of eligibility for children from five to eight 

years. 

The Veterans' Readjustment Benefits Act of 1966, as amended, Public Law 89-

358, 80 Stat. 12 (1966), which added Chapter 34, Veterans' Educational Assistance, to 

Title 38, United States Code, is the basic "GI Bill" for veterans of the post-Korean "Cold 

War" and the period of Southeast Asia hostilities. Under the Veterans' Readjustment 

Benefits Act of 1966, Public Law 89-358, id., an educational assistance allowance could 

be paid by the Veterans' Administration1

 to (1) an other-than-dishonorably-discharged 

veteran who had served on active duty for more than 180 days any part of which occurred 

after January 31, 1955, and before January 1, 1977, or who, regardless of length of 

service, had been discharged or released from active duty between such dates for a 

service-connected disability or (2) an individual who had served more than 180 days 

during that period in an active-duty status for so long as he continued on active duty 

without a break therein. 

The period of entitlement to educational benefits under this program was 

determined by the length of the veteran's active service during the post-Korean period 

and the period of Southeast Asia hostilities, with entitlement to assistance for one and 

one-half months (or the equivalent in part-time assistance) accruing for each month of 

active service after January 31, 1955. However, once a veteran had served a period of 18 

months or more on active duty after January 31, 1955, and had been released from such 

service under conditions that would satisfy his active duty obligation, he was entitled to 

educational assistance for a period of 36 months. Veterans' Education and Employment 

Assistance Act of 1976, Public Law 94-502, §203, 90 Stat. 2383, 2386 (1976), increased 

the 36-month limit to 45 months for all training. 

 

1

 The Veterans Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, §2, 102 Stat. 2635 (1988). Pursuant to that act, from and 

after March 15, 1989, all references in any federal law, executive order, rule, regulation, delegation of 

authority, or any document of or pertaining to the Veterans Administration is statutorily deemed to refer to 

the Department of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 

102 Stat. at 2640-2641; also see, 38 U.S.C.A. §301 note. 

956
As a general rule, an educational allowance could not be paid beyond a date 10 

years after a veteran's last discharge or release from active duty after January 31, 1955. 

Qualifying educational institutions included approved public and private secondary 

schools, junior or senior colleges, and vocational, scientific, or correspondence schools. 

Additionally, an allowance could be paid for apprenticeship and other on-the-job training, 

cooperative and farm cooperative programs, and refresher or other deficiency, 

preparatory, or special assistance courses. Monthly rates for educational assistance 

allowances varied depending on the type of training the recipient had chosen 

(institutional or cooperative), the amount of time the recipient spent on the program (full 

time, three-fourths time, or half-time), and the number of dependents the recipient had. 

Rates of assistance, as increased by the Veterans' Benefits Improvement Act of 1984, 

Public Law 98-543, §202(1), 98 Stat. 2735, 2741 (1984), were as follows: 

 Type of No One Two Amount 

 Program Dependents Dependent Dependents per Additional Dependent 

 

Institutional: 

 Full-Time $376 $448 $510 $32 

 3/4 Time 283 336 383 24 

 Half-Time 188 224 255 17 

 

Cooperative: 304 355 404 23 

 

The educational assistance allowance for an individual who pursued a program of 

education while on active duty was computed by reference to the charges for tuition and 

fees made by the institution to similarly-circumstanced non-veterans enrolled in the same 

program, or $376 per month for a full-time course, whichever was the lesser. A person 

training less than half-time was paid at the rate of tuition and fees not to exceed the halftime rate. A veteran enrolled in a program of education exclusively by correspondence 

was paid an allowance computed at the rate of 55 percent of the charge the institution 

required of non-veterans for the course or courses. For full-time apprenticeship or other 

on-the-job training, a veteran was entitled to a training assistance allowance the amount 

of which depended on how long the training lasted and the number of dependents the 

957
veteran had. This program terminated on December 31, 1989, having trained about 8.2 

million veterans. 

The Veterans' Education and Employment Assistance Act of 1976, Public Law 

94-502, §404, 90 Stat. 2383 (1976), provided for the so-called "Post-Vietnam Era 

Veterans' Educational Assistance Program" (VEAP), codified as Chapter 32, Title 38, 

United States Code, 38 U.S.C. §§3201-3243. As adopted, VEAP provided educational 

assistance to all members of the Armed Forces first entering military service on or after 

January 1, 1977 and before July 1, 1985, whereas the preexisting GI bill continued to 

apply to all personnel who first entered the service before that date. 

Although VEAP was in many respects similar to earlier veterans' educational 

assistance programs, it differed in several important respects. Whereas earlier programs 

had been more or less automatic in their application, VEAP was voluntary and 

contributory, with contributions by a service member being a condition of entitlement. 

The Department of Defense matched a service member's contributions on a $2 for $1 

basis. The maximum educational benefit available under basic VEAP was $8,100--

$2,700 of which was contributed by the service-member. The service member's 

contribution could be made monthly, at rates varying from $25 to $100, or in a lump sum, 

but no matter how the contribution was made, it could not exceed $2,700 in the 

aggregate. 

Under VEAP, a service member accrued benefits at the rate of one month of 

educational assistance for each month of contributions, up to a total of 36 months of 

benefits.2

 The amount of benefits depended on the total of the contributions made by the 

member. For a member who made the maximum contribution of $2,700 over a 36- month 

period,3

 the monthly VEAP benefit, payable over 36 months, was $225.4 In contrast to 

 

2 For a member who made a lump-sum contribution, the number of months of benefits payable were 

computed by assuming the contribution was made in monthly installments of $100 each. 

3 See footnote 2, above. 

958
earlier GI bill programs, the amount of the benefit does not vary with the number of a 

service member's dependents. Like earlier programs, however, benefits are payable to 

members on active duty. 

The Veterans' Education and Employment Assistance Act of 1976, Public Law 

94-502, id., viewed veterans' educational assistance benefits as serving a number of 

purposes. As expressly reflected in the language of the act itself, the educational 

assistance program was established in part "to promote and assist the all-volunteer 

military program of the United States by attracting qualified men and women to serve in 

the Armed Forces," as well as to enable members and former members to obtain 

educations they otherwise might not have been able to afford.5

 The legislative history of 

the act makes clear, however, that cost saving was also important in the adoption of 

VEAP. The Senate Committee on Veterans' Affairs, which considered the bill, expanded 

on these varied themes in its report: 

 ... In an attempt to balance the legitimate concerns about budgetary 

expenditures with the many advantages our Nation receives from GI bill 

expenditures, the reported bill creates a new post-Vietnam era veterans' 

educational assistance program.... The new program will result in reduced future 

expenditures of GI bill moneys while, at the same time, helping assure a viable 

military force and continuing the important educational investments by our 

Nation in the youth of our country.... 

 It is apparent to the Committee that the Nation needs to provide some 

form of readjustment assistance for those who serve and those who will serve in 

the Armed Forces.... 

 The Committee believes that ... the benefits [made available under 

VEAP] will facilitate the transition from military to civilian life that each service 

person must ultimately make.... 

 Another important factor contributing to the Committee's determination 

to provide an alternative to the termination of the GI bill is its desire to continue 

 4

 In addition to the basic VEAP program outlined above, the Department of Defense was authorized to 

make such additional contributions as the "Secretary deems necessary or appropriate to encourage persons 

to enter or remain in the Armed Forces. .. ." This supplemental benefit program, sometimes called 

UltraVEAP or the Army College Fund, was available only to service members enlisting in critical skills in 

the Army. Under regulations promulgated by the Department of Defense, the maximum benefit that could 

be accrued under this program was $20,100. 

5 38 U.S.C. §3201. 

959
to assist deserving young men and women in obtaining an education they might 

not otherwise be able to afford....Termination of the current GI bill, without 

providing a suitable alternative .... would impede the upward mobility of our 

Nation's minorities and disadvantaged.... 

 The Committee recognizes that the GI bill, although originally devised 

as a readjustment program, has been successfully utilized as a recruiting 

incentive.... 

 The Committee believes that terminating the GI bill, without providing 

an alternative postservice educational benefits program, would impair the 

military's ability to attract sufficient numbers of quality recruits.... 

 The Committee also recognizes that postservice educational benefits 

have been utilized by the Armed Forces to attract young men and women into the 

military. Educational opportunities are a major attraction for quality 

accessions...."6

Under an amendment to VEAP made by the Veterans' Benefits Improvement and 

Health-Care Authorization Act of 1986, Public Law 99-576, §309(a)(2), 100 Stat. 3248, 

3270 (1986), persons who first entered military service after June 30, 1985, are not 

eligible to participate in the Program, although the Program still applies to all persons 

who entered military service between January 1, 1977, and June 30, 1985. To receive 

benefits, a person must have made some contribution before April 1, 1987. 

The Veterans' Educational Assistance Act of 1984, enacted as Title VII of the 

Department of Defense Authorization Act, 1985, Public Law 98-525, Title VII, §§701-

709, 98 Stat. 2492, 2553-2572 (1984), established two new educational assistance 

programs for military personnel and former military personnel. One of the programs, 

termed the "All-Volunteer Force Educational Assistance Program,"7

 was enacted as new 

Chapter 30 to Title 38, United States Code (Veterans' Benefits), and the other, termed 

"Educational Assistance for Members of the Selected Reserve,"8

 was enacted as an 

amendment to Chapter 106 of Title 10, United States Code (Armed Forces). As explicitly 

stated at 38 U.S.C. §3001 as enacted and codified by §702 (a)(1) of the 1985 

Authorization Act, Public Law 98-525, id., §702(a)(1), 98 Stat. at 2553-2554, and as 

amended by the New GI Bill Continuation Act, Public Law 100-48, §5, 101 Stat. 331, 

 

6

 Senate Report No. 94-1243 (Committee on Veterans' Affairs), pp. 60-72, accompanying S. 969, 94th

Congress, 2d Session (1976). 

7

 Presently titled the Montgomery GI Bill--Active Duty. 

8 Presently titled the Montgomery GI Bill--Selected Reserve. 

960
331-332 (1987), the purposes of the All-Volunteer Force Educational Assistance Program 

were: 

(1) to provide a new educational assistance program to assist in the readjustment 

of members of the Armed Forces to civilian life after their separation from 

military service; 

(2) to extend the benefits of a higher education to qualifying men and women who 

might not otherwise be able to afford such an education; 

(3) to provide for vocational readjustment and to restore lost educational 

opportunities to those service men and women who served on active duty after 

June 30, 1985; 

(4) to promote and assist the All-Volunteer Force program and the Total Force 

Concept of the Armed Forces by establishing a new program of educational 

assistance based upon service on active duty or a combination of service on active 

duty and in the Selected Reserve (including The National Guard) to aid in the 

recruitment and retention of highly qualified personnel for both the active and 

reserve components of the Armed Forces; 

(5) to give special emphasis to providing educational assistance benefits to aid in 

the retention of personnel in the Armed Forces; and 

(6) to enhance our Nation's competitiveness through the development of a more 

highly educated and productive work force. 

The All-Volunteer Force Educational Assistance Program,9

 as originally enacted, 

consisted of a number of integrated provisions. The basic benefit accrued at the rate of 

$300 per month for military personnel who either served on active duty for three years or 

who serve on active duty for two years followed by four years in the Selected Reserve. 

Individuals who served on active duty for less than three years received $250 per month. 

In all cases, the benefits were, and continue to be, payable for the equivalent of a 

maximum of 36 full-time months. New entrants are automatically covered unless they 

decline to participate. 

 Under amendments to the program enacted in the Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, 

§337(a), 105 Stat. 75, 90 (1991), as itself subsequently amended by the Veterans 

 

9 See footnote 7 to this chapter, above. 

961
Reconciliation Act of 1993, enacted as Title XII of the Omnibus Budget Reconciliation 

Act of 1993, Public Law 103-66, §12009(a), 107 Stat. 312, 415 (1993), the Secretary of 

the Department of Veterans Affairs is authorized to make annual cost-of-living 

adjustments to the basic benefits to keep pace with inflation. The Veterans Education and 

Benefits Expansion Act for 2001, Public Law 107-103, 115 Stat. 977, prescribed that 

beginning in 2005 the Secretary make those yearly adjustments according to the yearly 

percentage changes in cost of living, as measured by the Consumer Price Index (CPI). 

The 2002 legislation prescribed specific dollar amounts for such increases to be made in 

the intervening years 2002 through 2004. As specified in the enactment of the program, 

allowances continue to fall into two categories: one for individuals with a three-year 

obligation and a lesser one for those with a two-year obligation. In 2004 the first category 

received $985 per month and the second category received $800 per month. Those 

figures are the basis for computing the CPI-based annual cost-of-living adjustments to 

begin in 2005. 

The Montgomery GI Bill—Active Duty, which is the active duty phase of the AllVolunteer Force Educational Assistance Program, gives the Secretary of Defense 

discretion to increase the amount of the basic benefit by a prescribed amount for 

individuals in critical or difficult-to-recruit-for skills. In 1996 the basic amount of such an 

allowance was $400, with individuals who first become members of the Armed Forces 

after November 28, 1989 receiving $700. The National Defense Authorization Act for 

Fiscal Year 1999, Public Law 105-261, 112 Stat. 2029, eliminated the distinction in 

amounts based on date of entry into service, establishing a uniform allowance of $950 per 

month for individuals in this overall category. 

 

Initially, the Montgomery GI Bill--Active Duty provided for benefits to be paid 

for attendance at institutions of higher learning as well as for pursuit of non-collegedegree courses at institutions of higher learning. Subsequently, the Active Duty program 

was amended by the Veterans' Benefits Improvement and Health-Care Authorization Act 

of 1986, Public Law 99-576, §301(a), 100 Stat. 3248, 3267-3268 (1986), to authorize 

payment of benefits for apprenticeship training, other on-job training, and 

962
correspondence study. The Veterans' Benefits and Program Improvement Act of 1988, 

Public Law 100-689, §108, 102 Stat. 4161, 4169-4170 (1988), further amended the 

Active Duty program to authorize benefits for cooperative training. The Veterans' 

Benefits Amendments of 1989, Public Law 101-237, §422, 103 Stat. 2062, 2088-2090 

(1989), authorized benefits for flight training during the period October 1, 1990, through 

September 30, 1994. 

As originally enacted, the Montgomery GI Bill--Active Duty applied to persons 

who first became members of the Armed Forces or who first entered on active duty on or 

after July 1, 1985, but before July 1, 1988. During this period, personnel eligible for the 

new Program were prohibited from the participating in VEAP. 

Experience with the Montgomery GI Bill--Active Duty generally proved 

favorable, and the authority was made permanent by the New GI Bill Continuation Act, 

Public Law 100-48, §3, 101 Stat. 331 (1987). In approving the permanent extension of 

authority for educational assistance, the House Armed Services Committee summarized 

the purposes of and experience under the program, as well as with the similar program for 

inactive-duty forces, as follows: 

PRIOR LEGISLATION 

 In 1976 Congress approved legislation (Public Law 94-502) ending 

educational assistance under the Vietnam-era GI Bill for individuals entering 

military service on or after January 1, 1977. 

 Those with post-Vietnam-era service were instead eligible for the Veterans' 

Educational Assistance Program (VEAP) which, unlike the Vietnam-era benefit, 

required a contribution by the service member. Under this contributory program, 

the Government matched the service member's contribution of up to $2,700 on a 

two-for-one basis (or a Government contribution of up to $5,400), for a maximum 

educational benefit of $8,100. To make the program more attractive, the Army 

decided to supplement the basic benefit with substantial "kickers" for enlistment 

in critical skills, principally the combat arms, under the Army College Fund. 

 With the exception of the Army College Fund which the Army advertised and 

marketed widely, VEAP was a dismal failure. Participation rates were low, and 

many who originally signed up subsequently decided to disenroll. Congress, 

therefore, decided to rethink the issue and subsequently in Title VII of the 

Department of Defense Authorization Act, 1985 (Public Law 98-525) approved a 

963
three-year test of a new educational assistance program, commonly called the new 

GI Bill.10

 NEW GI BILL 

 The New GI Bill was designed to use educational benefits as a way to attract 

and retain high quality young men and women in the Nation's Armed Forces--in 

both the active and reserve components. The structure of the program is as 

follows: 

Active duty personnel: 

 Applicable to all new entrants onto active duty from July 1, 1985, 

through June 30, 1988. 

 Basic benefit of $300 per month for 36 months in exchange for an 

enlistment of three years or longer (or $250 per month for 36 months for 

two-year enlistment). 

 Kicker authority up to $400 per month for critical skills. 

 Basic benefit paid by the Veterans Administration on a pay-as-you-go 

basis. 

 Kickers (and Reserve program) funded by the Department of Defense 

on accrual basis. 

 Participants' pay is reduced by $100 per month for first 12 months; 

service member is in program unless the individual declines to participate. 

Reserve and Guard personnel: 

 Applicable to all who enlist, reenlist, or extend an enlistment in a 

reserve component from July 1, 1985, to June 30, 1988. 

 Entitlement of $140 per month for 36 months in exchange for a sixyear commitment in the Selected Reserve. 

 No member contribution required. 

 Funded by the Department of Defense on an accrual basis. 

Based on the information available to date, the committee is convinced the 

New GI Bill is a highly successful program. The committee will not restate the 

wealth of back-up data provided in Part I of the report on H.R. 1085 [which was 

enacted as the New GI Bill Continuation Act, Public Law 100-48, 101 Stat. 331 et 

seq. (June 1,. 1987)] filed by the Committee on Veterans' Affairs. Participation 

rates by service members have far exceeded even the most optimistic predictions 

when this legislation was formulated two and half [sic] years ago. Witnesses 

before the committee have uniformly endorsed the continuation of the New GI 

 

10 Title VII of the Department of Defense Authorization Act, 1985, Public Law 98-525, §§701-709, 98 

Stat. 2492, 2553-2572 (1984), which dealt with, among other things, the educational assistance program for 

members of the Selected Reserve, was retitled "Montgomery GI Bill Act of 1984" by the New GI Bill 

Continuation Act, Public Law 100-48, §2, 101 Stat. 331 (1987). 

964
Bill as a vital tool to maintaining the outstanding recruiting and retention results 

currently experienced by the services. 

The Army's success during fiscal year 1986, the first year of experience 

under the New GI Bill, illustrates the importance of a viable educational 

assistance program. In fiscal year 1986, the active Army--the service that has 

traditionally experienced the greatest difficulty in meeting its recruiting goals--

recruited 91 percent high school graduates, with only four percent in Mental 

Category IV, the lowest Mental Category eligible for enlistment. In the Army 

Reserve, Mental Category I-IIIA recruits, the cream of the crop in recruiting, 

increased 24 percent and six-year enlistments increased 28 percent during the first 

year of the New GI Bill in comparison to the previous year. 

The committee believes the test program has been an unqualified success 

and, therefore, recommends that the June 30, 1988, expiration date for the New 

GI Bill be eliminated, thus making the program permanent.11

In addition to establishing the All-Volunteer Force Educational Assistance 

Program, the Veterans' Educational Assistance Act of 1984 also established an 

experimental educational assistance benefit specifically tailored for members of the 

Selected Reserve, including the National Guard. Under this later program, now called the 

Montgomery GI Bill--Selected Reserve, which was adopted as an amendment to Chapter 

106 of Title 10, United States Code, 10 U.S.C. §§2131-2138, members of the Selected 

Reserve received a $140 per month entitlement for up 36 months of benefits for full-time 

institutional training. Lesser amounts were authorized for less than full-time training. To 

qualify, an individual was required to enlist, reenlist, or extend an existing enlistment for 

a six-year period in the Selected Reserve. The program was limited to high school 

graduates or persons who had received equivalency certificates by the completion of the 

required period of initial active duty for training. Like the Montgomery GI Bill--Active 

Duty, the program for members of the Selected Reserve originally applied during the 

period of July 1, 1985, to June 30, 1988, but it too was extended and made permanent by 

 

11 House Report No. 100-22, Part 2 (Committee on Armed Services), pp. 2-3, accompanying H.R. 1085, 

100th Congress, 1st Session (1987). As indicated in the report of the House Committee on Armed Services, 

quoted above, a more extensive discussion of the purposes of the New GI Bill and the experience 

thereunder antedating enactment of the New GI Bill Continuation Act, Public Law 100-48, 101 Stat. 331 

(1987), is found in the Report of the House Committee on Veterans' Affairs, House Report No. 100-22, Part 

1 (Committee on Veterans' Affairs), accompanying H.R. 1085, 100th Congress, 1st Session (1987). See, in 

particular, pages 2-11 of House Report No. 100-22, Part 1. 

965
the New GI Bill Continuation Act.12 13 Under amendments to the program enacted in the 

Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991, 

Public Law 102-25, §337(b), 105 Stat. 75, 90 (1991), the Secretary of the Department of 

Veterans Affairs was authorized to make annual cost-of-living adjustments, based on 

changes in the CPI, to the basic benefit to keep pace with inflation. For fiscal year 2004, 

such adjustments had brought the full-time educational benefit under the Montgomery GI 

Bill--Selected Reserve to $282 per month. 

Like the Montgomery GI Bill--Active Duty, the Montgomery GI Bill--Selected 

Reserve initially provided for benefits to be paid for attendance at institutions of higher 

learning as well as for pursuit of non-college-degree courses at institutions of higher 

learning. Subsequently, the Selected Reserve program was amended by the Veterans' 

Benefits Amendments of 1989, Public Law 101-237, 103 Stat. 2062 (1989), to authorize 

payment of benefits for apprenticeship training, other on-job training, correspondence 

study, and cooperative training to reserves who enlisted, reenlisted, or extended an 

enlistment by six years after September 30, 1990. The Veterans' Benefits Amendments of 

1989, Public Law 101-237, id., §422(b), 103 Stat. at 2089-2090, also authorized flight 

training benefits during the period October 1, 1990, through September 30, 1994, for 

reserves who enlisted, reenlisted, or extended an enlistment by six years after September 

30, 1990. 

Expanding on Congress's frequently expressed concern about attracting and 

retaining "quality recruits" for the Armed Forces, the Department of Defense 

Authorization Act, 1981, Public Law 96-342, Title IX, §§901-906, 94 Stat. 1077, 1111-

 

12 Unlike earlier GI Bill entitlements, the Department of Defense, rather than the Veterans' Administration, 

is required to fund a major portion of the costs associated with the All-Volunteer Force Educational 

Assistance Program as well as the program for members of the Selected Reserve. In particular, the 

Department of Defense pays all costs above the basic benefit for the All-Volunteer Force Educational 

Assistance Program as well as all costs of the Selected Reserve program. Funding for these programs is 

done on an accrual accounting basis through the Department of Defense Educational Benefits Fund, 

established by Section 706 of the Department of Defense Authorization Act, 1985, Public Law 98-525, 

§706, 98 Stat. 2568-2570 (1984). See, e.g., 10 U.S.C. §2006. 

13 For a more complete description of the educational assistance program for members of the Selected 

Reserve, see "Educational Assistance for Members of the Selected Reserve" in Chapter II.E.2.d., "Reserve 

Affiliation, Enlistment and Reenlistment Bonuses, Special Unit Pay, and Educational Assistance," above. 

966
1117 (1980), established an educational assistance test program, partially codified at 10 

U.S.C. §§2141-2149, in an effort to determine the effectiveness of offering educational 

benefits as incentives to recruitment of enlisted personnel. In essence, the test program 

consisted of three different elements--a tuition/stipend program, a loan repayment 

program, and a noncontributory VEAP program--each of which is discussed below. 

* THE TUITION/STIPEND PROGRAM. This offered tuition benefits and a living 

allowance (available only to those who took advantage of the program after separation 

from the service) in the maximum amount of $15,600. Such benefits were available 

only to members enlisting or reenlisting for service on active duty after September 30, 

1980, and before October 1, 1981. In order to take advantage of such benefits, a 

member must have completed at least 24 months of his service obligation. At the first 

reenlistment point after the enlistment that established the member's entitlement, a 

reenlisting member had the option of either cashing in his remaining benefits at 60% 

of their value or transferring the full value thereof to dependents. If the benefits were 

not cashed in, a member retained the right to use or transfer them for 14 years after 

separation from the service.14

* THE LOAN REPAYMENT PROGRAM. This program authorized the Department 

of Defense to repay Guaranteed Student Loans or National Direct Student Loans of 

certain members enlisting or reenlisting in the Selected Reserve of the Ready Reserve 

of an armed force or for service on active duty after September 30, 1980, and before 

October 1, 1981. A member must have successfully completed one year of service in a 

qualifying occupational specialty to be entitled to benefits. For members meeting the 

entitlement criteria, including those established by the Secretary of Defense, loans 

could be repaid at the rate of 33 1/3 % or $1,500 of the outstanding principal, 

whichever was greater, for each year of qualifying service. The Department of 

Defense Authorization Act, 1982, Public Law 97-86, §406, 95 Stat. 1099, 1106-1107 

(1981), adopted December 1, 1981, extended the qualifying date from October 1, 

1981, to October 1, 1983. 

* THE NONCONTRIBUTORY VEAP PROGRAM. This program essentially 

mirrored the normal VEAP program, described above, except that the Department of 

Defense paid the service member's contribution. Members eligible for this program 

included members enlisting or reenlisting in the Armed Forces after September 30, 

1980, and before October 1, 1981, who elected to participate in VEAP and who met 

the selection criteria promulgated by the Secretary of Defense. 

 ... [T]he current recruiting and retention situation warrants expeditious 

action. The implementation of an effective educational assistance program may 

 

14 This eligibility limit was extended from ten years to 14 years by the National Defense Authorization Act 

for Fiscal Year 2003, Public Law 107-314, 116 Stat. 2576. 

967
well be the best approach for the volunteer force to attract personnel of needed 

quality.15

In keeping with Congress's expressed intention to test the effectiveness of 

educational benefits as recruitment and retention incentives for the Armed Forces, the 

Secretary of Defense is required to submit periodic reports on the "implementation and 

operation of the [test] educational assistance programs" established by the Department of 

Defense Authorization Act, 1981, Public Law 96-342, Title IX, §§901-906, 94 Stat. 

1077, 1111-1117 (1980). 

Veterans who were eligible for Old GI Bill benefits (Title 38, United States Code, 

Chapter 34) as of December 31, 1989, and who served on continuous active duty for 

three years after June 30, 1985, may also eligible for educational benefits without having 

any reductions in their basic pay. To be eligible for benefits, such individuals must have 

served on active duty sometime between October 19, 1984, and July 1, 1985, and 

continued on active duty without a break through their qualifying period. The full-time 

rate for these veterans is $604.62 per month. In addition, certain veterans who have been 

involuntarily separated from active duty or who voluntarily separate from the service 

under special separation incentive programs may be eligible for educational benefits. 

 

15 House Report No. 96-1222 (Committee of Conference), p. 100, and Senate Report No. 96-895 

(Committee of Conference), p. 96, accompanying H.R. 6974, 96th Congress, 2d Session (1980). 

968
Chapter V.B.3. 

 GI Bill 

 (Home Loan Assistance) 

Legislative Authority: Chapter 37, Title 38, United States Code (38 U.S.C. 

§§3701-3736). 

Purpose: To assist veterans and their families in obtaining and financing adequate 

housing by providing loan guarantees as an equivalent to down payments and ensuring 

that guaranteed loans are made available at reasonable rates of interest. 

Background: Over the years, Congress has enacted a series of laws--popularly 

known as "GI Bills"--covering veterans of World War II, the Korean Conflict, the postKorean period, the period of Southeast Asia hostilities, and the Persian Gulf Conflict to 

assist the speedy and successful reintegration of returning veterans, particularly draftees, 

into civilian life. One of the more important programs of the GI Bills is the Housing 

Assistance Program administered by the Department of Veterans Affairs.1

The Housing Assistance Program was first established by the Servicemen's 

Readjustment Act of 1944, ch. 268 [Public Law 346, 78th Congress], Title III, §§500-503, 

58 Stat. 284, 291-293 (1944). It authorized loan guarantees for the purchase and 

construction of homes, farms, and business property to be made to any member of the 

Armed Forces discharged or released from federal military service (i) under conditions 

other than dishonorable either after completion of 90 or more days of active service 

following September 15, 1940, or (ii) as a result of injury or disability incurred in line of 

duty. Although the benefits provided by the original act have been modified, expanded, 

and liberalized over the ensuing years, the basic structure of the program has remained 

essentially unchanged. 

 

1

 The Veterans Administration was redesignated as the Department of Veterans Affairs by the Department 

of Veterans Affairs Act, Public Law 100-527, §2, 102 Stat. 2635 (1988). Pursuant to that act, from and 

after March 15, 1989, all references in any federal law, executive order, rule, regulation, delegation of 

authority, or any document of or pertaining to the Veterans Administration is statutorily deemed to refer to 

the Department of Veterans Affairs. Department of Veterans Affairs Act, Public Law 100-527, id., §10, 

102 Stat. at 2640-2641; also see, 38 U.S.C.A. §301 note. 

969
Under the Housing Assistance Program, World War II benefits were made 

available to former members of the Armed Forces with qualifying service between 

September 16, 1940, and July 25, 1947; Korean Conflict benefits were made available for 

service between June 27, 1950, and January 31, 1955, inclusive; Vietnam benefits for 

service between August 5, 1964, and May 7, 1975, inclusive; and Persian Gulf benefits 

for service "on active duty for 90 days or more at any time during the Persian Gulf War."2

Entitlement to VA home loan benefits does not expire until used. 

The Veterans' Housing Act of 1970, Public Law 91-506, 84 Stat. 1108 (1970), 

extended eligibility to persons who served for more than 180 days in an active-duty status 

any part of which occurred after January 31, 1955, and to persons who served more than 

180 days in an active-duty status without a break in service. Subsequent legislation 

established eligibility for veterans of other peacetime periods, including service between 

World War II and the Korean Conflict, between the Korean Conflict and the Vietnam 

Era, and the Post-Vietnam period. 

In summary, veterans of wartime periods3

 must have served a minimum of 90 

days of active duty to qualify, and peacetime veterans must have served more than 180 

days. However, individuals separated from enlisted service that began after September 7, 

1980, or from officer service that began after October 16, 1981, must in most cases have 

served two years to be eligible.4

 

2

 Persian Gulf War eligibility was established by the Persian Gulf Conflict Supplemental Authorization and 

Personnel Benefits Act of 1991, Public Law 102-25, §341, 105 Stat. 75, 92 (1991). The term "Persian Gulf 

War" is defined at 38 U.S.C. §101(33), as added by the Persian Gulf Conflict Supplemental Authorization 

and Personnel Benefits Act of 1991, Public Law 102-25, id., §332(2), 105 Stat. at 88, as "the period 

beginning on August 2, 1990, and ending on the date thereafter prescribed by Presidential proclamation or 

by law." 

3

 For this purpose, "wartime periods" include World War II, the Korean Conflict, the Vietnam era, and the 

Persian Gulf War. 

4

 Until 1980, the Veterans Administration, now the Department of Veterans Affairs (see footnote 1 to this 

chapter, above), also had authority to provide direct government loans in areas where private capital was 

not readily available. Funding for the Direct Loan Program was discontinued in September 1980. 

970
The Housing Assistance Program guarantees up to 40 percent of the face value of 

a loan, not to exceed $36,000, for loans of more than $56,250 and less than $144,000. For 

loans of less than $45,000, the program provides 50 percent of the face value. A flat rate 

of $22,500 is available for loans of $45,000 to $56,250. For loans of more than $144,000 

taken for the purpose of constructing a home, the maximum allowable is the lesser of 25 

percent of the face value or $60,000. Between 1992 and 2004, only the last of these 

stipulated allowance levels was changed by legislation. The most recent change was 

made by the Veterans Education and Benefits Expansion Act of 2001, Public Law 107-

103, which raised the maximum amount from $50,750 to $60,000. The program is 

financed by the Loan Guaranty Revolving Fund. 

A brief description of the principal features of the loan guaranty program 

administered by the Department of Veterans Affairs follows: 

PRINCIPAL FEATURES OF DEPARTMENT OF VETERANS 

 AFFAIRS' LOAN GUARANTY PROGRAM

The program provides a loan guarantee by the United States in the amount of 50 

percent of the loan if the loan amount is less than $45,000; a flat rate of $22,500 for loans 

of $45,000 to $56,250; for loans of $56,250 to $144,000, 40 percent of the loan or 

$36,000, whichever is smaller; and, for loans above $144,000, $60,000 or 25 percent of 

the loan amount, whichever is less, if the loan is to purchase or construct a home or to 

refinance the outstanding balance of an existing VA loan to a lower interest rate. 

 

These amounts are available to (1) purchase or construct a dwelling to be owned 

and occupied by the veteran as a home; (2) purchase a farm on which there is a farm 

dwelling to be owned and occupied by the veteran as a home; (3) construct on owned 

land a farm residence to be owned and occupied by the veteran as a home; (4) repair, 

alter, or improve a farm residence or other owned dwelling occupied by the veteran as a 

home; (5) refinance existing mortgage loans which are secured of record on a dwelling or 

farm residence owned and occupied by the veteran as his or her home; (6) purchase a 

971
one-family residential unit in an approved condominium housing development or project; 

(7) improve a home through energy efficiency improvements; (8) refinance to a lower 

interest rate the outstanding balance on an existing loan guaranteed, insured, or otherwise 

made under the VA loan guarantee program; (9) to purchase a manufactured home to go 

on a lot owned by the veteran or to purchase a manufactured home and lot on which it 

will be placed, or to refinance existing loans relating to the same type of transaction; or 

(10) to purchase a home to be occupied by a veteran and make energy efficiency 

improvements. 

The program also provides a loan guarantee by the United States for the purchase 

of a mobile home or mobile home lot in an amount not to exceed 40 percent of the loan 

or $20,000, whichever is less. 

Participation: The number of loans guaranteed for all veterans and for active 

duty members since 1981, by fiscal year, are as shown on the following page: 

 

Fiscal Year Total Loans Closed Loans Guaranteed For Active Duty 

 Members 

 1981 187,628 27,889 

 1982 103,439 20,072 

 1983 245,122 43,285 

 1984 251,588 50,585 

 1985 178,931 35,721 

 1986 313,769 54,633 

 1987 479,491 72,249 

 1988 234,709 41,605 

 1989 189,705 38,945 

 1990 196,600 40,061 

 1991 180,852 36,266 

 1992 265,895 58,257 

 1993 383,067 73,844 

 1994 602,220 99,994 

 1995 263,102 52,825 

 1996 (first half) 150,366 28,808 

Note: Administrative costs include salaries, employee travel and other contractual services, but do not 

reflect general overhead such as agency-wide administrative and housekeeping costs, supplies, utilities, 

rent, furniture, fixtures, etc. 

Source: Department of Veterans Affairs.

972
Chapter V.B.4. 

 Homeowners Assistance Program (HAP) 

Legislative Authority: Section 1013 of the Demonstration Cities and 

Metropolitan Development Act of 1966, Public Law 89-754, §1013, 80 Stat. 1255, 1290-

1292 (1966), as amended, classified to 42 U.S.C. §3374. 

Purpose: The Homeowners Assistance Program (HAP) is designed to assist 

eligible military and federal civilian employee homeowners to help offset real estate 

losses suffered by such individuals as a result of the closure of Department of Defense or 

Coast Guard bases or installations or other reduction actions. 

Background: Section 1013 of the Demonstration Cities and Metropolitan 

Development Act of 1966, Public Law 89-754, §1013, 80 Stat. 1255, 1290-1292 (1966), 

as amended, authorized the Secretary of Defense to provide assistance to eligible military 

or civilian employee homeowners by payment of partial compensation for losses 

sustained in the private sale of a dwelling, by payment of the costs of judicial foreclosure, 

or by purchasing of a dwelling by the government. Such assistance is available to certain 

military personnel and civilian employees who are the owners and occupants of one- or 

two-family dwellings located at or near Department of Defense or Coast Guard 

installations ordered to be closed in whole or in part after November 1, 1964, including 

reductions in the scope of operations at such installations occurring after October 28, 

1969. As a condition of personal eligibility for benefits under the homeowners assistance 

program, the Secretary of Defense must find that the service or employment of the 

employee in question has been or will be terminated as the result of the closure or 

reduction action, and that as a result of the actual or pending closure or reduction action 

there is no present market for the sale of such dwellings upon reasonable terms and 

conditions. 

The Military Construction Authorization Act, 1971, Public Law 91-511, §612, 84 

Stat. 1204, 1225 (1970), amended the Demonstration Cities and Metropolitan 

973
Development Act, Public Law 89-754, id., effective October 28, 1969, to provide that 

consideration may be given to the cumulative effect on the local real estate market of all 

closure or reduction actions in the same area. The Military Construction Authorization 

Act, 1973, Public Law 92-545, §601, 86 Stat. 1135, 1150-1151 (1972), also amended the 

Demonstration Cities and Metropolitan Development Act, effective November 30, 1970, 

to authorize assistance to personnel at overseas bases who previously were not eligible 

because they were not assigned to a unit involved in the closure or reduction action or 

because they owned on-base housing. The Military Construction Authorization Act, 

1974, Public Law 93-166, §513(b), 87 Stat. 661, 679 (1973), approved November 29, 

1973, further amended the Demonstration Cities and Metropolitan Development Act, as 

to closures announced after April 1, 1973, to authorize assistance to certain military and 

civilian personnel who were previously not eligible because they were involved in routine 

transfers not connected with the closure action. Most recently, the Coast Guard 

Authorization Act of 1988, Public Law 100-448, §11(2), 102 Stat. 1836, 1842-1843 

(1988), amended the Demonstration Cities and Metropolitan Development Act to include 

closures of Coast Guard bases and installations within the scope of protection offered by 

the Homeowners Assistance Program.1

Eligibility Criteria: To qualify for benefits under HAP, a member of an armed 

force must have been (1) the owner-occupant of the dwelling with respect to which 

assistance is sought or have vacated the dwelling within the six-month period before the 

closure announcement as a result of having been ordered to occupy on-base housing and 

(2) either (a) serving at or near the Department of Defense or Coast Guard base or 

installation when the announcement of the closure or reduction was made, or (b) 

transferred from the base or from a duty station in the area of the base or installation 

during the six-month period immediately preceding the announcement, or (c) transferred 

from the base or from a duty station in the area of the base or installation during the 

three-year period immediately preceding the announcement and, in connection with the 

 

1 See, e.g., House Report No. 100-855 (Committee of Conference), p. 19, accompanying H.R. 2342, 100th

Congress, 2d Session (1988), and House Report No. 100-154 (Committee on Merchant Marine and 

Fisheries), pp. 8 and 27, accompanying H.R. 2342, 100th Congress, 2d Session (1988). 

974
transfer, informed of a future, programmed reassignment to the installation. In addition, 

the applicant for assistance must either have been required to relocate because of a 

transfer beyond a normal commuting distance from the dwelling for which benefits are 

sought or have become unemployed and be unable to meet mortgage payments and 

related expenses with respect to the dwelling for which benefits are sought. 

Benefits Available: Any one of three benefits is available to a service member 

under HAP, at the member's election. The three options are: 

* A cash payment for losses sustained in the private sale of the dwelling, equal to 

the difference between (i) 95 percent of the fair market value of the property 

before the announcement and (ii) the fair market value at the time of sale or the 

actual sale price, whichever is higher; or 

* Reimbursement for amounts paid as a result of foreclosure of the mortgage on 

the property, or payment by the Government of such amounts if not paid by the 

applicant; or 

* Sale of the property to the Government at 90 percent of its fair market value 

before the announcement or for the full amount of the outstanding mortgages, 

whichever is higher. 

Administration: DoD Directive 5100.54 of December 29, 1967, assigns 

responsibility for administration of the Program; DoD Instruction 4165.50 of February 

11, 1972, contains detailed instructions for its administration, management, and 

execution. 

975
Chapter V.B.5. 

 Enlisted Aides 

Legislative Authority: 10 U.S.C. §981. (For the Navy and Marine Corps, also 

see 10 U.S.C. §7579; for the Army and Air Force, see 10 U.S.C. §§3013 and 8013, 

respectively (derived from general powers of the Secretaries of the Army and Air Force). 

Cf. 10 U.S.C. §§3639 and 8639.) 

Purpose: To relieve certain general and flag officers occupying especially 

demanding and sensitive positions from having to perform various routine duties and 

chores, by providing enlisted "aides" to assist them and thereby to allow the affected 

officers to carry out their respective primary duties and responsibilities more effectively. 

Background: A report prepared by the United States General Accounting Office 

asserts that "enlisted aides have been provided to officers of the United States Armed 

Forces since the Revolutionary War."1

 The earliest identifiable legislative authority 

bearing on the provision of such "aides" is the Act of July 6, 1812, ch. 137, §5, 2 Stat. 

784, 785 (1812), which allowed officers the pay, rations, and clothing of a private soldier 

for as many "waiters" as they might keep, not to exceed a number fixed by regulations. 

Somewhat later, the Act of March 30, 1814, ch. 37, §§9 and 10, 3 Stat. 113, 114 (1814), 

specified the number of "servants" for which officers might receive allowances, rather 

than having that number fixed by regulations. The number of allowances for servants 

authorized in the 1814 act ranged from one for either a company officer commanding a 

separate post or detachment or a staff officer captain to four for a major general. 

It may be inferred from the language of the early statutes that Congress 

contemplated the employment of civilian servants by officers and that the purpose of 

providing the allowance was to subsidize, or defray the costs of, such private 

employment. Apparently, however, the practice of using enlisted personnel as servants 

 

1

 “Enlisted Aide Program of the Military Services, Report to the Congress by the Comptroller General of 

the United States,” p. 8, April 18, 1973. 

976
arose despite Congress's original intendment. The Act of July 17, 1862, ch. 200, §3, 12 

Stat. 594 (1862), recognized the practice by providing that "whenever an officer of the 

Army shall employ a soldier as his servant he shall, for each and every month during 

which said soldier shall be so employed, deduct from his own monthly pay the full 

amount paid to or expended by the Government per month on account of said soldier." At 

the same time, the act did not disturb the servants' allowances to which officers were 

entitled. Thus, the provision in question appears to have been aimed at preventing an 

officer from simultaneously receiving money to subsidize the employment of a servant 

while at the same time having the cost-free service of one or more enlisted members. 

Since servants' allowances were based on the pay and allowances of a private soldier, an 

officer would have had to deduct more than the amount of his allowance from his own 

pay if he employed a soldier of a higher grade as a servant. 

The Act of July 15, 1870 (Army Appropriations Act, 1871), ch. 294, 16 Stat. 315 

(1870), established a salary system for Army officers and eliminated servants' 

allowances. It also provided that "the pay and allowances of the enlisted men of the Army 

shall remain as now fixed by law until the 30th of June, 1871; and it shall be unlawful for 

any officer to use any enlisted man as a servant in any case whatever." Army 

Appropriations Act, 1871, ch. 294, id., §14, 16 Stat. at 319. The prohibitory part of this 

provision was later enacted into permanent law as Revised Statute 1232, the source of 

current Sections 3639 and 8639 of Title 10, United States Code, which continue to 

prohibit Army and Air Force officers from using enlisted members as "servants." 

For many years it was considered that the prohibition in the Army Appropriations 

Act, 1871, ch. 294, id., and Revised Statute 1232 constituted an absolute bar on the use of 

enlisted personnel in a service capacity in Army officers' quarters and messes. However, 

World War II conditions caused a new approach to be taken. Although the statute 

remained unchanged, a different interpretation was applied which maintained that the 

prohibition intended by Congress was to be determined by the object of the enlisted 

member's employment--that is, whether the employment was a military task beneficial to 

the Army or a personal service for an officer or group of officers. This interpretation was 

977
upheld by an Army Board of Review, which in an opinion dated May 23, 1945, 

concluded: 

 The statute in question (RS 1232 [Revised Statutes §1232 (1878)]) is 

one which obviously places a restriction upon officers using enlisted men as 

servants. It does not restrict or attempt to prevent an enlisted man from 

rendering a personal service to an officer if the enlisted man so chooses; it was 

obviously not designed to prevent the use of enlisted men for military purposes. 

The sole purpose of the statute is to prevent the use of enlisted men as personal 

servants. If the work in question is to be performed in the capacity of a private 

servant to an officer (against the enlisted man's will) then, under any 

circumstances, it is exactly contrary to the statute. If, on the other hand, the 

service is rendered as a military necessity and not in the capacity as a servant, it is 

not exacted unlawfully merely because an officer or group of officers benefit 

thereby.2

In a decision of September 16, 1955, the United States Court of Military Appeals 

reached a similar conclusion in regard to the distinction between "personal servants" and 

"enlisted aides," though it disavowed the Army Board of Review's implication that an 

enlisted member may volunteer to serve as a personal servant and thus cloak an otherwise 

proscribed assignment with legality. The court stated in pertinent part: 

The word "servant" has a myriad of meanings, but as used in the context 

of the original act, we conclude Congress intended to give it the meaning of one 

who labors or exerts himself for the personal benefit of officers. Certainly it could 

not have intended to prevent an enlisted man from laboring for officers in the 

furtherance of their official duties. As enacted originally, the Act suggests that 

Congress was interested in having the enlisted men of the Army earn their pay in 

the performance of military duties, and not as personal servants attending to the 

physical comforts of their individual superior officers.... 

 A construction which would apply the proscription to the kind of work 

done, and not to its ultimate purpose, would so circumscribe the military 

community that the preparation for, or the waging of, war would be impossible. 

In some degree at least, most enlisted men from the time they are inducted into 

the military service, spend some of their working hours performing tasks for 

commissioned officers, and in many cases the labors directly benefit the 

officer. Many of the tasks are equivalent to those performed by servants.3

 

2 United States v. Semioli, 53 BR 65 (1945). 

3 United States v. Robinson, 6 USCMA 347, 20 CMR 63 (1955). 

978
The Army Appropriations Act, 1871, ch. 294, id., and Revised Statute 1232 

applied only to the Army, and no similar statutory prohibition was placed against the use 

of naval enlisted personnel as servants until the Act of March 3, 1933 (Naval Service 

Appropriations Act, 1934), ch. 213 [Public Law 429, 72d Congress], 47 Stat. 1521, 1530 

(1933), specified that none of the funds appropriated therein were to be made available 

"for the pay, allowances, or other expenses of any enlisted man or civil employee 

performing service in the residence or quarters of an officer or officers on shore as a 

cook, waiter, or other work of a character performed by a household servant." The House 

Appropriations Committee explained the purpose of the provision in these terms: 

It has been the practice for many years to detail enlisted men rated as 

stewards, cooks, and mess attendants to the residences or quarters of commanding 

officers of the more important shore activities.... 

While it may be argued that officers occupying such positions should 

provide their own servants, and that view certainly cannot be controverted with 

respect to many of the details, it is questionable whether or not officers 

occupying such positions as the Chief of Naval Operations and the Superintendent 

of the Naval Academy, whose positions make necessary a considerable amount of 

official entertaining, should be required to defray the expenses of servants the 

need for whom is occasioned solely by the official stations of the incumbents of 

such positions. If this need be recognized as an appropriate expense of the 

Government in the two instances cited, perhaps the better way to handle the 

situation would be through a special allowance for the employment of civilian 

servants. 

With the pressure for more enlisted men for duty on shipboard and the 

ever present need for rigid economy, the committee has taken the position that the 

present practice can not be longer or at least at this time justified and has 

included on page 24 of the bill a provision designed to stop the practice. The 

committee is advised that no enlisted men in the Army are detailed in the capacity 

of servants in the residence or quarters of officers of the Army.4

The Act of March 15, 1934 (Naval Service Appropriations Act, 1935), ch. 69 

[Public Law 122, 73d Congress], 48 Stat. 403, 411-412 (1934), continued the prohibition 

against the use of appropriated funds to pay enlisted personnel assigned to domestic 

 

4

 House Report No. 2075 (Committee on Appropriations), p. 13, accompanying H.R. 14724, 72d Congress, 

2d Session (1933). 

979
service in officer residences and quarters on shore, but excepted from the prohibition "the 

public quarters occupied by the Chief of Naval Operations, the Superintendent of the 

Naval Academy, the Commandant of the Marine Corps, and messes temporarily set up on 

shore for officers attached to seagoing vessels, to aviation units based on seagoing 

vessels, and to landing forces and expeditions." The Act of June 24, 1935 (Naval Service 

Appropriations Act, 1936), ch. 291 [Public Law 163, 74th Congress], 49 Stat. 398, 408 

(1935), relaxed the prohibition further by permitting, in addition to the previous year's 

exceptions, the use of appropriated funds to pay not more than 40 enlisted personnel 

performing domestic service "at such places as shall be designated by the Secretary of the 

Navy." The easing of the prohibition in both the 1935 and 1936 Naval Service 

Appropriations Acts resulted from amendments added by the Senate Appropriations 

Committee. The committee's reports on the bills offer no explanation for its action in this 

regard. 

The prohibition against the use of appropriated funds to pay enlisted personnel 

assigned to domestic service in officer residences or quarters on shore, subject to the 

stated exceptions, was continued in each annual naval appropriation act through fiscal 

year 1946, though by 1946 the limit on the number of personnel who could be assigned at 

places designated by the Secretary of the Navy had been raised to 300. It was brought to 

the Navy's attention in 1946 that the naval appropriations bill requested funds for a 

number of items for which there was no authority in permanent law, and it was suggested 

that the Navy take action to obtain permanent authority for them. This suggestion resulted 

in a legislative proposal introduced as S. 1917, 79th Congress, 2d Session (1946). Among 

other things, this bill provided that "[e]nlisted naval personnel may be assigned to duty in 

a service capacity in officers' messes and public quarters, under such regulations as the 

Secretary of the Navy may prescribe, where the Secretary finds the use of such personnel 

for such work is desirable for military reasons...." This provision was enacted as part of 

the Act of August 2, 1946, ch. 756 [Public Law 604, 79th Congress], §16(b), 519, 60 Stat. 

853, 859 (1946), and is the source of current Section 7579 of Title 10, United States 

Code. 

980
The House and Senate reports on S. 1917, 79th Congress, 2d Session (1946), 

spoke briefly of the Navy enlisted aide authority, both merely stating that "Subsection 

16(b) is designed to take the place of the present proviso ... at the end of `Pay and 

Allowances' in the appropriation `Pay and subsistence of naval personnel.'"5

 In fact, with 

respect to authority for enlisted aides, the 1946 act stood the preexisting law on its head. 

It transformed what had at first been an outright prohibition against the specified 

employment of enlisted personnel and later a prohibition subject to certain exceptions 

into affirmative authority for such employment. It permitted the assignment of enlisted 

personnel to "officers messes" without any qualification as to the type of officers messes 

to which they could be assigned. In addition, it removed the limitation on the number of 

enlisted aides who could be assigned in officers' quarters and residences on shore. In 

place of these limitations, the 1946 act imposed a new restriction on such assignments by 

authorizing them only when "desirable for military reasons." Finally, the 1946 act made a 

subtle shift in emphasis by replacing the vaguely pejorative "service as a cook, waiter, or 

other work of a character performed by a household servant" with "duty in a service 

capacity." 

The current legislative provisions bearing on the use of enlisted personnel in a 

service capacity make no distinction between enlisted personnel assigned to officers' 

quarters and those assigned to officers' messes. Original DoD Directive 1315.9 governing 

the assignment of enlisted personnel to duty in public quarters and on the personal staffs 

of general and flag officers was issued on February 2, 1960, and identified personnel so 

assigned as "enlisted aides." That term has since come to mean only those personnel 

covered by DoD Directive 1315.9, and not those assigned to officers' messes. 

Congressional oversight of the enlisted aide issue has ever since taken place in the 

context of this understanding. 

The enlisted aide program was not a particularly controversial issue in the years 

following World War II until, starting in November 1972, it became the subject of review 

by the Congress, the General Accounting Office, the Internal Revenue Service, and the 

 

5 House Report No. 2549 (Committee on Naval Affairs), p. 7, and Senate Report No. 1173 (Committee on 

Naval Affairs), p. 6, accompanying S. 1917, 79th Congress, 2d Session (1946). 

981
Office of the Secretary of Defense. On November 20, 1972, a member of the Senate 

asked the General Accounting Office to study the enlisted aide program. On April 18, 

1973, the Comptroller General submitted a report (B-177516) to Congress on the 

program. The report made no recommendation concerning the need for the program or 

the number of persons assigned to it but did note that some aides were occasionally given 

tasks they were not supposed to do. It suggested that the regulations be revised to include 

a specific list of the tasks aides should or should not be called upon to perform and that 

every aide and each officer assigned aides be furnished a copy of the regulations. Revised 

policy guidance was issued on August 16, 1973, by the Department of Defense. The new 

policy reduced the number (1,722) of aides assigned in December 1972 to a maximum of 

1,245 effective March 1, 1974, specified that only volunteers be assigned as enlisted 

aides, outlined the duties aides may perform, and based the assignment of aides on (1) the 

occupancy of public quarters, (2) the size and age of the public quarters, and (3) the 

representational responsibilities of an officer's duty assignment. 

On June 8, 1973, the Internal Revenue Service advised a member of Congress in 

response to her inquiry that the value of services performed by enlisted aides did not have 

to be included in an officer's gross income for tax purposes as long as the aides were used 

only in an authorized manner to benefit the officer primarily in his official capacity. 

Congressional action taken on the Department of Defense Appropriation 

Authorization Act, 1974, Public Law 93-155, 87 Stat. 605 (1973), reduced the enlisted 

aide ceiling to 675, although this ceiling was not reflected in the act itself. The report of 

the House-Senate Committee of Conference describes how the new ceiling was imposed: 

In approving manpower authorizations for the Department of Defense the 

House Committee on Armed Services specified in its report that the present total 

of enlisted aides, 1,722, was excessive, and that the number should be reduced to 

1,105. 

 The Senate bill contained a provision, Section 1103, which would limit 

use of enlisted aides to no more than two for four-star officers and no more than 

one for three-star officers plus one additional aide for the Chiefs of Staff of 

each service. The Senate provision reduced the limit of aides to 218. The House 

982
conferees were able to convince the Senate conferees that the limitation in the 

Senate bill was too restrictive and that language in the law is not required. 

The Senate therefore recedes on its language and the conferees agree that 

the number of enlisted aides shall be limited to a total of no more than 675 with 

the distribution for authorization of use of such aides among the military 

departments to be determined by the Secretary of Defense.6

Neither the Department of Defense Appropriation Authorization Act, 1975, 

Public Law 93-365, 88 Stat. 399 (1974), nor any formal action taken by Congress 

effected a change in the existing 675 enlisted aide ceiling, but the conference report on 

the act required a report from the Secretary of Defense on the need for such aides, in 

these terms: 

Section 704 of the Senate amendment contained a provision that only 218 

enlisted men be assigned on a temporary basis to perform the duties of enlisted 

aides. The House bill did not address the issue. 

 The Senate conferees expressed the belief that the enlisted aide 

program was still being abused, there were too many unnecessary social activities 

engaged in by high ranking military personnel, and that curtailment of authority 

for aides would help curtail unnecessary functions. 

 The House conferees pointed out that the Congressional action taken 

during fiscal year 1974 reduced the number of aides from 1,722 to 675. The latter 

number was to be put in effect beginning July 1, 1975, and had not been given an 

opportunity to work. The House conferees were insistent that the agreement of 

last year be permitted to operate, at least on an experimental basis, before further 

reductions are made. The Senate conferees insisted that last year's action was 

insufficient. The Senate conferees agreed to yield on the number limitation 

provided the matter receives further scrutiny. 

 The conference, therefore, directs the Secretary of Defense to study the 

need for enlisted aides to provide military assistance to senior military officials 

and to report to Congress the results of the study within 90 days. It was further 

agreed by the conferees that the House or Senate Armed Services Committee, or 

both, would hold hearings as soon as possible.7

 

6

 House Report No. 93-588 (Committee of Conference), p. 43, accompanying H.R. 9286, 93d Congress, 1st

Session (1973). 

7

 House Report No. 93-1212 (Committee of Conference), pp. 44-45, accompanying H.R. 14592, 93d 

Congress, 2d Session (1974). 

983
The Secretary of Defense submitted the report called for in the conference report 

on November 1, 1974. In the meantime, however, the Senate had on August 21, 1974, 

accepted a floor amendment to the fiscal year 1975 Defense Appropriation Bill which 

provided that none of the funds it appropriated could be used to support more than 218 

enlisted aides. The House-Senate Conference Committee agreed to the amendment but 

not the limit. As enacted, the Department of Defense Appropriation Act, 1975, Public 

Law 93-437, §848, 88 Stat. 1212, 1232 (1974), provided that none of the funds 

appropriated could be used to support more than 500 enlisted aides. 

The Department of Defense Appropriation Authorization Act, 1976, Public Law 

94-106, §820, 89 Stat. 531, 544-545 (1975), specified that, notwithstanding any other 

provisions of law, the number of enlisted personnel who may be assigned as enlisted 

aides during any fiscal year could not exceed the total of four times the number of 

officers serving in pay grade O-10 and two times the number of officers serving in pay 

grade O-9 at the end of the fiscal year. On October 1, 1975, the Assistant Secretary of 

Defense for Manpower and Reserve Affairs allocated 390 enlisted aides to the services 

under the formula--114 to the Army, 140 to the Air Force, 114 to the Navy, and 22 to the 

Marine Corps. The report of the House-Senate Conference Committee expands on the 

intent of the provision: 

Section 912 of the Senate amendment contained a provision specifying 

that enlisted aides could only be assigned to four and three star general and flag 

officers of the Armed Forces in the following allocation: three aides for the 

Chairman of the Joint Chiefs of Staff, the Chiefs of Staff of the Armed Forces, 

and the Commandant of the Marine Corps; two for other officers in the rank of 

general or admiral; and one for officers in the rank of lieutenant general or vice 

admiral. This would result in a total of approximately 204 aides compared to the 

current number of 500. 

 The House bill contains no such provision. The conferees agreed that a 

provision in the law controlling the number of enlisted personnel assigned to 

officers staffs as aides was appropriate. However, the conferees consider that 

the assignment of these aides should be based not on the rank of the particular 

officer, but rather on the officer's position and its incumbent responsibilities. 

While the number of aides is to be determined by a formula based upon the total 

number of four star officers (four for each), and three star officers (two for each), 

984
the Secretary of Defense is given the authority to allocate these aides as he deems 

appropriate. The assigned duties of the officers should be the controlling factor. 

 This formula for determining the number of aides will result in 396 

aides for fiscal year 1976. Generals of the Army and admirals of the fleet are not 

considered in this formula; however this omission is not intended to alter the 

current practice of assigning aides to these officers.8

The Department of Defense Appropriation Act, 1976, Public Law 94-212, §745, 

90 Stat. 153, 175 (1976), provided that none of the funds appropriated could be used to 

support more than 396 enlisted aides for fiscal year 1976. The report of the House-Senate 

committee of conference explains the provision: 

The Senate receded to the House language which provides a total of 396 

enlisted aides. The Senate language had reduced the total to 250. The House 

language was in conformance with that approved in the fiscal year 1976 

Defense Authorization Act.9

The Department of Defense Appropriations Acts for fiscal years 1977 through 

1982 established a ceiling of 300 enlisted aides. Department of Defense Appropriation 

Act, 1977, Public Law 94-419, §748, 90 Stat. 1279, 1299 (1976) (for fiscal year 1977); 

Department of Defense Appropriation Act, 1978, Public Law 95-111, §849, 91 Stat. 886, 

908 (1977) (for fiscal year 1978); Department of Defense Appropriation Act, 1979, 

Public Law 95-457, §848, 92 Stat. 1231, 1252 (1978) (for fiscal year 1979); Department 

of Defense Appropriation Act, 1980, Public Law 96-154, §748, 93 Stat. 1139, 1160 

(1979) (for fiscal year 1980); Department of Defense Appropriation Act, 1981, Public 

Law 96-527, §747, 94 Stat. 3068, 3089 (1980) (for fiscal year 1981); and Department of 

Defense Appropriation Act, 1982, Public Law 97-114, §746, 95 Stat. 1565, 1586 (1981) 

(for fiscal year 1982). 

 

8 House Report No. 94-488 (Committee of Conference), pp. 72-73, accompanying H.R. 6674, 94th

Congress, 1st Session (1975). 

9 House Report No. 94-710 (Committee of Conference), p. 60, accompanying H.R. 9861, 94th Congress, 1st

Session (1975). 

985
No appropriation act for the Department of Defense was passed for fiscal year 

1983, but the limitations on the number of enlisted aides were continued in effect for that 

year through passage of a multi-departmental continuing appropriation act. Act of 

December 21, 1982 (Continuing Appropriations, 1983), Public Law No. 97-377, Title I, 

§101(c) [Title VII, §745], 96 Stat. 1830, 1858 (1982). The Department of Defense 

Appropriation Act, 1984, Public Law 98-212, §742, 97 Stat. 1421, 1446 (1984), 

continued the enlisted aides ceiling of 300 for fiscal year 1984. For fiscal year 1985, the 

same ceiling was maintained by the Act of October 12, 1984 (Continuing Appropriations, 

1985), Public Law 98-473, Title I, §101(h) [Title VIII, §8034], 98 Stat. 1837, 1930 

(1984). 

The limitation on the number of enlisted aides was formally codified at 10 U.S.C. 

§981(b) by the Department of Defense Authorization Act, 1985, Public Law 98-525, 

§1401(c)(1), 98 Stat. 2492, 2615 (1984). As explained in the House-Senate Conference 

Report,10 the limitations were codified in response to the requirement of Section 1267 of 

the Department of Defense Authorization Act, 1984, Public Law 98-94, §1267, 97 Stat. 

614, 705 (1983), for the Secretary of Defense to submit to the House and Senate 

Committees on Armed Services proposed legislation 

 ... for codification into appropriate titles of the United States Code, or 

for incorporation into other existing laws, those provisions of law that have been 

enacted during the past five years as a part of the annual Department of 

Defense Authorization Act or the annual Department of Defense Appropriation 

Act under the heading `General Provisions' and that in the opinion of the 

Secretary should be so codified or incorporated. 

In establishing this requirement, the Senate Armed Services Committee noted: 

 The committee has observed that it has been the practice of the 

Department of Defense to submit the same proposed legislative provisions each 

year in the Department of Defense Authorization Act or the Department of 

Defense Appropriations Act. Many of these provisions which have been enacted 

 

10 House Report No. 98-1080 (Committee of Conference), p. 336, accompanying H.R. 5167, 98th Congress, 

2d Session (1984). See Senate Report No. 98-500 (Committee on Armed Services), p. 265, accompanying 

S. 2723, 98th Congress, 2d Session (1984). 

986
on an annual basis are appropriate for codification in Title 10 of the United States 

Code or in other parts of Federal law. Accordingly, it is the Committee's view that 

the Secretary of Defense should evaluate each general provision that has been 

enacted over the last five years as part of a Defense Department Authorization or 

Appropriation Acts and submit to the Congress a legislative proposal for the 

codification of those general provisions which the Secretary judges to be 

appropriate for incorporation in the United States Code. The Committee believes 

that the enactment of such a codification bill would be a far more efficient manner 

of dealing with these legislative proposals than considering the same provisions 

every year.11

With the codification of the limitation on the number of enlisted aides, it is no 

longer necessary to impose annual limitations through the appropriations process.12 

 

11 Senate Report No. 98-174 (Committee on Armed Services), p. 259, accompanying S. 675, 98th Congress, 

1st Session (1983). See House Report No. 98-352 (Committee of Conference), p. 262, accompanying S. 

675, 98th Congress, 1st Session (1983). 

12 In deliberations on the National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, 

106 Stat. 2315 (1992), the Senate proposed a reduction in the number of statutorily permitted enlisted aides 

from 300 to 240 "consistent with the 20 percent reduction in general and flag officers mandated by the 

National Defense Authorization Act for Fiscal Year 1991." S. 3114, §562, 102d Congress, 2d Session 

(1992); see Senate Report No. 102-352 (Committee on Armed Services), pp. 205-206, accompanying S. 

3114, 102d Congress 2d Session (1992). The Senate provision was eliminated in conference, with the 

conferees noting: 

... The conferees expect the Secretary of Defense [sic] to review the current practices and numbers with 

regard to the assignment of enlisted aides, and to report the results of the review to the Committees on 

Armed Services of the Senate and House of Representatives by April 1, 1993. The conferees expect the 

review to consider the existing limit on the number of enlisted aides that are authorized and the overall 

reduction in the number of general and flag officers. In this regard, the conferees expect the Committees on 

Armed Services to consider and take appropriate action on the recommendations of the 

Department of Defense in this area next year. 

House Report No. 102-966 (Committee of Conference), pp. 711-712, accompanying H.R. 5006, 102d 

Congress, 2d Session (1992). 

Notwithstanding the directory language of the committee of conference, the statutory limit on the number 

of enlisted aides remains at 300. 

987
Chapter V.C.1. 

 Travel and Transportation Allowances 

Legislative Authority: 37 U.S.C. §§404-412. 

Purpose: To provide members of the uniformed services who perform travel on 

public business under competent orders with transportation and subsistence or with 

allowances to reimburse them for their costs of obtaining transportation and subsistence. 

Background: Travel and transportation allowances for members of the Armed 

Forces fall into three main categories: (1) member travel, (2) dependent travel, and (3) 

transportation of household goods. Such allowances are provided either in cash or in 

kind. The authorization of these allowances for military personnel who perform ordered 

travel on government business is at bottom premised on the notion that, where travel is 

performed on government orders for the convenience of the government, the government 

should bear the reasonable and necessary expense of such travel and transportation and 

defray the incidental costs members may incur to subsist themselves while in a travel 

status. For these purposes, the cost of subsistence includes the costs of food, lodging, and 

various related expenses. A wide variety of allowances is authorized in this connection, a 

brief description of some of the more prominent of which follows. 

Member Travel 

Permanent change of station transportation may be furnished a member either (1) 

in kind (including government transportation requests), (2) by reimbursement for 

common carrier transportation purchased at a member's own expense, or (3) by payment 

of a monetary allowance, in lieu of transportation (MALT), and per diem. Subsistence is 

furnished a member who receives transportation either in kind or through reimbursement 

by means of a per diem allowance designed to refund, on an average and reasonable 

basis, the costs of such subsistence. In short, a member in a PCS travel status is furnished 

the components of transportation or reimbursement either through a combination of 

transportation and reimbursement plus constructive per diem. 

988
Temporary change of station transportation may be furnished a member either (1) 

in kind, (2) by reimbursement for common carrier transportation purchased at a member's 

own expense, or (3) by payment of an allowance designed simply as a payment in lieu of 

transportation. Subsistence for such travel may be furnished an affected member either 

(1) in kind, (2) by payment of a per diem allowance, (3) by a combination of (1) and (2) 

under which per diem is reduced for food and/or lodging furnished in kind, or (4) by 

reimbursement for actual and necessary subsistence expenses incurred by the member. 

Per diem rates are based on locality. The “lodgings-plus-per diem method is used to 

compute the reimbursements of the traveler’s actual lodgings cost (not to exceed a preestablished locality maximum) and provides a set amount to cover meals and incidental 

expenses (M&EI). Reimbursement on an actual expense basis can be authorized only 

when unusual conditions cause the actual meal and lodging costs to exceed the maximum 

per diem allowance, or in situations where the traveler has no alternative but to incur 

lodging costs that absorb all or nearly all of the maximum per diem allowance. In short, a 

member in a temporary duty travel status is furnished the components of transportation 

and subsistence through a combination of transportation, reimbursement, or a constructed 

per diem, or, in some cases, reimbursement of actual subsistence expenses. 

The existing provisions of Titles 10 and 37, United States Code, that cover travel 

and transportation allowances derive from the Career Compensation Act of 1949, ch. 681 

[Public Law 351, 81st Congress], 63 Stat. 802 (1949). These provisions are not selfexecuting but instead merely authorize the payment of certain amounts, within specified 

limits, under regulations to be prescribed by the Secretaries of the uniformed services, 

including three non-DoD Secretaries. In practice, the six Secretaries exercise their 

regulation promulgation authority through the Per Diem, Travel and Transportation 

Allowance Committee (a uniform services committee), and the regulations issued under 

its authority are contained in Volume 1 of the Joint Travel Regulations (JFTR). 

Regulations properly prescribed in the JFTR have the same force and effect as a statute 

enacted by Congress. The Secretaries may, through the JFTR, prescribe lesser travel and 

transportation allowances than authorized by Titles 10 and 37, but they may not exceed 

any limits contained in Title 37 nor prescribe any allowance not contemplated by statute. 

