Financial Security

According to the Department of Defense, active-duty military members and their families relocate, on average, once every two to three years—typically across state lines or overseas. These frequent transitions can contribute to financial insecurity by making it difficult for military spouses to find and maintain valuable employment.

Additionally, the limited availability and high costs of child care, out-of-pocket relocation and housing expenses, and unexpected financial emergencies, can exacerbate financial circumstances of modern military and Veteran families.

Blue Star Families supports legislation that would ensure service members, Veterans, and their families are financially secure.

What does the data say?

In our 2019 survey, 63% of active-duty military family respondents reported experiencing “some stress” or “a great deal of stress” regarding their family’s current financial condition; however, over half (64%) of active-duty families regularly set aside money in their savings. Moreover, “financial issues/stress” was ranked as a top stressor among military families. When comparing military family respondents to their civilian counterparts, military family respondents in 2018 reported higher rates of difficulty making ends meet than civilian families (13% of military family respondents, compared to 7% of civilian families).

Among those active-duty military family respondents who reported experiencing “some stress” or “a great deal of stress” regarding their family’s current financial condition, the most commonly cited contributions to their stress included: underemployment or unemployment (48%), out-of-pocket housing costs (34%), out-of-pocket relocation costs (34%), excessive credit card debt (27%), and out-of-pocket child care costs (24%).

Resources:

Military families say this is their top concern (CNBC)

Service Member Compensation

Service member compensation must be competitive with that of the civilian sector to recruit and retain talented individuals in the armed forces.

What does the data say?

Policy Recommendation

Support annual increases to service member compensation tied to the Employment Cost Index

Resources:

How Much Does the 2020 Military Pay Raise Really Put In Your Pocket? (Military.com)

Military Spouse Employment

Unemployment and underemployment issues for military spouses continue to persist despite legislative and community efforts. We have been tracking this issue since the inception of the annual Military Family Lifestyle Survey in 2009, and we have elevated military spouse employment to the forefront of Department of Defense and legislative conversations.

What does the data say?

Our 2018 survey identified frequent relocations/permanent change of station (PCS) moves to be a primary reason for military and Veteran spouse underemployment. This was also reflected in the higher incidence of underemployment among military spouse respondents the more times said spouses relocated. To reduce military spouse unemployment, employers need to offer flexible jobs that allow military spouses to work despite the demands of their partner’s service.

In 2018, military spouse respondents identified working with large corporations to design military spouse-friendly work options (i.e., flexible hours, job-sharing options, remote/virtual work options) as the top suggestion for improving unemployment/underemployment of military spouses.

In our 2019 survey, 64% of active-duty military family respondents agreed that having two incomes is vitally important to their family’s well-being. Yet, 24% of active-duty spouse respondents were unemployed, and three-fourths of employed active-duty military spouse respondents experienced some degree of underemployment.

Forty-four percent of unemployed (i.e., not working but had actively sought work in the past four weeks) spouse respondents reported that service member day-to-day job demands were a barrier to employment. Only 23% indicated that recovering from a military move was a reason for not working, and 18% reported their service member’s deployment schedule was a barrier to employment.

Active-duty military spouses are impacted by underemployment in more than one way, suggesting that underemployment is a complex issue. Thirty-six percent of active-duty military spouse respondents reported three or more indicators of underemployment. When asked to define what flexible work means to them, active-duty military spouses most frequently reported flexible scheduling and remote/telework.

Policy Recommendations

Incentivize private sector employers to initiate flexible work programs for military spouses by amending the Internal Revenue Code, making employers of military spouses eligible for the Work Opportunity Tax Credit (therefore allowing them to claim a tax credit equal to a portion of the wages paid to said spouses)
Allow military spouses who must leave their jobs due to a PCS to defer their student loan payments for a fixed period
Encourage the Bureau of Labor Statistics to start tracking the military spouse unemployment rate

Resources

Military Housing

Housing and neighborhood quality have received increasing attention in recent years and are indelibly tied to a family’s economic condition. Department of Defense policy is written to ensure military families have access to quality, affordable housing, which reflects current community living standards. Starting in 2015, however, Basic Allowance for Housing (BAH) was incrementally reduced to 95% of local area rent, making it a matter of policy for military families to pay out-of-pocket for quality housing, though they rarely have full control over where they are stationed or when they move.

These BAH cuts impact base housing sustainment funding, which ensures that the DOD continues to provide military families with the quality housing its policies require.

What does the data say?

