MILITARY PAY RAISE 2023 IS HUGE, GET PREPARED FOR A BIGGER PAYCHECK

Pay raises are coming to troops in 2023, the biggest raise offered in 20 years. The military pay raise 2023 stipulations are important for those serving and their families as everyone continues to work to fend off inflation and make sure their financial health is where it needs to be. Learn more about the increases coming to service members and how they can impact your household.

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What To Know About the Military Pay Raise 2023

Will military get a pay raise in 2023? Yes, service members are going to get a lot more money on their paychecks, as the military pay raise 2023 is the largest in 20 years. A welcomed sight as purchasing power continues to shrink due to nationwide inflation that Americans continue to battle. Thanks to the yearly defense authorization bill, active-duty troops, drilling Guards, and those in the Reserves will enjoy a 4.6% pay raise. Not only is that much more than the previous increase of 2.7% in 2022, but it’s also the largest in two decades. While the 2023 National Defense Authorization Act (NDAA) still has to pass Congress, all indications point to it doing so. This will mean junior troops will see their yearly income increase by $1,300, with a $2,500 increase for senior officers.

The Largest Increase in 20 Years, But Don’t Get Too Excited

As of this writing, the 2023 NDAA has passed the house and is headed to the Senate, where it’s expected to pass. The military pay raise 2023 is necessary to help troops not so much keep up with the Joneses but rather keep up with inflation. Even though service members will welcome more cash in their pockets and this increase is larger than any for quite some time, pesky inflation is sure to make sure it doesn’t feel as good as it might seem. This isn’t the most positive point to be made about the 2023 military pay increase, but it’s still a very important one. Understanding how your finances are affected by inflation is an imperative part of keeping your household’s finances in check and avoiding unnecessary risks. It’s an unfortunate reality for service members and households in civilian life, alike. Dollars don’t go as far as they used to, and an increase in pay may help, but it doesn’t fix everything. Fortunately, paychecks aren’t the only thing increasing for the upcoming year. If you spend enough time in the military, you’ll learn soon enough that other forms of compensation aren’t just a great perk but can often be necessary for overcoming the costs associated with serving in the American Armed Forces.

The 2023 Military Pay Raise Isn’t the Only Increase

Originally, bonuses were proposed to be a part of the 2023 NDAA, as it was previously reported that the sweeping defense bill would include a 2.4% inflation bonus for troops, but sadly this is no longer the case. However, there are other forms of compensation already in play for some. An 11% increase in Basic Allowance for Subsistence (BAS) rates is coming to help active-duty troops who live outside their base’s barracks. BAS payments will increase from $280.29 to $311.68 for officers in 2023 and from $406.98 to $452.56 for enlisted members. Additionally, the Basic Needs Allowance (BNA) qualification has been extended to troops with household incomes at 150% of the poverty line, up from 130%. Along with the 2023 military raise, both measures aim to help amid the difficult inflation troops are facing, but only time will tell. The military pay raise 2023 has a tough task ahead of it in that it must be able to support troops hit hard by inflation as well as increase the perception of a volunteer force struggling to find volunteers. Overall, there are plenty of factors to consider, but troops can use any bit of help they can get.

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Military Pay Raise FY 2024

Following a historic military pay raise for the 2023 fiscal year, it looks like the 2024 budget is looking to continue the trend. President Joe Biden's budget proposal would give military members the largest pay raise in decades. As part of the Biden administration's request for $842 billion in Pentagon funding for the fiscal year 2024, the proposal includes a 5.2% increase in basic military pay. If approved, this would result in the largest budget for the DoD ever, with a $26 billion increase over what Congress approved for the Defense Department in 2023. The annual military pay raise is tied by law to what is known as the Employment Cost Index and is set to take effect at the rate specified in the index on January 1, regardless of the action taken by any President or Congress. However, raises brought forth by the President have historically received Congressional approval. Setting a 5.2% raise is even higher than the raise set for the fiscal year 2023 which was already the largest one in a decade at 4.6%. As a benchmark, in 2022, a 6.9% increase was put into place. The United States continues to work to overcome the effects of elevated inflation Americans have faced in recent years. But critics point out that using the Employment Cost Index, which lags behind inflation, may not be the best method of providing relief for military families. A big topic of benefits within the military community has also been Basic Allowance for Housing, which has also come under scrutiny due to the calculations used to determine how much is granted to service members. This increase comes amid recruiting woes across the board, in addition to bipartisan concern about whether or not compensation in the military is not only enough to keep up with inflation but also to simply compete as a stable option for employment. It remains to be seen how the 2024 Defense budget will help in such capacities, but the idea of budget cuts has been floating around the House of Representatives, despite the Biden administration looking for increased housing compensation. Overall, the entirety of the military budget will be a hotly contested topic, especially as tensions rise with Russia and China. Many proponents believe at least 3%-5% increases are necessary each year and that these increases must be in addition to any measures that account for inflation. By doing so, the U.S. will be able to not only keep up with but remain ahead of both rival nations. Additional details will be provided throughout the year. For now, the military community awaits as the hope for further relief comes from a 2024 military pay raise.