989
No discretionary travel or transportation allowance exists for military personnel unless 

and until it has been prescribed in the JFTR, even if authorized by statute. 

Member travel was originally provided as a matter of policy and regulation, rather 

than under explicit authority of law, and was limited to transportation in kind or to 

reimbursement of actual expenses. The Act of March 3, 1835, ch. 27, §2, 4 Stat. 755, 757 

(1835), authorized a mileage allowance of 10 cents a mile to pay for all transportation 

and subsistence expenses for Navy officers ordered to make a permanent change of 

station (PCS). The Act of August 14, 1848, ch. 173, 9 Stat. 304, 305 (1848), appropriated 

funds for a mileage allowance for Army officers. The allowance stemming from this tacit 

authorization was set at 10 cents a mile for those same expenses by Army regulations. 

The Act of July 17, 1862, ch. 200, §7, 12 Stat. 594, 594-595 (1862), was the first 

permanent statutory authority for the Army mileage allowance and established a rate of 6 

cents a mile except when the between-station travel required a crossing of the Rocky 

Mountains, when the rate was 10 cents per mile. The Act of July 15, 1870 (Army 

Appropriation Act, 1871), ch. 294, §24, 16 Stat. 315, 320 (1870), changed the dual 6-

cent/10-cent Army mileage allowance to a single rate of 10 cents per mile. The Act of 

June 30, 1876, ch. 159, 19 Stat. 65 (1876), reduced the Navy allowance from 10 to 8 

cents a mile. The mileage allowance remained at 8 cents per mile until the Career 

Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §303, 63 Stat. 802, 

813-815 (1949). Even after adoption of the Career Compensation Act of 1949, however, 

the mileage allowance was limited by regulations to 6 cents per mile for travel performed 

before July 1, 1974, when it was increased to 8 cents per mile. Subsequently, the mileage 

allowance was further increased to 10 cents per mile. Effective October 1, 1980, the 

Secretaries of the various military departments were given authority to prescribe mileage 

allowance rates under the Military Personnel and Compensation Amendments of 1980, 

Public Law 96-343, §5, 94 Stat. 1123, 1126 (1980). Pursuant to this grant of authority, 

the Per Diem, Travel and Transportation Allowance Committee promulgated a mileage 

allowance rate of 18.5 cents per mile, but Congress refused to approve such a rate 

through the appropriations process. Currently, members performing government-ordered 

travel are not allowed a mileage allowance but are paid per diem and either reimbursed 

990
for transportation or paid a monetary allowance in lieu of transportation (MALT) for the 

use of their privately owned vehicle (POV) while traveling PCS. 

 The Defense Department Authorization Act for Fiscal Year 1986, Public Law 99-

145, provided that members who travel by POV receive a MALT at the same rate as that 

set by the General Services Administration for civilian employees. That rate for members 

traveling alone on PCS orders is 15 cents per mile. For other MALT rates, see the section 

of this chapter on dependent travel. Public Law 99-145 also established a flat per diem 

rate of $50 to cover other expenses. The National Defense Authorization Act for Fiscal 

Year 2002, Public Law 107-107, increased that rate to the standard CONUS per diem 

rate. 

The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), ch. 212 

[Public Law 235, 67th Congress], §12, 42 Stat. 625, 631 (1922), was the first legislation 

to authorize a per diem allowance for military personnel. Per diem is authorized on a 

daily basis for the time required to travel between permanent duty stations or in 

connection with temporary duty, and for periods spent at a temporary duty station. The 

Joint Service Pay Readjustment Act of 1922 fixed the maximum per diem allowance in 

the United States at $6 a day. The increases in this maximum rate in subsequent 

legislation to some extent compensate for the nation's changing food-and-lodging cost 

patterns: 

 Date of Legislation Maximum U.S. Per Diem Allowance 

 June 26, 1943 $7 

 October 12, 1949 9 

 March 27, 1962 12 

 June 27, 1962 16 

 December 31, 1969 25 

 May 29, 1976 35 

 September 1, 1980 50 

 

On the other hand, when the rates remain fixed for substantial length of time, the 

relationship between the per diem rate and the costs the per diem intended to defray was 

eroded. 

991
The last specific dollar increase--to $50 per day--was authorized by the 

Department of Defense Authorization Act, 1981, Public Law 96-342, §807(a), 94 Stat. 

1077, 1096 (1980). This same act authorized reimbursement for "actual and necessary 

expenses" for extra high-cost areas or "unusual circumstances" up to a maximum of $75 

per day. The National Defense Authorization Act for Fiscal Year 1987, Public Law 99-

661, §614(a)(1), 100 Stat. 3816, 3879 (1986), eliminated the dollar restrictions from Title 

37, United States Code, and effectively provided that per diem for members of the 

uniformed services is to be paid at rates provided in Section 5704 of Title 5, United 

States Code. 

A member ordered to perform temporary duty away from his permanent duty 

station is authorized under the JFTR to per diem at a rate, determined by the location, for 

the time required to perform the travel, and to either per diem, subsistence in kind, or a 

combination of the two, for periods spent at a temporary duty station, plus either 

transportation in kind, reimbursement for the cost of transportation, or a mileage rate of 

37.5 cents a mile for the officially determined distance of the ordered travel.1

Dependent Travel 

The Act of May 18, 1920, ch. 190 [Public Law 210, 66th Congress], §12, 41 Stat. 

601, 604 (1920), authorized transportation in kind for the dependents of military 

personnel ordered to make a permanent change of station. The Act of June 10, 1922 

(Joint Service Pay Readjustment Act of 1922), ch. 212 [Public Law 235, 67th Congress], 

§12, 42 Stat. 625, 631 (1922), gave such personnel a choice between transportation in 

kind or reimbursement of actual transportation expenses for their dependents. The Act of 

April 27, 1946, ch. 240 [Public Law 368, 79th Congress], §2, 60 Stat. 126, 126-127 

(1946), added another option by authorizing a monetary allowance of 4 cents a mile for 

dependents 12 years of age and over and 2 cents a mile for those at least 5 but under 12 

years of age, in lieu of transportation in kind or reimbursement of actual expenses. 

 

1

 The 37.5 cent rate applies to travel by privately owned automobile. Other rates are authorized for travel 

by privately owned motorcycle or privately owned airplane. 

992
Current law provides that a member ordered to make a permanent change of 

station may, in addition to his own transportation or allowances, be authorized 

transportation in kind, reimbursement therefor, or a monetary allowance in lieu of 

transportation, plus per diem for dependents. The MALT rates are 17 cents per mile when 

the member is accompanied by one dependent, 19 cents per mile when accompanied by 

two dependents, and 20 cents per mile when accompanied by three or more dependents. 

The dependent per diem rates are 75 percent of the member rate (as determined from 

JFTR tables) for dependents 12 years and older, and 50 percent of the member rate for 

dependents younger than 12. 

Household Goods 

The Army Appropriation Act of August 23, 1842, ch. 183, §1(11), 5 Stat. 508, 

509 (1842), provided funds for transporting the household effects of Army personnel. 

This appropriation was renewed year after year, but a permanent law authorizing such 

transportation was not adopted until 1946. The Act of May 18, 1920, ch. 190 [Public Law 

210, 66th Congress], §12, 41 Stat. 601, 604 (1920), stated that "personnel of the Navy 

shall have the same benefit of all existing laws applying to the Army and Marine Corps 

for the transportation of household effects." Although this provision was somewhat 

unclear, since the Army's authority to ship household goods was dependent on its annual 

appropriations rather than on permanent law, it was construed to mean that Navy 

personnel had the same household effects authorization granted Army and Marine Corps 

personnel by Army regulations. The Act of August 2, 1946, ch. 756 [Public Law 604, 

79th Congress], §205, 60 Stat. 853, 860 (1946), finally adopted specific statutory 

authority for the shipment of household effects for the personnel of all branches of 

service. 

Permanent law currently provides in broad terms that a member ordered to make a 

permanent or temporary change of station is authorized transportation (including packing, 

crating, drayage, temporary storage, and unpacking) for his baggage and household 

effects, or reimbursement therefor. Different limitations were prescribed by the JFTR for 

permanent-change-of-station orders and temporary-change-of-station orders. Annual 

Department of Defense appropriation acts for years limited the amount of household 

993
goods transportable under this authority to a maximum net weight of 13,500 pounds in 

connection with any one permanent change of station.2

 Under the JFTR, the 13,500-

pound limit applied to officers in pay grade O-6 and above. This amount was gradually 

scaled down, by pay grade, to 7,000 pounds for enlisted personnel in pay grade E-4 (with 

over 2 years service). Enlisted personnel in pay grade E-4 (with 2 years of service or 

less), E-3, E-2, and E-1 were authorized a maximum weight allowance of either 5,000 

pounds or 1,500 pounds, depending on whether they had dependents or not. The National 

Defense Authorization Act for Fiscal Year 2002, Public Law 107-107, 115 Stat. 1144, 

increased the weight allowances of grades E-1 through E-4; for the three lowest grades, 

the maximums became 5,000 pounds without dependents and 8,000 pounds with 

dependents. For grade E-4, irrespective of time in service, the new maximums were 7,000 

pounds without dependents and 8,000 pounds with dependents. For all pay grades, 

additional amounts could be shipped at the member's own expense. All JFTR limitations 

were, and continue to be, explicitly made subject to such additional regulations as the 

individual services may prescribe. 

The National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, 

§602(a)(2), 102 Stat. 1918, 1976 (1988), adopted statutory weight limits for household 

goods shipments by pay grade and dependency status. The following table shows those 

limits in pounds, as modified by the National Defense Authorization Act for Fiscal Year 

2002:3

 

 

2 The 13,500 pound limitation was increased to 18,500 pounds in 1986, but no additional funds were 

appropriated to cover the higher costs associated with the increase. Accordingly, the JFTR continued the 

13,500 pound limitation until the National Defense Authorization Act, Fiscal Year 1989, Public Law 100-

456, §602(a)(2), 102 Stat. 1918, 1976-1977 (1988), effectively overrode the regulatory limitation and 

established statutory weight limits by pay grade. For details on the amendments made by the 1989 National 

Defense Authorization Act, see the following paragraph in the main body of the present chapter. 

3

 For an explanation of the reasons underlying adoption of the new and higher weight allowances for the 

shipment of household goods, see House Report No. 100-563 (Committee on Armed Services), pp. 251-

252, accompanying H.R. 4264, and Senate Report No. 100-326 (Committee on Armed Services), p. 93, 

accompanying S. 2355, 100th Congress, 2d Session (1988). Cf. House Report No. 100-753 (Committee of 

Conference), p. 403, accompanying H.R. 4264, and House Report No. 100-989 (Committee of 

Conference), p. 405, accompanying H.R. 4481, 100th Congress, 2d Session (1988). 

994
 Without With Temporary 

 Pay Grade Dependents Dependents Allowance 

 O-10 to O-6 18,000 18,000 2,000 

 O-5 16,000 17,500 1,500 

 O-4 14,000 17,000 1,000 

 O-3 13,000 14,500 1,000 

 O-2 12,500 13,500 800 

 O-1 10,000 12,000 800 

 W-5 16,000 17,500 800 

 W-4 14,000 17,000 600 

 W-3 13,000 14,500 600 

 W-2 12,500 13,500 600 

 W-1 10,000 12,000 600 

 E-9 12,000 14,500 500 

 E-8 11,000 13,500 400 

 E-7 10,500 12,500 400 

 E-6 8,000 11,000 400 

 E-5 7,000 9,000 400 

 E-4 7,000 8,000 400 

 E-3 5,000 8,000 400 

 E-2 5,000 8,000 400 

 E-1 5,000 8,000 400 

These weight allowances apply to both permanent and temporary changes of station. In 

practice, however, because the allowances are subject to such regulations as may be 

adopted under the JFTR, weight allowances for temporary changes of station are less than 

those for permanent changes of station.4

 For temporary change of station orders, weight 

allowances range from 400 pounds for pay grade E-1 to 2,000 pounds for pay grade O10. 

 For JFTR purposes, the term "household goods" does not include property such 

as a motor vehicle or a mobile home owned by a member or his dependents, and these 

items may not be shipped under a member's weight allowance. Under certain conditions, 

 

4

 Under further amendments made to the weight limitations shown above by the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, 103 Stat. 1352, 1447 (1989), the 

Secretaries of various military departments are authorized to permit a higher weight allowance for members 

below pay grade O-6 if application of the limitations prescribed would result in “significant hardship” to 

the member or the member’s dependents, provided that in no event may the weight allowance authorized 

exceed 18,000 pounds, the maximum weight allowance authorized for members in pay grades O-6 to O-10. 

The National Defense Authorization Act for Fiscal Year 1999, Public Law 105-261, allows the Secretary 

concerned to permit a weight allowance above 18,000 pounds to allow shipment of consumables that 

cannot be reasonably obtained at the new duty station. 

995
however, such property may be transported at government expense or the member may 

be reimbursed for all or part of the cost. See, e.g., 37 U.S.C. §409 (house trailers and 

mobile homes) and 10 U.S.C. §2634 (privately owned vehicles). 

 A member who is ordered to make a permanent change of station to, from, or 

between places outside the United States or upon an official change in the home port of 

the vessel to which assigned, may be, subject to some restrictions concerning vehicle 

weight, and service or foreign-government rules, authorized to have one motor vehicle 

owned by him or his dependents, for his or his dependents' personal use, shipped to the 

port serving the new duty station. 

 A member who would otherwise be authorized to have his household goods 

transported at government expense may elect, in place of such transportation, to receive 

an allowance for the transportation of a mobile home, to be used as a residence by the 

member and his dependents, within the contiguous United States, within Alaska, or 

between the contiguous United States and Alaska. In general, this allowance is in lieu of 

transportation of baggage and household goods. The amount of the allowance may not 

exceed what it would have cost the government to move the member's weight allowance 

of household goods. The member must pay excess costs, if any. Also, a member who is 

assigned to a duty station outside the United States, including Alaska, may have a mobile 

home moved in the United States, or Alaska, for use by his dependents. 

General 

 As noted throughout this chapter, the Secretarial regulations implementing the 

travel and transportation allowances authority of Title 37 impose grade and other 

limitations in some areas of travel and transportation allowances that are not required by 

the statutory authority on which they are based, and they prescribe certain allowances that 

are less than the maximums authorized in the controlling statutes. It may accordingly 

appear that the Secretaries could remove limitations or increase allowances merely by 

administratively changing the regulations. This is in fact the case, but only in a strict legal 

sense. As a practical matter, a change of this nature requires the approval of Congress 

996
because of its oversight responsibility and its "power of the purse." Any proposal to 

change travel and transportation eligibility or to increase one or more allowance rates 

creates a need for funds that Congress must appropriate, and on occasion Congress has in 

fact refused to appropriate funds for certain travel and transportation allowances that are 

facially authorized by statute. 

Cost: Temporary duty travel and transportation costs are paid by local commands 

from operations and maintenance funds, and costs for civilian and military personnel are 

maintained in a form that resists disaggregation. A breakdown between officer and 

enlisted personnel is not normally made in permanent change of station data. 

Cost: For the cost of travel and transportation allowances from 1972 to 1995, see 

Tables V-2 of Military Compensation Statistics Tables, volume II of this edition. 

997
Chapter V.C.2. 

 Clothing Issue and Replacement Allowances 

Legislative Authority: 37 U.S.C. §§415-419. 

Purpose: To provide clothing, or the commuted value thereof, to enlisted 

members of the Armed Forces adequate to enable them to satisfactorily perform their 

duties, and to reimburse officers for their purchase of required uniforms and equipment. 

Background: It is well established that when an individual enlists in an armed 

force, the government assumes as obligation to clothe (as well as feed and shelter) him 

during his term of service under an enlistment contract. There is no comparable 

"contractual" obligation with respect to officers. These principles were expressed in the 

testimony on the bill, H.R. 5007, 81st Congress, 1st Session (1949), that became the 

Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 

(1949), as follows: 

Whenever an officer goes into the service, he does so knowing he will be 

required to subsist himself. Any time a man enlists in the service, the law requires 

that the Government subsist that man. And, if the Government does not subsist 

that man, then we will have to reimburse him for that food. Under his contract, 

they agree to feed him, clothe him, and shelter him. But there is no contract with 

the officer.1

Even though there is no established "contractual" obligation to clothe officers, 

Congress has from time to time authorized the payment of uniform allowances to them. 

Until recently, such allowances were payable principally to reserve officers to reimburse 

them for costs incurred in procuring required uniforms and equipment. Effective 

September 15, 1981, the payment of an initial uniform allowance in the maximum 

amount of $200 was authorized for all officers--regular and reserve--by the Defense 

Officer Personnel Management Act (DOPMA), Public Law 96-513, §412, 94 Stat. 2835, 

2905 (1980). The reason for extending such allowances to regular officers, in addition to 

 

1 Hearings of March 18, 1949, on H.R. 5007 before Subcommittee No. 2 of the House Armed Services 

Committee, p. 1667, 81st Congress, 1st Session (1949). 

998
the reserve officers and certain other limited classes of officers set out in former 37 

U.S.C. §415(e) who were entitled to such allowances before enactment of DOPMA, was 

to remove provisions felt to be discriminatory against regular officers.2

 The National 

Defense Authorization Act for Fiscal Year 2001, Public Law 106-398, 114 Stat. 1654A150, increased the initial uniform allowance from $200 to $400 and the additional 

uniform allowance, paid upon re-entry into active duty after more than two years, from 

$100 to $200. 

Under present law and implementing regulations,3 4

 members of the Armed 

Forces are entitled to the following clothing and uniform allowances: 

* Regular and Reserve officers are entitled, by express statutory authority, to the 

following special clothing allowances: 

(1) Uniform Allowances. All officers commissioned or appointed in the regular or 

reserve components of an armed force are entitled to an initial uniform reimbursement 

or allowance of $400 on being called to active duty or active duty for training. 

Officers do not receive an annual clothing replacement or maintenance allowance, 

however. Reserve officers, officers of the Army or Air Force without component, and 

ROTC graduates appointed in regular components are entitled to an additional active 

duty uniform allowance of not more than $200 each time they enter on active duty for 

more than 90 days, provided (1) they are not entering upon active duty within two 

years after completion of a period of active duty of more than 90 days and (2) they 

have not received an initial uniform reimbursement or allowance of more than $400 

within the preceding two years. Prior to enactment of the National Defense 

Authorization Act for Fiscal Years 1990 and 1991, Public Law 101-189, §663(a), 103 

Stat. 1352, 1465 (1989), reserve officers were also entitled to not more than $50 as 

 

2 House Report No. 96-1462 (Committee on Armed Services), p. 111, accompanying S. 1918, 96th

Congress, 2d Session (1980). (Section 412 of DOPMA repealed 37 U.S.C. §415(e).) 

3

 See Chapters 5 and 6 of Part 3 of the Department of Defense Financial Management Regulation, Military 

Pay: Policy and Procedures for Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, concerning 

entitlements to uniform and clothing allowances for enlisted personnel and officers, respectively. Also see 

37 U.S.C. §415 as amended by DOPMA and 37 U.S.C. §§416-418, generally. 

4

 The clothing allowance authority relative to enlisted members of the Armed Forces is very broad, 

allowing the President to "prescribe the quantity and kind of clothing to be furnished annually ... [and to] 

prescribe the amount of a cash allowance to be paid ... if clothing is not so furnished." 37 U.S.C. §418. The 

substance of the clothing allowance provisions relative to enlisted members is, accordingly, found in 

implementing executive orders and departmental regulations. See, e.g., Department of Defense Financial 

Management Regulation, Military Pay: Policy and Procedures for Active Duty and Reserve Pay, Volume 

7A, DOD 7000.14-R, ¶30502. 

999
reimbursement for the purchase of required uniforms and equipment upon completion 

of each period of four years of service in an active status in one of the reserve 

components of the Armed Forces, provided they had not become entitled to a uniform 

allowance or reimbursement during the preceding four years. The 1990/1991 National 

Defense Authorization Act, Public Law 101-189, id., repealed this authority, on the 

recommendation of the Department of Defense, on the grounds that the clothing 

allowance entitlement for reserve officers was "obsolete."5 6

(2) Civilian Clothing Allowances. Under amendments to the clothing allowance 

entitlements provisions made by the National Defense Authorization Act for Fiscal 

Years 1988 and 1989, Public Law 100-180, §611, 101 Stat. 1019, 1093 (1987), 

officers of the Armed Forces assigned to permanent duty stations outside the United 

States who are required to wear civilian clothing "all or a substantial portion of the 

time in the performance of ... official duties" may be paid "a civilian clothing 

allowance" in an amount not to exceed the rates authorized for enlisted members, as 

set out below.7 8

* Enlisted members, under DoD regulations issued pursuant to 37 U.S.C. §418 and 

Executive Order 10113, as amended, are authorized: 

(1) An Initial Clothing Issue or Initial Cash Allowance, or a combination thereof, to 

furnish them with uniform and clothing items in the quantities customarily required 

 

5

 Senate Report No. 101-81 (Committee on Armed Services), p. 164, accompanying S. 1352, and House 

Report No 101-331 (Committee of Conference), p.591, accompanying H.R. 2461, 101st Congress, 1st

Session (1989). 

6

 A save-pay provision permitted officers who would, but for repeal of the authority, have become entitled 

to the $50 allowance in the one-year period following enactment of the National Defense Authorization Act 

for Fiscal Years 1990 and 1991, Public Law 101-189, §663(b), 103 Stat. 1352, 1465-1466 (1989), to 

nevertheless receive the allowance. (The 1990/1991 Authorization Act was enacted November 29, 1989.) 

7

 The provision of authority to pay officers of the Armed Forces a civilian clothing allowance was adopted 

by Congress at the urging of the Department of Defense to enable officers required to wear civilian clothing 

because of assignment to "high threat overseas areas where the wearing of civilian attire is mandatory," 

Senate Report No. 100-57 (Committee on Armed Services), p. 145, accompanying S. 1174, 100th Congress, 

1st Session (1987), see House Report No. 100-446 (Committee of Conference), p. 641, accompanying H.R. 

1748, 100th Congress, 1st Session (1987), to defray the cost of purchasing and maintaining such clothing. 

As such the officer civilian clothing allowance authority is quite similar in purpose to the enlisted civilian 

clothing allowance authority covered more fully below. 

8

 The initial authority to pay an officer civilian clothing allowance was adopted as an entitlement, but the 

authority to pay the allowance was made discretionary with the Secretary of Defense by amendments made 

to 37 U.S.C. §419 by the National Defense Authorization Act, Fiscal Year 1989, Public Law 100-456, 

§625, 102 Stat. 1918, 1984 (1988). The amendment was said to have been made in clarification of the 

original intent underlying adoption of the officer civilian clothing allowance authority. House Report No. 

100-989 (Committee of Conference), p. 409, accompanying H.R. 4481, 100th Congress, 2d Session (1988). 

cf. House Report No. 100-753 (Committee of Conference), p. 408, accompanying H.R. 4264, 100th

Congress, 2d Session (1988). 

1000
for wear in their branch of service. The amount of this allowance varies according to 

service branch and sex. For example, in 2004 the initial clothing allowance for an 

enlisted male in the Army was $1,211.64, while the allowance for a female in the 

Navy was $1,549.48. 

(2) A Cash Clothing Replacement Allowance.9

 This replacement allowance is payable 

to enlisted members annually at the end of their anniversary month of active duty. 

This allowance is divided into (i) a "basic" replacement allowance, which is intended 

to defray the cost of replacement of uniquely military items that would normally have 

to be replaced during the first three years of active duty, and (ii) a "standard" 

replacement allowance, which is intended to defray the cost of replacement of 

uniquely military items that would have to be replaced after completion of three years 

of active duty. Department of Defense Directive 1338.5, March 9, 1998, stipulates that 

the basic replacement allowance entitlement be 70 percent of the standard allowance. 

The basic allowance begins to accrue the day after completion of six months of active 

duty, and continues through the end of the 36th month of active duty; in most cases, 

the standard replacement allowance entitlement begins on the day following 

completion of 36 months of active duty. Both allowances are adjusted regularly to 

account for changing costs; they vary by service branch and the sex of the individual. 

For example, in 2004 the basic replacement allowance for a male in the Air Force was 

$216, while the allowance for a female in the Navy was $478.80.10

Initial and replacement issues and allowances are designed to provide funds for 

replacement of the clothing and equipment that enlisted personnel require in the 

performance of their duties under normal conditions. However, such allowances do not 

cover special circumstances that require a member to possess additional quantities or 

special items of clothing or wear articles not customarily worn by other enlisted members 

of the same service. The types of special clothing allowances are as follows: 

* A Special Initial Clothing Allowance payable to members attaining a status that 

requires the wearing of individual uniform clothing different from the uniforms 

customarily required for the majority of enlisted personnel of the same service. 

 

9

 Formerly, in addition to initial clothing issues and allowances enlisted members of the Armed Forces 

received allowances referred to as "clothing maintenance allowances." This terminology has been changed, 

and enlisted members now receive "clothing replacement allowances." As provided in Paragraph 30501 of 

the Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, this allowance is "authorized for replacement 

of clothing." The changes in question were all made administratively, without any need for congressional 

action. 

10 Department of Defense, Defense Finance and Accounting Service, "Military Pay."

<http://www.dfas.mil/money/milpay> 

1001
Currently, this allowance applies mainly to chief petty officers of the Navy and is 

payable upon a member's being advanced to that status or when the member first 

enlists or reenlists in that capacity. 

* A Special Cash Clothing Replacement Allowance payable to members who have 

received a special initial clothing allowance. This entitlement accrues on the day 

following an affected member's completion of 36 months of active duty. 

* A Supplementary Clothing Allowance payable to enlisted members assigned to 

specified duties in which they are required to have additional quantities or special 

items of clothing not normally required for the majority of enlisted personnel of the 

same armed force. This allowance is applicable to personnel such as recruiters and 

military police, those regularly assigned as escorts, and those assigned to locations 

where climatic conditions require special articles of clothing. There is no 

corresponding replacement allowance for the supplementary clothing allowance. 

* A Civilian Clothing Allowance payable to members who are required to wear 

civilian clothing in the performance of their official duties. Examples include 

intelligence or counterintelligence duties, and duty in a foreign country where the host 

government prohibits or discourages the wearing of uniforms by non-indigenous 

military or naval personnel. As of October 2003, the initial payment of this allowance 

was $834.57, followed by an annual replacement payment of $278.19. For temporary 

duty of 15 days in any 30-day period, the allowance was $278.19, and for temporary 

duty of 30 days in a 36-month period the allowance was $556.38. 

 Cost: For the cost of clothing allowances from 1972 to 2004, see Tables V-3, 

Military Compensation Statistics Tables, volume II of this edition. 

1002
Chapter V.C.3. 

 Overseas Station Allowances 

Legislative Authority: 37 U.S.C. §405. 

Purpose: To help defray the additional costs for food, lodging, and related 

incidental expenses incurred by members of the uniformed services and their dependents 

as a result of assignment to permanent duty outside the United States. 

Background: "Overseas station allowances" is the collective title of the payment 

authorized by law as "a per diem, considering all elements of the cost of living to 

members ... and their dependents, including the cost of quarters, subsistence, and other 

necessary incidental expenses, to ... a member who is on duty outside of the United States 

or in Hawaii or Alaska, whether or not he is in a travel status." 37 U.S.C. §405(a). This 

per diem now consists of three main components: (1) a housing allowance; (2) a cost of 

living allowance; and (3) a temporary lodging allowance. 

Authority to pay overseas station allowances to military personnel was initially 

granted with a minimum of Congressional review and with little Congressional 

expression as to the purpose to be served. The origin of the allowances is traceable to a 

provision in the Act of July 2, 1942 (Army Appropriation Act, 1943), ch. 477 [Public 

Law 649, 77th Congress], §1, 56 Stat. 611 (1942), which authorized the expenditure of 

funds appropriated for "Contingencies of the Army" for the "actual and necessary 

expenses or per diem in lieu thereof as may be determined and approved by the Secretary 

of War, of military and civilian personnel in and under the Military Establishment on 

special duty in foreign countries." The Second Supplemental National Defense 

Appropriation Act, 1943, ch. 629 [Public Law 763, 77th Congress], §102, 56 Stat. 990, 

993 (1942), provided that Navy appropriations for fiscal year 1943 were available to 

make similar payments to military and civilian personnel of the naval establishment. A 

Navy representative explained the need for overseas allowances in these terms: 

1003
... The reason it is necessary to make provision for these personnel is that 

the cost of living in many places abroad has risen steeply and rapidly. It is 

estimated that in London the average rental costs are about 63 percent higher 

than in Washington, and other costs are about 41 percent higher.... In 

Chun[g]king, China, the costs of everything are reported by our naval attache as 

rising vertically. Rentals are high, but food is higher. A State Department 

estimate in July indicates that rental was 123 percent higher than in Washington 

and it is understood that the State Department is granting special allowances to 

their personnel assigned to Chun[g]king....1

In the years immediately following fiscal year 1943, the expenditure of funds for 

station allowances was authorized in annual appropriations acts for personnel on special 

duty in foreign countries under the headings "Travel of the Army" and, for the Navy, 

"Transportation and Recruiting." It was brought to the attention of the Navy in 

connection with its 1946 appropriation bill that the bill requested funds for a number of 

items for which there was no authority in permanent law. Since such items were subject 

to a point of order, even though the appropriations had in the past been made without a 

point of order having been raised, it was suggested that the Navy take action to obtain 

permanent authority for them. The result was proposed legislation introduced as Senate 

Bill S. 1917, 79th Congress, 2d Session (1946). As passed by the Senate, the bill did not 

address overseas station allowances. A Title II was, however, later added to the bill by 

the House, and this title did deal with such allowances. Among other things, it authorized 

payment of actual and necessary cost-of-living expenses, or a per diem in lieu thereof, to 

members of the Armed Forces on duty "outside the continental United States or in 

Alaska." Though Title II was rather broad in scope and affected all branches of service, 

the hearings on it were brief, and a single Navy officer was the only person who testified 

in favor of passage. The Naval Affairs Committee explained its addition of Title II 

thusly: 

The eighth committee amendment would add Title II to the bill. This title 

consists of amendments to the Pay Readjustment Act. The general authority to 

make the payments authorized in Title II have been contained from time to time in 

the Naval Appropriation Acts and in the Appropriations Acts for the other armed 

 

1

 Hearings before a Subcommittee of the House Appropriations Committee on the Second Supplemental 

National Defense Appropriation Bill for 1943, pp. 93-94, 77th Congress, 2d Session (1942). The 

representative went on to list 37 other foreign countries in which rental or other living costs were 25 

percent or more in excess of Washington rates. 

1004
services. It appears appropriate to codify these legislative provisions as 

amendments to the Pay Readjustment Act. They embody no substantial changes 

from the authority which has been carried for several years in appropriation 

measures.2

As amended by the addition of so-called Title II, S. 1917 was adopted in the Act 

of August 2, 1946, ch. 756 [Public Law 604, 79th Congress], §203, 60 Stat. 853, 859 

(1946), entitled "An Act to enact certain provisions now included in the Naval 

Appropriation Act, 1946, and for other purposes," thus creating the first permanent 

overseas station allowances authority for all branches of service. Despite what was said in 

the House Report, the 1946 act made a fairly substantial change in the conditions of 

eligibility for station allowances, since it permitted payments to personnel on duty 

"outside the continental United States or in Alaska," whereas the appropriation acts had 

authorized payment only to those on duty in "foreign countries." 

Section 303(b) of H.R. 5007, 81st Congress, 1st Session (1949), the bill later 

enacted as the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st

Congress], §303(b), 63 Stat. 802, 814 (1949), restated this station allowances authority 

but in somewhat different terms. It established oversea station allowances as per diem 

payments, thereby withdrawing the previously existing authority to defray actual 

expenses. Further, it expressly provided that the extra living costs experienced overseas 

by dependents, as well as by members themselves, be included in computing the amount 

of the allowance entitlement. The proposed modifications to the overseas station 

allowances received scant attention in both House and Senate hearings.3

Section 303(b) of H.R. 5007, 81st Congress, 1st Session (1949), was enacted in the 

Career Compensation Act of 1949, ch. 681, id., exactly as initially drafted, and it is the 

source of the existing overseas station allowance provisions of Title 37, United States 

 

2 House Report No. 2549 (Committee on Naval Affairs), p. 11, accompanying S. 1917, 79th Congress, 2d 

Session (1946). 

3

 See, e.g., Hearings before a Subcommittee of the House Armed Services Committee on H.R. 2553, p. 

1711, 81st Congress, 1st Session (1949); and Hearings before the Senate Armed Services Committee on 

H.R. 5007, p. 280, 81st Congress, 1st Session (1949). 

1005
Code.4

 As enacted, the law authorized the payment of overseas station allowances under 

regulations to be prescribed by the Secretaries of the various services. Since the law 

classifies overseas station allowances as "travel and transportation" allowances, the 

Secretarial regulations are prescribed in Volume 1 of the Joint Federal Travel 

Regulations (JFTR). The JFTR divides station allowances into three main components: 

(1) a housing allowance, frequently referred to as overseas housing allowance (OHA), 

designed to reimburse military personnel for overseas housing costs in excess of their 

basic allowance for quarters, the level of which is to be based on data from overseas 

commands; (2) a cost of living allowance (COLA) designed to reimburse members for 

the overseas costs of goods and services other than housing in excess of similar costs in 

the United States, also to be based on data gathered by overseas commands and the State 

Department; and (3) a temporary lodging allowance (TLA) designed to partially 

reimburse members when they and/or their dependents are required to use public hotels 

or restaurants at an overseas duty station while awaiting or after vacating permanent 

housing. An interim housing allowance, designed to reimburse a member for expenses 

incurred for renting non-government family housing before arrival of the member's 

dependents at a new permanent duty station, formerly was a separate fourth component 

but has been combined with the overseas housing allowance provision. The amount of 

these different allowances varies geographically because the excess costs on which they 

are based vary from one foreign locality to another. The OHA and COLA also include 

intra-pay-grade differentials for each locality, on the theory that a member's standard of 

living is related to his level of income. And, because dependents' expenses are to be taken 

into account in determining the level of the allowances, the overseas housing allowance 

contains a within-grade differential based on dependency status and the COLA contains a 

series of within-grade differentials based on number of dependents. 

 

4

 Section 303(b) of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], 

§303(b), 63 Stat. 802, 814 (1949), was classified to 37 U.S.C. §253(b). See 37 U.S.C. §253(b) (1952). 

Later, when Title 37 of the United States Code was enacted into positive law by the Act of September 7, 

1962, Public Law 87-649, 76 Stat. 451 (1962), the overseas station allowance provisions were codified at 

37 U.S.C. §405, id., 76 Stat. at 473. 

1006
In December 1967, the Comptroller General of the United States ruled that the 

JFTR method of using basic allowance for quarters as the basis for computing the 

overseas housing allowance did not conform to the law, because BAQ purportedly 

represented a lesser amount than average housing costs in the United States and its use 

therefore overstated the excess cost of overseas housing by the difference between BAQ 

and actual United States housing costs. The Comptroller General further ruled that the 

JFTR practice of fixing the overseas housing allowance and COLA components of the 

overseas station allowance independently of each other did not comply with the law, 

which required that the total allowance (housing plus cost of living) be based on overall 

costs. Hence, if either housing or living costs were less in any overseas area than in the 

United States, the excess costs in the applicable component had to be reduced by the cost 

"savings" in the other component, at least under the Comptroller General's theory. 

Disagreeing with this interpretation, the Department of Defense requested that 

Congress review the question of overseas station allowances in general and the level at 

which they were fixed in particular. Congress having agreed to such a review, 

implementation of the Comptroller General's decision was deferred pending hearings. 

After completion of its review, Congress adopted the Act of October 22, 1970, Public 

Law 91-486, 84 Stat. 1085 (1970), which validated the system used by the Secretaries of 

the military departments to compute overseas housing and cost of living allowances and 

added a provision to remove any doubt about the propriety of such computational 

methods. 

The overseas station allowance program received further attention in the 

Department of Defense Authorization Act, 1985, Public Law 98-525, §602(e), 98 Stat. 

2492, 2536 (1984). Before January 1, 1985, all manifestations of overseas station 

allowances, specifically including overseas housing allowances, were available to Armed 

Forces personnel stationed in Alaska and Hawaii--as well as to personnel stationed in 

Tokyo, London, Rome, etc. Without disturbing other aspects of the overseas station 

allowance program, the 1985 Authorization Act withdrew overseas housing allowance 

entitlements from Armed Forces personnel stationed in Alaska and Hawaii. At the same 

time as authority to make overseas housing allowance payments to Armed Forces 

1007
personnel in Alaska and Hawaii was being withdrawn, however, authority to make 

variable housing allowance payments was being extended. 

The 1985 Department of Defense Authorization Act, Public Law 98-525, id., 

made substantial amendments to the Variable Housing Allowance program (VHA) 

previously in effect. Among other things, these changes created a totally new statutory 

provision—37 U.S.C. §403a--for dealing with VHA generally. See Chapter II.B.2., 

"Housing Allowances," above. Among other things, the amendments to the VHA 

program qua VHA5

 were intended, and expected, to save substantial amounts of money 

for the federal treasury.6

 In proposing amendments to the VHA program, both the 

original House and Senate bills--H.R. 5167 and S. 2723, respectively, 98th Congress, 2d 

Session (1984)--recommended that members of the Armed Forces stationed in Alaska 

and Hawaii be made eligible for VHA in lieu of overseas housing allowances.7

 The 

provision in question was deleted in Senate floor action but was restored in conference.8

Although the reason for substituting VHA authority for overseas housing allowances in 

Alaska and Hawaii is not clearly articulated anywhere in the legislative history of the 

1985 Authorization Act. 

While the 1985 Authorization Act, Public Law 98-525, id., changed the overseas 

housing allowance program as applied to members of the Armed Forces stationed in 

Alaska and Hawaii, it did not affect other aspects of the overseas station allowance 

program for such personnel. Compare, e.g., 37 U.S.C. §405(a) ("[T]he Secretaries may 

 

5 That is, to the VHA program without regard to any other programs, such as the overseas station 

allowances program. 

6

 See, e.g., House Report No. 98-691 (Committee on Armed Services), pp. 290, 292, accompanying H.R. 

5167, and Senate Report No. 98-500 (Committee on Armed Services), pp. 435, 436, accompanying S. 

2723, 98th Congress, 2d Session (1984). 

7

 See, e.g., House Report No. 98-691 (Committee on Armed Services), p. 256, accompanying H.R. 5167, 

and Senate Report No. 98-500 (Committee on Armed Services), p. 205, accompanying S. 2723, 98th

Congress, 2d Session (1984). 

8 See House Report No. 98-1080 (Committee of Conference), p. 295, accompanying H.R. 5167, 98th

Congress, 2d Session (1984). 

1008
authorize the payment of a per diem ... to ... a member who is on duty outside of the 

United States or in Hawaii or Alaska.") with 37 U.S.C. §405(b) ("A station housing 

allowance may not be prescribed under this section for a member who is on duty in 

Hawaii or Alaska."). Thus, the only overseas station allowance not available to Armed 

Forces personnel stationed in Alaska and Hawaii is the overseas housing allowance. 

Pursuant to the Department of Defense Authorization Act, 1980, Public Law 96-

107, §807, 93 Stat. 803, 813-814 (1979), the Secretaries of the various military 

departments were granted discretionary authority to pay overseas housing allowances in 

advance. As explained in the relevant Congressional report, the reason for the adoption of 

advance payment authority was to enable affected members to meet the added costs that 

overseas housing allowances were intended to defray at the time the expenses were 

incurred "in order to minimize the financial impact on service members assigned to highcost overseas areas."9

The National Defense Authorization Act for Fiscal Years 1990 and 1991, Public 

Law 101-189, §622, 103 Stat. 1352, 1446-1447 (1989), prospectively amended the 

overseas station allowance program to authorize, effective September 1, 1990, the 

Secretaries of the various military departments to make up-front, lump-sum payments 

"for nonrecurring expenses incurred by the member in occupying private housing outside 

the United States." In effect, the new authority extended to any housing-related costs that 

might be incurred by a member occupying housing overseas, independently of when the 

costs may be incurred. As explained by the House-Senate Conference Committee: 

The House bill contained a provision ... that would authorize the lumpsum payment for the nonrecurring up-front costs incurred by military service 

members moving into private housing overseas. The provision would apply with 

respect to expenses incurred after August 31, 1990. 

 . . . 

 

9 House Report No. 96-166 (Committee on Armed Services), p. 139, accompanying H.R. 4040, 96th

Congress, 1st Session (1979). 

1009
The amendment would expand lump-sum payment authority to other than 

initial housing costs, for example, modification to protect against a terrorist 

threat.10

Pursuant to amendments to the overseas station allowance program made by the 

National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, §622(a), 

107 Stat. 1547, 1683 (1993), the category of "nonrecurring expenses" for which lumpsum payments were authorized was expanded to include any losses sustained by a 

member on the refund of a rental deposit (or other deposit made by a member to secure 

housing) as a result of currency fluctuations.11

 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1776, effectively changed the computation of the overseas housing 

allowance. Prior to 1997, 37 U.S.C. §405 defined the “station housing allowance” as the 

difference between the basic allowance for quarters (BAQ) and the actual cost of housing 

in the location of assignment. This formula was eliminated when Public Law 105-85 

 

10 House Report No. 101-331 (Committee of Conference), p. 586, accompanying H.R. 2461, 101st

Congress, 1st Session (1989). Also see House Report No. 101-121 (Committee on Armed Services), p. 276, 

accompanying H.R. 2461, 101st Congress, 1st Session (1989): 

 ... Many amenities to which Americans are accustomed when moving into a new residence, such as light 

fixtures, kitchen cabinets and basic appliances like stoves or refrigerators are frequently not provided by 

foreign landlords. 

 As a result, service members moving into off-base quarters overseas are often faced with substantial upfront cash outlays just to make housing facilities livable. In addition, service members must pay a large 

finder's fee or other charges in some areas to local realtors in order to locate housing or obtain utility 

service. Currently, reimbursement for these up-front overseas housing costs is amortized over the life of the 

overseas tour in monthly OHA payments. Under the OHA system, service members cannot receive a lumpsum payment for up-front costs because current law only authorizes such payments on a per diem basis. 

The committee recognizes that in situations where overseas tours are cut short and because of the low value 

of the dollar against some foreign currencies, many service members never fully recover these 

expenditures. In addition, many lower ranking personnel must go into substantial debt to buy these essential 

items. As an outgrowth of this concern, [the amendment] would authorize a lump sum [sic] payment for the 

nonrecurring up-front costs of moving into private overseas housing, effective September 1, 1990. In 

providing this authorization, the committee expects that the services will require military members to 

account for their actual expenses by furnishing receipts or other evidence so that the amount of this 

payment will not exceed the actual amount of incurred expenses. 

11 See House Report No. 103-200 (Committee on Armed Services), p. 295, accompanying H.R. 2401; 

Senate Report No. 103-112 (Committee on Armed Services), p. 155, accompanying S. 1298; and House 

Report No. 103-357 (Committee of Conference), p. 684, accompanying H.R. 2401, 103d Congress, 1st

Session (1993). 

1010
consolidated the BAQ with the overseas housing allowance, creating a single allowance 

that varies according to local costs. See Chapter II.B.2, “Housing Allowances,” above. 

Current allowance authorized: The rate of overseas housing allowance 

authorized varies from country to country, depending on the local cost of living and the 

special types of nonrecurring expenses that may be encountered in the country in 

question. Without regard to nonrecurring expenses for which reimbursement is 

authorized, in 2004 basic monthly overseas rental allowance rates for representative 

locations were: for an O-1 with dependents, $750 in Veracruz, Mexico; $2,310 in Manila, 

the Philippines; $2,930 in Geneva, Switzerland, and $6,732 in Tokyo, Japan.12 The 

overseas cost-of-living rate is a percentage by which basic pay amounts are multiplied to 

achieve earning parity with local costs. For example, in 2004 the multiplier for Algeria 

was 102 percent; for Antwerp, Belgium it was 148 percent; and for Buenos Aires it was 

116 percent. 

Cost: For the cost of overseas station allowances from 1972 to 2004, see Table

V-4 of Military Compensation Statistics Tables, volume II of this edition. 

 

12 Defense Technical Information Center, Per Diem, Travel and Transportation Allowance Committee, 

“Overseas Housing Allowance (OHA).” <http://www.dtic.mil/perdiem/allooha.html> 

1011
Chapter V.C.4. 

 Cost of Living Allowance 

 for the 

 Continental United States 

 (CONUS COLA) 

Legislative Authority: 37 U.S.C. §403b. 

Purpose: To partially offset differentially higher non-housing living costs 

experienced by members of the uniformed services in different parts of the United States. 

Background: The National Defense Authorization Act for Fiscal Year 1995, 

Public Law 103-337, §602(a)(1), 108 Stat. 2663, 2779-2781 (1994), adopted a new 

provision1

 authorizing the payment of a "cost-of-living allowance" to a member of the 

uniformed services (i) "assigned to a high cost area in the continental United States," (ii) 

"assigned to an unaccompanied tour of duty outside the continental United States if the 

primary dependent of the member resides in a high cost area in the continental United 

States," or (iii) "assigned to duty in the continental United States if ... the primary 

dependent of the member must reside in a high cost area in the continental United States 

by reason of the member's duty location or other circumstances ... and it would be 

inequitable for the member's eligibility for the allowance to be determined on the basis of 

the duty location of the member." 37 U.S.C. §403b(b)(1)-(3). For the purpose of the costof-living allowance, "a high cost area" is an area in the United States in which the 

"uniformed services cost of living ... exceeds the average cost of living ... by at least the 

threshold percentage," with the "threshold percentage" being determined by the Secretary 

of defense in consultation with the service Secretaries at a rate "not ... less than 8 

percent". 37 U.S.C. §403b(c). The actual amount of the cost-of-living allowance payable 

to a particular member equals the product of the member's "average spendable income", 

determined only with respect to his regular military compensation, and the amount by 

which the difference between the "uniformed services cost of living" for the particular 

area in question and the "average cost of living in the continental United States" (both 

 

1

 Codified at 37 U.S.C. §403b, immediately following the provision authorizing a variable housing 

allowance, 37 U.S.C. §403a. 

1012
measured as percentages) exceeds the "threshold percentage." 37 U.S.C. §403b(d). Both 

"average spendable income" and the "uniformed services cost of living" are determined 

without reference to housing costs, which are theoretically compensated for by the basic 

allowance for housing.2

 37 U.S.C. §403b(g) and (h)(3). In administering the provision, 

the "threshold percentage" is to be adjusted every year so that the total amount of the 

cost-of-living allowance actually paid to all members of the uniformed services does not 

exceed the amount appropriated to all the uniformed services for that purpose. 37 U.S.C. 

§403b(c). 

In explaining the reasons for the new entitlement, the House Armed Services 

Committee noted: 

Members of the Armed Forces move around the country as a requirement 

of their service. Over a career, a service member is likely to be assigned to a 

variety of low, medium, and high-cost areas. Currently, military compensation is 

adjusted only to reflect differences in local housing costs; there is no pay element 

to compensate members stationed in the Continental United States (CONUS) for 

variations in non-housing costs which have increased in the last 10 years. 

The Seventh Quadrennial Review of Military Compensation (QRMC) 

found that CONUS non-housing costs vary from 5 percent below to 19 percent 

above the national average. It is impossible [sic, possible?] for a service member 

to move from an average-cost to a high-cost area and suffer a more severe loss in 

purchasing power than would result from a reduction in rank. QRMC analysis 

further showed that once a member is assigned to one of the very high cost areas, 

he or she has little chance of offsetting the loss in buying power through 

subsequent moves to low cost areas. 

During manpower budget overview hearings this year, the committee 

heard repeated testimony about the financial hardships experienced by service 

members in high-cost locations, particularly recruiters and other members 

assigned to independent duty that placed them at considerable distance from the 

nearest on-base facilities. 

 Therefore, the committee recommends ... the establishment of a 

CONUS COLA to partially defray the added non-housing costs incurred by 

service members assigned to high cost areas....3

 

2 See Chapter II.B.2., hereof, "Housing Allowances," above. 

3

 House Report No. 103-499 (Committee on Armed Services), p. 249, accompanying H.R. 4301, 103d 

Congress, 2d Session (1994). See House Report No. 103-701 (Committee of Conference), p. 712, 

accompanying S. 2182, 103d Congress, 2d Session (1994). 

1013
As originally enacted, no cost of living allowance could be paid to any member of 

the uniformed services earlier than 90 days following submission by the Secretary of 

defense of a report to Congress detailing how the program would be administered and 

what procedures would be established to "prevent uncontrolled growth" in costs under the 

program in future years. National Defense Authorization Act for Fiscal Year 1995, Public 

Law 103-337, §602(b), 108 Stat. 2663, 2781-2782 (1994). 

The cost of living allowance program for the continental United States is 

frequently referred to by the acronym "CONUS COLA." 

Current rate of pay authorized: The amount of the cost of living allowance 

authorized by 37 U.S.C. §403b varies depending on an eligible member's duty station and 

the location of the member's dependents. 

Cost: For the cost of the cost-of-living allowance in the continental United States 

from 1996 to 2004, see Table V-5 of Military Compensation Statistics Tables, volume 

II of this edition. 

 

1014
Chapter V.C.5. 

 Family Separation Allowance (FSA) 

Legislative Authority: 37 U.S.C. §427. 

Purpose: To partially reimburse, on average, members of the uniformed services 

involuntarily separated from their dependents for the reasonable amount of extra 

expenses that result from such separation, and to reimburse members who must maintain 

a home in the United States for their dependents and another home overseas for 

themselves for the average expenses of maintaining the overseas home. 

Background: The Department of Defense recognizes that a member is obligated 

to provide his family with a separate home when, because of duty assignment or health 

limitations of dependents,1

 he is unable to reside with them. Even if the member is 

himself furnished food and lodging by the government at his duty station, such separate 

living arrangements typically result in a myriad of small but collectively substantial 

expenses that would not have to be paid if the family were living together. For example, a 

member's spouse may have to pay for varied odd jobs around the home, automobile and 

appliance maintenance and repair, yard upkeep, and the like, that would ordinarily be 

taken care of by the member if not assigned to a remote duty station. In addition, a spouse 

may have to pay for someone to perform various chores that would normally be taken 

care of by either the spouse or the member were the member not so assigned, such as 

hiring a baby-sitter while shopping. In addition, when not at home, a member typically 

pays more for laundry and other cleaning that would normally be done as a part of the 

family laundry. Exchanging letters and packages similarly involves additional costs 

directly attributable to family separation. An occasional telephone call may increase 

separation costs even more. 

 

1 The National Defense Authorization Act for Fiscal Year 2002 , Public Law 107-107, 115 Stat. 1134, 

added the provision that a member retains eligibility for a family separation allowance when a dependent’s 

health limitation causes the member to elect an unaccompanied tour where such an election normally would 

preclude eligibility. 

1015
To help defray the cost of such incidental expenses, the Uniformed Services Pay 

Act of 1963, Public Law 88-132, §11, 77 Stat. 210, 217 (1963), authorized the payment 

of a $30 monthly family separation allowance (FSA) to members in pay grades E-5 and 

above, as well as to members in pay grade E-4 with over four years of service, who were 

involuntarily separated from their dependents for more than 30 days, whether inside or 

outside the United States. This allowance is commonly referred to as "Type II" FSA--

hereafter, "FSA-II"--to distinguish it from another category authorized for a different 

purpose. The original FSA-II, with its flat $30 rate, was obviously not intended as a direct 

reimbursement for actual expenses. Rather, it was designed to reimburse, on an average 

basis, the miscellany of non-quantifiable added expenses that result from family 

separation. 

 As indicated by the Senate Committee on Armed Services: 

The rationale for the family [separation] allowance is that enforced 

separations of servicemen from their families cause added household expenses 

where the member is absent for any extended period of time. This condition 

results in an inequity as compared to those members whose dependents are 

authorized to accompany them. The extra expenses include such matters as home 

and automobile maintenance, increased child care costs, etc.2

By the latter part of the 1970s, the Department of Defense became convinced that 

denial of FSA-II to members in pay grades E-1, E-2, E-3, and E-4 (with less than four 

years of service) was essentially inequitable. Citing the original purpose of the 

Uniformed Services Pay Act of 1963, Public Law 88-132, id., i.e., "to partially reimburse 

members involuntarily separated from their dependents for the average extra expenses 

that result from the separation," the Department of Defense took the position that the 

existing law establishing the FSA-II entitlement "denies it to those members least able to 

meet the additional costs of maintaining two households" and accordingly urged that the 

entitlement be extended to "help to reduce the financial hardship of married junior 

 

2 Senate Report No. 88-387 (Committee on Armed Services), p. 25, accompanying H.R. 5555, 88th

Congress, 1st Session (1963). 

1016
enlisted personnel who are serving unaccompanied tours at overseas locations."3

 The 

Senate Armed Services Committee, accepting the recommendations of the Department, 

agreed to extend the entitlement to junior enlisted personnel but in doing so expressed a 

somewhat different purpose--namely, the "hope that the payment of this additional 

allowance for unaccompanied tours will encourage married junior enlisted personnel to 

serve overseas on unaccompanied tours," thereby reducing "the large numbers of 

dependents overseas" and the attendant costs.4

 The extension of FSA-II to junior enlisted 

personnel was effected by the Department of Defense Authorization Act, 1981, Public 

Law 96-342, §809(a), 94 Stat. 1077, 1097 (1980). 

For the purpose of administering the family separation allowance (Type II) 

entitlements of 37 U.S.C. §427, FSA-II is divided into FSA-R, FSA-S, and FSA-T. FSAR applies to members for whom government transportation of dependents is not 

authorized and the dependents do not live at or near the member's permanent duty station 

or home port;5

 FSA-S applies where the member is on duty aboard a ship, when the ship 

is away from home port continuously for more than 30 days; and FSA-T applies to 

members assigned to temporary additional duty away from their permanent duty station 

continuously for more than 30 days.6

When bachelor government quarters are not available at an overseas duty station, 

a member so assigned must obtain private living accommodations for himself at his own 

 

3 Senate Report No. 96-826 (Committee on Armed Services), p. 134, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). 

4

 Senate Report No. 96-826 (Committee on Armed Services), p. 133, accompanying H.R. 6974, 96th

Congress, 2d Session (1980). 

5

 FSA-R does not apply to a member who, after September 30, 1986, "elects to serve a tour of duty 

unaccompanied by his dependents at a permanent station to which the movement of his dependents is 

authorized at the expense of the United States...." See 37 U.S.C. §427(b)(3) as added by the National 

Defense Authorization Act for Fiscal Year 1987, Public Law 99-661, §618(a)(4), 100 Stat. 3816, 3880-

3881 (1986). Also see the National Defense Authorization Act for Fiscal Year 1987, Public Law 99-661, 

id., §618(b), 100 Stat. at 3881, for savings provisions applicable to persons receiving FSA-R on September 

30, 1986, whose continuing entitlement would otherwise have been terminated by the instant amendment. 

6

 Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, DOD 7000.14-R, ¶ 30304. 

1017
expense. A member whose dependents are not permitted at the overseas station is thus 

required to maintain two homes: one in the United States for the member's family, and 

one overseas. In addition to establishing FSA-II, the Uniformed Services Pay Act of 

1963, Public Law 88-132, §11, 77 Stat. 210, 217 (1963), also established so-called "Type 

I" FSA--hereafter, "FSA-I"7

--to reimburse the relatively few personnel finding 

themselves in this situation. Under the Uniformed Services Pay Act of 1963, FSA-I is 

equal to the monthly "without-dependents" BAH for the member's grade. In other words, 

it provides a member with dependents who is separated from his family with the same 

cash allowance to obtain housing for himself as is provided a similar member without 

dependents who must obtain private quarters at his own expense. FSA-I is not an actualexpense reimbursement: its purpose is to help defray, on an average basis, the extra 

expense incurred by a member in maintaining a second home at an overseas duty station 

where his dependents are not permitted and where no bachelor quarters are available for 

assignment to him. With the extension of FSA-II to junior enlisted personnel by the 

Department of Defense Authorization Act, 1981, Public Law 96-342, §809(a), 94 Stat. 

1077, 1097 (1980), all members entitled to FSA-I are automatically eligible for FSA-II at 

the same time, since both kinds of extra expenses covered by the two types of FSA occur 

in these circumstances. A member entitled to FSA-I is also eligible, on the same basis as 

any unmarried member, for applicable overseas station allowances. See Chapter V.C.3., 

"Overseas Station Allowances," above. 

The legislative history of the Uniformed Services Pay Act of 1963, Public Law 

88-132, id., stressed the home maintenance and repair jobs a member/husband would do 

if he were home as being typical of the extra expenses FSA-II was created to offset, but 

the law made no reference to the family residential situation. Nonetheless, the 

Comptroller General, relying heavily on the "handyman" emphasis of the legislative 

history, ruled in 1968 that the law allowed payment of FSA-II only to a member who 

maintained a separate residence, subject to his own management and control, for his 

dependents. This ruling resulted in stripping the FSA-II allowance from a large number 

 

7 Codified at 37 U.S.C. §427(a). 

1018
of personnel who would otherwise have been eligible for it. For example, it made a 

member ineligible when his wife lived with her parents or parents-in-law during family 

separation resulting from the member's assignment to a distant duty station. The Act of 

December 7, 1970, Public Law 91-529, §1, 84 Stat. 1839 (1970), was enacted specifically 

to remedy this effect of the Comptroller General's ruling. This act, which was made 

retroactive to the date FSA-II payments were first authorized, expressly stated that FSAII was payable even though a member did not maintain a residence for his dependents 

that was both subject to his management and control and that he was likely to share with 

them as a common household when his duty assignment permitted. It thus made clear that 

the types of expenses the allowance was intended to reimburse were not limited to the 

"handyman" kind, but that the purpose of the allowance was to help defray the full range 

of miscellaneous expenses that result from family separation. 

The Uniformed Services Pay Act of 1963, Public Law 88-132, id., intentionally 

provided that an entitlement to cash BAQ was a condition precedent to entitlement to 

FSA-II. This was aimed at members whose dependents occupied family-type government 

quarters during the period of separation, on the theory that they had no significant extra 

expenses for home maintenance and repair. As the full array of family separation 

expenses came into clearer focus, however, Congress decided that this bar was not 

justified. Act of December 7, 1970, Public Law 91-533, §1, 84 Stat. 1392 (1970), also 

enacted on December 7, 1970, accordingly eliminated the BAQ and FSA-II entitlement 

pairing. 

The Department of Defense Authorization Act, 1986, Public Law 99-145, §607, 

99 Stat. 583, 639 (1985), increased FSA-II to $60.00 per month. As explained in the 

report of the Senate Committee on Armed Services: 

This allowance was enacted in 1963, and the amount of $30 per month has 

not changed since that time. The Fifth Quadrennial Review of Military 

Compensation reaffirmed the need for this allowance, and recommended that the 

monthly rate be increased to $60 per month. For the second year in a row, the 

defense budget includes a request to increase the Family Separation Allowance 

from $30 to $60 per month. 

1019
 The committee believes that the Family Separation allowance (Type II) 

should be increased. Section 505 [of the Senate Bill, S. 1029] increases this 

allowance from $30 to $60 per month as proposed by the Department of 

Defense.8 9

The National Defense Authorization Act for Fiscal Years 1992 and 1993, Public 

Law 102-190, §625, 105 Stat. 1290, 1379 (1991), again increased FSA-II, this time to 

$75 per month. The Persian Gulf Conflict Supplemental Authorization and Personnel 

Benefits Act of 1991, Public Law 102-25, §302, 105 Stat. 75, 80 (1991), had temporarily 

authorized an increase in FSA-II from $60 to $75 for "the period beginning January 15, 

1991, and ending on the first day of the first month beginning on or after the date 180 

days after the end of the Persian Gulf Conflict," and the changes to the FSA-II program 

made by the National Defense Authorization Act for Fiscal Years 1992 and 1993, Public 

Law 102-190, §625, id., was intended to make the temporary increase permanent.10 11

 

8

 Senate Report No. 99-41 (Committee on Armed Services), p. 192, accompanying S. 1029, 99th Congress, 

1st Session (1985). Cf. Senate Report No. 99-118 (Committee of Conference), p. 428, and House Report 

No. 99-235 (Committee of Conference), p. 428, accompanying S. 1160, 99th Congress, 1st Session (1985). 

9 Pursuant to 37 U.S.C. §1008(b), the President is required to conduct "a complete review of the principles 

and concepts of the compensation system for members of the uniformed services" at least once every four 

years and, after completing such a review, to "submit a detailed report to Congress summarizing the results 

of such review together with any recommendations ... proposing changes" to the compensation system. The 

Ninth Quadrennial Review of Military Compensation was convened in 1999, pursuant to Presidential 

directive, and its report and recommendations were submitted to Congress in late 2001. For the 

recommendations and supporting rationale of the Fifth Quadrennial Review concerning the family 

separation allowance (Type II), see “Executive Summary, Report of the Fifth Quadrennial Review of 

Military Compensation,” p. VI-12 (January 1984), and “Special and Incentive Pays, Report of the Fifth 

Quadrennial Review of Military Compensation, Volume III, pp. 729-738 (November 1983). 

10 House Report No. 102-60 (Committee on Armed Services), p.248, accompanying H.R. 2100; Senate 

Report No. 102-113 (Committee on Armed Services), p. 226, accompanying S. 1507; and House Report 

No. 102-311 (Committee of Conference), p. 551, accompanying H.R. 2100, 102d Congress, 1st Session 

(1991). 

11 In addition to making permanent the rate of FSA-II temporarily authorized by the Persian Gulf Conflict 

Supplemental Authorization and Personnel Benefits Act of 1991, Public Law 102-25, §302, 105 Stat. 75, 

80 (1991), the National Defense Authorization Act for Fiscal Years 1992 and 1993, Public Law 102-190, 

§611(b), 105 Stat. 1290, 1376 (1991), repealed the prohibition on payment of FSA "in time of war or 

national emergency ... declared by Congress." The prohibition was repealed to prevent potential "pay 

inequities in future conflicts like Operation Desert Storm." House Report No. 102-60 (Committee on 

Armed Services), p. 248, accompanying H.R. 2100, 102d Congress, 1st Session (1991). cf. House Report 

No. 102-311 (Committee of Conference), p. 248, accompanying H.R. 2100, 102d Congress, 1st Session 

(1991). 

1020
 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1795, raised the family separation allowance from $75 per month to $100 

per month. In response to the great increase in family separation situations caused by 

Operation Enduring Freedom and Operation Iraqi Freedom, the Wartime Supplemental 

Appropriations Act of 2003, Public Law 108-11, 117 Stat. 570, mandated a temporary 

increase in the allowance to $250 per month. The National Defense Authorization Act for 

Fiscal Year 2004, Public Law 108-136, 117 Stat. 1500, extended this increase through 

calendar year 2004. This outcome was a compromise between Senate and House 

positions on the question: the Senate Armed Services Committee recommended a 

permanent increase for all members, while the House called for application of the higher 

amount only to members involved in Operation Enduring Freedom and Operation Iraqi 

Freedom. 

Current rates of family separation allowance authorized: Family separation 

allowance is currently authorized at the following rates: 

FSA-I: Payable monthly to a member at the same rate as the basic allowance for 

 housing for members in the same pay grade without dependents. 

FSA-II: $250 per month. 

Cost: For the cost of family separation allowances from 1972 to 2004, see Tables 

V-6 of Military Compensation Statistics Tables, volume II of this edition. 

1021
Chapter V.C.6. 

 Dislocation and Departure Allowances 

Legislative Authority: 37 U.S.C. §§405a and 407. 

Purpose: To partially reimburse members of the uniformed services for the 

average expenses they incur in relocating their households incident to a permanent 

change of station (dislocation allowance) or as a result of unexpectedly having to 

evacuate their dependents from an overseas area to a safe haven or designated place 

(departure allowance). 

Background: The nature of military service gives rise to a number of permanent 

changes of duty station or other forced household relocations over the course of a full 

military career. The household relocations attendant on such changes of station in turn 

give rise to a number of individually small but collectively sizeable expenses that 

members of the Armed Forces must defray, such as loss of rent deposits, abandonment or 

forced sale of household goods that must be replaced, added wear and tear on household 

goods in transit, disconnecting and reconnecting telephone service, added costs for food 

and lodging after household goods have been shipped from an old duty station but before 

the member and the member's dependents actually leave, the same sorts of costs at a 

member's new duty station before household goods arrive, the purchase of miscellaneous 

furnishings for a new home, and similar expenses. Until 1955, expenses of this nature 

incurred by military personnel were not subject to reimbursement. 

The Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(12), 

69 Stat. 18, 21-22 (1955), recognized that duty station changes and resultant household 

relocations reflect personnel management decisions of the Armed Forces and are not 

subject to the control of individual members. The Career Incentive Act of 1955 

accordingly provided for the payment of a special allowance--termed "dislocation 

allowance" (DLA)--to help defray the cost of the various incidental relocation expenses 

incurred by members ordered to make a permanent change of station under such 

unexpected circumstances. 37 U.S.C. §407. In concept, DLA is not a direct 

1022
reimbursement for the actual added expenses involved in a particular household 

relocation; rather, it is designed to reimburse, on average, such extra expenses. Until 

October 1, 1985, DLA was equal to a member's basic allowance for quarters for one 

month. The Department of Defense Authorization Act, 1986, Public Law 99-145, 

§611(a), 99 Stat. 583, 639 (1985), increased DLA from one month's BAQ to two. The 

increase was proposed in response to the belief of the House Armed Services Committee 

that "the current levels [of DLA] are inadequate to meet the many miscellaneous 

expenses associated with PCS [permanent change of station] moves."1

 Despite the 

increase in the authorization, until enactment of the Department of Defense 

Appropriations Act, 1990, Public Law 101-165, 103 Stat. 1112 (1989), successive 

appropriations acts in terms specifically prohibited payment of DLA in any amount in 

excess of one month's basic allowance for quarters.2

 The National Defense Authorization 

Act for Fiscal Year 1997, Public Law 104-201, increased the DLA from two month’s 

BAQ to two and one-half months effective January 1, 1997. The National Defense 

Authorization Act for Fiscal Year 2002, Public Law 107-107, authorized partial DLA of 

$500 for members ordered to occupy or vacate government family-type housing. 

In 1967 the House Armed Services Committee expressed the view that members 

without dependents generally incur relocation expenses--similar to those incurred by 

members with dependents--when assigned to a new duty station where they are not 

furnished government quarters. The Act of December 16, 1967 (Uniformed Services Pay 

Act of 1967), Public Law 90-207, §1(4), 81 Stat. 649, 651-652 (1967), provided a 

measure of relief for such personnel by authorizing the payment of DLA incident to the 

permanent change of station of a member without dependents, if the member is not 

assigned to government quarters at the new duty station. 37 U.S.C. §407(a)(3). 

 

1 House Report No. 99-81 (Committee on Armed Services), p. 225, accompanying H.R. 1872, 99th

Congress, 1st Session (1985). See Senate Report No. 99-41 (Committee on Armed Services), pp. 192-193, 

accompanying S. 1029, 99th Congress, 1st Session (1985). 

2

e.g., Act of December 22, 1987 (Continuing Appropriations, 1988), Public Law 100-202, §8066, 101 

Stat. 1329, 1329-73 (1987), and Department of Defense Appropriations Act, 1989, Public Law 100-463, 

§8054, 102 Stat. 2270, 2270-26 (1988). Both the Department of Defense Appropriations Act, 1990, Public 

Law 101-165, 103 Stat. 1112 (1989), and the Department of Defense Appropriations Act, 1991, Public Law 

101-511, 104 Stat. 1856 (1990), were silent on the issue and the rate was increased to the equivalent of two 

months BAQ effective October 1, 1989. 

1023
 The National Defense Authorization Act for Fiscal Year 1998, Public Law 105-

85, 111 Stat. 1797, changed the basis for computing annual adjustments in the DLA. 

Using as a basis the BAQ-based DLA rates that were in place on December 31, 1997, 

adjustments in ensuing years are based on the average percentage change in basic pay, 

not the housing allowance. Because of the tie-in between DLA and basic pay, a change in 

basic pay also results in a change in DLA. Under present law, DLA rates may be 

expected to increase each year as annual pay raises occur. See Chapter II.B.1., “Basic 

Pay,” above. 

