United States military members will likely see their largest-ever pay increase in 2023 – a 4.6% hike, according to the Bureau of Labor Statistics’ Employment Cost Index (ECI) and the draft 2023 defense budget. Show
The White House released its 2023 defense budget proposal in March, and so far congress has upheld the 4.6% bump. Basic pay is the largest component of military service members’ cash compensation. Non-taxable allowances for housing and food make up the remainder. How the 2023 Military Basic Pay Raise is CalculatedThe ECI heavily influences final enacted increases to military basic pay. Federal law (Title 37 USC chapter 19, section 1009) has tied military pay increases to ECI since 2003. Deviations from the ECI require Congressional or Presidential intervention, which last occurred in 2016. Final military pay increases are subject to change based on the passage of the 2023 Defense Budget and negotiations between Congress and the White House. See the 2023 projected military pay charts based on 4.6% increase. 2023 Military Pay Increase Timeline:
By law, Congress must present a budget for the president to sign before the Oct. 1 start of each fiscal year, but has frequently missed the deadline in recent years. When that happens, Congress passes a continuing resolution to keep the military operating under the previous year’s budget while debate continues. ECI Increase for 2021 – 2022The fiscal year 2021 NDAA requested a 3.0% increase in basic pay which matched the automatic ECI statutory formula of 3.0%. The 2022 military pay raise matched the ECI formula for wages and salaries which increased 2.7% from September 2019 to September 2020. See the 2022 military pay charts based on this year’s 2.7% increase. About the Economic Cost Index (ECI)The Employment Cost Index (ECI) is a quarterly economic series that details total employee compensation growth across the United States. A unit of the United States Department of Labor called the Bureau of Labor Statistics creates the index by surveying employer payrolls each quarter. The surveys measure the change in the cost of labor, free from the influence of employment shifts among occupations and industries. ECI measures annual and quarterly percentage increases for three different populations — “private industry workers,” “state and local government workers” and a combination of those two called “civilian workers.” ECI differs from the Consumer Price Index (CPI-W), which determines pay increases for social security, retired military members, and VA benefits recipients via Cost of Living Adjustments (COLA). CPI-W is tied to inflation. Historical Military Pay Raises by Year
* 2002, 2003, 2004, and 2007 are average percentage raises, as military pay raises differed by pay grade at the time. 2022 military pay increases are for all branches of the U.S. Armed Forces; Air Force, Army, Coast Guard, Marines, Navy, Space Force and Reserve forces where applicable. [wp-post-author image-layout align=”right”]
Will veterans get a pay raise in 2023?The Social Security Administration recently announced a massive 8.7% COLA increase to VA Disability Rates 2023. Disabled veterans with a VA rating of 10% or higher will see their 2023 VA Disability Pay Increase by 8.7% effective December 1, 2022, with an official pay date of January 2023.
What will the COLA be for military retirees in 2023?2023 Annual Military Retirement Pay Increase
The cost of living adjustment for 2023 will be 8.7% for Social Security checks, VA disability compensation and other government pension and benefit programs. COLA raises for Social Security benefits and certain other benefits are automatic.
What will be the VA COLA for 2023?Each fiscal year, the Social Security Administration (SSA) sets a cost-of-living adjustment (COLA) which VA then uses to adjust VA disability compensation rates. The 2023 cost-of-living adjustment is 8.7 percent.
Will there be an increase in military retirement pay?Record Pay Increase Likely Coming for Disabled Veterans and Military Retirees in 2023. Veterans receiving disability pay from the Department of Veterans Affairs and military retirees will likely get record monthly check increases for 2023 thanks to the pace of inflation, according to a new estimate.
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