Explaining Your Tax-Free Stipend
This is a confusing topic for many in the travel world, period. Not just social work, but travel nursing, PT, OT, SLP, Rad Techs, anyone, really. The confusion, I've noticed starts when people hear about GSA rates... and then they look them up.
The GSA is the US General Services Administration. They're responsible for setting the daily maximum reimbursement rate for lodging and meals & incidentals for the Continental United States (CONUS), whereas the Department of Defense sets the maximum reimbursement rate for Hawai'i and Alaska. The key here is that they're setting the MAXIMUM allowable reimbursement rate, not the minimum and not the required. They're saying that for this area of the US, at this time of year (they break down the daily rate and adjust monthly), that you can receive UP to this amount per day.
The tricky part is that unfortunately, not every contract is going to even get near these rates in what they offer you in tax-free money. Why?
Your agency did one of two things to land a contract with that hospital, home health agency, or school where they're going to place you. Either they negotiated the exclusive contract themselves, or they went through a clearinghouse where the reimbursement rate was pre-determined by the facility themselves.
So, what does this mean? Let's say that your agency did the negotiating. The contract manager likely did their research before even starting dialogue with the facility about cost of living, average wages, and they're going in knowing what the agency's operating overhead is - that is to say, what is the agency's cost to employ, benefit, onboard you, and how they bonus their recruiters (the things that are not billable to the facility/hospital). When they're negotiating the billable rate, this will include your taxable hourly wage, your tax-free monies, and their overhead. GSA is the point where most agencies are going to start, but it's not going to be where most facilities are willing to settle or pay you.
Your taxable wage and tax-free monies are really determined by the final billable rate the facility agrees to - and much of the time, that means a lower housing and meals/incidentals stipend than what the GSA determined to be the maximum allowable.
I know this is a point of frustration for some people. As of this post, the maximum per diem rate for lodging plus meals and incidentals for the Island of Kauai, according to the DoD site, is $460. But if the local hospital in Lihue were required to pay that to every traveler they brought in, they'd go out of business. The facility that hires you is likely already paying more for you than they are their permanent employees, but they aren't going to agree to a rate that would cause permanent employees to leave and all join the travel field - and the hospital administrators aren't going to agree to a rate that is going to lose them money.
The GSA and DoD rates are starting points for your agency to negotiate direct billing rates for the hospitals. Unfortunately, they aren't guaranteed rates and the final negotiated contract may not always line up with covering the cost of living alone in any given city.
How can this be managed so you don't miss out on opportunities? My go-to site right now is FurnishedFinder - it's a site for travel nurse housing specifically. It needs a little work on its search feature (I travel with a pet, and the pet search 99% of the time brings up housing that is not pet-friendly), but it usually has good options for most places I've searched.
If you travel alone - consider renting a room. I know people love AirBnB (it's not my personal fave), but it's a great way to search for just a room in a house. Renting a room alone is going to allow you to maximize your tax-free money. VRBO is another option for short-term rentals. And sometimes, it's worth it to call your favorite hotel chain at it's local site and ask to speak with its corporate account person to see if you can negotiate a monthly deal better than what they're charging. One thing to keep in mind with all of these options is that many states have short-term rental taxes or vacation rental taxes that you might be responsible for, so it's best to ask about this ahead of time.
If possible, don't let a lower tax-free stipend deter you from an assignment. I now just keep a spreadsheet of my weekly budget open on my computer and every new opportunity, I plug in to see if I walk away a winner, break even, or if I need to find something else. Let me know if you've found out any other information about this topic that could be helpful!