Stipend and Bonus
The HPSP/FAP stipend and bonus/grant are entitlements of the HPSP/FAP program. Stipend is intended for the purchase of items not included by the scholarship. Each year the stipend and grant amount is determined and is published by a Health Affairs Memorandum. For the year 12 July 2018 through 30 June 2019, the stipend amount is $2,330.78 per month and the FAP grant is $45,000 per year. Stipend and bonus/grants are taxable by both the federal and state government. The HPSP/FAP student stipend begins accruing on the benefit start date and ends on graduation day, or on the date all academic requirements for receipt of the professional degree, if that date precedes the date of graduation by more than 45 days.
HPSP participants are eligible for 12 months of financial assistance each year: 10 ½ months of stipend and 1½ months of active duty pay and allowances as an Ensign while on annual training (AT). Stipend payments are suspended while a student is on AT or if placed in a Leave Without Pay (LWOP) status.
A scholarship participant is not eligible for stipend or bonus payments until the Benefit Start Date occurs. Additionally, the Accessions Department must receive all scholarship documents from Navy Recruiting Command and “gain” the student into the official Navy databases before a stipend or bonus payment can be made. In some cases, this could be up to 30 days after receipt of the document or longer if there are issues with the documents. Once a pay record is established, the Defense Finance and Accounting Service, Cleveland (DFAS-CL) initiates stipend and bonus/grant payments via direct deposit. The monthly stipend is split into two payments, stipend for days 1-15 of the month are paid on the 15th of the month, and stipend for days 16 – 31 are paid on the 1st of the next month.
I. Determination of the Benefit Start Date (BSD): The benefit start date is the date that benefits begin for participants. The benefit start date is the latter of three dates listed below:
· The date the Acceptance of Office/Oath of Office was signed.
· The date the HPSP Service Agreement was signed.
· The first day of the academic year (not including orientation).
II. Termination of Benefits: Scholarship benefits are terminated:
· On the date a participant graduates from school
· The date program requirements are completed if that date precedes the graduation date by 45 days or more.
· When the participant is separated from the program.
III. HPSP Accession Bonus: The Navy offers a $20,000.00, taxable, one time, incentive bonus to medical and dental HPSP signees. It is paid as 2 payments of $9000, and one of $2000. Each payment has taxes withheld prior to deposit in the student’s direct deposit account. Deposit of the signing bonus is generally made over the course of a week or two. On a leave and earnings statement, the signing bonus will be seen in the field labeled “FLPP,” which stands for the Foreign Language Proficiency Pay. Defense Finance Accounting System (DFAS) did not have another field that could be used for this bonus payment. The bonus is paid AFTER the benefit start date and after a pay record is established for the participant.
IV. Taxes. HPSP/FAP stipends, grants, bonuses and active duty pays are subject to State and Federal Withholding Tax. The amount of state and federal tax withheld is based on the exemptions claimed on the participant’s Withholding Certificate (form W-4) submitted at the time of entry into the program and kept in the service record, and the state of legal residence (as denoted on DD 2058, State of Legal Residence). If no Form W-4 was received with the record, the stipend is taxed at the rate of “single with no dependents.” To initiate a change in Federal Withholding Tax, complete and submit a new Form W-4. click here for a 2018 W-4 Form.
DFAS-Cleveland will send a Federal Wage and Earnings Statement (Form W-2) for all pays received during each tax year. Participants can obtain their W-2 from the DFAS MyPay website. Failure to receive a W-2 is generally a result of failure to provide Accessions Department with a current address.
HPSP graduates on active duty get their HPSP W-2 as a separate mailing from DFAS, which goes to the address that was on file while in the HPSP program. The active duty W-2 can be obtained from the MyPay Website. If prior HPSP/FAP participants (now on active duty) need a W-2 issued for their time in the HPSP/FAP program, they should call the DFAS Call Center at 1-888-332-7411, and specifically request their "Reserve W2."
Current HPSP/FAP students requiring a new W-2 should call the DFAS Help Line at 1-888-332-7411. Go through ALL the options one time and then punch in "O" to get a live voice Customer Service Representative (CSR) and explain that you are INACTIVE READY RESERVE (IRR). This is because you may reach a customer service representative who is a temporary employee hired during tax-season only and not familiar with the difference between active duty and reservist status. If that service rep is not familiar with the IRR/Reserves, please ask for a regular CSR who will know what to do. If all else fails, contact Accessions for help.
V. Accepting Pay or Scholarships from Other Sources: Members of the HPSP/FAP are prohibited from accepting other scholarship support in any form from the Federal Government (Dual Compensation), other than the pay associated with Annual Training. No restrictions apply to accepting pay or other remuneration from private or state sources, if doing so does not interfere with the participant’s HPSP status, requirements for graduation, Annual Training assignments or active duty service obligation.
