Defense secretary announces host of new policies to help military members with rising cost of living

By Ellie Kaufman, CNN

Secretary of Defense Lloyd Austin announced a series of policy changes to help military service members and their families deal with rising housing, food and childcare costs amid high inflation.

While President Joe Biden’s proposed budget for the Department of Defense includes a 4.6% pay increase for military service members starting January 1, 2023, the current annual consumer inflation rate in the US stands at 8.3%.

Many of the policy changes Austin announced will go into effect in October. They include changes to housing allowances for active-duty service members, changes to policies around permanent change of station moves service members are required to make for their postings and additional programs for childcare and employment of military spouses.

“Our Service members and families must be able to secure affordable basic needs. It is a matter of bedrock financial security and a critical individual readiness issue,” Austin said in a memo to senior Pentagon leaders and Combatant Commanders announcing the policy changes on Thursday.

Some of the policy changes Austin is implementing came from ideas from military service members themselves, and all of them are a “direct response” to what Austin has heard from military service members and their families “over the past 20 months,” Pentagon Press Secretary Brig. Gen. Pat Ryder said.

“Over the last 20 months, the Secretary has met with service members across the country and around the world,” Ryder said. “Today’s actions are a direct response of what the Secretary has heard from our service members. Some of these initiatives are ideas that came directly from the force, and they reflect his commitment to the families who sacrifice every day in order to serve.”

Austin directed an automatic increase in basic housing allowance for active-duty service members in the 28 military housing areas in the US that have experienced “an average of more than 20% spike in rental housing costs this year,” Austin said in the memo.

Austin also directed a change in how long service members are eligible for temporary lodging expenses to be covered when they must make a permanent change of station move, or a required move for their military service posting, starting in October. Austin increased the temporary lodging expense coverage from 10 days to 14 days for moves within the continental US. DoD will now also allow up to 60 days of temporary lodging expense coverage “if a service member is in a specified military housing area with a housing shortage,” the memo stated.

During these moves, service members also get a dislocation allowance. All service members will now be paid their dislocation allowance “automatically one month prior to their move date to preempt out-of-pocket expenses,” the memo stated. For service members rank E-1 through E-6, their dislocation allowance will also be increased. This will go into effect in October.

Austin also directed military commissaries to “cut prices at the register, with the goal of achieving at least a 25% savings on grocery bills compared to the local marketplace,” he wrote.

For military service members and their families whose gross household income is below the 130% federal poverty guideline level, the DoD will pay them a basic needs allowance starting in January, the memo said.

This allowance is “designed” to bring these service members and families “back up to that level,” Department of Defense Director of Military Compensation Jeri Bush said. The allowance will vary based on the families’ needs.

To help with “childcare shortages affecting the entire country,” the Department is instituting a “minimum 50% employee discount for the first child” of military family members who work at one of the military’s child development program facilities “to help attract more talented staff and to increase capacity,” according to the memo. This new discount will go into effect in October.

To help increase military spousal employment, the department will “launch a new career accelerator pilot initiative” in January “that will match military spouses with paid private sector fellowships in a variety of career paths,” the memo stated.

All of these measures are aimed at helping military families as they deal with rising costs of inflation impacting housing, food and jobs across the country.

“We remain profoundly committed to doing right by our military families, just as our military families remain profoundly committed to their loved ones and to the Nation that they all do so much to defend,” Austin said in the memo.

Austin will receive “regular updates” on the initiatives, according to the memo.

CORRECTION: A previous version of this story misstated which service members will automatically be paid their dislocation allowance one month prior to their move date.

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