Army Deployment Finance Entitlements

Military deployments involve significant financial considerations, both for the government and for the individual service member. The United States Army, like other branches, has a complex system of finance entitlements designed to compensate soldiers for the unique challenges and sacrifices associated with deployment.

Base Pay and Allowances: During deployment, soldiers continue to receive their regular base pay, which is determined by their rank and years of service. However, several additional allowances are triggered to account for the hardships of being away from home and potentially in a hazardous environment. These allowances are designed to offset increased expenses and provide financial support to families back home.

Hazardous Duty Pay (HDP): Soldiers deployed to areas designated as hostile fire or imminent danger zones receive HDP. The amount varies depending on the specific location and the level of risk involved. This pay recognizes the increased danger and stress associated with serving in combat zones or areas with ongoing instability.

Family Separation Allowance (FSA): This allowance is intended to help offset the expenses incurred by a service member being separated from their family for more than 30 days. It acknowledges the costs associated with maintaining two households, managing childcare, or dealing with other family needs in the absence of the deployed soldier.

Hardship Duty Pay (HDP): Separate from Hazardous Duty Pay, Hardship Duty Pay is provided for soldiers serving in locations with exceptionally difficult living conditions. This could be due to extreme climates, limited access to amenities, or other factors that significantly impact quality of life. The specific criteria for HDP vary based on the assigned location and the identified hardships.

Special Pay for Duty Subject to Hostile Fire or Imminent Danger (HFP/IDP): In addition to HDP, soldiers exposed to hostile fire or imminent danger may be eligible for HFP/IDP. This is a specific pay designed to acknowledge the immediate risk involved in these situations.

Thrift Savings Plan (TSP): Deployment offers unique opportunities to contribute to the Thrift Savings Plan, a retirement savings plan similar to a civilian 401(k). Combat zone tax exclusion allows certain income earned in designated combat zones to be tax-free, making TSP contributions even more advantageous. Soldiers should consult with a financial advisor to understand the optimal contribution strategies during deployment.

Tax Benefits: Deployments to combat zones often trigger significant tax benefits. Income earned in a combat zone is typically excluded from federal income tax, and in some cases, state income tax as well. This can result in substantial savings for deployed soldiers.

Savings Deposit Program (SDP): This program allows deployed soldiers in designated combat zones to deposit unallotted pay into a government-backed savings account that earns a high rate of interest, much higher than most civilian savings accounts. It’s a valuable tool for building savings while deployed.

Financial Counseling: The Army provides financial counseling services to soldiers and their families to help them manage their finances effectively during deployment. These services can provide guidance on budgeting, debt management, investment strategies, and other financial matters. Utilizing these resources can help ensure that soldiers make sound financial decisions during their deployment and beyond.

It is crucial for soldiers to understand their entitlements and to seek guidance from financial professionals to maximize the benefits available to them during deployment.