Military Personnel: DOD Has Not Implemented the High Deployment Allowance That Could Compensate Servicemembers Deployed Frequently for Short Periods

Military Personnel: DOD Has Not Implemented the High Deployment
Allowance That Could Compensate Servicemembers Deployed
Frequently for Short Periods (25-JUN-04, GAO-04-805).

The fiscal year 2004 National Defense Authorization Act directed
GAO to assess the special pays and allowances for servicemembers
who are frequently deployed for less than 30 days, and to
specifically review the family separation allowance. GAO's
objectives were to assess (1) the rationale for the family
separation allowance eligibility requirements, including the
required duration of more than 30 consecutive days away from a
member's duty station; (2) the extent to which DOD has identified
short-term deployments as a family separation allowance issue;
and (3) what special pays and allowances, in addition to basic
military compensation, are available to compensate members
deployed for less than 30 days.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-805
ACCNO: A10614
TITLE: Military Personnel: DOD Has Not Implemented the High
Deployment Allowance That Could Compensate Servicemembers
Deployed Frequently for Short Periods
DATE: 06/25/2004
SUBJECT: Military compensation
Military expense allowances
Military pay
Military personnel
Subsistence allowances
Eligibility criteria
Per diem allowances
Military policies
Policy evaluation
Abrams Tank
C-5 Aircraft
KC-10 Aircraft
M1A1 Tank
Galaxy Aircraft

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GAO-04-805

United States General Accounting Office

GAO

Report to Congressional Committees

June 2004

MILITARY PERSONNEL

DOD Has Not Implemented the High Deployment Allowance That Could Compensate
Servicemembers Deployed Frequently for Short Periods

GAO-04-805

Highlights of GAO-04-805, a report to Congressional Committees

GAO recommends DOD take the following actions: (1) set a timetable for
establishing criteria to implement the high deployment allowance; (2)
define, as part of the criteria, what constitutes frequent short-term
deployments within the context of the cumulative day requirement as stated
in the high deployment legislation; and (3) determine, as part of the
criteria, ways of targeting the deployment allowance to selected
occupations. DOD partially concurred with our recommendations because it
views the deployment allowance as a peacetime authority. GAO believes our
current wartime situation does not prevent DOD from setting a timetable
for establishing criteria.

www.gao.gov/cgi-bin/getrpt?GAO-04-805.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Derek B. Stewart at (202)
512-5559 or [email protected].

June 2004

MILITARY PERSONNEL

DOD Has Not Implemented the High Deployment Allowance That Could Compensate
Servicemembers Deployed Frequently for Short Periods

In 1963, Congress established the family separation allowance to help
offset the additional expenses that may be incurred by the dependents of
servicemembers who are away from their permanent duty station for more
than 30 consecutive days. Additional expenses may include the costs
associated with home repairs, automobile maintenance, and childcare that
could have been performed by the deployed servicemember. Over the years,
the eligibility requirements for the family separation allowance have
changed. Today, the family separation allowance is authorized for officers
and enlisted in all pay grades at a flat rate. The rationale for
establishing the 30-day threshold is unknown.

DOD has not identified frequent short-term deployments as a family
separation allowance issue. No proposals seeking modifications to the
family separation allowance because of frequent short-term deployments
have been provided to DOD for consideration as part of DOD's Unified
Legislation and Budgeting process, which reviews personnel pay proposals.
Further, DOD officials were not aware of any specific concerns that have
been raised by frequently deployed servicemembers about their eligibility
to receive the family separation allowance. Based on group discussions
with Air Force strategic airlift aircrews, who were identified as examples
of those most likely to be experiencing short-term deployments, we did not
identify any specific concerns regarding the lack of family separation
allowance compensation associated with short-term deployments. Rather,
many aircrew members indicated the high pace of operations and associated
unpredictability of their schedules was a greater concern due to the
negative impact on their quality of life.

In addition to basic military compensation, DOD has several special pays
and allowances to further compensate servicemembers deployed for short
periods. Servicemembers who are deployed for less than 30 days may be
eligible to receive regular per diem. The per diem amount varies depending
upon location. For example, these rates range from $86 to $284 per day
within the United States and from $20 to $533 per day when outside the
United States. However, DOD has not implemented the high deployment
allowance designed, in part, to compensate those frequently deployed for
shorter periods. Congress supported DOD's legislative proposal to
authorize a monthly high deployment allowance. This allowance permits the
services to compensate members for lengthy as well as frequent shorter
deployments. The most recent amendment to this provision provides DOD with
the authority to adjust a cumulative day threshold to help compensate
servicemembers experiencing frequent short deployments. DOD has
flexibility to exclude all occupations except those that it wishes to
target for additional pay. However, DOD has not established criteria to
implement this allowance, nor has DOD set a timetable for establishing
such criteria.

Contents

Letter

Results in Brief
Background
Congressional Rationale for DOD's Family Separation Allowance

Eligibility Requirements
DOD Has Not Identified Frequent Deployments Less Than 30-days
as a Family Separation Allowance Issue
Personnel Deployed Less Than 30 Days May Be Eligible to Receive

Additional Compensation
Conclusions
Recommendations
Agency Comments and Our Evaluation
Scope and Methodology

3 5

10 15 16 16 17

Appendix I Comments from the Department of Defense

Related GAO Products

Table

Table 1: Special Pays and Allowances Available for Short-Term Deployments
as of June 2004

Figure

Figure 1: Average Number of Days C-5 Co-Pilots Have Been Deployed, January
2001 through December 2003

Abbreviations

AMC Air Mobility Command DOD Department of Defense OSD Office of the
Secretary of Defense

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United States General Accounting Office Washington, DC 20548

