Basic Allowance for Housing: Ten Questions Answered

For the first time in 13 years, the overall average military BAH rates across the country have decreased. The 0.6 percent drop in BAH rates for 2011 is indicative of a reduction in the average rental costs across designated military housing areas.

However, around 400,000 active duty service members’ BAH will be protected from the drop Jan. 1 due to “individual rate protection,” which was adopted by Congress nine years ago.

–

The Veterans Benefits GI Bill recently received a comment on our Post 9/11 GI Bill post regarding Basic Allowance for Housing (BAH) and thought it due time to address some of the questions concerning the BAH program the Post 9/11 GI Bill provides.

The Department of Defense’s Military Compensation site has a section addressing the Basic Allowance for Housing program.

1. Do I qualify for Basic Allowance for Housing?

If you meet one of the following qualifications, you are entitled to BAH (stipulations also listed by each criteria):

• If you are assigned to permanent duty in the United States (the 50 states, specifically) and you are not furnished with government housing, you are eligible for BAH, based on your dependency status at your duty station’s zip code.
• If you are stationed overseas (except Hawaii and Alaska, as these are within the perimeters above), including U.S. territories and possessions, and you are not furnished with government housing, you are eligible for an Overseas Housing Allowance (henceforth OHA) based on your dependency status.
• If you are serving in an unaccompanied overseas tour (save for a member paying child support), you are eligible for BAH at the “with dependent” rate, based on the dependent’s U.S. residence zip code, plus FSH at the OCONUS PDS, if you are not furnished government housing overseas.

2. What if I am pursuing my education online?

Military personnel using their Post 9/11 GI Bill to pursue a distance learning education are not entitled to a housing stipend. Take a look at our article on how to choose a  Military Inclusive College to find a school that offers traditional campus-based programs so that you can make sure you’re eligible to collect your benefits.

3. I just looked at the annual benefits published; my BAH benefits are less than last year!

BAH rate protection ensures that you will not receive a reduction to your BAH as long as you maintain uninterrupted eligibility. This means you get the January 1st rate for the following year or December 31st’s rate from last year, whichever is larger. A servicemember who is already attached to a unit and receiving BAH will receive any published BAH increase, but will not be subject to a decrease. Once new BAH rates take effect, rate protection assures that the servicemember’s out-of-pocket costs may be less, but never more, than upon their reporting date. Use the DOD’s BAH calculator to calculate your benefits.

4. Will I ever lose BAH rate protection?

There are three conditions that can make you lose it, or have “interrupts in your eligibility:”

1. You PCS to a location with a housing cost that is less than your current duty station. At the new duty station you get a lower housing allowance, but this should not be difficult to deal with, since the allowance is driven by the housing costs there.
2. If you are demoted, your housing allowance reverts to the then-current published table of allowances for your lower grade. Promotions will not do this, however.
3. If your dependency status changes (from with-dependents to without-dependents, or vice versa), your housing allowance will be re-determined by your new dependency status.

5. What about all of these additional out-of-pocket expenses?

Your benefits are determined by a median. If you rent above the median rate for your grade/profile, you have to deal with additional expenses this luxury demands.

6. What if my allowance does not even begin to cover my mortgage payment?

BAH is based on rental data. If you are a homeowner, you will incur additional expenses due to your long term investment, and the BAH does not take this into account. Homeowners have higher economic hardship than renters because their investment pays out long term.

7. What is included in the “median housing costs” that determines BAH rates?

Current market rent, average utilities and renters insurance. The process involves defining BAH rates by zip code. According to the Defense Travel website, DoD and the Services conduct on-site evaluations at various locations to confirm and ensure reliability and accuracy of the cost data.

8. Does the size of my family make a difference?

No. BAH is determined on if you have dependents or do not have dependents, but beyond that, benefits are based on average family size, not specifically on the amount of dependents in your household.

9. Do these benefits give me the equivalent of what I would live in if I were in government quarters?

No. It’s based on civilian housing, given a civilian with a similar income.

10. Where can I find out my rates and learn more about BAH?

Visit this section of the Department of Defense’s website.

BAH for Online Schools

Distance learning students will finally be able to collect their benefits as of October 1st, 2011! Meaning, if you’re still enrolled in a campus-based education program, but looking to reduce costs by cutting down on the driving, or save time by cutting down on classroom attendance, there’s hope for you continuing to remain a recipient of BAH.

BAH will not be available to online students who are also active-duty service members, but other military students attending online schools will finally be able to access a portion of the BAH regularly available to traditional learners. BAH for Online Schools will be set at 1/2 the national average BAH for an E-5 with dependents, which in 2011, would be $673.50.

If you’re not already enrolled in a distance-learning degree program for military students, consider checking out our list of the factors to consider when choosing a Military Friendly College to find an online program that suits your needs!