The October 1962 evacuation of military dependents from Guantánamo Bay, 

Cuba, and the evacuation of dependents from Vietnam in the mid- to late-1960s and the 

early 1970s made it apparent that military personnel incur household relocation expenses 

when not provided with government quarters at their new stations, and that such expenses 

are similar to those for which members with dependents are paid DLA upon a permanent 

change of duty station. The Act of May 22, 1965, Public Law 89-26, §1(1), 79 Stat. 116, 

116-117 (1965), accordingly extended a special allowance authorization, codified at 37 

U.S.C. §405a, to members whose command-sponsored dependents are ordered to leave 

an overseas area for a "safe haven" or other specially designated place. This allowance--

similar in concept to DLA--is authorized in such amount "as the Secretary concerned 

determines necessary to offset the expenses incident to the departure."3

 This allowance is 

extraordinary in nature and is in addition to any other allowances authorized by any 

provision of Title 37 of the United States Code. See 37 U.S.C. § 405a, generally. 

 

3

 Under the Act of May 22, 1965, Public Law 89-26, §1(1), 79 Stat. 116, 116-117 (1965), the allowance 

was made available only for an "evacuation." The Foreign Service Act of 1980, Public Law 96-465, 

§2303(e), 94 Stat. 2071, 2165 (1980), made the allowance available whenever a "departure," rather than an 

"evacuation," was ordered. As explained in the relevant Congressional report: 

 The [Senate Foreign Relations Committee] believes that it is in the interests of both the Government and 

the employee to provide more flexible requirements in this area.... [T]he Government can more easily order 

departures from posts abroad of nonessential personnel when a crisis occurs without ordering a full-scale 

evacuation. 

 Senate Report No. 96-913 (Committee on Foreign Relations), p. 103, accompanying S. 3058, 96th

Congress, 2d Session (1980). (The National Defense Authorization Act for Fiscal Year 1987, Public Law 

99-661, §1343(b)(3), 100 Stat. 3816, 3995 (1986), changed the title heading for 37 U.S.C. § 405a from 

"Travel and transportation allowances: evacuation allowances" to "Travel and transportation allowances: 

departure allowances.") 

1024
Pursuant to the Uniformed Services Pay Act of 1981, Public Law 97-60, §124, 95 

Stat. 989, 1003 (1981), DLA and departure allowances may be paid in advance. The 

reason for allowing such advance payment of DLA and departure allowances was to 

"help alleviate the financial burdens currently encountered by military members 

experiencing government directed relocations by making the appropriate allowances 

available at the time the expenses are incurred, and reducing their interim out-of-pocket 

costs."4

 In essence, this authority put members of the Armed Forces on equal footing with 

their counterparts in the Foreign Service, who had been given advance payment 

authorization in the Foreign Service Act of 1980, Public Law 96-465, §2303, 94 Stat. 

2071, 2164-2165 (1980). 

Current amount of allowance authorized: The current level of dislocation and 

departure allowances authorized are as follows: 

Dislocation allowance: The amount of dislocation allowance payable to a 

member entitled to that allowance under the conditions set out in 37 U.S.C. §407 

equals the amount in effect December 31, 1997 (equal to two and one-half 

months’ basic allowance for quarters for a member in the same pay grade and 

with the same dependency status), adjusted by the annual average percentage 

increases in basic pay for the respective ensuing years. 

Departure allowance: The amount of departure allowance payable to a member 

entitled to that allowance under the conditions set out in 37 U.S.C. §405a is based 

on the number and ages of dependents and the circumstances of the departure. 

Dependents are authorized travel and transportation costs and a percentage of 

their lodgings cost plus the per diem that a TDY member would receive. 

Cost: For the cost of dislocation and departure allowances from 1972 to 2004, see 

Table V-7 of Military Compensation Statistics Tables, volume II of this edition. 

 

4 Senate Report No. 97-146 (Committee on Armed Services), p. 13, accompanying S. 1181, 97th Congress, 

1st Session (1981). 

1025
Chapter V.C.7. 

 Separation Travel and 

 Transportation Allowances 

Current Legislative Authority: 37 U.S.C. §404(a)(3), (c)(1)(C), and (f) and 

§406(a) and (g). 

Statutory Implementing Regulations: Chapters 4, 7 and 8, Joint Federal Travel 

Regulations (JFTR). 

Purpose: To defray the expenses incurred, upon separation, by service members 

returning to their homes or the places from which they originally entered military service 

from civilian life. 

Background: The policy of returning a service member to his home upon 

discharge, either actually or constructively, is traditional. Statutes authorizing such a 

policy have been in existence continuously since 1799. A lucid explanation of the 

purpose of such statutes and of the character of separation travel was provided nearly a 

hundred years ago by the United States Court of Claims in Major Sherburne's Case, 16 

Ct. Cl. 491 (1880). In delivering the opinion of the Court, Judge Nott stated, in pertinent 

part: 

This being the method, time out of mind, of compensating officers of the 

Army while in the service, there was also a payment for traveling expenses 

allowed to both officers and soldiers upon their discharge from the service by the 

Acts 3rd March, 1799, 11th January, 1812, 29th January, 1813. 

But this payment was not of the nature of wages for service. On the 

contrary it was a payment to be made after all service had ceased, and was of the 

nature of indemnity. When an ordinary employee binds himself by contract for 

work and service, he is free to designate the place of his discharge, and if, without 

its being designated, his employer should discharge him at a distant or 

unreasonable place, the law would award him such damages as would make him 

whole. In the case of persons entering the military service, they can prescribe no 

such condition and are liable to be sent by their employer to the most remote 

places of the earth, and are likewise liable to be discharged at any place, or at any 

moment. In a country with so vast a territory as ours this would often work great 

wrong to the individual and would result in great inequality of justice throughout 

1026
the Army generally. One soldier enlisted and domiciled in Washington might be 

discharged in Washington; another enlisted and domiciled in Florida might be 

discharged in Alaska. It has never been the policy of the government to deal out 

anything but even-handed justice to its soldiers, and if there be any one rule of 

policy which has been more invariably adhered to than another, it has been the 

rule of returning an officer or soldier to his home, either positively by his actual 

discharge there, or constructively by commutation for traveling expenses and 

time, or by pay with transportation and rations in kind. 

These things were a part of the moral compact between the government 

and its soldiers when the Act 1870 was passed. Pay might be increased or 

diminished, allowances might be added or taken away, traveling expenses might 

be commuted in money or transportation be furnished in kind, but morally there 

rested upon the government the obligation of paying a soldier while he remained 

in the service, and of returning him to his home when his service ended. 

This obligation, so far as the knowledge of the Court extends, the 

government has never sought to evade. 

A more recent indication of Congressional policy in this regard is contained in the 

House report accompanying H.R. 16243, 93d Congress, 2d Session (1974), enacted as the 

Department of Defense Appropriation Act, 1975, Public Law 93-437, 88 Stat. 1212 

(1974): 

For many years the Congress has authorized travel allowances or 

transportation to military personnel separated from the military services. This 

long-standing policy demonstrates the intent of the Congress to defray the 

expenses encountered by a serviceman in returning to his home or to the place 

where he entered the service from civilian life.1

Separation travel allowances include transportation of the member and his 

dependents and household goods, or reimbursement for such transportation, from the 

place he is separated to his home. A summary description of separation travel allowances 

and procedures is set out following the cost figures below. 

 

1 House Report No. 93-1255 (Committee on Appropriations), p. 43, accompanying H.R. 16243, 93d 

Congress, 2d Session (1974). 

1027
 SUMMARY OF SEPARATION TRAVEL BENEFITS 

1. A member retired (or transferred to the Fleet Reserve or Fleet Marine Corps 

Reserve) with pay; or immediately following at least eight years of continuous active 

duty with no single break of more than 90 days, discharged with severance or separation 

pay or involuntarily released to inactive-duty with readjustment or separation pay; or 

retired for physical disability or placed on the temporary disability retired list without 

regard to length of service, is authorized: 

* Travel allowances from the member's last duty station to a home of his 

selection. The allowance actually provided may consist of transportation in kind, 

reimbursement for transportation procured from a common carrier at the 

member's own expense, or a monetary allowance in lieu of transportation 

(MALT), plus a per diem allowance. Travel to whatever home is "selected" by the 

member must normally be completed within one year after termination of active 

duty. Members who had 18 or more years of active service as of November 1, 

1981, are authorized to select a home any place in the world; all other members 

are generally limited in their home selection to places within the United States, 

except for members first called or ordered to active duty from a place outside the 

United States. 

* Dependents' in-kind transportation, reimbursement for the actual cost of 

dependent transportation procured by common carrier at a member's own 

expense, or a monetary allowance in lieu of transportation (MALT), plus a per 

diem allowance for each dependent. The allowances are payable from the location 

of the member's last permanent duty station, or the place to which the dependents 

were transported at government expense, to a home selected by the member 

(which must be the same home selected by him for the purpose of his own travel 

allowance authorization). Travel to the selected home must normally be 

completed within one year after termination of active duty. 

1028
* Shipment of household goods at government expense, subject to weight 

limitations prescribed by pay grade, from the member's last or any previous 

permanent duty station, from a designated place in the United States from storage, 

or any combination thereof, to the home selected by the member (which must be 

the same home selected by him for the purpose of his own travel allowance 

entitlement), or to non-temporary storage for a period not to exceed one year. The 

household goods must normally be turned over to a transportation officer or 

carrier for shipment within 1 year following termination of active duty. 

2. A member separated from the service or released from active duty under 

honorable conditions who is not covered by the preceding paragraph is authorized: 

* Travel allowances from the member's last duty station to the member's home of 

record or the place from which the member was ordered to active duty, as the 

member may elect. The allowance actually provided may consist of transportation 

in kind, reimbursement for transportation procured from a common carrier at the 

member's own expense, or a monetary allowance in lieu of transportation 

(MALT), plus a per diem allowance. 

* Travel and transportation allowances for travel of dependents not to exceed the 

authorization from the member's permanent duty station, or place to which the 

member's dependents were last transported at government expense, to the place 

elected by the member under the previous paragraph. The allowance actually 

provided may consist of transportation in kind, reimbursement for the actual cost 

of dependent transportation procured by common carrier at the member's own 

expense, or a monetary allowance in lieu of transportation (MALT), plus a per 

diem allowance for each dependent. This authorization terminates unless travel is 

completed before the 181st day following separation or release from active duty. 

* Shipment of household goods at government expense, subject to weight 

limitations determined by pay grade, from (1) the member's last or any previous 

1029
duty station, (2) a designated place to which transported at government expense, 

or (3) a place of authorized storage, to the place elected by the member under the 

conditions stated above. Authorization for shipment normally terminates if the 

household goods are not turned over to a transportation officer or a designated 

representative prior to the expiration of the 180th day following separation or 

release from active duty. 

Under amendments to the separation travel provisions set out immediately above 

effected by the Uniformed Services Pay Act of 1981, Public Law 97-60, §121(a)(4), 95 

Stat. 989, 999-1000 (1981), separation travel allowances are payable only for travel 

actually performed. 37 U.S.C. §404(f)(1). In addition, unless the member served on 

active duty for at least 90 percent of the time for which he initially enlisted or otherwise 

agreed to serve, the travel and transportation authorized is limited to the provision of 

transportation in kind by the least expensive mode of common carrier transportation 

available, or a monetary allowance in lieu thereof that does not exceed the cost of the 

authorized transportation in kind. 37 U.S.C. §404(f)(2). 

3. Under amendments made to the separation travel and transportation allowance 

provisions of Title 37, United States Code, by the National Defense Authorization Act for 

Fiscal Year 1991, Public Law 101-510, §503, 104 Stat. 1485, 1558 (1990), during the 

five-year period beginning October 1, 1990, members of the Army, Navy, Air Force, or 

Marine Corps on active duty or full-time National Guard duty on September 30, 1990, 

who are involuntarily discharged, released from active duty, or denied reenlistment are 

authorized the same separation travel and transportation allowances as members retired 

(or transferred to the Fleet Reserve or Fleet Marine Corps Reserve) with pay, discharged 

with severance or separation pay, or involuntarily released to inactive duty with 

readjustment or separation pay, immediately following at least eight years of continuous 

active duty with no single break of more than 90 days, or retired for physical disability or 

placed on the temporary disability retired list without regard to length of service, as 

covered under Paragraph 1 of this Summary of Separation Travel Benefits, above. The 

extension of such allowances to personnel on active duty on September 30, 1990, who are 

1030
involuntarily separated from active duty service stemmed largely from Congress's 

perception of the altered nature of the military threats facing the United States in light of 

the changes taking place in Eastern Europe and the Soviet Union during the 1990s. As 

stated by the House Committee on Armed Services: 

 The changing nature of the Soviet threat seems indisputable. The 

conventional threat to NATO is greatly diminished and cannot be revived. The 

Soviet global conventional threat has also declined, although not as 

precipitously as in Europe. Although the Soviet Union continues to modernize its 

strategic forces, the risk of nuclear war has receded. Moreover, Soviet military 

spending is clearly on the decline. The growing economic crisis in the Soviet 

Union raises serious doubt that Soviets can maintain its [sic] current pace of 

weapons modernization and adds significant uncertainty about what the Soviet 

threat will look like in the future. 

 The policy guidelines under which the committee acted were: 

(1) Cuts in personnel and weapons should be made where the threat has 

decreased. 

 (2) Men and women leaving the force must be treated fairly. 

 . . . 

 The committee recommends reducing active end strength by 129,500 

below fiscal year 1990 levels--a reduction of 91,895 below the President's budget 

request. 

 . . . 

 To assist members being released from active duty as a result of the 

force drawdown, the committee recommends a comprehensive package of 

transition benefits to assist separating personnel and their families in readjusting 

to civilian life. The committee's recommendations include separation pay, 

continued medical coverage, pre-separation counseling, employment assistance 

and job training information, continued use of commissaries and exchanges, the 

opportunity for a dependent child to complete the school year in a Department of 

Defense overseas dependents school, the option to elect coverage in the 

Montgomery G.I. Bill, and post-separation transportation of household goods to 

home of choice, rather than home of record. 

 . . . 

 Section 503 [of H.R. 4739, the bill ultimately enacted, with 

amendments, as the National Defense Authorization Act for Fiscal Year 1991] 

would amend sections 404 and 406 of title 37, United States Code to entitle all 

service members involuntarily separated during the five-year period beginning 

October 1, 1990 to unrestricted selection of home, and one year of nontemporary 

1031
storage of baggage and household effects. The committee believes that the 

expanded transportation and household effects storage provided by [proposed] 

section 503 will assist involuntarily separated service members in relocating in 

areas where they are most likely to find immediate employment, thereby 

substantially reducing the cost of unemployment compensation.2

The National Defense Authorization Act for Fiscal Year 1994, Public Law 103-

160, §561(l) 107 Stat. 1547, 1668 (1993), extended from five years to nine years the 

period during which members involuntarily separated from active duty who did not 

qualify for separation travel and transportation benefits under the provisions of paragraph 

1 of this Summary of Separation Travel Benefits, above, could nevertheless receive 

separation travel and transportation allowances for themselves and their dependents. The 

period during which members involuntarily separated are authorized separation travel and 

transportation allowances was extended from five to nine years in order to "provide a 

safety net of benefits for separating military personnel during the defense drawdown"3

and thereby "minimize the uncertainties and personnel turbulence associated with such a 

drawdown" following the end of the Cold War.4

 The National Defense Authorization Act for Fiscal Year 1999, Public Law 105-

261, §561(f), extended the involuntary separation allowances until September 30, 2001. 

The transition authority was not extended by the authorization act for 2002. 

 

2

 House Report No. 101-665 (Committee on Armed Services), pp. 14, 19, 20, and 273, accompanying H.R. 

4739, 101st Congress, 2d Session (1990). In this same connection, see Senate Report No. 101-384 

(Committee on Armed Services), pp. 29 and 173, accompanying S. 2884, 101st Congress, 2d Session 

(1990). Cf. Senate Report No. 101-384 (Committee on Armed Services), pp. 8-30, accompanying S. 2884, 

101st Congress, 2d Session (1990), generally. Also see House Report No. 101-923 (Committee of 

Conference), p. 605, accompanying H.R. 4739, 101st Congress, 2d Session (1990). 

3 Senate Report No. 103-112 (Committee on Armed Services), p. 145, accompanying S. 1298, 103d 

Congress, 1st Session (1993). 

4 House Report No. 103-357 (Committee of Conference), p. 678, accompanying H.R. 2401, 103d 

Congress, 1st Session (1993). 

1032
Chapter V.C.8. 

 Personal Money Allowance 

 Special Position Allowance 

Legislative Authority: 37 U.S.C. §414. Also see 37 U.S.C. §413. 

Purpose: To partially reimburse the Chairman and Vice Chairman of the Joint 

Chiefs of Staff, the chiefs of staff of the various Armed Forces,1

 officers in pay grades O9 and O-10, and Navy officers occupying five specified positions, for various expenses 

they may reasonably be expected to incur in entertaining and extending hospitality to 

visiting officers and dignitaries of the United States and foreign countries. 

Background: The Act of June 10, 1922 (Joint Service Pay Readjustment Act of 

1922), ch. 212 [Public Law 235, 67th Congress], §8, 42 Stat. 625, 629 (1922), established 

a personal money allowance (PMA) of $2,200 a year for Navy rear admirals serving in 

the grade of admiral or as chief of naval operations and an annual $500 PMA for those 

serving in the grade of vice admiral. As explained to Congress, the rationale supporting 

PMA was: 

The last sentence of this section prescribes the additions to be made to the 

pay of rear admirals of the Navy when serving temporarily in the higher grades of 

vice admiral, admiral, or as Chief of Naval Operations. The money allowances 

prescribed for this purpose are placed at the figures given so as to preserve the 

same relative total compensation under the proposed schedule as under the 

present law. The addition is made to the pay of these officers rather than to their 

allowances as recognition of the responsibilities of their assignment.2

The provision of a PMA for Navy officers in the Joint Service Pay Readjustment 

Act of 1922, ch. 212, id., §8, 42 Stat. at 629, but not for Army officers stemmed from 

differences in the services' appointment authorities. The highest permanent grade in the 

Navy was rear admiral and, except for the general of the armies, who was under a 

 

1

 For this purpose, the term "Armed Forces" is defined as meaning the Army, Navy, Air Force, Marine 

Corps, and Coast Guard. 37 U.S.C. §101(4) (1988). 

2

 Hearings of March 18, 1922, on H.R. 10972 before a Special Committee of the House of Representatives, 

p.28, 67th Congress, 2d Session (1922). (The legislative history offers no clue as to why these "additions to 

be made to the pay" of certain Navy officers was given the title "personal money allowance".) 

1033
separate pay scale, the highest permanent grade in the Army was major general. While 

the Navy had authority to make temporary appointments to higher grades, the Army did 

not. The Act of February 23, 1929, ch. 298 [Public Law 796, 70th Congress], 45 Stat. 

1255 (1929), moved the services closer together in this respect. It authorized the 

appointment of the Army chief of staff to the grade of general and concomitantly gave 

him the same entitlement to PMA as prescribed for the chief of naval operations. The Act 

of August 5, 1939, ch. 454 [Public Law 290, 76th Congress], 53 Stat. 1214 (1939), 

authorized the appointment of certain Army commanders to the grade of lieutenant 

general and entitled them to the same PMA prescribed for Navy vice admirals. 

The Pay Readjustment Act of 1942, ch. 413 [Public Law 607, 77th Congress], §7, 

56 Stat. 359, 362 (1942), added certain officers to the PMA eligibility list and 

consolidated the various provisions of law authorizing the allowance into one statute, but 

it made no change in the nature, purpose, or rates of PMA. 

The Officer Personnel Act of 1947, ch. 512 [Public Law 381, 80th Congress], 

§504(e), 61 Stat. 795, 888 (1947), raised the PMA rate to $4,000 a year for the four 

military service chiefs. In explaining this action, the House Armed Services Committee 

commented: 

A supplemental allowance was also provided for the Chiefs of the four 

services in recognition of their added obligations as compared with other four-star 

officers.3

In thus indicating that PMA was authorized "in recognition of ... added obligations" of 

senior officers, it may be argued that Congress intended to change PMA from being 

compensation-based to being reimbursement-based. The so-called Hook Commission, 

which in 1948 conducted a comprehensive study of the military compensation system, 

apparently concluded that such a change of purpose had occurred. The commission 

addressed the reasons underlying PMA in these terms: 

 

3 House Report No. 640 (Committee on Armed Services), p. 12, accompanying H.R. 3830, 80th Congress, 

1st Session (1947). 

1034
The Commission considers that personal money allowances for highranking general and flag officers should be established definitely. Responsibilities 

of these officers and the maintenance of the prestige of such grade invariably 

entail entertainment and hospitality obligations. Nominal annual sums of $4,000 

for a chief of staff and $2,200 and $500 for general and lieutenant general, 

respectively, which are authorized today, are therefore proposed as appropriate 

complements to the recommended increase in basic compensation.4

The Hook Commission's recommendations led to the introduction and enactment 

of the Career Compensation Act of 1949, ch. 681 [Public Law 351, 81st Congress], §304, 

63 Stat. 802, 816 (1949), the basic source for the present PMA authority. Congress 

evidently agreed with the commission's view that PMA should be seen as a form of 

reimbursement for expenses incurred. The allowance was incorporated into the Career 

Compensation Act of 1949 exactly as recommended by the commission after only a 

perfunctory discussion that brought forth no dissenting view.5

Congress has taken no further explicit action in regard to PMA since 1949, but it 

has enacted two items of legislation that have a bearing on and reinforce the 

reimbursement-based purpose of the allowance. 

The Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], §2(3), 

69 Stat. 18, 19 (1955), gave generals and admirals an entitlement to an "additional 

increment of basic pay" of $200 a month and lieutenant generals and vice admirals to an 

"additional increment" of $100 a month, on top of their regular compensation and in 

addition to any PMA. The grades of major general or rear admiral (upper half) were still 

the highest grades for regular compensation purposes. The "additional increment" was 

extra pay awarded to recognize the increased responsibility of a three-star or four-star 

 

4

 “Career Compensation For the Uniformed Forces, a Report and Recommendation for the Secretary of 

Defense by the Advisory Commission on Service Pay,” p. 38, December 1948. 

5

 The personal-money-allowance provisions contained in Section 304 of the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], §304, 63 Stat. 802, 816 (1949), were classified to 37 U.S.C. 

§254. Later, when Title 37 of the United States Code was enacted into positive law by the Act of 

September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962), the personal-money-allowance provisions 

were codified at 37 U.S.C. §414(a), id., 76 Stat. at 476-477 (1962). Also see footnote 6 to this chapter, 

below. 

1035
officer as compared with a two-star officer. This, of course, was the same purpose for 

which PMA was first created. Had PMA been still fulfilling a pay-supplement purpose, it 

and the "additional increment" would have duplicated each other. There is nothing 

whatsoever in the legislative record to suggest that Congress intended to permit any such 

duplicate extra compensation. 

The Act of May 20, 1958, Public Law 85-422, §1(2), 72 Stat. 122, 124 (1958), 

created the pay grades of 0-9 and 0-10 and prescribed special pay rates for service chiefs. 

The establishment of pay grades above the major general/rear admiral level recognized, 

for purposes of the military compensation structure, the added responsibilities of threestar and four-star officers as compared to two-star officers. Notwithstanding this 

provision of higher regular compensation for the higher grades, PMA was not mentioned 

during the bill's consideration, and the PMA entitlement for such grades was not 

disturbed. If PMA was still serving as "extra compensation," the revision of the regular 

pay structure to include special rates of pay for three and four-star officers would 

arguably have done away with any need for PMA, and it would seem only logical that 

PMA authority should have been repealed, just as the "additional increment of basic pay" 

deriving from the Career Incentive Act of 1955 was repealed. 

The current PMA rates are $4,000 a year for the Chairman and Vice Chairman of 

the Joint Chiefs of Staff and the chiefs of staff of each of the services;6

 $2,200 a year for 

other generals and admirals; and $500 a year for lieutenant generals and vice admirals.7

For payment purposes, the annual PMA is converted to monthly rates and paid to eligible 

officers on a pro rata basis the same as other pay and allowances. 

 

6 Personal money allowance entitlement was extended to the chairman of the Joint Chiefs of Staff by the 

Act of September 7, 1962, Public Law 87-649, §413, 76 Stat. 451, 476 (1962), which enacted Title 37, 

United States Code, into positive law, and to the vice chairman of the Joint Chiefs of Staff by the National 

Defense Authorization Act for Fiscal Years 1988 and 1989, Public Law 100-180, §1314(c)(1), 101 Stat. 

1019, 1176 (1987). See 37 U.S.C. §413. 

7 A lieutenant general or vice admiral serving as a senior member of the Military Staff Committee of the 

United Nations is, while serving in that position, entitled to an additional PMA of $2,200 per year. 

1036
The rates of the allowance are the weakest link in the chain connecting it to a 

reimbursement-based purpose. The $2,200 and $500 rates were established in 1922 to 

preserve the then-existing relative total compensation among Navy officers of the top 

three grades, but have not been changed since. There is no traceable relationship between 

these rates and the expenses eligible officers incur in fulfilling entertainment and 

hospitality obligations. The $4,000 rate was established in 1947 and appears to have been 

based more on an off-the-cuff estimate than on careful calculations. However that may 

be, any relationship the $4,000 rate may have had to the applicable expenses in 1947 has 

been warped out of shape by the drastic changes that have occurred in the prices of goods 

and services in the succeeding years. The Hook Commission found the annual PMA rates 

in 1949 appropriate reimbursement for hosting and entertainment expenses incurred by 

affected officers. If PMA rates had been increased on the basis of changes in the 

Consumer Price Index since 1949, significantly higher PMA rates would be in existence 

today. 

The Act of August 2, 1946, ch. 756 [Public Law 604, 79th Congress], §3, 60 Stat. 

853 (1946), established a "special position allowance," presently codified at 37 U.S.C. 

§414(b),8

 of $5,200 a year for the superintendent of the Naval Academy and the director 

of naval intelligence; $1,000 a year for the President of the Naval War College; $800 a 

year for the commandant of midshipmen at the Naval Academy; and $400 a year for the 

superintendent of the Naval Postgraduate School. The special position allowance and the 

PMA are not mutually exclusive; an officer above the grade of rear admiral is entitled to 

both allowances whenever assigned to one of the positions that qualifies for the special 

position allowance. 

 

8

 The special-position-allowance provisions of the Act of August 2, 1946, ch. 756 [Public Law 604, 79th

Congress], §3, 60 Stat. 853 (1946), were classified to 37 U.S.C. §257. Later, when Title 37 of the United 

States Code was enacted into positive law by the Act of September 7, 1962, Public Law 87-649,76 Stat. 

451 (1962), these provisions were codified at 37 U.S.C. §414(b), id., §414(b), 76 Stat. at 477 (1962). No 

reason was given for codifying the special position allowance in the same section of Title 37 as PMA. 

Perhaps the similarity of the purposes underlying the two allowances, together with the fact that they are 

applicable to flag and general officers, led to their inclusion under the same section heading. 

(Parenthetically, it may be noted that the catchline, or heading, of 37 U.S.C. §414 is "Personal Money 

Allowance".) 

1037
The purpose of the special position allowance is to partially reimburse the officers 

occupying the named positions for official entertainment and hosting expenses, as the 

following colloquy reflects: 

 Mr. Cole: What is the reason for these extra allowances other than for 

entertainment? 

 Captain Nunn: That is all, sir.... 

 

 ... This is an entertainment fund for these individual officers, and the 

contingent fund of the Secretary [of the Navy] is also available for that purpose. 

 . . . 

 Mr. Grant: What comes within the responsibility of the head of the 

Naval Academy that makes him spend $100 a week for entertainment? 

 Captain Nunn: Visiting dignitaries, sir. He entertains most of the 

national figures that come to this country. They review the regiment of 

midshipmen and are entertained down there.9

The law provides that each of the five naval officers singled out in 37 U.S.C. 

§414(b) may spend his special position allowance "in his discretion for the contingencies 

of his position." Payment or accounting methods are not specified in any law or 

regulation; hence, the procedures used to pay and account for the allowance vary among 

the different positions for which it is authorized. However, as a matter of practice and in 

keeping with good business principles, most recipients account for how the allowance is 

spent. 

The special allowance for the five specified Navy positions has no statutory 

counterpart in the other services, but funds that may be used for official courtesy, hosting, 

and entertainment purposes are available to the other services from different sources. 

Annual appropriation acts permit, within the monetary limits set in each act, the use of 

funds appropriated for operation and maintenance of the Army, Navy, Air Force, and 

defense agencies for "emergencies and extraordinary expenses," subject to the approval 

 

9 Hearings of June 26, 1946, on S. 1917, To Enact Certain Provisions Now Included in the Naval 

Appropriation Act, 1946, and for Other Purposes, printed in Hearings before the House Committee on 

Naval Affairs on Sundry Legislation Affecting the Naval Establishment, 1946, pp. 3535-3536, 79th

Congress, 2d Session (1946). 

1038
or authorization of the appropriate service Secretary. The Secretary concerned allocates 

part of these funds to extend courtesies and provide entertainment to dignitaries and 

officials of the United States and foreign countries. These funds are available to flag and 

general officers as well as other personnel. Under certain conditions, expenditures are 

also made from non-appropriated funds for the same or similar purposes. Nevertheless, 

the legacy from pre-unification days of the law, singling out the holders of five Navy 

positions for a special entertainment allowance to the exclusion of officers holding 

similar positions in the other services, is basically incongruous with the principle that pay 

and allowance entitlements should be uniform among all comparable service members to 

the extent practicable. 

For federal income tax purposes, both PMA and special position allowances are 

includible in gross income, although with proper reporting, record keeping, and 

substantiation, expenditures made to defray the types of expenses for which the 

allowances were intended may be deducted as business expenses. 

Current rates of personal money allowance and special position allowance 

authorized: 

Personal money allowance: Personal money allowance is currently authorized for 

military personnel in pay grades O-10 and O-9 at rates ranging from $500 to 

$4,000 per year depending on the pay grade and duty assignment. The National 

Defense Authorization Act for Fiscal Year 2001, Public Law 106-398, 114 Stat. 

1654A-149, authorized a personal money allowance of $2,000 per year for senior 

enlisted members serving as sergeant major of the Army, chief petty officer of the 

Navy, chief master sergeant of the Air Force, sergeant major of the Marine Corps, 

and master chief petty officer of the Coast Guard. 

Special position allowance: Special position allowance is currently authorized for 

certain Navy personnel at rates ranging from $400 to $5,200 per year depending 

on duty assignment. Navy officers in pay grades O-10 and O-9 who are entitled to 

special position allowance because of their duty assignment are also entitled to 

personal money allowance appropriate to their grade. 

Cost: For the cost of personal money allowances from 1972 to 2004, see Table V-8

of Military Compensation Statistics Tables, volume II of this edition. 

1039
Chapter V.C.9. 

 Reimbursement for Recruiting Expenses 

Legislative Authority: 37 U.S.C. §428. 

Purpose: To reimburse members of the Armed Forces assigned to recruiting 

duties for the actual and necessary out-of-pocket expenses they experience in performing 

those duties. 

Background: Members on recruiting duty have, by the very nature of the duty, 

long been put to small but frequent personal expense for such items as snacks, lunches, 

coffee, etc., for prospective recruits or candidates, parking fees and telephone calls while 

away from the recruiting station, the purchase of copies of birth certificates, school 

transcripts, diplomas, etc., for applicants or prospective applicants, and so forth. Until 

1971, none of these expenses was reimbursable. In the Act of September 28, 1971, Public 

Law 92-129, §205(a), 85 Stat. 348, 359 (1971), Congress, recognizing that such expenses 

were properly a cost of conducting government business and that individual recruiters 

should not have to bear them personally, accordingly authorized their reimbursement. 

The Department of Defense had initially recommended that recruiting personnel 

be paid a fixed monthly allowance to help defray, on average, the official out-of-pocket 

expenses they incurred in connection with recruiting duties. The "average-allowance" 

proposal did not find its way into enacted legislation, but the title "Allowance for 

Recruiting Expenses" went into general use. It is something of a misnomer for what 

actually is a reimbursement of actual and necessary expenses. 

A member must submit a voucher to claim reimbursement of actual and necessary 

recruiting expenses, itemizing the expenses claimed. Any individual item over $25 must 

be supported by a receipt if practical, or an explanation of why it was not practical to 

furnish a receipt. Reimbursement vouchers must be approved at recruiting main stations, 

detachments, or higher levels before they can be paid. Except in unusual cases, such 

reimbursements may not exceed $60 per recruiter for any month. 

1040
Cost: For the cost of recruiting expense reimbursement from 1972 to 1995, see 

Table V-9 of Military Compensation Statistics Tables, volume II of this edition. 

 

1041
BACKGROUND AND LEGISLATIVE HISTORY OF THE 

ARMED FORCES LEAVE ACT OF 1946 

AND ITS AMENDMENTS 

The Armed Forces Leave Act of 1946, ch. 931 [Public Law 704, 79th Congress], 

60 Stat. 963 (1946), as amended and codified, is the source of the current military leave 

system. Before its enactment, officers were, under the Act of May 8, 1874, ch. 154, 18 

Stat. 43 (1874), the Act of July 29, 1876, ch. 239, 19 Stat. 102 (1876), and the Act of 

March 3, 1899, ch. 413, §13, 30 Stat. 1004, 1007 (1899), entitled to one month's leave 

per year and could accumulate such leave to a total of four months. Lump-sum payments 

were not authorized for unused accrued leave, but officers could be compensated for such 

unused leave through the granting of "terminal" leave. Under this procedure an officer, 

after being relieved from active duty for all practical purposes, remained on the activeduty rolls in a paid leave status to the extent of his accumulated leave. 

There was no comparable authority for enlisted personnel, although regulations 

authorized paid "furloughs" of up to 30 days a year for such personnel. Since such 

furloughs had no statutory basis, any unused portion thereof did not accrue to an enlisted 

member's credit. Any unused furlough time was therefore "lost" instead of being 

terminally compensated for as in the case of officers. 

In the Armed Forces Leave Act of 1946, ch. 931, id., Congress intended to 

equalize the treatment of officers and enlisted personnel with respect to leave, both for 

World War II and thereafter. To this end, the act provided that: 

 A. Effective September 1, 1946, all military personnel would earn 

leave at the rate of 2 1/2 days per month of active service and could accumulate 

such leave to a total of 60 days. 

 B. On or after September 1, 1946, enlisted personnel were entitled, by 

virtue of their statutory right to earn and accumulate leave, to terminal leave on 

the same basis as officers upon separation under honorable conditions. 

 C. Enlisted personnel were deemed to have earned leave at a rate of 2 

1/2 days per month during active service from September 8, 1939, through August 

31, 1946. Those discharged before September 1, 1946 (unless on active duty on 

that date), were entitled to a lump-sum payment for not more than 120 days of 

unused leave computed on such a basis. 

 D. Officers and enlisted personnel on active duty on September 1, 

1946, were entitled to an initial credit for actual or "deemed" leave accumulated 

as of August 31, 1946, or, if the accumulation was more than 60 days, to an initial 

credit of 60 days and a lump-sum payment for the number of days in excess of 60. 

However, the unused leave entitlement of any member on active duty on 

September 1, 1946, was limited to a number of days which, when combined with 

the member's initial leave credit, did not exceed 120 days. 

1042
The lump-sum payments authorized by the act were, with minor exceptions, to be 

made in five-year Treasury bonds issued in multiples of $25--with any odd amount paid 

in cash--bearing interest at the rate of 2 1/2 percent per year. Other than for use in 

connection with government life insurance policies, the bonds were not negotiable or 

transferable and, except as to interest, were not subject to taxation. 

The legislative history of the Armed Forces Leave Act, ch. 931, id., makes it clear 

that Congress included provisions authorizing leave accumulation and the granting of 

terminal leave and, later, the payment for unused accrued leave only in order not to 

discriminate against individuals who were prevented by bona fide military requirements 

and exigencies from taking leave on a current basis. This Congressional intent, as 

currently reflected in 10 U.S.C. §704(b)(3), was expressed by the Chairman of the Senate 

Military Affairs Subcommittee: 

 The subcommittee does not want to discontinue a leave of 2 1/2 days, 

an earned leave of 2 1/2 days a month, but it wants that leave taken in the current 

year. We believe that the military service will benefit by a leave taken during 

the current year and that an accumulated leave has a commercial aspect of men 

cashing in on a terminal leave which they should have taken. 

 We want them to have the leave as all other employees of the 

Government have, but we want them to take that leave because, if there is any 

good result to come from a leave, it must come from the exercise of the leave, not 

to make it a boost in pay.1

Although there has been no fundamental change to the military leave system 

created by the Armed Forces Leave Act, a number of important revisions have been made 

since 1946. 

The Act of July 26, 1947, ch. 344 [Public Law 253, 80th Congress], §1, 61 Stat. 

510 (1947), changed the medium of payment for unused leave from bonds to cash and 

made already-issued bonds redeemable after September 1, 1947, regardless of maturity 

date. As a concomitant to the elimination of bonds as a medium of payment, the act 

removed the provision making the bonds tax exempt. Thus, the basic pay element of 

payments for unused accrued leave became subject to taxation, while the allowances part 

was tax exempt.2

 

1

 Armed Forces Leave Act of 1946: Hearings on H.R. 4051 before a Subcommittee of the Senate 

Committee on Military Affairs, p. 4, 79th Congress, 2d Session (1946) (introductory statement of Senator 

Johnson). 

2

 Unused accrued leave payments were initially computed on the basis of basic pay and the basic 

allowances for quarters and subsistence, as well as the personal money allowance of certain senior officers. 

Under amendments to 37 U.S.C. §501 made by the Department of Defense Appropriation Authorization 

Act, 1977, Public Law 94-361, §304, 90 Stat. 923, 925-926 (1976), unused accrued leave payments are 

now computed on the basis of basic pay only. 37 U.S.C. §501(b)(1). See also discussion of the 1977 

Appropriation Authorization Act and the reasons for its adoption in the text accompanying footnotes 2 

through 4 to this chapter, above. 

1043
The Act of August 4, 1947, ch. 475 [Public Law 350, 80th Congress], §1,61 Stat. 

748, 748-749 (1947), repealed the authority under which terminal leave was granted and 

as a substitute authorized lump-sum cash payments for unused accrued leave to officers 

and enlisted personnel separated on and after August 4, 1947. 

In a 1949 decision, the Comptroller General of the United States ruled that the 

Armed Forces Leave Act did not permit an interim accumulation of leave in excess of 60 

days during a fiscal year and, once a member had accumulated 60 days, he could 

accumulate no further leave until the 60 days had been reduced by the actual taking of 

leave.3

 The Act of September 23, 1950, ch. 998 [Public Law 818, 81st Congress], §1, 64 

Stat. 978, 978-979 (1950), directly addressing the Comptroller General's ruling, provided 

that leave taken during a fiscal year may be charged to leave accumulated during that 

fiscal year, thus allowing a member to, in effect, accumulate more than 60 days of unused 

leave between accounting periods. 

Under the Armed Forces Leave Act of 1946, ch. 931 [Public Law 704, 79th

Congress], 60 Stat. 963 (1946), leave accumulated by a member did not survive his death 

on active duty. The Act of August 28, 1965, Public Law 89-151, §2, 79 Stat. 586 (1965), 

authorized payment to an eligible survivor for the unused accrued leave credited to a 

deceased member on the date of his death, subject to the 60 day maximum.4

The Act of January 2, 1968, Public Law 90-245, §1, 81 Stat. 782 (1968), 

permitted a member who had served at least 120 days in a hostile fire pay area to 

accumulate up to an additional 30 days of unused leave for a total of 90 days. The 

Military Pay and Allowances Benefits Act of 1980, Public Law 96-579, §10, 94 Stat. 

3359, 3368 (1980), extended this authority to members "assigned to a deployable ship, 

mobile unit, or to other duty" specially designated for the purpose in question. Leave 

accumulated in excess of 60 days must be separately accounted for. Such leave is "lost" 

unless used by the member before the end of the third fiscal year following the fiscal year 

in which the leave was accrued.5

 In adopting this legislation, Congress intended to 

recognize the inability of members assigned to certain duty areas to use all the leave they 

 

3

 29 Comp. Gen. 83 (1949). 

4

 The 60-day limit on payments for unused leave to the survivors of military decedents was effectively 

repealed by the National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §641(a), 

110 Stat. 186, 368 (1996). See Senate Report No. 104-112 (Committee on Armed Services), p. 258, 

accompanying S. 1026, 104th Congress, 1st Session (1995); cf. House Report No. 104-406 (Committee of 

Conference), p. 819, accompanying H.R. 1530, 104th Congress, 1st Session (1995), and House Report No. 

104-450 (Committee of Conference), p. 809, accompanying S. 1124, 104th Congress, 2d Session (1996). 

5

 Before adoption of the Department of Defense Authorization Act, 1984, Public Law 98-94, §1031, 97 

Stat. 614, 671 (1983), this special additional leave accumulation had to be used before the end of the fiscal 

year following the fiscal year in which it was accrued. The 1984 authorization act extended the period 

within which this excess leave must be used on pain of otherwise being lost to the end of the third fiscal 

year following the fiscal year it was accrued. For the reasons underlying this extension, see discussion of 

the 1984 authorization act in the text accompanying footnotes 6, 7, and 8 to this chapter, above. 

1044
earned. This provision, codified at 10 U.S.C. §701(f), gives affected members three extra 

years in which to use rather than lose leave that could not, due to "military exigencies,"6

be used. In effect, it puts affected members on a par with members not constrained by 

"military exigencies" with respect to the use or loss of earned leave. 

The Act of October 27, 1972, Public Law 92-596, §1(2), 86 Stat. 1317, 1317-

1318 (1972), authorized a member in a missing status to accumulate unused earned leave 

without limitation from the time such status began until he returned to United States 

custody or until the date his death is determined to have occurred. If, however, the 

missing member's death is determined to have actually occurred between the date he 

entered a missing status and the end of the fifth year of such a status, his leave 

accumulation is limited to 150 days in addition to leave accumulated before entering a 

missing status. If a presumptive date of death is determined, a member is likewise limited 

to 150 days of leave accumulation, plus leave accumulated before entering a missing 

status. Leave accumulated in a missing status is separately accounted for and cannot be 

used. It must be reimbursed to the member if he returns to United States custody or to his 

survivor if a determination of death is made. The term, "missing status," is defined at 37 

U.S.C. §551(2) for purposes, among others, of leave accrued entitlements and 

accumulation under 10 U.S.C. §701(g).7

Although not an amendment to the Armed Forces Leave Act of 1946, ch. 931 

[Public Law 704, 79th Congress], 60 Stat. 963 (1946), as amended and codified, the 

Employment Security Amendments of 1970, Public Law 91-373, §107, 84 Stat. 695, 701 

(1970), touched on unused accrued leave payments. An earlier law, the Act of September 

6, 1966, Public Law 89-554, §8524, 80 Stat. 378, 591 (1966), which had enacted Title 5, 

United States Code, into positive law, made former members of the uniformed services 

eligible for unemployment compensation from their state of residence during periods of 

unemployment following military service. Section 8524 of Title 5, United States Code, 5 

U.S.C. §8524, however, barred eligibility for unemployment compensation in all states 

for any period covered by a payment for unused accrued military leave, regardless of the 

state law. At the time, some states considered accrued leave payments as current wages--

i.e., as compensation for contemporaneous work--with the result that a person in receipt 

of a payment for unused leave would be considered employed for the period for which he 

was receiving such payments and accordingly not entitled to unemployment 

compensation for that period; other states considered such payments to be for past 

services--not contemporaneous work--with the result that an individual in receipt of such 

payments would not be disqualified from receiving unemployment compensation. The 

Employment Security Amendments of 1970, Public Law 91-373, id., repealed 5 U.S.C. 

§8524, thus permitting accrued military leave to be treated in each state the same as 

accrued leave of other unemployed persons. 

 

6

 Senate Report No. 98-174 (Committee on Armed Services), p. 231, accompanying S. 675, 98th Congress, 

1st Session (1983). 

7 For a more detailed discussion of military pay and benefits entitlements of persons in a "missing status," 

see that portion of Appendix VII, "Special Pay and Other Benefits for Missing Persons, Prisoners of War 

(POWs), and Victims of Terrorism," titled "Missing Persons," below. 

1045
Appendix I 

 Department of Defense 

 Military Retirement Fund 

Legal Authority: 10 U.S.C. §§1461-1467. 

Background: Before enactment of the Department of Defense Authorization Act, 

1984, Public Law 98-94, 97 Stat. 614 (1983), the military retirement system was funded 

on a "pay-as-you-go" basis. Every year as a part of the budgetary processes of the federal 

government, estimates were made of the aggregate retired and retainer pay entitlements 

of personnel on, or expected to be on, the retired lists of the various military departments 

that year, and Congress, through the appropriations process, appropriated moneys to pay 

for, or fund, those entitlements. If the original budget estimates were accurate, all of the 

appropriated moneys were paid out to military retirees in the year in which they were 

appropriated. In short, the military retired and retainer pay liabilities of the federal 

government were paid for out of current federal revenues, not out of a fund that had been 

built up as those liabilities were accruing. In fact, there was no fund from which the 

retired and retainer pay obligations of the federal government were met, and the military 

retirement system was, on that account, said to be "unfunded." The retired and retainer 

pay entitlements of retired members of the armed forces--as well as of future retirees--

were, in some sense, obligations of the federal government, but no moneys had been set 

aside to defray them. 

The Department of Defense Authorization Act, 1984, Public Law 98-94, 

§925(a)(1), 97 Stat. 614, 644-648 (1983), established effective October 1, 1984, a new 

Department of Defense function known as the "Department of Defense Military 

Retirement Fund," which is codified under that heading as Chapter 74 of Title 10, United 

States Code, 10 U.S.C. §§1461-1467. As stated at 10 U.S.C. §1461(a), the purpose 

underlying establishment of the fund was straightforward: 

... The [Department of Defense Military Retirement] Fund shall be used 

for the accumulation of funds in order to finance on an actuarially sound basis 

1046
liabilities of the Department of Defense under military retirement and survivor 

benefit programs. 

The Department of Defense Military Retirement Fund is a fund, "established on 

the books of the [United States Department of the] Treasury ... [and] administered by the 

Secretary of the Treasury," 10 U.S.C. §1461(a), from which the retired and retainer pay 

obligations of the federal government to retired members of the Army, Navy, Air Force, 

and Marine Corps1

 are to be met.2 3 10 U.S.C. §1463(a)(1)-(3). In addition, obligations of 

the federal government, arising under the Survivor Benefit Plan, to the survivors of 

deceased members and former members of the armed forces are to be paid from the fund. 

10 U.S.C. §1463(a)(4). 

The assets of the fund used to defray the obligations of the federal government for 

retired and retainer pay and survivor annuities come from three sources. 10 U.S.C. §1462. 

First, the secretary of defense is required to make monthly payments into the fund from 

moneys appropriated by Congress for the pay and allowances of members of the Armed 

Forces on active duty and in the Ready Reserve. 10 U.S.C. §1466(a). The actual amount 

of money transferred to the fund by the secretary of defense for a given month is 

computed, using actuarial techniques, as a percentage (i) of the total basic pay paid that 

month to members of the Armed Forces on active duty and (ii) of the total basic pay and 

compensation4

 paid to members the Ready Reserve. 10 U.S.C. §1466(a). Cutting through 

 

1 As well as to members of the Navy and Marine Corps transferred to the Fleet Reserve and Fleet Marine 

Corps Reserve, respectively. 

2

 The Army, Navy, Air Force, and Marine Corps are the only components of the uniformed services 

covered by the Department of Defense Military Retirement Fund. Retirement and survivor benefit 

obligations of the federal government to retired members and survivors of deceased members or former 

members of the Coast Guard, the Public Health Service, and the National Oceanic and Atmospheric 

Administration are not covered by the fund. For this reason, the term "Armed Forces," as used in the 

discussion of various provisions of the Department of Defense Military Retirement Fund in the remainder 

of this appendix, is restricted to those uniformed services under the direct jurisdiction of the Department of 

Defense. 

3 Retired pay obligations accruing on account of non-regular service, i.e., on account of reserve service, are 

also to be met from the Department of Defense Military Retirement Fund. 

4 As used in this appendix, the term "reserve compensation" covers pay to members of reserve components 

for inactive-duty training under 37 U.S.C. §206. 

1047
the technical language of actuarial science, the amount of money paid into the fund for a 

given month is supposed to cover the future retirement costs associated with the active 

duty and reserve service paid for by the basic pay and reserve compensation against 

which the "actuarially determined" percentage factor is applied in determining the 

contribution required for that month. Second, the secretary of the treasury is required to 

make an annual contribution, "[a]t the beginning of each fiscal year ... from the General 

Fund of the Treasury," 10 U.S.C. §1466(b)(1), in an amount that will, over time, amortize 

the unfunded liability of the Department of Defense Military Retirement Fund for retired 

and retainer pay and survivor annuity entitlements associated with prior active duty and 

reserve service.5

 Third, the secretary of the treasury is required to invest the various 

assets of the fund "in public debt securities with maturities suitable to the needs of the 

Fund," 10 U.S.C. §1467, and the return earned on these investments is also available to 

defray the obligations of the fund. The assets of the fund--coming from the three sources 

identified above--are specifically "made available for payment" of the obligations of the 

fund. 10 U.S.C. §1463(b). 

The plan adopted by Congress for dealing with and accounting for military retired 

and retainer pay and survivor annuities—the Department of Defense Military Retirement 

Fund--established what is frequently referred to as an "accrual accounting system" for 

dealing with such obligations. As is true of any retirement accrual accounting system, the 

system in issue gives Congress and the Department of Defense direct and immediate 

information on the future retirement costs associated with current manpower decisions. 

Under the system adopted, the pay and allowances accounts for members of the armed 

 

5

 As is true whenever a retirement fund is first established for an existing retirement system, money is 

needed for two different sets of costs that the fund will eventually have to bear. First, money is needed to 

pay for the retirement obligations accruing as a result of current service for personnel who will someday 

become entitled to retirement pay from the fund. Second, money is also needed to pay for retirement 

obligations already earned for past service--including not only persons already retired but also currently 

employed persons who have some past retirement-creditable service of one sort or another and who will 

someday retire. In the case of the Department of Defense Military Retirement Fund, Congress made the 

decision to amortize the initial unfunded liability of the fund for past service--which was determined to be 

$528.7 billion as of September 30, 1984--over a period of time. The annual payments to the fund from the 

General Fund of the Treasury are intended to accomplish just that. 

1048
forces are larger—by approximately 51% of basic pay6

--than they would be if the system 

had not been adopted. The following table shows the ratio of assets in the fund to the 

present value of future benefits to recipients, which is a common measurement of the 

funding progress of a pension plan, for the fiscal years 1986 through 2003.7

End of Fiscal Year... Ratio of Assets to Present Value of 

Future Benefits 

1986 .07187 

1987 .11431 

1988 .16211 

1989 .19549 

1990 .21878 

1991 .25127 

1992 .27018 

1993 .28314 

1994 .30306 

1995 .30375 

1996 .31314 

1997 .32200 

1998 .34567 

1999 .35142 

2000 .35085 

2001 .34476 

2002 .37376 

2003 .38989 

 

6

 See, e.g., Senate Report No. 99-292 (Committee on Armed Services), p. 3, accompanying S. 2395, 99th

Congress, 2d Session (1986) (relating to the legislative proposal ultimately enacted as the Military 

Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986), but discussing the Department 

of Defense Military Retirement Fund). 

7

 Source: United States Department of Defense, Fiscal Year 2003 Military Retirement Fund Audited 

Financial Statements, December 5, 2003, 10. 

1049
A direct and immediate consequence of the adoption of an accrual accounting 

system for military retired and retainer pay and survivor annuities is that Congress has to 

appropriate money every year for retirement "expenditures" that do not in fact result in 

out-of-pocket cash outlays for the federal government, considered as a whole, for quite 

some time. The fact that such moneys have to be appropriated and are subsequently 

transferred from Department of Defense to Department of the Treasury accounts, 

however, means that the funds are treated for all practical purposes as though they had 

really been "spent" by the Department of Defense--as though they had in fact been 

disbursed--in the year in which they were appropriated. For this reason, both Congress 

and the executive branch of the federal government can reduce current defense 

"expenditures"—that is, they can "save" current defense budget dollars--by reducing the 

amount of money that is appropriated for transfer to the fund. That is, the defense budget 

can be reduced by reducing military retirement accruals, and this is what happened in the 

Military Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986), 

which generally reduced future military retired and retainer pay entitlements for persons 

first becoming members of the uniformed services after July 31, 1986.8

 The Retired Pay 

Reform of 2000, contained in the National Defense Authorization Act for Fiscal Year 

2001, Public Law 106-65, 113 Stat. 662, essentially eliminated this reduction by 

returning most military personnel who entered service after July 31, 1986 to the retired 

pay computation formula (the “high three”) used before the1986 reform.9

As explained by Congress, the reasons for adoption of the Department of Defense 

Military Retirement Plan were as follows: 

 

8 Although the Department of Defense Military Retirement Fund applies only to personnel in the Army, 

Navy, Air Force, and Marine Corps, the changes to the "military retirement system" effected by the 

Military Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986), apply to all branches of 

the uniformed services--to the Coast Guard, the Public Health Service, and the National Oceanic and 

Atmospheric Administration as well as to the Army, Navy, Air Force, and Marine Corps. Thus, the total 

savings over time for the federal government as a whole that are attributable to the changes in the 

retirement system under the Military Retirement Reform Act are actually larger than the immediate 

reduction in the basic pay accounts of the four armed services. 

9 For a more complete discussion of the changes to the military retirement system effected by the Military 

Retirement Reform Act of 1986, Public Law 99-348, 100 Stat. 682 (1986) and by the Retired Pay Reform 

of 2000, see Chapter III.B.1, "Nondisability Retired and Retainer Pay," above. 

1050
 Most retirement plans in the private sector are funded, either partially 

or fully, and the trend--as a result of the Employee Retirement and Income 

Security Act (ERISA)--is toward full funding. Security of a retirement plan, i.e., 

the probability that promised benefits will be paid, is generally related to the 

method of funding. Full funding provides greater security than partial funding. 

 Of course, the security of payments from the Federal government is not 

generally related to the method of funding. From the Federal government's 

perspective, the issue of funding is primarily a matter of timing. Should funds be 

raised by taxing and borrowing when the obligation becomes due, or should funds 

be set aside through taxing and borrowing when the obligation is incurred?10 11 

In establishing the Department of Defense Military Retirement Fund and the 

funding mechanism by which future retirement and survivor annuity costs associated 

with current-year service are dealt with, Congress gave a definitive answer to the 

rhetorical question it posed: Funds to defray future retirement and survivor annuity 

obligations of the federal government should be set aside as the obligations are incurred. 

 For budgeted allotments for retirement accruals from 1985 to 2004, see Table A-1

of Military Compensation Statistics Tables, volume 2 of this edition. 

 

10 House Report No. 98-107 (Committee on Armed Services), p.225, accompanying H.R. 2969, 98th

Congress, 1st Session (1984). 

11 As indicated in the quoted excerpt, one of Congress's reasons for adopting the Department of Defense 

Military Retirement Fund was to provide a funding mechanism similar to private-sector retirement plans 

subject to the Employee Retirement Income Security Act (ERISA). While the funding mechanism adopted 

in fact succeeded in that regard, the military retirement system as a whole falls far short of meeting other, 

basic ERISA standards--including vesting requirements. 

1051
Appendix II 

 Uniformed Services Former Spouses' Protection Act 

Legislative Authority: 10 U.S.C. §1408 and various provisions in Chapters 55 

and 73 of Title 10, United States Code. 

Background: The Uniformed Services Former Spouses' Protection Act, enacted 

as Title X of the Department of Defense Authorization Act, 1983, Public Law 97-252, 

Title X, §§1001-1006, 96 Stat. 718, 730-738 (1982), was adopted to remove certain 

limitations that barred state and local courts from judicial enforcement of financial orders 

arising out of divorce and separation actions involving members of the Armed Forces and 

their spouses and former spouses and to extend certain benefits--mainly including 

survivor and medical benefits--to spouses and former spouses of members of the 

uniformed services. The provisions of the Former Spouses' Protection Act affecting state 

court judgments and orders arising out of divorce and separation actions are codified at 

10 U.S.C. §1408; the provisions affecting survivor benefits are codified at various places 

in Subchapter II of Chapter 73 of Title 10, United States Code, "Survivor Benefit Plan," 

10 U.S.C. §§1447-1460b; the provisions affecting medical care to spouses and former 

spouses of members and former members of the Armed Forces are partially codified at 

various places in Chapter 55 of Title 10, United States Code, "Medical and Dental Care," 

10 U.S.C. §§1071-1104. The reasons underlying enactment of the Uniformed Services 

Former Spouses' Protection Act were explained by the Senate Armed Services 

Committee in 1982: 

 Background and Discussion 

Currently, [a number of] States ... apply community property principles [in 

connection with the judicially ordered distribution of marital property incident to 

a divorce or legal separation or to the dissolution or annulment of a marriage]. 

The concept of the pool of property available for division on divorce or other 

dissolution of a marriage (i.e., marital property) in these States is based on French 

and Spanish Civil Law, rather than on the English common law from which other 

State marital property laws are derived. In community property States, all 

property earned by either spouse during the marriage is considered "community 

property" in which each spouse has a one-half interest. The general rule is that a 

pension earned by one party for work performed during the marriage becomes 

part of the marital property in which each spouse has an interest. 

1052
 [A number of other] States ... apply common law principles to the 

determination and distribution of marital property. An increasing number of these 

States are now determining that retirement and pension benefits can be deemed 

part of the marital property in divorce. However, in these jurisdictions, the 

concept of an equal interest created by law in marital property does not exist. 

These States apply a concept known as "equitable distribution" in dividing marital 

property. Under this approach, the court weighs the equities of each case and 

divides the property accordingly, not necessarily on a 50-50 basis, but however 

seems fair under all the circumstances. 

 

 Courts in ... [some] of the ... community property States also have the 

discretion to distribute marital property on this basis. 

 The ... remaining States ... are presently the only strict "title" States, in 

which title controls the distribution of marital assets. Upon divorce, pensions in 

these States remain the property of those who earn them. 

 In the vast majority of divorce cases, domestic relations courts do not 

become involved in the financial aspects of divorce. Usually, a privately 

negotiated property settlement is entered into by the parties and incorporated in 

the divorce decree. For this reason, there is little information available on the 

precise extent to which military retired pay has been considered and divided 

during the divorce process. What information exists, however, indicates that 

pensions are seldom divided between the parties to a divorce. Instead, the 

pensioner generally retains current or future annuity benefits and the non-working 

spouse receives an offsetting award of cash or other property. 

 However, there is a growing body of State laws and precedents in the 

area of dividing pensions and retired pay. As of June 26, 1981, case decisions in 

virtually all community property States, and a number of common law property 

States employing equitable distribution principles, specifically permitted military 

retired pay to be considered as an asset of the marriage and subject to division. [A 

number of] other States had specifically ruled that military retired pay could not 

be so considered. 

 The McCarty v. McCarty Decision 

 On June 26, 1981, the United States Supreme Court decided the case of 

McCarty v. McCarty, 453 U.S. 210 (1981), holding that absent a Federal statute 

permitting such action, a State court may not order a division of non-disability 

military retired pay as part of a distribution of community property incident to a 

divorce proceeding. 

 

 The Supreme Court examined the military retirement scheme and 

concluded that the application of State community property laws conflicted with 

that scheme. According to the Court, the Congress intended military retired pay to 

1053
be the personal entitlement of the retiree. Thus, the Court reasoned that the 

application of State community property laws "interfere(s) directly with a 

legitimate exercise of the power of the Federal Government" reflected in the 

military retirement scheme. However, the Court left it to the Congress to change 

the policy reflected by that scheme. Writing for the majority, Justice Blackmun 

stated: 

 We recognize that the plight of an ex-spouse of a retired service 

member is often a serious one ... Congress may well decide, as it has in the Civil 

Service and Foreign Service contexts, that more protection should be afforded a 

former spouse of a retired service member. This decision, however, is for 

Congress alone. We very recently have reemphasized that in no area has the Court 

accorded Congress greater deference than in the conduct and control of military 

affairs. 453 U.S. at 235-236. 

 Prior Legislation Similar to S. 1814 

 Until 1975, the Federal Government had refrained from involvement in 

the circumstances surrounding the divorce of a present or former Government 

employee or military member. However, in 1975, Public Law 93-647 

authorized the Federal Government to recognize a valid State court order 

garnishing or attaching the salary or retired pay of a present or former military 

member or Government employee when the individual failed to keep up with 

alimony or child support payments required by a court ordered divorce settlement. 

See 42 U.S.C. §659. The 95th Congress passed Public Law 95-30 which limited 

the amount of salary or retired pay that can be garnished or attached. A present or 

former military member or Government employee who is supporting a spouse or 

dependent can have up to 55 percent of disposable earnings garnished or attached; 

a person without a spouse or dependents can have up to 65 percent of disposable 

earnings attached. See 15 U.S.C. §1673(b); 5 CFR Part 581 (1982). 

 In 1978, the 96th Congress enacted a separate law, 5 U.S.C. §8354(j), 

which is applicable to the retired pay of Federal civil service employees. This law 

requires the Office of Personnel Management to comply with the terms of a court 

decree, order, or property settlement in connection with a divorce, annulment, or 

legal separation of a Federal employee. No limitation was imposed on the 

percentage of retired pay that could be paid out pursuant to such decrees and 

orders. This law does not apply to military personnel. 

 Finally, the Foreign Service Act of 1980 (Public Law 96-405) entitles 

the former spouse of a Foreign Service employee to receive up to 50 percent of 

the employee's retired pay, provided that the former spouse was married for at 

least 10 years of the employee's Foreign Service career. See 22 U.S.C. §§4044 et

seq. This right can be modified by spousal agreement or certain court orders. The 

rationale for this entitlement legislation was that the majority of Foreign Service 

duty is overseas and the "Foreign Service tradition of husband-wife ‘teams’ and 

1054
the participation of wives in the vital representational activities is still very much 

alive." 

 Provisions of S. 1814 

 On November 4, 1981, Senator Roger Jepson introduced S. 1814, the 

Uniformed Services Former Spouses Protection Act. Under S. 1814 military 

retired pay can be treated either as the property solely of the member or as the 

property of the member and his spouse. No right or entitlement to military retired 

pay is created by S. 1814. The bill does not require any division of retired pay by 

a State court; nor does it prohibit such division. 

 

 Treatment of such retired pay--with certain limitations--generally would 

be dependent on the divorce and property laws applied by the courts of the 

jurisdiction in which a divorce or other related decree is issued. 

 S. 1814 imposes three distinct limits on the division or enforcement of 

court orders against military retired pay in divorce cases. First, the total amount of 

the disposable retired or retainer pay of a member which the Service Secretary 

could pay out to satisfy a court order for prospective obligations could not exceed 

50 percent of such pay. Second, this bill would not create in the spouse or former 

spouse any right, title or interest which could be sold, assigned, transferred or 

disposed of by will or inheritance. Third, the courts could not direct that a service 

member retire at a particular time in order to effectuate any payment out of retired 

pay to a spouse or former spouse. Within these limitations, a former member's 

military retired pay would be subject to court orders issued incident to a divorce, 

dissolution, annulment or legal separation proceeding. The Service Secretaries 

would comply with such orders which direct the payment of a portion of that 

retired pay to a former spouse as alimony, as child support, or as the distribution 

of marital property. 

 S. 1814 extends limited health care coverage to certain unremarried 

former spouses of present or former service members. To qualify for the 

coverage, the former spouse must have been married to the member or former 

member for a period of at least 20 years on or before the date of the divorce 

during which period the member completed at least 20 years of creditable service. 

The health care is offered for a period of 180 days immediately following the date 

of the final decree of divorce, dissolution or annulment, provided that the former 

spouse remains unremarried. Under certain circumstances, health care will be 

extended by the Secretary concerned for the treatment of a medical condition 

which existed prior to the end of the 180-day period, but only if treatment for 

that condition has been provided by the uniformed services prior to the end of that 

period. 

 Finally, S. 1814 provides future participants in the Survivor Benefit 

Plan (SBP) the flexibility to provide for their former spouses. The bill provides 

that where the service member has not remarried and does not have a dependent 

1055
child for whom an annuity can be provided under SBP, the member could 

voluntarily provide an annuity to a former spouse. If the member chooses to 

provide such an annuity and then remarries, the member would be free to change 

the earlier designation so as to provide an annuity to the new wife or dependent 

child, unless the member had made a commitment as part of a voluntary written 

agreement to designate the former spouse. In that event, the member would have 

to obtain the appropriate court or other approval before changing the designation. 

It is the committee's intention that the service member retain the sole right to elect 

a former spouse as beneficiary of any SBP annuity.1

The Uniformed Services Former Spouses Protection Act introduced as S. 1814 

was in fact not enacted, but the substance of S. 1814 was picked up and adopted as Title 

X of S. 2248, which was enacted as the Department of Defense Authorization Act, 1983, 

Public Law 97-252, Title X, §§1001-1006, 97 Stat. 718, 730-738 (1982).2

 Subsequent 

Congressional enactments have amended and modified some aspects of the original act--

basically to extend the categories of benefits available to former spouses under the 

Survivor Benefit Plan and to perfect and clarify various provisions of the original 

enactment. See, e.g., National Defense Authorization Act for Fiscal Year 1987, Public 

Law 99-661, §§641-646, 100 Stat. 3816, 3885-3887 (1986);3

 National Defense 

Authorization Act, Fiscal Year 1989, Public Law 100-456, §652, 102 Stat. 1918, 1991 

(1988);4

 National Defense Authorization Act for Fiscal Years 1990 and 1991, Public Law 

101-189, §1404(a), 103 Stat. 1352, 1579-1586 (1989), enacting the Supplemental 

Survivor Benefit Plan;5

 National Defense Authorization Act for Fiscal Year 1991, Public 

Law 101-510, §555, 104 Stat. 1485, 1569-1570 (1990); National Defense Authorization 

 

1 Senate Report No. 97-502 (Committee on Armed Services), pp. 2-5, accompanying S. 1814, 97th

Congress, 2d Session (1982). 

2

 See House Report No. 97-749 (Committee of Conference), pp. 165-168, accompanying S. 2248, 97th

Congress, 2d Session (1982). 

3 cf. House Report No. 99-1001 (Committee of Conference), pp. 483-484, accompanying S. 2638, 99th

Congress, 2d Session (1986). 

4 Making several technical amendments to include former spouses within the Survivor Benefit Plan. 

5

 See especially 10 U.S.C. §1459 as adopted by the National Defense Authorization Act for Fiscal Years 

1990 and 1991, Public Law 101-189, §1404(a), 103 Stat. 1352, 1584-1585 (1989). cf. Senate Report No. 

101-81 (Committee on Armed Services), pp. 180-181, accompanying S. 1352, and House Report No. 101-

331 (Committee of Conference), pp. 660-661, accompanying H.R. 2461, 101st Congress, 1st Session (1989). 

1056
Act for Fiscal Year 1993, Public Law 102-484, §653(a)(2), 106 Stat. 2315, 2426-2428 

(1992);6

 the National Defense Authorization Act for Fiscal Year 1994, Public Law 103-

160, §555(a)(2), 107 Stat. 1547, 1666 (1993)7

; the National Defense Authorization Act 

for Fiscal Year 1997, Public Law 104-201, 110 Stat. 2579; the National Defense 

Authorization Act for Fiscal Year 1998, Public Law 105-85, 111 Stat. 1799; and the 

National Defense Authorization Act for Fiscal Year 1999, Public Law 105-261, 112 Stat. 

2048. 

 The Uniformed Services Former Spouse Protection Act remains a controversial 

and emotional topic for both members and former spouses. In 2001 the Department of 

Defense recommended several changes to the USFSPA. A copy of the DoD report is 

available at http://dod.mil/prhome/spouserev.html. As of 2004, Congress had not enacted 

any of the recommendations proposed by DoD. 