June 25, 2004

Congressional Committees

The Department of Defense (DOD) considers a servicemember as deployed when
a member is on orders and performing duties in a training exercise or
operation at a location or under circumstances that make it impossible or
infeasible for the member to spend off-duty time at the member's permanent
duty station or homeport. While deployed, in addition to receiving basic
military compensation,1 servicemembers can receive a variety of special
pays and allowances intended to (1) help the uniformed services meet
specific manpower requirements and (2) compensate servicemembers for
hardships associated with their deployments. For example, servicemembers
who have dependents and are deployed for more than 30 consecutive days are
eligible to receive the family separation allowance. In April 2003,
Congress temporarily increased the amount of the family separation
allowance by 150 percent (from $100 to $250 per month) as part of the
Emergency Wartime Supplemental Appropriations Act. Congress has since
extended this increase until December 2004; at which time it will expire
unless renewed or made permanent. According to DOD officials, the latest
estimated cost of the family separation allowance for fiscal year 2004 is
$1.1 billion with an average of 359,000 monthly recipients.2 When this
estimated cost is compared to the fiscal year 2002 obligations, the budget
for the family separation allowance increases by 850 percent. This
increase is primarily due to the increase in the monthly rate paid for
family separation allowance and the increased number of personnel deployed
in support of the global war on terrorism.

1 Basic military compensation consists of basic pay, basic allowance for
housing, basic allowance for subsistence, and the federal tax advantage.
The federal tax advantage is to account for the tax-free status of housing
and subsistence allowances. It is the added amount of taxable income that
servicemembers would have to receive in cash if housing and subsistence
allowances were to become taxable in order for them to be as well off in
after-tax income as they are under the existing system. Basic compensation
does not include special and incentive pays, other allowances, and the
value of fringe benefits such as health care and retirement.

2 Data on the total annual number of family separation allowance
recipients was not available.

The National Defense Authorization Act for Fiscal Year 2004 directed GAO
to assess the special pays and allowances for servicemembers who are
frequently deployed for less than 30 days. The act directed GAO to
specifically review the eligibility requirements for the family separation
allowance, including those related to the required duration of more than
30 consecutive days away from a servicemember's permanent duty station. As
agreed with your offices, our objectives were to assess (1) the rationale
for family separation allowance eligibility requirements, including the
30-day threshold; (2) the extent to which DOD has identified frequent
short-term deployments as a family separation allowance issue; and (3)
what special pays and allowances are available, in addition to basic
compensation, to further compensate servicemembers deployed for less than
30 days.

To conduct our review, we analyzed the legislative history and respective
DOD policies for selected special pays and allowances. We reviewed
proposals to make changes to the family separation allowance submitted
through DOD's Unified Legislation and Budgeting process. We held
discussions with officials from the Office of the Under Secretary of
Defense (Personnel and Readiness) and each of the services. We focused our
study on the Air Force since the reported average number of days Air Force
personnel were deployed in fiscal year 2002, the latest available data,
was less than 30 days. Further, through discussions with Air Force
officials we identified strategic airlift C-5 aircrews managed by the Air
Mobility Command (AMC) as examples of those who would most likely be
experiencing short-term deployments.3 We assessed the reliability of AMC
deployment data and determined that the data were sufficiently reliable
for the purposes of this report. To explore family separation allowance
issues at a location overseen by AMC, we conducted group discussions with
officers and enlisted servicemembers at Travis Air Force Base. We also
reviewed previously issued GAO reports on military compensation (see
Related GAO Products). More information on our scope and methodology is
provided at the end of this letter. We conducted our review from January
2004 to May 2004 in accordance with generally accepted government auditing
standards.

3 Air Force officials also identified other occupations that have been
frequently deployed for less than 30 days such as flying crew chiefs, who
are responsible for launch, recovery, inspection, servicing, and
maintenance of aircraft. Other service officials identified inspection
team members as another example of personnel who are deployed frequently
for short periods.

Results in Brief

DOD has not identified frequent short-term deployments for less than 30
days as a family separation allowance issue. No proposals seeking
modifications to the family separation allowance because of frequent
short-term deployments have been provided to DOD for consideration as part
of DOD's Unified Legislation and Budgeting process, which reviews
personnel compensation proposals. Further, DOD officials-including those
in the Office of the Secretary of Defense (OSD), the services, the
national guard, and reserves-were not aware of any specific concerns
raised by frequently deployed servicemembers about their eligibility to
receive the family separation allowance. Based on group discussions with
Air Force strategic C-5 airlift aircrews, we did not identify any specific
concerns regarding the lack of family separation allowance compensation
associated with short-term deployments. Rather, many of the aircrew
members indicated that the high pace of operations and associated
unpredictability of their schedules was a greater concern to them due to
the negative impact on their quality of life.

In addition to basic compensation, DOD has several special pays and
allowances available to further compensate servicemembers deployed for
less than 30 days. Servicemembers who are deployed for less than 30 days
may be eligible to receive regular per diem, which is used to pay for
lodging, meals, and incidental expenses while deployed. The per diem
amount varies depending upon location. For example, these rates range from
$86 to $284 per day within the continental United States and from $20 to
$533 per day when outside the continental United States. Servicemembers
may also be eligible to receive several other pays and allowances, such as
hazardous duty pay, mission-oriented hardship duty pay, and combat zone
tax exclusions. However, DOD has not implemented one special allowance-the
high deployment allowance-designed, in part, to compensate those
frequently deployed for short periods. Congress supported DOD's
legislative proposal to authorize the monthly high deployment allowance
with passage of the National Defense Authorization

Act of 2004. The high deployment allowance permits the services to
compensate their members for lengthy deployments as well as frequent
shorter deployments. The most recent amendment to this provision provides
the Secretary of Defense with the authority to adjust a cumulative day
threshold to help compensate servicemembers experiencing frequent shorter
deployments. This provision also provides additional flexibility in
targeting the allowance to selected occupational specialties, by allowing
DOD to exclude all occupations except those that it wishes to target for
additional compensation due to retention concerns. However, DOD has not
established criteria that would (1) define what constitutes frequent
deployments and (2) determine eligibility requirements for the high
deployment allowance, nor has DOD set a timetable for establishing such
criteria.

