New BAH rates will cover hikes

Basic Allowance for Housing (BAH) paid to service members living off base in the United States will rise an average of 5 percent in January to keep pace with local rental costs over the past year.

But senior defense officials are weighing whether this should be the last significant hike in housing allowances for a while as they struggle to keep personnel costs “in balance” with other needs as defense budgets fall.

Tom PhilpottThe size of the BAH increase for individuals, as always, will vary by pay grade, dependency status and assignment area.

For example, rates will climb an average of 14.9 percent in Mobile, Ala., highest among military housing areas, and drop an average of 7.7 percent in Sacramento, Calif.

Wide shifts will be over short distances too.

Average BAH will leap 7.7 percent next month in Everett, Wash., while 90 miles away, in Bremerton, rates will fall an average of 5.6 percent.

Average BAQ will be cut in 60 of 360 military housing areas. Thanks to a rate protection feature, however, members already living amid falling rents will see no drop in their own monthly allowance. Rate declines will only apply to members moving into affected areas.

The rate protection rule will help an estimated 250,000 BAH recipients in 2014.

The heft of the overall BAH increase could make some members more comfortable with the Obama’s administration’s decision to cap the Jan. 1 basic pay raise at 1 percent, versus 1.8 to match private sector wage growth.

Rates will climb enough to cover not only average hikes in rent but in utilities and renters’ insurance for housing types tied to rank and family status, said Cheryl Anne Woehr, BAH program manager for the Department of Defense.

The BAH budget for 2014 is almost $20 billion.

The average 5 percent pop means $75 to $80 more per month across the force, Woehr said.

New rates are online at:

http://www.defensetravel.dod.mil/site/bahCalc.cfm

Military leaders have been urging Congress for several years to slow compensation growth.

For more than a decade, they have pushed to make working-age retirees pay more of their own health costs. This month Congress accepted the modest pay cap but rejected again plans to raise TRICARE fees, co-pays and deductibles for retirees and their families.

The president’s 2015 budget request, to be unveiled in February, is expected to call for another pay cap as well as higher TRICARE fees. It also might include an initiative to dampen housing allowances.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at:

milupdate@aol.com

 

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