What is it?
As a current member or veteran of the U.S. armed forces, you may be entitled to a number of military benefits. The term benefits, as used here, includes military pay as well as other programs set up to improve the lives of military personnel. Because the scope of military benefits is enormous and ever-changing, this is intended only to be a broad overview of the subject. Servicemembers and veterans seeking more specific information should consult the appropriate government source.
You can find detailed information on benefits available to veterans at the website of the U.S. Department of Veterans Affairs, va.gov.
Who is eligible for military benefits?
Active duty servicemembers are eligible to receive many benefits from the military including base pay, special duty pay, allowances for housing costs and food, money for education, medical care, insurance, and a variety of other benefits. Members of the armed forces are eligible to voluntarily separate or retire after serving in the military for a certain number of years. Retirees receive retirement pay and often have access to military facilities and programs, including medical care, insurance benefits, and VA housing loans. Servicemembers who separate from the military may or may not receive separation pay and are eligible for limited, yet valuable benefits.
Some of the benefits available to servicemembers and veterans
Military base pay received by active duty servicemembers is based on rank and the number of years of service the individual has completed. Pay may be supplemented by such allowances as the Basic Allowance for Housing (BAH), the Basic Allowance for Quarters (BAQ), the Basic Allowance for Subsistence (BAS), and Cost-of-Living Allowances (COLAs).
Military retirement pay is based on the servicemember's base pay (of the highest rank the servicemember held) and the number of years of service the servicemember completed. Under the legacy system, no retirement annuity is generally payable unless the servicemember has completed 20 years of service. The longer an individual stays on active duty, the higher his or her retirement pay will be.
Servicemembers may also enroll in the Thrift Savings Plan (TSP), which is a government-sponsored retirement savings plan, similar to a 401(k) defined contribution plan. TSP funds may supplement military retired pay. Once enrolled, servicemembers may contribute to the plan through automatic payroll contributions (up to certain limits).
A new military retirement system, called the Blended Retirement System (BRS), went into effect on January 1, 2018. This system blends the traditional legacy retirement pension with a defined contribution to a servicemember's TSP account. Servicemembers will receive an automatic service contribution of 1% of their basic pay, whether or not they contribute to their TSP and will receive matching contributions when they do contribute to their TSP (subject to certain requirements and limits). This means that servicemembers who leave the military before meeting the length of service they need to receive a retirement pension may still potentially walk away with substantial retirement savings from their TSP.
Any servicemember who enters the military on or after January 1, 2018 will automatically be enrolled in the BRS.
You can find specific information on the BRS and the TSP, and how active duty military and retirement pay is calculated at the Defense Finance and Accounting Service website, dfas.mil.
Pensions for low-income veterans
Pensions may be paid to low-income veterans who are discharged under conditions other than dishonorable and who meet certain eligibility requirements. Eligible veterans must generally have had 90 days of service with at least one day occurring during a period of war.
Veterans are entitled to disability compensation for service-connected health problems. Several programs are available; some are sponsored by the Department of Defense (DoD), others by the Department of Veterans Affairs (VA), formerly known as the Veterans Administration. Military-sponsored programs include disability retirement, temporary disability retirement, and disability severance pay. VA benefits include disability compensation, vocational rehabilitation, and pensions. The rules surrounding these benefits can be complex and change often; it's best to check with your military personnel office or local VA office if you have questions about any of these benefits.
All veterans who were discharged under conditions other than dishonorable are eligible for VA hospital and outpatient care, but some veterans may not have access to it. This is because the resources of the VA are strained and VA health care is dependent on congressional appropriations. To ensure that as many veterans as possible who need health care have access to it, a VA health-care eligibility reform was signed into law in October 1996. The law requires the VA to manage veterans' access to VA care. Under the law, veterans apply for enrollment and are assigned to one of eight priority groups. As many veterans as possible from each of the groups will be enrolled for VA health care. Veterans can apply for enrollment at any time. Veterans who enroll will have access to health care at approximately 1,500 service sites. For more information, veterans should contact the nearest VA health-care facility or access information via the Internet at the VA website.
Active duty servicemembers, retired servicemembers, their qualified family members and certain survivors receive health-care coverage through TRICARE, the medical program for the U.S. military. Depending upon their status, availability of medical care at military facilities and the TRICARE option they choose, military members may receive care either through military or civilian providers.
Long-term care benefits
Veterans are eligible for inpatient care in VA nursing homes, private nursing homes subsidized by the VA, and other long-term-care facilities. Many outpatient care programs are also available. Veterans may receive home health care services, adult day care services, or other services that can help them remain in their homes for as long as possible.
Education and training
Servicemembers and veterans may be eligible for education benefits under several programs. The newest program, the Post-9/11 GI Bill, is available to active duty servicemembers and veterans who have served on active duty on or after September 11, 2001. Other benefit programs include the Montgomery GI Bill, the Reserve Educational Assistance Program (REAP), and the Veterans Educational Assistance Program (VEAP).
Many other programs are also available to help servicemembers and veterans pay educational costs. These include loan repayment and tuition assistance programs, scholarships, work-study programs, and tutorial assistance programs. For more information about education benefits, visit gibill.va.gov.
Servicemembers who are 180 days or less away from their planned discharge and veterans within one year after discharge are eligible for many educational and vocational counseling programs.
Home loan guarantees
The VA guarantees loans to servicemembers, veterans, and reservists who want to purchase a home, condominium, or manufactured home. The loan is issued by a financial institution but guaranteed by the federal government. The primary advantages of VA home loans are that they often require no down payment and, because the loan is partially guaranteed by the federal government, no mortgage insurance payments.