This report contains recommendations for DOD to set a timetable for
establishing criteria to implement the high deployment allowance and what
the criteria should include. In its comments on a draft of this report,
DOD partially concurred with the report's recommendations because it views
the high deployment allowance as a peacetime authority. We believe our
current wartime situation does not prevent DOD from setting a timetable
for establishing criteria. Further, given the expectations for a long-term
commitment to the war on terrorism, developing the criteria for
implementing the high deployment allowance would provide DOD with an
additional option for compensating those military personnel who are
frequently deployed for short periods.

Background

AMC, located at Scott Air Force Base, Illinois, is responsible for
providing strategic airlift, including air refueling, special air
missions, and aeromedical evacuation. As part of that mission, AMC is
responsible for tasking 67 C-5 aircraft: 35 stationed at Travis Air Force
Base in California and 32 stationed at Dover Air Force Base in Delaware.
Unlike other Air Force aircraft, the C-5 is rarely deployed for more than
30 days, since it is primarily used to move cargo from the United States
to locations worldwide. As a result, C-5 aircrews are deployed away from
home for several weeks and then return to their home station. Other Air
Force aircraft, such as the KC-10, can carry cargo but are primarily used
to refuel other aircraft and can be deployed to locations around the world
for extended periods of time. Since September 11, 2001, C-5 aircrews have
been deployed for periods of time less than 30-days, generally ranging
from 7 to 24 days.

Known for its ability to carry oversized and heavy loads, the C-5 can
transport a wide variety of cargo, including helicopters and Abrams M1A1
Tanks to destinations worldwide. Recently, the C-5's have been used for a
variety of missions, including: support of presidential travel, contracted
movement of materials by other government organizations, training
missions, and support of operations Enduring and Iraqi Freedom. In
addition, the C-5 can also transport about 70 passengers. The aircrew for
a C-5 is comprised of two pilots, a flight engineer, and two loadmasters.
At Travis Air Force Base there are 439 active duty and 383 reserve aircrew
members. At Dover Air Force Base there are 650 active duty and 344 reserve
aircrew members.

Within the Office of the Secretary of Defense (OSD), the Under Secretary
of Defense (Personnel and Readiness) is responsible for DOD personnel
policy, including oversight of military compensation. The Under Secretary
of Defense (Personnel and Readiness) leads the Unified Legislation and
Budgeting process, established in 1994 to develop and review personnel
compensation proposals. As part of this process, the Under Secretary of
Defense (Personnel and Readiness) chairs biannual meetings, attended by
the principal voting members from the Office of the Under Secretary of
Defense (Personnel and Readiness), including the Principle Deputy Under
Secretary of Defense (Personnel and Readiness), the Assistant Secretary of
Defense (Reserve Affairs), the Assistant Secretary of Defense (Health
Affairs), the Office of the Under Secretary of Defense (Comptroller), the
Joint Staff, and the services' Assistant Secretaries for Manpower and
Reserve Affairs.

Congressional Rationale for DOD's Family Separation Allowance Eligibility
Requirements

In 1963, Congress established the $30-per-month family separation
allowance to help offset the additional expenses incurred by the
dependents of servicemembers who are away from their permanent duty
station for more than 30 consecutive days. According to statements made by
members of Congress during consideration of the legislation establishing
the family separation allowance, additional expenses could stem from costs
associated with home repairs, automobile maintenance, and childcare that
could not be performed by the deployed servicemember. Over the years, the
eligibility requirements for the family separation allowance have changed.
For example, while the family separation allowance was initially
authorized for enlisted members in pay grades E-5 and above as well as to
enlisted members in pay grade E-4 with 4 years of service, today the
family separation allowance is authorized for servicemembers in all pay
grades at a flat rate of $250 per month. Servicemembers must apply for the
family separation allowance, certifying their eligibility to receive the
allowance. The rationale for establishing the 30-day threshold is unknown.
However, DOD officials noted that servicemembers deployed for more than 30
days do not have the same opportunities to minimize household expenses as
those who are deployed for less than 30 days. For example, servicemembers
who are able to return to their permanent duty locations may perform home
repairs and do not have to pay someone to do these tasks for them.

The 1963 family separation allowance legislation was divided into two
subsections, one associated with overseas duty and one associated with any
travel away from the servicemembers home station. The first subsection was
intended to compensate servicemembers who were permanently stationed
overseas and were not authorized to bring dependents. The second
subsection was intended to compensate servicemembers for added expenses
associated with their absence from their dependents and permanent duty
station for extended periods of time regardless of whether the members
were deployed domestically or overseas. Originally, this aspect of family
separation compensation was also to be based on the allowance for living
quarters. At that time, members would receive one-third the allowance for
living quarters or a flat rate of $30 per month, whichever amount was
larger. In July of 1963, the Senate heard testimony from DOD officials who
generally agreed with the proposed legislation, but raised concerns about
using the allowance for living quarters as a baseline. Their concerns were
related to the complexity of determining the payments and the inequities
associated with tying payment to rank. Ultimately, DOD proposed and the
Congress accepted a flat rate of $30 per month for eligible personnel.

