Basic Housing Allowance Set to Increase in Massachusetts

| Dec 30, 2015 | Military Divorce |

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Basic Housing Allowance (BAH) is a tax-free housing allowance that is provided to service members (with or without family members) who are authorized to live off-base, or sometimes to those who receive these funds due to the need to pay child support. BAH amounts are determined according to rank, location, and dependence status. that is, whether or not the member has dependents.

Basic Allowance for Housing for service members rates are going up by an average of $54 per month for service members nationwide 2016 according to a release announced by the Defense Department.

Despite the increase, the new rates, which hit January 1, 2016 reflect a recent change by Congress that reduces by two percent the amount of a service member’s housing expenses the entitlement is meant to cover. Rather than reflecting the entire price of housing, 2016 BAH rates were calculated to cover only 98 percent of the cost of housing and average utilities, officials said.

BAH rates are recalculated yearly using a snapshot of local housing costs in each housing region. While some areas as a whole or some paygrades within a specific area may see a substantial increase in their rate, other regions may experience a decrease.

Troops who live in an area set to receive a BAH rate increase will receive the new, higher rate. Those living in an area that will face a rate reduction in 2016 are grandfathered into the old rate until they leave the area or change rank. If they are promoted and their new rank receives a lower rate, they will continue to receive their old, higher rate.

Among the areas receiving the largest increase this year is Boston, Massachusetts, which is set to receive a 13.9 percent average increase, up from $2,538 for an E-4 with dependents to $2,904.

In Massachusetts, the amount received as basic housing allowance is includable as income when calculating child support and alimony. For this reason, it is imperative to review how these changes will affect you; whether you are receiving or paying child support and or alimony.

If you are in the midst of a divorce, contemplating divorce, or a paternity action in the coming year, contact the Law Offices of Renee Lazar either through email or telephone 978-844-4095 to schedule a Free no obligation consultation to review how the changes to the basic housing allowance will affect you.

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