 

6

 Adding provisions, codified at 10 U.S.C. §1408(h), extending protections of Uniformed Services Former 

Spouses' Protection Act to spouses and former spouses of members who have had their right to receive 

retired or retainer pay terminated as a result of abuse of a spouse or dependent child. See House Report No 

102-966 (Committee of Conference), p. 716, accompanying H.R. 5006, 102d Congress, 2d Session (1992). 

7 See Senate Report No. 103-112 (Committee on Armed Services), p. 155, accompanying S. 1298, and 

House Report No. 103-357 (Committee of Conference), p. 678, accompanying H.R. 2401, 103d Congress, 

1st Session (1993). 

1057
Appendix III 

 Highlights of Major Structural Studies of 

 Military Compensation 

Since the end of World War II, a number of studies of military compensation have 

been conducted under the general sponsorship of the Department of Defense, the 

President, and the Congress. Some of these studies have been broad in scope, others more 

narrowly circumscribed. From 1945 to 1965, the more comprehensive studies tended to 

come at approximately four-year intervals--usually in response to perceived crises or 

specific needs. In 1965, a provision was added to permanent law, at the behest of the 

House Armed Services Committee, requiring the President to conduct a comprehensive 

review of military compensation every four years.1

 The following listing identifies the 

major structural studies of military compensation that have been conducted since World 

War II, starting with the so-called Hook Commission in 1948 and ending with the Ninth 

Quadrennial Review of Military Compensation in 1999-2001. The listing indicates the 

significant accomplishments of each study.2

 

1. The Advisory Commission on Service Pay (The Hook Commission--1948). 

 In 1948, Secretary of Defense James V. Forrestal chartered the Advisory 

Commission on Service Pay, also known as the Hook Commission after its chairman, 

Charles J. Hook, to undertake the first comprehensive review of military compensation 

since 1908. Upon completion of its review, the commission issued a report, titled Career 

Compensation for the Uniformed Services: A Report and Recommendation for the 

Secretary of Defense by the Advisory Commission on Service Pay, which formed the 

basis for various recommendations to Congress to restructure military compensation. 

These recommendations eventuated in the enactment of the Career Compensation Act of 

1949, ch. 681 [Public Law 351, 81st Congress], 63 Stat. 802 (1949), which, with 

relatively minor emendations, established the structure of the military compensation 

system that exists today--i.e., basic pay, allowances, and special and incentive pays for 

active duty forces, and retired or retainer pay for retired forces. The rates of military 

 

1 See discussion relating to the adoption of Section 1008(b) of Title 37, United States Code, 37 U.S.C. 

§1008(b), under the heading relating to the First Quadrennial Review of Military Compensation (Hubbell 

Study Group), at paragraph 5 to this appendix, below. 

2 All of the studies referred to produced reports of one sort or another, and these reports may be consulted 

for specific details concerning the underpinnings of the findings and conclusions reached and the 

recommendations made, if any. 

1058
compensation established under the act were set by a comparison of levels of 

responsibility between military and private sector organizations. In focusing on and 

questioning the underpinnings and justifications of the entire system of military 

compensation, the Hook Commission completed what has turned out to be the most 

fundamental and most important of all the studies of military compensation that have 

taken place since the end of World War II. 

2. The Strauss Commission (1952-1953). 

 Under pressures deriving from the Korean War, which had started on June 25, 

1950, when North Korean troops invaded South Korea by crossing the 38th parallel at 

eleven separate points, the Strauss Commission was convened by Secretary of Defense 

Robert A. Lovett in 1952 to consider the continued need for special and incentive pays 

and to make recommendations concerning the form of such pays. After completing its 

study of special and incentive pays, the Strauss Commission prepared a comprehensive 

technical report3

 that, while never formally transmitted to Congress, had substantial 

influence on later legislation dealing with such pays--especially that adopted in the 

Career Incentive Act of 1955, ch. 20 [Public Law 20, 84th Congress], 69 Stat. 18 (1955). 

3. The Cordiner Committee (1956-1957). 

 The Cordiner Committee was convened in 1956 in response to a perceived problem 

in attracting and retaining qualified technical personnel in the armed services. The 

Cordiner Committee's work, which was undertaken shortly after the Soviet Union 

launched its first Sputnik satellite, led to the recommendation that resulted in the creation 

of four new pay grades--E-8 and E-9 in the enlisted grade structure and O-9 and O-10 in 

the officer grade structure--and to the introduction of proficiency pay for critical military 

skill occupations. Act of May 20, 1958, Public Law 85-422, §1(2), 72 Stat. 122, 124 

(1958). (Taking its cue from the Cordiner Committee's recommendation, Congress added 

responsibility pay to the military compensation system as an officer analogue to 

enlisted proficiency pay.) 

4. The Gorham Report and the Randall Panel (1962).

 A study was convened by Secretary of Defense Robert S. McNamara in 1962 to 

conduct a comprehensive study of the entire system of military compensation. Although 

no final report was ever issued, the study findings were set forth in a document generally 

referred to as the "Gorham Report." This report was reviewed by the Randall Panel, 

which approved the majority of its recommendations. The action of the Randall Panel, in 

turn, led to Congressional approval of one of the largest military pay raises of modern 

times--exceeded only by the pay raise of 1982. Another effect of the Gorham Report was 

the adoption of the consumer-price-index (CPI) method of adjusting military retired pay 

benefits, thereby removing the linkage of military retired pay to active duty basic pay. 

 

3

 “Differential Pays for the Armed Services of the United States, Report of the Commission on IncentiveHazardous Duty and Special Pays,” March 1953. 

1059
The Gorham Report also originated the earliest counterpart of the present-day 

construct known as "regular military compensation" to serve as a rough yardstick for 

comparing military and civilian compensation levels. 

5. The First Quadrennial Review of Military Compensation (The Hubbell Report--

1967). 

 The First Quadrennial Review of Military Compensation was convened in 1965 by 

Secretary of Defense Robert S. McNamara in response to the newly enacted requirements 

of Section 1008(b) of Title 37, United States Code. Under 37 U.S.C. §1008(b), the 

President was--and continues to be--required to conduct "a complete review of the 

principles and concepts of the compensation systems for members of the uniformed 

services" at least once every four years and, after completing such a review, to "submit a 

detailed report to Congress summarizing the results of such review together with any 

recommendations ... proposing changes" to the compensation systems. The first 

such review was conducted by a study group that soon came to be referred to as the First 

Quadrennial Review of Military Compensation.

4

 The major recommendation of the First QRMC was to move from the then-existing 

system of pay and allowances for military personnel to a salary system. Although this 

recommendation generated a good deal of interest--both in Congress and elsewhere--it 

did not in fact result in any changes to the military compensation system. The general 

consensus was that movement from the pay and allowances system of military 

compensation to a salary system would simply be too expensive and that, in light of thenexisting draft, a salary system was not needed to attract requisite numbers of military 

personnel. One of the most important results of the First QRMC was the implementation 

of annual pay raises for uniformed services personnel. 

6. The Gates Commission (1970). 

 The Gates Commission recommended the all-volunteer force concept--thus 

abandoning reliance on the draft as the primary source of military personnel in 

peacetime--together with certain necessarily associated changes in the pay system. The 

most important of the recommendations concerning the pay system was a proposal for a 

substantial pay increase for first-term military personnel, and this recommendation was in 

fact adopted in a modified form in connection with the movement to an all-volunteer 

force. 

7. The Second Quadrennial Review of Military Compensation (1971).

 The Second QRMC was concerned with proposals to restructure four selected 

special pays in line with the all-volunteer force concept. Recommendations made by the 

 

4 Subsequent reviews have been referred to, successively, as the Second Quadrennial Review of Military 

Compensation (QRMC), the Third QRMC, the Fourth QRMC, the Fifth QRMC, the Sixth QRMC, etc. The 

Ninth QRMC was convened in the fall of 1999, and its report was completed in the fall of 2001. 

1060
Second QRMC resulted in legislation affecting flight pay, reenlistment bonuses, and 

medical special pays. The preexisting flight pay program for rated aviators was replaced 

by the aviation career incentive pay program; the preexisting variable reenlistment bonus 

program was replaced by the selective reenlistment bonus program; and variable 

incentive pay was authorized for medical officers of the Armed Forces. Although the 

Second QRMC also considered the hostile fire pay program, especially in light of the 

imperatives of the Viet Nam War, no change to the program was recommended. The 

Second QRMC was unique in being the only one of the QRMCs to have virtually all of its 

recommendations enacted into law. 

8. Department of Defense Retirement Study Group (1972).

 The Department of Defense Retirement Study Group was constituted to review the 

findings and recommendations of the Interagency Committee on Uniformed Services 

Retirement and Survivor Benefits, which had been convened in 1971 to conduct a 

comprehensive review of the military retirement system. The report of the interagency 

committee recommended far-reaching reform of the military non-disability retirement 

system to reduce perceived inequities of the system, to improve its efficiency and 

effectiveness as a management tool, and to decrease its costs. The review of the 

interagency committee's report by the Department of Defense Retirement Study Group 

led to the Department of Defense's development of a legislative proposal that was 

forwarded to Congress in 1974 and again in 1975 as the Retirement Modernization Act 

(RMA). Despite having been submitted to Congress twice, the Retirement Modernization 

Act never was enacted. 

9. The Third Quadrennial Review of Military Compensation (1975-1976).

 The Third Quadrennial Review of Military Compensation conducted the first,

across-the-board, comprehensive review of the entire system of military compensation 

since the Hook Commission in 1948. Although the Third QRMC never issued a formal 

final report, its staff studies, which covered the entire spectrum of military compensation, 

were collected in ten volumes.5

 The major conclusions of the Third QRMC were that a 

modernized system of pay and allowances should be established as the basis for 

uniformed services pay, that comparability with Civil Service should be the standard for 

determining uniformed services pay levels, that pay should be set and adjusted on a 

"total compensation" basis, and that the military retirement system should be revamped in 

accordance with the twice-submitted Retirement Modernization Act. One of the major 

accomplishments of the Third QRMC was the collection and publication of the first 

edition of Military Compensation Background Papers--Compensation Elements and 

Related Manpower Cost Items: Their Purpose and Legislative Background (Washington, 

D.C.: Department of Defense, 1976), the predecessor of the present volume. 

 

5 A draft final report was sent to appropriate committees of the Congress. In addition, because of a change 

in administrations, the draft final report and staff studies of the Third QRMC were turned over to the 

President's Commission on Military Compensation for further review. (For a discussion of the President's 

Commission on Military Compensation and its accomplishments, see paragraph 11 of this appendix.) 

1061
10. The Defense Manpower Commission (1976). 

 The Defense Manpower Commission was convened in response to a Congressional 

directive to review a broad range of personnel and compensation issues. The commission 

recommended a major overhaul of the military compensation system, including the 

adoption of a salary system together with a radically revised retirement system. The 

commission's recommendations did not result in any legislative enactments. 

11. The President's Commission on Military Compensation (PCMC--1978-1979).

 The President's Commission on Military Compensation, sometimes referred to as 

the "PCMC" or the Zwick Commission (after its chairman, Charles Zwick), was 

convened by the newly ensconced Carter Administration to review all of the recently 

completed studies affecting military compensation--including the studies of the three 

QRMCs, the Interagency Committee, the Defense Manpower Commission, and various 

special studies of selected military compensation issues conducted by the General 

Accounting Office. Parting ways with the Defense Manpower Commission, the PCMC 

recommended against a salary system as well as against a formal comparability system 

for setting military pay levels. In a positive vein, the PCMC recommended more reliance 

on special and incentive pays to solve manpower shortage problems as well as a new, 

non-contributory, three-part, mandatory retirement plan. It also recommended a form of 

variable housing allowance and longevity pay based on time-in-grade rather than time-inservice. 

12. The Fourth Quadrennial Review of Military Compensation (1979).

 The Fourth Quadrennial Review of Military Compensation reviewed the findings, 

conclusions, and recommendations of the President's Commission on Military 

Compensation. Focusing particularly on the PCMC's retirement recommendations, the 

Fourth QRMC refined the recommendations in question and produced a legislative 

proposal that was submitted to Congress, in fulfillment of the report requirements of 37 

U.S.C. §1008(b), as the proposed Uniformed Services Retirement Benefits Act (USRBA) 

of 1979. One of the important features of the USRBA proposal was a modified vesting 

provision coupled with an early withdrawal option. Opposition by the Department 

of the Treasury to income averaging treatment for early withdrawals taken by service 

members effectively resulted in blocking favorable consideration of the proposal, and 

Congress in fact took no action on the submission. 

13. The Fifth Quadrennial Review of Military Compensation (1983-1984).

 Pursuant to Presidential directive, the Fifth Quadrennial Review of Military 

Compensation was convened to review the military retirement system and its associated 

benefits as well as the special and incentive pays program. The report and 

recommendations of the Fifth QRMC led to Congressional amendment of the special and 

incentive pays program, including the elimination of officer-enlisted pay differentials for 

seven hazardous duty incentive pays. The Fifth QRMC pioneered new methods for 

evaluating the impact of military retirement benefits as incentives affecting active duty 

1062
service members. It also prepared a statement on the principles and concepts of military 

compensation, which, in a modified form, is incorporated as Chapter 1 of this edition of 

Military Compensation Background Papers: Compensation Elements and Related 

Manpower Cost Items--Their Purposes and Legislative Backgrounds. 

14. The Sixth Quadrennial Review of Military Compensation (1986-1988). 

 The Sixth Quadrennial Review of Military Compensation was tasked by the 

President to perform a comprehensive evaluation of the benefits and costs of the reserve 

compensation system. As the first comprehensive review of reserve compensation, the 

Sixth QRMC provided both a systematic evaluation of the elements of compensation for 

members of the reserve components and an analysis of the way reserve compensation 

affects the ability of the National Guard and the reserve components of the Armed Forces 

to meet their manpower requirements in support of readiness. The report of the Sixth 

QRMC contained separate studies of the compensation of full-time support 

personnel, compensation in support of reserve medical manpower requirements, and of 

National Guard and reserve retirement. The studies of full-time support and reserve 

medical manpower were the first comprehensive studies completed in these areas. The 

retirement study was the first to employ analytical models to assess the effects of the 

current system and evaluate the costs and benefits of alternatives. Many 

recommendations of the Sixth QRMC were adopted by Congress, including a muster 

allowance, benefits for "gray area" retirees, statutory authorization of the Delayed 

Enlistment Program, revised medical special pay, bonus test programs, an improved 

system of incapacitation pay, and amendments to the Soldiers' and Sailors' Civil Relief 

Act. Legislation to revise the reserve retirement system as recommended by the Sixth 

QRMC was not submitted because of the high initial costs associated with its 

implementation. 

14. The Seventh Quadrennial Review of Military Compensation (1990-1991). 

 The Seventh Quadrennial Review of Military Compensation was chartered to 

conduct a fundamental review of the overall military compensation system and assess its 

ability to continue to attract and retain the numbers and kinds of personnel needed in the 

post-Cold War environment and in particular to evaluate the major components of the 

military compensation system--specifically including basic pay, the various allowances, 

special pays, and bonuses--and the mechanisms for their periodic adjustment. The 

Seventh QRMC recommended continuation of the present system of pay and allowances 

but with realistic pricing of existing housing and subsistence allowances and internal 

restructuring of basic pay to achieve the identified objectives. As for periodic adjustments 

in the compensation system, the Seventh QRMC recommended annual adjustments in 

basic pay based on the Employment Cost Index (ECI), annual adjustments in the 

allowances based on costs actually experienced by service members, and annual reviews 

of the levels of special and incentive pays in light of the objectives they were intended to 

serve. In addition, the Seventh QRMC recommended development of a cost-of-living 

allowance applicable in the continental United States to help offset differentially higher 

1063
non-housing costs in different parts of the country, which has since been enacted as the 

"CONUS COLA" (cost-of-living allowance for the continental United States) program.6

 

15. The Eighth Quadrennial Review of Military Compensation (1995-1997) 

The Eighth Quadrennial Review of Military Compensation was tasked by the 

President of the United States to focus its analysis on the military compensation scheme’s 

current effectiveness in attracting, maintaining, and motivating its work force. 

Accordingly, the Eighth QRMC analyzed the role of human resource management in 

attaining overall performance and efficiency goals. The recommendations of the review 

involve the design and implementation of a centralized core of policies and practices that 

can be flexibly tailored to the needs of specific organizations. The goal of this approach 

was to establish a future-oriented human resource management plan that can be 

responsive to issues posed by a changing workforce and to the need for improved 

effectiveness in leadership and organization within the overall framework of the 

Department of Defense. The establishment of such a plan was to include a Defense 

Human Resources Board that would contribute expert advice and perspective as new 

policies and practices are integrated. This board finally was established in 2002 and first 

met in July 2003, assisted by a civilian Strategic Advisory Group tasked with analyzing 

future change. 

16. The Ninth Quadrennial Review of Military Compensation (1999-2001) 

 The Ninth Quadrennial Review of Military Compensation was asked to perform a 

strategic review of regular military compensation (RMC) in addition to benefits provided 

by the Department of Veteran Affairs. Specifically, the Ninth QRMC was tasked to 

evaluate the effectiveness in retention and recruitment of high-quality personnel through 

special and incentive pays and bonuses in addition to an analysis of the adequacy of basic 

pay in maintaining the financial well-being of service members and their families. The 

primary recommendations of the report indicated that although new advertising 

campaigns and recruiting messages had been successful in bringing an increased number 

of youths into the military, the continued increase in recruitment and retention of highquality candidates would best be encouraged by focusing on the increase of balance and 

flexibility of the compensation system. The analysis found that regular military 

compensation was still below the standards set by the private sector, increasing the 

tendency for potential recruits to go to the private sector for better pay. The report 

recommended that RMC be adjusted to reflect levels close to private sector salary, and 

that the potential for pay differentials be increased to maintain highly educated and 

skilled members. The review concluded that expanding incentive pays, the basic 

allotment for housing, and increasing flexibility for assignments also may assist in recruit 

attraction and retention. Finally, the Ninth QRMC suggests expansion of programs in 

education and employment for spouses that assist entire families of members, since the 

decision to stay in the military often is a family decision. 

 

6 See Chapter V.C.4. hereof, "Cost of Living Allowance for the Continental United States (CONUS 

COLA)", above. 

1064
17. The Defense Science Board (2000) 

The Defense Science Board Task Force on Human Resources Strategy was tasked 

by the Secretary of Defense to address “How to attract and retain personnel with the 

motivation and skills to serve and lead in civilian and military capacities in the 

Department of Defense.” The task force concluded that the All-Volunteer Force is still 

the appropriate vehicle for procuring and sustaining Defense military manpower. 

Further, military personnel should limit their activity to inherently military functions with 

civilians performing other government tasks. The task force identified three issues as 

having an adverse impact on force quality – (1) the Department does not have the 

authority and tools necessary to integrate the management of its human resources and to 

shape the military force. Specifically, the ‘one-size-fits-all’ approach in compensation 

and personnel policies is no longer suited to the current needs of the force; (2) the 

Department lacks a strategic plan for future human resource requirements for a fully 

integrated DoD force; and, (3) the American public is less involved and less inclined to 

serve in the Department of Defense. 

1065
Appendix IV 

 BAH Entitlements of 

 Members of the Uniformed Services 

 Married to Other Members of the 

 Uniformed Services

Under Section 403 of Title 37, United States Code, the normal rule is that 

members of the uniformed services are entitled to basic allowance for housing, or BAH, 

unless they are assigned to quarters provided by the Federal Government that are 

"appropriate to [their] grade, rank or rating and adequate for [themselves] and [their] 

dependents, if with dependents," in which case they are specifically declared to be "not 

entitled to a basic allowance for housing." 37 U.S.C. §403 (e)(1).1

 As indicated in 

Chapter II.B.2., “Housing Allowances,” above, members who are entitled to BAH under 

37 U.S.C. §403 and who have dependents are entitled to a higher rate of BAH than 

members without dependents. Section 421 of Title 37, however, creates an exception to 

eligibility for the “with dependents” BAH rate in the case of a member of the uniformed 

services whose sole dependent also is a member of the uniformed services: 

A member of a uniformed service may not be paid an increased allowance 

under [Chapter 7 of Title 37, which contains the BAH provisions here in issue], 

on account of a dependent, for any period during which that dependent is entitled 

to basic pay under section 204 of [Title 37].2

As interpreted, the quoted provision requires service members married to other 

service members to be treated as single for the purpose of determining the rate of BAH to 

which they are entitled unless they have one or more additional dependents who are not 

entitled to basic pay. 

 

1

 The major exception to this general rule is that a member in pay grade E-7 or above who is without 

dependents but who is assigned to quarters provided by the federal government "may elect not to occupy 

those quarters and instead to receive the basic allowance for quarters prescribed for his pay grade." See, 

e.g., 37 U.S.C. §403 (e)(2). 

2 This provision, which was formerly codified as Section 420 of Title 37, United States Code, was 

recodified as Section 421 of Title 37 by the National Defense Authorization Act for Fiscal Years 1988 and 

1989, Public Law 100-180, §611(a)(1)(A), 101 Stat. 1019, 1093 (1987). 

1066
Section 403(f) of Title 37 deals with the entitlement to BAH of certain members 

of the uniformed services without dependents, or who are considered under 37 U.S.C. 

§421 as being without dependents for the purpose of determining the BAH to which they 

are entitled, as follows: 

(1) A member of a uniformed service without dependents who makes a permanent 

change of station for assignment to a unit conducting field operations is not entitled 

to a basic allowance for housing while on that initial field duty unless his 

commanding officer certifies that the member was necessarily required to procure 

quarters at his expense. 

(2) A member of a uniformed service without dependents who is in a pay grade 

below E-6 is not entitled to a basic allowance for quarters while on sea duty.3

Prior to 1997, the combined effect of these various provisions prohibited the 

payment of a housing allowance to a member of a uniformed service below pay grade E6 who was married to another member of a uniformed service, who was without other 

dependents, and who was assigned to sea duty.4

 Thus, when both members of a married 

service couple below pay grade E-6 were assigned to sea duty, they were statutorily 

denied a basic allowance for quarters and had to either choose to live on board their 

respective vessels or suffer financial losses measured by the costs of establishing a 

household off the vessels to which they were assigned. The National Defense 

Authorization Act for Fiscal Year 1997, which generally revised regulations on housing 

allowances, provided that such a couple is jointly entitled to one basic allowance for 

housing for the duration of such simultaneous sea duty. 

 

3 Before enactment of the National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, 

110 Stat. 186 (1996), the rule was that a member of a uniformed service without dependents who was in a 

pay grade below E-7 was not entitled to a basic allowance for quarters while on sea duty. That legislation, 

at 110 Stat. at 358, changed the rule so that members in pay grade E-6 and above without dependents 

became entitled to basic allowance for housing even while on sea duty. 

4

 For the purpose of determining the entitlement of affected persons to BAH, a member of a uniformed 

service is considered as being assigned to sea duty if assigned to a self-propelled vessel that is in an active 

status, in commission, or in service, and that is equipped with berthing and messing facilities. 

1067
Appendix V 

 Federal Taxation of Members of the Armed Forces 

No other category of federal taxpayers has more special tax rules than members of 

the Armed Forces. These special rules have been enacted over many decades in response 

to changing circumstances related to service as a member of the Armed Forces. This 

appendix will identify those provisions of Title 26, United States Code, also identified as 

the Internal Revenue Code of 1986, regarding federal taxation of members of the Armed 

Forces in effect as of January 1, 2004. To provide structure, the provisions will be 

addressed by their function, i.e., exclusions, exemptions, postponements, etc., rather than 

numerical order on the basis of the section number within Title 26, United States Code. 

To eliminate ambiguity regarding which individuals are entitled to these special tax 

benefits, Section 7701(a)(15) of the Internal Revenue Code, IRC §7701(a)(15), 26 U.S.C. 

§7701(a)(15), defines the terms "military or naval forces of the United States" and 

"Armed Forces of the United States" to include all regular and reserve components of the 

uniformed services that are subject to the jurisdiction of the Secretary of Defense, the 

Secretary of the Army, the Secretary of the Navy, or the Secretary of the Air Force. 

Income Taxes 

 Subtitle A of Title 26, United States Code 

The vast majority of provisions that establish special rules for members of the 

Armed Forces are contained in Subtitle A of the Internal Revenue Code of 1986--the 

federal income tax. 

 Exclusions From Gross Income 

In general, income tax is computed by applying a particular tax rate or set of tax 

rates to a measure of income determined by law. The federal income tax is computed by 

applying the tax rate prescribed by law to a measure of income identified as taxable 

income. Taxable income is defined as adjusted gross income reduced by various 

deductions for certain expenses and exemption amounts based on family size. Adjusted 

gross income is defined as gross income, as adjusted by increases and decreases for 

1068
various items. Gross income is defined as income from all sources regardless of form 

unless excluded by law. An exclusion from gross income removes items from 

consideration in determining gross income--the initial measure of income. In many cases, 

amounts excluded from gross income are never reported for tax purposes. Since the 

federal income tax rate increases with increases in taxable income, the economic value of 

an exclusion from gross income is greater for taxpayers who receive greater amounts of 

income subject to tax and subject to higher rates of tax. The following exclusions from 

gross income are available to members of the Armed Forces. 

 

 Military Disability (IRC §104)

Subsection (a)(4) of Section 104 of the Internal Revenue Code, IRC §104(a)(4), 

26 U.S.C. §104(a)(4), excludes from gross income "amounts received as a pension, 

annuity, or similar allowance for personal injuries or sickness resulting from active 

service in the Armed Forces of any country or in the Coast and Geodetic Survey [now the 

National Oceanic and Atmospheric Administration] or the Public Health Service." This 

provision provides the statutory basis to exclude disability retired pay and disability 

separation pay from gross income subject to federal income tax. Section 104 was 

amended in 1975 to limit the exclusion to compensation for "combat-related injuries." 

Combat-related injuries are injuries or sickness incurred as a direct result of armed 

conflict, while engaged in extra hazardous service, or under conditions simulating war, or 

caused by an instrumentality of war. The limitation enacted in 1975 pertains only to 

individuals who became members of the Armed Forces after September 25, 1975. 

 Compensation for Service in a Combat Zone (IRC §112)

Section 112 of the Internal Revenue Code, IRC §112, 26 U.S.C. §112, excludes 

from gross income compensation received for active service as an enlisted member of the 

Armed Forces of the United States for any month during any part of which such member 

served in a combat zone or was hospitalized as a results of wounds, disease, or injury 

incurred while serving in a combat zone. In 1996 the amount of the monthly exclusion for 

commissioned officers was increased from $500 per month to the "the maximum enlisted 

amount." For 2004, the maximum exclusion for a commissioned officer is $6,315.90, 

1069
consisting of $6090.90 per month in pay, plus $225 per month of hostile fire or imminent 

danger pay. 

A combat zone is an area designated by the President of United States by 

executive order as an area in which Armed Forces of the United States are or have 

engaged in combat. Service is performed in a combat zone only if performed on or after 

the date designated by the President by executive order as the date of commencing of 

combatant activities and before the date designated by the President by executive order as 

the date of termination of combatant activities in the combat zone. Compensation 

excludable under Section 112 does not include pensions or retirement pay. 

By U.S. Treasury regulation (Treas. Reg. §1.112), members entitled to hostile 

fire/imminent danger pay under Section 310 of Title 37, United States Code, who are 

serving in support of members of the Armed Forces in a combat zone are treated as if 

they were serving in a combat zone. In addition, members of the Armed Forces who are 

present in a combat zone other than as a result of presence pursuant to orders are not 

considered to be performing active service in a combat zone and, as a result, are not 

entitled to the benefits of Section 112 or other provisions of the Internal Revenue Code 

requiring active service in a combat zone. 

 The exclusion from gross income for members of the Armed Forces serving in a 

combat zone was first authorized for the Korean war. That authorization ended January 

31, 1955. Since then there have been four combat zones. Authorization for Vietnam 

ended June 30, 1996. A third zone includes certain areas in the Persian Gulf region (i.e., 

Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, the United Arab Emirates, and certain 

surrounding waters), which were designated in 1991 and maintained their status in 2004. 

Operation Iraqi Freedom, which began in 2003, was included under the ongoing 

provision for this region. On March 24, 1999, Executive Order 13119 designated Kosovo, 

including Albania, the Adriatic Sea region, the Ionian Sea region north of the 39th

parallel, and Serbia and Montenegro, as a combat zone. Afghanistan was designated as a 

combat zone September 9, 2001. 

1070
 In addition, special legislation has been enacted to provide combat zone-like tax 

treatment for crew members of the USS Pueblo held by the government of North Korea 

(Act of April 24, 1970, Public Law 91-235, 84 Stat. 200 (1970)) and for members of the 

uniformed services, civil service, citizens, and resident aliens held hostage in the United 

States embassy in Teheran, Iran (Hostage Relief Act of 1980, Public Law 96-449, 94 

Stat. 1967 (1980)). The Act of March 20, 1996, Public Law 104-117, 110 Stat. 827 

(1996), and the Act of April 19, 1999, Public Law 106-21 also authorized combat-zonelike tax treatment for members of the Armed Forces serving in a "qualified hazardous 

duty area," defined to include Bosnia and Herzegovina, Croatia, and Macedonia, Serbia 

and Montenegro, and Albania, during the period in which a member of the Armed Forces 

is entitled to special pay for duty subject to hostile fire or imminent danger under 37 

U.S.C. §310 for service in those areas. 

Additional measures have been enacted to provide benefits for members of the 

Armed Forces and civilian personnel who were determined to be missing under 37 U.S.C. 

§551(2) or 5 U.S.C. §5561 during the Vietnam conflict as a result of such conflict. These 

benefits included exclusion from gross income for compensation received for active 

service as a member of the Armed Forces or as a civilian employee for any month during 

any part of which such member or employee was in a missing status. (Because the entire 

compensation of an enlisted member serving in a combat zone is excluded from gross 

income, this additional exclusion for members and civilian employees in a missing status 

had the effect of making the tax treatment of commissioned officers and civilian 

employees in that status equal to the tax treatment of enlisted members of the Armed 

Forces in a combat zone.) 

 

Certain Reductions in Uniformed Services Retirement Pay (IRC §§122 and 72(n))

Members and former members of the uniformed services entitled to retired pay 

are eligible to enroll in the Survivor Benefit Plan (SBP) under Chapter 73 of Title 10, 

United States Code. Under the SBP, the retired pay of participating retirees is reduced to 

provide an annuity to a surviving spouse or other eligible beneficiary. Under Section 122 

of the Internal Revenue Code, IRC §122, 26 U.S.C. §122, gross income of a member or 

1071
former member of the uniformed services does not include the amount of any reduction 

in military retired pay resulting from participation in the Survivor Benefit Plan (SBP). In 

addition, under Section 72(n) of the Internal Revenue Code, IRC §72(n), 26 U.S.C. 

§72(n), annuities received under the Retired Servicemen's Family Protection Plan 

(RSFPP) or SBP after December 31, 1965, were excluded from gross income until the 

amount excluded equals reductions in military retired pay that were subjected to federal 

income tax and, as a result, considered consideration for the annuity provided by RSFPP 

or SBP. Section 122 and subsection (n) of Section 72 were enacted to treat SBP for 

members of the uniformed services in a manner comparable to joint and survivor 

annuities under qualified pension plans available to civilian employees. 

 Military Benefits (IRC §134)

Although enacted in 1986, Section 134 of the Internal Revenue Code, IRC §134, 

26 U.S.C. §134, does not establish any new exclusion for military benefits. It was enacted 

to preserve the tax-exempt treatment of military benefits that were traditionally regarded 

as excluded from gross income. The provision became necessary because the Tax Reform 

Act of 1984 included provisions clarifying the taxation of fringe benefits. The exclusion 

for "fringe benefits" under Section 132 of the Internal Revenue Code was not applicable 

to exclude many benefits provided to members of the uniformed services yet the 

legislative history regarding the tax treatment of fringe benefits indicated no intention to 

alter the non-taxability of benefits provided to members of the Armed Forces. However, 

the absence of an explicit statutory basis to exclude military benefits from gross income 

raised questions regarding the continuing tax-free treatment of in-kind benefits provided 

to members of the Armed Forces. Section 134 was enacted to eliminate ambiguity and to 

provide a statutory basis for the exclusion of many military benefits that were and would 

continue to be excluded from gross income. These traditional exclusions for military 

benefits were based on regulation, administrative ruling, or practice. 

Benefits excluded under Section 134 include several important military cash 

allowances payable under provisions of Title 37, United States Code, that were excluded 

on the basis of a Treasury regulation (Treas. Reg. §1.62-2(b)) adopted after a 1925 

1072
decision of the United States Court of Claims, Jones v. United States, 60 Ct.Cl. 552 

(1925). These allowances include the Basic Allowance for Subsistence (BAS), payable 

under 37 U.S.C. §402 and; the Basic Allowance for Housing (BAH), payable under 37 

U.S.C. §403. Other allowances payable in cash were excluded on the basis of a ruling of 

the Internal Revenue Service. These benefits include dislocation allowance (DLA), 

payable under 37 U.S.C. §407; departure (evacuation) allowances, payable under 37 

U.S.C. §405a; family separation allowances (FSA), payable under 37 U.S.C. §427; and 

various allowances payable to members stationed overseas, payable under 37 U.S.C. 

§405, i.e., overseas housing allowance (OHA), cost of living allowance (COLA), and 

temporary lodging allowance (TLA).1

In addition to benefits payable in cash, Section 134 also excludes "any in-kind 

benefit (other than personal use of a vehicle) which is received by any member or former 

member of the uniformed services or any dependent of such member by reason of such 

member's status or service as a member which was excludable from gross income under 

any provision of law, regulation, or administrative practice which was in effect on 

September 9, 1986." This includes various in-kind benefits such as space available travel 

on military aircraft provided under regulations of the Department of Defense, legal 

assistance provided to members of the Armed Forces under the authority of Title 10, 

United States Code, shopping privileges at military commissaries, as authorized by 

Sections 2484 and 2685 of Title 10, United States Code, 10 U.S.C. §§2484 and 2685, and 

shopping at military exchanges, as authorized by Congressional approved regulations of 

the Department of Defense. The Military Family Tax Relief Act, Public Law 108-121, 

clarified that section 134 applies to dependent car assistance programs provided to 

members of the uniformed services. 

 

Veterans' Benefits (IRC §137, 38 U.S.C. §3101)

Section 137 of the Internal Revenue Code, IRC §137, 26 U.S.C. §137, provides 

cross reference to Section 3101 of Title 38, United States Code, 38 U.S.C. §3101, for 

 

1 See footnote 16 to Chapter II.B.4. hereof, "Federal Tax Advantage," for a statement of congressional 

purpose underlying adoption of Section 134 of the Internal Revenue Code. 

1073
exemption from federal taxation for benefits under laws administered by the Veterans' 

Administration (Department of Veterans' Affairs). Eligibility for benefits under laws 

administered by the Department of Veterans' Affairs requires service as a member of the 

Armed Forces of the United States. Accordingly, the exemption from federal taxation for 

veterans' benefits is included within this listing of federal tax benefits provided to 

members of the Armed Forces. Many benefits administered by the Department of 

Veterans' Affairs are related to disabilities incurred or aggravated during a period of 

service as a member of the Armed Forces. However, the Department of Veterans' Affairs 

also administers the Veterans' Educational Assistance Program under which veterans and 

current members of the Armed Forces may obtain financial assistance to pursue higher 

education goals. Assistance under these programs is excluded from gross income. 

Moving and Storage Expenses (IRC §217(g))

Section 82 of the Internal Revenue Code, IRC §82, 26 U.S.C. §82, specifically 

includes in gross income (as compensation for services) any amount received by an 

individual as payment or reimbursement for the expenses of moving from one residence 

to another residence in connection with employment. Under Section 217, certain 

expenses are deductible in arriving at taxable income. 

Subsection 217(g) of the Internal Revenue Code, IRC §217(g), 26 U.S.C. 

§217(g), provides a different rule for members of the Armed Forces. Under this 

subsection, any moving and storage expenses which are furnished in-kind (or for which 

reimbursement or an allowance is provided, but only to the extent of the expenses paid or 

incurred) to a member of the Armed Forces on active duty who moves pursuant to a 

military order and incident to a permanent change of station are excluded from gross 

income. The exclusion also extends to moving and storage in-kind and moving 

reimbursements and allowances provided to a member's spouse and dependents in 

connection with the member's permanent change of station. 

1074
Exemption From Income Tax 

Income Tax Exemption for Certain Deceased Members of the Armed Forces 

(IRC §692)

Under Section 692 of the Internal Revenue Code, IRC §692, 26 U.S.C. §692, the 

federal income tax does not apply for any taxable year in which a member of the Armed 

Forces dies while in active service in a combat zone (as determined under Section 112, 

supra) or as a result of wounds, injury, or disease incurred while serving in a combat 

zone. This exemption extends to income tax on all sources of taxable income, not just 

compensation for service as a member of the Armed Forces. The exemption is also 

applicable to members of the Armed Forces who die as a result of injuries incurred as the 

result of a terrorist or military action. Unlike most other military tax benefits, the 

exemption from income tax for death as a result of wounds or injuries incurred in a 

terrorist or military action is also applicable to civilian employees of the United States 

who die in the same circumstances. The exemption applies to the year death occurs and 

every prior year served in a combat zone or one prior year in the case of death resulting 

from terrorist or military action. 

Exemption From Income Tax Limitations 

Various provisions of subtitle A of Title 26 related to the imposition of the federal 

income tax impose various requirements and restrictions on the availability of certain 

provisions. In many cases, members of the Armed Forces are exempt from these 

limitations or different, less demanding or more generous limitations are prescribed for 

members of the Armed Forces. 

Earned Income Credit (IRC §32)

Under Section 32 of the Internal Revenue Code, IRC §32, 26 U.S.C. §32, an 

eligible individual is entitled to a refundable credit against federal income tax in an 

amount of up to $4,204 (in tax year 2003) for families with more than one child. If the 

amount of the credit exceeds tax liability, the excess is paid to the taxpayer in the form a 

1075
refund. The amount of the credit is based on taxable earned income. To be eligible, an 

individual's principal place of abode must be in the United States. 

Under paragraph (4) of subsection (c) of Section 32, a member of the Armed 

Forces of the United States stationed outside the United States while serving on extended 

active duty shall be treated as having a principal place of abode in the United States for 

purposes of the earned income credit. As a result, a member of the Armed Forces of the 

United States is exempt from the requirement to have his principal place of abode in the 

United States. 

Section 3507 of the Internal Revenue Code, IRC §3507, 26 U.S.C. §3507, 

requires employers to make advance payment of the earned income credit to employees 

who have filed an eligibility certificate with the employer. The amount of the advanced 

payment of the earned income credit is based on employee's wages for a payroll period. 

For members of the Armed Forces, the earned income advance amount is determined by 

taking into account the member's earned income as determined under Section 32 rather 

than wages under 3402 of the Internal Revenue Code. 

Moving Expenses Deductions (IRC §217)

Section 82 of the Internal Revenue Code, IRC §82, 26 U.S.C. §82, mandates that 

reimbursements and allowances paid to an employee to offset expenses of moving from 

one residence to another residence in connection with employment are included in gross 

income, and Section 217 of the Internal Revenue Code, IRC §217, 26 U.S.C. §217, 

authorizes a deduction for certain expenses paid or incurred in connection with certain 

moves. As explained above, subsection (g) of Section 217 of the Internal Revenue Code 

provides an exclusion from gross income for moving and storage benefits and allowances 

provided to members of the Armed Forces and their dependents in connection with a 

permanent change of station. 

1076
To be deductible, Section 217 requires that the taxpayer's new principal place of 

work must be at least 50 miles farther from his former residence than was his former 

residence. In addition, the taxpayer must be a full-time employee in the same general 

location of the new principal place of work for at least 39 weeks. Under subsection (g), 

members of the Armed Forces who move in connection with a permanent change of 

station are exempt from the 50-mile and 39-week rules. 

IRA Deductions (IRC §219)

Under Section 219 of the Internal Revenue Code, IRC §219, 26 U.S.C. §219, in 

2004 every individual receiving compensation for services included in gross income 

subject to tax could make a contribution of up to $3,000 per year to an Individual 

Retirement Account (IRA). The maximum annual contribution is scheduled to increase to 

$4,000 for the period 2005-2007 and to $5,000 in 2008. If an individual is an active 

participant in an employer-provided retirement system, including a plan established by 

the United States for the benefit of its employees, the amount of a contribution to an IRA 

that may be deducted is limited if the individual's adjusted gross income exceeds certain 

amounts. Between 2002 and 2005, the maximum amount increased from $54,000 to 

$80,000 for members filing jointly and from $34,000 to $50,000 for members filing 

singly. Partial deductions are available to members with employer-provided retirement 

plans if those members’ income falls within a specified range. Between 2002 and 2005 

the range increased from $54,000-$64,000 to $80,000-$100,000 for members filing 

jointly and from $34,000-$44,000 to $50,000-$60,000 for members filing singly. 

Active participation does not require any vesting of a pension benefit. Active 

participation requires that an employee earn something toward an employer-provided 

retirement benefit. An active participant in an employer-provided retirement system must 

be earning something toward a potential retirement benefit, such as accruing years of 

service for purposes of calculating a retirement benefit. 

Satisfactory completion of 20 years of active service in the reserve components of 

the Armed Forces can provide the basis for reserve component retirement benefits. 

1077
Entitlement to reserve component retired pay for non regular service requires completion 

of 20 years of qualifying service as an active member of the reserves. Payment begins at 

age 60, pursuant to Section 12739 of Title 10, United States Code. Consequently, a 

member of the reserves who is performing active service as a member (usually by 

monthly weekend drills and two weeks of annual active duty for training) is earning 

something toward an government-provided retirement system and, as a result, would be 

considered an active participant in a retirement system established by the United States. 

Pursuant to subsection (g)(6) of Section 219 of the Internal Revenue Code, a 

member of the reserve component of the Armed Forces of the United States is exempt 

from this limitation. An active member of a reserve component of the Armed Forces of 

the United States is not treated as an active participant in a retirement system established 

by the United States as a result of service as a member of the reserves for purposes of 

deducting a contribution to an IRA unless the member serves on active duty for a period 

in excess of 90 days during a year. Periods of active duty for training are disregarded. 

Expenses Relating to Exempt Income (IRC §265)

Under Section 163 of the Internal Revenue Code, IRC §163, 26 U.S.C. §163, 

interest on indebtedness to acquire a residence and interest on certain home equity 

indebtedness are deductible as an itemized deduction. Under Section 164 of the Internal 

Revenue Code, IRC §164, 26 U.S.C. §164, state and local real property taxes are also 

deductible as an itemized deduction. 

Members of the Armed Forces on active duty who are not provided with housing 

for themselves and their dependents are entitled to housing allowances payable in cash. 

These cash allowances are excluded from gross income (see Military Benefits, supra.) 

Section 265 of the Internal Revenue Code, IRC §265, 26 U.S.C. §265, limits the 

deduction of otherwise allowable deductions to the extent the deduction is considered 

allocable to income exempt from federal income tax. Since cash housing allowances 

provided to a member of the Armed Forces are excluded from gross income, they could 

1078
be considered income exempt from federal income tax for purposes of Section 265. If 

mortgage interest and real property taxes on a personal residence were considered 

allocable to exempt income in the form of tax-free housing allowances, members would 

not be permitted to deduct these normal expenses of home ownership. Application of the 

provisions of Section 265 to a member's deduction for mortgage interest and real property 

taxes would decrease or eliminate the benefits of these deductions and increase a 

member's federal and, in most cases, state tax liability. 

To prevent application of Section 265 to members of the Armed Forces, 

subsection (a)(5) of Section 265 of the Internal Revenue Code provides that Section 265 

shall not apply to deny deductions for mortgage interest or real property taxes on the 

home of a military taxpayer as a result of receiving a military housing allowance. 

Exclusion of Gain on Sale of Principal Residence (IRC §1034)

Prior to May 1997, section 1034 applied to sale of a principal residence and allowed for a 

deferral of capital gain tax on such a sale if the taxpayer met certain requirements in 

purchasing a replacement residence. Internal Revenue Code Section 121 replaced this 

provision of the law beginning in May 1997. 

Under section 121, taxpayers can exclude up to $250,000 of gain on a sale of a 

principal residence (or $500,000 of gain for married taxpayers filing jointly) as long as 

the taxpayer owned and occupied the residence as a principal residence for two of the 

five years prior to the date of sale. Because of frequent relocations, military members 

often had difficulty meeting this requirement. For this reason, the Military Family Tax 

Relief Act, Public Law 108-121, 177 Stat. 1336 (2003), provided an extension of the 

capital gain exclusion on home sales. Section 121 of Title 26 of the U.S.Code states that a 

military member may exclude up to $250,000, or $500,000 for married couples filing 

jointly, of the profit gained from sale of a residence in which the member resided for at 

least two of the five years preceding the sale. This 2003 amendment of the tax law 

effectively extends the five-year period for up to ten years by excluding from the fiveyear computation time in which a member or spouse was away from the residence on 

1079
extended military duty. Extended military duty includes a period of duty longer than 90 

days in a location more than 50 miles from the residence or under orders compelling 

residence in government-furnished quarters. 

 

1080
 Other Taxes 

 Estate Taxes 

 Subtitle B of Title 26, United States Code 

 Exemption From Additional Estate Tax (IRC §2201)

Subtitle B of Title 26, United States Code (Internal Revenue Code Section 2001 et

seq., 26 U.S.C. §2001 et seq.) entitled Estate and Gift Taxes, imposes federal taxes on 

estates and gifts. Chapter 11 (IRC § 2001 et seq.) imposes a federal tax on estates. 

Pursuant to Section 2011(d) of the Internal Revenue Code, the federal estate tax consists 

of the basic estate tax and the additional estate tax. The basic estate tax is 125 percent of 

the amount determined to be the maximum credit for state death taxes. The additional 

estate tax is the difference between the federal estate tax imposed by Section 2001 or 

2101 and the basic estate tax. Under Section 2010, every decedent is entitled to an estate 

tax credit that has the effect of establishing a maximum tax-free transfer of a taxable 

estate. Between 2002 and 2004, the maximum tax-free estate value increased from 

$1,000,000 to $1,500,000; increases scheduled for the ensuing years would bring the 

maximum to $2,000,000 in 2006 and $3,500,000 in 2009. 

Pursuant to Section 2201 of the Internal Revenue Code, the additional estate tax 

as defined above shall not apply to the transfer of the taxable estate of a citizen or 

resident of the United States dying while in active service as a member of the armed 

forces of the United States if the decedent was killed in action while serving in a combat 

zone, as determined under Section 112, supra, or died as a result of wounds, disease, or 

injury suffered while serving in a combat zone, while in the line of duty, by reason of a 

hazard to which he was subjected as an incident to such service. The imposition of state 

death taxes and the credit against federal estate taxes for state death taxes paid increases 

the taxable estate that can be transferred free of federal estate taxes. 

1081
 Employment Taxes 

 Subtitle B of Title 26, United States Code 

 Exemption From FICA Taxes (IRC §3121(i)(2))

To finance the federal system of old age, survivor, disability, and hospital 

insurance, (known as Social Security) Section 3101 of the Internal Revenue Code, IRC 

§3101, 26 U.S.C. §3101, imposes an excise tax on the wages of employees. This tax is 

known as the Federal Insurance Contributions Act (or FICA) tax. The first dollar of 

covered wages is subject to tax. The old age, survivor, and disability insurance tax rate is 

6.2 percent and is applicable to the first $87,900 of wages (for 2004). The hospital 

insurance tax rate is 1.45 percent, and all wages paid are subject to this tax. 

In general, “wages” means all remuneration from employment, including the cash 

value of all remuneration (including benefits) paid in any medium other than cash, with 

certain specified exemptions. The Servicemen's and Veteran's Survivor Benefits Act, 70 

Stat. 857, ch. 837 [Public Law 881, 84th Congress] (1956), made certain compensation 

for service as a member of the uniformed services subject to FICA tax. However, 

pursuant to paragraph (2) of subsection (i) of Section 3121, the term "wages" shall only 

include basic pay, as described in Chapter 3 and Section 1009 of Title 37, United States 

Code, 37 U.S.C. §1009. The term "wages" as applied to members of the uniformed 

services also includes compensation received for service as a member of the reserves. 

 

As explained previously, a member of the uniformed services may be entitled to 

many special or incentive pays such as hazardous duty incentive pay, aviation career 

incentive pay, submarine duty incentive pay, diving duty pay, etc. Although each of these 

special and incentive pays is included in gross income subject to federal income tax, none 

is included in wages subject to FICA taxes. 

 Exemption From Withholding (IRC §3401)

In general, every employer making payment of wages is required to deduct and 

withhold federal income tax on wages paid to employees in accordance with tables and 

1082
schedules based on marital status, dependents, and additional allowances for excess 

itemized deductions. Pursuant to Section 3401(a)(1) of the Internal Revenue Code, IRC 

§3401(a), 26 U.S.C. §3401(a), the term "wages" for purposes of withholding income tax 

does not include remuneration paid for active service performed in a month for which a 

taxpayer is entitled to the exclusion from gross inclusion for service in a combat zone. 

This exclusion from wages subject to withholding for remuneration paid for a month 

during which a member served in a combat zone or was hospitalized as a result of such 

service immediately increases the monthly take-home of every member of the Armed 

Forces entitled to the exclusion of Section 112 for combat zone service. 

This exclusion from wages subject to withholding also presented problems for 

commissioned officers. Prior to a 1996 amendment, Section 3401(a)(1) provided an 

exclusion from withholding for any member of the Armed Forces entitled to an exclusion 

from gross income for service in a combat zone without regard to the amount excluded 

from gross income. The amendment limited that entitlement with the phrase, “to the 

extent remuneration for such service is excludable from gross income under this section” 

[section 112]. As explained above, the monthly exclusion for commissioned officers is 

limited. Prior to the 1996 amendment that increased the monthly exclusion for 

commissioned officers to the highest level of enlisted pay plus imminent danger pay if 

paid that month, the exclusion was limited to $500. If compensation for a commissioned 

officer exceeded the amount excluded from gross income, an unlimited exemption from 

withholding created an "under-withheld" situation in which the amount withheld would 

be less than the tax liability. Financial difficulties could arise if the officer did not 

authorize additional income tax withholding or otherwise did not set aside amounts to 

satisfy this tax liability. This dilemma was remedied when subsection 3401(a)(1) was 

amended to limited the exclusion from withholding to the amount excluded from gross 

income under Section 112. 

 Excise Taxes 

Subtitle D of Title 26, United States Code (Internal Revenue Code Section 4001 

et seq.), Chapters 31 through 47, impose a number of different federal excise taxes 

1083
including retail excise taxes (Chapter 31), manufacturing excise taxes (Chapter 32), and 

facilities and services excise taxes (Chapter 33). 

Exemption From Toll Telephone Excise Tax (IRC §4253)

Subchapter B of Chapter 33 (IRC §4251 et seq., 26 U.S.C. §4251 et seq.) imposes 

a federal excise tax on certain communication services, including local telephone service, 

toll telephone service, and teletypewriter exchange service. Pursuant to Section 4251, this 

federal excise tax is equal to 3 percent of amounts paid for communication services 

subject to tax. 

Section 4253 establishes several exemptions from the communication excise tax. 

Under subsection (d), toll telephone service that originates within a combat zone from a 

member of the Armed Forces of the United States performing service within such zone, 

as determined under Section 112, supra, is exempt from the federal excise tax on such 

toll telephone service. 

Procedure and Administration Exemptions 

Subtitle F, Title 26, United States Code (Internal Revenue Code Sections 6001 et

seq., 26 U.S.C. §6001 et seq.) establishes procedure and administrative rules for various 

federal tax purposes. These matters pertain to information reporting, returns, time and 

place of paying tax, collections, etc. Several provisions provide special rules for members 

of the Armed Forces. 

Joint Returns/Surviving Spouse for Missing Status (IRC §§2(a)(3) and 6013(f)(3))

 

In general, Section 6013 of the Internal Revenue Code, IRC §6013, 26 U.S.C. 

§6013, authorizes a husband and wife to make a single joint return even though one had 

neither gross income nor deductions. Subsection (f) of Section 6013 permits the spouse of 

an individual in a missing status as a result of service in a combat zone, as determined 

under Section 112, supra (including a member of a uniformed service in a missing status 

entitled to pay and allowances under Section 552 of Title 37, United States Code, 37 

U.S.C. §552), to elect to file a joint return. This election may be revoked by either spouse 

1084
on or before the due date (including extensions) for such taxable year. See 

Postponements, infra. 

Under Section 1 of the Internal Revenue Code, IRC §1, 26 U.S.C. §1, the tax 

table for a surviving spouse is the same as the tax table for married individuals filing joint 

returns. Section 2 of the Internal Revenue Code, IRC §2, 26 U.S.C. §2, defines surviving 

spouse as a taxpayer whose spouse died during either of his two taxable years 

immediately preceding the taxable year and who maintains as his home a household 

which is the principal place of abode of a dependent son, stepson, daughter, or 

stepdaughter of the taxpayer. If a deceased spouse was in a missing status as a result of 

service in a combat zone, then, for purposes of eligibility as a surviving spouse, the date 

of death shall be established as the earlier of: (A) the date of determination of death, or 

(B) the date two years after the date of termination of combatant activities in that combat 

zone.

Exemption From Reporting

Section 6051 of the Internal Revenue Code, IRC §6051, 26 U.S.C. §6051, 

requires every employer who is required to deduct and withhold taxes under 3402 of the 

Internal Revenue Code to furnish to each employee a written statement showing various 

items, including the total amount of wages as defined in Section 3401(a) (related to 

income tax withholding), IRC §3401(a), 26 U.S.C. §3401(a), and the total amount of 

wages as defined in 3121(a) (related to FICA taxes), IRC §3121(a), 26 U.S.C. §3121(a). 

This written statement is the familiar W2 form received by every employee no later than 

January 31 for the preceding year. 

For members of the uniformed services, the amounts to be shown as FICA wages 

are modified to reflect wages, as computed under Section 3121(i)(2), which limits FICA 

wages to basic pay. In addition, in lieu of wages as defined in Section 3401, the 

statements furnished to members of the Armed Forces are required to show as wages paid 

the amount of such compensation that is not excluded from gross income under Chapter 1 

of the Internal Revenue Code (whether or not such compensation constitutes wages as 

defined in Section 3401(a)). This has the effect of making the Department of Defense the 

1085
administrator of military tax exclusions under Section 104 (related to compensation for 

disability) and Section 112 (related to compensation for service in a combat zone). 

Statements provided to members of the Armed Forces must also included such member's 

earned income as determined for purposes of Section 32 (relating to earned income 

credit). 

Exemption From Levy

If any person liable to pay any tax neglects or refuses to pay the tax after notice 

and demand, Section 6331 of the Internal Revenue Code, IRC §6331, 26 U.S.C. §6331, 

authorizes the Secretary of the Treasury Department to collect such tax by levy upon all 

property and rights to property belonging to such person. Section 6334 of the Internal 

Revenue Code provides that certain property is exempt from levy including certain 

amounts paid to members of the Armed Forces and annuities based on retired pay. 

In particular, paragraph (6) of subsection (a) of Section 6334, IRC §6334, 26 

U.S.C. §6334, provides exemption for two payments received as a result of service as a 

member of the Armed Forces. The first enumerated exemption from levy is for the 

"special pension payments received by a person whose name has been entered on the 

Army, Navy, Air Force, and Coast Guard Medal of Honor roll (38 U.S.C. 562)." The 

second exemption from levy is for "annuities based on retired or retainer pay under 

Chapter 73 of Title 10, United States Code." These annuities are the annuities payable to 

surviving spouses and other eligible beneficiaries of a deceased member of the uniformed 

services under the Survivor Benefit Plan (SBP) of the Retired Servicemen's Family 

Protection Plan (RSFPP). 

Postponements Because of Combat Zone Service (IRC §7508)

Federal tax law requires certain acts to be performed within specified time frames. 

For example, Section 6072 of the Internal Revenue Code, IRC §6072, 26 U.S.C. §6072, 

requires individual income tax returns to be filed on or before April 15th of the year 

following the close of the calendar year. Under Section 6151 of the Internal Revenue 

Code tax is to be paid at the time and place fixed for filing a tax return. 

1086
Section 7508 of the Internal Revenue Code, IRC §7508, 26 U.S.C. §7508, 

provides a postponement in the time when certain acts must be performed for a member 

of the Armed Forces of the United States serving in a combat zone as designated by the 

President by executive order under Section 112 of the Internal Revenue Code, supra, an 

individual serving in support of such Armed Forces in a combat zone or in support, or an 

individual serving in a contingency operation outside the United States. The 

postponement continues for the period of service in the combat zone, any periods of 

hospitalization as a result of injury received while serving in a combat zone, 180 days 

thereafter, plus whatever time the individual had remaining in the normal schedule for 

such acts on the day when he entered into combat or contingency service. 

The postponement extends to: a) filing any return for income tax, estate tax, or 

gift tax; b) payment of any income, estate, or gift tax, or any other liability to the United 

States related to such taxes; c) filing a petition with the Tax Court for redetermination of 

a deficiency, or a petition for judicial review of a decision of the Tax Court; d) allowance 

of a credit or refund of any tax; e) filing a claim for credit or refund of any tax; f) 

bringing suit upon a claim for refund; g) assessment of any tax; h) giving or making 

notice or demand for the payment of any tax; i) collection by levy or otherwise; j) 

bringing suit by the United States in respect of any liability for tax; and k) any other act 

required or permitted under the internal revenue laws as specified in regulations. The 

postponement period is also disregarded in determining the amount of any credit or 

refund but is considered for purposes of determining the amount of interest on an 

overpayment. 

Individuals eligible for postponement include members of the Armed Forces and 

other individuals serving in support of the Armed Forces, such as Red Cross workers, 

civilian employees of the Federal Government, and accredited correspondents. In 

addition, under subsection (c) of Section 7508, the provisions of Section 7508 apply to 

the spouse of any individual entitled to postponement under Section 7508. 

1087
As a result of Public Law 102-2, 105 Stat. 5 (1991), enacted shortly after the 

designation of the Persian Gulf combat zone, postponement under Section 7508 is also 

applicable to individuals performing Desert Shield services. Under subsection 7508(f) of 

the Internal Revenue Code, Desert Shield services are defined as service in the Armed 

Forces of the United States or in support of the Armed Forces in the area designated by 

the President by executive order as the "Persian Gulf Desert Shield area" during the 

period beginning on August 2, 1990, and ending on the date when any part of the 

designated area was designated as a combat zone pursuant to Section 112. Executive 

Order 12750, 56 Fed. Reg. 6785 (February 14, 1991) designated the Desert Shield area as 

the Persian Gulf, the Red Seas, the Gulf of Oman, a portion of the Arabian Sea north of 

10 degrees north latitude and west of 68 degrees east longitude, the Gulf of Aden, and the 

land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab 

Emirates. Executive Order 12744, 56 Fed. Reg. 2663 (January 21, 1991) designated as a 

combat zone an area identical to the Desert Shield area. Because Executive Order 12744 

designated January 17, 1991, as the date of commencement of combatant activities in the 

Persian Gulf combat zone, eligibility for postponement as a result of service in the Desert 

Shield area terminated as of that date, and eligibility for postponement as a result of 

service in a combat zone commenced on that date. 

As indicated above, the Act of March 20, 1996, Public Law 104-117, 110 Stat. 

827 (1996), provided that service in the Armed Forces of the United States or in support 

thereof in the area designated as a "qualified hazardous duty area" is to be treated as 

service in a combat zone for purposes of Section 112. A "qualified hazardous duty area" 

includes the Adriatic Sea region, Albania, Bosnia and Herzegovina, Croatia, the Ionian 

Sea region north of the 39th parallel, Macedonia, and Serbia and Montenegro, if members 

of the Armed Forces serving in that area are eligible for hostile fire/imminent danger pay 

under Section 310 of Title 37, United States Code. Combat zone-like treatment includes 

eligibility for postponement pursuant to Section 7508 of the Internal Revenue Code. 

In addition, the Act of March 20, 1996, Public Law 104-117, 110 Stat. 827 (1996) 

and Public Law 106-21 (1999), also provided that members of the Armed Forces serving 

1088
in Operation Joint Endeavor outside the United States while deployed away from their 

permanent duty station are also eligible for postponement under Section 7508. As a 

result, Section 7508 postponement is available to members serving in locations such as 

Hungary and Italy, if such members are deployed away from their permanent duty 

stations and are serving in support of Operation Joint Endeavor. 

Conclusion 

As indicated by the preceding, the Internal Revenue Code is replete with many 

explicit statutory provisions that provide special treatment for members of the Armed 

Forces. Special tax measures for members of the Armed Forces are an important part of 

federal tax policy. The explanations above highlight provisions of the Internal Revenue 

Code in effect as of January 1, 2004. These various provisions are the product of 

numerous revisions enacted throughout the duration of the twentieth century to respond 

to changing circumstances. The parameters and contours of these provisions will 

undoubtedly undergo further change to respond to the challenges in the future related to 

the taxation of members of the Armed Forces of the United States. 

1089
Appendix VI 

 Impact of State Income Taxes 

 on Military Compensation

Introduction: Generally speaking, members of the Armed Forces are subject to 

both state and federal income taxation on their military compensation. The disposable 

income of a member of the Armed Forces--what the member has to spend after paying all 

income tax liabilities, state and federal, associated with his or her military compensation--

depends on the amount, or level, of the member's state and federal income tax liability, 

among other things. Generally speaking, the rules concerning federal income taxation of 

military compensation are the same for all members of the Armed Forces--especially for 

those who are similarly situated with respect to pay grade, years of service, special and 

incentive pay entitlements, and family situation. Generally speaking, the rules concerning 

state income taxation of military compensation are not the same for all members of the 

Armed Forces--even for those who are similarly situated with respect to pay grade, years 

of service, special and incentive pay entitlements, and family situation. To the extent that 

the military personnel and compensation systems are intended to provide incentives to 

induce men and women to engage in military careers, those incentives may be affected by 

disparities in the income tax laws of the various states and localities throughout the 

United States. This appendix is intended to highlight the major tax policies of the various 

states insofar as those tax policies may have a differential impact on similarly situated 

personnel.1

 In this same connection, and because of the intimate relationship between the 

state income tax liabilities of members of the Armed Forces and the Servicemembers’ 

Civil Relief Act, this appendix also highlights the effects of the Servicemembers’ Civil 

Relief Act on the state income tax liabilities of members of the Armed Forces and their 

spouses. The latter subject is discussed in Section I, below, and the former, in Section II. 

Section I considers two subjects: the Servicemembers’ Civil Relief Act and state income 

taxation of military compensation, and the Servicemembers’ Civil Relief Act and state 

income taxation of non-military compensation. Section II provides a brief overview of 

 

1 A discussion of the differences between tax rates applicable to military compensation in different states is 

beyond the scope of the present appendix. 

1090
state income taxation of military compensation, in alphabetical order by state, including 

the District of Columbia. 

I. The Servicemembers’ Civil Relief Act. 

* The Servicemembers’ Civil Relief Act and State Income Taxation of 

Military Compensation.

Every member of the Armed Forces is subject to federal income taxation under 

the Internal Revenue Code, classified to Title 26, United States Code. While some 

members are entitled to exclude from their income that would otherwise be subject to 

taxation under the Internal Revenue Code all or a portion of that income because of 

particular conditions of service--for instance, Section 112 of the Internal Revenue Code, 

26 U.S.C. §112, specifically provides that "gross income" is not to include a specified 

portion of the income a member of the Armed Forces "received for active service ... for 

any month during any part of which [the] member ... served in a combat zone"--the 

federal income tax laws are generally applicable to all members of the Armed Forces and 

the general rule is that, unless a specific exception applies, all compensation received by 

a member of an armed force on account of such service is subject to taxation under the 

Internal Revenue Code.2

In addition to being subject to income taxation under the federal Internal Revenue 

Code, members of the Armed Forces are also subject to income taxation by state and 

local taxing authorities.3

 Persons subject to the tax laws of a particular state are persons 

 

2 As previously indicated, see Chapter II.B.4., above, "Federal Income Tax Advantage," the amounts 

received by members of the uniformed services as basic allowance for housing and basic allowance for 

subsistence are not subject to taxation under the Internal Revenue Code. The exclusion of such items from 

"gross income" derives from a decision rendered by the United States Court of Claims in 1925 in a case 

titled Jones v. United States, 60 Ct.Cl. 552 (1925). In that case, the Court of Claims determined that neither 

the provision of government quarters nor any allowance provided in commutation thereof was 

"compensatory" in nature and on that account should not be included in income subject to taxation. While 

the Jones case dealt only with quarters, the rationale of the decision has been extended to various other 

allowances, including basic allowance for subsistence as well as variable and overseas station housing 

allowances. See Chapter II.B.4., "Federal Income Tax Advantage," generally, above. 

3

 Although local income tax laws have the potential for having the same kinds of effects on the incentives 

created by the military personnel and compensation systems as state tax laws do, a discussion of local tax 

laws is beyond the scope of this appendix. Accordingly, although this appendix considers only state income 

tax laws, the reader should keep in mind that localities' tax laws may have similar effects. 

1091
who are, in some sense or other, "subject to the jurisdiction" of that state, and if a 

member of a uniformed service is in fact subject to the income tax jurisdiction of a 

particular state, the member is treated no differently than any person would be who is 

similarly situated with respect to that state for the purpose of determining state tax 

liabilities.4

 As a general matter, persons subject to the jurisdiction of a particular state for 

the purposes of the income tax laws of that state are persons who are "residents" of that 

state or who otherwise derive income from a source or sources within that state. From the 

point of view of the taxing authorities of the states, there are two categories of persons 

who may be treated as "residents" for purposes of determining income tax jurisdiction. 

First, a state may assert "tax jurisdiction" over persons who, while not physically present 

in that state, have a relationship with the state that amounts to "legal residence." Included 

within this category of persons are individuals who, even though they do not maintain a 

place of permanent abode within the state, vote within the state, have automobiles 

licensed within the state, and who regard themselves, for whatever reason or reasons, as 

residents of the state. Typically, persons who at one time were physically present in a 

state, who were on that account treated as residents of the state, who have left the state on 

a temporary basis, and who have an intention sometime to return to the state to resume 

permanent physical residence are regarded as legal residents of the state. Second, and 

conversely, a state may assert tax jurisdiction over persons who are physically present in 

the state even if they do not intend to remain there permanently. 

Under the general principles concerning potential liability for state income taxes 

briefly set out above, a person who is a legal resident of one state and a physical resident 

of another state is potentially subject to the income tax jurisdiction of both states. For 

most purposes, however, legal and physical residency go hand in hand, and it may safely 

be stated that the vast majority of people wish to be regarded as legal residents of the 

 

4

 This is not to suggest that the tax liabilities of a member of the uniformed services and a non-member 

both of whom have the same level of "income" will be exactly the same. Some states have excluded from 

income taxation certain categories of military compensation, and others have excluded some initial amount 

of military compensation from the "income" that would otherwise be subject to taxation. Where relevant, 

these differences will be highlighted below. 

1092
state where they physically reside--if for no other reason than to minimize the likelihood 

of being subjected to the income taxing jurisdictions of two or more states and other 

similar problems.5

 Indeed, for the vast majority of people the question never really arises, 

as legal and physical residence are in fact united in one state. 

Members of the Armed Forces are, however, in a different position. They may 

well find themselves being treated as legal residents of the state in which they resided 

when they initially entered the Armed Forces and as residents of the state in which they 

physically reside while on active duty in the Armed Forces. Thus, a member of the 

Armed Forces who is a legal resident of one state but who is stationed and living in 

another state could be regarded as a "resident" subject to income taxation by the taxing 

authorities of each state--as a "legal resident" of the first state and as a physically-present 

"resident" of the second state. Under the principles previously stated, the state where a 

member of the Armed Forces lives and is stationed--even if different from the state where 

the member legally resides--thus has two potential grounds for asserting income tax 

jurisdiction over the member: first, on the ground that the member is a "resident" of that 

state, at least in the physically-present sense set out above, and second, on the alternative 

ground that, even if not a "resident," no matter how the term may be interpreted, the 

member is in receipt of income from a source, i.e., from the member's station, that is 

within the state. A very slightly altered set of factual assumptions could theoretically 

make a member of the Armed Forces subject to taxation on the member's military 

compensation in three states: if the member is a legal resident of one state, is living in a 

second, and is stationed in a third, the member could be subject to income taxation on the 

member's military compensation by the state where the member legally resides, by the 

state where the member physically resides, and by the state where the member is 

stationed. 

