What is BAH?
Basic Allowance for Housing provides Massachusetts service members not living on base or in government-provided housing a cash supplement to be able to rent housing at local market rates. The amount paid to a service member depends on rank, whether or not they have dependents, and where they are based.
Current BAH rates aim to cover 95 percent of housing costs
This year, the Pentagon bumped the 2020 Basic Housing Allowance rates an average 2.8 percent higher compared to last years, setting the tax-free benefit at a level intended to cover 95 percent of the anticipated housing costs for each assigned duty post in the U.S. Individual service members are now expected to pay the remaining 5 percent of housing costs with out-of-pocket cash.
Any active-duty service member stationed in the 50 U.S. states who is not provided with government housing is eligible. Those stationed in U.S. territories, possessions or overseas who are not provided government housing are eligible for an Overseas Housing Allowance, which is calculated under a separate formula.
BAH is non-taxable, and unlike the Overseas Housing Allowance, if a service member can find housing below the BAH rate for their assigned location, they are able to pocket the difference, because what service members actually spend is not used to calculate BAH. (In Overseas Housing Allowance, however, it’s “use it or lose it.” Service members lose whatever portion of OHA they do not spend.)
How BAH is calculated
DoD calculates median rental costs for 300 military housing areas, including Alaska and Hawaii. The calculations are based on the rental costs for a 1 or 2 bedroom apartment, a 2 or 3 bedroom townhome, and a 3 or 4 bedroom single family home, and then set against specific enlisted and officer ranks for a service member with dependents and service members without dependents.
Rates very widely
Based on rank and the local real estate market, what you take home can be less than $1,000 or more than $3,000. For example, an E-1 at Fort Bragg, North Carolina without dependents would receive $954 according to the 2020 BAH Calculator. On the other hand, a colonel or Navy captain working in Washington, D.C. with dependents would receive $3,171, based on the 2020 rates.
What if BAH for my area is cut while I live there?
Service members are protected from falling rates under a rate protection policy that maintains their current rate for as long as they remain at their location, regardless of whether the official rates drop. However, they will receive the new, lower rate if they are demoted or if their dependency status changes, in which case they’d receive the current rate for their new status.
If rates rise in a location, all service members receive the higher rates regardless of when they arrived. Two rates are set for each location by a survey of rental costs: The with-dependents rate goes to personnel with at least one dependent, whether that be a spouse or a child, and does not increase for additional family members.
What if my spouse and I are both in the military?
If there are no children, both spouses get the without-dependents rate. If the couple has children, one spouse receives the with-dependent BAH rate, while the other gets the single-rate BAH.
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