When you are in the military, you can expect homes to change, schools to change, and even military Basic Allowance for Housing (BAH) rates to change with every new PCS location.
As long as you know the right questions to ask for each new move, you can stay ahead of the PCS rollercoaster.
Have questions about your new BAH rates or what military BAH even is? We have answers – keep reading!
Q1. What is the Basic Allowance for Housing?
A1. Basic Allowance for Housing (BAH) is a monetary allowance provided to military service members to help cover the cost of housing when they are not living in government-provided housing or on a military installation.
Multiple factors determine BAH rates, including duty location, rank and whether or not you have dependents. The rates are subject to change based on the defense budget.
The Department of Defense releases updated rates annually in December. The rates begin on Jan. 1 of the following year.
Q2. How is military BAH calculated?
A2. The Defense Travel Management Office (DTMO) handles BAH for the entire Department of Defense.
To calculate BAH, DTMO collects data on housing costs like rent and utilities from military housing areas across the United States. Then, it profiles that data for apartments, townhouses, and single-family rental units of varying size.
DTMO links housing profiles with specific pay grades and dependency statuses. The chart below shows the outline of the six standard housing profiles.
Q4. Why is BAH not covering full housing costs?
A4. BAH covers 95% of median housing costs in a military housing area.
Originally, BAH was calculated to cover 80% of housing costs. In 2000, the Secretary of Defense authorized a BAH increase to close the gap, and by 2005, BAH was covering 100% of off-base living expenses.
However, the 2015 and 2016 Defense Authorization Acts eliminated renters insurance from the calculations and a cost-sharing element was introduced to shift some housing expenses back to service members, which is why today it is at 95%.
Q5. Is military BAH designed to offset costs of renting or purchasing a home?
A5. Service members are free to use their BAH how they choose, but BAH should not be expected to cover all homeowner expenses.
By design, BAH only considers the median cost of renting locally, not the home purchase market.
Q6. Does family size make a difference in the BAH rate a service member receives?
A6. No. While BAH distinguishes between with-dependent and without-dependent status, the with-dependent compensation is based on comparable civilians using average family size.
BAH rates do not increase with multiple dependents.
A service member married with no kids and a service member married with four kids receives the same with-dependent rate.
Use the BAH calculator to determine your rates with and without dependents.
Q7. Why is BAH based on service member’s duty location and not residence location?
A7. Duty station is the basis for BAH so that members are compensated for the typical housing cost near that installation. Once the member is assigned, the BAH compensation is fixed, regardless of where the member chooses to live.
If the DoD based it on the residential location then people would be incentivized to live in certain places to make more money versus the lower paying areas.
Q8. I am divorced with children, what is my BAH?
A8. The service member has to have primary or sole custody of their children to continue to receive with-dependent BAH unless they are in government-provided family housing.
If the service member does not have custody of the children following the divorce then the member will receive the without-dependent rate.
Q9. What is BAH for dual-military couples?
A9. BAH for dual-military couples depends on whether or not the couple has children or not.
If the couple has children, one service member will receive the with-dependent BAH rate and one will receive the without-dependent rate. If the couple does not have children, both members will receive the without-dependent rate.
Use our BAH calculator to determine your rates with and without dependents.
Q10. What happens when military BAH rates change?
A10. If BAH rates go up in your area, your benefits will increase as well. If the rates go down, your BAH will remain the same.
BAH rate protection protects your benefits from going down if the rates decrease while living at your duty location.
Your BAH rates would only change if you PCS, if you have a reduction in pay grade, or a change in dependency status.