It’s the new year and along with resolutions, new tax regulations and the Winter Olympics, we also have the annual military pay increase.
In years past the raise has been a little lackluster, but this year most folks are pretty happy with the pay increase. How much are we going to see? For active duty, the 2.4% pay increase will be the largest pay raise since 2010. For my spouse, that means a monthly increase of just under $100 a month. Not too shabby, maybe we can finally institute a monthly date night.
For retirees, the annual cost of living adjustment (COLA) pay increase will be 2%, a definite increase over years past.
To see how much the pay increase for active duty personnel will benefit your household, check out the 2018 Military Pay Rates chart here. Retirees and disabled veterans can find more information about the new COLA rate by clicking here.
In addition to all the stir about the pay increase, you might also have heard that BAH rates are ticking up slightly. And by slightly, I mean just barely at 0.7% on average, but an increase is an increase, I suppose.
The average service member will see less than a $20 increase in their BAH rates, but over the course of the year, an extra $240 can come in handy. If you’re like me, that’s my budget to replant my vegetable garden and buy a new watering can.
Keep in mind that the uptick in BAH is not a blanket increase. Some places will see as much as 10% to 15% (Beale AFB, Mountain Home AFB and Fort Wayne), while other places like Fort Riley, Camp Lejeune and Pensacola will see BAH drop as much as 5% or more.
Don’t worry if you already live in one of the areas that will see a decrease. Current regulations prevent BAH dropping for personnel already stationed at a particular location. Only incoming personnel will be affected by the drop.
That being said, make sure you do your research if a PCS is in your future.
One thing many folks may not be aware of, however, is the current BAH dampening plan to push 5% of housing cost responsibilities back to service members by 2019.
Even with the increases offered to many this year, service members will see the increase in their BAH not stretching as far as it did in years past. The published 2018 BAH rates will only cover 96% of the average housing costs, with an additional 1% reduction expected next year. The thought is that this plan will free up some much-needed funds in the defense budget.
I’m not sure how I feel about this idea. In part this feels like another inch in the steady erosion of military pay and benefits. In many specialty job positions, services are struggling to retain qualified military personnel who reap the benefits of training while in service only to be romanced away by the large salary and benefit offers coming from civilian employers.
I understand the money has to come from somewhere, but in my experience, BAH has frequently not kept up with growing housing costs and given that service members have no say in the duty stations they are assigned to, reduction in the BAH benefits will make PCSing to some duty stations that much harder.
In places like Virginia Beach, San Diego and Washington, D.C., where the cost of living is already 15% to 40% higher than the national average, even a 5% reduction in benefits will hit service members’ wallets hard.
And it doesn’t exactly scream “stay in” when it comes time to consider re-enlistment.
When you consider this pay increase – that’s not really an increase – along with some of the jumps in medical costs put out by Tricare for 2018, the benefits so many service members expected as part of their pay is slowly but surely being whittled away.
Don’t get me wrong, I’m certainly not going to turn down a pay increase, but it’s important that we remain aware of what those increases actually mean. And when you consider that the call to serve is answered by so few, I have a hard time understanding why pay and benefits seem to be on the steady decline.