DOD Has Not Identified Frequent Deployments Less Than 30-days as a Family
Separation Allowance Issue

DOD has not identified frequent short-term deployments less than 30-days
as a family separation allowance issue. No proposals seeking modifications
to the family separation allowance because of frequent short-term
deployments have been provided to DOD for consideration as part of DOD's
Unified Legislation and Budgeting process, which reviews personnel
compensation proposals. Since 1994, a few proposals have been made seeking
changes to allowance amounts and eligibility requirements. None of the
proposals sought to change the 30-day eligibility threshold. Further, our
discussions with OSD, service, and reserve officials did not reveal any
concerns related to frequent short-term deployments and the family
separation allowance. To analyze concerns that might be raised by those
experiencing frequent short-term deployments, we conducted group
discussions with Air Force strategic C-5 airlift aircrews at Travis Air
Force Base, which we identified as an example of servicemembers who
generally deploy for periods less than 30 days. We did not identify any
specific concerns regarding compensation received as a result of
short-term deployments. We found that the C-5 aircrews were generally more
concerned about the high pace of operations and associated
unpredictability of their schedules, due to the negative impact on their
quality of life, than about qualifying for the family separation
allowance.

DOD's Proposals to Change Family Separation Allowance Have Been Minimal

DOD has proposed few changes to the amount of the family separation
allowance and no proposals have been submitted to alter the 30-day
eligibility threshold. Our review of proposals submitted through DOD's
Unified Legislation and Budgeting process revealed that DOD has considered
one proposal to change the amount of the monthly family separation
allowance since 1994. In 1997, an increase in the family separation
allowance from $75 to $120 was proposed. This provision was not approved
by DOD.

Since 1994, three modifications to the eligibility criteria have also been
proposed. In 1994, a proposal was made to allow payment of the family
separation allowance for members embarked on board a ship or on temporary
duty for 30 consecutive days, whose family members were authorized to
accompany the member but voluntarily chose not to do so. The proposal was
endorsed by DOD and accepted by Congress. In 2001, DOD considered but
ultimately rejected a similar proposal that would have applied to all
members who elect to serve an unaccompanied tour of duty. The third
proposal sought to modify the use of family separation allowance for joint
military couples (i.e. one military member married to another military
member). According to a DOD official, while this proposal was not endorsed
by DOD, Congress ultimately passed legislation

that clarified the use of family separation allowance for joint military
couples. The family separation allowance is now payable to joint military
couples, provided the members were residing together immediately before
being separated by reason of their military orders. Although both may
qualify for the allowance, only one monthly allowance may be paid to a
joint military couple during a given month. If both members were to
receive orders requiring departure on the same day, then payment would be
made to the senior member.

Aircrews More Concerned about Unpredictability of Their Deployments Than
Compensation

Overall, C-5 aircrew members and aircrew leadership with whom we met noted
that the unpredictability of missions was having more of an adverse impact
on crewmembers' quality of life than the compensation they receive as a
result of their deployments. For example, several aircrew members at
Travis Air Force Base indicated that over the past two years, they have
been called up on very short advance notice, as little as 12 hours, and
sent on missions lasting several weeks, making it difficult to conduct
personal business or make plans with their families. According to the
aircrew members and both officer and enlisted leadership with whom we met,
the unpredictability of their missions is expected to continue for the
foreseeable future due to the global war on terrorism. Officials informed
us that the average number of days by month that aircrew members have been
deployed has increased since September 11, 2001, with periods of higher
activity, or surges. For example, as shown in figure 1, the average number
of days in September 2001 that AMC C-5 co-pilots were deployed was 9.
Since then, the average number of days by month that C-5 co-pilots were
deployed has fluctuated between 12 and 19. Prior to September 2001,
available data shows a low monthly average of 5 days in January 2001.

Figure 1: Average Number of Days C-5 Co-Pilots Have Been Deployed, January 2001
through December 2003

Average number of days deployed

Jan.Feb.Mar.Apr.MayJuneJulyAug.Sept.Oct.Nov.Dec.Jan.Feb.Mar.Apr.MayJuneJulyAug.Sept.Oct.Nov.Dec.Jan.Feb.Mar.Apr.MayJuneJulyAug.Sept.Oct.Nov.Dec.

2001 2002 2003

Source: Air Mobility Command.

Note: This data represents the average number of days C-5 co-pilots have
been deployed. According to AMC, the deployment trends for co-pilots are
representative of other C-5 aircrew members deployment activity.

While the average number of days deployed has fluctuated, aircrew members
expressed concern about the intermittent suspension of pre-and
post-mission crew rest periods that have coincided with increased
operations. Generally, these periods have been intended to ensure that
aircrew members have enough rest prior to flying another mission. However,
aircrew members noted that crew rest periods also allow them to perform
other assigned duties and spend time with their families. During our
discussion-group meetings, aircrew members indicated that the rest period
after a mission had been reduced from as much as 4 days to as little as 12
hours due to operational needs.

Personnel Deployed Less Than 30 Days May Be Eligible to Receive Additional
Compensation

In addition to basic compensation, DOD has several special pays and
allowances available to further compensate servicemembers deployed for
less than 30 days. Servicemembers who are deployed domestically or
overseas for less than 30 days may be eligible to receive regular per
diem. The per diem amount varies depending upon location. Servicemembers
also may be eligible to receive other pays and allowances, such as
hazardous duty pay, mission-oriented hardship duty pay, and combat-zone
tax exclusions. However, DOD has not implemented one special allowance
designed, in part, to compensate those frequently deployed for short
periods. Congress supported DOD's legislative proposal to authorize a
monthly high-deployment allowance with passage of the National Defense
Authorization Act for Fiscal Year 2004. This provision allows the services
to compensate their members for lengthy deployments as well as frequent
shorter deployments. However, DOD has not set a timetable for establishing
criteria to implement this allowance.

