New rules on overseas housing allowances may trim paychecks
U.S. troops living overseas might have found their paychecks a little lighter this week, thanks to new rules regarding overseas housing allowances.
Starting Oct. 1, one of the changes enacted by the Defense Finance and Accounting Service was to stop paying servicemembers the flat-rate Basic Allowance for Housing-II (BAH-II), which allowed some to collect more money than they actually were paying in rent.
Under the old system, troops stationed overseas who live off base collected a flat-rate housing allowance, known as BAH-II, based on their rank, location and if they had dependents. They also were entitled to the Overseas Housing Allowance if their housing expenses exceeded their flat rate.
That BAH-II was paid regardless of the servicemember’s actual rent. If a servicemember’s BAH-II was $1,800, but rent only $1,400, the troop could pocket the extra $400, explained Steve Westbrook, director of the Department of Defense’s Per Diem, Travel and Transportation Allowance Committee, in Washington.
The changes mean servicemembers now will receive only an Overseas Housing Allowance, authorized for those personnel living off base who provide the base housing office with a lease agreement.
“Under the new law, if rent is $1,400, they’ll be paid $1,400 in Overseas Housing Allowance,” Westbrook said.
The change will greatly affect “roommate servicemembers,” he said, or those who share an off-base house. In the past, if both troops collected the full $1,800 BAH-II, but split the $1,400 monthly rent, each servicemember made a healthy profit of $1,100 a month.
In 1997, Congress gave the government eight years to close loopholes that allowed some uniformed members to collect extra cash — albeit legally — and make a profit off of the U.S. government entitlements, Westbrook said.
There are about 55,000 U.S. troops worldwide who collect the Overseas Housing Allowance, Westbrook said, though he said he has no way of knowing how many might have profited from the loopholes under the old system.
The changes resulted in an automatic stoppage of the Overseas Housing Allowance for about a thousand servicemembers worldwide.
The DFAS’ computer system was set up to flag those members’ accounts affected by the changes, and the system automatically put a hold on their Overseas Housing Allowance payments, which then prompted financial officials to examine each of the cases, said Navy Lt. Joe Orosco, officer-in-charge of the Personnel Support Detachment in Naples, Italy.
About 80 percent of the affected 142 Naples-based sailors, for example, had their allowance immediately restored, he said. In some of the cases, the sailors no longer qualified for the entitlements.
Navywide, 961 sailors were affected. Personnel Support Activity Europe has started to collect information from each of its 12 detachments to get the number of Navy personnel in Europe, a tally that won’t be available for roughly a week, said Danilo Gammad, an analyst with the support activity.
U.S. Air Forces in Europe reported a “minimal” number of airmen were shorted the entitlement on their last paycheck, spokesman Capt. Phillip Ulmer wrote in an e-mail.
“While implementing these changes, the Oct. 15 pay for a small number of members in USAFE was affected,” he wrote. “The command has taken immediate steps to take care of those who were affected. Finance personnel are working closely with the impacted customers to reinstate their OHA entitlement for end of month pay.”
Army and Marine Corps personnel in Europe seem to have made a smooth transition to the new rules.
“No Marines had their OHA stopped because of the changes,” said Sgt. Randy Olivaz of the Marine Forces Europe personnel office. “We’d see that on our feedback report and we’ve had no stops.”
Same news from U.S. Army Europe, said Steve Bridges, director of finance operations for the 266th Finance Command in Schwetzingen, Germany. As of Thursday, he had no reports of soldiers shorted their Overseas Housing Allowances.
“We don’t know of any problems yet, but there were some major changes and I don’t think we’ll know the full impact of the changes until a few more pay cycles,” Bridges said. “If there are going to be problems, it’ll likely be very apparent by the end of the month.”
Those who think their pay was incorrect should report the problem to the command finance or personnel office, he said.
The adjustment to the Overseas Housing Allowance is one of three major changes that took effect Oct. 1. Here are the others:
¶ DFAS also did away with the command sponsorship requirement for entitlement to the Overseas Housing Allowance, Westbrook said.
Under the old regulation, if a soldier was on an unaccompanied tour in South Korea, for example, he could collect both the flat-rate allowance and Overseas Housing Allowance if needed. In addition, he would collect the stateside Basic Allowance for Housing for his dependents who remained in the United States. “Some members could, and did, bring their families to Korea, but at their own expense,” Westbrook said.
But without command sponsorship, the soldier could not collect the Overseas Housing Allowance at the “with dependents” rate, or any cost of living allowance for those dependents.