In our 2018 survey, military family respondents identified better housing options or increased BAH as a top way their family’s quality of life could improve. Of the 66% of military family respondents who utilized on-installation housing during their military service, one-third (33%) indicated that they were dissatisfied with their on-installation housing experience. In qualitative responses, military family respondents expressed frustration with privatized housing management, aging properties, and environmental health hazards, such as contaminated water, lead poisoning, and mold infestations.

For military family respondents who live off-installation, inadequate BAH rates (relative to local area rent) and housing shortages were cited as limiting factors for finding quality, affordable housing in desirable communities. For the vast majority of these respondents, BAH did not cover total monthly housing costs, including utilities, leaving only 15% of off-installation housing fully covered.

Starting in 2015, BAH was incrementally reduced to 95% of local area rent. This means military families are forced to pay out-of-pocket for quality housing. In 2018, we asked: “What amount of your monthly out-of-pocket housing costs, including utilities, are not covered by your BAH?” We found the following:

43% of respondents had out-of-pocket costs of less than $500 per month;
8% had out-of-pocket costs between $500 and $1,000 per month; and
2% reported out-of-pocket costs of over $1,000 per month.

Military family respondents identified the cost of housing as their top financial stressor after military spouse un/underemployment. As Rep. Susan Davis (D-CA-53) once said: “The military pay system is not designed for junior enlisted members with families in high-cost areas.”

Policy Recommendation

Restore BAH to 100% of local area rent

Resources

Relocation and Out-of-Pocket Expenses

Every year, a full third of our All-Volunteer Force packs up and reports to new duty stations—some across the country, others across the globe. When choosing housing, families prioritize proximity to base, family safety, a desirable school district, pet acceptance, and whether BAH will cover the costs. Financial stress increases with greater out-of-pocket housing costs.

What does the data say?

In our 2018 survey, military family respondents reported relocating an average of four times due to military orders, and, although the federal government covers the majority of expenses incurred by relocation, one-third (31%) reported spending over $1,000 in unreimbursed expenses during their last move. Thus, over an average of four moves, military families may spend upwards of $4,000 in out-of-pocket moving expenses.

Policy Recommendation

Increase lead time given to military families prior to relocation

Resources

How Do You Move 10 Family Members Every 1-2 Years? Not Easily and at a Great Cost.

Basic Needs

While food insecurity is on the rise in recent years following the COVID-19 pandemic, the issue is not new, and the military and Veteran community is not insulated from it.

Across the country, service members and their loved ones are turning to food banks or seeking economic assistance to feed their families, and distribution programs exist on or near every single U.S. military base. Contributing to financial stress, military spouse un- and underemployment increase the threat of food insecurity, as do out-of-pocket living expenses, PCS expenses, and debt.

What does the data say?

In our 2018 survey, we found that 7% of military family respondents and 12% of Veteran family respondents indicated that someone in their household had faced food insecurity in the past year. Additionally, 9% of military family respondents and 18% of Veteran family respondents indicated that someone in their household had sought emergency food assistance through a food bank, food pantry, or charitable organization. Recent Pentagon records show that during the 2018-19 school year, one-third of military children at DOD-run schools in the U.S. were eligible for free or reduced-price lunch.

Food insecurity among military families is often triggered by a number of different factors, including:

high rates of unemployment and underemployment among military spouses,
limited availability and high costs of child care,
out-of-pocket relocation and housing expenses, and
unexpected financial emergencies.

Military families are barred from qualifying for the Supplemental Nutrition Assistance Program (SNAP), despite being food insecure. This is because the Basic Allowance for Housing (BAH) is treated as income for the purpose of determining eligibility for SNAP. Meanwhile, housing vouchers for low-income civilians are not treated as income for the purposes of determining SNAP eligibility. Furthermore, BAH is not treated as income for federal income tax purposes or for determining eligibility for most federal assistance programs. Current policy for SNAP eligibility (as authorized in the 2018 Farm Bill) thus establishes an unnecessary and harmful barrier to nutrition assistance for struggling military families.

Policy Recommendations

Amend the Farm Bill to prevent the Basic Allowance for Housing (BAH) from being treated as income when calculating SNAP eligibility
Establish a basic needs allowance to supplement the base pay of junior enlisted members at or below 130% of the federal poverty line

Resources

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It's Survey Time!

Financial Security

Service Member Compensation

Military Spouse Employment

Military Housing

Relocation and Out-of-Pocket Expenses

Basic Needs

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