This is a benefit we provide service members for their service and sacrifice. Those who receive this money need it dearly (many just to eat), holding this against them (which that effectively does) is unthinkable. This is something earned in a manner that those who haven't cannot begin to comprehend no matter how many times they watch Apocalypse Now or Full Metal Jacket and does not provide enough "income" to legitimately be considered a part of their living income useable to determine housing eligibility (if it was, we wouldn't have sooooo many homeless vets in this country). It should be tax free and non countable for any reason whatsoever. For that matter, why are we taxing military members on their paychecks? They don't make very much to begin with, let alone pay taxes on, certainly nothing commensurate with what they do compared to either a civilian sector equivalent by itself, let alone the hazard factors involved. If we cut the pay of our employees (also known as Senators and Representatives) by even a small amount we would save far more than we get from taxes brought in on military pay.