“[Before Oct. 1], what wound up happening is that they’d be receiving a housing allowance based on where the family was supposed to be in the States, but the family was actually living right outside of the front gate,” he said. “Under the new rules, we do not pay the stateside housing allowance if we know [the family] is in Korea.”
Under the new rules, the soldier would receive the Overseas Housing Allowance at the “with dependent” rate. He will not, however, receive any extra COLA, according to information on the Navy Personnel Center Web site, www.npc.navy.mil.
South Korea is just an example, Westbrook said. The command sponsorship requirement for the entitlement has been eliminated worldwide.
¶ DFAS also now will let families who “unofficially” return to the States ahead of the servicemember’s scheduled duty change collect the stateside Basic Allowance for Housing, Westbrook said.
Under the old rules, once a family left an overseas base, the servicemember could not get the stateside housing allowance unless the family was sent back for official reasons, he said.
Examples of unofficial moves could be the family disliked living overseas, or a dependent was kicked out of the school system, he said.
“With the change, we don’t care what the reason is. The simple fact is, if government money transports the family to the States, we are now paying for housing.”
The servicemember remaining overseas still will be able to collect the overseas housing allowances to pay for rent, Westbrook said.
Examples of the new entitlements ...
On Oct. 1, the Defense Finance and Accounting Service made changes to the overseas housing allowances for U.S. troops.
Some examples of the new entitlements:
Servicemember with dependent(s) on an unaccompanied tour who lives off base.Entitlements: Member is authorized to draw Basic Allowance for Housing at dependent location and single-rate Overseas Housing Allowance.Example 2
Servicemember with dependent(s), rank E-4 and below, on an unaccompanied tour and assigned to barracks.Entitlements: Member is authorized to draw Basic Allowance for Housing at dependent location. If later authorized to live off base, member may collect single-rate Overseas Housing Allowance.Example 3
Servicemember with dependent(s) on accompanied tour but selects not to bring dependent(s), did not request change in tour election to unaccompanied tour, and lives off base.Entitlements: Member is not authorized to draw Basic Allowance for Housing at dependent location, but member draws Overseas Housing Allowance at with-dependent rate.Example 4
Servicemember with dependent(s) on accompanied tour but selects not to bring dependent(s), member did not request change in tour election to unaccompanied tour, and member lives on base.Entitlements: Member is not authorized to draw Basic Allowance for Housing at dependent location, and not authorized Overseas Housing Allowance.Member may request unaccompanied tour status within 90 days after arrival at overseas duty station, and would then collect Basic Allowance for Housing at dependent location.Example 5
Servicemember with Early Return of Dependent(s) at government expense other than Permanent Change of Station orders and lives in government quarters.Entitlements: Member is authorized to draw Basic Allowance for Housing at dependent location effective on arrival date. Member not authorized to draw Overseas Housing Allowance.Example 6
Servicemember with Early Return of Dependent(s) at government expense other than PCS order who lives off base.Entitlements: Member is authorized to draw Basic Allowance for Housing at dependent location effective on the arrival date, member’s Overseas Housing Allowance at with-dependent rate stops the day before BAH at dependent location allowance starts, and begins drawing Overseas Housing allowance at single rate.Example 7
Servicemember with Early Return of Dependent(s) at personal expense and lives in government quarters.Entitlements: No allowance changes.Example 8
Servicemember with Early Return of Dependent(s) at personal expense and lives off base.Entitlements: Member continues to draw Overseas Housing Allowance at with-dependent rate and is not authorized to draw Basic Allowance for Housing at dependent location.Example 9
Servicemember acquired dependent(s) after effective date of orders, and dependent(s) are not authorized transportation at government expense, and member lives off base.Entitlements: If dependent(s) are in the U.S., member is authorized Basic Allowance for Housing at dependent location, and Overseas Housing Allowance at single rate. If dependent(s) are overseas, member is authorized Overseas Housing Allowance at the dependent’s overseas location and Overseas Housing Allowance at the single rate at member’s duty station.Example 10
Servicemember acquires dependent(s) after the effective date of orders, and dependent(s) are not authorized transportation at government expense, and member is assigned to barracks.Entitlements: If dependent(s) are in the U.S., member is authorized Basic Allowance for Housing at dependent location. If dependent(s) are overseas, member is authorized Overseas Housing Allowance based at dependent’s overseas location. Member is not authorized to collect Overseas Housing Allowance for himself.Source: Naval Support Activity Naples, Italy, Personnel Support Detachment