Paycheck Chronicles

Changes To Allotment Rules (Making Me Cranky)

Effective 1 January 2015, the military will not longer permit pay allotments for the purchase of personal property.  This means vehicles, sofas, TVs, refrigerators and pool tables will no longer be eligible to have payments made via a military allotment.  Current allotments for these items are not affected by this change.

Troops are permitted have up to six allotments deducted from their pay before it is distributed.  These allotments may be used for a wide variety of purposes including savings accounts, insurance, dependent support, household payments, government debt payments, or charitable contributions.    Under the new rule, when setting up an allotment, troops will have to certify that it is not for "the purchase, lease, or rental of personal property of, or payment toward personal property."  The rule change does not apply to allotments made by retirees or civilian employees. So, that's the news part of this post.  Here come the editorial part:

This change has been made in response to a study that determined that 3 of the 10 largest allotment recipients participated in business practices that could be considered harmful to the customers.

Personally, I am again offended that the Department of Defense has determined that I am not capable enough to make my own bad decisions, and so it is going to protect me.

Rather than provide useful education and counseling, the Department of Defense has again decided that it makes more sense to limit the consumer freedoms of military members, under the guide of protection.

This change is very similar to the "protections" contained in the  Military Lending Act and it's proposed "improvements."  Further investigation has shown that the true driver to the Military Lending Act and its improvements is convenience and cost to the Department of Defense.  In fact, military service member's don't use these predatory lenders any more often than their civilian counterparts.  And yet, because a person has signed up to defend the freedoms of our country, the Department of Defense has decided to further those freedoms by getting involved in their personal financial business.

I absolutely agree that we don't want anyone, military or not, using financial services that are detrimental to their financial well-being.  However, it isn't my job to legislate the legal actions of others.  If these companies were participating in illegal activity, then there would be appropriate non-military ways to stop them.  But these business practices are not illegal, and customers are entitled to make dumb choices.  Unless, apparently, the customers are military.  In that case, the Department of Defense would like to take away the right to be dumb.

If find this to be a poor choice.  I'd much rather a service member make a dumb choice, and learn from it, while on active duty.  Active duty folks have a regular paycheck and access to financial counseling to help them recover from their poor decisions.  With these new laws, the learning point will more likely be coming after the person has separated from the service, when her or she may not have the resources to rebound as quickly.

I'm curious what you think about these new laws.  Do you think that protecting military families is a great thing?  Does it bother you?  Have you used an allotment for personal property, and was it a good or a bad decision?  Comment away!

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