THE ARMY IS CHANGING WHEN SOLDIERS RECEIVE CONTINUATION PAY: DON'T MISS OUT ON $10K+ MILITARY BONUS
Did you know that members under the Blended Retirement System (BRS) are eligible for a mid-career bonus that is worth 2.5x their monthly base pay?! It is known as Continuation Pay (CP), and is one key distinguishing factor between Blended Retirement and the Legacy System. This bonus was outlined in the original BRS guidance and was set between the eight and twelve year service mark for members to opt in and sign up to serve an additional four years.
Each branch gets to decide when members are able to apply for this one time bonus; however, it's important to note that it disappears after 12 years of service, currently for all branches.
As of late, Army leaders have been working to make changes to the CP. A memo signed on December 31,2024 was released in January of this year, outlining those upcoming changes that are expected to occur over the next 3 years, along with a plan to ensure members are notified every year.
What Does the Current Continuation Pay Military Bonus Look Like?
For CY 2025, no changes have been made compared to what was set in place by the BRS in 2018. Any soldier who has served between eight years and twelve years is eligible to apply for CP.
The bonus requires members to serve an additional four years of Active Duty Service Obligation (ADSO). The bonus is currently set at 2.5 times a soldier's base pay.
It can be paid in one large bonus or in four equal installments. Members also have the option to have the bonus go directly to their Thrift Savings Plan, but need to ensure they stay under the yearly cap.
Members' pay is based on their current base pay; both of these increase with time in service and rank.
For enlisted members, the breakdown generally would be that an E-7 with eight years of service would receive $12,396.00, and an E-8 with 11 years would receive $14,226.75.
For Warrant Officers (WO), a WO1 with eight years of service would receive $13,449.75. A Chief Warrant 2 (CW2) with 11 years of service would receive $15,131.25.
Alternatively, for an officer, (an O-3 with eight years of service) the Continuation Pay Bonus is currently $19,569.75, while an O-4 with 11 years of service would receive $22,687.50.
These payouts are based on CY2025 Pay Charts and current multiples of 2.5.
What is Changing?
The most significant change set to occur is the widening of the window of eligibility, and the fact that it is then shrinking and moving earlier over the next 3 years. In the past, a 4-year window has been between year 8 and 12.
In 2025, this will remain the same.
In 2026, this will change, and will include those with no less than 7 years to no more than 12 years.
In 2027, the upper threshold will fall to 10 years, and the lower threshold will still remain at 7 years.
Examples
- An E-6 at 7 years of service would receive $10,201.50. An E-7 with nine years of service would receive $12,396.00.
- Warrant Officers generally don’t transfer from enlisted ranks until eight years, requiring an additional two years of service to reach CW2. This means the highest amount Warrant Officers can receive, with nine years of service, would be $13,449.75.
- Alternatively, an O-3 with seven years of service would receive $18,634.50. While an O-3 with nine years of service would receive $19,569.75. Since officers typically do not meet the rank of O-4 until after 10 years of service, there is no adjustment for rank, only time in grade.
These changes are important to keep in mind, as historically it was smart to take continuation pay later to maximize your time in service and your rank-based pay.
However, this may now not be possible given the changes over the calendar years. Therefore, it is important to map out where you fall related to these changes and your time in service.
Unit Commanders Have a Training & Tracking Requirement
Unit Commanders are required to track and provide counseling to members as they enter the CP window, and before they leave, to help ensure members are aware of the benefit before it expires.
Also, at the end of each fiscal year, units are required to provide an analysis of the CP program.
The report will include a cost benefit analysis of the CP program, and will show the short-term and long-term retention. The Army will use the information provided to help determine future changes for the CP program.
What Should Soldiers Do With Their CP?
Taking CP can be great for soldiers who are planning to stay in the service. But if your family is currently considering leaving the military, then it is important to discuss the choice with your partner. Also, it is strongly advised that soldiers talk to their installation’s Financial Service Department to determine the best way to use their CP.
Soldiers should take into consideration if they want to invest the money, pay off debt, use it for a family trip, build an emergency fund, or put it towards some other important financial priority.
It can also be split among multiple financial opportunities. Don’t forget that your CP is taxed, and it can be split over four years to reduce the tax bill.
Soldiers interested in applying for their CP need to fill out the Request for Continuation Pay form. After you sign the form, you need to have the O-5 in your chain of command approve it.
Then, your unit HR will send the form and substantiating documents to the military pay office. Most members receive their CP within two weeks of requesting it.
You can choose to receive the continuation pay in a lump sum, or you can choose to spread it out in yearly payments over 2, 3, or 4 years.
Take the Steps to Find Out if You're Eligible for CP
Taking continuation pay is a personal decision; however, it is important for service members to understand the options that are available to them.
As a final reminder, if you are enrolled in BRS, meaning you joined after January 1, 2018 or switched when BRS was announced, and have between the current service commitment requirements, then you are eligible for CP.
Make sure you talk to your leadership if you have not been notified to ensure you have met the requirements. They can also help you decide when the best time to take CP is, while also considering the additional four year ADSO. Also, it is recommended that you talk with your partner, spouse, or other family members that could potentially be impacted, to best leverage your bonus, and the financial planning resources available to you.
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