Additional Compensation In addition to basic military pay, servicemembers
who are deployed for Available for Eligible less than 30 days may also be
eligible to receive regular per diem, other Personnel Deployed special
pays and allowances, and tax exclusions (see table 1).

Less Than 30 Days

Table 1: Special Pays and Allowances Available for Short-Term Deployments
as of June 2004

Type of special pay or
allowance Purpose Qualification requirements Amount

Per diem To reimburse servicemembers Must perform temporary duty of more
than Varies by location
for lodging, meal, and 12 hours at a location to receive
incidental any of the per
expenses incurred while on diem rates for that location
government travel

Hostile fire and imminent To recognize members subject to Must be subject
to event of hostile $225/montha

danger pay hostile fire or explosion of hostile fire/explosion of hostile
mine, or must perform mine, or service in designated official duty in
designated imminent danger imminent danger area area (e.g., Iraq)

Must perform a
Mission-oriented To compensate a designated $150/month
hardship mission
servicemembers' (e.g., remains
hardship duty pay performance of recovery in remote
area of
a designated hardship Vietnam)
mission
Must perform
Combat-zone tax To recognize members official duty in a One month tax
while in a designated
exclusion combat zone or a combat area (e.g., exclusion;
qualified Persian Gulf) amount
hazardous duty area. varies based on
taxable
military pay

Per Diem

Source: GAO

Note: Table does not include selected reenlistment bonuses or career
incentive pays, such as aviator continuation pay.

a The amount of hostile fire and imminent danger pay last changed in 1990
from $110 to $150 per month. The fiscal year 2003 Emergency Wartime
Supplemental Appropriations Act temporarily increased the monthly rate of
this pay from $150 to $225 per month. This increase has been extended
through December 31, 2004. However, if Congress takes no further action,
this rate will revert to $150 per month on January 1, 2005.

When servicemembers are performing temporary duty away from their
permanent duty station, they are entitled to per diem, which provides
reimbursement for meals, incidental expenses, and lodging.4 To be eligible
for per diem, servicemembers must perform temporary duty for more than 12
hours at a location to receive any of the per diem rate for that location.
The per diem rates are established by: the General Services
Administration, the State Department, and DOD's Per Diem, Travel, and
Transportation Allowance Committee. The rates range from $86 to $284 per
day within the continental United States and from $20 to $533 per day when
outside the continental United States, depending on whether government
meals and lodging are provided. Aircrews can earn various per diem rates
during the course of their travel. For example, a typical two-week mission
for Travis C-5 aircrew members would take them to Dover Air Force Base,
then to Moron, Spain, and then to Baghdad, Iraq. At

4 37 U.S.C. S: 404 and S: 405

Hostile Fire and Imminent Danger Pay

Mission-Oriented Hardship Duty Pay

each of these locations, the aircrews can spend a night allowing them to
accrue applicable per diem rates for that location. According to the Air
Force, per diem rates for a typical C-5 mission are as follows: $157 for
Dover Air Force Base; $235 for Moron, Spain; and $154 for Baghdad, Iraq.
In some cases, aircrews may receive a standard $3.50 per day for
incidental expenses, when they are at locations where the government can
provide meals and lodging. This is the standard per diem rate used to
compensate servicemembers traveling outside of the continental United
States when the government can provide lodging and meals.

Hostile Fire and Imminent Danger Pay are pays that provide additional
compensation for duty performed in designated areas where the
servicemembers are subject to hostile fire or imminent danger.5 Both pays
are derived from the same statue and cannot be collected simultaneously.
Servicemembers are entitled to hostile fire pay, an event-based pay, if
they are (1) subjected to hostile fire or explosion of hostile mines; (2)
on duty in an area close to a hostile fire incident and in danger of being
exposed to the same dangers actually experienced by other servicemembers
subjected to hostile fire or explosion of hostile mines; or (3) killed,
injured, or wounded by hostile fire, explosion of a hostile mine, or any
other hostile action. Imminent danger pay is a threat based pay intended
to compensate servicemembers in specifically designated locations, which
pose a threat of physical harm or imminent danger due to civil
insurrection, civil war, terrorism, or wartime conditions. To be eligible
for this pay in a month, servicemembers must have served some time, one
day or less, in one of the designated zones during the month. The
authorized amount for hostile fire and imminent danger pay is $150 per
month, although the fiscal year 2003 Emergency Wartime Supplemental
Appropriations Act temporarily increased the amount to $225 per month. If
Congress takes no further action, the rate will revert to $150 per month
in January 2005.

Mission-oriented hardship duty pay compensates military personnel for
duties designated by the Secretary of Defense as hardship duty due to the
arduousness of the mission.6 Mission-oriented hardship duty pay is payable

5 37 U.S.C. S: 310

6 37 U.S.C. S: 305 authorizes special pay for uniformed servicemembers
performing hardship duty and directs the Secretary of Defense to prescribe
regulations implementing hardship duty pay. There are two types of
hardship duty pay-hardship duty pay for mission assignment and hardship
duty pay for location assignment. Hardship duty pay for location
assignment is payable to members for duty in a designated hardship
location for more than 30 consecutive days. Personnel must be in a
designated hardship location at least 31 days to qualify for this pay.

Combat-Zone Tax Exclusion

at a monthly rate up to $300, without prorating or reduction, when the
member performs the specified mission during any part of the month. DOD
has established that this pay be paid at a flat monthly rate of $150 per
month. Active and Reserve component members who qualify, at any time
during the month, receive the full monthly mission-oriented hardship duty
pay, regardless of the period of time on active duty or the number of days
they receive basic pay during the month. This pay is currently only
available to servicemembers assigned to, on temporary duty with, or
otherwise under the Defense Prisoner of War/Missing Personnel Office, the
Joint Task Force-Full Accounting, or Central Identification Lab-Hawaii.
Hardship duty includes missions such as locating and recovering the
remains of U.S. servicemembers from remote, isolated areas including, but
not limited to, areas in Laos, Cambodia, Vietnam, and North Korea.

