thedrifter
10-18-06, 02:42 PM
October 18, 2006
Retiree, disability pay to rise by 3.3 percent next year
By Rick Maze
Staff writer
Military retired pay and veterans’ disability compensation will increase by 3.3 percent on Dec. 1, marking an annual cost-of-living adjustment that is both less than expected and smaller than last year’s 4.1 percent increase.
The 3.3 percent increase will first appear in January checks. For the second straight year, it is larger than Jan. 1 increase in military basic pay, which will be just 2.2 percent.
The main reason the retirement COLA is below 4 percent is that energy prices and transportation costs have dropped in the last three months, according to statistics provided by the U.S. Labor’s Department’s Bureau of Labor Statistics, which compiles consumer prices.
In the past year, some consumer costs have risen by more than 4 percent. Health care costs increased an average of 4.2 percent and housing costs jumped by 4.1 percent, according to the BLS. Food price, on the other hand, rose by just 2.5 percent.
At the same time, transportation costs have dropped by 3.2 percent from a year ago and overall energy costs have declined by 4.3 percent.
Annual increases in military and federal civilian retired pay and military survivor benefits are automatic, linked by law to the increase in Social Security benefits. All the benefits are tied to a comparison of consumer prices from the last three months of each fiscal year, which ends on Sept. 30, to the same period of the previous fiscal year.
Veterans’ disability benefits, veterans’ dependency and indemnity compensation for survivor and veterans’ pensions do not automatically increase. But Congress passed and President Bush signed a bill guaranteeing they would get the same Dec. 1 increase.
Military pay raises also are approved only by an act of Congress, but that is not the reason why the Jan. 1 basic pay increase will be less than the retirement adjustment.
Military and federal civilian pay raises are computed by law to keep pace with private-sector wage growth, not with inflation. Often, such as in 2002 through 2005, this results in military raises that are larger than retirement increases. But the Jan. 1, 2006 military raise and now the coming Jan. 1, 2007 military increase will be lower because private-sector wage growth has been lower than inflation.
Ellie
Retiree, disability pay to rise by 3.3 percent next year
By Rick Maze
Staff writer
Military retired pay and veterans’ disability compensation will increase by 3.3 percent on Dec. 1, marking an annual cost-of-living adjustment that is both less than expected and smaller than last year’s 4.1 percent increase.
The 3.3 percent increase will first appear in January checks. For the second straight year, it is larger than Jan. 1 increase in military basic pay, which will be just 2.2 percent.
The main reason the retirement COLA is below 4 percent is that energy prices and transportation costs have dropped in the last three months, according to statistics provided by the U.S. Labor’s Department’s Bureau of Labor Statistics, which compiles consumer prices.
In the past year, some consumer costs have risen by more than 4 percent. Health care costs increased an average of 4.2 percent and housing costs jumped by 4.1 percent, according to the BLS. Food price, on the other hand, rose by just 2.5 percent.
At the same time, transportation costs have dropped by 3.2 percent from a year ago and overall energy costs have declined by 4.3 percent.
Annual increases in military and federal civilian retired pay and military survivor benefits are automatic, linked by law to the increase in Social Security benefits. All the benefits are tied to a comparison of consumer prices from the last three months of each fiscal year, which ends on Sept. 30, to the same period of the previous fiscal year.
Veterans’ disability benefits, veterans’ dependency and indemnity compensation for survivor and veterans’ pensions do not automatically increase. But Congress passed and President Bush signed a bill guaranteeing they would get the same Dec. 1 increase.
Military pay raises also are approved only by an act of Congress, but that is not the reason why the Jan. 1 basic pay increase will be less than the retirement adjustment.
Military and federal civilian pay raises are computed by law to keep pace with private-sector wage growth, not with inflation. Often, such as in 2002 through 2005, this results in military raises that are larger than retirement increases. But the Jan. 1, 2006 military raise and now the coming Jan. 1, 2007 military increase will be lower because private-sector wage growth has been lower than inflation.
Ellie