DOD releases 2016 Basic Allowance for Housing rates

| January 8, 2016 | 0 Comments
Helemano Military Reservation is located in North Oahu. (Photo courtesy of Island Palm Communities)

Photo courtesy of Island Palm Communities

Department of Defense
News Release

The Department of Defense released the 2016 Basic Allowance for Housing rates, Dec. 15.

BAH rates increased an average of 3.4 percent when the new rates took effect, Jan. 1.

An estimated $21 billion will be paid to approximately one million service members. On average, BAH rates will increase approximately $54 per month.

Continuing to slow the growth in compensation costs, the 2016 BAH program expands the member cost-sharing element (out-of-pocket expense). Based on the authority provided in the FY 2016 National Defense Authorization Act, the cost-sharing element was increased to 2 percent.

The cost-sharing amounts incorporated in the 2016 BAH rates vary by grade and dependency status and range from $24 to $57 monthly. This means for 2016, a typical member will need to absorb 2 percent of the national average housing cost by pay grade.

This rate computation change slows the growth of certain military pay and benefits in a fair, responsible and sustainable way. Even with these nominal changes, the overall military pay and benefits package remains robust and healthy.

Housing cost data are collected annually for over 300 military housing areas in the U.S., including Alaska and Hawaii. An important part of the BAH process is the cooperation from the services and local military housing offices in the data collection effort.

Input from local commands is used to determine in what neighborhoods data is collected and to direct the data collection effort towards adequate apartment complexes and individual housing units.

Median current market rent and average utilities (including electricity, heat and water/sewer) comprise the total housing cost for each military housing area and are included in the BAH computation. Total housing costs are developed for six housing profiles (based on dwelling type and number of bedrooms) in each military housing area. BAH rates are then calculated for each pay grade, both with and without dependents.

An integral part of the BAH program is the provision of individual rate protection to all members. No matter what happens to measured housing costs, including the out-of-pocket cost sharing adjustment noted above, an individual member who maintains uninterrupted BAH eligibility in a given location will not see his rate decrease. This ensures that members who have made long-term commitments in the form of a lease or contract are not penalized if the area’s housing costs decrease.

The DOD is committed to the preservation of a compensation and benefit structure that provides members with a suitable and secure standard of living to sustain a trained, experienced and ready force now and in the future.

Basic Allowance for Housing

For more information on, including the 2016 BAH rates and 2016 BAH rate component breakdown, visit www.defensetravel.dod.mil/site/bah.cfm.

Service members can calculate their BAH payment by using the calculator at www.defensetravel.dod.mil/site/bahCalc.cfm.

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