FAQ’s About Military Basic Pay

| Jun 12, 2020 | Military Divorce |

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Massachusetts military service members and veterans have seen major changes to their pay and benefits over the past year. Basic pay is once again rising at the same rate as private-sector wages after several years of tight Pentagon budgets resulted in service members losing some ground compared to their civilian counterparts

What is basic pay?

Basic pay is determined by rank and length of service, with automatic raises when troops meet certain time and promotion markers. In addition, each year Congress determines how much of a pay raise all troops should get.

The figure is tied by law to the anticipated increase in private sector pay, but lawmakers in the past have approved bigger raises to help with recruitment and retention or smaller raises to save money for other military priorities.

Annual pay increases

The annual military pay increase takes effect in January of each year. The White House issues its target for the hike each August, either going along with the projected rise in private sector wages, known as the Employment Cost Index, or offering justification for proposing a different rate.

Congress has the final say, however. In the past, lawmakers have overridden attempts by the White House to submit lower pay raises in an effort to save money for other priorities. The raise is usually applied across the board, although lawmakers made an exception at the height of the wars in Iraq and Afghanistan to provide more money for some mid-career service members to help with retention.

The most junior enlisted service members make around $20,000 a year in basic pay (not including allowances, special pays and other benefits), while enlisted troops nearing retirement typically earn about $70,000 annually. Officer pay is significantly higher: The most junior officers clear close to $38,000 a year while senior officers nearing 20 years of service can make in excess of $170,000. That means that even a small change in the anticipated pay raise calculations can make a big difference for military families.

For example, in recent years (but not for 2021) the Pentagon has backed plans for a pay raise 0.5 percent below the federal formula for the annual increases.

If that reduction were to be put in place for 2021, an E-4 with three years of service would see a difference of about $150 in take-home pay over the course of a year compared to the expected level of pay boost. For a senior enlisted or junior officer, the difference is closer to $300 over 12 months.

Outside advocates have said even though those gaps won’t cover a mortgage payment, they are the difference between being able to afford a monthly co-pay for prescriptions or having to go without. That makes even small increases or trims a major issue in the military community.

Since the start of the all-volunteer military force in 1973, Congress has authorized a pay raise of at least 1 percent for troops every year, even during budget cycles where other civilian wages held steady. For the last four years, those increases have matched the rate of expected growth in civilian wages.

This year’s pay raise

The 3.1 percent pay raise troops received in January 2020 was the largest they had seen since 2010. That increase matched the federal formula based on the annual Employment Cost Index calculation, but lawmakers and the president claimed credit for the boost as proof they are taking care of military members and families.

In February, White House officials released their fiscal 2021 budget proposal which included a 3.0 percent pay raise for next January. It too matches the ECI formula under federal law, and if it becomes law, it would mark the first time in a decade that troops receive pay raises of 3 percent or more in consecutive years.

Lawmakers have already voiced support for that level. If it holds, that means a monthly boost of around $70 for junior enlisted troops, $125 for senior enlisted and junior officers, and nearly $240 for senior officers.

Congress is expected to debate the pay raise level along with the rest of the defense budget over the next few months. Typically, the full budget plan is not approved until winter, even though the next fiscal year begins Oct. 1. With the November election compressing the legislative schedule this year, final approval of the pay raise could again stretch well into the fall and early December.

Should you be in the midst of a Massachusetts military divorce or contemplating divorce, contact the Law Offices of Renee Lazar at 978-844-4095 to schedule a FREE one hour no obligation consultation

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