The summer PCS season is coming up, and many military families will be considering their options to move their household goods. Will you let the government contract your move or do some version of a Personally Procured Move (PPM), formerly known as a DITY move?
One important part of this decision is understanding the allowance that you'll receive if you do a PPM. PPM allowances fall in the top 10 most frequently misunderstood parts of military pay and benefits.
Here's how a PPM move works:
You Will Be "Reimbursed", But It's Not Really a Reimbursement
The first problem with understanding PPM allowances is that people often use the term reimbursement. I personally think that's a terrible choice of words; you are not being reimbursed in any way.
The Department of Defense uses that term because your PPM allowance is based on how much it would cost the DoD to hire a mover to move your weight of household goods for the distance of your move. The DoD pays you the amount they'd pay someone else to do the same job -- moving your things.
But the allowance does not reimburse you for any of your actual expenses. You receive the calculated rate, regardless of how much you spend, or what you spend it on. Depending on your expenses, you may spend far less than the allowance amount, or you may spend more. Whichever way it goes, you are responsible for the costs incurred; you have to pay your mover under a PPM move.
So Why Does a PPM Require Receipts?
Part of the reason that people think that their PPM allowance is a reimbursement is because the DoD encourages you to submit your expenses with your claim. But they don't use those expenses to calculate how much money you receive. They use the expenses to calculate the amount of taxes to be withheld from the payment.
This is because the allowance is taxable income, but it may be offset by your costs. Using your actual expenses allows the military to figure out how much of your allowance is going to be taxable, and that's how they figure out how much tax to withhold.
Those receipts do change how much money you actually receive, but only because they change the amount of taxes withheld. They do not change how much allowance you receive before taxes. The amount of the allowance is based only on the weight tickets and the distance traveled.
The PPM Allowance Is Usually Issued with Other PCS Allowances
Another confusing part about the PPM allowance is that it may get lumped together with many of the other allowances that you receive during a PCS move. Those payments don't always come separately, and they aren't always marked clearly.
You may have a friend or co-worker who tells you about the thousands of dollars that they "earned" doing a PPM. Often, they are telling you the amount of all their allowances. This includes a dislocation allowance (DLA) and transportation allowances -- allowances that would be received, regardless of the type of household goods moved.
There are many good reasons to do a PPM, and money may be part of the reason. But be sure that you understand exactly what you're doing when you make that decision. You should be able to get an estimate of your PPM allowance from your personal property office when you schedule your PPM move. Use that information to make the right choice.
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