Military Retired Pay Change

[mickeyd]

I caught this little tidbit from an email from MOAA recently. It's only a once-in-a-while change, but your pension payment will show up earlier in October. The good news...

Normally, military retired pay is processed on the first day of the month, but when that fell on a weekend or holiday, the previous law delayed retired pay checks until the day after the weekend/holiday.
The recent law change now requires DFAS to process retiree pay on the preceding business day when the first day of the month falls on a weekend or national holiday.
This affects retired pay checks previously scheduled for Oct 3, 2011 and Jan 3, 2012, but which now will be issued on Sep 30, 2011 and Dec 30, 2011 respectively.

The bad news ...

The bad news (for 2011, anyway) is that, for tax purposes, retirees will see 13 rather than the normal 12 payments for calendar year 2011

 

[braumeister]

So it's evened out in the long run by just 11 payments in 2012, right?

 

[BLS53]

I don't know, but I've been getting paid on Saturdays, when the 1st falls on a Monday, since 2008. Only issue is it's makes the interval 4 weeks and 5 days until the next month, if you're dealing with a 31 day month. Don't know why they just don't pay every 4 weeks. It would make things easier for some of us. Just total the annual pension value and divide by 13.

 

[JPatrick]

So it's evened out in the long run by just 11 payments in 2012, right?

It would appear so, still the added imaginary income in 2011 could mess with some state tax situations I imagine.

 

[JPatrick]

Anything new on getting a fix for the 13 paydays in 2011??

 

[BLS53]

Anything new on getting a fix for the 13 paydays in 2011??

Nope, apparently the law was changed regarding paying on the 30th when the 1st falls on a weekend. I don't want to misquote the law, so go to the DFAS site and it's fully explained.

Why do you think it needs a fix? Is this creating a hardship of some kind? I don't understand.

 

[mickeyd]

So it's evened out in the long run by just 11 payments in 2012, right?

I read somewhere (Army Times?) that 2012 would include 12 paydays.

 

[BLS53]

I read somewhere (Army Times?) that 2012 would include 12 paydays.

The 13 paydays in 2011 is an anomaly caused by switching to the new law mid year. All future years will be 12, as it has been in the past.

 

[JPatrick]

Nope, apparently the law was changed regarding paying on the 30th when the 1st falls on a weekend. I don't want to misquote the law, so go to the DFAS site and it's fully explained.

Why do you think it needs a fix? Is this creating a hardship of some kind? I don't understand.

Yes, I understand the law. As, has been pointed out, this action may affect the tax liability of some.. I am one of the "some."
I wouldn't call it a hardship, but at the same time, I am one of the "some" who do not welcome the opportunity to pay more taxes.