FINANCIAL MANAGEMENT OFFICER COURSE FINANCIAL WARRANT OFFICER COURSE

UNITED STATES MARINE CORPS

Financial Management School

Marine Corps Combat Service Support Schools

Training Command

PSC Box 20041

Camp Lejeune, North Carolina 28542-0041

COLLECTIONS & DEDUCTIONS

STUDENT OUTLINE

FMOC 0902 – FWOC 0202

FINANCIAL MANAGEMENT OFFICER COURSE (COURSE ID M03FNH0)

FINANCIAL WARRANT OFFICER COURSE (COURSE ID M03FNK0)

REVISED 05/12/2012

1. LEARNING OBJECTIVES:

a. TERMINAL LEARNING OBJECTIVES:

(1) Given access to applicable financial systems, internet connectivity, appropriate staff, and operational requirements, manage a disbursing section, ensuring disbursing operations and financial reporting are in compliance with DOD FMR 7000.14-R. (3404-FSCL-1001, 3402-FSCL-2001)

(2) Given access to automated systems, internet connectivity, substantiating documents, and the references, process Miscellaneous Military Pay Order/Special Authorizations (NAVMC 11116), ensuring standards of accuracy for all transactions are met as outlined in DFAS-CL 7220.31-R. (3404-PAY-1002, 3402-PAY-2002)

b. ENABLING LEARNING OBJECTIVES:

(1) Given access to applicable financial systems, internet connectivity, appropriate staff, and operational requirements manage pay section workflow, ensuring disbursing operations and financial reporting are in compliance with DOD FMR 7000.14-R. (3404-FSCL-1001e, 3402-FSCL-2001e)

(2) Given access to automated systems, internet connectivity, substantiating documents, and the references, process collections, ensuring standards of accuracy for all transactions are met as outlined in DFAS-CL 7220.31-R. (3404-PAY-1002e, 3402-PAY-2002e)

(3) Given access to automated systems, internet connectivity, substantiating documents, and the references, process deductions, ensuring standards of accuracy for all transactions are met as outlined in DFAS-CL 7220.31-R. (3404-PAY-1002f, 3402-PAY-2002e)

1. COURT-MARTIAL FORFEITURES:

a. General Knowledge.

(1) A sentence to partial forfeiture of pay deprives a member of the amount of pay stated in the sentence. The sentence applies for the number of months or days expressly stated.

(2) When a sentence includes forfeitures in addition to confinement (not suspended), the forfeitures will apply to pay (and allowances, if total forfeitures are adjudged) becoming due on and after the date the sentence is approved by the convening authority, unless the convening authority defers application of the forfeitures pending completion of further appellate review.

b. Forfeiture of allowances. Allowances are forfeited only when a sentence by a general court-martial includes forfeiture of all pay and allowances.

c. Pay subject to forfeiture. Forfeitures, other than total forfeitures, apply to:

(1) Basic pay, based on the member's years of service, and

(2) Career sea pay or Hardship duty pay, provided such pay continues to accrue after the effective date of the sentence.

(3) An allotment made voluntarily. (This means that allotments can be terminated in order to collect a forfeiture.)

EXAMPLE

A Cpl was awarded a forfeiture of $250.00 for 3 months, totaling $750.00. Because of the forfeiture, the Cpl is now in an over- allotted status. Member must terminate or reduce some of the allotments until the forfeiture has been collected.

d. Pay not subject to forfeiture. Forfeitures, other than total forfeitures, do not apply to special (other than sea or hardship duty pay) or incentive pay.

e. Maximum amount that can be withheld. By law, the maximum amount that can be withheld from a Marine’s pay is an amount equal to 2/3's of the member’s gross pay.

f. Taxes. Forfeiture is a loss of entitlement to the pay involved. Consequently, forfeitures are not taxed. Compute the amount of pay to be forfeited before withholding for federal and state income and FICA taxes. Compute taxes on the gross pay remaining after deductions of the forfeiture.

g. Reduction in grade. If a member's sentence includes or requires a reduction in grade, apply forfeitures to the pay of the grade to which reduced. (This means that the amount of the forfeiture cannot exceed 2/3 of the pay of the lower rank.)

h. Concurrent Forfeitures. When two or more sentences require forfeitures for a concurrent period, the amount stated in each sentence is forfeited only for the specified period. If each forfeiture, resulting from a court-martial under the maximum forfeiture which could be imposed, is two-thirds of the pay subject to forfeiture, collect only two-thirds of the pay subject to forfeiture for the concurrent period. Following the concurrent period, pay is forfeited under the remaining sentence at the rate specified in the sentence for the time remaining in that sentence.

2. NON-JUDICIAL PUNISHMENT FORFEITURES:

a. General knowledge.

(1) Under authority of Article 15, Uniform Code of Military Justice (UCMJ), authorized commanders may impose non-judicial punishment for minor offenses without resorting to courts-martial.

