Panel urges reworking of housing allowance system
June 10, 2006
WASHINGTON — Single and married servicemembers should receive an equal housing allowance, and troops living on base should pay rent to the Defense Department, according to recommendations made by a panel formed to review military compensation.
The recommendations, released Thursday, are part of a yearlong review by the Defense Advisory Committee on Military Compensation, and will help shape the debate within the military on potential changes to the services’ pay and benefits.
Defense officials called for the study to anticipate future recruiting and retention challenges, calling the compensation structure “arguably the single most important factor affecting our ability to staff the forces with qualified people.”
Housing changesThe committee has proposed big changes in housing allowances. Members argue that the current system is unfair to single servicemembers and could hurt their morale.
“There is no evidence that the differential in allowances is related to differences in productivity or the value of an individual to the service,” the report says. “Members without dependents undertake the same risks and endure the same hardships as those experienced by members with spouses and other dependents.”
Currently troops with dependents receive about 30 percent more in their housing allowances than those without dependents.
The committee recommends paying all troops the current “with dependents” rate, including those living on a military installation.
Those servicemembers currently receive no BAH or OHA payments. The report outlines plans to charge them “fair market rates” for living in government quarters, which would be less than their housing payouts.
Doing so would take away some of the financial incentive “for junior members to marry and acquire dependents,” the report said.
Troops with dependents could still receive extra money through such pays as the family separation allowance, the report said, but that would depend on individual assignments, and not be given to all military families automatically.
Retirement planningThe report recommends a dramatic overhaul of the current 20-year retirement system, calling it an archaic management plan “structured for another era, when military skills were less transferable to the civilian sector and life expectancies were shorter.”
The committee prefers a tiered retirement system, offering various incentives for those who leave after as early as 10 years, stay as long as 40 years, or retire at various points in between.
For those who stay longer, the pay table would be extended to offer a higher salary and more generous retirement package. On the other end, the committee recommended voluntary buyouts after 10 years for force shaping purposes, to eliminate unneeded specialties or excess troop numbers.
But the members stressed the buyouts should be the troops’ decision, not compulsory.
They also prefer pay-for-performance initiatives that would reward troops promoted ahead of schedule, keeping their salaries ahead of peers, instead of the current tenure-based pay system.
That time-in-grade approach, rather than time-in-service, will “will reward superior performance and provide a strong financial incentive that will retain superior performers,” according to the report.
Plans also call for the simplification of all military bonuses, consolidating them into fewer categories applicable to various specialties and recruitment programs.
Reserve equalityMobilized Reserve members would receive the same pay and benefits as their active-duty counterparts under the recommendations.
Committee members wrote that the arrangement would recognize the increased demand on the Reserves since the Sept. 11, 2001, attacks and help with force recruiting.
They also proposed paying a health care stipend to Reserve members who are called to active duty but choose not to participate in Tricare offerings, or help pay for their health-care costs.
Committee members held several public meetings with servicemembers and private business experts to draft the ideas. Any changes must be approved by Congress.