The combat-zone tax exclusion provides exclusion from federal income tax,
as well as income tax in many states, to servicemembers serving in a
presidentially designated combat zone or in a statutorily established
hazardous duty area for any period of time.7 For example, although the C-5
aircrews at Travis and Dover Air Force Bases do not serve in a designated
combat zone for an extended period of time, many of the missions that they
fly may be within areas designated for combat-zone tax exclusion
eligibility. Enlisted personnel and warrant officers may exclude all
military compensation earned in the month in which they perform active
military service in a combat-zone or qualified hazardous duty area for
active military service from federal income tax. For commissioned
officers, compensation is free of federal income tax up to the maximum
amount of enlisted basic pay plus any imminent danger pay received.8

DOD Has Not Developed DOD has not established criteria defining what
constitutes frequent Criteria to Implement deployments, nor has it
determined eligibility requirements in order to the High Deployment
implement the high deployment allowance. DOD sought significant Allowance
modifications to high deployment compensation through a legislative

proposal to the National Defense Authorization Act for Fiscal Year 2004.

Congress had established a high deployment per diem as part of the

7 26 U.S.C. S: 112

8 In 2004, the maximum amount of compensation for commissioned officers
that is eligible for combat zone tax exclusion is $6,091 plus $225
(imminent danger pay), or $6,316 per month.

National Defense Authorization Act for Fiscal Year 2000.9 Pursuant to
statutorily granted authority, on October 8, 2001, DOD waived application
of the high deployment compensation in light of the ongoing military
response to the terrorist attacks on September 11, 2001. After
implementing the waiver authority, DOD sought legislative changes to the
high deployment compensation in an effort to better manage deployments.

DOD's proposal sought, among other things, to: (1) change highdeployment
compensation from a per diem rate to a monthly allowance, (2) reduce the
dollar amount paid so that it was more in line with other special pays
(e.g. hostile fire pay), and (3) allow DOD to recognize lengthy
deployments as well as frequent deployments. The National Defense
Authorization Act for Fiscal Year 2004 reflects many of DOD's proposed
changes. The act changed the $100 per diem payment into an allowance not
to exceed $1,000 per month. To help compensate those servicemembers who
are frequently deployed, the act established a cumulative 2-year
eligibility threshold not to exceed 401 days. Also, the act provided the
Secretary of Defense with the authority to prescribe a cumulative
threshold lower than 401 days.10 Depending upon where the Secretary of
Defense establishes the cumulative threshold, servicemembers, such as the
C-5 aircrews, serving multiple short-term deployments may be compensated
through the high deployment allowance. Once a servicemembers' deployments
exceed the established cumulative day threshold for the number of days
deployed, the member is to be paid a monthly allowance not to exceed
$1,000 per month at the beginning of the following month. From that point
forward, the servicemember will continue to qualify for the allowance as
long as the total number of days deployed during the previous 2-year
period exceeds the cumulative threshold established by the Secretary of
Defense. The high deployment allowance is in addition to per diem and any
other special pays and allowances for which the servicemember might
qualify. Moreover, the servicemember does not have to apply for the
allowance, as the act mandated that DOD track and monitor days deployed
and make payment accordingly. Finally, DOD may exclude specified duty
assignments from eligibility for the high deployment allowance (e.g.,
sports teams or senior officers). According to DOD officials, this
provision

9 37 U.S.C S: 436

10 The act also established a maximum 191-day consecutive day deployment
threshold. The Secretary of Defense was given the authority to prescribe a
lower consecutive day threshold.

Conclusions

also provides additional flexibility in targeting the allowance to
selected occupational specialties, by allowing DOD to exclude all
occupations except those that it wishes to target for additional
compensation because of retention concerns. The Senate report accompanying
the bill that amended the high deployment provision encouraged DOD to
promptly implement these changes.11 However, DOD officials told us that a
timetable for establishing the criteria necessary to implement the high
deployment allowance has not been set. Although we could not ascertain
exactly why DOD had not taken action to implement the high deployment
allowance, OSD officials informed us that the services had difficulty
reaching agreement on what constitutes a deployment for purposes of the
high deployment payment.

The family separation allowance is directed at enlisted servicemembers and
officers whose dependents incur extra expenses when the servicemember is
deployed for more than 30 consecutive days. We found no reason to question
the eligibility requirements that have been established for DOD's family
separation allowance. We believe that no basis exists to change the 30-day
threshold, as a problem has not been identified with the family separation
allowance. Further, servicemembers who deploy for less than 30 days may be
eligible to receive additional forms of compensation resulting from their
deployment, such as per diem, other special pays and allowances, and tax
exclusions.

Since the terrorists' attacks on September 11, 2001, some servicemembers
have experienced more short-term deployments. Given the long-term nature
of the global war on terrorism, this increase in the frequency of
short-term deployments is expected to continue for the foreseeable future.
DOD will need to assure adequate compensation for servicemembers using all
available special pays and allowances in addition to basic pay. While the
aircrews with whom we met did not express specific concerns about
compensation, they, like other servicemembers, are concerned about
quality-of-life issues. The high deployment allowance could help to
address such issues for servicemembers, while helping to mitigate DOD's
possible long-term retention concerns. Also, unlike the family separation
allowance, the high deployment allowance could be used to compensate
servicemembers regardless of whether or not they have dependents. Although
the Senate report accompanying the bill that amended the high

11 S. Rept. 108-46

Recommendations

o o

Agency Comments and Our Evaluation

deployment provision encouraged DOD to promptly implement these
changes, the Secretary of Defense has not taken action to implement the
high deployment allowance.

