Risk and Combat Compensation
Final rept. Jun-Aug 2011
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
Pagination or Media Count:
The principal justification for combat compensation is to recognize military personnel who face significant combat risk. This paper demonstrates that there is only a weak relationship between the risk faced by personnel and the combat-related compensation they receive. It describes the elements of combat compensation, the most important being Hostile Fire PayImminent Danger Pay HFPIDP and the Combat Zone Tax Exclusion CZTE. While HFPIDP is 225 per month for all members, CZTE varies from individual to individual for many reasons. Eligibility for combat compensation is determined by the designation and management of combat zones. Today many areas in combat zones entail very little risk e.g., Saudi Arabia and United Arab Emirates as well as ships in the combat zone. Since most combat compensation is the result of the CZTE, the amount individuals receive is driven by the vagaries of the tax code, which are totally unrelated to risk. One unexpected aspect of CZTE-related compensation is that high-ranking officers qualify for the Earned Income Credit EIC, established to help low-wage earners over 2,000 officers of rank O-4 and above receive this benefit. Possible policy changes that would more closely align combat compensation and risk are presented.
- Personnel Management and Labor Relations