VI. Direct Deposit Form (SF1199A) Direct Deposit.pdf: Use this form to change bank account information for direct deposit. When filling out this form, Section I, Item C should be your Social Security Number, and Section 2 should list Navy Bureau Of Medicine And Surgery, NM Accessions Department.” The address is 8955 Wood Road Suite 13132, Bethesda, MD 20889-5628.” When submitting new bank information, please allow payment to post to the new account BEFORE you close your old bank account in order to avoid delay in payment.
VII. myPay, Web Access to your Military Leave and Earnings Statement (LES) and your W2: myPay is a password protected website that displays your current pay account information and allows selected pay changes directly to your DFAS pay record. Except for short periods of system maintenance, myPay is available to you seven days a week, 24 hours a day. You should get your temporary password in the mail about 30 days after your DFAS account is set up. It will stay active for only 7 days, so please initiate your account immediately upon receipt. After you access myPay, menus will guide you through the applications available. The myPay home page is located at: https://mypay.dfas.mil/mypay.aspx . When accessing myPay for the first time using the temporary password, it will be necessary for you to customize your password. If you have any problems accessing myPay or need further password assistance, call toll free 1-888-DFAS411 or 1-888-332-7411, commercial (216) 522-5096, or DSN 580-5096 from 7:00 a.m. to 6:30 p.m. EST. Please note that access to your W2 form for completion of your income tax will soon be available ONLY via myPay.
VIII. FAP Annual Training Active Duty Pay: Members of the FAP are eligible for 12 months of financial assistance each year: 11 1/2 months of stipend and 14 days of full pay and allowances while on Annual Training (AT). FAP participants also receive a 14 day prorated Medical Officer Pay while on active duty. Stipend payments are suspended while participants are on AT.
IX. FAP Grant : FAP participants receive an annual grant of $45,000. The initial FAP grant is received upon entry into FAP. Subsequent grant payments are paid after the entry anniversary date, until the participant graduates. The last grant payment is prorated from the anniversary date to the graduation date. An example of a FAP Grant payment schedule for a participant starting in January 2012 and graduating in July 2014:
· First grant payment (full) is in January 2012
· Second payment (full) is in January 2013
· Third payment (half) is in January 2014
X. Annual Training Pay:
1. Members with Prior Military Service: During Annual Training, prior service members will be paid based on their prior PEBD years of pay longevity. Members with at least four years and one day of prior active enlisted service are entitled to "O-1 E" pay. If you have prior service, please send a copy of your DD 214, (Report of Separation from Active Duty), and any documentation of Reserve drill time and/or National Guard duty to the Personnel Section of the Accessions Department. These documents will be forwarded to the Bureau of Naval Personnel for computation of creditable prior service for pay purposes.
2. Save Pay: The National Defense Authorization Act of 2008 (NDAA 08) authorized HPSP medical students who fall within the provisions of sections 2004a, 2114, or 2121, to receive an increased rate of basic pay if they have prior active service in the military and the basic pay for their former grade would exceed the basic pay for an O-1 (the pay grade at which they serve on active duty while attending professional school). The higher rate does not apply to Basic Allowance for Housing (BAH) or Basic Allowance for Subsistence (BAS). HPSP students with prior service will receive the established stipend when not on annual training (AT). When on their 45 days of annual training, Defense Finance and Accounting Service (DFAS) will automatically pay them the higher of base pays – from their prior service or the 0-1E or 0-1 with years of service. They will receive that base pay in addition to BAH and BAS at the 0-1 rate and any per diem if on travel. When the annual training is completed, these students revert to their stipend.
XI. GI Bill: The Department of Veterans’ Affairs considers the HPSP/FAP/NCP stipend a scholarship. This enables participants with GI bill benefits to collect the stipend plus the GI Bill education benefits earned while on active duty. To qualify, you must have served on continuous active duty for more than 180 days, attend an approved institution, and pursue an approved program of education. For more information, application forms, etc. see the VA officer at your school or contact the local Veteran's Affairs office in your area. As with the stipend, you are not entitled to receive GI Bill benefits while you are on Annual Training.
XII. Thrift Savings Program (TSP): The TSP is a retirement savings plan for civilians employed by the United States Government and members of the uniformed services. Only active duty pay and bonuses are eligible for the TSP. HPSP/FAP stipend is not eligible for deposit into a TSP account. The Federal Retirement Thrift Investment Board administers the Thrift Savings Plan (TSP). The Web site http://www.tsp.gov has extensive information about this program. All military active duty are eligible to participate in the TSP, which allows active duty members to contribute up to a yearly specific limit of "pre-tax" dollars into the managed funds. HPSP and FAP participants can only open a TSP account when on Active Duty for Training (ADT) orders. To establish an account, during an ADT period email the signed TSP-U-1 form to
DFAS.CLEVELAND-OH.JFL.MBX.NVRES-TSP-CLE@MAIL.MIL. Include a cover sheet with a short explanation. DFAS will enter the data.