Protection stops allowance drop
December 21, 2010
About 400,000 active duty service members will see their Basic Allowance for Housing protected from a rate drop Jan. 1, thanks to “individual rate protection” Congress adopted nearly a decade ago.
Users of the Post-9/11 GI Bill education program also will be protected from any cut to student monthly stipends, which are based on BAH rates.
For the first time since BAH was established in 1998, average rates across the country will decline next month, though only by 0.6 percent, to reflect changes in average rental costs across 366 military housing areas.
Because of rate protection, only members arriving after Dec. 31 to areas where rents have fallen will feel the effect of lowered allowances. Those same new arrivals, however, also should face lower rents than did colleagues who arrived in 2010 or earlier, said Cheryl Anne Woehr, BAH program analyst for the Department of Defense.
For members already living in areas where stateside rates are set to drop, their monthly BAH will not change. The effect of rate protection is that housing allowances nationwide for a million BAH recipients will climb Jan. 1 by an average of 1.1 percent, lifting program costs to $19 billion.
A typical junior enlisted member with dependents will see BAH rise about $39 a month. A senior non-commissioned officer with dependents will receive about the same as last year, on average.
The value of rate protection can be seen in areas like Fayetteville, N.C., where average BAH is dropping 8 percent. Other areas to see sharply lower rates are; Nellis Air Force Base, Nev. (down 7 percent); Seymour Johnson AFB, N.C. (7 percent); Whiteman AFB, Mo. (5 percent) and Cherry Point Marine Corps Air Station, N.C. (down 5 percent).
Rate protection, Woehr said, is there to recognize that current BAH recipients “entered into housing agreements based on the economy at the time they made those agreements.” New arrivals, on the other hand, should be comfortable with the lower BAH because they “will be obtaining housing in the current economy on which those rates are based.”
Areas where average BAH will rise significantly include: China Lake Naval Air Training Center, Calif. (up 14 percent); Barksdale AFB/Shreveport, La. (9.5 percent); Minot AFB, N.D. (8 percent); Beale AFB, Calif. (7 percent) and Fort Benning, Ga. (up 6 percent).
“In areas where rates go up — and we do have quite a lot of them certainly — members still get the benefits of the higher rate regardless of when they reported,” Woehr said.
Unaffected are service members living off base overseas. They get an Overseas Housing Allowance, which is based on what they actually pay in rent. OHA is adjusted as the value of the dollar shifts against local currency.
Other military pays will change Jan. 1. Basic pay will climb by 1.4 to match wage growth in the private sector. Monthly food allowance, or Basic Allowance for Subsistence (BAS), will rise by just a third of 1 percent.