2016 Basic Allowance for Housing (BAH) Rates Available
On December 15, the Department of Defense (DoD) released the Basic Allowance for Housing (BAH) rates for 2016. The news was an early Christmas present for many military families, as housing allowances are set to increase by an average of 3.4%. But while the increase is welcome, there is also a lump of coal waiting in military families’ stockings, thanks to a provision in last year’s National Defense Authorization Act (NDAA). That legislation stipulated that BAH would no longer be set to cover 100% of housing and utility costs for a given location and pay grade. Instead, military families will have to absorb a percentage of housing costs – an average of 2% this year, rising 1% each year for the next three years.
What does that mean for you and your family? Read on for more details.
How does DoD calculate BAH?
BAH is based on the average cost of rent and utilities at a given location for types of dwellings that vary by service members’ rank. DoD collects housing cost information annually from over 300 locations across the U.S. and uses the data to set two rates for each pay grade: with dependents and without dependents. For 2016, the rates at most locations will go up, reflecting higher rent and utility costs.
Wait, our BAH is set to decrease. What does that mean for us?
If DoD’s calculations show housing costs at a location have decreased, then BAH rates will be reduced. However, families should know the BAH program includes individual rate protection. That means even if BAH rates decline, a service member who maintains uninterrupted BAH eligibility in a given location will not see a rate decrease. This ensures service members who have made long-term commitments in the form of a lease or contract are not penalized if local housing costs decrease.
We’re planning to PCS this year. What should we expect?
Military families moving to a new duty station should know the 2016 BAH rates were calculated to cover an average of 98% of housing and utility costs. That means families need to be prepared to pay a small percentage of their housing costs out-of-pocket. Remember, the amount of BAH you receive at your new location will not decrease, even if the rate drops next year.
What about basic pay and BAS?
Military pay and other compensation rates, like Basic Allowance for Subsistence (BAS) and Cost of Living Allowances (COLA), have not yet been released by DoD. We do know the National Defense Authorization Act (NDAA) for Fiscal Year 2016 authorized a 1.3% increase in basic pay, among other things.
Stay tuned with NMFA to find out what other 2016 rates and compensation details are released by the Department of Defense.
Posted December 18, 2015