FOR IMMEDIATE RELEASE
November 10, 2006
MAYOR BLOOMBERG ANNOUNCES MODIFICATION TO EXTENDED MILITARY BENEFITS PACKAGE OFFERED TO CITY EMPLOYEES SERVING IN ARMED FORCES
Military Food and Housing Allowances Will Be Excluded From Amount Reservists Remit to the City; Employees Called to Service Still Can Receive City Salary and Benefits
Change Will Aid 1,466 Reservists Who Have Served Since September 11, 2001; Amount Owed By Returning Employees Will Be Reduced By 40% on Average
Mayor Michael R. Bloomberg and Department of Citywide Administrative Services (DCAS) Commissioner Martha K. Hirst today announced that City employees serving in the armed forces who participate in the City's Extended Military Benefits Package will no longer have to repay military food and housing allowances to the City. Currently, those enrolled in the program receive both a City and military salary, and agree to repay the City the lesser of those two salaries upon their return. Until today, military food and housing allowances were included in the "military pay" that returning City employees were required to repay the City (if their military salary was less than their City salary). Now, City employees can still enroll in the program, but food and housing allowances will not be counted as military pay, so that participating employees will only have to repay the City their base military salary upon their return. These changes, which will increase the program's cost by approximately $24 million, apply retroactively to 1,466 City employees who have served the country since September 11, 2001.
"The men and women serving in our military make extraordinary sacrifices to defend our freedoms, and the Extended Military Benefits Package provides them and their families continued support and benefits while they are on active duty," Mayor Bloomberg said. "This modification will correct an inequity in what is among the most generous programs of its kind in the country."
"The New Yorkers who will benefit from this modification have far exceeded the call of duty," said City Council Speaker Christine Quinn. "Not only have they dedicated themselves to defending our nation, they also provide invaluable services to our City. Today's announcement is the right thing for the City to do, and reflects both our gratitude and our support of these great New Yorkers who have sacrificed for our country."
"This modification recognizes that in many cases, reservists called away on active duty must rely on their food and housing allowances when on-base housing is not provided to them, and thus do not have the money readily available to them when they return from active service," said Commissioner Hirst. "We will make sure reservists are properly informed of the program's benefits and obligations."
The City's Extended Military Benefits Package (EMBP) is a voluntary program that allows City employee reservists to continue to receive the City's salary and benefits when they are called to active military duty for more than 30 calendar days or 22 working days. The City's health benefits are more generous than those offered by the military. The program also keeps the employees on City payroll in full-time status, allowing them to continue to contribute toward their pension and deferred compensation. The City also makes pension and welfare fund contributions on their behalf. Employees who sign up for EMBP agree to pay back to the City the lesser of the two salaries upon their return to avoid "double-dipping." Created in October 2001 in the wake of the World Trade Center attacks, the program has aided 1,466 City employees called to active duty for homeland security operations or service in Afghanistan or Iraq. In all, 85% of the 1,720 City employee reservists called to active duty have signed up for EMBP.
In creating EMBP, the City adopted the same definition of "military pay" as used by many other jurisdictions that offer military benefits packages, and included the military's food and housing allowances in calculating the income that reservists received while on military duty. The City also delegated to individual City agencies the responsibility of calculating the amounts owed by returning employees and collecting repayment. In October, the Mayor directed DCAS to centralize oversight and administration of the program and review options for modifying EMBP in light of concerns expressed by returning reservists.
Under the modification recommended by DCAS and adopted today, repayments will be calculated solely on the gross "base pay" that individuals receive while serving in the armed forces. Any additional nontaxable allowances for food and housing that individuals may receive while serving will no longer be counted.
The recalculation will be applied retroactively to all employees who signed up for extended benefits. Those who have already paid the City their food and housing allowances will be reimbursed. As a result, the amounts owed by reservists are expected to be reduced by 40%, on average, depending on the reservist's status and benefits while on active duty. The modifications will add approximately $24 million to the program's cost, bringing the total cost of the program to approximately $50 million.
DCAS will continue to standardize the administration of the program by advising agency personnel offices about the modification and providing standardized forms, fact sheets and other information about the program to be shared with employees. In addition, two of the leading national tax preparation firms, H&R Block and Jackson Hewitt, have agreed to provide free tax advice to affected City employees.
Stu Loeser/Matthew Kelly (212) 788-2958
Mark Daly (Department of Citywide Administrative Services)