(2) Non-judicial punishments that affect pay are forfeiture of pay, reduction in grade, or combinations of these. Except as provided in chapter 49, of the DODFMR, provisions of chapter 48, of the DODFMR, relating to forfeiture of pay and reduction in grade by courts-martial also apply when such penalties are imposed as non-judicial punishment.

b. Limitations.

(1) Maximum Forfeiture of Pay. The maximum forfeiture of pay that may be imposed under Article 15, UCMJ, is outlined in the Manual for Courts-Martial. (Based on grade and position of the officer imposing the NJP.)

(2) Reduction in grade. When punishment includes both reduction in grade, whether or not suspended, and forfeiture of pay, the forfeiture is based on the grade to which reduced.

c. Effective dates. Non-Judicial Punishment forfeitures and reduction in grade, if not suspended, are effective on the date the commander imposes the punishment. If they are suspended, they become effective only if vacated. Forfeitures of pay must not be applied to pay which accrued before the punishment was imposed.

3. COLLECTION OF FORFEITURES:

a. Forfeitures. Since forfeitures constitute a loss of entitlement for the pay concerned, they take precedence over all debts. Charge forfeitures of pay, as approved and ordered executed, against a member's pay at the rate stated by the sentence until the sentence is fully satisfied. Prorate the monthly rate of forfeitures on a daily basis for a portion of a month.

EXAMPLE

LCpl Jackson was awarded a forfeiture of $100.00 for 2 months. Total forfeiture is $200.00 effective 200*0117. For the month of Jan the deduction would be computed as follows:

Forfeiture $100.00

Divided by 30

Daily rate 3.33333

Multiply by number days x 14 1/17 to 1/30 (14)

Deduction for Jan $46.67

Deduction for Feb would be $100.00

Deduction for Mar would be the remainder of $200.00

Daily rate 3.33333

Multiply by number days x 16 3/1 to 3/16

Deduction for Mar $53.33

b. Non-Pay status. During periods when a member is in a non-pay status, pay does not accrue; therefore, forfeitures cannot be applied. Do not count such periods in computing the time during which pay is forfeited for a specific period.

c. Restoration to duty. A member restored to duty following a non-pay status is again entitled to pay; therefore, forfeitures may apply.

d. Non-Collection due to administrative error. Collect forfeitures not collected due to administrative error when the error is discovered. Collection may be made for the forfeiture or for erroneous payments made during the period covered by the sentence.

e. Concurrent forfeitures.

(1) Only court-martial forfeitures. When two or more court-martial sentences require forfeitures for a concurrent period, the amount stated in each sentence is forfeited only for the specified period, computed on a daily basis, not to exceed the two-thirds rule.

(2) Mixed courts-martial and non-judicial forfeitures. When non-judicial punishment forfeitures run concurrently with partial courts-martial forfeitures, which are subject to the two-thirds limitation, the maximum total amount collectible is two-thirds of the pay subject to forfeiture.

(3) Only non-judicial forfeitures. For Navy and Marine Corps members, non-judicial forfeitures do not run concurrently. If such forfeiture is imposed while a prior forfeiture is still in effect, it will not commence until the prior forfeiture is completed.

4. SUSPENSION AND CANCELLATION OF FORFEITURES:

a. Death or Separation.

(1) The death or discharge of a member under a suspended sentence operates as a complete remission of any sentence.

(2) Discharge, release from active duty, or death of a member under sentence to forfeiture cancels any portion of the forfeiture which would extend beyond the date of discharge, release or death.

b. Vacation of suspension. When a suspension of a forfeiture is vacated, the uncollected forfeiture is revived and proper for collection, effective the date of the vacation of the suspension.

EXAMPLE

A PFC was awarded a forfeiture of $250.00 a month for 2 months effective 20**103. On 20**218 the PFC was discharged. The collection would be as follows:

Forfeiture $250.00 divided by 30 = 8.33333 (daily rate)

Daily rate forfeiture 8.33333

Number days 1/3 to 1/30 x 28

Deduction for Jan $233.33

Forfeiture $250.00 divided by 30 = 8.33333 (daily rate)

Daily rate forfeiture 8.33333

Number days 2/1 to 2/18 x 18 (date of discharge)

Deduction for February $150.00

The remainder of the forfeiture is canceled due to discharge.

5. SERVICEMAN'S GROUP LIFE INSURANCE (SGLI):

a. General knowledge. Effective 1 September 2005, this program automatically insures every member against death for $400,000.00 while the member is serving full time active duty, or training on orders to duty not limited to 30 days or less.

(1) Members who do not desire full coverage may elect in writing for an amount less than $400,000 in $50,000 increments or may elect to waive coverage. The coverage will terminate the last day of the month that the member elects no coverage or a reduced amount, and the reduced amount will commence on the 1st of the next month.

(2) If no elections are made, the member will automatically be covered for $400,000.00 of SGLI.

(3) Members may change their election at any time.

(4) Effective December 1, 2005, every member who has SGLI also has TSGLI coverage. This coverage applies to active duty members, reservists, funeral honors duty and one-day muster duty.

