As of Sept 1, 2012, the Department of National Defense will be cutting the Separation Expense and meal allowances of military members on Imposed Restriction. They announced the cuts in the middle of July.
While I don’t pretend to understand the nuances of federal fiscal management, I DO thoroughly understand household fiscal management.
By the middle of July, the better part of the home selling/buying season is over. It is almost impossible to manage a house hunting trip, sell and buy a house. Children have already been registered in schools for the fall. For families with children who have special needs, it is difficult to find appropriate care in a new city and on short notice it would be almost impossible.
I’ve run some numbers, and here’s what I come up with…
Approximate cost of IR: $500 rations/month $1800 quarters/month = $23,000 for 10 months
Approximate cost of full service move (Trenton to Toronto): $9000
Approximate Posting Living Differential: $1450/month = $17,400
Approximate cost of family living in Toronto: $9000 + $17,400 = $26,400 for the first 12 months, $17,400 for every year after that.
The military would be spending $3,400 MORE if our family were to move for only one year. Any cost savings would be realized only after the first 12 months.
If my numbers aren’t right, I welcome the correction because I’m just not seeing the savings part – at least for this year.
11 thoughts on “Imposed Restriction – 2012 Budget Cuts”
Ooh doesn’t sound good. I did hear we would have additional income while hubby is away at training due to .ir, guess i won’t be counting on that! What exactly is a posting living differential? Is 500 the monthly .ir money you get? Is that intended to cover your husband’s food cost living on base or does he not pay for that? they must have banked on you staying in trenton anyway!
The extra funds you receive depends on the type of “separation”. Usually if it is training, then the military pays for room & board – or rations and quarters as they like to call it. If there is an actual posting then there may be some coverage such as quarters but not rations. You need to fully investigate all options and benefits on each posting/type of training.
Posting Living Differential (PLD) is the amount of extra money a military member can receive to compensate for the differences in cost of living between Canadian cities. In the civilian world, a secretary would earn a higher salary in a big city than in a small town. In the military, the salaries do not change regardless of where the soldier lives. In order to compensate for the difference in this cost of living, military members receive the PLD. NOTE: The PLD is a TAXABLE allowance. This means if you get $1450/month extra with PLD your annual taxable income is $17,400 MORE so in the end you pay more income tax.
neat! Thanks for explaining! my husband has already had to report to edmonton and is staying on base for now, EVERYONE is talking about the budget cuts! but they haven’t quite figured out exactly how they’re going to impose the change in the meal plan, we’re waiting til next week to see what happens.
I was wondering how people can afford to move to more expensive cities on the same pay! ha! with the new baby coming i should be home for a while, so hopefully we won’t be heavily taxed on a single income.
The military provides a Posting Living Differential “PLD” This is an extra amount of taxable income to compensate for the cost of living in different cities. The amount received is based on geography and salary. It’s a taxable allowance so the government takes some of it back.
Get over it, don’t like it leave the military. Your always told not to depend on the extra allowances, as they can be taken away at anytime!!!
Steve, It is not that we depend on the extra allowances (nor should any military member depend on any allowance), but when we are being forced to move, for the better of the military, we should not be expected to pay more money out of our pockets to do so. This is what is happening now. Without the new rules, many had to pay a significant amount out of pocket for their moves. I have a family of 6, and have moved 7 times. Our cheapest move cost me about $2K out of pocket. Others have been much more (if I count in loss in $$ in home sale, etc). Costs that are not covered by DND can be signficant, with the most expensive in Interm Lodging and storage if you cannot get your house exactly on the date your stuff arrives (tough in some areas where bases are, and there is not much available on the market), the loss in sale on a home, and some “cheaper” costs that nonetheless add up to a lot include buying curtains, re-painting (with boys, they really dont want pink rooms), etc. The bottom line is very few families that move because of the army come out with extra money (only the lucky few that may have sold their house at a huge gain, then moved into an area that was a cheaper to live, and never moved again). Money aside, the emotional upheaval on kids, and the effect this has on their education, life, etc cannot even begin to compare. We DONT leave, because we believe in serving our country, we believe in the greater good. If we were in it for the money, we would be long gone.
In the case above (of IR for Toronto), the family can move, and cost the military more money than if the member went IR. In reality, she underestimated moving costs, as a move alone is costed at about $35K not $9K. It would take a member several years on IR to even equal that cost.
Hey, thanks for explaining:) this is so nice for new military wives! Does anyone know if you get PLD in Trenton? We are trying to figure out where we want to go after we are done in Borden.
I have no idea if PLD (posting living differential) is given in Trenton. PLD, also known as AAA (accommodation assistance allowance) is also based on salary. The unit orderly room would be able to let you know.
These changes had a signifcant impact on moves and it gets frustrating! In 2009 when they first strengthened the Door to Door policy, we would have had to pay for about 3 months of Interm Lodging and storage. Bottom line is no PMQ was available until Nov, and the kids had to start school (and us our jobs, we were both COs!).. but the DCBA answer is always, find another home that will meet the dates.. like thats easy with a family of 6! Luckily, the base commander gave up his PMQ for our use.. but a “soldier” would not have been so lucky.
Now they have come up more new rules. For example, they wont pay to break a mortgage.. Hmm.. but this came in AFTER we got our current 5 yr mortgage… There should be some sort of grandfathering… or what about when you leave to go into a PMQ, (or provinces like QC where not all mortgages can port too). They will not pay for IR, yet in some cases, like if you are on course for the 10 months in Toronto, it makes no sense to move your family (financially or emotionally). So, what choice do you have?
Sometimes it does not make sense.. Like when my husband was posted from Trenton, to Toronto, to kingston. We remained in Napanee… When it was time to move to Quebec, we were deemed “off base area” and were suppose to be on the hook for the cost. Even though we saved the department about 80K (40K per move) by not moving, we were on the hook to pay for the 3 KM outside of area. On our initial move, this was our halfway point to live, so neither one of us would be IR, again, saving the department a LOT of money).
This will no doubt cause more people to end their careers to avoid IR, or other financial hardships if posted. Having great talent leave prematurly costs the government millions of dollars.. so I am not convinced that these little methods of “shaving” the ice-cube to save money will indeed accomplish it.
Shaving the ice-cube is a great analogy! I think that looking at moves on a case-by-case basis would be better. I never calculated how much money we’ve actually saved the military on moves but it would be fun to let them know. When we moved from Montreal to Trenton they told me that because my husband was in Afghanistan at the time, they would put our stuff in storage and us in a hotel for 3 weeks rather than moving us to Trenton and giving us a PMQ. I went back to them with the costs (ILM&I + hotel + childcare + storage HG&E) for 3 weeks and compared that to the costs (income for them) of us doing a door-to-door move into a PMQ. After much arguing they relented. Their chief concern was that I was unable to complete the move on my own. HA!
Too funny… Because, of course a helpless wife can’t do it alone! To think my hubby moved twice on his own while I was away..!!
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