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2006 Defense Budget Increases Military Pay, Benefits

By Donna Miles
American Forces Press Service

WASHINGTON, Jan. 9, 2006 – President Bush ushered in an across-the-board 3.1 percent military pay raise, effective Jan. 1, and a variety of other new or enhanced benefits for servicemembers and their families when he signed the 2006 National Defense Authorization Bill into law Jan. 6.

In addition to a pay raise that's a half percent higher than the average private-sector increase, the new budget provides about 20 new or increased bonuses or special pays or benefits, reflecting a trend DoD officials emphasize is becoming increasingly rare in the private sector.

The new law provides a variety of benefits designed to better compensate servicemembers, improve their quality of life, bring reserve-component benefits more on par with those for the active force and promote recruiting and retention, Chuck Witschonke, DoD's deputy director for compensation, told the American Forces Press Service and the Pentagon Channel.

"Not only does it contain the routine annual pay raise, which is one-half percent higher than the raise measured in the private sector, but it also includes a number of increases in ceilings on some very important pays," he said.

Among the law's most significant features are:

  • An increase in the maximum reenlistment bonus offered, from $60,000 to 90,000;
  • A higher maximum enlistment bonus, up from $20,000 to $40,000;
  • A new ceiling on hardship-duty pay, from $300 to $750 a month;
  • A doubling of the maximum assignment incentive pay for hard-to-fill billets or assignments, from $1,500 to $3,000 a month, now payable either in a lump sum or installments;
  • A new allowance to cover the first $150,000 in Servicemembers' Group Life Insurance premiums for troops serving in Operations Iraqi and Enduring Freedom;
  • A new bonus of up to $2,500 for servicemembers who agree to transfer from one service to another and serve for at least three years;
  • An incentive pay of up to $1,000 for servicemembers who refer someone who enlists in the Army and successfully completes basic training;
  • An average 5.9 percent increase in housing allowances, with authority to increase set levels temporarily by as much as 20 percent in areas affected by natural disasters or troop surges resulting from force realignments;
  • An increase of 500 to 1,000 pounds in the household goods weight allowance for senior noncommissioned officers E-7 and above, depending on rank and whether with or without dependents;
  • Enhanced death benefits, resulting in a total of $238,000.00 for all deaths not previously qualified for enhanced benefits, and the permanent institution of a policy that continues the basic allowance for housing or government quarters for one year for families of deceased servicemembers;
  • Authority to pay the applicable overseas cost-of-living allowance to dependents who remain at their location outside the continental United States when a servicemember deploys from that location;
  • Expanded eligibility or increased ceilings for special pays for designated medical and dental officers, and officers with nuclear qualifications;
  • A bonus of up to $12,000 per year for both active and reserve members with certified language proficiency;
  • Payment of travel and lodging for families of hospitalized servicemembers wounded in combat zones or other designated areas.
The law also provides a variety of benefits specifically targeting members of the reserve components. These include:

  • Full housing allowance payments for reserve members called to active duty for more than 30 days, vs. the previous 140-day requirement;
  • Income replacement benefits to help offset the pay loss some reservists and guardsmen experience when called to active duty, based on specific guidelines provided in the law;
  • Increases in the maximum payment for accession and affiliation bonuses, from $10,000 and $15,000, respectively, to a consolidated $20,000 for enlistment in the Selected Reserve;
  • Boosts in the maximum affiliation bonus for officers in the Selected Reserve, from $6,000 to $10,000;
  • A bonus that could total up to $100,000 over a career for members with a designated critical skill or who volunteer to serve in a designated high-priority unit; and
  • Extension of eligibility for a prior-service enlistment bonus to include Selected Reserve members who previously received one.

Witschonke emphasized that the new law does not guarantee that all servicemembers will qualify for these pays and benefits, or that those who do will receive the highest amounts authorized. Rather, he said, the law gives defense and service leaders the flexibility they need to tailor the force to meet operational, recruiting and retention goals.

The 2006 authorization act, like those in recent years, reflects steady progress in compensating servicemembers and their families with increased benefits and opportunities, he said.

"Every year for the past several years, our servicemembers have gotten larger pay, increased benefits and increased special incentive pays. This is a clear reflection of our Congress, our administration and our country wanting to take care of our servicemembers and their families," he said.

"The members of our uniformed services should feel very good about this year's defense bill as a follow-on to those from past few years," he added.

More information about pay and benefits is posted on DoD's military compensation Web site.

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