We recommend that the Secretary of Defense direct the Deputy
Undersecretary of Defense (Personnel and Readiness), in concert with the
Service Secretaries and the Commandant of the Marine Corps, to take the
following three actions

set a timetable for establishing criteria to implement the high deployment
allowance;
define, as part of the criteria, what constitutes frequent short-term
deployments within the context of the cumulative day requirement as
stated in the high deployment allowance legislation; and
determine, as part of the criteria, eligibility requirements targeting the
high
deployment allowance to selected occupational specialties.

In written comments on a draft of this report, DOD partially concurred
with our recommendations that it set a timetable for establishing criteria
to implement the high deployment allowance and what the criteria should
include. While DOD agreed that servicemembers should be recognized
with additional pay for excessive deployments, it stated that DOD has not
implemented the high deployment allowance because it views the high
deployment allowance as a peacetime authority. Further, DOD stated that
since we are in a wartime posture, it is more difficult to control the
pace of
deployments than during peacetime. DOD's response noted that it has
elected to exercise the waiver given to it by Congress to suspend the
entitlement for reasons of national security. DOD also noted that it has
encouraged the use of other flexible pay authorities to compensate
servicemembers who are away from home for inordinate periods. Finally,
DOD stated that it would reassess the use of the high deployment
allowance at some point in the future.

We do not believe that the nation's current wartime situation prevents
DOD from taking our recommended actions. The first recommended
action being to set a timetable for establishing criteria to implement the
high deployment allowance. We did recognize in our report that pursuant
to statutorily granted authority, on October 8, 2001, DOD waived
application of the high deployment allowance in light of the ongoing
military response to the terrorist attacks on September 11, 2001. However,
since then, DOD sought modifications through a legislative proposal to the
National Defense Authorization Act for Fiscal Year 2004 for more

flexibilities to manage the high deployment compensation better. These
additional flexibilities include providing DOD with the opportunity to
tailor the allowance to meet current or expected needs. Since the purpose
of special pays and allowances is primarily to help retain more
servicemembers, the high deployment allowance could be used as another
compensation tool to help retain servicemembers during a time of war. As
our report clearly states, given the expectations for a long-term
commitment to the war on terrorism, developing the criteria for
implementing the high deployment allowance would provide DOD with an
additional option for compensating those military personnel who are
frequently deployed for short periods of time. Regarding DOD's use of
other flexible pay authorities to compensate servicemembers who are away
from home for inordinate periods, the examples DOD cites for lengthy or
protracted deployments in Iraq, Afghanistan, and Korea are not applicable
to those servicemembers deployed for less than 30 days, the focus of this
review.

Finally, the vagueness of when and how the high deployment allowance will
be implemented runs contrary to the congressional direction, which
encouraged DOD to promptly implement the new high deployment allowance
authority. Based on DOD's response, it is not clear when DOD intends to
develop criteria to implement the high deployment allowance. We
recommended that DOD set a timetable for establishing criteria to
implement the high deployment allowance, not that DOD implement the
allowance immediately. We believe that this recommendation is warranted,
since establishing the criteria will make it possible for DOD to implement
the high deployment allowance quickly, whenever it is deemed appropriate
and necessary. DOD's comments are reprinted in their entirety in appendix
I. DOD also provided technical comments, which we have incorporated as
appropriate.

Scope and To assess the rationale for family separation allowance
eligibility requirements, including the rationale for the 30-day
threshold, we

Methodology reviewed the legislative history concerning the family
separation allowance and analyzed DOD policies implementing this pay. We
also interviewed officials in the offices of the Under Secretary of
Defense (Personnel and Readiness); the Secretaries of the Army, Navy, and
Air Force; the Commandant of the Marine Corps; the Air National Guard; and
the Air Force Reserve.

To determine the extent to which DOD had identified frequent short-term
deployments as a family separation allowance issue, we reviewed

proposals submitted through DOD's Unified Legislation and Budgeting
process. We met with compensation representatives from the Office of the
Under Secretary of Defense (Personnel and Readiness) and each of the
services. We interviewed officials with the Defense Manpower Data Center
and the Defense Finance and Accounting Service. We sought to use DOD's
database for tracking and monitoring deployments to determine the extent
of servicemembers experiencing frequent deployments lasting less than
30 days. We were not able to use the database for the purposes of our
report to discern the number of deployments by location lasting less than
30 days, since more than 40 percent of the data for location was not
included in the database. In addition, the database did not contain
information related to some types of non-deployment activities (e.g.
training), which we deemed important to our review. We focused our
study on the Air Force since the fiscal year 2003 Secretary of Defense
Annual Report to the President and Congress showed that the Air force
was the only service whose members were deployed less than 30 days on
average in fiscal year 2002. Further, through discussions with Air Force
officials we identified strategic aircrews managed by the AMC as examples
of those who would most likely be experiencing short-term deployments.
We visited AMC, where we met with officials from personnel, operations,
finance, and the tactical airlift command center. To understand the views
of one group of short-term deployers, we visited Travis Air Force Base in
California where we met with officer and enlisted leadership for the C-5
and KC-10 aircraft. We held discussion groups with 12 officers and
12 enlisted aircrew members from both aircraft, for a total of 48 aircrew
members. We visited Dover Air Force Base in Delaware where we met
with C-5 officer and enlisted leadership. We also met with officials
representing personnel, operations, and finance offices at both Travis and
Dover Air Force Bases. We assessed the reliability of AMC C-5 copilot
deployment data, as well as data contained in the fiscal year 2003
Secretary of Defense Annual Report to the President and Congress. GAO's
assessment consisted of (1) reviewing existing information about the data
and the systems that produced them, (2) examining the electronic data for
completeness, and (3) interviewing agency officials knowledgeable about
the data. We determined that the data were sufficiently reliable for the
purposes of this report.