 

5

 Persons maintaining physical residences in two or more jurisdictions in each of which they have a source 

or sources of earned income have to face the problem of which jurisdiction to treat as their legal residence 

squarely. The resolution of this issue raises a number of questions that are basically factual in nature. 

1093
The Servicemembers’ Civil Relief Act of 20036

 deals with these various 

situations by providing, in essence, that a member of the Armed Forces who is a legal 

resident of one state but maintains an abode and is stationed in another—or others--has 

income tax liability with respect to his or her military compensation only to his or her 

state of legal residence. 

* The Servicemembers’ Civil Relief Act and State Income Taxation of NonMilitary Compensation. 

Despite the fact that a member of the Armed Forces may choose as his or her state 

of legal residence a state different from the state where he or she lives or is stationed and 

that, under the Servicemembers’ Civil Relief Act, the state where the member physically 

resides or where he or she is stationed may not assert income tax jurisdiction over the 

member's military compensation, the Servicemembers’ Civil Relief Act does not shield a 

member's non-military compensation from income taxation by the state where the 

member physically resides or by the state from which the member derives non-military 

compensation. Similarly, the Servicemembers’ Civil Relief Act has no effect on income 

earned by a non-service-member spouse of a member of the Armed Forces. These two 

facts may add substantially to the difficulty of filing state income tax returns. 

Thus, for instance, if a member of the Armed Forces is a legal resident of State A, 

physically resides in State B, has a part-time job in State C, owns a retirement house that 

is currently being rented out in State D, and has a spouse who is employed in State E, the 

member may have to deal with five taxing jurisdictions. First, the member's spouse will, 

in all probability, have to pay income taxes to State E, where he or she is employed, on 

the amount of income the spouse earned in State E. State B will, in all probability, treat 

the member's spouse as a "resident" for state income tax purposes, and the member's 

 

6

 The Soldiers' and Sailors' Civil Relief Act of 1940, which was enacted by the Act of October 17, 1940, 

ch. 888 [Public Law 861, 76th Congress], 54 Stat. 1178 (1940), is codified at 50 U.S.C. App. §501 et seq. 

The particular provision of the Soldiers' and Sailors' Civil Relief Act that is at issue with respect to the state 

income tax liabilities of members of the Armed Forces is classified to 50 U.S.C. App. §574. In 2003 a 

major revision of the Soldiers’ and Sailors’ Civil Relief Act of 1940 was enacted by the Act of December 

19, 2003, Public Law 108-189 (2003), which changed the name of the act to the Servicemembers’ Civil 

Relief Act. The new act retained the provisions of the 1940 law regarding state income taxation of military 

compensation. 

1094
spouse will have to file an income tax return with respect to the income earned in State E, 

although the spouse will, in all probability, be able to credit the amount of the tax paid to 

State E against the tax due and owing to State B on account of the State-E income. The 

member will, in all probability, have to file an income tax return for State C with respect 

to the amount of income earned from the part-time job. The member will also have to file 

an income tax return in State A covering both the member's military compensation and 

earnings from the part-time job, although the member will, most probably, be able to 

claim a credit for the income taxes paid to State C on account of the part-time job. With 

respect to the income earned from the rental of the retirement house in State D, a further 

income tax return will, in all probability, be required for State D based on the amount of 

the rental income received. If the member and the member's spouse jointly own the rental 

property, they will, in all probability, have to apportion the income between them and 

report the apportioned amount credited to each as income, respectively, in State A, the 

state of the member's legal residence, and in State C, the state in which the member's 

spouse is "resident," although each will, in all probability, be able to credit the amount of 

the tax paid to State D on account of the rental income against the taxes due and owing to 

States A and C, respectively. If the member and the member's spouse derive investment 

income from property inherited by each in States F and G, respectively, the same rules 

outlined above will most probably apply to that further income as well. Since the member 

files with respect to his or her military compensation and other attributable income in 

State A and the member's spouse files with respect to his or her compensation and other 

attributable income in State C, the possibility exists that each will be treated by his or her 

state of filing as married but filing separately, which has the effect of prohibiting the 

member and spouse from taking advantage of the generally lower tax rates applicable to 

joint returns. 

Exactly how the possibilities outlined above will be applied in practice depends 

on the income tax laws and regulations of the different states and on the precedent of 

court decisions interpreting those laws and regulations. To the extent that the 

Servicemembers’ Civil Relief Act was initially intended to simplify the complex of state 

laws and regulations confronting members of the Armed Forces who were, as a 

1095
consequence of their conditions of service, frequently forced to move from one state to 

another, the states, in their quest for ever greater sources of revenues, may be seen as 

having substantially undercut that purpose. 

II. Overview of State Income Taxation of Military Compensation. 

As indicated above, a member of the Armed Forces may be subject to income 

taxation on his military compensation by his state of legal residence. Depending on the 

state of a member's legal residence, the member may not have any state income tax 

liability: some states do not impose any state income taxes whatsoever, with the result 

that no resident of such a state, whether a member of the Armed Forces or not, has any 

state income tax liability; other states exempt military compensation from the operation 

of their income tax laws; others exempt military compensation earned while stationed in 

another state or abroad from the operation of their income tax laws; and still others 

exempt a portion of military compensation from the operation of their income tax laws. 

On the other hand, some states tax military compensation independently of where the 

member is stationed. To determine how a particular state will tax the military 

compensation of one of its legal residents, it is necessary to consult the tax laws of that 

state. 

In addition, there is a subsidiary question of whether a particular state follows 

federal tax rules with respect to members stationed in a "combat zone" or a "qualified 

hazardous duty area." Under Section 112 of the Internal Revenue Code, I.R.C. §112, 26 

U.S.C. §112, an enlisted member of the Armed Forces is entitled to exclude from gross 

income subject to federal income taxation all military compensation received for active 

service for any month during any part of which the member served in a combat zone or 

was hospitalized as a result of wounds, disease, or injury incurred while serving in a 

combat zone. Under the same provision, an officer is entitled to exclude from gross 

income subject to federal income taxation military compensation up to the maximum 

enlisted pay amount plus imminent danger pay amount ($6,315.90 per month in 2004, 

consisting of the $6,090.90 highest enlisted pay amount plus $225 imminent danger pay) 

for any month during any part of which the officer served in a combat zone or was 

1096
hospitalized as a results of wounds, disease, or injury incurred while serving in a combat 

zone.7

 Under special rules adopted pursuant to the Act of March 20, 1996, Public Law 

104-117, 110 Stat. 827 (1996) and the Act of April 19, 1999 Public Law 106-21, the 

same federal exclusions apply to compensation earned by a member of the Armed Forces 

for military service in a "qualified hazardous duty area," which in 2004 included Albania, 

the Adriatic Sea region, Bosnia and Herzegovina, Croatia, the Ionian Sea region north of 

the 39th parallel, Macedonia, and Serbia and Montenegro,8

 while the member is entitled 

to hostile fire or imminent danger pay under 37 U.S.C. §310 for service in such an area.9

The following three aspects of state income taxation of active-duty military 

compensation are dealt with below: 

1. The extent to which active-duty military compensation is subject to income 

taxation by a particular state. 

2. Whether that state provides a combat zone tax exclusion similar to that 

provided under the Internal Revenue Code, i.e., the "combat zone" exclusion of 

Section 112 of the Internal Revenue Code. 

3. Whether that state provides qualified hazardous duty area ("QHDA") benefits 

similar to those provided for federal income tax purposes under the Act of March 

 

7

 As a member's basic allowances for housing and subsistence, overseas station allowances, travel and 

transportation allowances, clothing allowances, as well as any other "qualified military benefits," are 

exempt from federal income taxation in any case, the "compensation" excludable by an officer under 

Section 112 of the Internal Revenue Code includes the total of basic pay and any special or incentive pays 

received by the officer, specifically including any hazardous duty and hostile fire pays, not to exceed the 

maximum enlisted pay amount ($6,315.90 per month in 2004), in addition to all the officer's "qualified 

military benefits." (With respect to the items of military compensation deemed "qualified military benefits", 

see in particular footnote 16 to Chapter II.B.4 hereof, "Federal Income Tax Advantage," together with the 

accompanying text, above. See also footnote 18 of that chapter with respect to the inclusion of the cost-ofliving allowance for the Continental United States--so-called "CONUS COLA" --in military compensation 

subject to federal income taxation.) 

8

 Albania, the Adriatic Sea region, the Ionian Sea region north of the 39th parallel, and Serbia and 

Montenegro received status as qualified hazardous duty areas from Public Law 106-21 (1999). 

9

 The only "compensation" excludable from gross income, and hence from federal income taxation, under 

Section 112 of the Internal Revenue Code and the Act of March 20, 1996, Public Law 104-117, 110 Stat. 

827 (1996), is military compensation. Any non-military compensation received by an individual member 

while serving in a "combat zone" or a "qualified hazardous duty area"--e.g., interest income, dividends 

received, capital gains, rent income, etc.--is not excludable under either of those provisions. 

1097
20, 1996, Public Law 104-117, 110 Stat. 827 (1996) or the Act of April 19, 1999, 

Public Law 106-21 (1999). 

Information on these three aspects of state taxation of military compensation is provided 

for each of the 50 states of the United States and the District of Columbia.10 11 Unless 

otherwise noted, the only items of military compensation subject to state income taxation 

by those states that tax such compensation are basic pay and special and incentive pays.12

The following highlights the special rules, incorporated in the income tax laws of 

the various states, that apply to active duty military compensation received by members 

of the Armed Forces who are, for one reason or another, subject to the income tax 

jurisdiction of those states. 

* Alabama 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion for tax year 1991 and later. 

3. No exclusion for service in a qualified hazardous duty area 

 

10 For those states that have no state income tax or that exempt military compensation from state income 

taxation altogether, the issue of combat zone and qualified hazardous duty area exclusions does not arise. 

11 A fourth aspect of state income taxation of members of the Armed Forces deals with the question of 

whether a specific state provides extra time for a member of the Armed Forces subject to its income tax 

jurisdiction who is stationed in a "combat zone" or a "qualified hazardous duty area" to prepare and file a 

state income tax return. This question has special relevance with respect to non-military compensation 

earned by members of the Armed Forces subject to the income tax jurisdiction of states that follow the 

federal exclusionary rules for service in a combat zone or qualified hazardous duty area. While identified 

here as an additional aspect of state income taxation of members of the Armed Forces of relevance to such 

members, that aspect is not dealt with in this appendix. 

12 As a practical matter, the Federal Government, as the "employer" of members of the Armed Forces, at 

the end of each year provides each member serving in the Armed Forces during any part of that year with a 

statement--known as a "W-2" wage statement--of the member's "military compensation" that is subject to 

income tax for that year. The cost-of-living allowance for the continental United States--so-called "CONUS 

COLA"--should be included in a member's W-2 statement as well as basic pay and special and incentive 

pays unless it is specifically excluded under the operation of Section 112 of the Internal revenue Code or 

the Act of March 20, 1996, Public Law 104-117, 110 Stat. 827 (1996). The information provided to each 

member on Form W-2 is also provided to the member's state of legal residence (if that state has a state 

income tax). 

1098
* Alaska 

No state income tax. 

* Arizona 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Arkansas 

1. Military compensation subject to state income tax except for first $6,000. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* California 

1. Military compensation subject to state income tax if stationed in California. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Colorado 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Connecticut 

1. Military compensation not taxable if member does not maintain a permanent place of 

abode in state, maintains a permanent place of abode outside state, and spends 30 days or 

less per year in state. 

2. Follows federal rules for combat zone tax exclusion for members subject to state 

income taxation. 

1099
3. Follows federal rules for qualified hazardous duty area tax exclusion for members 

subject to state income taxation. 

* Delaware 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* District of Columbia 

1. Military compensation subject to state income tax. 

2. No exclusion for service in a combat zone. 

3. No exclusion for service in a qualified hazardous duty area. 

* Florida 

No state income tax. 

* Georgia 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Hawaii 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Idaho 

1. Military compensation subject to state income tax unless member serves 120 or more 

consecutive days of active duty outside state. 

2. Follows federal rules for combat zone tax exclusion for members subject to state 

income taxation. 

1100
3. Follows federal rules for qualified hazardous duty area tax exclusion for members 

subject to state income taxation. 

* Illinois 

Military compensation exempt from state income tax. 

* Indiana 

1. Military compensation subject to state income tax, except for first $2,000. 

2. Follows federal rules for combat zone tax exclusion. 

3. No exclusion for service in a qualified hazardous duty area. 

* Iowa 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Kansas 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Kentucky 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Louisiana 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

1101
* Maine 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Maryland 

1. Military compensation subject to state income tax unless serving abroad, in which 

case, first $15,000 is exempt if military pay does not exceed $30,000. Above $30,000, no 

exemption applies. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Massachusetts 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Michigan 

Military compensation exempt from state income tax but military personnel must file. 

* Minnesota 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Mississippi 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

1102
* Missouri 

1. Military compensation subject to state income tax.

2. Follows federal rules for combat zone tax exclusion for members subject to state 

income taxation. 

3. Follows federal rules for qualified hazardous duty area tax exclusion for members 

subject to state income taxation. 

* Montana 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Nebraska 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Nevada 

No state income tax. 

* New Hampshire 

Military compensation exempt from state income tax. 

* New Jersey 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. No exclusion for service in a qualified hazardous duty area. 

* New Mexico 

1. Military compensation subject to state income tax. 

1103
2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* New York 

1. Military compensation not taxable if member does not maintain a permanent place of 

abode in state, maintains a permanent place of abode outside state in compliance with 

military orders, and spends 30 days or less per year in state. 

2. Follows federal rules for combat zone tax exclusion for members subject to state 

income taxation. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* North Carolina 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* North Dakota 

1. Military compensation subject to state income tax, with limited partial exceptions. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Ohio 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Oklahoma 

1. Military compensation subject to state income tax.

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

1104
* Oregon 

1. Military compensation subject to state income tax for residents. However, military can 

be treated as non-residents if they meet certain requirements.

2. Follows federal rules for combat zone tax exclusion for members subject to state 

income taxation. 

3. No exclusion for service in a qualified hazardous duty area. 

* Pennsylvania 

1. Military compensation not taxable if member is stationed outside the state. 

 

2. Follows federal rules for combat zone tax exclusion for members subject to state 

income taxation. 

3. No exclusion for service in a qualified hazardous duty area. 

* Rhode Island 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* South Carolina 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* South Dakota 

No state income tax. 

* Tennessee 

Military compensation exempt from state income tax. 

* Texas 

No state income tax. 

1105
* Utah 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Vermont 

1. Military compensation subject to state income tax if stationed outside the state. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Virginia 

1. Military compensation subject to state income tax. Military compensation up to 

$15,000 can be deducted; no deduction if military compensation exceeds $30,000. 

2. Follows federal rules for combat zone tax exclusion, except that all military 

compensation for officers is excluded. 

3. Follows federal rules for qualified hazardous duty area tax exclusion, except that all 

military compensation for officers is excluded. 

* Washington 

No state income tax. 

* West Virginia 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. Follows federal rules for qualified hazardous duty area tax exclusion. 

* Wisconsin 

1. Military compensation subject to state income tax. 

2. Follows federal rules for combat zone tax exclusion. 

3. No exclusion for service in a qualified hazardous duty area. 

1106
* Wyoming 

No state income tax. 

1107
Appendix VII 

 Special Pay and Other Benefits 

 for Missing Persons, 

 Prisoners of War (POWs), and 

 Victims of Terrorism 

Over the years, Congress has adopted a number of special provisions concerning 

the pays, allowances, and benefits of members of the uniformed services who are in a 

"missing status," who are "prisoners of war" (POWs), or who are victims of terrorism. As 

a general proposition, the special provisions are intended to leave members of the 

uniformed services who are missing, who are POWs, or who are victims of terrorism, and 

any of their dependents, in the same position they would have been if the members were 

not missing, POWs, or victims of terrorism. This appendix briefly summarizes the most 

important of those provisions. 

 Missing Persons 

As a general proposition, the entitlement of members of the uniformed services to 

various pays and allowances for full-time military service turns upon their being on 

"active duty."1

 Entitlement to basic pay is explicitly premised on a member's being on 

active duty, 37 U.S.C. §204(a)(1), or other "full-time duty," 37 U.S.C. §204(a)(2). 

Entitlement to certain medical and other pays is also premised on being on "active duty." 

See, e.g., 37 U.S.C. §302(a)(1) (medical officers of the Armed Forces entitled to special 

pay under 37 U.S.C. §302 if "on active duty under a call or order to active duty for a 

period of not less than one year"); 37 U.S.C. §302a (optometrists entitled to "special pay 

[under 37 U.S.C. §302a] ... for each month of active duty"); 37 U.S.C. §302b (dental 

officers entitled to special pay under 37 U.S.C. §302b if "on active duty under a call or 

order to active duty for a period of not less than one year"); etc. Entitlement to various 

other special and incentive pays and allowances is premised on a member's being entitled 

 

1

 The term "active duty" is defined at 37 U.S.C. §101(18) as meaning: 

... full-time duty in the active service of a uniformed service, and includes full-time training duty, annual 

training duty, full-time National Guard duty, and attendance, while in the active service, at a school 

designated as a service school by law or by the Secretary concerned. 

1108
to basic pay, which, as above indicated, is itself premised on the member's being on 

active duty. See, e.g., 37 U.S.C. §301(a) (entitlement to hazardous duty incentive pay 

premised, in the first instance, on a member's entitlement to basic pay); 37 U.S.C. 

§301a(a)(1) (entitlement to aviation career incentive pay (ACIP) premised on entitlement 

to basic pay);2

 37 U.S.C. §301c(a)(1) (entitlement to submarine duty incentive pay); 37 

U.S.C. §304 (diving duty pay); 37 U.S.C. §402(a) (basic allowance for subsistence); 37 

U.S.C. §403(a) (basic allowance for housing); etc. For all these pays and allowances, 

entitlement ceases when a person is no longer on active duty. In particular, a member's 

entitlement to these various pays and allowances ceases with the member's death, at 

which time there is a final settlement of accounts with respect to that member. 

Department of Defense Financial Management Regulation, Military Pay: Policy and 

Procedures for Active Duty and Reserve Pay, Volume 7A, ¶40512. See 10 U.S.C. §2771; 

cf. 37 U.S.C. §557. 

In most cases, it is reasonably clear whether a particular member is or is not alive 

and hence is or is not entitled to pay and allowances. In some cases, however, it is not at 

all certain whether a member is alive. In particular, because of the exigencies of a 

military career, members of the Armed Forces may be missing, and in that case it may 

not in practice be possible to determine readily whether they are or are not alive. Special 

rules have been adopted by Congress over the years to cover the pay and allowances 

entitlements of persons in such situations. These rules and provisions are set out in Titles 

10 and 37, United States Code. 

Until enactment of the National Defense Authorization Act for Fiscal Year 1996, 

Public Law 104-106, §569, 110 Stat. 186, 336-353 (1996), questions concerning the 

status of missing persons and their continuing entitlement to basic and other pays and 

allowances was governed solely by Chapter 10 of Title 37, United States Code, 37 U.S.C. 

§§551-558. The National Defense Authorization Act for Fiscal Year 1996, Public Law 

 

2

 Entitlement to aviation career continuation pay (AOCP) under 37 U.S.C. §301b--the catchline of which 

reads: "Special pay: aviation career officers extending period of active duty"--is premised on entitlement to 

ACIP, which is in turn, as above noted, premised on entitlement to basic pay. 

1109
104-106, §569, 110 Stat. 186, 336-353 (1996), established Chapter 76 of Title 10, United 

States Code, entitled "Missing Persons." That chapter governs questions concerning the 

status of certain missing persons, i.e., whether they are to be carried in a missing status on 

the rolls of the Armed Forces or may be declared dead, whereas questions concerning the 

entitlement to basic and other pays and allowances of members of the Armed Forces 

deemed to be in a missing status continues to be governed by Chapter 10 of Title 37, 

United States Code, 37 U.S.C. §§551-558. 

In essence, members of the active-duty Armed Forces deemed to be missing as a 

result of hostile action are entitled to continuing pays and allowances under the 

provisions of Chapter 10 of Title 37, United States Code, until they are declared no 

longer to be in a missing status pursuant to the provisions of Chapter 76 of Title 10, 

United States Code. Status determinations for "[a]ny member of the Armed Forces on 

active duty who becomes involuntarily absent as a result of a hostile action, or under 

circumstances suggesting that the involuntary absence is a result of a hostile action, and 

whose status is undetermined or who is unaccounted for" are required to be made 

pursuant to the provisions of Chapter 76 of Title 10, United States Code. As explicitly 

stated in the 1996 Authorization Act, the purpose of the new chapter is-- 

 ... to ensure that any member of the Armed Forces (and any Department of 

Defense civilian employee or contractor employee who serves with or 

accompanies the Armed Forces in the field under orders) who becomes missing 

or unaccounted for is ultimately accounted for by the United States and, as a 

general rule, is not declared dead solely because of the passage of time.3

 

To this end, the new chapter requires the Secretary of Defense to establish an office of 

missing persons within the Department of Defense. The responsibilities of this office 

include the establishment of 

 (A) policy, control, and oversight within the Department of Defense of the 

entire process for investigation and recovery related to missing persons (including 

matters related to search, rescue, escape, and evasion); and 

 

3 National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §569(a), 110 Stat. 186, 

336 (1996). 

1110
 (B) coordination for the Department of Defense with other departments and 

agencies of the United States on all matters concerning missing persons.4

In addition to requiring the establishment of a special office to deal with missing 

persons, the new provisions also place stringent limitations on the ability of the 

Department of Defense and any of its military departments to declare a missing person 

to be dead.5

 Special provisions have been included for reviewing the status of persons 

previously declared dead who were involved in the Korean conflict, the Cold War, or 

the Indochina War era.6

 Finally, any person in a missing status or declared dead who 

is subsequently found alive and returned to the control of the United States is 

specifically provided to be entitled to all pay and allowances while in a missing status 

or while declared dead.7

 As stated by the House-Senate Conference Committee: 

The conferees expect that the Secretary of Defense will organize this new 

office to serve as the focal point in the Department of Defense for POW/MIA 

matters and consolidate the formulation and oversight of search, rescue, escape 

and evasion and accountability policies. The conferees further expect that the 

Secretary of Defense will make every effort to ensure a close working relationship 

with the national intelligence agencies.8

As previously indicated, persons covered by new Chapter 76 of Title 10, United 

States Code, include "[a]ny member of the Armed Forces on active duty who becomes 

involuntarily absent as a result of a hostile action, or under circumstances suggesting that 

the involuntary absence is a result of a hostile action, and whose status is undetermined or 

who is unaccounted for." 10 U.S.C. §1501(c)(1). The status of any member falling within 

 

4 10 U.S.C. §1501(a). 

5 10 U.S.C. §1507(a). 

6 10 U.S.C. §1509. 

7 10 U.S.C. §1511. 

8

 House Report No. 104-450 (Committee of Conference), p.801, accompanying S. 1124, 104th Congress, 2d 

Session (1996), and House Report No. 104-406 (Committee of Conference), p. 811, accompanying H.R. 

1530, 104th Congress, 1st Session (1995). cf. Senate Report No. 104-112 (Committee on Armed Services), 

p. 245, accompanying S. 1026, and House Report No. 104-131 (Committee on National Security), pp. 223-

224, accompanying H.R. 1530, 104th Congress, 1st Session (1995). 

1111
the above category is required to be determined by the Secretary of the member's 

departmental affiliation (the "Secretary concerned"). 10 U.S.C. §1503. After reviewing 

preliminary recommendations submitted by field commanders, the Secretary concerned 

determines whether the member should be categorized as "missing,” "deserted", "absent 

without leave," or "dead." 10 U.S.C. §1503(i)(3). For the purpose of determining whether 

a given member should be categorized as a "missing person" or placed in one of the other 

categories, the term "missing person" is defined to include "a member of the Armed 

Forces on active duty who is in a missing status". 10 U.S.C. §1513(1)(A). Section 

1513(2) defines the term "missing status" to mean 

 ... the status of a missing person who is determined to be absent in a category of 

any of the following: 

 (A) Missing. 

 (B) Missing in action. 

 (C) Interned in a foreign country. 

 (D) Captured. 

 (E) Beleaguered. 

 (F) Besieged. 

 (G) Detained in a foreign country against that person's will. 

Members who are not "involuntarily absent," or who become missing while not 

engaged in hostile action, or who become missing under circumstances not suggesting 

their absence is connected with hostile action, are not covered by Chapter 76 of Title 10, 

United States Code. Nor are members who become missing from service in inactive-duty 

training. Status determinations for these latter categories of persons are still made under 

Chapter 10 of Title 37, United States Code. Under Section 551(2) of Title 37, the term 

"missing status" is defined to mean 

 ... the status of a member of a uniformed service who is officially carried or 

determined to be absent in a status of-- 

1112
 (A) missing; 

 (B) missing in action; 

 (C) interned in a foreign country; 

 (D) captured, beleaguered, or besieged by a hostile force; or 

 

 (E) detained in a foreign country against his will. 

Under 37 U.S.C. §552(a)(1), a member of the uniformed services who is on active duty 

or performing inactive-duty training and who is categorized as being in a "missing 

status," no matter whether that status is determined under Chapter 76 of Title 10 or 

Chapter 10 of Title 37, is 

... for the period he is in that status, entitled to receive or have credited to his 

account the same pay and allowances ... to which he was entitled at the beginning 

of that period or may thereafter become entitled; ... 

In the case of a member of the uniformed services who is determined to be in a missing 

status while performing full-time training duty or other full-time duty without pay, or 

inactive-duty training with or without pay, the member 

... is entitled to the pay and allowances to which he would have been entitled if he 

had been on active duty with pay. 

37 U.S.C. §552(a). In the case of a member performing full-time training duty or 

inactive-duty training, however, this rule applies only if the member 

... is officially determined to be in a missing status that results from the 

performance of duties prescribed by competent authority. 

37 U.S.C. §552(d). 

For members covered by Chapter 10 of Title 37, members determined to be in a 

missing status are continued in that status for 12 months unless a "finding of death" is 

made before. At the end of 12 months, the Secretary of the member's departmental 

affiliation is required to review the member's status. 37 U.S.C. §555(a). Upon conclusion 

of that review, the Secretary in question may (i) continue the member in a missing status, 

1113
"if the member can reasonably be presumed to be living," 37 U.S.C. §555(a)(1), or (ii) 

"make a finding of death," 37 U.S.C. §555(a)(2). If the Secretary continues the member 

in a missing status, a later review may be made "when warranted by information received 

or other circumstances." 37 U.S.C. §555(a). Upon completion of such a later review, the 

Secretary may either continue the member in a missing status or make a finding of death. 

If the Secretary concerned makes a finding of death with respect to a particular member, 

the finding is required to 

 ... include the date death is presumed to have occurred for the purpose of-- 

 (1) ending the crediting of pay and allowances; 

 (2) settlement of accounts; and 

 (3) payment of death gratuities. 

 37 U.S.C. §555(b). 

Pursuant to the provisions of new 37 U.S.C. §555(d), as added by the National 

Defense Authorization Act for Fiscal Year 1996, Public Law 104-106, §569(c)(1)(B), 

110 Stat. 186, 351-352 (1996), the provisions of 37 U.S.C. §555(a)-(c) relating to 

secretarial review of the status of members in a missing status for the purpose of 

declaring them dead is specifically provided not to apply to persons placed in a missing 

status pursuant to the provisions of Chapter 76 of Title 10, United States Code. This has 

the effect of prohibiting the Secretary of the department of a member placed in a missing 

status under Chapter 76 of Title 10, United States Code, from declaring the member dead 

under 37 U.S.C. §555, with the attendant result that the member's pay and allowances 

continue to be credited until the member is declared dead pursuant to the provisions of 

Chapter 76 of Title 10, United States Code. The pay and allowances entitlements of 

members determined to be dead under the provisions of Chapter 76 of Title 10, United 

States Code, are governed by Chapter 10 of Title 37, United States Code. 

In the case of a member in a missing status, no matter whether determined under 

the provisions of Chapter 76 of Title 10 or Chapter 10 of Title 37, the Secretary 

concerned may order an allotment to the member's dependents of the pay and allowances 

1114
with which the member is to be credited under 37 U.S.C. §552. 37 U.S.C. §553(e) and 

(h). Persons in a missing status are granted an automatic extension of the time within 

which they would otherwise have to file a federal income tax return and pay federal 

income taxes. 37 U.S.C. §558. 

 Prisoners of War (POWs) 

Members of the Armed Forces of the United States who have been held as 

"prisoners of war" are, in addition to the pay and other benefits to which they may be 

entitled as persons in a "missing status,"9

 as set out above, also entitled to certain 

additional benefits under the provisions of 50 U.S.C. App. §2005. For the purposes of the 

provision in question, the term "prisoner of war" is defined generally to mean: 

... any regularly appointed, enrolled, enlisted, or inducted member of the military 

or naval forces of the United States who was held as a prisoner of war for any 

period of time subsequent to December 7, 1941, by any government of any nation 

with which the United States has been at war subsequent to such date. 

50 U.S.C. App. §2005(a) and (d)(1). Persons who qualify as "prisoners of war" under this 

definition are entitled to compensation at the rate of $1 per day for each day the 

government by which they were held "violat[ed] ... its obligation to furnish [them] the 

quantity of food to which [they] were entitled as ... prisoner[s] of war under the ... 

Geneva Convention...."10 50 U.S.C. App. §2005(b). They are in addition independently 

entitled to compensation at the rate of $1.50 per day for each day the government by 

which they were held "violat[ed] ... such government's obligations under ... the Geneva 

Convention ... relating to labor of prisoners of war," 50 U.S.C. App. §2005(d)(2)(A) and 

 

9

 As indicated above, members of the uniformed services are placed in a "missing status" if they are 

"officially carried or determined to be absent in a status of ... interned in a foreign country; ... captured ... by 

a hostile force; or ... detained in a foreign country against [their] will." 37 U.S.C. §551(2)(C), (D), and (E). 

In addition to any special benefits to which members of the Armed Forces may be entitled as "prisoners of 

war" under 50 U.S.C. App. §2005, they are also entitled to the various benefits available to them as persons 

in a "missing status." See Chapter 10 of Title 37, United States Code, 37 U.S.C. §§551-559, generally. Also 

see discussion of "missing persons" in this appendix, above. 

10 For the text of the Geneva Convention of July 27, 1929, relative to the treatment of prisoners of war, see 

47 Stat. 2021 (1932). 

1115
(d)(3)(A), or for each day they were subjected to "inhumane treatment"11 by the 

government by which they were held, 50 U.S.C. App. §2005(d)(2)(B) and (d)(3)(B), 

subject to a limitation of $1.50 for any one day, 50 U.S.C. App. §2005(d)(2). Persons 

entitled to such compensation include the actual prisoners of war themselves and, if they 

are dead, certain named beneficiaries. 50 U.S.C. App. §2005(c) and (d)(4). Although the 

United States has not been "at war" with any other nation since the end of World War 

II,12 the subject law would be applicable to any persons taken prisoner of war in a war 

formally declared by Congress. 

As set out above, the term "prisoner of war" was limited by definition to include 

only persons "held as ... prisoner[s] of war ... by any government of any nation with 

which the United States has been at war subsequent to" December 7, 1941. 50 U.S.C. 

App. §2005(a) and (d)(1) (emphasis added). This definition necessarily excluded persons 

held captive during the "Korean War," 50 U.S.C. App. §2005(e) (catchline), and the 

"Vietnam Conflict," 50 U.S.C. App. §2005(f)(1)(A), since the United States was never 

officially "at war" in either case. For this reason, the "Korean War" gave rise to a change 

in the governing law relating to prisoners of war, effectively expanding the concept of 

prisoners of war to include persons held by a hostile force without respect to whether an 

"at war" determination had been made. Thus, the Act of August 21, 1954, ch. 784 [Public 

Law 615, 83d Congress], §2(b), 68 Stat. 759, 761-762 (1954), extended the application of 

the "prisoner of war" provisions of 50 U.S.C. App. §2005 to 

... regularly appointed, enrolled, enlisted, or inducted member[s] of the Armed 

Forces of the United States who w[ere] held as ... prisoner[s] of war for any 

period of time subsequent to June 25, 1950, by any hostile force with which the 

Armed Forces of the United States were actually engaged in armed conflict 

subsequent to such date and prior to the date of enactment [of this provision, 

August 21, 1954]. 

 

11 The term "inhumane treatment" was itself defined as consisting of violations of various provisions of the 

Geneva Convention of July 27, 1929. 

12 Under the War Claims Act amendments of 1954, ch. 1162 [Public Law 744, 83d Congress], §102(c), 68 

Stat. 1033, 1034 (1954), the deadline for filing claims for prisoner-of-war benefits with respect to World 

War II captivity was August 31, 1955. 

1116
50 U.S.C. App. §2005(e)(1). Persons qualifying as "prisoner[s] of war" under this 

definition were given the same right to compensation, for the same violations of the 

Geneva Convention, at the same rates of compensation, and subject to the same overall 

daily limitation as was true of persons who qualified as "prisoner[s] of war" under 50 

U.S.C. App. §2005(a) and (d)(1).13 For the purposes of the "Korean War" provisions here 

in issue, the term "prisoner[s] of war" was later broadened to include both military and 

civilian personnel assigned to duty on the U.S.S. Pueblo who were captured on January 

23, 1968, and were thereafter held prisoner by the government of North Korea for any 

period of time ending on or before December 23, 1968.14

The Act of June 24, 1970 (War Claims Act of 1948 Amendments), Public Law 

91-289, §§1,2, 84 Stat. 323, 323-324 (1970), further extended the application of the 

"prisoner of war" provisions of 50 U.S.C. App. §2005 to 

... regularly appointed, enrolled, enlisted, or inducted member[s] of the Armed 

Forces of the United States who w[ere] held as ... prisoner[s] of war for any 

period of time during the Vietnam Conflict by any force hostile to the United 

States, except any such member who, at any time, voluntarily, knowingly, and 

without duress, gave aid to or collaborated with, or in any manner served, such 

hostile force. 

50 U.S.C. App. §2005(f)(1)(B). Persons qualifying as "prisoner[s] of war" under this 

definition were given the same right to compensation for the same violations of the 

Geneva Convention as was true of persons who qualified as "prisoner[s] of war" under 50 

U.S.C. App. §2005(a) and (d)(1). The rates of compensation were, however, increased--to 

$2.00 per day for substandard food and $3.00 per day for labor and inhumane treatment 

 

13 The deadline for filing claims by or with respect to Korean War prisoners under 50 U.S.C. App. 

§2005(e) was, in the general case, August 21, 1955. Act of August 21, 1954, ch. 784 [Public Law 615, 83d 

Congress], §2(b), 68 Stat. 759, 761-762 (1954). Persons who continued to be held as prisoners of war after 

the cessation of hostilities had one year after being "returned to the jurisdiction of the Armed Forces of the 

United States" within which to file claims. Claims filed with respect to prisoners of war subsequently 

determined to have "actually died or ... presumed to be dead" had to be filed within one year after the 

Department of Defense made its determination of death or presumption of death. 50 U.S.C. App. 

§2005(e)(5)(A), (B), and (C). 

14 The deadline for filing claims with respect to the U.S.S. Pueblo was June 24, 1971. See, e.g., 50 U.S.C. 

App. §2005(e)(5)(D). 

1117
violations of the Geneva Convention. The overall daily limitation on the amount of 

compensation that could be paid for labor and inhumane treatment violations of the 

Geneva Convention was also increased--to a maximum of $3.00 per day.15

 Victims of Terrorism 

Section 806 of the Victims of Terrorism Compensation Act, enacted as Title VIII 

of the Omnibus Diplomatic Security and Antiterrorism Act of 1986, Public Law 99-399, 

§806, 100 Stat. 853, 884-887 (1986), added four special provisions to Titles 10 and 37, 

United States Code, establishing benefits for members of the uniformed services and their 

dependents who are victims of terrorism.16 These provisions were added to cover persons 

taken captive in a non-belligerent status--basically, to cover persons who are victims of 

incidents of political warfare. The first of the four provisions, codified at 37 U.S.C. §559, 

provides for special compensation for members of the uniformed services held in a 

"captive status." For the purposes of 37 U.S.C. §559, the term "captive status" is defined 

to mean: 

... a missing status of a member of the uniformed services which, as determined 

by the President, arises because of a hostile action and is a result of membership 

 

15 The period for filing claims under the general provisions of 50 U.S.C. App. §2005(f) are set out at 50 

U.S.C. App. §2005(f)(5): 

Each claim filed under this subsection must be filed not later than three years after whichever of the 

following dates last occurs: 

(A) the date of enactment of this subsection [50 U.S.C. §2005(f), i.e., June 24, 1970]; 

(B) the date the prisoner of war for whom the claim is filed returned to the jurisdiction of the Armed Forces 

of the United States; or 

(C) the date upon which the Department of Defense makes a determination that the prisoner of war has 

actually died or is presumed to be dead, in the case of any prisoner of war who has not returned to the 

jurisdiction of the Armed Forces of the United States. 

16 The Victims of Terrorism Compensation Act, Public Law 99-399, Title VIII, 100 Stat. 853 (1986), was 

modeled on the Hostage Relief Act of 1980, Public Law 96-449, 94 Stat. 1967 (1980), set out at 5 U.S.C. 

§5561 note (1988), which was in turn substantially derived from Viet Nam-era legislation concerning 

persons missing in action and prisoners of war. The Hostage Relief Act of 1980, which was enacted in 

response to the takeover of the American Embassy in Teheran in 1979, was temporary legislation; the 

Victims of Terrorism Compensation Act, which was enacted in response to the hijacking of TWA Flight 

847 on June 14, 1985, and the subsequent murder in Beirut of an enlisted member of the Navy, is 

permanent legislation. 

1118
in the uniformed services, but does not include a period of captivity of a member 

as a prisoner of war if Congress provides to such member, in an Act enacted after 

the date of enactment of the Victims of Terrorism Compensation Act, monetary 

payment in respect of such a period of captivity. 17

37 U.S.C. §559(a)(1). The term "former captive" is defined to mean: 

 ... a person who, as a member of the uniformed services, was held in a 

captive status. 

37 U.S.C. §559(a)(2). 

With respect to the "compensation" authorized, Section 559(c)(1) of Title 37, 

United States Code, provides that the President 

... shall make a cash payment to any person who is a former captive. Such 

payment shall be made before the end of the one-year period beginning on the 

date on which the captive status of such person terminates. 

The amount of the payment is to be determined by the President in accordance with 5 

U.S.C. §5569(d)(2).18 37 U.S.C. §559(c)(2). While the President is required by the 

Victims of Terrorism Compensation Act to make the payments specified, the President is 

permitted to defer the payment of such compensation to any former captive charged with 

 

17 Section 559 of Title 37, United States Code, as enacted by Section 806(a) of the Victims of Terrorism 

Compensation Act, Public Law 99-399, id., §806(a), 100 Stat. at 884, is codified as a part of Chapter 10 of 

Title 37, which deals generally with "payments to missing persons". As indicated earlier in this appendix in 

the discussion of special benefits for "missing persons", the term "missing status" is defined at 37 U.S.C. 

§551(2). That definition is quoted above. 

18 Section 5569(d)(2) of Title 5, United States Code, which was itself enacted under Section 803(a) of the 

Victims of Terrorism Compensation Act, provides: 

Except as provided in section 802 of the Victims of Terrorism Compensation Act [dealing with 

compensation for persons held captive during the period November 4, 1979, through January 21, 1981, i.e., 

the period during which Americans were held captive at the American Embassy in Teheran], the amount of 

the payment under this subsection with respect to an individual held as a captive shall be not less than onehalf the amount of the world-wide average per diem rate under section 5702 of [Title 5, United States 

Code] which was in effect for each day that individual was so held. 

The Department of Defense Financial Management Regulation, Military Pay: Policy and Procedures for 

Active Duty and Reserve Pay, Volume 7A, ¶40601(b)(1), provides that "[f]or each day a member was held 

in a captive status, payment is 50 percent of the world-wide average per diem rate which was in effect for 

each day the member was held in a captive status," but ¶40601(b)(2) provides that "[f]ormer captives may 

receive more than the 50 percent rate when specifically approved by the SECDEF." 

1119
a "captivity-related offense" pending resolution of such charges and, if the person is 

found guilty of such charges, to deny such compensation altogether.19

Section 806(b) of the Victims of Terrorism Compensation Act added Section 

1032 to Chapter 53 of Title 10, United States Code. This provision permits the United 

States to 

 ... pay compensation for the disability or death of a dependent of a member of the 

uniformed services if the President determines that the disability or death-- 

 (1) was caused by hostile action; and 

(2) was a result of the relationship of the dependent to the member of the 

uniformed services. 

The "compensation" provided for, and the amount thereof, is to be determined in 

accordance with regulations required to be prescribed by the President. 

 Section 806(c) of the Victims of Terrorism Compensation Act added Section 

1095a to Chapter 55 of Title 10, United States Code. The provision in question provides 

for the payment, "by advancement or reimbursement," for health care and related 

expenses of members of the uniformed services and their dependents "to the extent that 

such care ... is incident to the captive status" and is not otherwise covered by government 

health or medical programs or by insurance. 

Finally, Section 806(d) of the Victims of Terrorism Compensation Act added 

Chapter 110 to Part III of Title 10, United States Code, concerning educational benefits 

for members of the uniformed services held as captives and their dependents.20 Under the 

provisions in question, codified at 10 U.S.C. §§2181-2185, members of the uniformed 

 

19 In addition to the "compensation" authorized to be paid to members of the uniformed services held in a 

captive status, another provision directs the Secretary of the Treasury to establish a special "saving fund" to 

which the pay and allowances of captives may be allotted by the "Secretary concerned." Any amounts so 

allotted bear interest, compounded quarterly, equal to the average rate paid on U.S. Treasury bills with 3-

month maturities issued during the preceding calendar quarter. 37 U.S.C. §559(b). 

20 The educational benefits of the Victims of Terrorism Compensation Act derive substantially from Viet 

Nam-era educational benefits. 

1120
services who are held as captives and their dependents may be paid, "by advancement or 

reimbursement," various specified educational expenses. Payments may be made to 

"former captives" for up to ten years following the date on which "the status of that 

person as a captive terminates," although payments are permitted "only to the extent ... 

not otherwise authorized by law." 10 U.S.C. §2183. Payments may be made to the 

dependents of a person in a "captive status" after that person has been in such a status for 

90 days and may continue for a limited period after "the captive status of that person 

terminates," provided that the dependents are not otherwise eligible for educational 

assistance under other provisions of law. 10 U.S.C. §2182. 

1121
Appendix VIII 

 Special Benefits Applicable To 

 Certain Members of the Armed Forces 

 Assigned to the National Security Agency, 

 The Central Intelligence Agency, and 

 The Defense Intelligence Agency 

Legal Authority: 37 U.S.C. §431; Section 4 of the Central Intelligence Agency 

Act of 1949, ch. 227 [Public Law 110, 81st Congress], §5, 63 Stat. 208, 209-211 (1949), 

as amended (50 U.S.C. §403e); Section 9 of the Act of May 29, 1959 (National Security 

Agency Act of 1959), Public Law 86-36, §9, 73 Stat. 63 (1959), as amended by the 

Intelligence Authorization Act for Fiscal Year 1981, Public Law 96-450, §402, 94 Stat. 

1975, 1977-1978 (1980) (50 U.S.C. §402 note). 

Background: The military compensation and benefits system detailed in Chapters 

I through V.C.9 of this volume, above, is the compensation and benefits system for the 

vast majority--well over 99 percent--of all members of the Armed Forces. For this 99+ 

percent of all members of the Armed Forces, the compensation and benefits system 

detailed above is both comprehensive and all-encompassing--in the sense that it 

establishes the outer boundaries within which members of the Armed Forces are paid and 

receive benefits in return for their services. The fact is, however, some members are, 

under specific conditions, eligible for additional, or alternative, benefits. One such group 

consists of prisoners of war (POWs), persons who are in a "missing status," and victims 

of terrorism. The special compensation and benefits available to this group of persons is 

dependent upon a specific, involuntary status such persons have, as detailed in Appendix 

VII, above. Another category of persons for whom special compensation and related 

benefits have been authorized includes military personnel assigned to intelligence 

activities of one sort or another--including the Central Intelligence Agency, the National 

Security Agency, the Defense Attache System, and the Defense Intelligence Agency. 

This category of "intelligence personnel" is distinguished from the category that includes 

persons in a "missing status," POWs, and victims of terrorism on the grounds, among 

others, that the status of "intelligence personnel" is not involuntary. The present appendix 

summarizes the benefits available to affected personnel and the conditions of entitlement. 

1122
Sections 501 and 601 of the Intelligence Authorization Act for Fiscal Year 1982, 

Public Law 97-89, §§501 and 601, 95 Stat. 1150, 1152-1154 (1981), authorized the 

payment of certain "allowances and benefits" to members of the Armed Forces "detailed 

or assigned" to the Central Intelligence Agency and the National Security Agency, 

respectively. Section 501 of the 1982 Intelligence Authorization Act, id., amended 

Section 4 of the Central Intelligence Agency Act of 1949, ch. 227 [Public Law 110, 81st

Congress], §5, 63 Stat. 208, 209-211 (1949) (classified to 50 U.S.C. §403e), by adding a 

new subsection (b), to provide that members of the Armed Forces "detailed or assigned" 

to the Central Intelligence Agency could be paid "allowances and benefits comparable to 

the allowances and benefits authorized to be paid to members of the Foreign Service 

under chapter 9 of title I of the Foreign Service Act of 1980, Public Law 96-465, §§901-

905, 94 Stat. 2071, 2124-2128 (1980) (22 U.S.C. §4081 et seq.), or any other provision of 

law." Under this authority, the Director of Central Intelligence 

... may pay allowances and benefits related to officially authorized travel, 

personnel and physical security activities, operational activities, and cover-related 

activities ... when payment of such allowances and benefits is necessary to meet 

the special requirements of work related to such activities. 

The rates at which such allowances and benefits may be paid are limited by the rates 

authorized by 5 U.S.C. §§5724 and 5724a when "relocation [is] attributable, in whole or 

in part, to relocation within the United States." Section 601 of the 1982 Intelligence 

Authorization Act, on the other hand, amended subsection (b)(1) of Section 9 of the 

National Security Agency Act of 1959 (50 U.S.C. §402 note) to provide that members of 

the Armed Forces "detailed or assigned" to the National Security Agency could be paid 

 (1) allowances and benefits-- 

 (A) comparable to those provided by the Secretary of State to members 

of the Foreign Service under chapter 9 of title I of the Foreign Service Act of 

1980 (22 U.S.C. 4081 et seq.) or any other provision of law; and 

 (B) in the case of selected personnel serving in circumstances similar to 

those in which personnel in the Central Intelligence Agency serve, comparable 

to those provided by the Director of Central Intelligence to personnel of the 

Central Intelligence Agency. 

1123
With respect to the "allowances and benefits" that may be paid to members of the 

Armed Forces under 50 U.S.C. §§403e and 402 note, as amended, a special limitation 

prohibits members of the Armed Forces from receiving, at the same time, "allowances 

and benefits" both under these provisions and also under comparable provisions of Title 

37, United States Code. Sections 4081-4086 of Title 22, United States Code, in turn detail 

the various "travel, leave, and other benefits" that the Secretary of state may authorize for 

members of the Foreign Service and their families--which benefits are, by virtue of the 

1982 Intelligence Authorization Act, available to members of the Armed Forces "detailed 

or assigned" to the Central Intelligence Agency or the National Security Agency.1

Section 501 of the Intelligence Authorization Act for Fiscal Year 1984, Public 

Law 98-215, §501(a), 97 Stat. 1473, 1478-1479 (1983), also extended certain of these 

benefits to personnel assigned to the Defense Intelligence Agency. Under the subject 

provision, which was originally codified at Section 192 of Title 10, United States Code, 

but which has since been amended and recodified at Section 431 of Title 37, United 

States Code, the Secretary of Defense was authorized to 

 ... provide to members of the Armed Forces who are assigned to Defense Attache 

Offices and Defense Intelligence Agency Liaison Offices outside the United 

States and who are designated by the Secretary of Defense for the purposes of 

this [provision] allowances and benefits comparable to those provided by the 

Secretary of State to officers and employees of the Foreign Service under 

paragraphs (2), (3), (4), (6), (7), (8), and (13) of section 901 and sections 705 and 

903 of the Foreign Service Act of 1980 (22 U.S.C. 4081(2), (3), (4), (6), (7), (8), 

and (13), 4025, 4083) and under section 5924(4) of title 5 [United States Code]. 

 

1

 See, e.g., Senate Report No. 97-57 (Select Committee on Intelligence), pp. 6-7 and 10, accompanying S. 

1127, and House Report No. 97-332 (Committee of Conference), pp. 17-19, accompanying H.R. 3454, 97th

Congress, 1st Session (1981), for a discussion of the reasons underlying adoption of these provisions. In 

essence, the provisions were adopted to compensate "intelligence personnel" for the "frequent moves 

between major metropolitan centers" such personnel were required to undertake because of "career 

development" and to limit adverse effects on "morale and efficiency of significant numbers of intelligence 

personnel" due to such moves and the attendant "price of considerable personal loss" such personnel had 

theretofore been personally required to bear. House Report No. 97-332, id., p. 18. No particular attention 

was given to the extension of these special benefits to members of the Armed Forces. 

1124
Benefits covered include, among others, home visitation between consecutive foreign 

tours, travel and related expenses of family members accompanying, preceding, or 

following a member on temporary duty assignments; environmental and morale leave; 

child care expenses associated with spouses' intelligence training precedent to overseas 

duty assignments of DIA personnel. The stated reason for the adoption of such benefits 

was to "bring the attache system in line with other intelligence personnel overseas who 

may receive similar allowances under existing law."2

 

 

2

 Senate Report No. 98-77 (Select Committee on Intelligence), pp. 7-8, accompanying S. 1230, 98th

Congress, 1st Session (1983). 

1125
Appendix IX 

 Death Benefits Payable to 

 Survivors of Military Decedents 

Background: Various questions arise concerning the death benefits payable to 

survivors of members of the Armed Forces who die on active duty. First, there is the 

question of what benefits exist; second, the amount of the benefit payable in each 

individual case; and third, when and under what circumstances the benefit is payable in 

each individual case. This appendix is intended to provide a bare-bones listing or 

catalogue of the individual benefits payable to survivors of active-duty military 

decedents. For greater detail on the amount of certain benefits payable under a specific 

heading, when those benefits are payable, and the reasons underlying the existence of the 

benefits in the first instance, the reader is referred to those chapters in this volume dealing 

with the individual benefit in question. 

Death Gratuity: A $12,000 death gratuity is intended to provide immediate cash 

to meet the needs of survivors. In general, the death gratuity is payable immediately upon 

the death of a member of the Armed Forces. Legislative authority: 10 U.S.C. §§1476-

1478. See Chapter III.D.3., hereof, "Death Gratuity," above. 

Continued Government Housing or an Allowance in Lieu Thereof: Survivors 

are provided rent-free government housing for 180 days after the death of a member or a 

tax-free housing allowance for that portion of the 180-day period when not in 

government housing, with the amount of the allowance based on the member's grade at 

the time of death. Legislative authority: 37 U.S.C. §403(l). 

Burial Costs: The government reimburses up to $6,900 of expenses for the 

member's burial if the member’s death is service-connected, and provides travel for nextof-kin under invitational travel orders. Legislative authority: 10 U.S.C. §1482 and 38 

U.S.C. §§2301-2308. Cf. ASD (FM&P) Memorandum dated March 21, 1991. 

1126
Unused Leave: Survivors of a deceased member are entitled to payment for the 

decedent's unused accrued leave, if any. The amount of the payment is based only on the 

member's basic pay at the time of death. Legislative authority: 37 U.S.C. §501. See 

Chapter IV.B.1., hereof, "Annual Leave/Accrued Leave Payments/Leave Lost," above. 

Servicemen's Group Life Insurance (SGLI): Service members may elect 

insurance coverage in multiples of $10,000 up to a maximum coverage of $250,000 

under the Servicemen's Group Life Insurance program, or SGLI. The program also 

provides $100,000 of coverage for spouses of members and $10,000 of coverage per 

dependent child. SGLI is a Government-sponsored group life insurance program that 

provides insurance coverage to members of the Armed Forces at rates often lower than 

those available, given the added risk involved in insuring members of the Armed Forces, 

under normal commercial insurance policies. SGLI has one affordable insurance rate for 

all members of the Armed Forces. The government pays the portion of SGLI premium 

costs that exceeds premiums that would be payable for group life insurance for persons 

not subject to the special risks involved in military service. Legislative authority: 38 

U.S.C. §§1965-1980. See Chapter III.D.2., hereof, "Servicemen's Group Life 

Insurance/Veterans' Group Life Insurance," above. 

Dependency and Indemnity Compensation (DIC): The Department of Veterans 

Affairs pays a tax-free monthly annuity to an unremarried surviving spouse of a service 

member who dies from a service-connected disability. The basic spousal DIC is currently 

$967 per month. An additional $242 per month is payable for each dependent child of the 

deceased member under the age of 18. Additional amounts are authorized for specific 

purposes. Legislative authority: 38 U.S.C. §§1301-1323. See Chapter III.D.4., hereof, 

"Dependency and Indemnity Compensation," above. 

Survivor Benefit Plan (SBP): Surviving spouses and/or children of members 

may be entitled to monthly annuity payments under the Survivor Benefit Plan. The 

amount of the annuity for a surviving spouse under age 62 is 55 percent of the retired or 

retainer pay the member would have been entitled to receive if the member was retired on 

the date of death with a total disability; for a surviving spouse age 62 or older, the annuity 

1127
is 35 percent of that amount because Social Security normally becomes available at that 

age. A supplemental SBP is available to spouses in that category, to counteract the 20 

percent annuity reduction that occurs at 62. The amount of an SBP annuity payable to a 

surviving spouse is reduced by the amount of DIC, if any, the spouse receives on account 

of the member's death. A surviving spouse who remarries before reaching age 55 loses 

entitlement to SBP, although SBP is reinstated if the remarriage ends in death or divorce. 

Children may receive the SBP benefit instead of the surviving spouse in order to allow 

the benefit to be received without the DIC reduction. Legislative authority: 10 U.S.C. 

§§1447-1460b. See Chapter IV.C.2., hereof, "Survivor Benefit Plan," above, and 

National Defense Authorization Act for Fiscal Year 2004, PL 108-136, 117 Stat. 1518. 

Social Security: Social Security death benefits are payable on behalf of a 

"currently insured" deceased member to a surviving spouse caring for the deceased 

member's dependent children under age 16 and to eligible minor children of the deceased 

member. Social Security old-age survivor benefits are payable on behalf of a "fully 

insured" deceased member to a surviving spouse at least 60 years old. The amount of an 

old age survivor benefit is a percentage of a deceased member's Primary Insurance 

Amount, and depends on the age of the survivor at the time of applying for a Social 

Security old age survivor benefit. See Chapter IV.C.1., above, "Government Contribution 

to Social Security," above. 

Health Care: A surviving spouse less than 65 years old and the minor dependents 

of a deceased member are eligible for space-available medical care at military medical 

facilities or are otherwise covered by TRICARE. A surviving spouse 65 years old or 

older is eligible for space-available medical care at military medical facilities or is 

otherwise covered by Medicare. Legislative authority: 10 U.S.C. Chapter 55. 

Commissary and Exchange Privileges: The unmarried surviving spouse and 

qualified dependents of a deceased member are eligible to shop at military commissaries 

and exchanges. Legal authority: DoD Directive 1330.17, "Armed Services Commissary 

Regulations," and DoD Directive 1330.9, "Armed Services Exchange Regulations." 

1128
Tax Benefits: The next-of-kin of a deceased service member whose death occurs 

overseas in a terrorist or military action is exempt from paying federal income tax on 

income received by the decedent during at least the year of the decedent's death. 

Legislative authority: Internal Revenue Code, Section 692, 26 U.S.C. §692. Benefits 

received by a survivor of a deceased member from the Department of Veterans Affairs 

are exempt from levy by the United States or any agency or instrumentality thereof with 

respect to any indebtedness the decedent may have had to the United States. Legislative 

authority: 38 U.S.C. §5301. 

1129
Appendix X 

 CHAMPUS and TRICARE 

Purpose: To provide contractual civilian medical care to eligible beneficiaries 

when the required care cannot be provided by the direct care system, through sharing the 

cost of medically necessary civilian health care for the dependents of active duty service 

members, retired members of the uniformed services and their dependents, surviving 

family members of deceased active or retired members, and eligible former spouses of 

members. 

Background: Early in the history of the United States, it was understood that, in 

order to have a healthy fighting force capable of meeting the nation's military needs, it 

would be necessary to provide for the medical care of members of the Armed Forces. 

Because of the remoteness of many of the nation’ military outposts, it was soon 

determined that each of the nation's military organizations--the Army and Navy at the 

time--should have its own medical department. Accordingly, the Act of March 2, 1799, 

ch. 27, §6, 1 Stat. 721, 722 (1799), authorized medical departments for the Army and 

Navy and provided for the "compensations" of members of those departments as well as 

additional "compensation for forage, rations, and ... expenses." 

The primary mission of the medical departments of the Army and Navy was to 

provide medical care to active-duty personnel, but over time, as more and more of those 

personnel came to have dependents, medical care was also provided to dependents, 

mainly on a "space-available" basis. When military personnel were given retirement 

rights, it always was understood that they might be recalled to active duty in time of 

national need, and it was determined that military retirees should be given medical care 

so that they would be available as force augmentees if needed. Retirees were in fact 

members, even if not on active duty, and both they and their dependents received medical 

care from military medical facilities on a "space-available" basis. 

1130
After World War II, and especially after the Korean War, when national policy 

dictated a large standing force capable of quick and effective deployment to any of the 

"Cold War" hotspots around the world, the active-duty dependent and retiree 

communities grew rapidly, and the medical care provided through military medical 

facilities to dependents and retirees (and their dependents) came to be rationed. Indeed, it 

was during this time that the "space-available" nature of military medical care for 

dependents and retirees came to be fully understood. Many retirees in fact were forced to 

seek medical care in the civilian economy, as they had in World War II and the Korean 

War, and, at least until they became eligible for Medicare after 1966, had to pay for such 

care on their own. Dependents of active-duty members, on the other hand, while given a 

higher priority than some retirees, also had their medical care needs rationed. 

Because of the adverse effects on morale occasioned by the rationing of medical 

care provided through military medical facilities to active-duty dependents and retirees 

(and their dependents), Congress determined to provide alternative sources of medical 

care to those communities, so that, if their medical care needs could not in fact be met 

through the "space-available" military medical facilities, they would nevertheless get 

needed care. The system through which this care is provided initially was referred to as 

the Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS. As 

one of the fastest growing parts of the military manpower budget, CHAMPUS and its 

successor program TRICARE has been of great concern to Congress and to the 

Department of Defense. The remainder of this appendix sets out the legislative 

background leading up to CHAMPUS and describes the current administration of the 

TRICARE program. 

Legislative Background and Administration: The Dependents Medical Care 

Act of June 7, 1956, Public Law 84-569, 70 Stat. 250 (1956), gave military retirees and 

their dependents the right to care in military medical facilities based on the "availability 

of space and facilities and the capabilities of the medical and dental staff." It also gave 

the Secretary of Defense the authority to contract with civilian sources for the medical 

1131
care of spouses and children of active duty members of the uniformed services, but not 

for retirees and their dependents. 

In recognition that the demand for military medical care was exceeding the 

capabilities of the services in general, in 1966 Congress, following passage of Medicare 

legislation, amended the provisions of Title 10 dealing with health care for members, 

former members, and their dependents and survivors, creating authority to contract for 

the provision of civilian health care to retired members and their dependents under age 

65, as well as the survivors of certain former members, among others. The Department of 

Defense subsequently exercised this authority through creation of a program that was 

adopted as part of the Military Medical Benefits Amendments of 1966, Public Law 89-

614, 80 Stat. 863 (1966), and which came to be known as the Civilian Health and 

Medical Program of the Uniformed Services (CHAMPUS). 

The principal features of the CHAMPUS legislation, which used the Blue CrossBlue Shield High Option Plan of the Federal Health Benefits Program as a model, 

established partial government payment for new and expanded inpatient and outpatient 

care provided by civilian sources to designated beneficiaries. The benefits payable under 

CHAMPUS were not quite as extensive as those authorized in military medical facilities, 

and some beneficiaries eligible for care in military facilities—notably those over 65 years 

of age--were not eligible for care under CHAMPUS. Those with only military facility 

eligibility were primarily retirees and their dependents and the dependents of deceased 

members and former members who by law lose their eligibility for CHAMPUS upon 

becoming entitled to Medicare because of age or disability.1

 The eligibility of parents and 

parents-in-law of active and retired service members also is limited to military facilities. 

Among the differences between CHAMPUS and the Federal Employees' Health 

Benefits Program were that civilians had to pay a part of the monthly premium but could 

choose from a variety of plans with different annual benefit structures, while 

 

1 See footnote 1 to Chapter III.D.1. hereof, "Retired Members Medical Care," above. 

1132
CHAMPUS-eligible individuals did not have to pay a premium but also had no choice 

among a variety of plans. CHAMPUS and its successor program, TRICARE Standard,

also differ from federal employees' plans in that, under CHAMPUS AND TRICARE 

Standard, beneficiaries generally are required to obtain non-emergency inpatient care 

from nearby military medical facilities if such care is available there. Thus, CHAMPUS 

and TRICARE Standard have provided only a part of the medical care that their 

beneficiaries receive. For that reason, those programs are not directly comparable to the 

various plans available to participants in the Federal Employees' Health Benefits 

Program, which provide for complete medical care to beneficiaries. 

The annual National Defense Authorization Acts from 1991 to 1996 mandated a 

variety of changes to the CHAMPUS program and the TRICARE programs that 

succeeded it: 

A. The annual outpatient deductible increased to $150 (individual) and $300 

(family) for most eligible beneficiaries effective with care provided on and after April 1, 

1991. The dependents of active duty members in grades E-4 and below were exempt 

from the increase and continued to be liable for an annual individual deductible of $50 

and family deductible of $100 for outpatient care. These rates remained in effect in the 

TRICARE Standard and Extra programs through 2004; the TRICARE Prime program, in 

which all active-duty personnel are automatically enrolled, has no deductible if care is 

received from a military facility or from the preferred network of outside providers. (See 

below for a discussion of the TRICARE program.) 

 B. The annual limits on inpatient mental health care, subject to waivers, changed 

from 60 days per calendar year, effective February 15, 1991, to: 

 (1) 30 days in any year for patients aged 19 or older; 

 (2) 45 days in any year for patients under 19; 

 (3) 150 days in any year for inpatient mental health services provided by 

residential treatment centers. Previously, there was no limit on such care. 

1133
 C. A broadened benefit for pap smears and mammograms, allowing costsharing for such services obtained as diagnostic or preventive health care measures. 

 D. "Transitional" health care (60 or 120 days of eligibility for CHAMPUS 

benefits and care at military medical facilities, depending on length of active service) 

were offered to service members (and their families) who were involuntarily separated 

from active duty during a nine-year period beginning October 1, 1990. Involuntarily 

separated service members also could buy a "conversion" health care policy after leaving 

active duty when they still retain CHAMPUS eligibility. If such a policy was purchased, 

these families received separate benefits in military medical facilities and under 

CHAMPUS for one year from the starting date of the conversion policy for any 

preexisting conditions (including pregnancy) that were not covered by the policy. The 

National Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, §4408, 

106 Stat. 2315, 2708-2712 (1992), extended the same "transitional" health care benefits 

to otherwise qualified service members who agree to voluntarily separate from active 

duty under any of the voluntary separation incentive programs. This provision remained 

in effect as of 2004. See 10 U.S.C. §1078a as added by Section 4408 of the National 

Defense Authorization Act for Fiscal Year 1993, Public Law 102-484, id.

The most recent transitional health care program provides similar benefits to 

members and the families of members who have been involuntarily separated from active 

duty on or after January 1, 2002 and to members and the families of members who have 

been separated from active duty but retained involuntarily in support of a contingency 

operation. The program also applies to reserve members who have been separated from 

active duty then called up to serve in a contingency operation for a period of more than 

30 days. 

By law, CHAMPUS shared the cost of covered civilian inpatient and outpatient 

health care for eligible persons. The dependents of active duty members in pay grades E4 and below had an outpatient care deductible in each fiscal year of $50 per person with a 

$100 family limit. The outpatient care deductible each fiscal year for all others was $150 

1134
per person with a $300 family limit. These limits remained under the TRICARE 

programs. After the deductible was met, CHAMPUS paid 80 percent of allowable 

outpatient costs for dependents of active duty members and 75 percent of the allowable 

cost for all others. Under TRICARE Prime, Extra, and Standard, the respective outpatient 

cost coverages are 100 percent, 85 percent, and 80 percent. For covered inpatient care 

under CHAMPUS, active duty dependents paid a nominal daily fee ($9.30 for fiscal year 

1994) or a total of $25, whichever was greater. TRICARE Prime charges nothing for such 

care, while TRICARE Extra and Standard both charge $13.32 per day or $25, whichever 

is greater. All other CHAMPUS patients--i.e., retirees, their families, survivors, and 

eligible former spouses--paid a fixed daily rate ($271 for fiscal year 1994), or 25 percent 

of billed charges, whichever was less, in hospitals that fell under the diagnosis-related 

group (DRG) payment system. In DRG-exempt facilities, they paid 25 percent of the 

CHAMPUS-determined allowable charge. CHAMPUS paid the remaining allowable 

charges. Under TRICARE Extra, individuals in those categories pay the lesser of $250 

per day or 25 percent of negotiated charges plus 20 percent of negotiated professional 

fees, and under TRICARE Standard the inpatient charges are the lesser of $441 per day 

or 25 percent of billed charges plus 25 percent of allowed professional fees. Under 

TRICARE Prime, the inpatient charges are $11 per day, with a $25 minimum per 

admission. 

Beginning October 1, 1987, all CHAMPUS-eligible families were protected from 

catastrophic civilian medical expenses by a $1,000 (active duty families only) or $7,500 

(all other families) "cap" on the amount of money required to meet the family's annual 

deductibles and cost-shares based on CHAMPUS allowable charges for covered medical 

care received in any one fiscal year. The TRICARE Extra and Standard programs provide 

a cap on catastrophic expenses of $1,000 per year for the dependents of active duty 

members and a cap of $7,500 per year for other beneficiaries. The cap for members in 

TRICARE Prime also is $1,000 per year. 

The 1966 legislation also established the CHAMPUS Program for the 

Handicapped (PFTH), a specialized program of assistance for active duty members with 

1135
spouses or children who are moderately or severely mentally retarded or seriously 

physically handicapped. PFTH has no known counterpart in other federal or civilian 

health care plans. In 1971, eligibility for PFTH was extended to dependents of active duty 

members who died while eligible for hostile-fire pay (formerly known as combat pay), or 

who died from a disease or injury incurred while eligible for such pay. 

CHAMPUS benefits unique to dependents of active duty members, in addition to 

the Program for the Handicapped, include an annual eye examination. Otherwise, the 

benefits for all eligible persons are the same. 

The legislation allowed only extremely limited dental care under CHAMPUS: 

only that care necessary as an adjunct to covered medical or surgical treatment of other 

than a dental condition. Since "space-available" dental care for active duty families was 

only available under limited conditions at military facilities, in 1985 the Congress 

authorized a voluntary-enrollment basic dental benefit for dependents of active duty 

members, with enrollees sharing in the costs of monthly premiums through payroll 

deductions. This dental benefit, provided for in the Department of Defense Authorization 

Act, 1986, Public Law 99-145, 651, 99 Stat. 655-656 (1985), is not part of CHAMPUS, 

but is administered by a contractor. 

In an attempt to improve the quality of health care for service families while at the 

same time controlling health care program costs, Congress, in the Department of Defense 

Authorization Act, 1987, Public Law 99-661, 701-702, 100 Stat. 3894-3900 (1986), 

supported Department of Defense initiatives to change the CHAMPUS program by 

enactment of a number of new provisions to Chapter 55 of Title 10, U.S. Code. 

