Housing allowance rates raised

Basic Allowance for Housing paid to a million service members living off base in stateside areas will rise an average of 2 percent Jan. 1.

BAH for a typical enlisted member, in pay grade E-6 with dependents, will increase by an average of about $35 a month. BAH for a typical officer, a married O-3, will climb by about $40 a month.

Actual BAH rates for individuals, as well as the size of increases for 2012, will vary widely, determined by changes in local rents, a member’s rank or pay grade, and dependency status. Those who are married or have children will draw the higher “with dependents” rate in all housing areas.

BAH will jump an average of 41 percent, to $2,040 a month, for members with families in Minot, N.D. The largest average BAH will be found in San Francisco, $3,147 a month for all pay grades with dependents. More typical is average BAH of $1,422 for married members in El Paso, Texas.

Again in 2012 many BAH recipients won’t see any housing allowance increase because rental costs in their area fell over the past year. Rents dropped in 35 percent military housing areas, said Cheryl Anne Woehr, BAH program manager for the Defense Department. But thanks to a “rate protection” feature, only members who arrive after Dec. 31 in areas where rents dropped will feel the affects of lowered allowances. The law shields other members from any cut in their tax-free housing payments.

“As long as they stay at the same duty station, have the same dependency status and are not demoted, they will keep the previous year BAH rate if that is the higher one,” Woehr said. “We do that because those service members already have housing commitments in their area that were based on the market at the time they made that commitment.”

Since 2008, BAH “without dependent” rates has benefited from an artificial floor. These single member rates must match at least 75 percent of the local “with dependents” rate at the same pay grade.

Housing areas that will see larger percentage jumps in BAH include: Washington DC (9.9 percent); Fort Bragg/Pope Air Force Base, N.C. (9.6 percent); Morehead/Cherry Point Marine Corps Air Station, N.C. (9.5 percent) and Fort Campbell, Ky. (8.6 percent).

Areas where BAH will fall significantly include: Barstow/Fort Irwin, Calif. (-8.5 percent); Wichita Falls/Sheppard Air Force Base, Texas (-7.5 percent); Holloman AFB/Alamogordo (-5.7 percent) and Beale AFB, Calif. (-5.2 percent). Individual rates for 2012 can be found online at:https://www.defensetravel.dod.mil/site/bahCalc.cfm

Also rising Jan. 1 will be military basic pay, by 1.6 percent, and basic allowance for subsistence (BAS) by 7.2 percent to match the increase in food prices during fiscal 2011 as measured by a Department of Agriculture food cost index. BAS for enlisted will increase from $325.04 a month to $348.44. Officer BAS, lower of the two, will rise from $223.84 to $239.96.

Service members living off base overseas get an Overseas Housing Allowance instead of BAH. OHA is based on what members actually pay in rent. It gets adjusted as the dollar’s value shifts against local currency.

Veterans using the Post-9/11 GI bill get a monthly “living” stipend equal to BAH in their area for an E-5 without dependents. VA will use new BAH rates to adjust the stipend next August before the start of the new academic year, said Keith Wilson, director of VA education services.

The methodology and its appropriateness for setting BAH rates is reviewed periodically, most recently in 2010, said Woehr. No changes were needed, she added.

BAH payments will total $20 billion in 2012, up from $19 billion “and change” last year, Woehr said.