Pre-tax child care savings has advocates for military families smiling

The Department of Defense (DOD) will offer new flexible spending accounts to help meet the cost of child care for active-duty service members.

The dependent care flexible spending accounts for active-duty members will let families set aside up to $5,000 in pre-tax income through payroll deductions for eligible dependent care expenses, the DOD said last week.

The ability to set aside more for child care can be seen as the most important of new benefits the DOD unveiled, said Kelly Hruska, government relations director for the Alexandria, Va.-based National Military Family Association.

“Honestly, we have been working on the dependent care accounts for over a decade,” Hruska said in an interview. “I mean, we’ve been working on this one for a very long time.”

The move does not require congressional approval, and the association was confident that the DOD had the authority it needed to go forward.

“We’re really very happy that they decided to go ahead and implement this,” she said. “This is a benefit every federal employee has access to. And now service members will, as well.”

Child care is expensive enough today that $5,000 can be expected to be spent very quickly, she said.

Existing dependent care flexible spending accounts for federal employees can be used to pay for preschool, summer day camp, before- or after-school programs, and child or adult daycare.

Among the other benefits announced, the DOD is allowing parental leave benefits that provide 12 weeks of paid, non-chargeable leave to service members welcoming a child through birth, adoption or long-term foster-care.

Also announced: A program providing up to $4,000 in help military spouses obtain a license, certificate or associate degree. The “MyCAA financial assistance” program will be expanded to the E-6 and O-3 ranks, the department said.

The DOD said it is also working with Congress to secure funding for universal pre-kindergarten at DOD schools. That will require not only congressional approval but a phased implementation over five years, the department said.

This is the second memo that Secretary of Defense Lloyd Austin III has put out on these kinds of issues, Hruska noted. “Clearly the department is trying to work through the various issues that military families are experiencing.”

On Jan. 1, members of the military and civilian employees received a 4.6% pay raise, the department’s largest in 20 years.

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