First, Section 702 of the 1987 Authorization Act required the secretary of defense, 

as part of the CHAMPUS Reform Initiative, to conduct a demonstration project to test the 

relative merits of providing alternative methods of obtaining health care for service 

families, besides the standard CHAMPUS program. The CHAMPUS Reform Initiative 

began August 1, 1988 in California and Hawaii and continued in 1994 under the 

1136
administration of the original contractor, who was selected through a competitive bidding 

contract award process. 

Second, the act permitted the secretary of defense to contract with a variety of 

health care providers and insurers for the provision of basic health care services. Included 

within the scope of permitted contractors were health maintenance organizations, 

preferred provider organizations, individual providers, individual medical facilities, 

insurers, and consortiums of all such providers, facilities and insurers. In addition, the act 

specifically authorized the secretary of defense to prescribe premiums, deductible 

amounts, copayment percentages or amounts, and other health care charges for affected 

beneficiaries. 

Third, while authorizing the secretary of defense to prescribe premiums, 

deductibles, copayments and the like, the act also specifically authorized the secretary to 

waive beneficiary financial liabilities. The secretary may waive such payments, or may 

waive limitations on the kinds of health care services that may be provided as an 

inducement to beneficiaries of the military health care system to enroll in alternative 

health care programs that offer equal or better services, at equal or lower cost. 

Fourth, the 1987 Authorization Act required the secretary of defense to establish a 

health care enrollment system for beneficiaries of the military health care program. Under 

the enrollment system, beneficiaries would be permitted to choose a health care plan from 

a number of alternative plans designated by the secretary of defense. Eligible plans would 

include uniformed services medical facilities, CHAMPUS providers, all health care plans 

contracted for by the secretary of defense, or any combination of such plans. Freedom to 

choose from among available plans could be limited out of necessity to assign 

beneficiaries to uniformed services medical facilities in order to assure their full use in a 

given area. 

In 1994 the Department of Defense embarked on a new program, known as 

TRICARE, to improve the quality, cost, and accessibility of services for its beneficiaries. 

1137
Because of the size and complexity of the military health services system (MHSS), 

TRICARE implementation was phased in over a period of several years. The principal 

mechanisms for the implementation of TRICARE were the designation of the 

commanders of selected Military Medical Treatment Facilities (MTFs) as lead agents for 

12 TRICARE regions across the country, operational enhancements to the MHSS, and 

the procurement of managed care support contracts for the provision of civilian health 

care services within those regions. The first region, including Alaska, Oregon, and 

Washington, went into operation in 1995; the twelfth and final region, the Northeastern 

United States, went into operation in 1998. When the TRICARE regional programs were 

completed in 1998, all military hospitals and clinics in the United States had become part 

of the program coverage. 

 Some of the fundamental rules and standards of the CHAMPUS system, such as 

deductible amounts and eligibility standards, remain in the basic structure of TRICARE. 

Many other elements have changed since 1994. A major feature of TRICARE is the 

establishment of a triple option benefit. CHAMPUS-eligible beneficiaries are offered 

three options: they may elect to receive health care through (1) an HMO-type program 

called TRICARE Prime, (2) the preferred provider network on a case-by-case basis under 

TRICARE Extra, or (3) non-network providers under TRICARE Standard. (TRICARE 

Standard is the same as standard CHAMPUS.) Active-duty members are automatically 

enrolled in TRICARE Prime; unless they enroll specifically in another program, 

dependents are automatically covered by TRICARE Standard. Enrollees in TRICARE 

Prime obtain most of their care within the network and pay substantially reduced cost 

shares when they receive care from civilian network providers. Enrollees in TRICARE 

Prime retain freedom to use non-network civilian providers, but they have to pay cost 

sharing considerably higher than TRICARE Standard if they do so. Under most 

circumstances, beneficiaries who choose not to enroll in TRICARE Prime preserve their 

freedom of choice of provider by remaining in TRICARE Standard. These beneficiaries 

face standard CHAMPUS cost-sharing requirements, except that their coinsurance 

percentage is lower when they opt to use the preferred provider network under TRICARE 

1138
Extra. All beneficiaries continue to be eligible to receive care in MTFs, but active-duty 

family members who enroll in TRICARE Prime have priority over all other beneficiaries. 

Effective September 1, 2002, the TRICARE Prime program added a “remote” 

health coverage for members and their dependents who are serving in the United States 

50 miles or farther from the nearest military treatment facility. This coverage is available 

to active-duty personnel and their dependents and to reserve personnel and their 

dependents if the reservist is activated for more than 30 consecutive days. The TRICARE 

for Life (TFL) program, which was introduced in all regions during 2004, combines 

TRICARE and Medicare coverage for Medicare-eligible military retirees and dependents. 

Under TFL, TRICARE acts as the second payer for expenses covered by both programs, 

covering deductibles and certain other expenses not covered by Medicare. If 

hospitalization exceeds 150 days, TRICARE becomes the primary payer. TFL also 

provides a $3,000 cap on catastrophic expenses. 

TRICARE Prime incorporates the "Uniform HMO Benefit Option", which was 

mandated by Section 731 of the National Defense Authorization Act for Fiscal Year 

1994, Public Law 103-160, §731, 107 Stat. 1547, 1696 (1993). It required the 

establishment of a Uniform HMO Benefit Option, which was required "to the maximum 

extent practicable" to be included "in all future managed health care initiatives 

undertaken by" the Department of Defense. This option is to provide "reduced out-ofpocket costs and a benefit structure that is as uniform as possible throughout the United 

States". The 1994 Authorization Act further requires a determination that, in the managed 

care initiative that includes the Uniform HMO Benefit Option, Department of Defense 

costs are to be "no greater than the costs that would otherwise be incurred to provide 

health care to the covered beneficiaries who enroll in the option". 

In addition to this provision of the 1994 Authorization Act, a similar requirement 

was established by Section 8025 of the Department of Defense Appropriations Act, 1994, 

Public Law 103-139, §8025, 107 Stat. 1418, 1443-1444 (1993). As part of an initiative 

"to implement a nationwide managed health care program for the MHSS", the 

1139
Department of Defense was required to establish "a uniform, stabilized benefit structure 

characterized by a triple option health benefit feature". The Uniform HMO Benefit also 

implements this requirement of law. It offers reduced cost sharing to CHAMPUS-eligible 

beneficiaries who enroll in TRICARE Prime. 

Cost: For the cost of the CHAMPUS and TRICARE coverages from 1978 to the 

present, see Table – of Military Compensation Statistical Tables, volume II of this 

edition.2

 

2 For information on how the number of persons eligible for military medical care, by category, i.e., active 

duty personnel and their dependents as opposed to retirees and their dependents and survivors, have 

changed over time, and are expected to change in the future, see Chapter III.D.1. hereof, "Retired Members 

Medical Care", above. 

1140
Appendix XI 

 Manpower-Related Mobilization Actions 

 to be Taken by the Department of Defense 

Background: Operation Iraqi Freedom, which began in 2003, required a 

mobilization of the nation's military manpower, both active duty and reserve forces 

personnel. During and preceding the process, questions arose as to manpower-related 

actions necessary to support such a full-scale mobilization. Some of the actions were 

directly compensation-related; others, having less to do with compensation, were merely 

manpower-related. This appendix summarizes the range of manpower-related actions the 

Department of Defense must take in the event of a future mobilization. 

For the purposes of the following listing of manpower-related actions to be taken 

by the Department of Defense in support of a mobilization of the nation's military 

manpower, it is assumed that a declaration of war has been made by the Congress or a 

declaration of national emergency has been proclaimed by the President. 

 * Prehostility Actions 

* Call up of reserve forces by the President. Authority/Reference: 10 U.S.C. 12304; 

see 10 U.S.C. §§12301, 12302, and 12303. 

* Stop Loss Action Initiated by the Military Departments. Authority/Reference: 10 

U.S.C. §12305. 

* Designation by the Secretary of Defense of area or areas for imminent danger 

pay. Authority/reference: 37 U.S.C. §310(a). 

* Evacuate noncombatants and insure that other noncombatants do not enter area of 

hostilities. Requires coordination between the State Department and the Joint 

Chiefs of Staff. Authority/reference: Executive Order 12656; Joint Federal Travel 

Regulations, Volumes I and II; Department of Defense Directives 3025.14 and 

1400.11; 5 U.S.C. §5522a and 37 U.S.C. §405(a). 

* Review manpower policies and personnel management actions necessary to 

support hostilities, with particular emphasis on: 

1141
 - Manpower Acquisition Process; 

 - Force Quality Parameters; 

 - Partial Mobilization; 

 - Full Mobilization. 

* Establish policies for treatment of U.S. prisoners of war with respect to pays and 

allowances, treatment, and repatriation. 

 * Establish policies for treatment of enemy prisoners of war. 

* Preliminary planning for mobilization of the civilian work force. Authority/ 

Reference: Department of Defense Directive 1400.31 and Instruction 1400.32. 

* Obtain inventory of personnel able to understand the language spoken in the area 

of hostilities. Request language inventory survey from military services, including 

reserves. 

* Project casualties and replacement requirements. Coordinate with Joint Chiefs of 

Staff. 

 * Hostilities 

* Declaration of a combat zone by Presidential Executive Order. Implications for 

tax exemptions for participants in hostilities. Authority/ reference: Internal 

Revenue Code, §112, 26 U.S.C. §112. 

* Obtain Presidential Executive Order mobilizing Commissioned Corps of the 

United States Public Health Service as a branch of the land or naval forces. 

Authority/ reference: 42 U.S.C. §217. 

* Evaluate current Military Personnel Authorization (MPA) for possible funding 

shortfall and coordinate with DoD Comptroller to obtain adequate funds; prepare 

legislation and backup information for submission to Congress as necessary. 

Authority/ reference: 41 U.S.C. §3732 (Food and Forage Act). 

* Suspend promotion laws, authorize temporary appointments, and waive ceilings 

on the number of general and flag officers by Presidential Executive Order. 

Authority/ reference: 10 U.S.C. §§527, 644, 688c, and 12305. 

* Review memorandum of understanding with Selective Service System and 

consider advisability of resuming draft. Prepare legislation to allow conscription if 

deemed necessary for manpower requirements. Authority/ reference: 50 U.S.C. 

§467c. 

1142
 * Consider induction of health care personnel. 

* Increase supply of military manpower by accelerating entry date of members in 

the Delayed Entry Program. Authority/ reference: 10 U.S.C. §12303. 

* Expand services training bases to meet surge requirements and take action 

necessary to obtain needed funding. 

* Reduce length of instruction in officer commissioning programs to increase 

officer flow. 

* Enhance manpower production capacity by preparing and submitting draft 

legislation to waive Occupational Safety and Health (OSHA) standards. 

Authority/reference: 29 U.S.C. §651. 

* Review and implement tax-exempt savings programs for members in designated 

combat exclusion zones, if desired. Authority/reference: 10 U.S.C. §1035. 

* Transfer Coast Guard or portions thereof to jurisdiction of the Navy pursuant to 

Presidential Executive Order. Authority/reference: 14 U.S.C. §3. 

 * Order to active duty all members of reserve components being held as hostages. 

 Authority/reference: 10 U.S.C. §12301(g)(1). 

* Develop and disseminate guidance on payment of reserve forces personnel called 

to active duty. Authority/reference: 10 U.S.C. §113. 

 * Recall military retirees. Authority/reference: 10 U.S.C. §688(a). 

* Disseminate leave accrual regulations for persons missing in action (MIAs). 

Authority/reference: 10 U.S.C. §701(g). 

* If in a period of war declared by Congress, consider suspension of incentive pays 

for hazardous duty and other special and incentive pays by Presidential Executive 

Order. 

1143
Appendix XII 

 Poverty Guidelines in Relation to 

 Military Compensation 

Background: The question of how many members of the Armed Forces receive 

military compensation that leaves, or has left, them below the federal poverty threshold 

has arisen in different contexts over the years. To answer the question, the federal poverty 

guidelines prepared annually by the Department of Health and Human Services have 

been used most frequently to provide the standard by which to judge whether particular 

members of the Armed Forces and their families are at or below the poverty threshold for 

a particular year.1

 The following table sets out the federal poverty guidelines in the 48 

contiguous United States from 1973 to date. 

Year Single Person 2-Person 

Family 

3-Person 

Family 

Per-Person 

Increment 

1973 $2,200 $2,900 $3,600 $700 

1974 $2,330 $3,070 $3,810 $740 

1975 $2,590 $3,410 $4,230 $820 

1976 $2,800 $3,700 $4,600 $900 

1977 $2,970 $3,930 $4,890 $960 

1978 $3,140 $4,160 $5,180 $1,020 

1979 $3,400 $4,500 $5,600 $1,100 

1980 $3,790 $5,010 $6,230 $1,220 

1981 $4,310 $5,690 $7,070 $1,380 

1982 $4,680 $6,220 $7,760 $1,540 

1983 $4,860 $6,540 $8,220 $1,680 

1984 $4,980 $6,720 $8,460 $1,740 

1985 $5,250 $7,050 $8,850 $1,800 

1986 $5,360 $7,240 $9,120 $1,880 

1987 $5,500 $7,400 $9,300 $1,900 

1988 $5,770 $7,730 $9,690 $1,960 

1989 $5,980 $8,020 $10,060 $2,040 

1990 $6,280 $8,420 $10,560 $2,140 

1991 $6,620 $8,880 $11,140 $2,260 

 

1

 The poverty guidelines prepared by the Department of Health and Human Services are a simplified 

version of the Federal Government's statistical poverty thresholds used by the Bureau of the Census to 

prepare statistical estimates of the numbers of persons and families in poverty. The poverty threshold 

determinations of the Bureau of the Census are primarily used for statistical purposes only, whereas the 

poverty guidelines of the Department of Health and Human Services are used administratively to determine 

whether a particular person or family is eligible for assistance or services under one or more federal antipoverty programs. 

1144
1992 $6,810 $9,190 $11,570 $2,380 

1993 $6,970 $9,430 $11,890 $2,460 

1994 $7,360 $9,840 $12,320 $2,480 

1995 $7,470 $10,030 $12,590 $2,560 

1996 $7,740 $10,360 $12,980 $2,620 

1997 $7,890 $10,610 $13,330 $2,720 

1998 $8,050 $10,850 $13,650 $2,800 

1999 $8,240 $11,060 $13,880 $2,820 

2000 $8,350 $11,250 $14,150 $2,900 

2001 $8,590 $11,610 $14,630 $3,020 

2002 $8,860 $11,940 $15,020 $3,080 

2003 $8,980 $12,120 $15,260 $3,140 

2004 $9,310 $12,490 $15,670 $3,180 

 

Source: "Annual Update of the HHS Poverty Guidelines," prepared annually by the Department of Health 

and Human Services. The "Annual Update of the HHS Poverty Guidelines" for 2004 was published at 

Federal Register, volume 69, 7335-7338 (February 13, 2004). 

The guidelines for Alaska and Hawaii have been somewhat higher throughout the 

period covered in this table. In 2003, the guidelines for a single person in Alaska and 

Hawaii were $11,200 and $10,300, respectively, and the add-on for each additional 

family member was $3,930 in Alaska and $3,610 in Hawaii. 

Probably the most useful source of information on military compensation by pay 

grade, longevity step, and family size is set out in the annual report of the Directorate of 

Compensation, Office of the Deputy Assistant Secretary of Defense for Military 

Personnel Policy, which is under the Office of the Under Secretary of Defense for 

Personnel and Readiness (OUSD(P&R)(MPP))/Compensation, generically titled 

"Selected Military Compensation Tables." Those tables incorporate increases in the rates 

of basic pay authorized by the annual national defense authorization acts and increases in 

the basic allowances for housing and subsistence prescribed by formulas established in 

the National Defense Authorization Act for Fiscal Year 1998, Public Law 105-85, and 

modified in the National Defense Authorization act for Fiscal Year 2001, Public Law 

106-398. 

Regular Military Compensation (RMC) is the measure of compensation that is 

typically used in comparisons with federal poverty thresholds for various family sizes. 

Following the 1998 consolidation of housing allowances for members stationed in the 

1145
United States and overseas, RMC includes basic pay, basic allowance for subsistence, 

basic allowance for housing, and federal income tax advantage. The amount of basic pay 

a member receives varies depending on the member's pay grade and longevity step; the 

amount of basic allowance for subsistence varies depending on whether one is an officer 

or an enlisted member, i.e., by pay grade; basic allowance for housing varies depending 

on pay grade, duty location, and dependency status (with or without dependents); and 

federal income tax advantage varies by pay grade, longevity step, tax filing status 

(married/unmarried/head of household), and family size. Using the simplifying 

assumption that anyone with dependents, i.e., anyone with family size greater than one, is 

married, thereby effectively conflating the head-of-household tax filing status with 

married tax filing status, the DoD publication "Selected Military Compensation Tables" 

shows regular military compensation and each of their constituent parts by pay grade, 

longevity step, and family size. Generally speaking,2

 the "regular military compensation" 

construct for a member in a particular pay-grade/longevity-step/family-size category is a 

reasonable approximation of what the member would have to make in fully taxable 

compensation if the member were in the civilian labor force rather than in the military--

especially for members in the lower enlisted pay grades where the poverty guidelines 

have the greatest likelihood of being in issue. 

In making comparisons between military compensation levels for members in 

different pay-grade/longevity-step/family-size categories with poverty thresholds, one 

should keep in mind how the Federal HHS poverty guidelines are used in connection with 

the different programs for which they serve as an input. The appropriate military 

compensation figure to use may, for example, depend importantly on the federal program 

in issue. 

 The number of members in the Armed Forces entitled to food stamp aid under 

The Food Stamp Act of 1964, Public Law 88-525, 78 Stat. 703 (1964), and its successor, 

 

2

 But see the discussion of the various simplifying assumptions that must be made to calculate the federal 

income tax advantage for a member in a particular pay-grade/longevity-step/family-size category as set out 

in Chapter II.B.4. hereof, "Federal Income Tax Advantage," above. In particular, see text accompanying 

footnotes 22 to 26 of Chapter II.B.4. hereof, above. 

1146
the Food Stamp Act of 1977, as amended,3

 is a question that frequently arises in the 

context of the adequacy of overall military compensation levels. That some members of 

the Armed Forces receive food stamp aid is a fact. Whether they should or not is subject 

to question. Section 8121(a) of the Department of Defense Appropriation Act, 1995, 

Public Law 103-335, §8121(a), 108 Stat. 2599, 2649-2650 (1994), required the 

Department of Defense to provide information to Congress on the use of food stamps by 

members of the Armed Forces, including the number of members eligible to receive 

benefits under the food stamp program and their location, the number of members 

receiving benefits and their location, and an estimate of the cost of raising the basic pay 

of members of the Armed Forces to a rate at which no member of the Armed Forces 

would be eligible to receive benefits.4

Partly in response to Congressional concern5

, in 2003 the Department of Defense 

conducted a study of food stamp use by members of the Armed Forces. The summary of 

findings of the May 2003 Department of Defense report, entitled “Food Stamp Usage in 

the Military,” are set out below: 

 Less than two-tenths of one percent of the military members included 

in this study received food stamps (1478 members out of a total military 

population of 886,347). Furthermore, more than 50 percent of these individuals 

lived in government quarters. The majority of these members were eligible for 

food stamps because the Department of Agriculture [which oversees eligibility 

criteria] does not include the value of in-kind housing benefits in the income 

eligibility calculations. 

 

3 The Food Stamp Act of 1965, Public Law 88-525, 78 Stat. 703 (1964), as amended, is classified to 7 

U.S.C. §2011 et seq. 

4

 Eligibility for food stamp aid is household- rather than family-based, depending on the number of people 

in the household under consideration, gross household income, net household income, and total financial 

household resources, as well as a number of non-financial factors. In general, gross household income of a 

household seeking food stamp aid may not exceed 130 percent of the federal poverty guidelines for 

however many people are in the household. Net household income, which is determined by subtracting 

from gross household income a standard cost-of-living charge, an earned-income deduction, a dependentcare deduction, an excess-shelter deduction, and a medical deduction, may not exceed 100 percent of the 

federal poverty guidelines for the number of people in the household. For most members of the Armed 

Forces, total household financial resources may not exceed $2,000 for the household to be eligible for food 

stamps. If the household includes a person age 60 or older, the limit is $3,000. 

5 As expressed, for example, in the National Defense Appropriations Act for Fiscal Year 1995, Public Law 

103-335, section 8121(a). 

1147
 Overall, in 2004 the data did not support a claim that military food 

stamp usage was widespread. The fact that some enlisted members and even a few 

officers receive food stamps is more a result of larger-than-average household 

sizes and whether a member lives on or off base than it is an indicator of 

inadequate military compensation. 

The 2003 report noted that consecutive studies of the issue had showed a 

substantial decline in food stamp utilization. In 1991 some 19,400 members were 

estimated to be using food stamps. A 1995 study found 11,900 such members. 

The 1999 study identified food stamp utilization by only 6,300 members. The 

2003 study noted the substantial decline in food stamp usage. In 1991, some 

19,400 members were estimated. 

Nevertheless, as noted in Chapter IIB3 of this volume, the existing need 

for food stamps by nearly 1 percent of the Armed Forces brought about major 

changes in the basic allowance for subsistence in subsequent years. In 2000, 

noting that more than 6,000 members still were depending on food stamps for 

subsistence,6

 Congress provided a BAS supplement, the Family Subsistence 

Supplemental Allowance (FSSA), for targeted personnel in the National Defense 

Authorization Act for Fiscal Year 2001. That provision was encoded in 37 U.S. 

Code 402(a). The supplement would raise the subsistence allowance of a member 

with dependents who was eligible to receive food stamps, to the point where food 

stamps no longer were necessary, as long as the monthly payment did not exceed 

$500. A member’s eligibility for food stamps would be determined by the 

standards of the Food Stamp Act of 1977 (7 U.S.Code 201(c), taking into 

consideration the amount of BAH for which the member was eligible by virtue of 

grade, location, and dependency status. The BAH amount would be considered 

whether or not the member was receiving such an allowance by virtue of not 

living in government quarters. The supplement would be curtailed by a 

promotion, permanent change of station, or after payment had been made for 

twelve consecutive months. 

 

6

 See, for example, House Report No. 106-616 (House Armed Services Committee, p. 375, accompanying 

H.R. 5408, 106th Congress, 2d Session (2000). 

1148
Appendix XIII 

 Critical Dates Relating to Hostilities and Entitlement to 

 Various Military and Veterans Benefits 

 

Background: Whether a member or former member of an armed force is or is not 

entitled to various military or veterans benefits frequently turns on whether the member 

was a member of an armed force during a particular period of time, or was assigned to 

specific types of duty, or duty within a qualifying locality, during a particular period of 

time. For example, entitlement to certain veterans' benefits, including so-called "GI Bill" 

educational benefits, requires active duty as a member of an armed force for a certain 

minimum length of time during a designated period. Other entitlements limited by 

specific dates include combat duty pay (now known as hostile fire or imminent danger 

pay) and certain income and other federal tax benefits. 

The following is a brief listing of some of the more important dates for 

determining eligibility for and entitlement to various military and veterans benefits 

deriving from military service during World War II, the Korean Conflict, the Vietnam 

Conflict, the Persian Gulf War, and the Bosnia-Herzegovina Peacekeeping Operation.1

 If 

an individual member or former member of an armed force was not on active duty during 

one or more of the inclusive periods set out below, the member will not be entitled to the 

general category of benefits indicated. If the member was on active duty during one or 

more of the inclusive periods, the member may or may not be entitled to one or more of 

the benefits included within the general category of benefits indicated, depending on 

whether the member met certain additional requirements for receipt of those benefits. The 

question of what specific benefits a member or former member may be entitled to is 

beyond the scope of this appendix, as is the question of what the additional requirements 

for receipt of any particular benefit may be. For these latter two questions, the reader is 

referred to the requirements for receipt of benefits under specific program headings. 

 

1

 Certain other important dates are also set out below, such as the date or dates of various precipitating and 

aggravating events underlying the different periods of armed conflict, the date or dates of events ending 

such periods, the date or dates of other important events preceding, accompanying, and following such 

periods, etc. 

1149
World War II: 

* Japanese attack on Pearl Harbor December 7, 1941 

* United States declares war on Japan December 8, 1941 

* United States declares war on Germany, Italy December 11,1941 

* Veterans' benefits of various kinds December 7, 1941– 

December 31, 1946 

* Germany surrenders unconditionally May 7, 1945 

* Japan announces its intention to surrender August 14, 1945 

* Formal unconditional surrender of Japan September 2, 1945 

 (aboard "U.S.S. Missouri" in Tokyo Bay) 

* Presidential proclamation of end of hostilities December 31, 1945 

* Formal end of war with Germany October 19, 1951 

 (Joint resolution of Congress) 

* Peace treaty with Japan April 28, 1952 

* Prisoner of war pay filing deadline August 31, 1955 

Korean Conflict: 

* North Korea invades South Korea June 25, 1950 

* Combat duty pay authorized May 31, 1950– 

 January 31, 1955 

* Federal tax benefits (combat zone) June 25, 1950– 

 January 31, 1955 

* Veterans' benefits of various kinds June 27, 1950– 

 January 31, 1955 

* Kaesong/Panmunjom truce talks begin July 10, 1951 

* Cease fire announced at Panmunjom July 27, 1953 

1150
* Prisoner of war pay filing deadline August 21, 1955 (subject to 

exceptions for persons in 

POW status after August 21, 

1954) 

Vietnam Conflict: 

* Armed Forces Expeditionary Medal authorized July 2, 1958 

* Federal tax benefits (combat zone) February 28, 1961– 

 June 30, 1996 

* Hostile fire pay/imminent danger pay October 1, 1963– 

 January 31, 1976 

* Veterans' benefits of various kinds August 5, 1964– 

 May 7, 1975 

* Paris Peace Accord signed (cease fire) January 27, 1973 

* United States forces withdraw from Vietnam March 28, 1973 

* Prisoner of war pay filing deadline June 24, 1973 (subject to 

exceptions for persons in 

POW status after June 24, 

1970) 

* Selective Service inductions terminated June 30, 1973 

 (implementation of "All-Volunteer Force") 

* Last U.S. citizen evacuated from Saigon April 29, 1975 

* Republic of Vietnam (South Vietnam) April 30, 1975 

 surrenders to Socialist Republic of 

 Vietnam (North Vietnam) 

Persian Gulf War: 

* Iraq invades Kuwait August 1, 1990 

* Southwest Asia Service Medal authorized August 2, 1990– 

 November 30, 1995 

* Hostile fire/imminent danger pay authorized August 2, 1990, to date 

(Discontinued August 31, 

1993, for all of Southwest 

1151
Asia except Kuwait, Iraq, 

Saudi Arabia, Yemen, and 

Persian Gulf Waters) 

* Veterans benefits of various kinds August 2, 1990, to date 

* Operation Desert Shield: U.S. deploys August 7, 1990 

 forces into Southwest Asia 

* Iraq annexes Kuwait August 28, 1990 

* UN Resolution 678: authorizes use of November 29, 1990 

 force if Iraq not out of Kuwait by 

 January 15, 1991. U.S. begins orchestra- 

 tion of a 28-nation coalition with 690,000 

 troops, 450,000 of which were U.S. 

* Operation Desert Storm: air war begins January 17, 1991 

* Federal tax benefits (combat zone) January 17, 1991, to date 

* Operation Desert Storm: ground war February 24, 1991 

 begins 

* Iraq stops resistance: cessation of hostilities February 28, 1991 

* Formal cease fire establishes “no-fly zones” 

 over Iraq April 11, 1991 

Somalia Peacekeeping Operation Restore Hope December 1992– 

 March 1993 

 

Bosnia-Herzegovina Peacekeeping Operation: 

* United States and European Community April 7, 1992 

 recognize Bosnia-Herzegovina as an 

 independent state 

* Armed Forces Service Medal authorized June 1, 1992, to date 

* Hostile fire/imminent danger pay authorized June 22, 1992, to date 

* Dayton Peace Accords initialed November 21, 1995 

* Federal tax benefits (combat zone) November 21, 1995, to date 

1152
* Secretary of Defense declares Bosnia- December 2, 1995 

 Herzegovina deployment to be a 

 contingency operation 

* President formally authorizes deployment December 3, 1995 

 of United States forces 

* Beginning of call-up of Selected Reserves December 8, 1995 

 for support of Bosnia-Herzegovina 

 peacekeeping operations 

* Dayton Accords formally signed in Paris December 14, 1995 

* Multinational Implementation Force (IFOR) 

oversees military aspects of Dayton Accords December 1995– 

 December 1996 

* Stabilization Force Bosnia-Herzegovina 

 (SFOR) succeeds IFOR, carries on multi- December 1996– 

 national peacekeeping activities 

* Housing allowance system is consolidated and 

 basic allowance for subsistence is reformed by 

 National Defense Authorization Act for Fiscal 

 Year 1998 January 1, 1998 

Kosovo 

 

* Rambouillet Accord declares Kosovo February 23, 1999 

 autonomy 

* NATO Operation Allied Force bombs 

 Serbian targets in Kosovo March 24– 

 June 10, 1999 

* Hostile fire/imminent danger pay authorized 

 for area around Yugoslavia April 13, 1999 

* Kosovo Force (KFOR) deploys, including 

 7,000 United States troops June 12-20, 1999 

 * KFOR presence in Kosovo continues June 1999 to date 

Operation Enduring Freedom (Afghanistan) 

* Hostile fire/imminent danger pay approved for 

 Afghanistan November 1, 1988 

1153
* Missile attacks on suspected terrorist sites in Sudan 

 and Afghanistan in response to bombings of United 

 States embassies in Kenya and Tanzania August 1998 

* National Defense Authorization Act for Fiscal 

 Year 2000 reforms retired pay system October 5, 1999 

* Terrorist attack on U.S.S. Cole in Aden harbor October 12, 2000 

* Terrorist hijackers attack World Trade Center and 

 Pentagon September 11, 2001 

* Multinational Operation Enduring Freedom begins 

 in Afghanistan October 7, 2001 

* Interim government of Hamid Karzai is seated December 22, 2001 

* Georgia designated for hostile fire/imminent danger 

 pay July 30, 2002 

* Djibouti, Eritrea, and Kenya designated for hostile 

 fire/imminent danger pay July 31, 2002 

* Imminent danger pay increases to $225 per month 

 and family separation allowance to $250 per month October 1, 2002 

* Ivory Coast designated for hostile fire/imminent danger 

 pay February 27, 2003 

* NATO takes role in Afghanistan by assuming command 

 of International Security Assistance Force August 11, 2003 

 

* Occupation and security operations of Operation 

 Enduring Freedom continue October 2001– 

Operation Iraqi Freedom 

* Launch of Operation Iraqi Freedom March 19, 2003 

* United States forces enter Baghdad April 9, 2003 

* First meeting of Iraq governing council July 13, 2003 

* Saddam Hussein captured December 13, 2003 

1154
* Phase-in of full concurrent receipt begins January 1, 2004 

 for retired disabled members 

* Provisional government installed in Iraq; 

 occupation coalition retains military control June 30, 2004 

1155
Appendix XIV

 United States Casualties in Wars of the 20th and 21st Centuries 

 

 

War/Conflict Service Number 

Serving 

Casualties and 

Percentage 

Deaths and 

Percentage 

World War I 

(1917-1918) 

Total 4,734,991 320,518 6.8 116,516 2.5 

Army 4,057,101 300,041 7.4 106,378 2.6 

Navy 599,051 8,106 1.4 7,287 1.2 

Marines 78,839 12,371 15.7 2,851 3.6 

World War II 

(1941-1945) 

Total 16,122,566 1,077,245 6.7 405,399 2.5 

Army 11,260,000 884,135 7.9 318,274 2.8 

Navy 4,183,466 100,392 2.4 62,614 1.5 

Marines 669,100 92,718 13.9 24,511 3.7 

Korean Conflict 

 (1950-1953) 

Total 5,720,000 140,197 2.5 36,913 0.6 

Army 2,834,000 107,757 3.8 30,161 1.1 

Navy 1,177,000 2,224 0.2 648 0.1 

Marines 424,000 28,352 6.7 4,608 1.1 

Air Force 1,285,000 1,864 0.2 1,496 0.1 

Vietnam 

Conflict 

 (1964-1973) 

Total 8,744,000 211,480 2.4 58,177 0.7 

Army 4,368,000 134,997 3.1 38,195 0.9 

Navy 1,842,000 6,740 0.4 2,562 0.1 

Marines 794,000 66,229 8.3 14,837 1.9 

Air Force 1,740,000 3,514 0.2 2,583 0.1 

Persian Gulf 

War (1991) 

Total 2,050,790 849 .04 383 .02 

Army 744,981 480 .06 224 .03 

Navy 576,124 67 .01 56 .01 

Marines 200,358 160 .08 68 .04 

Air Force 529,287 44 .01 35 .01 

Operation 

Enduring 

Freedom 

(2001-)* 

Total 2,819,943 340 .01 112 .004 

Army 1,272,072 269 .02 71 .005 

Navy 641,993 10 .002 10 .002 

Marines 133,605 21 .02 12 .01 

Air Force 677,589 40 .06 19 .03 

1156
Operation Iraqi 

Freedom 

(2003-)* 

Total 2,641,900 3,410 .1 570 .02 

Army 1,183,000 2,961 .3 2,492 .2 

Navy 563,000 20 .004 10 .002 

Marines 272,900 389 .1 83 .03 

Air Force 612,300 40 .01 8 .002 

 

 *Figures for Operation Enduring Freedom and Operation Iraqi Freedom as of March 

2004, based on U.S. Department of Defense website 

http://web1.whs.osd.mil/mmid/mmidhome.htm and International Institute for Strategic 

Studies, The Military Balance 2003-2004 (London: Oxford University Press, 2003), 18-

23. Figures for Operation Enduring Freedom include casualties incurred in and around 

Afghanistan and in the Philippines, Southwest Asia, and other locations. 

1157
Appendix XV 

 Statute of Limitations for Claims 

 Against the Federal Government 

 for Back Pay and Other Matters 

Background: Questions frequently arise concerning the entitlement of a member 

or former member of the Armed Forces to compensation for or on account of service or 

other compensable action that took place in the distant past. In the absence of a 

specifically controlling statute of limitations that provides for a longer period of time in 

which a suit may be brought against the Federal Government, claims against the Federal 

Government must generally be brought with six years after the claim or cause of action 

accrues.

1

 Thus, Section 2401 of Title 28, United States Code, 28 U.S.C. §2401, provides 

that every civil action against the United States, other than an action based on a tort 

claim, must be brought within six years after the cause of action "first accrues," provided 

that if the claimant is "under a legal disability" or "beyond the seas" when the claim 

accrues, an action may be brought within three years "after the disability ceases". 28 

U.S.C. §2401(a). An action against the United States premised on a tort claim, on the 

other hand, must generally be brought within two years after the cause of action accrues. 

28 U.S.C. §2401(b). The same rule applies to claims against the United States over which 

the United States Court of Claims has jurisdiction. 28 U.S.C. §2501. 

An exception to these general rules applies if the claim of a member or former 

member of the Armed Forces accrues during wartime or within five years before war 

begins, in which case the claim must be presented to the Department of Defense "within 

five years after peace is established"2

 or within six years after the claim accrues,3

 

1

The question of when a particular claim or cause of action accrues, or accrued, for the purpose of applying 

a statute of limitations is beyond the scope of this appendix. The question has, however, been the subject of 

much dispute and extended litigation in various contexts over the years. 

2

 The question when "peace is established" with respect to a particular war or a particular claimant is 

beyond the scope of this appendix. 

3 See footnote 1 hereof, above. 

1158
whichever is later. 31 U.S.C. §3702(b)(2).4

 The National Defense Authorization Act for 

Fiscal Year 1997, Public Law 104-201, 110 Stat. 2543, amended 31 U.S.C. §3702 by 

providing that the Secretary of the relevant department can waive the peacetime six-year 

limit for claims of outstanding pay or allowances if the amount of the claim is less than 

$25,000. 

 

4

 As originally provided, the Comptroller General was required to settle all claims against the Federal 

Government under 31 U.S.C. §3702. The Comptroller General's functions under former 31 U.S.C. §3702 

were transferred, effective June 30, 1996, to the director of the Office of Management and Budget by 

Section 211 of the Legislative Branch Appropriations Act, 1996, Public Law 104-53, §211, 104 Stat. 514, 

535 (1995). Insofar as those functions relate to claims for military pay, travel, retirement, survivor benefits, 

and other matters falling within the purview of the Department of Defense, the director of the Office of 

Management and Budget has delegated those function to the Department of Defense. 

1159
 Selected References and Citations 

Public Laws 

Public Law Number Page

Public Law 62-401 — Act of March 2, 1913 (Army Appropriation Act of

1914), ch. 93 [Public Law 401, 62d Congress], 37 Stat. 704 (1913)

Flight Pay (Crew Member) and ........................................................................................................ 282 

Public Law 64-85 — Act of June 3, 1916 (National Defense Act of 1916), 

ch. 134 [Public Law 85, 64th Congress], 39 Stat. 166 (1916)

Disability Retired Pay and ................................................................................................................. 741 

Members of the National Guard and ................................................................................................. 231 

Nondisability Retired and Retainer Pay and ..................................................................................... 689 

Professional Education and Training and ......................................................................................... 947 

Public Law 67-235 — Act of June 10, 1922 (Joint Service Pay Readjustment Act of 1922), 

ch. 212 [Public Law 235, 67th Congress], 42 Stat. 625 (1922) 

Adjustments to Retired and Retainer Pay and .................................................................................. 758 

Aviation Career Incentive Pay (ACIP) and ....................................................................................... 351 

Basic Allowance for Quarters and .................................................................................................... 106 

Basic Allowance for Subsistence and ............................................................................................... 183 

Basic Pay and ...................................................................................................................................... 22 

Compensation for Inactive-duty Training and .................................................................................. 236 

Diving Duty Pay and ....................................................................................................................... 447 

Drill Pay for Enlisted Members of Reserve Components and .......................................................... 236 

Flight Pay (Crew Member) and ....................................................................................................... 283 

Flight Pay (Non-Crew Member) and ................................................................................................ 314 

Personal Money Allowance and Special Position Allowance and .................................................. 1033 

Reenlistment Bonuses and ................................................................................................................. 613 

Reserve Officers Pay for Administrative Duty .................................................................................. 675 

Selective Reenlistment Bonus and ..................................................................................................... 613 

Special Pay While on Duty at Certain Places and ............................................................................. 660 

Submarine Duty Incentive Pay and ................................................................................................... 419 

Travel and Transportation Allowances and ....................................................................................... 991 

Public Law 69-446 — Act of July 2, 1926 (Army Air Corps Act), 

ch. 721 [Public Law 446, 69th Congress], 44 Stat. 780 (1926)

Aviation Career Incentive Pay and Inactive Duty Training Entitlement of

Members of Reserve Components ....................................................................................... 363 

Demolition Duty Pay and Inactive Duty Training Entitlement of 

Members of Reserve Components ....................................................................................... 274 

Experimental Stress Duty Pays and Inactive Duty Training Entitlement of

Members of Reserve Components ..................................................................494 

Flight Deck Duty Pay and Inactive Duty Training Entitlement of

Members of Reserve Components and .............................................................400 

Flight Pay (Air Weapons Controllers) Inactive Duty Training Entitlement of 

Members of Reserve Components and .............................................................363 

Flight Pay (Crew Member) and Inactive Duty Training Entitlement of

Members of Reserve Components ......................................................................298 

 Flight Pay (Non-Crew Member) and Inactive Duty Training Entitlement of 

Members of Reserve Components.......................................................................314 

1160
Public Law 69-446 — Act of July 2, 1926 (Army Air Corps Act), 

ch. 721 [Public Law 446, 69th Congress], 44 Stat. 780 (1926) (continued) 

 Glider Duty Pay and Inactive Duty Training Entitlement of 

Members of Reserve Components .............................................................................................388 

 Leprosy Duty Pay and Inactive Duty Training Entitlement of 

 Members of Reserve Components..............................................................................................515 

Parachute Duty Pay and Inactive Duty Training Entitlement of 

Members of Reserve Components ............................................................................................378 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) and 

Inactive Duty Training Entitlement of Members of Reserve Components ..........................506 

Submarine Duty Incentive Pay and Inactive Duty Training Entitlement 

of Members of Reserve Components ..................................................................................436 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and 

Inactive Duty Training Entitlement of Members of Reserve Components ......................... 414 

Public Law 73-78 — Independent Offices Appropriations Act, 1934, ch. 101 

 [Public Law 78, 73d Congress], 48 Stat. 283 (1933) 

Non-Crew Member Flight Pay and ...................................................................................................305 

Public Law 74-29 — Act of April 9, 1935, ch. 413 [Public Law 29, 

 74th Congress], 49 Stat. 120 (1935) 

Basic Allowance for Quarters and .....................................................................................................106 

Public Law 74-271 — Social Security Act of 1935, ch. 531 [Public Law 271, 

 74th Congress], 49 Stat. 620 (1935) 

Government Contribution to Social Security and ..............................................................................884 

Retired Members Medical Care and ..................................................................................................820 

Unemployment Compensation and ....................................................................................................801 

Public Law 76-649 — Act of July 2, 1942 (Military Appropriations Act for Fiscal 

 Year 1943), ch. 477 [Public Law 649, 76th Congress], 56 Stat. 611 (1942) 

Overseas Station Allowances and ...................................................................................................1003 

Station (Overseas) Housing Allowance and.......................................................................................144 

Public Law 76-783 — Selective Service and Training Act of 1940, 

 ch. 720 [Public Law 783, 76th Congress], 54 Stat. 885 (1940) 

Reserve Components and ..................................................................................................................239 

Public Law 76-801 — National Service Life Insurance Act of 1940, ch. 757 

 [Public Law 801, 76th Congress], 54 Stat. 1008 (1940) 

Servicemen's Group Life Insurance and.............................................................................................828 

Public Law 76-861— Soldier's and Sailor's Civil Relief Act of 1940, enacted 

 by the Act of October 17, 1940, ch. 888 [Public Law 861, 76th 

 Congress], 54 Stat. 1178 (1940) 

State Taxation of Military Compensation and ................................................................................ 1094 

Public Law 76-872 — Act of October 17, 1940, ch. 899 [Public Law 872, 

 76th Congress], 54 Stat. 1205 (1940) 

Basic Allowance for Quarters and......................................................................................................109 

Public Law 77-98 — Act of June 3, 1941, ch. 166 [Public Law 649, 76th 

 Congress], 55 Stat. 240 (1941) 

Parachute Duty Pay and ....................................................................................................................367 

Public Law 77-490 — Act of March 7, 1942, ch. 166 [Public Law 490, 77th 

 Congress], 56 Stat. 143 (1942) 

Special Pay for Career Sea Duty and .................................................................................................458 

Special Pay While on Duty at Certain Places and ..............................................................................661 

Public Law 77-607 — Pay Readjustment Act of 1942, ch. 681 [Public 

Law 607, 77th Congress], 56 Stat. 359 (1942) 

Aviation Career Incentive Pay and ................................................................................................... 352 

Basic Allowance for Quarters and .................................................................................................... 107 

1161
Basic Pay and ..................................... ................................................................................................ 23 

Compensation for Inactive-duty Training and.................................................................................... 238 

Drill Pay for Enlisted Members of Reserve Components and ............................................................ 237 

Flight Pay (Crew Member) and ......................................................................................................... 299 

Flight Pay (Non-Crew Member) and ................................................................................................ 315 

Glider Duty Pay and........................................................................................................................... 389 

Leprosy Duty Pay and ....................................................................................................................... 515 

Parachute Duty Pay and ..................................................................................................................... 380 

Personal Money Allowance and Special Position Allowance and ................................................... 1034 

Reenlistment Bonuses and ................................................................................................................. 614 

Reserve Officers Pay for Administrative Duty and ........................................................................ 676 

Selective Reenlistment Bonus and ...................................................................................................... 614 

Special Pay for Career Sea Duty and .................................................................................................. 458 

Special Pay. While on Duty at Certain Places (Foreign Duty Pay) and .............................................. 661 

Submarine Duty Incentive Pay and ..................................................................................................... 437 

Public Law 77-697 — Act of August 4, 1942, ch.546 [Public Law 697, 

77th Congress], 56 Stat. 736 (1942) 

Submarine Duty Incentive Pay and ..................................................................................................... 419 

Public Law 77-763 — Act of October 26, 1942, (Second Supplemental 

National Defense Appropriation Act for Fiscal Year 1943), ch. 629 

 [Public Law 763, 77th Congress], 56 Stat. 990 (1942)

Station (Overseas) Housing Allowance and ...................................................................................... 144 

Public Law 78-68 — Current Tax Payment Act of 1943, ch. 120 [Public 

Law 68, 78th Congress], 57 Stat. 126 (1943) 

Federal Income Tax Advantage and ............................................................................................ 211 

Public Law 78-393 — Act of June 30, 1944, ch. 335 [Public Law 393, 

78th Congress], 58 Stat: 648 (1944) 

Hostile Fire Pay (Badge Pay) and ..................................................................................................... 250 

Public Law 78-409 — Act of July 1, 1944, ch. 372 [Public Law 409, 

78th Congress], 58 Stat. 682 (1944) 

Glider Duty Pay and ......................................................................................................................... 383 

Public Law 79-137 — Act of July 6, 1945, ch. 279 [Public Law 137, 

79th Congress], 59 Stat. 462 (1945) 

Hostile Fire Pay (Badge Pay) and ..................................................................................................... 250 

Public Law 79-604 - Act of August 2, 1946, ch. 756 [Public Law. 604, 

79th Congress],. 60 Stat. 853 (1946) 

Special Position Allowance and ........................................................................................................ 144 

Station (Overseas) Housing Allowance and .................................................................................. 1005 

Public Law 79-704 — Armed Forces Leave Act of 1946, ch. 931 

[Public Law 704, 79th Congress], 60 Stat. 963 (1946) 

Annual Leave and ............................................................................................................................ 857 

Public Law 80-253 — National Security Act of 1947, ch. 343 [Public 

Law 253, 80th Congress], 61 Stat. 495 (1947) 

Air Force and ............................................................................................................................. 239, 720 

Compensation for Inactive-duty Training and ................................................................................... 239 

 Nondisability Retired and Retainer Pay and ......................................................................................720 

Public Law 80-365 — Army-Navy-Public Health Service Medical Officer Procurement 

Act of 1947, ch. 494 [Public Law 365, 80th Congress], 61 Stat. 776 (1947) 

 Special Pay for Dentists (Dental Officers of the Armed Forces) .......................................................550 

Special Pay for Physicians (Medical Officers of the Armed Forces) ................................................520 

Special Pay for Veterinarians ............................................................................................................567 

Public Law 80-381— Officer Personnel Act of 1947, ch. 512 [Public 

Law 381, 80th Congress], 61 Stat. 795 (1947) 

Nondisability Retired and Retainer Pay and ......................................................................................692 

1162
Nondisability Separation Pay and .......................................................................................................787 

Personal Money Allowance and Special Position Allowance and ...................................................1034 

Public Law 80-759 — Selective Service Act of 1948, ch. 625 

[Public Law 759, 80th Congress], 62 Stat. 604 (1948) 

Compensation for Inactive-duty Training and ....................................................................................240 

Enlistment Bonuses and .....................................................................................................................600 

Special Pay for Optometrists ..............................................................................................................572 

Special Pay for Veterinarians .............................................................................................................567 

Public Law 80-810 — Army and Air Force Vitalization and Retirement Equalization 

Act of 1948, ch. 708 [Public Law 810, 80th Congress] 62-Stat. 1081 (1948) 

 Compensation for Inactive-duty Training and......................................................................................243 

Nondisability Retired and Retainer Pay and .......................................................................................692 

Nondisability Separation Pay and .......................................................................................................788 

Retired Pay for Non-Regular Service (Reserve Retirement) and ...................................................... 722 

Public Law 81-20 — Servicemen's Indemnity Act of 1951- 65 Stat. 33 

Public Law 81-351 — Career Compensation Act of 1949, ch. 681 

[Public Law 351, 81st Congress], 63 Stat. 802 (1949) 

Adjustments to Retired and Retainer Pay and ....................................................................................758 

Aviation Career Incentive Pay and ..................................................................................................... 353 

Basic Allowance for Quarters and ......................................................................................................107 

Basic Allowance for Subsistence and .................................................................................................184 

Basic Pay and .......................................................................................................................................23 

Clothing Issues and Maintenance Allowances and ............................................................................998 

Compensation for Inactive-duty Training and ....................................................................................241 

Demolition Duty Pay and ...................................................................................................................266 

Disability Retired Pay and ..................................................................................................................738 

Disability Severance Pay.....................................................................................................................798 

Diving Duty Pay and ..........................................................................................................................448 

Experimental Stress Duty Pays and ....................................................................................................487 

Flight Deck Duty Pay and ..................................................................................................................392 

Flight Pay (Crew Member) and ..........................................................................................................284 

Flight Pay (Non-Crew Member) and ..................................................................................................306 

Glider Duty Pay and ...........................................................................................................................384 

Hostile Fire Pay ("Badge Pay"), Repeal of Authority for, and ...........................................................250 

Imputed Contribution for Retirement Benefits and .............................................................................774 

Inactive Duty Training Pay for Members of Reserve Components and..............................................241 

Leprosy Duty Pay and ........................................................................................................................510 

Operational Submersible Duty Pay and ..............................................................................................443 

Overseas Station Allowances and .....................................................................................................1005 

Parachute Duty Pay and ......................................................................................................................369 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) and ........................................499 

Personal Money Allowance and Special Position Allowance and ...................................................1035 

Reenlistment Bonuses and ..................................................................................................................614 

Reserve Officers Pay for Administrative Duty and ............................................................................676 

Sea Duty, Special Pay for Career, and ................................................................................................459 

Selective Reenlistment Bonus and .....................................................................................................614 

Special Pay for Dentists (Dental Officers of the Armed Forces) ........................................................551 

Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................521 

Special Pay While on Duty at Certain Places and ..............................................................................662 

Station (Overseas) Housing Allowance and .....................................................................................1005 

Submarine Duty Incentive Pay and ....................................................................................................420 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and .......................................... 405 

Travel and Transportation Allowances and ........................................................................................989 

1163
Variable Housing Allowance and .......................................................................................................145 

Public Law 81-771— Dependents Assistance Act of 1950 (DAA), ch. 922 

[Public Law 771, 81st Congress], 64 Stat. 794 (1950) 

Basic Allowance for Quarters and ......................................................................................................111 

Public Law 81-779 — Act of September 9, 1950 ("Doctors Draft Act"), 

ch. 939 [Public Law 779, 81st Congress], 64 Stat. 826 (1950) 

Special Pay for Dentists (Dental Officers of the Armed Forces) ........................................................551 

Special Pay for Optometrists ..............................................................................................................572 

Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................522 

Special Pay for Veterinarians ..............................................................................................................567 

Public Law 82-51— Universal Military Training and Service Act of 1951, 

ch. 144 [Public Law 51, 82d Congress], 65 '

Scat. 75 (1951) 

Compensation for Inactive-duty Training and ....................................................................................240 

Public Law 82-476 — Armed Forces Reserve Act of 1952, 

ch. 608 [Public Law 476, 82d Congress], 66 Stat. 481 (1952) 

Nondisability Separation Pay and ......................................................................................................789 

Reserve Components of the Armed Forces and .................................................................................234

Public Law 82-488 — Department of Defense Appropriation Act, 1953, 

 ch. 630 [Public Law 488, 82d Congress], 66 Stat. 517 (1952) 

Combat Duty Pay Act of 1952, Authorizing "Combat Pay" ..............................................................252 

Voluntary Education and Training and ..............................................................................................865 

Public Law 83-84 — Act of June 29, 1953, ch. 158 [Public Law 84, 

83d Congress], 67 Stat. 86 (1953) 

Special Pay for Veterinarians .............................................................................................................568 

Public Law 83-179 — Act of August 1, 1953, ch. 305 [Public 

Law 179, 83d Congress], 67 Stat. 336 (1953) 

Basic Allowance for Subsistence and .................................................................................................186 

Voluntary Education and Training and ..............................................................................................866 

Public Law 83-239 — Uniformed Services Contingency Option Act 

of 1953, ch. 393 [Public Law 239, 89th Congress], 67 Stat. 501 (1953) 

Survivor Benefit Plan and ..................................................................................................................902 

Public Law 83-349 — Officer Grade Limitation Act of 1954, ch. 180 

[Public Law 349, 83d Congress], 68 Stat. 85 (1954) 

Nondisability Retired and Retainer Pay and .......................................................................................692 

Public Law 83-379 — Warrant Officer Act of 1954, ch. 249 [Public 

Law 379, 83d Congress], 68 Stat. 157 (1954) 

Nondisability Retired and Retainer Pay and....................................................................................... 695 

Public Law 83-506 — Act of July 16, 1954, ch. 535 [Public Law 506, 

83d Congress], 68 Stat. 488 (1954) 

Reenlistment Bonus and .................................................................................................................... 616 

Selective Reenlistment Bonus and .................................................................................................... 616 

Public Law 84-20 — Career Incentive Act of 1955, ch. 210 [Public 

Law 20, 84th Congress], 69 Stat. 18 (1955) 

Basic pay and ...................................................................................................................................... 24 

Demolition Duty Pay and .................................................................................................................. 268 

Dislocation and Departure Allowances and ..................................................................................... 1022 

Diving Duty -Pay and ........................................................................................................................ 450 

Experimental Stress Duty Pays and ................................................................................................... 486 

Flight Deck Duty Pay and .................................................................................................................. 391 

Flight Pay (Crew Member) and ......................................................................................................... 290 

Flight Pay (Non-Crew Member) and.................................................................................................. 308 

Glider Duty Pay and ........................................................................................................................... 384 

Leprosy Duty Pay and ........................................................................................................................ 511 

1164
Parachute Duty Pay and ........................................................................................370 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) and .............................499 

Personal Money Allowance and Special Position Allowance and ......................................1035 

Submarine Duty Incentive Pay and ............................................................................421 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay ....................................404 

Public Law 84-497 — Act of April 30, 1956, ch 223 [Public, Law 497, 

84th Congress], 70 Stat. 119 (1956) 

Special Pay for Dentists (Dental Officers of the Armed Forces).......................................552 

 Special Pay for Physicians (Medical Officers of the Armed Forces).....................................522 

Public Law 84-569 — Dependents' Medical Care Act, ch 37.4 [Public 

Law 569, 84th Congress], 70 Stat. 250 (1956) 

Medical Care (Service Members and. Dependents) ........................................................................ 874 

Retired Members Medical Care and ......................................................................................... 819 

Public Law 84-881 — Servicemen's and Veterans' Survivor Benefits 

Act, ch. 837 [Public Law 8813 84th Congress], 70 Stat. 857 (1956) 

Death Gratuity and ........................................................................................................................... 838 

Dependency and Indemnity Compensation and ............................................................................... 846 

Government Contribution to Social Security and ............................................................................ 886 

Servicemen's Group Life Insurance and .......................................................................................... 830 

 Public Law 85-208 — Act of August 28, 1957 — 71 Stat. 484 

Experimental Stress Duty Pays and ......................................................................................... 486 

 Public Law 85-422 — Act of May 20, 1958 (Uniformed Services Pay Act 

of 1958), Public Law 85-422, 72 Stat. 122.(1958) 

Adjustments to Retired and Retainer Pay and ................................................................................ 759 

Basic Pay and ................................................................................................................................... 24 

Nondisability Retired and Retainer Pay and .................................................................................... 720 

Personal Money Allowance and Special Position Allowance ....................................................... 1036 

Special Duty Assignment Pay, Proficiency Pay, and ....................................................................... 654 

Special Pay for Officers Holding Positions of Unusual Responsibility and .................................... 278 

 Public Law 86-635 — Act of July 12, 1960, Public Law 86-635, 74 Stat. 469 (1960) 

 Operational Submersible Duty Pay and .................... ............................................................... 443 

 Public Law 87-531 — Act of July 10, 1962, Public Law 87-531, 76 Stat. 152 (1962) 

 Basic Allowance for Quarters and ............................................................................................ 112 

Public Law 87-649— Act of September 7, 1962, Public Law 87-649, 76 Stat. 451 (1962) 

Personal Money Allowance and ................................................................................................... 1035 

Regular Military Compensation and ................................................................................................ 15 

Public Law 88-132 — Uniformed Services Pay Act of 1963, Public 

 Law 88432, 77 Stat. 210 (1963) 

Adjustments to Retired and Retainer Pay and ................................................................................ 760 

Basic Pay and ................................................................................................................................... 25 

Experimental Stress Duty Pay and.................................................................................................. 486 

Family Separation Allowance and .............................................................................................. 1016 

Hostile Fire Pay and ...................................................................................................................... 253 

Nondisability Retired and Retainer Pay ........................................................................................ 720 

Responsibility Pay and ................................................................................................................... 279 

Special Pay for Dentists (Dental Officers of the Armed Forces) ................................................... 553 

Special Pay for Physicians (Medical Officers of the Armed Forces) ............................................. 523 

Special Pay, While on Duty at Certain Places and ......................................................................... 663 

 Public Law 89-132 -- Act of August 21, 1965, Public Law 89-132, 79 Stat. 545 (1965) 

Adjustments to Retired and Retainer Pay, and ............................................................................... 761 

Basic Allowance for Quarters ........................................................................................................ 114 

Basic Allowance for Subsistence and ............................................................................................. 188 

Basic Pay and ................................................................................................................................... 28 

Federal Income Tax Advantage and ............................................................................................... 218 

Hostile Fire Pay and ....................................................................................................................... 256 

1165
Imputed Contribution for Retirement Benefits and ............................................................................. 779 

Public Law 89-149 — Act of August 28, 1965, Public Law 89-149, 79 Stat. 585 (1965) 

Flight Deck Duty Pay and ................................................................................................................... 391 

Public Law 89-614 Military Medical Benefits Amendments of 1966 

Public Law 89-614, 80 Stat. 862 (1966) 

Medical Care (Service Members and Dependents) .............................................................................874 

Retired Members Medical Care and ................................................................................................... 820 

Public Law 90-168 — Reserve Forces Bill of Rights and Vitalization Act, 

Public Law 90-168, 81 Stat. 521 (1967) 

Selected Reserve and .......................................................................................................................... 243 

Public Law 90-206 — Postal Revenue and Federal Salary Act of 1967, 

Public Law 90-206, 81 Stat. 613 (1967) 

Basic Pay and ........................................................................................................................................ 27 

Public Law 90-207 — Act of December 16, 1967, Public Law 90-207, 81 Stat. 649 (1967) 

 Basic Allowance for Quarters and ...................................................................................................... 112 

Basic Allowance for Subsistence and ................................................................................................. 186 

Basic Pay and ......................................................................................................................................... 26 

Dislocation and Departure Allowances and ...................................................................................... 1023 

Federal Income Tax Advantage and..................................................................................................... 218 

Imputed Contribution for Retirement Benefits and ............................................................................. 779 

Special Pay for Dentists (Dental Officers of the Armed Forces) ........................................................ 556 

Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................. 525 

Public Law 91-20 — Act of June 3, 1969, Public Law 91-20, 83 Stat. 12 (1969) 

Nuclear-Qualified Officers, Special Pay for, and ................................................................................ 476 

Public Law 91-656 — Federal Pay Comparability Act of 1970, Public 

Law 91-656, 84 Stat. 1946 (1971) 

Basic Pay and ........................................................................................................................................ 30 

Public Law 92-129 — Act of September 28, 1971 (Military Selective Service 

 Act Amendments of 1971), Public Law 92-129, 85 Stat. 348 (1971) 

Aviation Career Incentive Pay (ACIP) and ....................................................................................... 323 

Basic Allowance for Quarters and ..................................................................................................... 113 

Basic Pay and ....................................................................................................................................... 31 

Enlistment Bonuses and ..................................................................................................................... 601 

Imputed Contribution for Retirement Benefits and ........................................................................... 782 

Reimbursement for Recruiting Expenses and .................................................................................. 1040

Selective Reenlistment Bonus and ......................................................................................................610 

Special Pay for Optometrists .............................................................................................................. 572 

Special Pay for Veterinarians ............................................................................................................ 569 

 Public Law 92-425, 86 Stat. 706 (1982) 

 Minimum Income Widows Provision ................................................................................................. 911 

 Survivor Benefit Plan .......................................................................................................................... 906 

Public Law 92-455 — Act of October 2, 1972, Public Law 92-455, 86 Stat. 761 (1972) 

 Basic Pay and ....................................................................................................................................... 27 

Public Law 92-581 — Act of October 27, 1972, Public Law 92-581, 86 Stat 1277 (1972) 

 Nuclear-Qualified Officers, Special Pay for, and................................................................................. 477 

Public Law 93-64 — Act of July 9, 1973, Public Law 93-64, 87 Stat. 149 (1973) 

 Basic Allowance for Quarters and ...................................................................................................... 113 

Enlistment Bonuses and ...................................................................................................................... 601 

Special Pay for Dentists (Dental Officers of the Armed Forces) ....................................................... 554 

Special Pay for Optometrists .............................................................................................................. 573 

Special Pay for Physicians (Medical Officers of the Armed Forces) ................................................. 524 

Special Pay for Veterinarians ............................................................................................................. 569 

Public Law 93-274 — Act of May 6, 1974, Public Law 93-274, 88 Stat. 94 (1974) 

Special Pay for Dentists (Dental Officers of the Armed Forces) ...................................................... 554 

1166
Special Pay for Optometrists ............................................................................................................ 574 

 Special Pay for Physicians (Medical Officers of the 

Armed Forces) ....................................................................................524 

 Special Pay for Veterinarians...............................................................................569 

Public Law 93-277 -Armed Forces Enlisted Personnel Bonus 

Revision Act of 1974, Public Law 93 277, 88 Stat 119 (1974) 

Enlistment Bonuses and .................................................................................................................... 601 

Reenlistment Bonuses and .................................................................................................................616 

Selective Reenlistment Bonuses and .................. ..............................................................................616 

Public Law 93-294 — Aviation Career Incentive Act of 1974, Public 

Law 93-294, 88 Stat. 177 (1974) 

 Aviation Career Incentive Pay and ..................................................................................................... 320 

Flight Pay (Crew Member) and ......................................................................................................... 290 

Submarine Duty Incentive Pay and ................................................................................................... 432 

Public Law 93-419 — Act of September 19, 1974, Public 

Law 93-419, 88 Stat. 1152 (1974) 

Basic Allowance for Quarters and ......................................................................................................114 

Basic Allowance for Subsistence and ................................................................................................ 187 

Basic Pay and ........................................................................................................................................ 29 

 Federal Income Tax Advantage and ................................................................................................... 219 

Imputed Contribution for Retirement Benefits and ............................................................................779 

Regular Military Compensation (RMC) and .........................................................................................15 

Public Law 94-286 — Act of May 14, 1976, Public. Law 94-286, 90 Stat. 517 (1976) 

 Reserves (Presidential Call Up Authority) and .............................................................................244 

Public Law 94-356 — Nuclear Career Incentive Act of 1975, Public 

Law .94-356 90 Stat: 901 (1976) 

Nuclear-Qualified Officers, Special Pay for, and.................................................................................477 

Public Law 94-361— Department of Defense Appropriation Authorization 

 Act, 1977, Public Law 94-361, 90 Stat. 923 (1976) 

Adjustments to Retired and Retainer Pay and .... .................................................................................762 

Annual Leave and ................................................................................................................................859 

Basic Allowance for Quarters and .......................................................................................................114 

Basic Allowance for Subsistence and ..................................................................................................187 

Basic Pay and ........................................................................................................................................32 

Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................. 525 

Public Law 95-79 Department of Defense Appropriation Authorization 

 Act of 1978, Public Law 95-79 91 Stat. 323 (1977) 

Bonuses for Members of the Selected Reserve ...................................................................................633 

Public Law 95-397 - Uniformed Services Survivors' Benefits 

 Amendments of 1978, Public Law 95-397, 92 Stat. 843 (1978) 

Retired Pay for Non-Regular Service and Survivor Benefit Plan ........................................................729 

Survivor Benefit Plan and ...................................................................................................................905 

Public Law 95-485 Department of Defense Appropriation Authorization 

 Act of 1979, Public Law 95-485, 92 Stat. 1611 (1978) 

Bonuses for Members of the Selected Reserve .................................................................................. 635 

Enlistment Bonuses and ......................................................................................................................602 

Reenlistment Bonus and ......................................................................................................................618 

Sea Duty, Special Pay for Career .........................................................................................................460 

Selective Reenlistment Bonus and ......................................................................................................618 

Special Pay for Dentists (Dental Officers of the Armed Forces)..........................................................555 

Special Pay for Optometrists ...............................................................................................................574 

Special Pay for Veterinarians ..............................................................................................................570 

Special Pay While on Duty at Certain Places and ...............................................................................662 

1167
Public Law 96-107 — Department of Defense Authorization Act, 1.980, 

 Public Law 96-107, 93 Stat. 808 (1979) 

Bonuses for Members of the Selected Reserve ...................................................................................647 

Overseas Housing Allowance and .......................................................................................................147 

Reserve Officers Pay for Administrative Duty and ............................................................................. 675 

Station (Overseas) Housing Allowance and ........................................................................................647 

Survivor Benefit Plan and ...................................................................................................................908 

Public Law 96-284 — Uniformed Services Health Professionals Special Pay Act of 

1980, Public Law 96-284, 94 Stat. 587 (1980) 

Special Pay for Dentists (Dental Officers of the Armed Forces) .........................................................555 

Special Pay for Optometrists ...............................................................................................................575 

Special Pay for Physicians (Medical Officers of the 

Armed Forces) ..............................................................................................................................519 

Special Pay for Veterinarians ..............................................................................................................570 

Public Law 96-342 — Department of Defense Authorization Act, 

 1981, Public Law 96-342, 94 Stat. 1077 (1980) 

Adjustments to Retired and Retainer Pay and .....................................................................................762 

Aviation Career Incentive Pay and ......................................................................................................323 

Basic Allowance for Quarters and ....................................................................................................... 116 

Basic Allowance for Subsistence and ..................................................................................................188 

Basic Pay and ....................................................................................................................................... 34 

Bonuses for Members of the Selected Reserve ...................................................................................636 

Disability Retired Pay and ...................................................................................................................744 

Educational Assistance for Members of the Selected Reserve ............................................................ 636 

Enlistment Bonuses and ......................................................................................................................602 

Family Separation Allowance and......................................................................................................1017 

Imputed Contribution for Retirement Benefits and .............................................................................782 

Nondisability Retired and Retainer Pay and.........................................................................................688 

Reenlistment Bonuses and ................................................................................................................... 618 

Retired Pay for Non-Regular Service and ...........................................................................................724 

Sea Duty, Special Pay for Career .........................................................................................................463 

Selective Reenlistment Bonuses and ...................................................................................................618 

Travel and Transportation Allowances and..........................................................................................992 

Veterans' Educational Assistance ("GI Bill") and .............................................................................. 966 

 Public Law 96-343 — Military Personnel and Compensation Amendments 

 of 1980, Public Law Public Law 996-343, 94 Stat. 1123 (1980) 

Aviation Career Incentive Pay and ..................................................................................................... 323 

Basic Allowance for Quarters and ...................................................................................................... 117 

Basic Allowance for Subsistence and ..................................................................................................188 

Basic Pay and ........................................................................................................................................35 

Disability Retired Pay and ...................................................................................................................947 

Flight Pay (Crew Member) and............................................................................................................290 

Nondisability Retired and Retainer Pay and.........................................................................................697 

Sea Duty, Special Pay for Career .........................................................................................................462 

Travel and Transportation Allowances and ........................................................................................ 990 

Variable Housing Allowance and ........................................................................................................130 

Public Law 96-513 - Defense Officer Personnel Management 

Act (DOPMA), Public Law 96-513, 94 Stat. 2835 (1980) 

Clothing Issues and Maintenance Allowances and ............................................................................. 998 

Disability Retired Pay and ...................................................................................................................747 

Nondisability Retired and Retainer Pay and ....................................................................................... 693 

Nondisability Separation Pay and ........................................................................................................786 

Retired Pay for Non-Regular Service (Reserve Retirement) and ........................................................ 784 

Special Pay for Dentists (Dental Officers of the Armed Forces)..........................................................552 

