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What Congress Has in Store For You

The FY 2005 Military Authorization Act

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Updated January 21, 2005
Military pay and benefits are primarily based upon two yearly acts of legislation. The first is the Defense Appropriations Act, which allocates funds to the military. The second is the Defense Authorization Act, which basically tells the military how to spend the money granted by the other act.

Both bills for Fiscal Year 2005 are now law. The President signed the final bill, HR 4200, the FY 2005 Military Authorization Act, into law on October 28th.

The bills make up 19.9 percent of the total fiscal 2005 federal budget and 3.6 percent of the gross domestic product. Last year, the percentages were 20.2 percent and 3.8 percent, respectively.

So, what are the major provisions that Congress has in store for military members?

Basic Pay. This year, Congress authorized an across the board 3.5 percent basic pay raise (see FY 05 Basic Pay Charts). Unlike the past several years, this year Congress elected not to target higher percentages to certain ranks/pay groups. This across-the-board raise will lower the "average pay gap" between military pay and civilian pay to 5.1 percent. As with other years, the raise becomes effective on January 1, which means service members will see the increase in their January 15th paychecks.

Housing Allowance. (See BAH Rate Charts). Five years ago, the Department of Defense began pushing a plan to reduce average out-of-pocket expenses when a member lives off base to zero by the year 2005. The FY 2005 Military Authorization Act continues to support this plan, authorizing an average raise of 3.5 percent more than the increase in housing/rental prices. This means that most military members will see an average BAH raise of around 6.2 percent over their 2004 Basic Allowance for Housing (BAH) rates.

DOD is currently in the process of gathering housing price data to compute the new rates for 2005. Historically, they release the new rates around the middle of December. When the rates are released we'll have them here on the About.com U.S. Military site. As with previous years, the new rates will take effect on the 1st of January, so service members will see the increase in their January 15th paycheck.

Under current BAH rules, if a service member moves to a state-side location for an assignment where dependents are authorized to travel at government expense, the military member recieves the BAH rate for the location of his/her assignment, even if they elect not to move their dependents. The new law allows military members serving at an assignment for training or school that is less than 12 months in duration, to elect the BAH rate of their previous assignment, if they choose not to relocate their dependents.

Combat Pay. In 2002, Congress temporarily increased Hostile Fire Pay, also known as "Combat Pay," or "Imminent Danger Pay," from $150 per month to $225 per month. This temporary increase was scheduled to run out on January 1. The new law makes the increase permanent.

Family Separation Allowance. As with Combat Pay, in 2002 Congress passed legislation to temporarily increase Family Separation Allowance from $100 per month to $250 per month. This provision would normally expire on January 1, but the new act makes the increase permanent.

Concurrent Receipt. The bill also speeds up concurrent-receipt payments for retirees rated 100 percent disabled. In the past, retirees had their pay docked dollar for dollar by the amount of disability payments the Department of Veterans Affairs paid them. Last year, Congress authorized a phase-in process that would eliminate the concurrent-receipt prohibition over a decade.Veterans who are 100 percent disabled will now receive their entire retirement pay, effective on January 1st.

Foreign Language Bonus. Under the old law, the services could pay up to $100 per month for service members who maintain a proficiency in a foreign language that the service deems "critical." The law increases the maximum bonus amount to $1,000 per month for enlisted members, and up to $6,000 per year for Reservists. However, Congress left it entirely up to the military services to decide what criteria they would use to award the bonus, and the services do not have to award the maximum amount. We'll have to wait and see what implementing regulations DOD and the individual services devise to find out what amounts will be paid, and what the eligibility criteria will be. This is likely to take several months.

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