Financial protection while on active duty
The Servicemembers Civil Relief Act (SCRA) protects servicemembers against certain civil actions that might be taken while the servicemember is on active duty. Under the SCRA, servicemembers may seek relief from certain financial obligations if they encounter difficulties because of their service commitments. For example, servicemembers are offered some protection from mortgage foreclosures, lease termination, and eviction proceedings, and may seek a cap on interest rates for some types of consumer debt.
Life, disability, and long-term care insurance
There are three major types of life insurance available to servicemembers and veterans. Active duty members of the military are eligible for coverage under Servicemembers Group Life Insurance (SGLI). Servicemembers are automatically insured for $400,000 but can elect a lesser amount or decline coverage. The amount they contribute to pay for their coverage depends upon the level of coverage they select. Spouses or next of kin must be notified if a servicemember elects not to be covered, to be covered in an amount less than the maximum available, or whenever the servicemember changes the amount of life insurance he or she has.
Veterans' Group Life Insurance (VGLI) is available to reservists and to individuals who have coverage under SGLI at the time they are released from active duty or from the reserves. Individuals with part-time SGLI coverage who become disabled or aggravate a pre-existing disability during a reserve period and who are uninsurable at standard premium rates are also eligible. Members of the Individual Ready Reserves or the Inactive National Guard are eligible for coverage as well. Under VGLI, eligible veterans can only be issued the same amount of SGLI they had in the service or less.
Service Disabled Veterans Insurance is available to veterans who have a service-connected disability. Veterans who left the service after April 24, 1951, are eligible for up to $10,000 in life insurance unless they are found to be totally disabled and eligible for waiver of premiums. In this case they can receive up to $20,000 of additional coverage (premiums for additional coverage are not waived).
Servicemembers who have SGLI also have disability coverage through the Traumatic Injury Protection Insurance Program (T-SGLI). T-SGLI is a rider that is attached to SGLI and provides disability insurance payments ranging from $25,000 to $100,000 to servicemembers who suffer traumatic injuries. Although T-SGLI coverage is automatic, servicemembers have the option of declining this coverage if they wish.
Finally, servicemembers, veterans, and family members can help protect themselves against the financial burden of long-term care by applying for coverage under the Federal Long-Term Care Insurance Program. This program helps covered individuals pay for the ongoing care they need due to an illness, injury, or cognitive disorder. For more information, visit ltcfeds.com or call 800-582-3337.
Burial allowances are available to the survivors of servicemembers who die on active duty and to the survivors of some other veterans. The government also provides free markers and headstones to some veterans, as well as some final honors such as flags, presidential certificates, and an honor guard. In addition, almost all veterans are eligible for burial in a national cemetery.
Some veterans receive preference over other candidates when they look for employment with the federal government. Qualified veterans who have honorable discharges receive an extra 5 points for any competitive examinations if they earned a campaign ribbon or spent time on active duty during certain periods. Qualified disabled veterans and certain spouses of disabled or deceased veterans can receive an extra 10 points on examinations. This means that the hiring preference for veterans doesn't guarantee a job to the veteran; it just gives the veteran a slight advantage.
Servicemembers and veterans are eligible for benefits available to the general population as well, such as unemployment compensation and Social Security benefits. The Social Security Administration (SSA) publishes a special booklet for military personnel that explains how military service affects Social Security benefits. To receive this booklet, contact your local Social Security office (call (800) 772-1213 for the location nearest you), or view the information online at the SSA website (ssa.gov).
Some of the benefits available to survivors of servicemembers and veterans
Survivors of servicemembers and veterans are eligible for some of the same benefits available to their sponsor, such as VA home loan guarantees and educational assistance. In addition, they're eligible for the following benefits as well.
Survivor's Benefit Plan
The Survivor's Benefit Plan (SBP) provides a monthly lifetime annuity payment to qualified widows, widowers, dependent children, and some ex-spouses who are survivors of retired military servicemembers. Retired servicemembers pay premiums for SBP coverage from their gross retired pay. SBP benefits may be offset by Social Security benefits the survivor receives.
Dependency and Indemnity Compensation
Dependency and Indemnity Compensation (DIC) provides a monthly pension to widows, widowers, dependent children, and low-income parents of some deceased active duty servicemembers and some disabled veterans (if disability was service related). Beneficiaries receive a fixed monthly benefit that usually increases annually due to inflation.
Available to qualified survivors of low-income veterans, the death pension provides a fixed monthly benefit that usually increases annually with inflation. The amount of monthly benefit a survivor receives depends upon the survivor's other income and whether other dependents reside with the survivor.
The spouse or dependent children of disabled veterans, veterans who died as a result of a service-connected disability, or veterans who died on active duty may purchase low-cost government-backed health insurance called CHAMPVA. Survivors and spouses and dependent children of active duty servicemembers and retirees may also receive health care through TRICARE, the medical program for the U.S. military.
Proving eligibility for benefits
While the active duty servicemember's identification card is his or her best friend, the veteran will rely upon his or her DD Form 214, or military discharge papers, to apply for benefits (if retired, he or she will also have an ID card). You will receive your DD Form 214 upon discharge, or you can apply for duplicates free of charge from VA offices and veterans organizations. When you apply for veterans benefits, you (or your surviving spouse) will be asked for a copy of your DD Form 214.
This material is intended for informational purposes only, and is not intended to be a substitute for specific individualized advice. Although the information has been gathered from sources believed to be reliable, it cannot be guaranteed, and the accuracy of the information should be independently verified. LPL Financial and IHMVCU Investment Services are not endorsed by or affiliated with the federal government.
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