Special Pay for Physicians (Medical Officers of the Armed Forces)....................................................523 

1168
Public Law 96-579 - Military Pay and Allowances Benefits 

Act of 1980, Public Law 96-579, 94 Stat. 3359 (1980) 

Annual Leave and ................................................................................................................................860 

Basic Pay and ......................................................................................................................................... 29 

Federal Income Tax Advantage and.....................................................................................................220 

Nuclear-Qualified Officers, Special Pay for, and ................................................................................479 

Operational Submersible Duty Pay and ...............................................................................................444 

Overseas Duty Extension Pay and .......................................................................................................667 

Overseas Station Allowances and ......................................................................................................1044 

Reenlistment Bonuses and ...................................................................................................................619 

Regular Military Compensation (RMC) and .........................................................................................15 

Sea Duty, Special Pay for Career .........................................................................................................463 

Selective Reenlistment Bonuses and ...................................................................................................619 

Station (Overseas) Housing Allowance and.......................................................................................1044 

Submarine Duty Incentive Pay and ................................... ................................................................ 423 

Public Law 96-584 — Act of December 23, 1980, Public Law 96-584, 94 Stat. 3377 (1980) 

 Reserves (Presidential Call Up Authority) and ....................................................................................244 

Public Law 97-60 — Uniformed Services Pay Act of 1981, Public 

Law 97-60, 95 Stat. 989 (1981) 

Aviation Career Incentive Pay and ...................................................................................................... 324 

Basic Allowance for Quarters and .......................................................................................................116 

Basic Allowance for Subsistence and .................................................................................................. 189 

Basic Pay and ....................................................................................................................................... 36 

Demolition Duty Pay and ................................................................................................................... 268 

Dislocation and Departure Allowances and ....................................................................................... 1025 

Diving Duty Pay and ............................................................................................................................ 452 

Enlistment Bonus and ..........................................................................................................................603 

Engineering and Scientific Career Continuation Pay .......................................................................... 593 

Experimental Stress Duty Pay and ......................................................................................................487 

Flight Deck Duty Pay and ...................................................................................................................393 

Flight Pay (AWACS Duty) and ...........................................................................................................357 

Flight Pay (Crew Member) and ............................................................................................................ 291 

Flight Pay (Non-Crew Member) and ...................................................................................................308 

Glider Duty Pay and ............................................................................................................................ 384 

Imputed Contribution for Retirement Benefits and ............................................................................. 782 

Leprosy Duty Pay and .........................................................................................................................511 

Nondisability Retired and Retainer Pay .............................................................................................. 699 

Nuclear-Qualified Officers, Special Pay for, and................................................................................480 

Parachute Duty Pay and ......................................................................................................................370 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ..............................................498 

Reenlistment Bonuses and ..................................................................................................................619 

Sea Duty, Special Pay for Career .......................................................................................................464 

Selective Reenlistment Bonuses and ..................................................................................................619 

Separation Travel and Transportation Allowances and ....................................................................1030 

Submarine Duty Incentive Pay and ....................................................................................................424 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay ................................................403 

Public Law 97-66 — Veterans' Disability Compensation, Housing, and Memorial 

Benefits Amendments Act of 1981, Public Law 97-66, 95 Stat. 1026 (1981) 

 Servicemen’s Group Life Insurance and .......................................................................................... 832 

Public Law 97-86 — Department of Defense Authorization 

Act, 1982 — 95 Stat. 1109 

Bonuses for Members of the Selected Reserve ................................................................................. 641 

 Public Law 97-252 — Department of Defense Authorization Act, 1983, 

Public Law 97-86, 96 Stat. 718 (1982) 

1169
Uniformed Services Former Spouses' Protection Act and ..................................................................912 

 Public Law 98-94 — Department of Defense Authorization Act, 1984, 

Public Law 98-94, 97 Stat. 614 (1983) 

Adjustments to Retired and Retainer Pay and ...................................................................................762 

Annual Leave and .............................................................................................................................861 

Aviation Officer Continuation Pay and .............................................................................................328 

Basic Allowance for Quarters and ....................................................................................................117 

Basic Allowance for Subsistence and ...............................................................................................190 

Basic Pay and ......................................................................................................................................39 

Bonuses for Members of the Selected Reserve .................................................................................643 

Department of Defense Military Retirement Fund and ...................................................................1046 

Disability Retired Pay and ................................................................................................................746 

Enlisted Aides and .............................................................................................................................986 

 Hostile Fire Pay and...........................................................................................................................256 

 Imputed Contribution for Retirement Benefits and ........................................................................... 784 

 Medical Care for Active Duty Personnel and their Dependents and ............................................... 877 

 Nondisability Retired and Retainer Pay ............................................................................................ 699 

 Nondisability Separation Pay and .....................................................................................................791 

 Overseas Station Allowance and ....................................................................................................1044 

 Retired Pay for Non-Regular Service (Reserve Retirement) and ......................................................729 

 Survivor Benefit Plan ........................................................................................................................ 912 

 Toxic Fuels and Propellants and Chemical Munitions Exposure Pay ................................................ 404 

 Voluntary Education and Training and .............................................................................................. 866 

Public Law 98-473 — Act of October 12, 1984 (Continuing Appropriations, 1985) 

 Public Law 98-473, 98 Stat. 1837 (1984) 

Enlisted Aides and ............................................................................................................................... 981 

Special Pay for Dentists (Dental Officers of the Armed Forces) ........................................................558 

Station (Overseas) Housing Allowance and ....................................................................................... 146 

Variable Housing Allowance and .......................................................................................................146 

Public Law 98-525— Department of Defense Authorization Act, 1985 

Public Law 98-525, 98 Stat. 2492 (1984) 

Aviation Officer Continuation Pay and ............................................................................................... 330 

Basic Allowance for Housing and ....................................................................................................... 117 

Basic Allowance for Subsistence and ..................................................................................................190 

Basic Pay and . ......................................................................................................................................40 

Bonuses for Members of the Selected Reserve ...................................................................................648 

Commissaries and ...............................................................................................................................929 

Compensation for Inactive-duty Training and .................................................................................... 244 

Demolition Duty Pay and ...................................................................................................................270 

Enlistment Bonuses and ......................................................................................................................602 

Enlisted Aides, Limitations on Number of, and ..................................................................................986 

Experimental Stress Duty Pays and ....................................................................................................489 

Flight Deck Duty Pay and ...................................................................................................................395 

Flight Pay (Non-Crew Member) and ................................................................................................... 310 

Glider Duty Pay and. ............................................................................................................................383 

Leprosy Duty Pay and ..........................................................................................................................510 

Medical Care (Service Members and Dependents) .............................................................................. 877 

Overseas Station Allowances and .......................................................................................................1007 

Parachute Duty Pay and........................... ............................................................................................372 

Personal Exposure. Pay (Toxic Pesticides and Dangerous Organisms) ...............................................501 

Reenlistment Bonuses and .................................................................................................................. 620 

 Sea Duty, Special Pay for Career ......................................................................................................... 465 

 Selective Reenlistment Bonuses and ...................................................................................................620 

 Special Duty Assignment Pay, Proficiency Pay, and ..........................................................................655 

 Station (Overseas) Housing Allowance and ........................................................................................1007 

 Survivor Benefit Plan and ..................................................................................................................... 906 

1170
Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and .........................................407 

Variable-Housing Allowance and ......................................................................................................131 

Veterans' Educational Assistance ("GI Bill") and ..............................................................................960 

Voluntary Education and Training and ...............................................................................................868 

Public Law 99-145— Department of Defense Authorization Act, 1986, 

 Public Law 99-145, 99,

Stat. 583 (1985) 

Aviation Officer Continuation Pay and ..............................................................................................331 

Basic Allowance for Quarters and ...................................................................................................... 119 

Basic Allowance for Subsistence and .................................................................................................190 

Basic Pay and ........................................................................................................................................ 41 

Bonuses for Members of the Selected Reserve ..................................................................................636 

Demolition Duty Pay and ...................................................................................................................268 

Disability Retired Pay and...................................................................................................................749 

Dislocation and Departure Allowances and ......................................................................................1023 

Engineering and Scientific Career Continuation Pay and ..................................................................595 

Experimental Stress Duty Pays and ....................................................................................................488 

Family Separation Allowance and ....................................................................................................1019 

Flight Deck Duty Pay and ................................................................................................................... 393 

Flight Pay (Air Weapons Controllers) and ......................................................................................... 364 

Flight Pay (Crew Member) and .......................................................................................................... 282 

Flight Pay (Non-Crew Member) and .................................................................................................. 308 

Glider Duty Pay and............................................................................................................................386 

Hostile Fire Pay and Incentive Pay for Hazardous Duty and .............................................................257 

Medical Care (Service Members and Dependents) .............................................................................878 

Nondisability Retired and Retainer Pay and .......................................................................................701 

Nuclear-Qualified Officers, Special Pay for, and.... ...........................................................................480 

Operational Submersible Duty Pay and...............................................................................................445 

Overseas Duty Extension Pay and.......................................................................................................669 

Overseas Housing Allowance and ......................................................................................................146 

Parachute Duty Pay and ......................................................................................................................370 

Personal Exposure Pay (Toxic Pesticides and 

 Dangerous Organisms ................................................................................................................ 500 

Reenlistment Bonus and .....................................................................................................................623 

Sea Duty, Special Pay for Career ........................................................................................................466 

Selective Reenlistment Bonuses and ..................................................................................................623 

Special Pay for Dentists (Dental Officers of the Armed Forces) ........................................................556 

Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................519 

Station (Overseas) Housing Allowance and .......................................................................................146 

Submarine Duty Incentive Pay and ....................................................................................................427 

Survivor Benefit Plan and ..................................................................................................................913 

Toxic Fuels and Propellants and Chemical Munitions 

 Exposure Pay and ..........................................................................................................405

Variable Housing Allowance and .......................................................................................................132 

Public Law 99-335—Federal Employees’ Retirement System Act of 1986 

 Thrift Savings Plan and .............................................................................................................. 939 

Public Law 99-348 — Military Retirement Reform Act of 1986, Public 

Law 99-348, 100 Stat. 682 (1986) 

 Adjustments to Retired and Retainer Pay (Regular and 

Non-Regular Service) and ...........................................................................................................763 

Department of Defense Military Retirement Fund and ......................................................................1050 

Nondisability Retired and Retainer Pay and.........................................................................................702 

Survivor Benefit Plan and ...................................................................................................................918 

 Public Law 99-433 — Goldwater-Nichols Department of Defense Reorganization 

 Act of 1986 Public Law 99-433, 100 Stat. 992 (1986) 

1171
Theory of Military Compensation and ....................................................................................................2 

Basic Pay and ........................................................................................................................................25 

 Public Law 99-514 — Tax Reform Act of 1986, Public. Law 99-514, 100 Stat. 2085 (1986) 

Basic Pay and ........................................................................................................................................29 

Federal Income Tax Advantage and ....................................................................................................210 

 Public Law 99-661— National Defense Authorization Act for 

 Fiscal Year 1987, Public Law 99-661, 100 Stat. 3816 (1986) 

Aviation Officer Continuation Pay and................................................................................................332 

Basic Allowance for Quarters and .......................................................................................................119 

Basic Allowance for Subsistence and ..................................................................................................190 

Basic Pay and ........................................................................................................................................41 

Compensation for Inactive-duty Training and......................................................................................244 

Death Gratuity and ..............................................................................................................................839 

Disability Retired Pay and ...................................................................................................................746 

Dislocation and Departure Allowances and .......................................................................................1024 

Foreign Language Proficiency Pay and ...............................................................................................671 

Medical Care (Service Members and Dependents) ..............................................................................879 

Members of Reserve Components, Authority to Order to Active Duty, and........................................244 

Reenlistment Bonus and ......................................................................................................................746 

Retired Members Medical Care and .................................................................................................... 821 

Selective Reenlistment Bonus and ....................................................................................................... 746 

Special Pay for Physicians (Medical Officers of the Armed, Forces) .................................................532 

Survivor Benefit Plan and .................................................................................................................. 919 

Uniformed Services Former Spouses' Protection Act and ................................................................. 1056 

Public Law 100-48 New GI Bill Continuation Act, Public Law 100-48, 

101 Stat. 331 (1987) 

Educational Assistance for Members of Selected Reserve and............................................................643 

Veterans' Educational Assistance ("GI Bill") and ...............................................................................960 

Public Law 100-140 — Act of October 26, 1987, Public Law 100-140, 

101 Stat. 830 (1987) 

Special Pay for Psychologists and Other Nonphysician 

Health Care Providers ...................................................................................................................578 

Public Law 100-180 — National Defense Authorization Act for Fiscal Years 

1988 and 1989, Public Law 100-180, 101 Stat. 1019 (1987) 

Aviation Officer Continuation Pay and ...............................................................................................333 

Basic Allowance for Quarters and ...................................................................................................... 119 

Basic Allowance for Subsistence and ..................................................................................................190 

Basic Pay and ......................................................................................................................................... 41 

Diving Duty Pay and ............................................................................................................................ 454 

Enlistment Bonuses and ....................................................................................................................... 602 

Medical Care for Active Duty Personnel and their Dependents and ................................................... 875 

Operational Submersible Duty Pay and ............................................................................................... 445 

 Personal Money Allowance and ....................................................................................................... 1036 

 Reenlistment Bonus and ...................................................................................................................... 620 

 Retired Members Medical Care and ................................................................................................... 824 

 Sea Duty, Special Pay for Career Sea, Duty, and ............................................................................... 468 

 Selective Reenlistment Bonus and ...................................................................................................... 620 

 Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................. 536 

 Survivor Benefit Plan and ................................................................................................................... 922 

 Submarine Duty Incentive Pay and ..................................................................................................... 430 

 Public Law 100-202 — Act of December 22, 1987 (Continuing Appropriations, 1988), 

 Public Law 100-202, 101 Stat. 1329 (1987) 

Basic Allowance for Quarters and ........................................................................................................119 

Basic Allowance for Subsistence and ...................................................................................................190 

Basic Pay and ..........................................................................................................................................41 

1172
Selective Reenlistment Bonus and ......................................................................................................624 

 Public Law 100-456 — National Defense Authorization Act for Fiscal Year 1989, 

 Public Law 100-456, 101 Stat. 1918 (1988) 

Aviation Officer Continuation Pay (Aviator Retention Bonus) and ................................................... 342 

Basic Allowance for Quarters and ......................................................................................................179 

Basic Allowance for Subsistence and..................................................................................................190 

Basic Pay and ........................................................................................................................................42 

Clothing Allowances and ..................................................................................................................1000 

Compensation for Inactive-duty Training and .................................................................................... 245 

Special-Pay for Physicians (Medical Officers of 

the Armed Forces) ...................................................................................................................... 537 

Survivor Benefit Plan and ...................................................................................................................922 

Travel and Transportation Allowances and .........................................................................................994 

Uniformed Services Former Spouses' Protection Act and ................................................................1056 

 Public Law 101-189 — National Defense Authorization Act for Fiscal Years 

1990 and 1991, Public Law 101-189, 103 Stat. 1352 (1989) 

Aviation Officer Continuation Pay (Aviator Retention Bonus) and ....................................................339 

Aviation Career Incentive Pay and .....................................................................................................340 

Basic Allowance for Quarters and .......................................................................................................120 

Basic Allowance for Subsistence and..................................................................................................189 

Basic Pay and ........................................................................................................................................42 

Bonuses for Members of the Selected Reserve ...................................................................................638 

Clothing Allowances and ....................................................................................................................999 

Enlistment Bonuses and ......................................................................................................................604 

Nuclear Qualified Officers, Special Pays for, and ..............................................................................482 

Overseas Station Allowances and .....................................................................................................1009 

Psychologists and Other Nonphysician Health Care Providers and ....................................................578 

Reenlistment Bonus and .....................................................................................................................625 

Selective Reenlistment Bonus and ......................................................................................................625 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists ...............................................585 

Special Pay for Physicians (Medical Officers of the 

Armed Forces) .............................................................................................................................536 

Special Pay for Psychologists and Other Nonphysician Health Care Providers .................................578 

Station (Overseas) Housing Allowance and .......................................................................................120 

Survivor Benefit Plan and ...................................................................................................................909 

 Travel and Transportation Allowances and ........................................................................................995 

 Uniformed Services Former Spouses' Protection Act, and ...............................................................1056 

 Public Law 101-510 — National Defense Authorization Act for 

 Fiscal Year 1991, Public Law 101-510, 104 Stat.. 1485 (1990) 

Annual Leave and ..............................................................................................................................862 

Basic Allowance for Quarters and......................................................................................................120 

Basic Allowance for Subsistence and ................................................................................................190 

Basic Pay and ....................................................................................................................................... 42 

Commissaries and ..............................................................................................................................925 

Death Gratuity and ............................................................................................................................841 

Hostile Fire Pay and ..........................................................................................................................260 

Medical Care for Active Duty Personnel and their Dependents and .................................................882 

Military Exchanges and .....................................................................................................................923 

Nondisability Separation Pay and .....................................................................................................787 

Reenlistment Bonus and ....................................................................................................................625 

Selective Reenlistment Bonus and ....................................................................................................623 

Separation Travel and Transportation Allowances and....................................................................1030 

Special Pay and Accession Bonus for Nurses and 

Nurse Anesthetists ......................................................................................................................586 

Special Pay for Optometrists .............................................................................................................575 

1173
Special Pay for Physicians (Medical Officers of the Armed Forces) .................................................544 

Special Pay for Psychologists and Other Nonphysician Health Care Providers..................................581 

Survivor Benefit Plan and ..................................................................................................................925 

Uniformed Services Former Spouses' Protection Act and ................................................................1056 

Variable Housing Allowance and........................................................................................................137 

 Public Law 102-25 — Persian Gulf Conflict Supplemental Authorization 

and Personnel Benefits Act of 1991, Public Law 102-25, 105 Stat. 75 (1991) 

Annual Leave and................................................................................................................................862 

Death Gratuity and ..............................................................................................................................840 

Family Separation Allowance and ....................................................................................................1020 

Foreign Language Proficiency Pay and ..............................................................................................673 

GI Bill (Home Loan Assistance) and ..................................................................................................970 

Hostile Fire Pay and ...........................................................................................................................260 

Reserve Forces and .............................................................................................................................225 

Servicemen's Group Life Insurance and .............................................................................................832 

Veterans' Educational Assistance ("GI Bill") and ..............................................................................961 

 Public Law 102-190 — National Defense Authorization Act for Fiscal Years 

 1992 and 1993, Public Law 102-190, 105 Stat. 1290 (1991) 

Annual Leave and................................................................................................................................862 

Aviation Officer Continuation Pay (AOCP) and ................................................................................. 348 

Basic Allowance for Quarters and ......................................................................................................122 

Basic Allowance for Subsistence and .................................................................................................190 

Basic Pay and .......................................................................................................................................27 

 Family Separation Allowance and ...................................................................................................1020 

Flight Pay (Crew Member) and ..........................................................................................................293 

Foreign Language Proficiency Pay and ..............................................................................................673 

Hostile Fire Pay and .......................................................................................................................... 261 

Parachute Duty Pay and .................... .................................................................................................376

Sea Duty, Special Pay for Career, and.................................................................................................470 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists ...............................................586 

Submarine Duty Incentive Pay and ....................................................................................................430 

Temporary Voluntary Separation Incentives and .............................................................................. 810

Variable Housing Allowance and........................................................................................................179 

Public Law 102-484 — National Defense Authorization Act for Fiscal Year 1993, 

Public Law 102-484, 106 Stat. 2315 (1992) 

Aviation Officer Continuation Pay (AOCP) and ............................................................................... 348 

Basic Allowance for Quarters and ......................................................................................................123 

Basic Allowance for Subsistence and ................................................................................................ 190 

Basic Pay and ......................................................................................................................................49 

Disability Retired Pay and ... ..............................................................................................................750 

Disability Severance Pay and ..............................................................................................................799 

Enlisted Aides and...............................................................................................................................987 

Enlistment Bonuses and .....................................................................................................................606 

Medical Care for Active Duty Personnel and their Dependents and ..................................................876 

Nondisability Retired and Retainer Pay and .......................................................................................708 

Reenlistment Bonus and .....................................................................................................................620 

Retired Members Medical Care and ...................................................................................................821 

Retired Pay for Non-Regular Service (Reserve Retirement) and ........................................................730 

Selective Reenlistment Bonus and ...................................... . .............................................................606 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists................................................589 

Special Pay for Psychologists and Other Nonphysician Health Care Providers..................................582 

Temporary Voluntary Separation Incentives and ...............................................................................810 

Uniformed Services Former Spouses' Protection Act, and ...............................................................1057 

Variable Housing Allowance and........................................................................................................190 

1174
Public Law 102-587 — Oceans Act of 1992, Public Law 102-587, 106 Stat. 5039 (1992) 

 Responsibility Pay and ......................................................................................................................... 303 

Public Law 103-160 — National Defense Authorization Act for 

 Fiscal Year 1994, Public Law 103-160, 107 Stat. 1547 (1993) 

Adjustments to Retired and Retainer Pay and .....................................................................................769 

Aviation Officer Continuation Pay (AOCP) and ................................................................................348 

Basic Allowance for Quarters and ......................................................................................................124 

Basic Allowance for Subsistence and .................................................................................................190 

Basic Pay and ....................................................................................................................................... 49 

Disability Retired Pay and ..................................................................................................................750 

Disability Severance Pay and .............................................................................................................799 

Enlistment Bonuses and ............................................. .......................................................................603 

Medical Care for Active Duty Personnel and their Dependents and ..................................................882 

Military Exchanges and ......................................................................................................................935 

Nondisability Retired and Retainer Pay and .......................................................................................709 

Nondisability Separation Pay and ......................................................................................................795 

Overseas Housing Allowance and ......................................................................................................190 

Reenlistment Bonus and .....................................................................................................................603 

Retired Members Medical Care and ...................................................................................................882 

Selective Reenlistment Bonus and .....................................................................................................603 

Separation Travel and Transportation Allowances and ....................................................................1032 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists ...............................................589 

Station (Overseas) Housing Allowance and .......................................................................................136 

Temporary Voluntary Separation Incentives and ...............................................................................814

Uniformed Services Former Spouses' Protection Act, and ...............................................................1057 

Variable Housing Allowance and .......................................................................................................136 

Public Law 103-337 — National Defense Authorization Act for 

 Fiscal Year 1995, Public Law 103-377, 108 Stat. 2663 (1994) 

Adjustments to Retired and Retainer Pay and ....................................................................................770 

Aviation Officer Continuation Pay (AOCP) and ................................................................................348 

Basic Allowance for Quarters and ..................................................................................................... 124 

Basic Allowance for Subsistence and .................................................................................................190 

Basic Pay and .......................................................................................................................................50 

Cost-of-living Allowance in the Continental 

United States (CONUS COLA) and ..........................................................................................1012 

Enlistment Bonuses and .................................................................................................................... 606 

Federal Income Tax Advantage and .................................................................................................. 217 

Nondisability Retired and Retainer Pay and .......................................................................................709 

Professional Education and Training and ...................................................................................945, 946 

Reenlistment Bonus and ....................................................................................................................620 

Retired Pay for Non-Regular Service (Reserve Retirement) and ......................................................723 

Selective Reenlistment Bonus and .....................................................................................................620 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists ..............................................589 

Temporary Voluntary Separation Incentives and ............................................................................. 812 

Public Law 104-106 — National Defense Authorization Act for 

 Fiscal Year 1996, Public Law 104-106, 110 Stat. 186 (1996) 

Adjustments to Retired and Retainer Pay and ...................................................................................770 

Annual Leave and ............................................................................................................................. 864 

Aviation Officer Continuation Pay (AOCP) and ............................................................................... 347 

BAQ Entitlement of Members Married to Other Members .............................................................. 126 

Basic Allowance for Quarters and .....................................................................................................128 

Basic Allowance for Subsistence and ................................................................................................190 

Basic Pay and ......................................................................................................................................50 

Dependency and Indemnity Compensation (DIC) and ......................................................................847 

Educational Assistance for Members of the Selected Reserve...........................................................653 

1175
Enlistment Bonuses and ....................................................................................................................607 

Flight Pay (AWACS Duty) and .........................................................................................................358 

Missing Persons and ........................................................................................................................1109 

Nondisability Retired and Retainer Pay and...................................................................................... 709 

Nuclear-Qualified Officers, Special Pay for, and...............................................................................482 

Reenlistment Bonus and ....................................................................................................................620 

Selective Reenlistment Bonus and ....................................................................................................620 

Servicemen's Group Life Insurance and.............................................................................................832 

Special Duty Assignment Pay, Proficiency Pay, and ........................................................................657 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists ............................................. 590 

Special Pay for Psychologists and Other Nonphysician Health Care Providers ................................582 

Temporary Voluntary Separation Incentives and .............................................................................. 815 

Variable Housing Allowance and ......................................................................................................137 

Public Law 104-201—National Defense Authorization Act for Fiscal Year 1997 

Basic Allowance for Quarters and..............................................................................190

Basic Allowance for Subsistence and ......................................................................... 190 

Basic Pay and........................................................................................................53 

Special Pay for Dentists and .................................................................................... 563 

Survivor Benefit Plan and........................................................................................ 911 

Public Law 105-85—National Defense Authorization Act for Fiscal Year 1998 

Weapons Controller Pay and ............................................................................................................. 360 

Aviation Career Incentive Pay and .................................................................................................... 349 

Basic Allowance for Housing and ..................................................................................................... 139 

Basic Allowance for Subsistence and ............................................................................................... 190 

Basic Pay and .................................................................................................................................... 139 

Dislocation Allowance and .............................................................................................................. 1024 

Experimental Stress Pay and ............................................................................................................. 493 

Family Separation Allowance and ................................................................................................... 1021 

Flight Deck Duty Pay and ................................................................................................................. 399 

Fight Pay (Crew Member) and .......................................................................................................... 302 

Flight Pay (Non-Crew Member) and ................................................................................................. 319 

Foreign Duty Pay and...............................................................................................660 

Overseas Duty Extension Pay and ............................................................................... 670 

Overseas Station Allowance and.............................................................................. 1010 

Parachute Duty Pay and.......................................................................................... 377 

Personal Exposure Pay and ......................................................................................504 

Special Pay for Dentists and .................................................................................... 563 

Special Pay for Nuclear Qualified Officers and ............................................................. 483 

Public Law 105-261—National Defense Authorization Act for Fiscal Year 1999 

Aviation Career Incentive Pay and............................................................................. 320

Flight Pay (Crew Member) and ................................................................................ 302 

G.I. Bill and ....................................................................................................... 962 

Public Law 105-368—Veterans’ Benefits Enhancement Act of 1998 

Serviceman’s Group Life Insurance and....................................................................... 833 

Public Law 106-65—National Defense Authorization Act for Fiscal Year 2000 

Basic Pay and ....................................................................................................... 55 

Disability Retirement and ....................................................................................... 751 

Diving Duty Pay and .............................................................................................453 

Enlistment Bonus and ............................................................................................ 605 

Foreign Language Pay and ...................................................................................... 674 

Professional Education and Training and ...................................................................... 948 

Reserve Enlistment and Reenlistment Bonuses and ........................................................... 637 

Retirement Pay and ............................................................................................... 708 

Selective Reenlistment Bonus and ............................................................................... 626 

Special Pay for Nuclear Qualified Officers and ............................................................... 483 

Thrift Savings Plan and............................................................................................ 939

1176
Public Law 106-398—National Defense Authorization Act for Fiscal Year 2001 

Basic Allowance for Housing and .......................................................................... 142 

Basic Allowance for Subsistence and ....................................................................... 191 

Basic Pay and .................................................................................................... 55 

Clothing Allowance and Enlistment Bonus and .......................................................... 999 

Personal Money Allowance and Professional Education and Training and 

Reserve Retirement and ................................................................................... 1039 

Special Pay for Pharmacists and ............................................................................ 583 

Temporary Voluntary Separation Incentives and ........................................................ 818 

Public Law 106-419—Veterans’ Benefits and Health Care Improvement Act of 2001 

Serviceman’s Group Life Insurance and .................................................................. 833 

Public Law 107-14—Veterans’ Survivor Benefits Improvement Act of 2002 

Serviceman’s Group Life Insurance and .................................................................. 833 

Public Law 107-107—National Defense Authorization Act for Fiscal Year 2002 

Accrued Leave Payment and................................................................................ 863 

Basic Pay and................................................................................................... 56 

Disability Retirement and .................................................................................. 755 

Home Loan Assistance and.................................................................................. 971 

Submarine Duty Pay and.................................................................................... 433 

Travel and Transportation Allowances and............................................................... 991 

Public Law 107-314—National Defense Authorization Act for Fiscal Year 2003 

Basic Allowance for Subsistence and...................................................................... 192 

Disability Retirement and.................................................................................... 755 

Reserve Retirement and...................................................................................... 733 

Special Duty Assignment Pay and.......................................................................... 659 

Special Pay for Nurses and.................................................................................. 586

Special Pay for Optometrists and........................................................................... 576 

Special Pay for Pharmacists and............................................................................ 584 

Special Pay for Physicians and............................................................................. 546 

Temporary Voluntary Separation Incentives and....................................................... 818 

Public Law 107-330—Veterans’ Education and Benefits Expansion Act of 2003 

Veterans’ Educational Assistance (G.I. Bill) and ......................................................962 

Public Law 108-11—Wartime Supplementary Appropriations Act of 2003 

Hostile Fire Pay and ........................................................................................ 263 

Public Law 108-121—Military Family Tax Relief Act of 2003 

Death Gratuity and ......................................................................................... 842 

Public Law 108-136—National Defense Authorization Act for Fiscal Year 2004 

Basic Pay and ................................................................................................ 56 

Death Gratuity and ........................................................................................ 842 

Disability Retirement and ................................................................................ 755 

Family Separation Allowance and ..................................................................... 1021 

Hostile Fire Pay and ...................................................................................... 263 

Public Law 108-147—Veterans’ Compensation Cost-of-Living Adjustment Act of 2003

Dependency and Indemnity Compensation and ........................................................ 849 

Public Laws 

Public Law—Common Name Cross Reference

Act of July 2, 1926 ...................................................................................... See "Air Corps Act," this section 

Act of April 9, 1935 .......................................................................................................See Public Law 74-29 

Act of October 17, 1940 ...............................................................................................See Public Law 76-872 

Act of June 3, 1941 ........................................................................................................See Public Law 77-98 

Act of August 2, 1942 .................................................................................................See Public Law 77-697 

Act of March 7, 1942 ...................................................................................................See Public Law 77-490 

Act of June 30, 1944 ....................................................................................................See Public Law 78-393 

1177
Act of July 1, 1944 ...................................................................................................... See Public Law 78-409 

Act of July 6, 1945 ..................................................................................................... See Public Law 79-137 

Act of August 2, 1946 ..................................................................................................See Public Law 79-604 

Act of September 9, 1950 ........................................................................................... See Public Law 81-779 

Act of June 29, 1953 ......................................................................................................See Public Law 83-84 

Act of August 1, 1953 ................................................................................................. See Public Law 83-179 

Act of July 16, 1954 ................................................................................................... See Public Law, 83-506 

Act of April 30, 1956 ...................................................................................................See Public Law 84-497 

Act of August 28, 1957 ................................................................................................See Public Law 85-208 

Act of May 20, 1958.....................................................................................................See Public Law 85-422 

Act of July 12, 1960 .....................................................................................................See Public Law 86-635 

Act of July 10, 1962 ................................................................................................... See Public Law 87-531 

Act of September 7, 1962 ........................................................................................... See Public Law 87-649 

Act of October 2, 1963 ................................................................................................See Public Law 88-132 

Act of August 21, 1965 .............................................................................................. See Public Law 89-132 

Act of August 28, 1965 .............................................................................................. See Public Law 89-149 

Act of December 16, 1967 .......................................................................................... See Public Law 90-207 

Act of June 3, 1969 ........................................................................................................ See Public Law 91-20 

Act of September 28, 1971 ..........................................................................................See Public Law 92-129 

Act of October 2, 1972 ............................................................................................... See Public Law 92-455 

Act of October 27, 1972 ............................................................................................. See Public Law 92-581 

Act of May 6, 1974 ......................................................................................................See Public Law 93-274 

Act of September 19, 1974 ......................................................................................... See Public Law 93-419 

Act of May 141976...................................................................................................... See Public Law 94-286 

Act of December 23, 1980 .......................................................................................... See Public Law 96-584 

Act of October 26, 1987 ............................................................................................See Public Law 100-140 

Act of December 22, 1987 .........................................................................................See Public Law 100-202 

Air Corps Act ..............................................................................................................See Public Law 69-446 

Armed Forces Enlisted `Personnel Bonus Revision Act of 1974 ................................See Public Law 93-277 

Armed Forces Leave Act of 1946 ................................................................................See Public Law 79-704 

Armed Forces Reserve Act of 1952 ............................................................................See Public Law 82-476 

Army and Air Force Vitalization and Retirement 

Equalization Act of 1948 ........................................................................See Public Law 80-810 

Army Appropriation Act of March 2, 1913 ................................................................ See Public Law 62-401 

Army Appropriation Act for Fiscal Year 1943 ........................................................... See Public Law 76-649 

Army-Navy-Public Health Service Medical Officer 

Procurement Act of 1947 .....................................................................................See Public Law 80-365 

Aviation Career Incentive Act of 1974 ........................................................................See Public Law 93-294 

Career Compensation Act of 1949 ..............................................................................See Public Law 81-351 

Career Incentive Act of 1955 .........................................................................................See Public Law 84-20 

Continuing Appropriations, 1988 ..............................................................................See Public Law 100-202 

Current Tax Payment Act of 1943 ................................................................................ See Public Law 78-68 

Defense Officer Personnel Management Act ..............................................................See Public Law 96-513 

Federal Employees’ Retirement System Act of 1986 .................................................. See Public Law 99-335 

Military Family Relief Act ......................................................................................... See Public Law 108-121 

National Defense Authorization Act for Fiscal Year 1997 ........................................ See Public Law 104-201 

Public Laws 

Public Law—Common Name Cross Reference

Department of Defense Appropriation Act of 1953 ................................................... See Public Law 82-488 

Department of Defense Appropriation Authorization 

Act of 1977 .......................................................................................................... See Public Law 94-361 

Department of Defense Appropriation Authorization 

Act of 1978 ............................................................................................................ See Public Law 95-79 

Department of Defense Appropriation Authorization 

 Act of 1979 ............................................................................................................. See Public Law 95-48 

1178
Department of Defense Appropriations Act, 1985 .....................................................See Public Law 98-473 

Department of Defense Authorization Act, 1980 ........................................................See Public Law96-197 

Department of Defense Authorization Act, 1981 .......................................................See Public Law 96-342 

Department of Defense Authorization Act, 1982 .........................................................See Public Law 97-86 

Department of Defense Authorization Act, 1983 .......................................................See Public Law 97-252 

Department of Defense Authorization Act, 1984 .........................................................See Public Law 98-94 

Department of Defense Authorization Act, 1985 .......................................................See Public Law 98-525 

Department of Defense Authorization Act, 1986 .......................................................See Public Law 99-145 

Dependents Assistance Act of 1950 (DAA) ...............................................................See Public Law 81-771 

Dependents' Medical Care Act ...................................................................................See Public Law 84-569 

Federal Pay Comparability Act of 1970 .....................................................................See Public Law 91-656 

Former Spouses' Protection Act .................................................................................See Public Law 97-252 

Goldwater-Nichols Department of Defense Reorganization 

Act of 1986 ..........................................................................................................See Public Law 99-433 

Independent Offices Appropriations Act, 1934 ............................................................See Public Law 73-78 

Joint Service Pay Act of 1922 ....................................................................................See Public Law 67-235 

Military Medical Benefits Amendments of 1966 .......................................................See Public Law 89-614 

Military Pay Act of 1958 ............................................................................................See Public Law 85-422 

Military Pay and Allowances Benefits Act of 1980 ...................................................See Public Law 96-579 

Military Personnel and Compensation Amendments of 1980 .....................................See Public Law 96-343 

Military Retirement Reform Act of 1986 ...................................................................See Public Law 99-348 

Military Selective Service Act of 1971 ......................................................................See Public Law 92-129 

National Defense Act of June 3, 1916 ..........................................................................See Public Law 64-85

National Defense Authorization Act for Fiscal Year 1987 ........................................See Public Law 99-661 

National Defense Authorization Act for 

Fiscal Years 1988 and 1989 .............................................................................See Public Law 100-180 

National Defense Authorization Act for Fiscal Year 1989.......................................See Public Law 100-456 

National Defense Authorization Act for 

Fiscal Years 1990 and 1991 .............................................................................See Public Law 101-189 

National Defense Authorization Act for Fiscal Year 1991.......................................See Public Law 101-510 

National Defense Authorization Act for Fiscal Years 

1992 and 1993 ...................................................................................................See Public Law 102-190 

National Defense Authorization Act for Fiscal Year 1993........................................See Public Law 102-484 

National Defense Authorization Act for Fiscal Year 1994........................................See Public Law 103-160 

National Defense Authorization Act for Fiscal Year 1995........................................See Public Law 103-337 

National Defense Authorization Act for Fiscal Year 1996........................................See Public Law 104-106 

National Defense Authorization Act for Fiscal Year 1997........................................ See Public Law 104-201 

National Defense Authorization Act for Fiscal Year 1998.......................................... See Public Law 105-85 

National Defense Authorization Act for Fiscal Year 1999........................................ See Public Law 105-261 

National Defense Authorization Act for Fiscal Year 2000.......................................... See Public Law 106-65 

National Defense Authorization Act for Fiscal Year 2001........................................ See Public Law 106-398 

National Defense Authorization Act for Fiscal Year 2002........................................ See Public Law 107-107 

National Defense Authorization Act for Fiscal Year 2003........................................ See Public Law 107-314 

National Defense Authorization Act for Fiscal Year 2004........................................ See Public Law 108-136 

National Security Act of 1947 ....................................................................................See Public Law 80-253 

National Service Life Insurance Act of 1940 .............................................................See Public Law 76-801 

New GI Bill Continuation Act ....................................................................................See Public Law 100-48 

Nuclear Career Incentive Act of 1976 ........................................................................See Public Law 94-356 

Oceans Act of 1992 ..................................................................................................See Public Law 102-587 

Officer Grade Limitation Act of 1954 ........................................................................See Public Law 83-349 

Officer Personnel Act of 1947 ................................................................................... See Public Law 80-379 

Pay Readjustment Act of 1942 ................................................................................... See Public Law 77-607 

Persian Gulf Supplemental Authorization and 

Personnel Benefits Act of 1991 ........................................................................ See Public Law 102-25 

1179
Reserve Forces Bill of Rights and Vitalization Act ............................................... See Public Law 90-168 

Second Supplemental National Defense Appropriation Act for 

Fiscal Year 1943 ............................................................................................ See Public Law 77-761 

Selective Service and Training Act of 1940 ........................................................... See Public Law 76-783 

Selective Service Act of 1948 ................................................................................ See Public Law 80-759 

Servicemen's and Veterans' Survivor Benefits Act of 1956 .................................... See Public Law 84-880 

Servicemen's Indemnity Act of 1951 ........................................................................ See Public Law 81-20 

Social Security Act of 1935 .................................................................................... See Public Law 74-271 

Soldiers' and Sailors' Civil Relief Act of 1940 ....................................................... See Public Law 76-861 

Survivor Benefit Plan Amendments of 1985 .......................................................... See Public Law 99-145 

Tax Reform Act of 1986 ......................................................................................... See Public Law 99-514 

Uniformed Services Contingency Option Act of 1953 ........................................... See Public Law 83-239 

Uniformed Services Former Spouses' Protection Act ............................................. See Public Law 97-252 

Uniformed Services Pay Act of 1963 ..................................................................... See Public Law 88-132 

Uniformed Services Pay Act of 1981 ..................................................................... ..See Public Law 97-60 

Uniformed Services Survivors' Benefits Amendments of 1978 ............................. See Public Law 95-397 

Universal Military Training and Service Act of 1951 ............................................... See Public Law 82-51 

Veterans’ Benefits and Health Care Improvement 

 Act of 2000 ........................................................................................................ See Public Law 106-419 

Veterans’ Benefits Enhancement Act of 1998 ...................................................... See Public Law 105-368 

Veterans’ Compensation Cost-of-Living 

 Adjustment Act of 2003..................................................................................... See Public Law 108-147 

Veterans' Disability Compensation, Housing, and Memorial Benefits 

Act of 1981 ....................................................................................................... See Public Law 97-66 

Veterans’ Education and Benefits Expansion Act 

 of 2002 .............................................................................................................. See Public Law 107-330 

Veterans’ Survivor Benefit Improvement Act 2002 ............................................... See Public Law 107-14 

Warrant Officer Act of 1954 .................................................................................. See Public Law 83-379 

Wartime Supplementary Appropriations Act 

 of 2003 .................................................................................................................. See Public Law 108-11 

 Public Law by Statutes at Large Citation Cross Reference

37 Stat. 707 ............................................................................................................. See Public Law 62-401 

39 Stat. 211 ............................................................................................................... See Public Law 64-85 

42 Stat. 625.............................................................................................................. See Public Law 67-235 

44 Stat. 782-783 ...................................................................................................... See Public Law 69-446 

48 Stat. 283 ............................................................................................................... See Public Law 73-78 

49 Stat. 120................................................................................................................ See Public Law 74-29 

49 Stat. 620 ............................................................................................................. See Public Law 74-271 

54 Stat. 885 ............................................................................................................. See Public Law 76-783 

54 Stat. 1008 ........................................................................................................... See Public Law 76-801 

54 Stat. 1178 ........................................................................................................... See Public Law 76-861 

54 Stat. 1205 ............................................................................................................ See Public Law 76-872 

55 Stat 240................................................................................................................. See Public Law 77-98 

56 Stat. 148.............................................................................................................. See Public Law 77-490 

56 Stat. 359.............................................................................................................. See Public Law 77-607 

56 Stat. 611 ............................................................................................................. See Public Law 76-649 

56 Stat. 736 ............................................................................................................. See Public Law 77-697 

56 Stat. 990 .............................................................................................................. See Public Law 77-761 

57 Stat. 126................................................................................................................ See Public Law 78-68 

58 Stat. 648 ............................................................................................................. See Public Law 78-393 

58 Stat. 682.............................................................................................................. See Public Law 78-409 

59 Stat. 462.............................................................................................................. See Public Law 79-137 

60 Stat. 859 ............................................................................................................. See Public Law 79-604 

60 Stat. 964 .............................................................................................................. See Public Law 79-704 

61 Stat. 495 .............................................................................................................. See Public Law 80-253 

1180
61 Stat. 776 ........................................................................................................... See Public Law 80-365 

61 Stat. 795 ...........................................................................................................See Public Law 80-379 

62 Stat. 604 ........................................................................................................... See Public Law 80-759 

62 Stat. 1081 .........................................................................................................See Public Law 80-810 

63 Stat. 802 ........................................................................................................... See Public Law 81-351 

64 Stat. 794 ........................................................................................................... See Public Law 81-771 

64 Stat. 826 ........................................................................................................... See Public Law 81-779 

65 Stat. 33 ............................................................................................................... See Public Law 81-20 

65 Stat. 75 ............................................................................................................... See Public Law 82-51 

66 Stat. 481 ........................................................................................................... See Public Law 82-476 

66 Stat. 538 ........................................................................................................... See Public Law 82-488 

67 Stat. 86 ............................................................................................................... See Public Law 83-84 

67 Stat. 336 ........................................................................................................... See Public Law 83-179 

67 Stat. 501 ........................................................................................................... See Public Law 83-239 

68 Stat. 65 ............................................................................................................. See Public Law 83-349 

68 Stat. 157 ........................................................................................................... See Public Law 83-379 

68 Stat. 488 ........................................................................................................... See Public Law 83-506 

69 Stat. 18 ...............................................................................................................See Public Law 84-20 

70 Stat. 119 ........................................................................................................... See Public Law 84-497 

70 Stat. 250 ........................................................................................................... See Public Law 84-569 

70 Stat. 851 ........................................................................................................... See Public La y 84-880 

71 Stat. 208 ........................................................................................................... See Public Law 85-208 

72 Stat. 122 ........................................................................................................... See Public Law 85-422 

74 Stat. 469 ........................................................................................................... See Public Law 86-635 

76 Stat. 152 ........................................................................................................... See Public Law 87-531 

76 Stat. 461............................................................................................................ See Public Law 87-649 

77 Stat. 216 ........................................................................................................... See Public Law 88-132 

79 Stat. 545-547 ................................................................................................... See Public Law 89-132 

79 Stat. 585 ........................................................................................................... See Public Law 89-149 

80 Stat. 863 ........................................................................................................... See Public Law 89-614 

81 Stat. 521 ........................................................................................................... See Public Law 90-168 

81 Stat. 649 ........................................................................................................... See Public Law 90-207 

83 Stat. 12 ...............................................................................................................See Public Law 91-20 

84 Stat. 1946 ......................................................................................................... See Public Law 91-656 

85 Stat. 348 ........................................................................................................... See Public Law 92-129 

86 Stat. 761 ........................................................................................................... See Public Law 92-455 

86 Stat. 1277 ......................................................................................................... See Public Law 92-581 

88 Stat. 94 ............................................................................................................. See Public Law 93-274 

88 Stat. 120 ...........................................................................................................See Public Law 93-277 

88 Stat. 177 ........................................................................................................... See Public Law 93-294 

88 Stat. 1152 ......................................................................................................... See Public Law 93-419 

90 Stat. 517 ........................................................................................................... See Public Law 94-286 

90 Stat. 901 ........................................................................................................... See Public Law 94-356 

90 Stat. 923 ........................................................................................................... See Public Law 94-361 

91 Stat. 330-331 ..................................................................................................... See Public Law 95-79 

92 Stat. 843 ........................................................................................................... See Public Law 95-397 

92 Stat. 1619-1621 ...............................................................................................See Public Law 95-485 

93 Stat. 808, 813 ................................................................................................... See Public Law 96-107 

94 Stat. 1090-1092, 1100-1102 ............................................................................ See Public Law 96-342 

94 Stat. 1126-1129 ............................................................................................... See Public Law 96-343 

94 Stat. 2835 ..........................................................................................................See Public Law 96-513 

94 Stat. 3360-3364 ................................................................................................See Public Law 96-579 

94 Stat. 3377 ..........................................................................................................See Public Law 96-584 

95 Stat. 989-996 ......................................................................................................See Public Law 97-60 

95 Stat. 1030-1031 ..................................................................................................See Public Law 97-66 

95 Stat. 1109 ............................................................................................................See Public Law 97-86 

1181
96 Stat. 730-738 ....................................................................................................See Public Law 97-252 

97 Stat. 634-635, 644-648 .......................................................................................See Public Law 98-94 

98 Stat. 1943 ..........................................................................................................See Public Law 98-473 

98 Stat. 2533 ..........................................................................................................See Public Law 98-525 

99 Stat. 635-636, 643-646, 655 .............................................................................See Public Law 99-145 

100 Stat. 593........................................................................................................... See Public Law 99-335 

100 Stat. 682 ..........................................................................................................See Public Law 99-348 

100 Stat. 992 ..........................................................................................................See Public Law 99-433 

100 Stat. 2085 ........................................................................................................See Public Law 99-514 

100 Stat. 3816 ........................................................................................................See Public Law 99-661 

101 Stat. 331 ..........................................................................................................See Public Law 100-48 

101 Stat. 830 ........................................................................................................See Public Law 100-140 

101 Stat. 1019 ......................................................................................................See Public Law 100-180 

101 Stat. 1329.......................................................................................................See Public Law 100-202 

102 Stat. 1918 ......................................................................................................See Public Law 100-456 

103 Stat. 1352 ......................................................................................................See Public Law 101-189 

104 Stat. 1485 ......................................................................................................See Public Law 101-510 

105 Stat. 75 ............................................................................................................See Public Law 102-25 

105 Stat. 1290 ......................................................................................................See Public Law 102-190 

106 Stat. 2315 ......................................................................................................See Public Law 102-484 

106 Stat. 5039 ......................................................................................................See Public Law 102-587 

107 Stat. 1547 ......................................................................................................See Public Law 103-160 

108 Stat. 2663 ......................................................................................................See Public Law 103-337 

110 Stat. 186 ........................................................................................................See Public Law 104-106 

110 Stat. 2538 ...................................................................................................... See Public Law 104-201 

111 Stat. 1770 ........................................................................................................ See Public Law 105-85 

112 Stat. 2035..............................................................................See Public Law 105-261 

112 Stat. 3315.............................................................................. See Public Law 105-368 

113 Stat. 634 .................................................................................See Public Law 106-65 

114 Stat. 1482.............................................................................. See Public Law 106-419 

114 Stat. 1654A-142 ......................................................................See Public Law 106-398 

115 Stat. 128 .............................................................................. See Public Law 107-107 

115 Stat. 976............................................................................... See Public Law 107-103 

116 Stat. 2458.............................................................................. See Public Law 107-314 

117 Stat. 559 ..................................................................................See Public Law 108-11 

117 Stat. 1335.............................................................................. See Public Law 108-121 

117 Stat. 1494.............................................................................. See Public Law 108-136 

117 Stat. 1885.............................................................................. See Public Law 108-147 

 Citations to United States Code Page

5 U.S.C. §5307 (Relating to Maximum Rates of Pay Authorized) 

Basic Pay and .............................................................................................................................56, 77 

5 U.S.C. §8340 (Relating to Adjustments to Retired Pay) 

Adjustments to Retired and Retainer Pay and ...............................................................................762 

5 U.S.C. §§8521-8525 (Relating to Unemployment Compensation) 

Annual Leave and ..........................................................................................................................953 

Unemployment Compensation and ................................................................................................801 

10 U.S.C. §101(a)(13) (Definition of "Contingency Operation") 

Annual Leave and...........................................................................................................................863 

Foreign Language Proficiency Pay and ..........................................................................................673 

Variable Housing Allowance and ..................................................................................................138 

10 U.S.C. § 101(a)(15) (Definition of "Pay" for Purposes of Title 10, United States Code) 

Death Gratuity and .........................................................................................................................839 

10 U.S.C. §101(d)(1) (Definition of "Active Duty") 

 Active and Inactive Duty Compensation, and .................................................................................. 11 

1182
10 U.S.C. §101(d)(5) (Definition of "Full-time National Guard Duty) 

Active and Inactive Duty Compensation, and .................................................................................11 

10 U.S.C. § 101(d)(7) (Definition of "Inactive-duty Training") 

Active and Inactive Duty Compensation, and ..............................................................................228 

Members of Reserve Components, generally, and .........................................................................11 

Military Compensation, generally, and ..........................................................................................11 

Nondisability Retired and Retainer Pay and .................................................................................715 

Reserve Components Pay and ......................................................................................................225 

10 U.S.C. § 153 (Relating to the Duties of the Chairman of the Joint Chiefs of Staff) 

 Professional Education and Training and ....................................................................................944 

10 U.S.C. §154(f) (Relating to Vice Chairman of the Joint Chiefs of Staff) 

Basic Pay and ................................................................................................................................25 

10 U.S.C. §311 (Definition of "Militia of the United States") 

Compensation for Inactive-duty Training and .............................................................................229 

10 U.S.C. §514 (Relating to Bounties for Enlistment) 

Prohibition on Bounties ...............................................................................................................600 

10 U.S.C. §533 (Relating to Original Appointment Service Credits for Officers) 

Special Pay for Dentists (Dental Officers of the Armed Forces) .................................................566 

Special Pay for Physicians (Medical Officers of the Armed Forces) ..........................................549 

10 U.S.C. §673b (Relating to Presidential Call Up Authority of Reserves) 

Presidential Call Up Authority for Reserves ...............................................................................244 

10 U.S.C. §688 (Relating to Ordering Retired Members to Active Duty) 

Nondisability Retired and Retainer Pay and ................................................................................695 

Retired Pay for Non-Regular Service (Reserve Retirement) and ................................................543 

10 U.S.C. §§701-704 (Relating to Annual Leave) 

Annual Leave and ........................................................................................................................857 

10 U.S.C. §705 (Relating to Special Leave for Rest and Recuperative Absence) 

 Overseas Duty Extension Pay, Special Leave for Rest and 

Recuperative Absence, and ..................................................................................................667

10 U.S.C. §801-941 (Relating to the Uniform Code of Military Justice) 

Uniform Code of Military Justice and .................................................................. 683 

 10 U.S.C. §981 (Relating to Enlisted Aides) 

Enlisted Aides and .......................................................................................................................976 

10 U.S.C. §§1071-1110 (Relating to Medical Care for Members, 

Former Members, Dependents, and Survivors) 

Medical Care (Service Members and Dependents) .....................................................................873 

Retired Members Medical Care and ............................................................................................819 

10 U.S.C. §1174 (Relating to Involuntary Separation) 

Nondisability Separation Pay and ...............................................................................................786 

10 U.S.C. §1174a (Relating to Temporary Voluntary Separation Incentives) 

Temporary Voluntary Separation Incentives and ........................................................................810 

10 U.S.C. §§1201-1221 (Relating to Retirement or Separation for Physical Disability) 

Disability Retired Pay and ...........................................................................................................736 

Disability Severance Pay and ......................................................................................................798 

10 U.S.C. §1401 (Relating to Computation of Retired and Retainer Pay) 

Disability Retired Pay and ...........................................................................................................725 

Retired Pay for Non-Regular Service and ...................................................................................725

10 U.S.C. §1401a (Relating to Adjustments to Retired and Retainer Pay) 

Adjustments to Retired and Retainer Pay and .............................................................................. 756 

Nondisability Retired and Retainer Pay and ........................................................................... 700 

10 U.S.C. § 1406 (Relating to Retired Pay Bases)

 Nondisability Retired and Retainer Pay and ................................................................................. 703

1183
10 U.S.C. §-1408 (Relating to Uniformed Services Former Spouses' Protection Act) 

Uniformed Services Former Spouses' Protection Act ................................................1052 

10 U.S.C. §1409 (Relating to Retired Pay Multipliers) 

Nondisability Retired and Retainer Pay and .........................................................710 

10 U.S.C. §§1447-1455 (Relating to the Survivor Benefit Plan) 

Survivor Benefit Plan and ................................................................................. 902 

10 U.S.C. §1460-60 (Relating to Supplementary Survivor Benefit Plan).............................. 925 

10 U.S.C. §§1461-1467 (Relating to the Military Retirement Fund) 

Department of Defense Military Retirement Fund and ............................................................... 1046 

Imputed Contribution for Retirement Benefits and ....................................................................... 784 

 Retired Pay for Non-Regular Service (Reserve Retirement) and ........................................... 699 

10 U.S.C. §1475-1480 (Relating to Death Benefits) 

Death Gratuity and ....................................................................................................................... 836 

10 U.S.C. §§1501-1513 (Relating to Missing Persons) 

Missing Persons and ................................................................................................................... 1108 

10 U.S.C. §§2005, 2006 (Relating to Education) 

Voluntary Education and Training and ........................................................................................ 865 

10 U.S.C. §2130a (Relating to Financial Assistance for Nurse Officer Candidates) 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists ................................. 586 

10 U.S.C. §2484 (Relating to Commissaries) 

Commissaries and ................................................................................................ 928

10 U.S.C. §2685 (Relating to Commissaries)

Commissaries and ..................................................................................................................... 928 

10 U.S.C. §2830 (Relating to Voluntary Occupancy of Substandard Housing) 

 Basic Allowance for Quarters and ............................................................................. 129 

10 U.S.C. §3991 (Relating to Retired and Retainer Pay for Enlisted Personnel 

Credited with Performance of Acts of Extraordinary Heroism—Army) 

Nondisability Retired and Retainer Pay and ............................................................................ 718 

10 U.S.C. §4621 (Relating to Commissaries—Army) 

Commissaries and ........................................................................................................................ 928 

10 U.S.C. §6330(c) (Relating to Retired and Retainer Pay for Enlisted P 

 Credited with Performance of Acts of Extraordinary Heroism—Navy) 

 Nondisability Retired and Retainer Pay and ............................................................................... 718 

10 U.S.C. §§7601, 7603 (Relating to Commissaries—Navy and Marine Corps) 

 Commissaries and ........................................................................................................................ 928 

10 U.S.C. §8991 (Relating to Retired and Retainer Pay for Enlisted Personnel 

 Credited with Performance of Acts of Extraordinary Heroism—Air Force) 

 Nondisability Retired and Retainer Pay and ............................................................................... 718 

10 U.S.C. §9621 (Relating to Commissaries—Air Force) 

Commissaries and .................................................................................................................. 928 

10 U.S.C. §§12731-12739 (Relating to Reserve Retirement) 

Retired Pay for Non-Regular Service (Reserve Retirement) and .............................................. 722 

10 U.S.C. §16131-7 (Relating to Educational Assistance for 

Members of the Reserve Components of the Armed Forces) ........................................ 633 

 Educational Assistance for Members of the Selected Reserve and ............................ 954 

12 U.S.C. §1715m (Relating to Mortgage Insurance Premiums) 

Mortgage Insurance Premiums and ............................................................................................ 870

26 U.S.C. §32 (Relating to Earned Income Credit) 

 Federal Taxation of Members of the Armed Forces and ............................................1075 

26 U.S.C. §61 (Definition of "Gross Income") 

 Federal Income Tax Advantage and ............................................................................. 214

1184
26 U.S.C. § 104(a)(4) (Relating to Taxation of Disability Benefits) 

Disability Retired Pay and ..................................................................... 748 

 Federal Taxation of Members of the Armed Forces and.................................. 1070 

26 U.S.C. §112 (Relating to Exclusions from Gross Income) 

Combat Zone Tax Exclusion and ............................................................ 1069 

Federal Income Tax Advantage and ........................................................... 222 

Federal Taxation of Members of the Armed Forces and ................................. 1070 

 Impact of State Income Taxes on Military Compensation ............................... 1091 

26 U.S.C. §72(n) (Relating to Reductions in Retired Pay for SBP) 

 Federal Taxation of Members of the Armed Forces and ................................. 1072 

26 U.S.C. §121 (Relating to Rollover of Gain on Sale of Principal Residence) 

 Federal Taxation of Members of the Armed Forces and ................................. 1079 

26 U.S.C. §122 (Relating to Reductions in Retired Pay for SBP) 

 Federal Taxation of Members of the Armed Forces and ................................. 1071 

26 U.S.C. §134 (Relating to Military Benefits) 

 Taxation of Certain Military Allowances and Benefits ................................... 1072 

26 U.S.C. §137 (Relating to Taxation of Veterans Benefits) 

 Federal Taxation of Members of the Armed Forces and ................................. 1073 

26 U.S.C. §217(g) (Relating to Taxation of Moving and Storage Expenses) 

 Federal Taxation of Members of the Armed Forces and ................................. 1074 

26 U.S.C. §219 (Relating to IRA Deductions) 

 Federal Taxation of Members of the Armed Forces and ................................. 1077 

26 U.S.C. §265 (Relating to Disallowance of Interest Deductions) 

 Federal Income Tax Advantage and .......................................................... 216 

26 U.S.C. §692 (Relating to Tax Exemptions for Deceased Members) 

 Federal Taxation of Members of the Armed Forces and ................................. 1075 

26 U.S.C. §2201 (Relating to Exemption from Additional Estate Taxes) 

 Federal Taxation of Members of the Armed Forces and .................................. 1081 

26 U.S.C. §3101, 3111, 3121 (Relating to Social Security) 

Government Contribution to Social Security and ........................................... 884 

Federal Income Tax Advantage and ...................................................... 215 

Federal Taxation of Members of the Armed Forces and ................................. 1082 

26 U.S.C. §3401 (Relating to Exemption from Withholding) 

 Federal Taxation of Members of the Armed Forces and .................................1082 

26 U.S.C. §4253 (Relating to Exemption from Telephone Excise Taxes) 

Federal Taxation of Members of the Armed Forces and ..................................1084 

26 U.S.C. §7701 (Definition of "Military or Naval Forces of the United States") 

Federal Taxation of Members of the Armed Forces and ..................................1068 

28 U.S.C. §2401 (Relating to Statute of Limitations for Claims against the United States) 

 Claims for Back Pay and .......................................................................1158 

31 U.S.C. §3702 (Relating to Statute of Limitations for Claims against the United States) 

 Claims for Back Pay and ....................................................................... 1159 

37 U.S.C. §101(4) (Relating to Definition of "Uniformed Services") 

 Uniformed Services and ............................................................................................... 1033 

37 U.S.C. §101(6) (Definition of "National Guard") 

Diving Duty Pay and ................................................................................................................ 454 

Experimental Stress Duty Pays and .......................................................................................... 493 

Flight Deck Duty Pay and ........................................................................................................ 399 

Flight Pay (AWACS Duty) and ................................................................................................ 362 

Flight Pay (Crew member) and ................................................................................................ 294 

Flight Pay (Non-Crew Member) and ........................................................................................ 313 

Glider Duty Pay and .................................................................................................................. 387 

Leprosy Duty Pay and .............................................................................................................. 514 

Parachute Duty Pay and ........................................................................................................... 377 

1185
Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ...................................... 505 

Submarine Duty Incentive Pay and ............................................................................................ 435 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and ................................. 412 

37 U.S.C. §101(7) (Definition of "Army National Guard") 

Diving Duty Pay and .................................................................................................................. 454 

Experimental Stress Duty Pays and ............................................................................................ 493 

Flight Deck Duty Pay and .......................................................................................................... 399 

Flight Pay (AWACS Duty) and .................................................................................................. 362

Flight Pay (Crew Member) and .................................................................................................. 294 

Flight Pay (Non-Crew Member) and .......................................................................................... 313 

Glider Duty Pay and .................................................................................................................... 387 

Leprosy Duty Pay and ................................................................................................................ 514 

Parachute Duty Pay and ............................................................................................................. 377 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ...................................... 505 

Submarine Duty Incentive Pay and ............................................................................................ 435 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and ................................. 412 

37 U.S.C. § 101(9) (Definition of "Air National Guard") 

Diving Duty Pay and .................................................................................................................. 454 

Experimental Stress Duty Pays and ............................................................................................ 493 

Flight Deck Duty Pay and .......................................................................................................... 399 

Flight Pay (AWACS Duty) and .................................................................................................. 362 

Flight Pay (Crew Member) and .................................................................................................. 294 

Flight Pay (Non-Crew Member) and .......................................................................................... 313 

Glider Duty Pay and ................................................................................................................... 387 

Leprosy Duty Pay and ................................................................................................................ 514 

Parachute Duty Pay and ............................................................................................................. 377 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ...................................... 505 

Submarine Duty Incentive Pay and ............................................................................................ 435

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and ................................. 412 

37 U.S.C. §101(11) (Definition of "Officer") 

Responsibility Pay and ............................................................................................................... 280 

37 U.S.C. §101(18) (Definition of "Active Duty" for the Purposes of Title 37) 

Members of Reserve Components and ...................................................................................... 1108 

37 U.S.C. §101(22) (Definition of "Inactive-duty Training") 

Reserve Components Pay and ..................................................................................................... 225 

Submarine Duty Incentive Pay and ............................................................................................ 436 

37 U.S.C. §101(23) (Definition of "Member" [of an Armed Force]) 

Demolition Duty Pay and ............................................................................................................ 269 

Experimental Stress Duty Pays and ............................................................................................ 488 

Flight Deck Duty Pay and ......................................................................................................... 394 

Parachute Duty Pay and ............................................................................................................. 371 

 Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and................................... 406 

37 U.S.C. §101(24) (Definition of "Reserve Component”)

 Aviation Career Incentive Pay (ACID) and ................................................................................. 350 

 Operational Submersible Duty Pay and....................................................................................... 445 

 Diving Duty Pay and ................................................................................................................... 454 

 Experimental Stress Duty Pays and............................................................................................. 493 

 Flight Pay (AWACS Duty) and................................................................................................... 362 

 Flight Pay (Crew Member) and ................................................................................................... 297 

 Flight Pay (Non-Crew Member) and........................................................................ 313 

 Glider Duty Pay and Flight Pay (Non-Crew Member) and .............................................. 386 

 Leprosy Duty Pay and ........................................................................................ 513 

 Parachute Duty Pay and ...................................................................................... 377 

 Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ................................ 504 

 Submarine Duty Incentive Pay and ......................................................................... 435 

 Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and ............................. 412 

1186
37 U.S.C. §101(25) (Definition of "Regular Military Compensation”)

 Basic Allowance for Quarters and ........................................................................................................ 102 

 Basic Allowance for Subsistence and .................................................................................................. 102 

 Basic Pay and .......................................................................................................................................... 29 

 Death Gratuity and ................................................................................................................................ 841 

 Federal Income Tax Advantage and ..................................................................................................... 208 

 Imputed Contribution for Retirement Benefits and ............................................................................. 779 

 Overseas Station Allowances and ........................................................................................................ 102 

 Regular Military Compensation and ...................................................................................................... 16 

 Station (Overseas) Housing Allowance and ........................................................................................ 102 

 Variable Housing Allowance (VHA) and ............................................................................................ 188 

37 U.S.C. §101(26) (Definition of "Contingency Operation") 

 Annual Leave and........................................................................................................................... 862 

 Foreign Language Proficiency Pay and ............................................................................................... 673 

37 U.S.C. §203 ("Rates" of Basic Pay) 

 Basic Pay and .......................................................................................................................................... 19 

 Professional Education and Training and ............................................................................................ 944 

37 U.S.C. §205 (Relating to Computation of Creditable Service for Pay Purposes) 

 Special Pay for Health Professionals and ............................................................................................. 566 

37 U.S.C. §206 (Relating to Reserves and Inactive-Duty Training) 

 Aviation Career Incentive Pay and ....................................................................................................... 323 

 Bonuses for Members of the Selected Reserve .................................................................................... 646 

 Compensation for Inactive-Duty Training, generally ........................................................................... 228 

 Demolition Duty Pay and Members of Reserve Components ............................................................. 274 

 Department of Defense Military Retirement Fund and ...................................................................... 1047 

 Diving Duty Pay and ............................................................................................................................ 454 

 Experimental Stress Duty Pays and ...................................................................................................... 494 

 Flight Deck Duty Pay and ..................................................................................................................... 399 

 Flight Pay (AWACS Duty) and ............................................................................................................ 362 

 Flight Pay (Crew Member) and ...................................................................................................... 294 

 Flight Pay (Non-Crew Member) and .............................................................................................. 313 

 Glider Duty Pay and ....................................................................................................................... 387 

 Leprosy Duty Pay and ..................................................................................................................... 514 

 Nondisability Retired and Retainer Pay and ................................................................................... 723 

 Parachute Duty Pay and ................................................................................................................. 377 

 Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) .......................................... 505 

 Reserve Components Pay and ....................................................................................................... 225 

 Retired Pay for Non-Regular Service (Reserve Retirement) and .................................................. 723 

 Submarine Duty Incentive Pay and ............................................................................................... 435 

 Toxic Fuels and Propellants and Chemical Munitions Exposure Pay ............................................ 413 

37 U.S.C. §301 (Relating to Incentive Pay for Hazardous Duty) 

Aviation Officer Continuation Pay (AOCP) and .......................................................................... 320 

Combat Pay and ............................................................................................................................. 253 

Demolition Duty Pay and ............................................................................................................. 266 

Experimental Stress Duty Pays and .............................................................................................. 486 

Flight Deck Duty Pay and ............................................................................................................ 391 

Flight Pay (Air Weapons Controllers) and ................................................................................... 357

Flight Pay (Crew Member) and .................................................................................................... 282 

Flight Pay (Non-Crew Member) and ............................................................................................ 305 

Glider Duty Pay and ..................................................................................................................... 383 

Hostile Fire Pay and ..................................................................................................................... 253 

Leprosy Duty Pay and .................................................................................................................. 510 

Operational Submersible Duty Pay and ........................................................................................ 443 

Parachute Duty Pay and ............................................................................................................... 367 

Personal Exposure Pay (Toxic Pesticides and 

Dangerous Organisms) .......................................................................................................... 498 

1187
Submarine Duty Incentive Pay and ............................................................................................... 418 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay .......................................... 403 

37 U.S.C. §301a (Relating to Aviation Career Incentive Pay) 

Aviation Career Incentive Pay and ............................................................................................... 320 

Flight Pay (Air Weapons Controllers) and ................................................................................... 357 

Flight Pay (Crew Member) and .................................................................................................... 282 

Glider Duty Pay and .................................................................................................................. 383 