To assess what special pays and allowances are available, in addition to
basic compensation, to further compensate servicemembers deployed for
less than 30 days, we identified special pays and allowances that do not
have a time eligibility factor through the DOD's Military Compensation
Background Papers, legislative research, and discussions with
OSD officials. We reviewed the legislative history regarding recent

legislative changes to special pays and allowances and how DOD has
implemented these changes.

We are sending copies of this report to the Secretary of Defense; the
Under
Secretary of Defense (Personnel and Readiness); the Secretaries of the
Army, the Air Force, and the Navy; the Commandant of the Marine Corps;
and the Director, Office of Management and Budget. We will also make
copies available to appropriate congressional committees and to other
interested parties on request. In addition, the report will be available
at no
charge at the GAO Web site at http://www.gao.gov.

If you or your staff have any questions concerning this report, please
call me at (202) 512-5559 or Brenda S. Farrell at (202) 512-3604. Major
contributors to this report were Aaron M. Adams, Kurt A. Burgeson,
Ann M. Dubois, Kenya R. Jones, and Ronald La Due Lake.

Derek B. Stewart
Director, Defense Capabilities and Management

List of Committees

The Honorable John W. Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Duncan L. Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives

The Honorable Saxby Chambliss
Chairman
The Honorable E. Benjamin Nelson
Ranking Minority Member
Subcommittee on Personnel
Committee on Armed Services
United States Senate

The Honorable John M. McHugh
Chairman
The Honorable Vic Snyder
Ranking Minority Member
Subcommittee on Total Force
Committee on Armed Services
House of Representatives

Note: A GAO comment supplementing those in the report text appears at the
end of this appendix.

See comment 1.

Page 21 GAO-04-805 Military Personnel

See comment 1.

Page 22 GAO-04-805 Military Personnel

Note: Page numbers in the draft report may differ from those in this
report.

Page 23 GAO-04-805 Military Personnel

Page 24 GAO-04-805 Military Personnel

Appendix I: Comments from the Department of Defense

GAO's Comment

1. The purpose of our congressionally directed review was to assess the
special pays and allowances available to DOD that could be used to
compensate servicemembers who are frequently deployed for less than 30
days. Consequently, our scope did not include an assessment of
compensation for servicemembers serving lengthy, or protracted,
deployments of 30 days or more. We found that DOD has available and is
using several special pays and allowances, in addition to basic
compensation, to further compensate servicemembers deployed for less than
30 days. However, we also found that DOD has one special allowance, the
high deployment allowance, that is not available to provide further
compensation to servicemembers who frequently deploy for less than 30 days
and that DOD has not set a timetable to establish criteria to implement
the allowance. During our review, we could not ascertain exactly why DOD
had not taken action to develop criteria for implementing the high
deployment allowance. During several discussions, OSD officials stated
that the services had difficulty reaching agreement on what constitutes a
deployment for the purposes of the high deployment payment. DOD's response
to our draft report noted that it has elected to exercise the waiver given
to it by Congress to suspend the high deployment allowance for reasons of
national security. We recognized this waiver in our report. We also noted
that after DOD waived application of the high deployment payment on
October 8, 2001, DOD sought legislative modifications of the high
deployment payment that would give it more flexibilities to better manage
this type of compensation. Congress granted DOD these flexibilities and
encouraged DOD to promptly implement these changes. As noted in our
report, given the expectations for a long-term commitment to the war on
terrorism, developing the criteria for implementing the new high
deployment allowance would provide DOD with an additional option for
compensating those military personnel who are frequently deployed for
short periods of time. Also, the high deployment allowance, unlike the
family separation allowance, could be used to compensate servicemembers
regardless of whether or not they have dependents and thus would reach
more servicemembers.

Related GAO Products

Military Personnel: Active Duty Compensation and Its Tax Treatment.
GAO-04-721R. Washington, D.C.: May 7, 2004.

Military Personnel: Observations Related to Reserve Compensation,
Selective Reenlistment Bonuses, and Mail Delivery to Deployed Troops.
GAO-04-582T. Washington, D.C.: March 24, 2004.

Military Personnel: Bankruptcy Filings among Active Duty Service
Members. GAO-04-465R. Washington, D.C.: February 27, 2004.

Military Pay: Army National Guard Personnel Mobilized to Active Duty
Experienced Significant Pay Problems. GAO-04-89. Washington, D.C.:
November 13, 2003.

Military Personnel: DOD Needs More Effective Controls to Better Assess
the Progress of the Selective Reenlistment Bonus Program. GAO-04-86.
Washington, D.C.: November 13, 2003.

Military Personnel: DFAS Has Not Met All Information Technology
Requirements for Its New Pay System. GAO-04-149R. Washington, D.C.:
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Military Personnel: DOD Needs More Data to Address Financial and
Health Care Issues Affecting Reservists. GAO-03-1004. Washington, D.C.:
September 10, 2003.

Military Personnel: DOD Needs to Assess Certain Factors in
Determining Whether Hazardous Duty Pay Is Warranted for Duty in the
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Military Personnel: Preliminary Observations Related to Income,
Benefits, and Employer Support for Reservists During Mobilizations.
GAO-03-573T. Washington, D.C.: March 19, 2003.

Military Personnel: Oversight Process Needed to Help
Maintain Momentum of DOD's Strategic Human Capital
Planning. GAO-03-237. Washington, D.C.: December 5, 2002.

Military Personnel: Management and Oversight of
Selective Reenlistment Bonus Program Needs Improvement. GAO-03-149.
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