BAH Basics: Understanding Military Housing Allowance

Posted in Uncategorized on April 28, 2017
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2017 BAH (Basic Allowance for Housing) Rates

According to the Defense Department, the 2017 BAH rate has increased an average of 2.4% or $41 per month. These 2017 rates for BAH took effect on January 1, 2017 and service members should have seen their first rate increase on January 15th pay.

The DTMO maintains a robust website, including a BAH primer, for more information on the housing allowance. You can also contact your local finance office or command or the BAH service representative for your branch, or use the online BAH calculator for more information.

What is the Basic Allowance for Housing?

For many active members of the United States military, and some reservists and veterans, the Basic Allowance for Housing (BAH) helps cover the costs for housing for the service members and his or her dependents is they are not occupying government quarters or barracks. Previously called the Basic Allowance for Quarters (BAQ), these non-taxable funds are administered by the Defense Travel Management Office (DTMO), and are calculated based on several factors:

  • Marital status: Married service members typically receive substantially more through the BAH. BAH Basics: Understanding Military Housing Allowance
  • Rank: Typically, the higher the pay grade, the higher the BAH. Veterans who are full-time students using the Post 9-11 GI Bill are given a BAH allowance and classified at an E-5, regardless of previous rank. Reservists that have been activated typically receive a BAH because it is assumed they retain obligations from their civilian life, such as a mortgage.
  • Location: The calculation of the BAH varies depending on the average cost of rent in the service member’s duty location, calculated by the Military Housing Areas (MHAs) or zip codes, and other stats about city rent and cost of housing. You can estimate you BAH using an online calculator and your zip code.
  • Assignment Type: Your assignment type – especially if it is unaccompanied or temporary – will impact your BAH allotment.
  • Dependents: BAH calculations on dependents are categorized into two groups: with dependents and without. The numbers of dependents does not affect the final amount granted, although service members with dependents typically receive more BAH funds on the assumption that a family needs more room than a single person.

How is BAH Calculated?

The BAH allotment is adjusted every year based on stats from the active rental season, and generally changes 2-5% annually (but up to 5-10% in hottest markets). The BAH does not, however, take into consideration the size of the potential rental property, or the actual individual rent amount; calculations are based on average rental properties and costs in the duty location. If you or your family chooses to live in a different city than the duty location, you still receive the BAH for the duty location.

It’s important to note that the BAH program stresses the service member’s ability to make his or her own choices in how to spend the housing allowance. Since it is a flat rate, your choice on where and how to live may mean out of pocket costs that are not covered by your BAH amount. Other times, families who choose to “economize” their housing may have all housing expenses paid, with some left over.

BAH also includes rate protection, meaning if a member’s current BAH rate is less than the previous year, the member receives at least the same amount of BAH as the previous year, provided that the member’s duty location, rank, and dependency status stays the same. If BAH rates go up, the member will receive the higher BAH rate as long as eligibility is uninterrupted. This ensures that members who have made long-term commitments in the form of a lease or contract are not penalized if the area's housing costs decrease.

A service member stationed overseas (except in Hawaii and Alaska) is eligible for an Overseas Housing Allowance (OHA) based on the member's dependency status. If he or she is serving an unaccompanied tour and has dependents back at home, and is not provided government housing overseas, he or she is still eligible for the with-dependents rate, based on the U.S. location of his or her family, to help pay for housing while deployed.

If a service member is divorced or separated, but retains joint custody, or pays child support, his or her status as “with-dependent” gets a bit more complicated and it’s a good idea to contact your servicing finance office or a BAH service representative. BAH-DIFF is the housing allowance amount for a member who is assigned to single-type quarters and who is authorized a BAH due to paying child support. A member is not authorized BAH-DIFF if the monthly rate of that child support is less than the BAH-DIFF amount. If the service member was married to another service member, only one can claim the “with-dependent” BAH status.

Written by Megan Hammons

 

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