There is a lot of confusion when it comes to military pay and what is more beneficial for the service member. No one can receive both Drill Pay and VA compensation for the same day’s work. Drill Pay is taxable whereas VA compensation is not. This does not automatically mean that Drill Pay is better.To figure out which is right for you, it is essential to understand what each is.
Drill pay is when you are paid for every day that you serve in the Guard and Reserves. This also includes training days. The pay is determined by rank, job, and level of education. The more time you serve, the more you will be compensated as well. There are comprehensive tables for what your exact pay will be in the 2018 and 2019 fiscal year available online. Drill takes place two days per month with an annual two weeks of training. When you are at Annual Training and job skill you will be categorized as Active Duty, which will be compensated as such.
Drill Pay is equal to one day's active duty base pay per drill period. One weekend drill has four drill periods. A drill period is four hours long and each day has two drill periods (eight hour days). This is why a weekend is considered to be four drill periods. A training event that is going over a weekend results in prorated Basic Pay.
The amount of Drill Pay a service member receives does vary if a change has been made to the pay scale. 2018 saw a 2.4% increase in pay and 2019 would see a 2.6% increase in pay due to the National Defense Authorization Act (NDAA) Congress passed and the sitting president signed into law.
There are several types of VA compensation available, but the most commonly referred to compensation is for disabilities. VA compensation comes from taxpayer money and is for veterans who have injuries or developed medical conditions during their time in active military service. VA compensation is meant to “make-up” some of the loss of civilian wages after leaving the service due to the incurred issues.
VA compensation is not an income and is not a replacement check for a civilian job. It is simply meant to compensate for missed hours and work days that may occur due to doctor appointments or lack of ability to work full-time. Drill Pay (depending on individual rank factors) have the opportunity to make it their only source of income, unlike with compensation.
In order to obtain VA compensation, you must file for it. You also must be actively serving in the Reserves/National Guard or have been honorably discharged from active military service of any kind to qualify for the claim. The money is kept from being handed out with laws to keep people from abusing the system.
The rate at which you are compensated has a few different factors. Are you married? Do you have children? Are any of your parents alive? What is your disability percentage? A disability percentage is a system used by the VA to determine the severity of a person’s active duty-related injuries/conditions. It directly affects the amount of compensation you can claim. Depending on your specific situation the amount of compensation for the current fiscal year can vary between $500 and $3,500 per month.
An approved compensation rate is subject to change. Illnesses and injuries can improve or worsen with time. The VA has the right to reassess your health and family dynamic in order to have the compensation reflect your current situation (always contact the VA with a change in dependents shortly after it occurs). Failure to show up to the reexamination appointment can result in your benefits being terminated or decreased. In some cases, your disability rating and compensation can be protected based on a number of qualifying factors.
Which One is Better?
The best option is the one that will give you the most money in the end. There are ways to calculate how much you will earn in Drill Pay per fiscal year versus in VA compensation. Let’s say you are a low-level rank (E-1) with less than two years of served time in the Guard/Reserve.
You are paid 218.43 per drill period. This means you are earning $873.72 per month before taxes. Per year (before taxes and without factoring in the two weeks of Annual Training) this will be $10,485.
To be fair in comparisons let's assume you qualify for the lowest rate of compensation from the VA at a 10% rate with no dependents. This will earn you a monthly check of 136.24 per month in the 2017/2018 fiscal year. This will accumulate a total sum of $1,635. Although the VA compensation is nontaxable, you can see why it is not the best option for this specific case.
It is important to factor in the amount of taxes you pay and if you have a Service member’s Group Life Insurance (SGLI) premiums as it will reduce the amount of Drill Pay. Luckily, there are online Drill Pay calculators that are available to calculate your pay after inputting your information. In most situations, Drill Pay will earn you more money, but not always. If you are lower in rank in the Guard/Reserve but have a high VA compensation rate, it may lead to a small difference between the two sums or result in the compensation being more than the Drill Pay per year.
Lastly, it is always a good idea to get in contact with your local Veteran Service Organizations (VSOs). They are in place to help you find the resources you need and to file any claims and benefits you may qualify for. Many VSOs have financial advisors or can lead you to one that can help you figure out your financial situation and future. At the end of the day, the decision is yours to make.