Many troops protected from Basic Allowance for Housing rate drop
About 400,000 active-duty servicemembers will see their Basic Allowance for Housing (BAH) protected from a rate drop Jan. 1, thanks to “individual rate protection” Congress adopted nearly a decade ago.
Users of the Post-9/11 GI Bill education program also will be protected from any cut to student monthly stipends, which are based on BAH rates.
For the first time since 1998, average rates across the country will decline next month, though only by 0.6 percent, to reflect changes in average rental costs across 366 military housing areas.
Because of rate protection, only members arriving after Dec. 31 to areas where rents have fallen will feel the effect of lowered allowances. Those same new arrivals, however, also should face lower rents than did colleagues who arrived in 2010 or earlier, said Cheryl Anne Woehr, BAH program analyst for the Department of Defense.
For members already living in areas where stateside rates are set to drop, their monthly BAH will not change. The effect of rate protection is that housing allowances nationwide for a million BAH recipients will climb Jan. 1 by an average of 1.1 percent, lifting program costs to $19 billion.
A typical junior enlisted member with dependents will see BAH rise about $39 a month. A senior noncommissioned officer with dependents will receive about the same as last year, on average.
Without rate protection, Woehr said, members living off base in the United States would draw $100 million less in BAH payments in 2011.
Rate protection is just one reason average BAH still will climb a percentage point in 2011 despite a depressed rental market.
“The other reason is the distribution of personnel across the country,” Woehr said. “We have more personnel in the areas where rates are going up than in the areas where rates are going down.”
The value of rate protection can be seen in areas like Fayetteville, N.C., where average BAH is dropping 8 percent. Other areas to see sharply lower rates are: Nellis Air Force Base, Nev. (down 7 percent); Seymour Johnson Air Force Base, N.C. (7 percent); Whiteman Air Force Base, Mo. (5 percent); and Cherry Point Marine Corps Air Station, N.C. (down 5 percent).
Rate protection, Woehr said, is there to recognize that current BAH recipients “entered into housing agreements based on the economy at the time they made those agreements.”
New arrivals, on the other hand, should be comfortable with the lower BAH because they “will be obtaining housing in the current economy on which those rates are based.”
Areas where average BAH will rise significantly include: China Lake Naval Air Training Center, Calif. (up 14 percent); Barksdale Air Force Base/Shreveport, La. (9.5 percent); Minot Air Force Base, N.D. (8 percent); Beale Air Force Base, Calif. (7 percent); and Fort Benning, Ga. (up 6 percent).
“In areas where rates go up —and we do have quite a lot of them certainly — members still get the benefits of the higher rate regardless of when they reported,” Woehr said.
Veterans in college on the Post-9/11 GI bill get a monthly “living” stipend equal to BAH in their area for an unmarried enlisted member in pay grade E-5.
These stipends will be adjusted Feb. 1, because the GI Bill stipend is paid a month in arrear. VA rate protection will allow the stipend to climb where E-5 BAH rates are moving up and stay level in areas where E-5 BAH is set to fall.
Unaffected are servicemembers living off base overseas. They get an Overseas Housing Allowance, which is based on what they actually pay in rent. OHA is adjusted as the value of the dollar shifts against local currency.
Other military pays will change Jan. 1. Basic pay will climb by 1.4 percent to match wage growth in the private sector. Monthly food allowance, or Basic Allowance for Subsistence (BAS), will rise by just a third of 1 percent.
Annual BAS adjustments track with price changes for a “liberal food plan” for American males, ages 20 to 50, designed by the Department of Agriculture, said Jerilyn Busch, director of military compensation for DOD.
The new BAS rates will be $223.04 a month for officers and $323.87 for enlisted. The reason for the disparity, in favor of enlisted members, is too arcane to explain here, but it has survived for many years.
Stateside housing allowances are set to cover 100 percent of average rental costs, utilities and rental insurance reported locally for the type of housing deemed appropriate for the military pay grade. There are two different rates for each pay grade, one for members with dependents and a lower rate for those having no spouse or child.
Rental cost data are collected from May through July when housing markets are most active. Sixty percent is gathered by local military housing offices. They exclude rents in high-crime areas and for inadequate units like mobile homes. Runzheimer International, a contractor, gathers the rest of the data and verifies the accuracy all information used to revise BAH rates.
Data are collected on six types of housing with different numbers of bedrooms. Rates then are set based on rents for types of housing deemed appropriate for each pay grade, both with and without dependents.
BAH recipients upset about their new rate can complain to their military housing office. It won’t trigger a rate change for 2011 which, once set, can’t be changed for a year. But complaints can be investigated and those found to be legitimate might affect 2012 rates.
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