Plan to fix pay raise and bonuses takes shape

Plan to fix pay raise and bonuses takes shape
By Rick Maze - Staff writer
Posted : Wednesday Jan 16, 2008 17:06:59 EST

The revised 2008 defense authorization bill expected to be sent to the White House as early as next week sets the stage for a retroactive military pay raise and creates a 120-day sanctuary period to deal with the unexpected termination of authority for many bonuses and special pays.

The 120-day period for signing enlistment, re-enlistment or service obligation commitments is aimed at protecting from financial harm anyone who was eligible for a bonus or special and incentive pay since Dec. 31, when the services lost permission to make new payments of more than 30 types of bonuses.

Bonuses lapsed, and service members received a 3 percent increase in basic pay instead of the 3.5 percent passed by Congress after President Bush refused to sign the annual defense policy bill because it included a provision that involved freezing U.S.-held assets of foreign countries facing lawsuits from American citizens.

Under the new bill, the 3.5 percent raise proposed by Congress would be retroactive to Jan. 1, setting the stage for modest back payments to make up the difference. Lawmakers will leave it to the Defense Department to decide how to provide the back pay, but it is most likely to come as a lump sum in the first paycheck after the revised bill is signed into law. Defense officials did not immediately respond to questions about how the back pay would be provided.

In reauthorizing the bonuses, the new bill also includes language guaranteeing that anyone eligible for a bonus or special pay who had been in a combat zone since Dec. 31 would not have to pay federal income tax on their payment if they signed a commitment during the 120 days but are no longer in the combat zone.


Rest of article at: http://www.armytimes.com/news/2008/01/military_authorizationbill_080116w/