YOKOSUKA NAVAL BASE, Japan — Charles Molden calls it the stare-at-the-yen-rate game.
"And sometimes I’m not too good at it," Molden admitted.
As a civilian paying off-base rent and as deputy director at the Human Resources Office at Yokosuka Naval Base, Molden has watched in recent days as the dollar’s value has fallen against the yen.
"I should have paid my rent two weeks ago," Molden said last week. "I would have paid less."
Like other Department of Defense workers and servicemembers living off base, Molden receives a housing allotment in dollars in each paycheck. Those dollars, in turn, must be converted to yen to pay rent and utilities.
So when the dollar’s value falls, paying rent can put an unexpected dent in a household budget. On Oct. 1, a dollar bought 106 yen, according to the Federal Reserve Board. Ten days later, the dollar dropped in value to 99 yen. By Monday, the dollar was back slightly, at almost 102 yen.
On base last week the rate dipped to 97 yen. For Kristen Krupka, a Navy spouse at Yokosuka, the yen drop made this month’s rent "the most we’ve ever paid," she said.
"Our rent has varied up to $250 from month to month," she said as she was paying her off-base rent at the Navy Exchange last week. "I guess you have to go with the flow, but fluctuating rates means you have to think careful about your purchases.
"You wouldn’t want to repair your car right now."
The military oversees servicemembers’ housing allotments and the State Department sets the housing amounts paid for Defense Department’s civilian workers. Both systems set allotments based on locations, rank or grade, and family size. Both have ways of adjusting the housing money when foreign currencies fluctuate, officials said in recent interviews.
But those adjustments take time to show up in paychecks, officials note. And the adjustments won’t always make up for losses, especially when a worker or servicemember signed a lease close to his or her maximum allowance and gambled that the dollar would remain strong.
Setting aside some personal savings can create a cushion for times when the dollar drops, according to Senior Master Sgt. Armando Fajardo, the squadron superintendent for the comptroller at the 35th Fighter Wing at Misawa Air Base.
Still, it can be frustrating.
"It’s really hard to predict," Fajardo said of what the dollar and yen may do in coming days and weeks.
Petty Officer 3rd Class Terry Bush tries to save money by paying his bills before they are due, taking advantage of a stronger dollar when he can.
"Luckily, I was able to pay my rent right before it dropped real bad," the sailor at Naval Air Facility Atsugi said Friday.
Some admit they have to pay out of their own pockets. Kelly Esler, another Navy spouse at Yokosuka, estimated her family has paid $200 to $300 on top of their military housing allotment.
"It sucks," she said last week. "They need to give us more if they expect us to pay rent."
Esler said she tries to save money by cutting back on utilities.
Servicemembers get set rates for utilities each month, regardless of whether they spend the money.
Using that utility money for rent can help, Fajardo said, though only if you are willing to readjust the thermostat.
"But some may use their heaters in October," he said.
Stars and Stripes reporter Allison Batdorff contributed to this story.
How the allowances workOverseas Housing Allowance
OHA pays for servicemembers’ rent, utilities and some moving expenses. The rent allotment has a maximum based on location, family size and rank. An overseas servicemember may spend only the amount needed to cover rent within the maximum. The monthly utility payment is a set rate based on family size only. Any unused utility money can be kept.
The Pentagon’s Per Diem, Travel and Transportation Committee sets the allotments. In Japan, the housing allotments are set in yen. That means, for example, the monthly rent maximum for an E-5 with family members stationed at Misawa Air Base is 195,000 yen. This overall amount is reviewed at least every six months.
The allotment is paid in dollars in each servicemember’s paycheck. The committee watches the exchange rates each day and makes adjustments, if needed, each pay cycle.
In October, for example, that E-5 got about $912 for rent in the first half of the month and will get about $960 for the second half of the month. The overall rate of 195,000 yen remains unchanged; the increase in dollars is meant to keep up with the growing value of the yen.
As the committee reviews exchange rates daily, it also compares the rate it uses to figure allowances with the exchange rates where the servicemember lives — Tokyo, Misawa, Sasebo, etc. When the difference between the committee’s exchange rate and the local currency rates reaches 5 percent, the committee readjusts the overall allowance amount. That readjustment, however, may be stretched over eight weeks.
Source: Office of the comptroller, 35th Fighter Wing, Misawa Air Base
Living Quarter Allowances
LQA pays for Department of Defense civilian workers’ rent and utilities. The housing allotment is an annual amount based on location, family size and grade. Civilian workers cannot keep any unused allowance, even if the rent or utility costs end up being less than the maximum amount.
The State Department sets the allowance amount based on cost-of-living in the area; it generally only resets the rate once a year. A GS-9 worker without family at Yokosuka Naval Base, for example, gets a maximum annual allowance of $32,300 to cover rent and utilities. That worker pays his or her rent and utilities in yen.
Civilians are paid 26 times a year, or every two weeks. Therefore, the living allowance is split into 26 payments. The allowance is paid in dollars and the maximum rate is based in dollars.
Each payday, officials at the Defense Finance and Accounting Service look at the local exchange rate and adjust the housing money up or down to reflect the strength or weakness of the dollar. That adjustment is a snapshot and is not meant to make up for any fluctuations over time. So, if the dollar was weaker on a Friday, but stronger a few days later on payday, the amount in the paycheck will reflect the exchange rate on payday.
At the end of each calendar year, civilian workers compare their actual rent and utility payments with the allowances they received during the year. If that Yokosuka GS-9 paid $32,000 in living expenses but received only $31,500 in allowance payments, he or she will get $500. If that worker paid more than $32,300, there is no extra reimbursement.
Source: Human Resources Office, Yokosuka Naval Base