(5) This benefit is also provided retroactively for members who incur severe losses as a result of traumatic injury between October 7, 2001 and December 1, 2005 if the loss was the direct result of injuries incurred in Operations Enduring Freedom or Iraqi Freedom. The rate for TSGLI is always $1.00.

b. RATES FOR SGLI AS OF JULY 1, 2006:

$26.00 = $400,000.00

$22.75 = $350,000.00

$19.50 = $300,000.00

$16.25 = $250,000.00

$13.00 = $200,000.00

$9.75 = $150,000.00

$6.50 = $100,000.00

$3.25 = $ 50,000.00

c. Monthly deductions are NOT prorated for partial month coverage.

d. Deductions start on the first day of the month member enters on active duty. (Example: Member enlists in the Marine Corps on 18 January. Deduction is for the entire monthly amount.)

e. Traumatic Injury Protection Under SGLI (TSGLI)

The Traumatic Injury Protection Program (TSGLI) under the auspices of the SGLI program provides payments to severely injured members who suffer a scheduled loss as a direct result of serious trauma, such as a loss of an arm or leg (see 38 CFR 9.20 (e)(7)). This monetary assistance helps the member and his/her family through an often long and arduous treatment and rehabilitation period. Effective December 1, 2005, ALL members covered by SGLI program will be automatically covered under TSGLI. Members must decline SGLI coverage in order to cancel TSGLI. The monthly rate for TSGLI is $1.00.

f. Family Coverage Under SGLI (FSGLI)

Effective November 1, 2001, FSGLI automatically covers spouses and dependent children (insurable dependents) of uniformed service members. In order for the spouse and children to be eligible for family coverage, the service member shall be enrolled in the full-time SGLI coverage. Enrollment for members of the Uniformed Services is based on dependent information in the Defense Enrollment Eligibility Reporting System (DEERS). For Marine Corps members, enrollment is based on dependent information on the Marine Corps Total Force System (MCTFS).

FSGLI Rates:

Under 35 / $0.55 / $0.50 / $5.00
35-39 / 0.70 / 0.65 / 6.50
40-44 / 0.90 / 0.85 / 8.50
45-49 / 1.40 / 1.30 / 13.00
50-54 / 2.70 / 2.50 / 25.00
55-59 / 4.00 / 3.70 / 37.00
60 & Up / 5.20 / 5.00 / 50.00

6. DEPENDENT DENTAL PLAN (DDP):

a. There are two monthly rates of deduction for this coverage.

Individual Coverage (1 depn) Family Coverage

$10.30 (effective 20120401) $30.89 (effective 20120401)

b. Do not prorate DDP deduction.

7. ARMED FORCES RETIREMENT HOME:

a. An automatic deduction of $.50 is withheld from the following Marines pay:

(1) All enlisted members in the regular Marine Corps.

(2) All warrant officers in the regular Marine Corps & Limited Duty Officers (LDO).

b. Do not prorate Armed Forces Retirement Home.

8. ITEMS SUBJECT TO WITHHOLDING OF FEDERAL AND STATE INCOME TAX:

a. Taxable wages are as follows:

(1) Basic Pay

(2) Special Pay

(3) Incentive Pay for Hazardous Duty

(4) Lump Sum payment of accrued leave

(a) Entitlement is taxed at the applicable percentage rate for Federal.

(b) Entitlement is taxed at the applicable flat percentage rate in accordance with (APSM, Appendix D) for State Tax.

(5) Separation Pay, Readjustment Pay or Severance Pay.

(a) Taxed at the applicable percentage rate for Federal.

(b) Taxed at the applicable flat percentage rate in accordance with (APSM, Appendix D) for State Tax.

(6) Selective or Regular Reenlistment Bonus, to include applicable installments.

(a) Taxed at the applicable rate for Federal.

(b) Taxed at the applicable flat percentage rate in accordance with (APSM, Appendix D) for State Tax.

b. Pay that is forfeited by courts-martial sentence or NJP is a loss of entitlement and is not subject to federal/state income tax.

c. The "Montgomery G.I. Bill", reduces the member's taxable income for each month in which it is deducted. (DODFMR, Table 44-1)

9. THRIFT SAVING PLAN (TSP)

a. TSP is a government-sponsored retirement savings and investment plan. Congress established the plan as part of the Federal Employees' Retirement System Act. Participation in the plan for military members was allowed by the National Defense Authorization Act for Fiscal Year 2000 as amended by the National Defense Authorization Act for Fiscal Year 2001 and was effective October 9, 2001. The plan offers tax deferral advantages similar to those offered by private corporations to their employees under 401(k) plans. The Federal Retirement Thrift Investment Board (Board), which operates the plan solely for the benefit of the participants and their beneficiaries, administers the plan. The Agency Technical Services (ATS) staff processes TSP data submissions from the submitting payroll offices. The Board issues TSP regulations via 5 Code of Federal Regulations (CFR), part 1600 and bulletins providing necessary guidance relating to TSP operations.