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Here we go again. It now looks like military members are going to have to wait until the very last minute before they know for sure whether or not they will receive a pay raise on time, and what that raise will be.

In fact, the targeted pay raise that everyone has taken for granted for FY 2003 ultimately may not be approved at all, or may be approved months late. In the latter case, whether or not "back pay" would be included is anyone's guess.

There are two separate laws that need to be passed each year in order for military pay raises to take effect. The first is the Defense Appropriations Act. This is the yearly law that actually allocates the funds for the military to operate. The good news is that the FY 2003 Defense Appropriations Act is already law. It was passed by Congress on October 15th, and signed into law by President Bush on October 23.

The bad news is that the Defense Appropriations Act is only one-half of the battle. While the money is allocated, separate legislation is required to actually change the military pay tables, which allows the Department of Defense to pay the new amounts. This legislation is known as the Defense Authorization Act, and it is currently stalled -- dead in the water.

Why is it stalled? At issue is the elimination or reduction of "concurrent receipt." Under current law, military members who receive VA disability pay must give up an equal amount of their military retired pay. In other words, a military retiree who receives $200 per month in VA disability compensation must relinquish $200 per month in military retired pay (Note: VA Disability Compensation is not taxable, while military retired pay is).

Congress wants to change that, and (both the House and the Senate) have included provisions to eliminate or significantly reduce the concurrent receipt penalty. In a nutshell, a majority of the members of Congress feel that a member's retirement pay should not be penalized if they receive VA Disability Compensation.

So, what's the problem? Eliminating and/or reducing concurrent receipt will be very expensive, and the Bush Administration has threatened to veto the entire FY 2003 Defense Authorization Act if it contains provisions to eliminate or significantly reduce the current concurrent receipt requirements.

Update: November 11, 2002: Congress is now back in session, following the November elections, but there doesn't seem to be any urgency in passing the Defense Authorization Act. There's a lot of work to do before the House and the Senate can come up with a compromise about concurrent receipt that they feel won't be vetoed by the President.

So, what can happen? Well, a 1999 law guarantees a minimum of a 4.1 percent across-the-board pay raise, effective 1 January, even if the Defense Authorization Act isn't passed. The Defense Appropriations Act (already passed) authorizes the money, and the 1999 law authorizes the 4.1 percent raise. However, this would not include the proposed target pay raise which would give some service members a raise of up to 6.5 percent. The targeted pay raise provision is contained in the Defense Appropriations Act, and can't take effect until that act is passed by Congress and signed into law by the President.

Because the yearly pay raise isn't seen in military paychecks until the 15th of the month, and because of automation of the DOD finance pay system, however, even if Congress passes the Defense Authorization Act as late as the 10th of January, the targeted raises could be seen in the mid-month pay check. If passed later than that, back-pay to the 1st of January is almost a sure thing, once the act is finally passed.

Of more important concern are enlistment and reenlistment bonuses. Under current law, the authority to pay enlistment and reenlistment bonuses expires on December 31st. The un-passed Defense Authorization Act contains authority for the services to pay bonuses for another year. The military does have the authority to pay bonuses for those who already signed an enlistment (including DEP) or reenlistment contract with bonuses guaranteed, but unless the Defense Appropriations Act (or a separate bill entirely) is enacted by 31 December, the services will be unable to enter into any further bonus guarantees until legislation is passed.

Update: November 22, 2002: Good news and bad news. The good news is that Congress got busy immediately upon return from break. The House passed its version of the Defense Authorization Act on the 12th of November, and the Senate passed its version on the 13th. There are only minor differences between the two versions, which should be quickly worked out by the conference committee. Once a final compromised is reached, the President is expected to sign the bill.

Now the bad news: Most disabled veterans who are also retirement eligible got the shaft. Congress began the year promising veterans that this would be the year to overturn "concurrent receipt." Under the current concurrent receipt laws, a veteran must give up one dollar in military retirement pay for each dollar received in VA disability compensation.

Concurrent receipt provisions stay, but Congress is going to give an extra payment (equal to the concurrent receipt forfeitures) to *SOME* disabled veterans. These few veterans will receive an extra payment that is equal to what they now must give up in retirement pay (which, for all practical purposes, eliminates "concurrent receipt" penalties).

To be eligible, a Veteran must fall into one of two categories:

• Must be disabled due to a combat wound for which they received the Purple Heart, or
• Must be rated at least 60 percent disabled, and the disability must be directly attributed to combat or combat-type training

This will affect only 1.5 to 5 percent of disabled veterans who are currently forfeiting retirement pay.

While veterans in this category are certainly deserving, this is a far cry from what Congress promised. It's also significant that negotiations were stalled for several months before the elections, with Congress informing veteran groups that they would hold firm, and the compromise was announced IMMEDIATELY after Congress reconvened following the elections. Kind of makes you think that this compromise was actually reached months ago, but not announced, in order to garnish the veteran vote.

Update: December 1, 2002: The House and the Senate have both passed the FY 2003 Defense Authorization Act, and presented it to the President for signature on November 26, 2002. The President is expected to sign the act into law in early December, in plenty of time for members to see the increases in their January 15th paycheck. For details, see Your 2003 Military Pay and Benefits.

Update: December 3, 2002: The President signed the FY 2003 Defense Authorization Act into law on December 2, 2002.

Fiscal Year 2003 Proposed Base Pay Charts.