Cover: Payment of the Full Rate of Special and Incentive Pays to Members of the Reserve Components

Payment of the Full Rate of Special and Incentive Pays to Members of the Reserve Components

Published Feb 9, 2022

by James V. Marrone, Michael G. Mattock, Beth J. Asch, Hannah Acheson-Field

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Research Questions

  1. What would be the yearly cost of paying part-time RC members risk pay and flight pay at the same rate as AC members serving full-time?
  2. How many RC members would qualify or would potentially qualify for each form of S&I pay at the full rate?
  3. Is it feasible and advisable to pay eligible part-time RC members the full rate of S&I pay that is currently paid to full-time AC members who serve a full month?

Military service members are paid special and incentive (S&I) pays, such as hazardous duty incentive pay and aviation incentive pay, on a prorated basis in proportion to the amount of basic pay they receive in a month. Some observers argue that part-time reserve component (RC) members should be paid at the same full monthly rate as typical active component (AC) members, since RC members are required to undergo the same training as AC members, and the standards RC members must meet to establish proficiencies to receive certain S&I pays are the same as for AC members. Others counter that part-time RC members do not have the same readiness availability as AC members who serve full time.

In response to this issue, Congress called for a report on the extension to members of the RC of S&I pays that are currently paid to AC members. In this report, the authors (1) estimate the cost of paying members of the RC, who perform service at the typical rate of four training periods of inactive duty per month (or active duty for less than a full month), the same full monthly rate of S&I pays that AC members receive for performing the S&I pay qualifying service for a full month; (2) estimate the number of RC members who would qualify for each form of S&I pay at the full rate; and (3) consider the feasibility and advisability of paying eligible members of the RC at the full S&I pay rate.

Key Findings

  • The yearly cost increase associated with paying members of the RC risk pay and flight pay at the full monthly rate would range from $46.3 million to $88.5 million annually, or 100 percent to 194 percent over the baseline of $45.7 million annually. Although the cost increase would represent a substantial increase in the S&I pay budget, it would be small relative to the overall RC personnel budget: less than 0.4 percent for fiscal year 2021.
  • RC members serve more periods per month than the stereotypical one weekend per month and two weeks in the summer. The implication is that the cost increase associated with a full-rate S&I pay policy is less than expected because RC members are already paid closer to the full monthly rate than expected.
  • The number of RC members who would qualify or would potentially qualify for either hazardous duty incentive pay or aviation incentive pay in a given month ranges from 17,796 to 379,148 (out of more than 800,000 total members).
  • The full-rate policy could reduce incentives to participate in the RC for more than the minimum required training periods. Thus, the full-rate policy would adversely affect readiness. Furthermore, the full monthly rate policy would be inefficient because it would increase costs while potentially reducing participation—i.e., paying more for less.

This research was sponsored by the Office of the Under Secretary of Defense for Personnel and Readiness and conducted within the Forces and Resources Policy Center of the RAND National Security Research Division (NSRD).

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