Cashing in Military Leave

Accrual of Military Leave

Pursuant to 10 U.S. Code § 701(a), military members on active duty accrue leave at the rate of 30 days per year, or 2 1/2 days per month. A full month of paid vacation per year sounds pretty generous (and it is!), but it’s value is somewhat diminished by the fact that a member on leave uses one day per day of leave, even if that day were a weekend or holiday when he/she would not be working anyway. So a full two-week vacation uses 14 days of leave, even though the member only missed 10 days of work.

The Cr Bal box of the LES shows a member’s accumulated leave. A member, with limited exceptions typically involving deployments, may only carry over 60 days leave from one fiscal year to the next (the fiscal year ends on September 30). 10 U.S. Code § 701(b). Leave in excess of 60 days is aptly called “use it or lose it” leave, and is reflected in the Use/Lose box on the LES.

Cashing In Leave

Service members are authorized to sell back their military leave, also known as cashing in their leave, when they are discharged from the military under honorable conditions. 37 U.S. Code § 501. Leave is valued at 1/30 of base pay per day cashed in. No other allowances, such as BAH or BAS, are included in the value of leave. 37 U.S. Code § 501(b)(1).

For enlisted members only, “discharge” includes the expiration of an enlistment term, even if the member reenlists. 37 U.S. Code § 501(a)(1). For purposes of dissolution, this means that the value of leave for an enlisted member with an upcoming ETS date may not be speculative - it’s readily provable.

The maximum amount of leave that can be cashed in is 60 days, per 37 U.S. Code § 501(f). This is a lifetime limit, so an enlisted member who has previously cashed in leave as part of a reenlistment will have her maximum reduced by the days previously cashed in.

Transitional Leave.

Instead of cashing-in leave, often members leaving active duty will choose to take transitional leave (formerly known as “terminal leave”). This means that they have out-processed from the military, and, for all practical purposes, are out of the military, but they still receive their full pay while on transitional leave.

The advantages to a member are that he/she receives full pay and allowances, including BAH, BAS, etc, rather than just basic pay. And, by obtaining a waiver, he/she is permitted to work while on transitional leave.

The disadvantage is that the servicemember is still, technically, on active duty in case war breaks out, or for purposes of jurisdiction if the member commits a UCMJ violation.

Treatment of Military Leave in a Divorce

A state divorce court may, under certain circumstances, treat accrued military leave as a divisible asset. As an example, if a servicemember whose basic pay is $6000 per month has exactly 30 days of accrued leave, that could be considered a $6000 asset.

In Colorado, the deciding factor is whether the employee has the right to cash in the leave, and whether its value can be determined. See the Division of Vacation & Sick Time article in the Colorado Family Law Guide for more information.