Major pay raises will be coming into effect in 2023 for both active-duty military members and Veterans.
The largest military pay raise in decades is on the way as part of the annual defense authorization bill which was approved by Congress this month.
Under the plan, active-duty troops and drilling Guard and reserve members will receive a 4.6% pay raise, which is the largest bump in the last 20 years.
For reference, the 2022 military pay raise sat at 2.7% — this being almost a full 2.0% higher.
This expected pay raise, which would represent $1,300 more over the course of the year for many junior troops and $2,500 for senior enlisted and junior officers will begin in January and was included as part of the 2023 National Defense Authorization Act which was signed into law by President Biden last week.
The 2023 raise is accompanied by a more than 11% bump to Basic Allowance for Subsistence rates, an allotment received by active-duty troops who live outside the barracks.
In 2023, the monthly BAS payment will be $311.68 for officers, which will be a step up from the $280.29 they received previously, while enlisted members will see their BAS increase from $406.98 to $452.56.
Unfortunately, while this news does sound great, the pay raises are not keeping up with the growing pace of inflation, which sat at almost 8.0% in October.
The NDAA does not include any additional inflation-specific bonus, however, a measure that extends the qualification for the Pentagon’s new Basic Needs Allowance (BNA) to troops with a household income at 150% of the poverty line was included.
This 4.6% active-duty, Guard, and reserve pay raise joins an 8.7% cost of living adjustment (COLA) given to military retirees and Veterans who receive disability checks from the Department of Veterans Affairs.
That boost is the highest since 1981 – retirees and Veterans alike saw a 5.9% increase in 2022 which was up from the 1.3% increase they saw the previous year.
The annual adjustment has averaged out to roughly 1.9% over the last decade.
This increase means that in 2023, military retirees and Veterans who received disability payments will be seeing an extra $87 for each $1,000 of military retirement pension they receive on a monthly basis.
Moreover, Survivor Benefit Plan payments will increase by the same amount.
Military retirees who entered military service on or after August 1st, 1986, and opted for the Career Status Bonus (CSB/Redux Retirement Plan) will have any COLA increases reduced by 1%.
They will see a smaller increase of $77 compared to $87, per $1,000 received in 2023.
