WASHINGTON — Even as the Pentagon anticipates furloughing nearly all of its civilian employees to save money in the wake of automatic budget cuts, the Defense Department will likely pay more than $900 million in unemployment compensation this year for servicemembers who left military service voluntarily.
Unemployment compensation is administered through the states, and is generally paid to workers who are unemployed “through no fault of their own,” as determined by the individual states, according to the Department of Labor. But because of a 1958 law, many servicemembers who leave the military are eligible for unemployment compensation — and the service branches must reimburse the Department of Labor in full for those payments.
In fiscal 2003, the DOD’s bill was about $295 million [see chart]. But the costs have shot up in the past decade, peaking at $937 million in fiscal 2011. Last year, the Pentagon paid $928 million in unemployment compensation, DOD spokesman Lt. Cmdr. Nate Christensen said.
Members of the National Guard or reserve who have served at least 90 continuous days of active duty and active-duty troops who have completed their first term of active service are eligible, if they did not retire and separated from active duty under honorable conditions, Christensen said.
The Pentagon isn’t sure why the costs have increased so much, but Christensen said they believe increased use of National Guard and Reserve units in Iraq and Afghanistan, with their extended time on active duty, has increased the number of servicemembers eligible for the program. Those numbers, as well as high unemployment and extensions on the length of time the unemployed can receive benefits, are likely to have had an impact on the DOD’s bill.
Veterans unemployment reached 12.1 percent in 2011, falling to 9.9 percent in 2012, but is still well above the national unemployment rate.