Changes to military combat compensation and career incentive pays would be implemented under recommendations made by the Quadrennial Review of Military Compensation (QRMC). 

The president is required, every four years, to review the compensation systems for the uniformed services, including DoD, the Coast Guard, and the commissioned members of the National Oceanographic and Atmospheric Administration and the Public Health Service.  This QRMC is the 11th such report since 1965.

The QRMC report does not recommend changes to military pay.  The study found that at this time military pay is not at a disadvantage when compared with civilian wages, pointing out that recent military pay increases have outpaced those of civilians. 

The QRMC found that current monthly payments of $225 for both Hostile Fire Pay (HFP) and Imminent Danger Pay (IDP) do not reflect the level of danger to which servicemembers are exposed.  The report recommends setting HFP pay at levels higher than IDP to reflect the higher level of risks or hazards in combat areas.  The report also recommends establishing different levels of Imminent Danger Pay, based on defined criteria, to reflect the varying degrees of danger to which a member is exposed.

The QRMC also addressed what it sees is an inequity in how the Combat Zone Tax Exclusion (CZTE) is applied.  Under the current federal tax code, the report states, higher ranking officers receive a larger tax benefit than lower ranking personnel.  To correct this, the QRMC recommends replacing the CZTE with refundable tax credits for Hostile Fire Pay and Imminent Danger Pay.  As a result, lower ranking enlisted personnel who have little or no tax liability would receive the full amount of the credit as a refund.  This change would base the benefit more on exposure to danger than income levels, according to the report. 

The QRMC found that special monthly incentive pays and bonuses for specific career fields are effectively used “to address staffing requirements that cannot be efficiently handled through across-the-board increases.”  Because of this success, the QRMC recommends that special pays and bonuses be expanded to other career specialties.  However, rather than creating more career-specific incentive pays, the QRMC recommends developing a career incentive pay structure that can be applied to any career field to address staffing shortfalls for specialty occupations.   

The report also addresses compensation for wounded warriors, caregivers, and survivors and reserve compensation and benefits. 

The QRMC found that current programs for wounded warriors, caregivers, and survivors adequately replace lost compensation.  However, the report recommends that these programs require further study to “understand how well these benefit programs perform in the longer term.”

To better align current and planned use of the reserves, the report recommends transitioning reserve compensation to a “total force pay structure.”  Under this proposal, reserve members would receive Regular Military Compensation for each day of reserve service and incentive pays (to shape the force).  In addition, reserve members would receive retired pay on 30th anniversary of service, after attaining 20 qualifying years of service.

The report also recommends establishing a Permanent Change of Assignment travel status for reserves that would allow them to get housing allowances for their permanent residence and assignment duty location.  And, to address health care, the report recommends establishing a TRICARE program for reserves who are not covered by TRICARE Reserve Select or TRICARE Retired Reserve.