37 U.S.C. §301b (Relating to Aviation Officer Continuation Pay) 

Aviation Career Incentive Pay and .............................................................................................. 320 

Aviation Officer Continuation Pay and ....................................................................................... 332 

37 U.S.C. §301c (Relating to Submarine Duty Incentive Pay) 

Submarine Duty Incentive Pay and .............................................................................................. 418 

Operational Submersible Duty Pay and ...................................................................................... 443 

37 U.S.C. §301d (Relating to Retention Bonuses for Physicians 

(Medical Officers of the Armed Forces)) 

Special Pay for Physicians (Medical Officers of the Armed Forces) and ............................... 518 

37 U.S.C. §302 (Relating to Special Pay for Physicians 

(Medical Officers of the Armed Forces)) 

Members of Reserve Components and ........................................................................................ 225 

Special Pay for Physicians (Medical Officers of the Armed Forces) and ............................. 518 

Special Pay for Officers Holding Positions of Unusual Responsibility and ................................ 303 

37 U.S.C. §302a (Relating to Special Pay for Optometrists) 

Special Pay for Officers Holding Positions of Unusual Responsibility and..................................303 

Special Pay for Optometrists ........................................................................................................572 

37 U.S.C. §302b (Relating to Special Pay for Dental Officers of the Armed Forces) 

Special Pay for Dentists (Dental Officers of the Armed Forces) ................................................. 550 

Special Pay for Officers Holding Positions of Unusual Responsibility and..................................303 

37 U.S.C. §302c (Relating to Special Pay for Psychologists and 

 Other Nonphysician Health Care Providers) 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists .........................................585 

Special Pay for Psychologists and Other Nonphysician Health Care Providers ...........................578 

37 U.S.C. §302d (Relating to Accession Bonuses for Nurses) 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists .........................................585 

37 U.S.C. §302e (Relating to Special Pay for Nurses) 

Special Pay and Accession Bonus for Nurses and Nurse Anesthetists .........................................585 

37 U.S.C. §303 (Relating to Special Pay for Veterinarians) 

Special Pay for Officers Holding Positions of Unusual Responsibility and................................. 303 

Special Pay for Veterinarians .......................................................................................................567 

37 U.S.C. §303a (Relating to Special Pay for Health Professionals Generally) 

Special Pay for Dentists (Dental Officers of the Armed Forces) ..................................................550 

Special Pay for Optometrists ........................................................................................................572 

Special Pay for Physicians (Medical Officers of the Armed Forces) ...........................................518 

Special Pay for Veterinarians .......................................................................................................567 

37 U.S.C. §303b (Relating to Waiver of Board Certification Requirements) 

Special Pay for Dentists (Dental Officers of the Armed Forces) ..................................................550 

Special Pay for Physicians (Medical Officers of the Armed Forces) and ....................................518 

37 U.S.C. §304 (Relating to Diving Duty Pay) 

Diving Duty Pay and ....................................................................................................................447 

37 U.S.C. §305 (Relating to Special Pay While on Duty at Certain Places) 

Special Pay for Career Sea Duty and ...........................................................................................457 

Special Pay While on Duty at Certain Places and ........................................................................660 

37 U.S.C. §305a (Relating to Special Pay for Career Sea Duty) 

Special Pay for Career Sea Duty and ...........................................................................................457 

Special Pay While on Duty at Certain Places and ........................................................................660 

37 U.S.C. §306 (Relating to Responsibility Pay) 

1188
Special Pay for Officers Holding Positions of Unusual Responsibility and..................................278 

37 U.S.C. §307 (Relating to Special Duty Assignment Pay) 

Special Duty Assignment Pay, Proficiency Pay, and ...................................................................654 

37 U.S.C. §308 (Relating to Selective Reenlistment Bonuses) 

Selective Reenlistment Bonus and ...............................................................................................610 

37 U.S.C. §308b (Relating to Reserve Bonuses) 

Reserve Bonuses and ....................................................................................................................633 

37 U.S.C. §308c (Relating to Reserve Bonuses) 

Reserve Bonuses and ....................................................................................................................633 

37 U.S.C. §308d (Relating to Special Assignment Pay for the Selected Reserve) 

Special Assignment Pay for the Selected Reserve and .................................................................633 

37 U.S.C. §308e (Relating to Reserve Bonuses) 

Reserve Bonuses and .................................................................................... ...............................633 

37 U.S.C. §308g (Relating to Reserve Bonuses) 

Reserve Bonuses and ...................................................................................................................633 

37 U.S.C. §308h (Relating to Reserve Bonuses) 

Reserve Bonuses and ...................................................................................................................633 

37 U.S.C. §308i (Relating to Reserve Bonuses) 

Reserve Bonuses and ...................................................................................................................633 

37 U.S.C. §309 (Relating to Reserve Officers Pay for Administrative Duty—Repealed) 

Reserve Officers Pay for Administrative Duty and .....................................................................675 

37 U.S.C. §310 (Relating to Hostile Fire Pay) 

Hostile Fire Pay and .................................................................................................................... 250 

37 U.S.C. §312 (Relating to Special Continuation Pay for Nuclear-Qualified Officers) 

Nuclear: Qualified Officers and....................................................................................................476 

37 U.S.C. §312a (Relating to Special Pay for Nuclear-Trained 

and Qualified Enlisted Members) 

Nuclear Pay and ...........................................................................................................................476 

37 U.S.C. §312b (Relating to Nuclear Career Accession Bonuses) 

Nuclear-Qualified Officers and ....................................................................................................476 

37 U.S.C. §312c (Relating to Nuclear Career Annual Incentive Bonuses) 

Nuclear-Qualified Officers and ....................................................................................................476 

37 U.S.C. §314 (Relating to Overseas Duty Extension Pay) 

Overseas Duty Extension Pay and ...............................................................................................667 

37 U.S.C. §315 (Relating to Engineering and Scientific Career Continuation Pay) 

Engineering and Scientific Career Continuation Pay and ............................................................593 

37 U.S.C. §316 (Relating to Foreign Language Proficiency Pay) 

Foreign Language Proficiency Pay and .......................................................................................671 

37 U.S.C. §316a (Relating to Waiver of Certification Requirement for 

Foreign Language Proficiency Pay) 

Foreign Language Proficiency Pay and .......................................................................................671

37 U.S.C. §402 (Relating to Basic Allowance for Subsistence) 

Basic Allowance for Subsistence and ......................................................................................... 183 

37 U.S.C. §403 (Relating to Basic Allowance for Housing) 

Basic Allowance for Housing and ..............................................................................................102 

BAH Entitlement of Members Married to Other Members ......................................................1066 

Entitlement to Continued Occupation of Military Housing ........................................................117 

Variable Housing Allowance and ...............................................................................................119 

37 U.S.C. §403a (Relating to Variable Housing Allowance) 

Basic Allowance for Housing and ..............................................................................................131 

Station (Overseas) Housing Allowance, substitution of 

Variable Housing Allowance for in Alaska and Hawaii .......................................................147 

Variable Housing Allowance and ...............................................................................................119 

37 U.S.C. §403b (Relating to Cost-of-living Allowance for 

 the Continental United States (CONUS COLA)) 

1189
Cost-of-Living Allowance (CONUS COLA) and .....................................................................1012 

Federal Income Tax Advantage and ...........................................................................................217

37 U.S.C. §404 (Relating to Travel and Transportation Allowances) 

Separation Travel and Transportation Allowances and ............................................................1026 

37 U.S.C. §§404-412 (Relating to Travel and Transportation Allowances Generally) 

 Travel and Transportation Allowances and ................................................................................ 988 

37 U.S.C. §405 (Relating to Per Diem while Stationed Overseas) 

Overseas Station Allowances and .............................................................................................1003 

Station (Overseas) Housing Allowance and ................................................................................143 

37 U.S.C. §405a (Relating to Departure Allowances) 

Dislocation and Departure Allowances and ..............................................................................1022 

37 U.S.C. §406 (Relating to Travel and Transportation Allowances) 

Separation Travel and Transportation Allowances and..............................................................1026 

37 U.S.C. §407 (Relating to Dislocation Allowances) 

Dislocation and Departure Allowances and ............................................ .................................1022 

37 U.S.C. §414 (Relating to Personal Money Allowance and Special Position Allowance) 

Personal Money Allowance and Special Position Allowance and ............................................1033 

37 U.S.C. §§415-419 (Relating to Clothing Issues and Maintenance Allowances) 

Clothing Issues and Maintenance Allowances and ................................................................. 998 

37 U.S.C. §421 (Relating to Allowances when Dependent is Entitled to Basic Pay) 

BAQ Entitlement of Members Married to Other Members .......................................................1066 

37 U.S.C. §427 (Relating to Family Separation Allowances) 

Family Separation Allowance and .............................................................................................1015 

37 U.S.C. §428 (Relating to Allowance for Recruiting Expenses) 

Reimbursement for Recruiting Expenses and ....................................... ...................................1040 

37 U.S.C. §431 (Relating to Benefits for Members Assigned to Defense Intelligence Agency) 

Benefits for Members Assigned to Defense Intelligence Agency and .......................................1122 

37 U.S.C. §501 (Relating to Accrued Leave Payments) 

Accrued Leave, Payments for, and ..............................................................................................857 

Benefits for Survivors and .........................................................................................................1127 

37 U.S.C. §§551-558 (Relating to Benefits for Missing Persons) 

Missing Persons (MIAs), Benefits 'for, and ...............................................................................1109 

37 U.S.C. §559 (Relating to Benefits for Captives) 

Captives, Benefits for, and ........................................................................................................1115 

37 U.S.C. §907 (Relating to Basic Pay and Allowance Entitlements of 

Warrant Officers and Enlisted Members Appointed as Officers) 

Basic Pay and ................................................................................................................................19 

37 U.S.C. § 1008 (Relating to Statutorily Required Reviews of 

Military Pays and Allowances, Annually and Quadrennially) 

Basic Allowance for Housing and ............................................................................................... 115 

Basic Allowance for Subsistence and ..........................................................................................188 

Basic Pay and ................................................................................................................................33 

Demolition Duty Pay and ............................................................................................................270 

Diving Duty Pay and ...................................................................................................................455 

Engineering and Scientific Career Continuation Pay and ...........................................................596 

Experimental Stress Duty Pays and .............................................................................................490 

Family Separation Allowance and .............................................................................................1020 

Flight Deck Duty Pay and ...........................................................................................................396 

Flight Pay (Crew Member) and ...................................................................................................295 

Flight Pay (Non-Crew Member) and ...........................................................................................311

Glider Duty Pay and.....................................................................................................................385 

Hostile Fire Pay and .....................................................................................................................259 

Leprosy Duty Pay and .................................................................................................................512 

Parachute Duty Pay and ..............................................................................................................373 

1190
Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) .......................................502 

 Reenlistment Bonus and ..............................................................................................................612 

Sea Duty, Special Pay for Career and .........................................................................................467 

Selective Reenlistment Bonus and .............................................................................................612 

Theory of Military Compensation and ......................................................................................1060 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay .........................................408 

37 U.S.C. §1009 (Annual Adjustment of Military Pay and Allowance Rates) 

Basic Allowance for Housing and ...............................................................................................108 

Basic Allowance for Subsistence and ..........................................................................................187 

Basic Pay and ................................................................................................................................19 

Imputed Contribution for Retirement Benefits and .................................................................... 782 

38 U.S.C. §§1301-1323 (Relating to Dependency and Indemnity Compensation) 

Dependency and Indemnity Compensation and ..........................................................................844 

38 U.S.C. § 1562 (Relating to Special Pension for Recipients of Medal of Honor) 

Retired and Retainer Pay and ......................................................................................................718 

38 U.S.C. §§1965-1980 (Relating to Servicemen's Group Life Insurance) 

Dependency and Indemnity Compensation and ....................................................................... 1127 

Servicemen's Group Life Insurance and ......................................................................................827

38 U.S.C. §§3001-3036, 3201-3243, 3451-3493, 3500-3566 (Relating to 

Veterans' Educational Benefits) 

Veterans' Educational Assistance ("GI Bill") and .......................................................................954 

Voluntary Education and Training and .......................................................................................865

38 U.S.C. §§3701-3736 (Relating to Home Loan Assistance "GI Bill") 

GI Bill— Home Loan Assistance and ..........................................................................................969 

38 U.S.C. §§5305 (Relating to Waiver of Retired Pay for Eligibility 

for Department of Veterans Affairs Compensation) 

Disability Retired Pay and ...........................................................................................................750 

Retired and Retainer Pay and ......................................................................................................717 

42 U.S.C. §3374 (Relating to Homeowners Assistance Program) 

Homeowners Assistance Program and .........................................................................................973 

50 U.S.C. App. §2005 (Relating to Payments to Prisoners of War) 

Prisoners of War, Payments to, and ...........................................................................................1117 

Executive Orders 

Executive Order 11157 (revoked 2003) 

Aviation Career Incentive Pay and ..............................................................................................355 

Basic Allowance for Quarters (Partial) and ................................................................................. 179 

Demolition Duty Pay and : ..........................................................................................................272 

Experimental Stress Duty Pays and .............................................................................................497 

 Flight Deck Duty Pay and ...........................................................................................................402 

Flight Pay (Crew Member) and ...................................................................................................303 

Flight Pay (Non-Crew Member) and ...........................................................................................319

Glider Duty Pay and ....................................................................................................................387 

Leprosy Duty Pay and .................................................................................................................508 

Parachute Duty Pay and ..............................................................................................................378 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) .......................................508 

Sea Duty, Career Sea Duty, and ................................................................................................... 473 

Submarine Duty Incentive Pay and .............................................................................................440 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and ..................................416 

Executive Order 12387 

Automatic Adjustment of Elements of Regular Military Compensation and ................................38 

1191
 Basic Allowance for Quarters and ...............................................................................................116 

Basic Allowance for Subsistence and ..........................................................................................190 

Executive Order 12546 

Basic Pay and ................................................................................................................................ 38 

Executive Order 12663 

Basic Allowance for Quarters and .............................................................................................. 179 

Executive Order 12984 

Basic Pay and ... ........................................................................................................................... 42 

Executive Order 12990 

Basic Allowance for Quarters and .............................................................................................. 128 

Basic Allowance for Subsistence and ......................................................................................... 179 

Basic Pay and .............................................................................................................................. 49 

Executive Order 13002 

Hostile Fire Pay and .................................................................................................................. 265 

Executive Order 13119 

 Kosovo and areas in Former Yugoslavia as Hostile Fire Zone ............................................... 1070 

Executive Order 13239 

 Afghanistan as Hostile Fire Zone .............................................................................................. 260 

Executive Order 13294 

 Aviation Career Incentive Pay and ............................................................................................ 355 

Basic Allowance for Quarters (Partial) and ............................................................................... 179 

Demolition Duty Pay and .......................................................................................................... 274 

Experimental Stress Duty Pays and ........................................................................................... 497 

 Flight Deck Duty Pay and ......................................................................................................... 402 

Flight Pay (Crew Member) and ................................................................................................. 303 

Flight Pay (Non-Crew Member) and ......................................................................................... 319 

Glider Duty Pay and .................................................................................................................. 387 

Parachute Duty Pay and ............................................................................................................. 382 

Personal Exposure Pay (Toxic Pesticides and Dangerous Organisms) ..................................... 508 

Sea Duty, Career Sea Duty, and ................................................................................................ 473 

Submarine Duty Incentive Pay and ........................................................................................... 440 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay and ................................ 416 

Court Cases and Administrative Proceedings 

American Federation of Government Employees, AFL-CIO v. Reagan, 

 806 F.2d 1034 (Fed.Cir. 1986), cert. denied sub nom. National 

 Treasury Employees Union v.Reagan, 481U.S.1068 (1987) .................................................... 30 

Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983) ........................................ 30 

Jones v. United States, 60 Ct. Cl. 552(1925) 

Federal Income Tax Advantage and ..................................................................................... 29, 208 

Levy v. Urbach, 651 F.2d 1278 (9th Or. 1981) 

Leprosy Duty Pay, Entitlement to, and ..................................................................................... 510 

Major Sherburne's Case, 16 Ct. Cl. 491 (1880) 

Separation Travel and Transportation Allowances and ............................................................ 1026 

McCarty v. McCarty, 453 U.S. 210 (1981) 

Uniformed Services Former Spouses' Protection Act and ........................................................ 1053 

Pollock v. Farmers' Loan and Trust Company, 157 U.S. 429 (1895) 

Taxation of Military Pay and ..................................................................................................... 209 

Pollock v. Farmers' Loan and Trust Company, 158 US. 601 (1895) 

Taxation of Military Pay and ............................................................................................. 209, 212 

1192
Process Gas Consumers Group v. Consumer Energy Council of America, 

463 U.S. 1216, rehearing denied, 463 U.S. 1250 (1983), summarily 

 affirming 673 F.2d 425 (D.C.Cir. 1982) and 691 F.2d 575 (D.C.Cir. 1982) .................................. 30 

Selective Draft Law Cases, 245 U.S. 366 (1918) .............................................................................. 231 

United States v. Silver, 243 Fed. 422 (1917) ..................................................................................... 231 

1193
INDEX 

A 

AAFES (Army and Air Force Exchange Service) ......................... see Military Exchanges 

ACIP .............................................................................. see Aviation Career Incentive Pay 

Acceleration Duty Pay ................................................... see Experimental Stress Duty Pay 

Accrued Leave Payments .......... see Annual Leave/Accrued Leave Payments/ Leave Lost 

Adjustments to Retired and Retainer Pay 

 Generally..............................................................................................................756 

 Chart of Current Adjustment Mechanisms ........................................................ 767 

 Consumer Price Index (CPI) and ....................................................................... 761 

 Recomputation.....................................................................................................756 

 Retired Pay Increases ......................................................................................... 769 

 Summary of Adjustment Mechanisms ............................................................... 769 

Administrative Duty, Reserve Officers Pay for ............................................................. 675 

Advisory Commission on Service Pay ... see Structural Studies of Military Compensation 

Affiliation Bonus for Reserves ............................. see Reserve Affiliation, Enlistment and 

 Reenlistment Bonuses and Educational Assistance 

Air Force Exchange ........................................................................ see Military Exchanges 

All-Volunteer Force Educational Assistance Program .............. see Veterans’ Educational 

 Assistance (GI Bill) 

Annual Leave/Accrued Leave Payments/Leave Lost 

 Generally..............................................................................................................857 

 Armed Forces Leave Act of 1946 ...................................................................... 858 

 Ceilings 

 Exception for members in missing status .............................................. 858 

 Exception for payments to survivors of military decedents .................. 862 

 Exception for certain reserve components ............................................. 863 

 Ninety-day ceiling for certain “contingency operations”....................... 860 

 Cost of Unused Accrued Leave Payments . . . . . . . . . . . . . . see v. 2, Table IV–1

 Purpose................................................................................................................857 

AOCP (Aviation Officer Continuation Pay) .......... see Aviation Career Continuation Pay 

Army and Air Force Exchange Service ......................................... see Military Exchanges 

Army Exchange ............................................................................. see Military Exchanges 

Aviation Career Continuation Pay ................................................................................ 320 

 Generally.............................................................................................................320 

 Condition of entitlement .................................................................................... 321 

 Costs.........................................................................................see v. 2, Table II–12 

 Origin..................................................................................................................320 

 Rates....................................................................................................................356 

Assignment Incentive Pay ............................................................................................. 659 

Aviation Career Incentive Pay 

 Generally.............................................................................................................320 

 Aviation manning and air operations, relation to .............................................. 356 

1194
Conditions of Entitlement: “Gates”....................................................... 340, 347

 Costs.......................................................................................see v. 2, Table II–12 

 Origin................................................................................................................320 

 Rates..................................................................................................................327 

 Current: Pay table revisions of 1998 and 1999 ................................... 356 

Original: Aviation Career Incentive Act of 1974 ............................... 320 

 Uniform Services Pay Act of 1981 ..................................................... 608

 Reserve Forces Personnel, for Inactive Duty Training ....................... 352 

 Reserve Forces Personnel, Entitlement for Inactive Duty Training ............... 350 

Aviation Officer Continuation Pay ....................... see Aviation Career Continuation Pay 

AWACS Pay .......................................................... see Flight Pay (Air Weapons Control 

 Officers) 

B 

BAH (Basic Allowance for Housing) .....................see Basic Allowance for Housing 

BAH Entitlements for Members Married to Other Members 

BAQ (Basic Allowance for Quarters ............................. see Basic Allowance for Housing 

 Generally.............................................................................................................103 

 Adequacy Issues ................................................................................................ 129 

 Adjustments.........................................................................................................106 

 Advance Payment Authority ............................................................................. 147 

 Costs............................................................................................see v. 2, Table II-2 

 Enlisted Members and ....................................................................................... 170 

 “Class Q” Allotments ..................................................................... 111-113 

 Dependents’ Assistance Act (DAA) of 1950 ................................ 111, 179 

 FHA standard ............................................................................................ 108, 771 

 Origin..................................................................................................................103 

 Career Compensation Act of 1949 ................................................ 107-113 

 Commutation of quarters and fuel; quarters, heat, and light ......... 103-106 

 Rental Allowance and.....................................................................106-107 

 Partial BAQ ...................................................................................................... 115 

 Rates 1922-1997 ............................................................................................... 181 

 Regular Military Compensation (RMC) and .................................................... 102 

 “Salary” System and ......................................................................................... 103 

 Variable Housing Allowance and ..................................................................... 130 

Basic Allowance for Housing (BAH) ........................................................................ v,130 

Generally ........................................................................................................... 139 

 Advance Payment Authority ............................................................................. 147 

 Computation System ......................................................................................... 140 

 Costs............................................................................................see v. 2, Table II-2 

 Military Housing Areas ..................................................................................... 141 

 Partial BAH ....................................................................................................... 181 

Basic Allowance for Subsistence (BAS) 

 Generally.............................................................................................................183 

 Adjustments in Rates ......................................................................................... 183 

 Annual Adjustment Mechanism ............................................................ 186 

1195
 Congressional Preemption of Annual Adjustment .............................. 190 

Commuted Rations .......................................................................................... 189 

Computation Formulas of 1998 and 2001 ................................................... v, 193 

Conditions of Entitlement 

 Enlisted Members ................................................................................ 186 

 Officers..................................................................................................184 

Costs ........................................................................................ see v. 2, Table II-3 

Family Subsistence Supplementary Allowance (FSSA) ................................. 192 

Leave Rations .................................................................................................. 186 

Origin: Career Compensation Act of 1949 ..................................................... 184 

Rates ................................................................................................................ 193 

 Current (2004) IIB3, 11...................................................................... 193 

 Enlisted Commuted Rations Rates, 1951-1996) ................................. 205 

 Officer Rates (1922-1996) .......................................................... 195-204 

Regular Military Compensation and ................................................................185 

Basic Pay 

 Generally.............................................................................................................19 

 Adjustments 

 Annual Adjustment Mechanism (U.S.C. 37 §1009) ............................. 36 

 Comparison of Military and Civilian Pay Increases ............................. 42 

 Computation Formula for 2001-2006 IIB1, 28 .................................. 55 

 Congressional Preemption of Annual Adjustment Mechanism ............ 36 

Indexes for 

 “Reallocation” Authority.........................................................................35

 Costs..........................................................................................see v. 2, Table II-1 

 Early forms 

 “Base” and “Longevity” Pay ............................................................ 22-23 

 “Pay of the Troops”................................................................................ 19 

 “Pay Periods”...........................................................................................22 

 “Permanent Additions to Base Pay”....................................................... 23 

 Limitations on Amount.....................................................................................106 

 Origin..................................................................................................................19 

 Career Compensation Act of 1949 ........................................................ 23 

 “Longevity Steps”...................................................................................24 

 Pay Periods..........................................................................................................23 

 Pay Raises ................................................................................................... 28, 31 

 Comparison of Military and Civilian Pay Increases (1945-1996) ........ 28 

 Rates 

 Current (2004) ....................................................................................... 56 

Regular Military Compensation and ................................................................. 28 

“Salary” System, Relation to ............................................................................. 22 

Saved Pay for Enlisted Members and Warrant Officers 

Appointed as Officers ........................................................................................ 35 

 Special Rates 

For Senior Enlisted Members ............................................................ 1039 

For Senior Officers .............................................................................. 321 

1196
 Targeted Increases IIB1, 28 ............................................................................ 55 

Benefits, Critical Dates for Receipt of ...................................................................... 1149 

Bounties for Enlistment .............................................................................................. 600 

C

Career Sea Pay ......................................................... see Special Pay for Career Sea Duty 

Career Flight Deck Duty Pay .................................................... see Flight Deck Duty Pay 

Casualties, Military .................................................................................................... 1156 

Central Intelligence Agency (CIA) ................. see Special Benefits Applicable to Certain 

 Members Of The Armed Forces Assigned to the 

 National Security Agency, the Central Intelligence 

 Agency, and the Defense Intelligence Agency 

Chemical Munitions Exposure Pay .......... see Toxic Fuels and Propellants and Chemical 

 Munitions Exposure Pay 

CHAMPUS/TRICARE ............................................................................................... 1130 

Civilian Health and Medical Program of the Uniformed Services ............ see CHAMPUS 

Claims Against the Federal Government for Back Pay, etc., Limitations 

Clothing Allowance ............................... see Clothing Issue and Maintenance Allowances 

Clothing Issue and Maintenance Allowances 

 Generally.............................................................................................................998 

 Costs............................................................................................see v. 2 Table V-3 

 Program Description 

 Enlisted Personnel................................................................................1000 

 Officers...................................................................................................998 

COLA (Cost-of-Living Allowance) ......... see Overseas Station Allowances and Cost-of- 

 Living Allowance for Continental United States 

Combat Pay ......................................................................................... see Hostile Fire Pay 

Commissaries 

 Generally............................................................................................................928 

 Appropriated Funds and ................................................................................... 929 

 Costs...................................................................................................................933 

 Defense Commissary Agency .......................................................................... 932 

 Jones Commission, Report of .......................................................................... 932 

 Origin.................................................................................................................928 

Compensation for Non-Regular Service ............................. see Reserve Components Pay 

Compensation for Reserve Service ..................................... see Reserve Components Pay 

Contingency Option Plan .......................................................... see Survivor Benefit Plan 

Contribution for Retirement Benefits ............... see Imputed Contribution for Retirement 

 Benefits 

CONUS COLA ................... see Cost-of-Living Allowance for Continental United States 

Cordiner Committee .............................. see Structural Studies of Military Compensation 

Cost-of-Living Allowance (COLA) ......... see Cost-of-Living Allowance for Continental 

 United States and Overseas Station Allowance 

Cost-of-Living Allowance for Continental United States (CONUS COLA) 

 Generally..........................................................................................................1012 

 Costs..........................................................................................see v. 2, Table V-5 

1197
 Origin and Purpose ......................................................................................... 1012 

 Program Description ....................................................................................... 1012 

Crew Member Flight Pay .................................................. see Flight Pay (Crew Member) 

Critical Dates for Receipt of Benefits ............. see Benefits, Critical Dates for Receipt of 

Critical Skills Retention Bonus .................................................................................... 630 

D 

DAA ...............................................................see Dependents Assistance Act 

Danger pay .....................................................................see Hostile Fire Pay 

Dangerous Organisms Exposure Pay ...............................see Personal Exposure Pay 

Death Benefits .........see Death Benefits Payable to Survivors of Military Decedents and 

 Death Gratuity and Dependency and Indemnity Compensation and 

 Servicemens’ Group Life Insurance and Survivor Benefit Plan 

Death Benefits Payable to Survivors of Military Decedents ...............................1126 

Death Gratuity 

 Generally .................................................................................836 

 Costs ..................................................................see v. 2, Table III-11

 Persian Gulf Conflict, Temporary Rate Increase for ................................841 

 Purpose ....................................................................................836 

 Rates .......................................................................................843 

Deceleration Duty Pay ..................................... see Experimental Stress Duty Pays 

Deep Sea Diving Pay ........................................................ see Diving Duty Pay 

Defense Intelligence Agency (DIA) ............ see Special Benefits Applicable to Certain 

 Members of the Armed Forces Assigned to the National 

 Security Agency, the Central Intelligence Agency, and 

 the Defense Intelligence Agency 

Defense Manpower Commission ......... see Structural Studies of Military Compensation 

Demolition Duty Pay 

 Generally ................................................................................v, 266 

 Conditions of Entitlement ................................................................266 

 Costs .....................................................................see v. 2, Table II-8 

 Origin: Career Compensation Act of 1949 ..........................................266 

 Officer/Enlisted Differential ...........................................................267 

 Rate Equalization of Enlisted and Officer Personnel ..............................269 

Rates ......................................................................................277 

 Reserve Forces Personnel for Inactive Duty Training, Entitlement ..............273 

Dentists, Special Pay for .........................................................................550 

Department of Defense Military Retirement Fund 

 Generally ................................................................................1046 

 Costs, Accrual Basis .................................................. see v. 2, Table A-1 

 Origin and Purpose .......................................................................................... 1046 

Department of Defense Retirement Study Group ........ see Structural Studies of Military 

 Compensation 

Departure Allowance ............................. see Dislocation and Departure Allowances 

1198
Dependency and Indemnity Compensation (DIC) 

 Generally .................................................................................844 

 Costs ..................................................................see v. 2, Table III-12

 Rates and Comparison with Basic Military Compensation ........................845 

 Origin and Purpose ......................................................................844 

 Survivors Benefit Plan, Supplementary Payments under, and .....................846 

Dependents Assistance Act of 1950 ............................................................111 

DIA (Defense Intelligence Agency) ..............see Special Benefits Applicable to Certain 

 Members of the Armed Forces Assigned to the 

 National Security Agency, the Central Intelligence 

 Agency, and the Defense Intelligence Agency 

DIC ..............................................see Dependency and Indemnity Compensation 

Disability Retired Pay 

 Generally .................................................................................736 

 Concurrent Receipt IIIB3, 13 .........................................................751 

Conditions of Entitlement ...............................................................738 

 Costs ....................................................................see v. 2, Table III-5

 Disability Severance Pay, Distinguished .............................................749 

 Origin .....................................................................................736 

 Rates 

 Monthly Retired or Retainer Base and ......................................744 

 Percentage of Disability and ..................................................747 

 Terminal Basic Pay and .......................................................713 

 Statutes Relating to Disability Retirement and Retired Pay, Summary of ......743 

 Taxation ..................................................................................748 

 Temporary Disability Retirement .....................................................749 

 Veterans Compensation, Waiver of Disability Retired Pay .......................717 

Disability Severance Pay 

 Generally .................................................................................798 

 Costs ..................................................................see v. 2, Table III-7

 Origin and Purpose .....................................................................798 

 Rates .....................................................................................799 

Dislocation and Departure Allowances 

 Generally ..............................................................................1022 

 Advance Payment Authority ........................................................1024 

 Costs ...................................................................see v. 2, Table V-7 

 Origin and Purpose ...................................................................1022 

 Rates ....................................................................................1025 

 Relation to Housing Allowance Rates ..............................................1025 

Diving Duty Pay 

 Generally .............................................................................v, 447 

 Conditions of Entitlement .............................................................447 

 Costs .................................................................see v. 2, Table II-19 

 Origin and Purpose ....................................................................447 

 Rates ....................................................................................456 

1199
DLA (Dislocation Allowance) ...................see Dislocation and Departure Allowances 

Doctors, Special Pay for .............................see Special Pay for Health Professionals 

“Double Time” and Hazardous Duty Pay ..................................................... 269, 291, 486 

E

Education ............................see Professional Education and Training and Voluntary 

 Education and Training and Veterans Education Assistance 

Education Assistance for Reserves ...see Reserve Bonuses, Special Pay, and Educational 

 Assistance 

Engineering and Scientific Career Continuation Pay 

 Generally ...............................................................................v, 593 

 Conditions of Entitlement ..............................................................594 

 Costs ...................................................................see v. 2, Table II-30 

 Current Usage of ........................................................................597 

 Origin and Purpose ......................................................................593 

 Rates .......................................................................................597 

Engineers, Special Pay for .......see Engineering and Scientific Career Continuation Pay 

Enlisted Aides 

 Generally .................................................................................976 

 Limitation on number ...................................................................984 

 Origin ......................................................................................976 

Enlistment Bonus ........................................see also Selective Reenlistment Bonus 

 Generally .................................................................................598 

 Conditions of Entitlement ..............................................................598 

 Consolidation of Bonuses ...............................................................608 

 Costs ..................................................................see v. 2, Table II-31 

 Distinguished from Bounty for Enlistment ..........................................599 

 Origin and Purpose .....................................................................598 

 Rates ......................................................................................609 

Enlistment Bonus for Reserves .......see Reserve Bonuses, Special Pay, and Educational 

 Assistance 

Enlistment Bounties ................................................see Bounties for Enlistment 

Evacuation Allowance ...........................see Dislocation and Departure Allowances 

Exchanges .................................................................see Military Exchanges 

Executive Orders ...............................................................................1192 

Experimental Stress Duty Pay 

 Generally .................................................................................486 

 Conditions of Entitlement ..............................................................486 

 Costs ...................................................................see v. 2, Table II-22 

 Origin: Career Compensation Act of 1949 ..........................................486 

 Rates 

 Active Duty Personnel .........................................................497 

 Reserve Forces Personnel for Inactive Duty Training .....................493 

Exposure Pay, Personal ...............................................see Personal Exposure Pay 

Explosives Demolition Pay ............................................see Demolition Duty Pay 

1200
Extension Pay (Overseas Duty) .............................see Overseas Duty Extension Pay 

Extraordinary Heroism, Addition to Retired Pay for .........see Nondisability Retired and 

 Retainer Pay 

F

Family Separation Allowance (FSA) 

 Generally .................................................................................1015 

 Costs .....................................................................see v. 2, Table V-6 

 Origin and Purpose .....................................................................1015 

 Program Description 

 FSA-I ............................................................................1018 

 Purpose .................................................................1018 

 Rates ....................................................................1021 

 FSA-II ............................................................................1017 

 Purpose ................................................................1017 

 Rates ...................................................................1021 

 Types (FSA-R, FSA-S, FSA-T) ....................................1017 

Federal Income Tax Advantage (FITA) 

 Generally .................................................................................208 

 Definition, Conceptual ..................................................................208 

 Definition, Statutory (37 U.S.C. §101(25) ...........................................223 

 Determination of Amount ...................................................211, 215, 218 

 Fringe Benefits, Federal Tax Treatment of .........................................1072 

 Origin .....................................................................................208 

Jones v. United States (1925) ................................................214 

 Congressional recognition ...................................................213 

 Range by Pay Grade, 2004 ............................................................221 

 Regular Military Compensation (RMC) and ........................................219 

 Tax rates, Effect of Changes in .......................................................211 

Federal Unemployment Compensation and Taxes ......see Unemployment Compensation 

FICA (Federal Insurance Contributions Act— 

Social Security) .................... see Government Contributions to Social Security 

Fifth Quadrennial Review of Military Compensation ...............see Structural Studies of 

 Military Compensation 

First Quadrennial Review of Military Compensation ...............see Structural Studies of 

 Military Compensation 

FITA ..........................................................see Federal Income Tax Advantage 

Flight Deck Duty Pay 

 Generally ...............................................................................v, 391 

 Conditions of Entitlement ..............................................................402 

 Costs ...................................................................see v. 2, Table II-15 

 Origin and Purpose ......................................................................391 

 Rates .......................................................................................402 

 Current Rates ....................................................................402 

 Equalization of Enlisted and Officer Rates ..................................401 

 Reserve Forces Personnel for Inactive Duty Training .....................401 

1201
Flight Pay .......see Flight Pay (Crew Member) and Flight Pay (Non-Crew Member) and 

 Aviation Career Incentive Pay and Aviation Career Continuation Pay 

 and Flight Pay (Air Weapons Control Officers) 

Flight Pay (Air Weapons Controllers) 

 Generally ..............................................................................v, 357 

 Conditions of Entitlement ..............................................................364 

 Costs ...................................................................see v. 2, Table II-13 

 Enlisted Member and Warrant Officer Entitlement .................................358 

 Origin ......................................................................................357 

 Rates ......................................................................................365 

 Current, for Active Duty Personnel ..........................................365 

 Reserve Forces Personnel, for Inactive Duty Training ...................365 

Flight Pay (Crew Member) 

 Generally .............................................................................vi, 282 

 Conditions of Entitlement ..............................................................283 

 Costs ...................................................................see v. 2, Table II-10 

 Officers Entitlement .....................................................................283 

 Original Flight Pay Program ..................................................282 

 Abolition and Reinstatement of Flight Pay for Officers ...................282 

 Origin and Purpose ......................................................................282 

 Rates .......................................................................................303 

 Career Compensation Act of 1949 ...............................286, 287, 300 

 Career Incentive Act of 1955 .................................................288 

 Uniformed Services Pay Act of 1981 .......................................292 

 Department of Defense Authorization Act of 1986 ........................292 

 Department of Defense Authorization Acts of 1998 

 and 1999 2D1b1, 17 ...........................................................302 

 Reserve Forces Personnel, for Inactive Duty Training ...................297 

Flight Pay (Non-Crew Member) 

 Generally .............................................................................vi, 305 

 Conditions of entitlement ..............................................................305 

 Costs ..................................................................see v. 2, Table II-11 

 Origin and Purpose ......................................................................305 

 Rates ......................................................................................319 

 Career Compensation Act of 1949 ...........................................306 

 Current rates (2004) ...........................................................319 

 Equalization of Enlisted and Officer Rates .................................309 

 Reserve Forces Personnel, for Inactive Duty Training ...................313 

Foreign Duty Pay ...........................see Special Pay While on Duty at Certain Places 

 (Hazardous Duty Pay) 

Foreign Language Proficiency Pay 

 Generally ..............................................................................vi, 671 

 Conditions of Entitlement ..............................................................671 

 Costs ..................................................................see v. 2, Table II-37 

 Origin and Purpose .....................................................................671 

 Rates ......................................................................................674 

1202
Former Spouses’ Protection Act ..............................see Uniformed Services Former 

 Spouses’ Protection Act 

Fourth Quadrennial Review of Military Compensation ............see Structural Studies of 

 Military Compensation 

FSA, FSA-I, FSA-II ..........................................see Family Separation Allowance 

G 

Gates Commission ........................see Structural Studies of Military Compensation 

GI Bill (Educational Assistance) ..........see Veterans’ Educational Assistance (GI Bill) 

GI Bill (Home Loan Assistance) 

 Generally ................................................................................969 

 Conditions of Eligibility ..............................................................970 

Origin and Purpose ....................................................................969 

 Program Description ...................................................................971 

Glider Duty Pay 

 Generally ............................................................................vi, 383 

 Origin and Purpose ....................................................................383 

 Rates 

 Career Compensation Act of 1949 .........................................384 

 Reserve Forces Personnel, for Inactive Duty Training ..................386 

 Repeal of Authority ...................................................................390 

Gorham Report ...........................see Structural Studies of Military Compensation 

Government Contribution to Social Security 

 Generally ...............................................................................884 

 Costs .................................................................see v. 2, Table IV-5 

 OASDI Program .......................................................................891 

 Origin ...................................................................................884 

 Retirement Earnings Test ......................................................893-894 

Social Security Program .............................................................888 

 Insured Status ................................................891-892, 897-898 

 Benefits in General ..........................................................892 

 Old-Age Benefits ......................................................886, 892 

 Survivor Benefits .................................................897, 923-927 

 Disability Benefits ............................................................898 

 Health Insurance for the Aged and Disabled (Medicare) ...............899 

 Tax Rates (1937-1992) ...............................................................889 

 Tax Rates (1993-2004) ...............................................................890 

 Wage Base (1937-1992) ..............................................................888 

 Wage Base (1993-2004) ..............................................................890 

H 

HAP ......................................................see Homeowners Assistance Program 

Hardship Duty Pay 

 Generally ................................................................................660 

 Costs ..................................................................see v. 2, Table II-35 

1203
 Origin and Purpose .....................................................................660 

 Rates ......................................................................................664 

Health Professionals, Special Pay for .............see Special Pay for Health Professionals 

High-Altitude Low-Opening (HALO) Parachute Duty Pay ........see Parachute Duty Pay 

High Deployment Allowance ...................................................................679 

High Pressure Chamber, Special Pay for Duty Involving ...........see Experimental Stress 

 Duty Pays 

Home Loans ................................................see GI Bill (Home Loan Assistance) 

Homeowners Assistance Program 

 Generally ..................................................................................973 

 Origin and Purpose .......................................................................973 

 Program Description 

 Benefits ...........................................................................975 

 Eligibility .........................................................................974 

Hook Commission ...........................see Structural Studies of Military Compensation 

Hostile Fire Pay 

 Generally .............................................................................v, vi, 250 

 Costs ....................................................................see v. 2, Table II-7 

 Origin ......................................................................................250 

 “Badge” Pay .......................................................250, 1162-1163 

 Combat Pay ......................................................................251 

 Hazard Duty Pay ................................................................251 

 Rates .......................................................................................265 

 Current Rate .....................................................................265 

 Hazardous Duty Incentive Rates ..............................................247 

Housing Allowances ................................................................................102 

Hubbell Commission ......................see Structural Studies of Military Compensation 

Human Test Subject Pay ....................................see Experimental Stress Duty Pay 

I 

Imminent Danger, Special Pay for Duty Subject to .....................see Hostile Fire Pay 

Imputed Contribution for Retirement Benefits 

 Generally .................................................................................774 

 Department of Defense Military Retirement Fund and .............................784 

 Increases in Military Compensation and ..............................................778 

 Origin .....................................................................................774 

 Hook Commission Recommendations ......................................775 

 Report of First Quadrennial Review of Military Compensation ........776 

Inactive Duty Training Pay 

 Generally .............................................................................vi, 228 

 Compensation for Review Service, Overview ......................................231 

 Costs ....................................................................see v. 2, Table II-5 

 Militia, Federal ..........................................................................230 

 Multiple drills and multiple training periods ...................................243, 723 

 Origin ......................................................................................228 

 Federal Authority over National Guard ......................................229 

1204
Militia of the Colonies and States ..........................................228 

Pay Rate Formula .............................................................240 

 Pay and Compensation 

 Armory Drill Pay ..................................................231, 236, 238 

 Compensation for Services ...................................................234 

 Retainer Pay .........................................................233-234, 671 

 Inactive Duty Training Pay ...................................................228 

 Presidential Authority to Order to Active Duty .....................................244 

Rate of Pay Formula ....................................................................240 

 Reserve Components of the Armed Forces .....................................244-246 

 Retirement Credit for Inactive Duty Training .......................................715 

Income Taxes ..........see Impact of State Income Taxes on Military Compensation and 

 Federal Income Tax Advantage 

Interim Housing Allowance .................................see Overseas Station Allowances 

J 

Joint Federal Travel Regulations (JFTR) .......see Travel and Transportation Allowances 

 and Overseas Station Allowances 

L 

Language Pay ............................................see Foreign Language Proficiency Pay 

Leave .................................see Annual Leave/Accrued Leave Payments/Leave Lost 

Leave, Special, for Extending Duty Overseas ............see Overseas Duty Extension Pay 

Leprosy Duty Pay .................................................................................510 

Life Insurance ..........................................see Servicemen’s Group Life Insurance 

Lost Leave ...........................see Annual Leave/Accrued Leave Payments/Leave Lost 

Low-Pressure Chamber, Special Pay for Duty Involving ...........see Experimental Stress 

 Duty Pay 

M 

MOS Conversion Bonus .........................................................................632 

Manpower-Related Cost Items, Overview ....................................................942 

Manpower-Related Mobilization Actions by the Department of Defense ...............1141 

Marine Corps Exchange ..................................................see Military Exchanges 

Medal of Honor, Special Pension for Recipients of ..........................................718 

Medical Care, Retired Members and Dependents ......see Retired Members Medical Care 

Medical Care, Service Members and Dependents 

 Generally ...................................................................................873

 Benefits .....................................................................................876 

 CHAMPUS ................................................................................875 

 Costs ...................................................................see v. 2, Table IV-4 

 Dependent Care ............................................................................877 

Origin .......................................................................................873 

TRICARE ...........................................................................1130, 881 

Medical Doctors, Special Pay for ..................see Special Pay for Health Professionals 

1205
Member Married to Member, Housing Entitlements of ...........see BAH Entitlements for 

 Members Married to Other Members 

Military Compensation and Poverty Guidelines ............................................1144 

Military Exchanges 

 Generally ..................................................................................935 

 Appropriated Funds and .................................................................937 

 Costs .......................................................................................937 

 Origin 

 Army and Air Force Exchange Service ......................................936 

 Navy Exchange System ........................................................936 

Military Retirement Fund ............see Department of Defense Military Retirement Fund 

Militia ...............................................................see Reserve Components Pay 

Missing Persons ........see Special Pay and Other Benefits for Missing Persons, Prisoners 

 of War, and Victims of Terrorism 

Mobilization .........see Manpower-Related Mobilization Actions by the Department of 

 Defense 

Morrill Act .............................................see Professional Education and Training 

Move-in Housing Allowance ................................see Overseas Housing Allowance 

N 

National Security Agency (NSA) ..........................see Special Benefits Applicable to 

 Certain Members of the Armed Forces Assigned to the 

 National Security Agency, Central Intelligence Agency, 

 and Defense Intelligence Agency 

National Service Life Insurance .....................see Servicemen’s Group Life Insurance 

Navy Exchange ............................................................see Military Exchanges 

Ninth Quadrennial Review of Military Compensation ...see Structural Studies of Military 

 Compensation 

Noncontributory Retirement System ...see Imputed Contribution for Retirement Benefits 

Nondisability Retired and Retainer Pay 

 Generally .................................................................................684 

 Accrual Accounting for .................................................................699 

 Career Status Bonus, Role of .........................................................708 

 Costs ....................................................................see v. 2, Table III-2 

 Department of Defense Military Retirement Fund .................................1046 

 Extraordinary Heroism, Additional 10 Percent for Members 

 Credited with ..............................................................................697 

 Involuntary Retirement under Defense Officer Personnel 

 Management Act ..........................................................................684 

 Origin and Purpose ........................................................................684 

 Rates 

 High Three Years Average Basic Pay ........................................699 

 Military Retirement Reform Act of 1986 ....................................702 

 Redux System ..............................................................704-705

 Reform under National Defense Authorization Act of 2000 ..............708 

1206
 Terminal Basic Pay ...................................................698, 702 

 Retirement Systems Currently in Force, Summary ........................712-714 

 Statutes Relating to Nondisability Retirement, Summary ......................718 

 Voluntary Retirement Authority .............................................686, 692 

Nondisability Separation Pay 

 Generally ...............................................................................786 

 Costs ................................................................see v. 2, Table III-6

 Origin and Purpose ...................................................................786 

 Rates ....................................................................................796 

Nonphysician Health Care Providers ......see Special Pay for Psychologists and Other 

 Nonphysician Health Care Providers 

Non-Regular Service, Compensation for .....................see Reserve Components Pay 

Nuclear-Trained and Qualified Enlisted Members, Special Pay for .....................626 

Nuclear Officer Pays ........see Special Continuation, Accession, and Annual Incentive 

 Pays for Nuclear-Qualified Officers 

Nurse Anesthetists .........see Special Pay for Nurse Anesthetists and Other Nurses and

 Accession Bonus for Registered Nurses 

Nurses .......................see Special Pay for Nurse Anesthetists and Other Nurses and

 Accession Bonus for Registered Nurses 

O 

OASDHI (Old-Age, Survivors, Disability, 

 and Health Insurance Program) ...............see Government Contribution to 

 Social Security 

OHA ..........................................................see Overseas Housing Allowance 

Operational Submersible Duty Pay 

 Generally ...........................................................................vi, 443 

 Conditions of Entitlement ............................................................444 

 Costs ................................................................see v. 2, Table II-18 

 Origin and Purpose ...................................................................443 

 Rates 

 Active Duty Personnel ......................................................446 

 Reserve Forces Personnel for Inactive Duty Training ..................445 

 Submarine Duty Incentive Pay and ...................................vii, 418 

Optometrists, Special Pay for .....................see Special Pay for Health Professionals 

Overseas Duty Extension Pay 

 Generally ...............................................................................667 

 Costs .................................................................see v. 2, Table II-36 

 Origin and Purpose ....................................................................667 

 Rates .....................................................................................670 

 Rest and Recuperative Absence, Special Leave Provisions .....................667 

Overseas Housing Allowance 

 Generally ................................................................................143 

 Costs ..............................................................................145, 1006 

 Elements of Computation .............................................................145 

 Origin and Purpose .....................................................................143 

1207
 Overseas Station Allowances, Relation to ..........................................143 

Overseas Station Allowances 

 Generally ..............................................................................1003 

 Components of ........................................................................1003 

 Costs ....................................................................see v. 2, Table V-4 

Joint Federal Travel Regulations and ................................145, 1006, 1026 

 Origin and Purpose ...................................................................1003 

 Overseas Housing Allowance and Variable Housing Allowance ..........130, 994 

 Travel and Transportation Allowances, Relation to ...............................993 

P 

Parachute Duty Pay 

 Generally .................................................................................367 

 Conditions of Entitlement .............................................................380 

 Costs ..................................................................see v. 2, Table II-14 

 High-Altitude Low-Opening (HALO) Duty ....................................vi, 376 

 Origin and Purpose .....................................................................367 

 Rates .....................................................................................382 

Pay Periods ...........................................................................see Basic Pay 

Per Diem Payments and Allowances .....see Travel and Transportation Allowances and

 Overseas Station Allowances 

Personal Exposure Pay 

 Generally ................................................................................498 

 Conditions of Entitlement ............................................................507 

 Costs ..................................................................see v. 2, Table II-23 

 Origin and Purpose .....................................................................498 

 Rates .....................................................................................499 

 Active Duty Personnel .......................................................509 

 Reserve Forces Personnel, for Inactive Duty Training ...................504 

Personal Money Allowance (PMA)/Special Position Allowance (SPA) 

 Generally ..............................................................................1033 

 Costs ...................................................................see v. 2, Table V-8 

Post Exchanges ............................................................................ see Military Exchanges 

Poverty Guidelines, in Relation to Military Compensation ..............................1144 

Premium Career Sea Pay ................................see Special Pay for Career Sea Duty 

Premium Sea Pay .........................................see Special Pay for Career Sea Duty 

President’s Commission on Military Compensation......see Structural Studies of Military 

 Compensation 

Prisoners of War (POWs) .........see Special Pay and Other Benefits for Missing Persons, 

 Prisoners of War, and Victims of Terrorism 

Professional Education and Training 

 Generally .................................................................................944 

 Costs .....................................................................see v. 2, Table V-1 

 Program Descriptions

 Enlisted Programs ..............................................................952 

 Officer Programs ................................................................949 

1208
 Reserve Officer Training Corps .........................................................948 

Proficiency Pay .......................see Special Duty Assignment Pay and Proficiency Pay 

Psychologists .....................see Special Pay for Psychologists and Other Nonphysician 

 Health Care Providers 

R 

Randall Panel .................................see Structural Studies of Military Compensation 

Readjustment Pay ..............................................see Nondisability Separation Pay 

Recruiting Expenses, Reimbursement for ....see Reimbursement for Recruiting Expenses 

Reenlistment Bonus ..........................................see Selective Reenlistment Bonus 

Reenlistment Bonus for Reserves .........see Reserve Bonuses and Educational Assistance 

Registered Nurses ............see Special Pay for Nurse Anesthetists and Other Nurses and

 Accession Pay for Registered Nurses 

Regular Military Compensation (RMC) 

 Generally ...................................................................................14 

 Basic Military Compensation (BMC), Relation to ....................................14 

 Basic Pay and ...............................................................................32 

 Definition ...................................................................................15 

 Increases in Elements of .................................................................30 

 Origin ........................................................................................14 

 Gorham Commission ............................................................14 

 First Quadrennial Review of Military Compensation .........28, 774, 1060 

 Role in Setting Basic Pay Rates, 1967-1973 ..........................................16 

Reimbursement for Recruiting Expenses 

 Generally ................................................................................1040 

 Costs .....................................................................see v. 2, Table V-9 

Reserve Bonuses and Educational Assistance 

 Generally .................................................................................633 

 Costs ...................................................................see v. 2, Table II-33 

 Origin and Purpose .....................................................................633 

 Rates ......................................................................................653 

Reserve Components Pays 

 Inactive Duty Training Pay .........................................................vi, 228 

 Overview of Compensation for Non-Regular Service ..............................225 

 Reserve Bonuses and Educational Assistance .......................................633 

 Retired Pay for Non-Regular Service .................................................722 

 Special, Incentive, Attraction, and Retention Pays ............................247, 518 

Reserve Educational Assistance ..........see Reserve Bonuses and Educational Assistance 

Reserve Enlistment Bonus .................see Reserve Bonuses and Educational Assistance 

Reserve Officers Pay for Administrative Duty 

 Generally ..................................................................................675

 Costs ....................................................................see v. 2, Table II-38 

 Origin ......................................................................................675 

 Repeal of Authority for ..................................................................677 

Reserve Officer Training Corps (ROTC) ..........see Professional Education and Training 

Reserve Reenlistment Bonus .............see Reserve Bonuses and Educational Assistance 

1209
Responsibility Pay ...............see Special Pay for Officers Holding Positions of Unusual 

 Responsibility 

Rest and Recuperative Absence .............................see Overseas Duty Extension Pay 

Retainer Pay ........................................see Nondisability Retired and Retainer Pay 

Retired and Retainer Pay 

Adjustments to ...........................see Adjustments to Retired and Retainer Pay 

 For Regular Service ......................see Nondisability Retired and Retainer Pay 

 Overview of 

 Generally .........................................................................682 

Costs ............................................................see v. 2, Table III-1 

Differences between Military and Civilian Retirement Systems ..........683 

Purposes ...........................................................................682 

Retired Members Medical Care 

 Generally ..................................................................................819 

 CHAMPUS/TRICARE ..................................................................824 

 Participant Costs ..........................................................................821 

 Space-Available Care ................................................826, 877, 900, 1128 

Retired Pay, for Regular Service ................see Nondisability Retired and Retainer Pay 

Retired Pay, for Non-Regular Service 

 Generally .................................................................................722 

 Accrual Accounting and ................................................................729 

 Conditions of Entitlement ..............................................................725 

 Costs ....................................................................see v. 2, Table III-3 

 Department of Defense Military Retirement Fund and .......................729-730 

 Origin and Purpose .....................................................................722 

 Point System .............................................................................728 

 Active Duty Points .............................................................723 

 Inactive Duty Points ............................................................723 

 Survivor Benefit Plan and ..........................................................vii, 902 

Retired Pay for Reserve Service ...................see Retired Pay, for Non-Regular Service 

Retired Servicemen’s Family Protection Plan (RSFPP) ..........see Survivor Benefit Plan 

Retirement ............see Imputed Contribution for Retirement Benefits and Nondisability 

 Retired and Retainer Pay and Retired Pay for Non-Regular Service and

 Disability Retired Pay and Adjustments to Retired and Retained Pay and

 Retired Members Medical Care 

Retirement Benefits, Contribution for ...see Imputed Contribution for Retirement Benefits 

Retirement Fund ......................see Department of Defense Military Retirement Fund 

ROTC (Reserve Officers Training Corps) ........ see Professional Education and Training 

RSFPP (Retired Servicemen’s Family Protection Plan) ......... see Survivor Benefit Plan 

S 

Saved Pay 

 Enlisted Members Appointed as Warrant or Commissioned Officers ...132, 513-14 

 Warrant Officers Appointed as Commissioned Officers .......................517, 531 

SBP ........................................................................see Survivor Benefit Plan 

1210
Scientists, Special Pay for .........see Engineering and Scientific Career Continuation Pay 

Sea Duty Pay ................................................see Special Pay for Career Sea Duty 

Sea Pay ......................................................see Special Pay for Career Sea Duty 

Second Quadrennial Review of Military Compensation ...............see Structural Studies 

 of Military Compensation 

Selective Reenlistment Bonus 

 Generally ..............................................................................vi, 610 

 Conditions of Entitlement ..............................................................613 

 Costs ...................................................................see v. 2, Table II-32 

 Nuclear-Trained and Qualified Enlisted Members ..............................vi, 626 

 Origin and Purpose ......................................................................610 

 Rates ......................................................................................629 

Separation Pays 

 Disability Separation ......................................see Disability Severance Pay 

 Nondisability Separation .............................see Nondisability Severance Pay 

Separation Travel and Transportation Allowances 

 Generally .................................................................................1026 

 Costs ....................................................................see v. 2, Tables V-2 

 Origin and Purpose ......................................................................1026 

 Summary of Benefits ....................................................................1028 

Servicemen’s Group Life Insurance 

 Generally ..............................................................................vii, 827 

 Costs ...................................................................see v. 2, Table III-10

 Origin and Purpose .......................................................................827 

 Program Description 

 Members of Reserve Components ............................................831 

 Termination of Coverage .......................................................829 

 Veterans’ Group Life Insurance ........................................................834 

Severance Pays 

 Disability Severance .......................................see Disability Severance Pay 

 Nondisability Severance ..............................see Nondisability Severance Pay 

SGLI ....................................................see Servicemen’s Group Life Insurance 

SHA (Station Housing Allowance) ...........................see Overseas Station Allowance 

Sixth Quadrennial Review of Military Compensation ..............see Structural Studies of 

 Military Compensation 

Soldiers and Sailors Civil Relief Act ............................................................1091 

Special Benefits Applicable to Certain Members of the Armed Forces Assigned to 

 the National Security Agency, the Central Intelligence Agency, and the Defense 

 Intelligence Agency ...............................................................xiii, 1122 

Special Continuation, Accession, and Annual Incentive Pay for Nuclear-Qualified 

 Officers 

 Generally ..................................................................................476 

 Conditions of Entitlement ...............................................................476 

 Costs ...................................................................see v. 2, Table II-21 

 Nuclear-Trained and Qualified Enlisted Members, Special Pay for ...............477 

 Origin and Purpose .......................................................................476 

1211
 Rates 

 Annual Incentive Bonus ......................................................478 

 Continuation Pay ..........................................................vi, 476 

 Nuclear Accession Bonus ....................................................484 

Special Duty Assignment Pay and Proficiency Pay 

 Generally ................................................................................654 

 Conditions of Entitlement ............................................................658 

 Costs ..................................................................see v. 2, Table II-32 

 Origin and Purpose .....................................................................654 

 Rates .....................................................................................658 

 Recruiters ................................................................................656 

Special Position Allowance ..................................see Personal Money Allowance/ 

 Special Position Allowance 

Special Pay and Other Benefits for Missing Persons, Prisoners of War, 

 and Victims of Terrorism 

 Generally ..............................................................................1108 

 Missing Persons .......................................................................1108 

 Prisoners of War ......................................................................1115 

 Victims of Terrorism .................................................................1118 

Special Pay for Career Sea Duty 

 Generally ................................................................................457 

 Conditions of Entitlement ............................................................473 

 Costs ..................................................................see v. 2, Table II-20 

 Origin ....................................................................................457 

 Purpose ..................................................................................457 

 Career Sea Pay ..............................................................v, 461 

 Sea Duty Pay ..................................................................460 

 Premium Career Sea Pay ..........................................................vi, 464 

 Rates .....................................................................................470 

Special Pay for Dentists (Dental Officers of the Armed Forces) 

 Generally ................................................................................550 

 Costs ..................................................................see v. 2, Table II-25 

 Origin and Purpose .....................................................................550 

 Program Description ...................................................................550 

 Rates ......................................................................................564 

Special Pay for Health Professionals ........see Special Pay for Dentists and Special Pay 

 for Physicians and Special Pay for Optometrists 

 and Special Pay for Veterinarians 

Special Pay for Nuclear-Trained and Qualified Enlisted Members ......................626 

Special Pay for Nurse Anesthetists and Other Nurses and 

 Accession Bonus for Registered Nurses 

Generally .................................................................................585 

Costs ..................................................................see v. 2, Table II-29 

Origin and Purpose .....................................................................585 

1212
Special Pay for Officers Holding Positions of Unusual Responsibility 

 Generally ..................................................................................278 

 Conditions of Eligibility ................................................................194 

Costs .....................................................................see v. 2, Table II-9 

 Origin ......................................................................................278 

 Rates ........................................................................................281 

Special Pay for Optometrists 

 Generally ..................................................................................572 

 Costs ....................................................................see v. 2, Table II-27 

 Continuation Pay Authority ..............................................................575 

 Origin and Purpose .......................................................................572 

 Rates ........................................................................................576 

Special Pay for Physicians (Medical Officers of the Armed Forces) 

 Generally .................................................................................518 

 Costs ...................................................................see v. 2, Table II-24 

 Origin and Purpose .....................................................................518 

 Program Descriptions ..................................................................518 

 Initial .............................................................................522 

 Career Compensation Act of 1949 ...........................................521 

 Graduated Rates ................................................................520 

 Special Continuation Pay for Physicians ....................................525 

 Types of Pay ....................................................................532 

 Additional Special Pay ...........................................vi, 534 

 Board Certification Pay ..........................................vi, 534 

 Incentive Special Pay .................................................542 

 Multi-Year Retention Program ......................................545 

 Variable Special Pay ...............................................vi, 533 

Variable Incentive Pay for Medical Officers ...............................527 

 Rates .......................................................................................525 

Special Pay for Psychologists and Other Nonphysician Health Care Providers 

 Generally .................................................................................578 

 Costs ...................................................................see v. 2, Table II-28 

 Origin and Purpose ......................................................................578 

 Rates .......................................................................................582 

 Scope of Authority .......................................................................557 

Special Pay for Veterinarians 

 Generally .................................................................................567 

 Costs ...................................................................see v. 2, Table II-26 

 Origin and Purpose ......................................................................567 

 Rates .......................................................................................571 

Special Pay While on Duty at Certain Places (Hardship Duty Pay) 

Special Pension for Recipients of Medal of Honor ...........................................718 

Spouses’ Protection Act ..........see Uniformed Services Former Spouses’ Protection Act 

State Income Taxes, Impact on Military Compensation 

Generally .................................................................................1090 

Soldiers’ and Sailors’ Civil Relief Act ...............................................1091 

1213
State Policies 

 Listing by State ........................................................1098-1107 

Overview ......................................................................1096 

Station Housing Allowance...see Overseas Housing Allowance and Basic Allowance for 

 Quarters and Variable Housing Allowance and Overseas 

 Housing Allowance 

Statute of Limitations for Claims Against Federal Government ........................1158 

Strauss Commission .......................see Structural Studies of Military Compensation 

Structural Studies of Military Compensation 

 Generally ...............................................................................1058 

 Advisory Commission on Service Pay .............................................1058 

 Cordiner Commission .................................................................1059 

 Department of Defense Retirement Study Group .................................1061 

 Defense Manpower Commission ....................................................1062 

 Gates Commission .....................................................................1060 

 Gorham Report ........................................................................1059 

 Hook Commission .....................................................................1058 

 President’s Commission on Military Compensation (PCMC) ..................1062 

 Quadrennial Reviews of Military Compensation, First through Ninth .........1060 

 Randall Panel ...........................................................................1059 

 Strauss Commission ..................................................................1059 

 Zwick Commission ...................................................................1062 

Submarine Duty Incentive Pay 

 Generally ...........................................................................vii, 418 

 Conditions of Entitlement ............................................................440 

Costs .................................................................see v. 2, Table II-17 

 Origin and Purpose ....................................................................418 

 Rates ....................................................................................440 

 Active Duty Personnel ......................................................436 

 Reserve Forces for Inactive Duty Training ................................435 

Submarine Pay .............................................see Submarine Duty Incentive Pay 

Submersible Duty Pay ...............................see Operational Submersible Duty Pay 

Supplemental Survivor Benefit Plan ..............................see Survivor Benefit Plan 

Supporting Benefits, Overview of ............................................................855 

Survivor Benefit Plan (SBP) 

 Generally ...........................................................................vii, 901 

 Description of Operations 

 Integration with Dependency and Indemnity Compensation (DIC) ...844 

 Reserve Components, Retired Members of ...............................225 

 Social Security Offset ........................................................913 

 Supplemental Survivor Benefit Plan .......................................925 

 Uniformed Services Former Spouses’ Protection Act and .............1052 

 Origin ..................................................................................1052 

 Contingency Option Plan ....................................................903 

 Retired Servicemen’s Family Protection Plan .....................903, 1072 

 Purpose .................................................................................902 

1214
T 

Tax Advantage ..............................................see Federal Income Tax Advantage 

Temporary Disability Retirement ....................................see Disability Retired Pay 

Temporary Voluntary Separation Incentives 

 Generally ..................................................................................810 

 Origin ......................................................................................810 

 Early Retirement ................................................................810 

 Special Separation Benefit .....................................................810 

 Voluntary Separation Incentive ...............................................810 

 Rates .......................................................................................818 

Terrorism, Victims of .............see Special Pay and Other Benefits for Missing Persons, 

 Prisoners of War, and Victims of Terrorism 

Thermal Stress, Special Pay for Duty Involving .........see Experimental Stress Duty Pays 

Third Quadrennial Review of Military Compensation ..............see Structural Studies of 

 Military Compensation 

TLA (Temporary Lodging Allowance) .....................see Overseas Station Allowances 

Toxic Fuels and Propellants and Chemical Munitions Exposure Pay 

 Generally ..................................................................................403 

 Conditions of Entitlement ...............................................................416 

 Costs ...................................................................see v. 2, Table II-16 

Origin and Purpose .........................................................................403

 Rates .......................................................................................417 

 Active Duty Personnel .........................................................417 

 Reserve Forces Personnel for Inactive Duty Training .....................412 

Toxic Pesticide Exposure Pay .......................................see Personal Exposure Pay 

Travel and Transportation Allowances .........................see also Separation Travel and 

 Transportation Allowances 

 Generally .................................................................................988 

 Costs .....................................................................see v. 2, Table V-2 

 Program Description 

 Dependent Travel ...............................................................992 

 Household Goods Shipment ...................................................993 

Member Travel ..................................................................988 

 Purpose .......................................................................................988 

TRICARE .................................................................................824, 1130 

U 

Unemployment Compensation 

 Generally ...................................................................................801 

 Conditions of Entitlement ................................................................804 

 Costs ....................................................................see v. 2, Table III-8

 Relation to Unused Leave, Retired and Retainer Pay, 

 and Separation Pay.........................................................................809 

Uniformed Services Former Spouses’ Protection Act .......................................1052 

United States Air Force Academy ..................see Professional Education and Training 

United States Casualties in Wars of the 20th and 21st Centuries ..........see Appendix XIV 

1215
United States Government Life Insurance ..........see Servicemen’s Group Life Insurance 

United States Military Academy (West Point) ....see Professional Education and Training 

United States Naval Academy (Annapolis) .......see Professional Education and Training 

USGLI (United States Government Life Insurance) ..........see Servicemen’s Group Life 

 Insurance 

V 

Variable Housing Allowance 

 Generally .................................................................................130 

 Advance Payment Authority ...........................................................135 

 Basic Allowance for Quarters (BAQ) and ............................................130 

 Implementation ..........................................................................131 

 Origin .....................................................................................130 

 Overseas Housing Allowance (OHA) and ...........................................143 

 Regular Military Compensation and ..................................................117 

 Station Housing Allowance and .......................................................143 

Variable Reenlistment Bonus ...............................see Selective Reenlistment Bonus 

Veterans’ Educational Assistance (GI Bill) 

 Generally ..................................................................................954 

 Origin and Purposes .....................................................................954 

 Program Descriptions ....................................................................954 

 All-Volunteer Force Educational Assistance Program ...............868, 961 

 Educational Assistance for Members of the Selected Reserve ............647 

Veterans’ Group Life Insurance (VGLI) ............see Servicemen’s Group Life Insurance 

Veterans’ Special Term Life Insurance (VSLI) ...see Servicemen’s Group Life Insurance 

Veterinarians, Special Pay for ...............................see Special Pay for Veterinarians 

VGLI (Veterans’ Group Life Insurance) ............see Servicemen’s Group Life Insurance 

VHA (Variable Housing Allowance) ........................see Variable Housing Allowance 

Voluntary Education and Training 

 Generally .................................................................................865 

 Costs ...................................................................see v. 2, Table IV-2 

VSLI (Veterans’ Special Term Life Insurance) ...see Servicemen’s Group Life Insurance 

Z

Zwick Commission ........................see Structural Studies of Military Compensation 

1216