There are over seventy types of special pays and allowances that members of the military may be eligible to receive above and beyond their base pay. The government pays the military this way for a variety of reasons, but one of the largest reason is to pay less to retirees in the form of pension benefits. The problem with this crazy system is that it is crazy! There are so many moving pieces. It is complex if you have a family or personal situation that is not cut and dry. So, errors to a military members’ paycheck are bound to happen.
For example, surprisingly, there are a lot of rules for a Soldier to receive hazardous duty for jumping out of an airplane. Airborne Paratroopers must jump four times throughout the year in order to maintain their proficiency and continue to receive the entitlement. Many Soldiers do not stay up-to-date with their jumps and begin to lose the $150 per month pay. The problem comes when the military pay system does not keep up with the rapidly changing status of the Soldier. Many service members are overpaid as a result. Eventually, the overpayment is recouped by the Defense Finance and Accounting Service from their paycheck.
So, what do you do if you realize that you were paid in error? You should do nothing! You should not spend that money, and you should warn your spouse from spending that money as well. Set it aside because Uncle Sam will be coming for it eventually. And, of course, he will come at the worst possible time when you least expect it. You need to have a monthly budget and guard against using that money that you are not entitled to.
Move that money you were not expecting to a savings account and leave it alone. You may be able to set up a payment plan if it is a large amount. But, you should be ready in the event that you happen to receive the dreaded “No Pay Due” LES.
Guard yourself against money paid to you in error. The best course of action is for you and your family not to spend any of it until you can figure out if you really get to keep it. Erring on the side of caution will keep you and your budget intact.