Housing: Basic Allowance for Housing - Military Housing - Military Times

Housing: Basic Allowance for Housing

Many service members stationed in the U.S. live off base and collect the Basic Allowance for Housing, or BAH. The tax-free monthly allowance goes to families who cannot get government quarters or who choose to live off base.

The system is intended to provide service members with housing compensation in line with civilian rental costs in the area where they are stationed. Allowances are based on location, rank and whether a member has dependents.

Allowances are devised from surveys of local civilian housing costs and changed accordingly. Rates are usually adjusted each Jan. 1, although Pentagon officials can update more often, as they did in the Gulf Coast region in the wake of hurricanes Katrina and Rita in 2005.

The allowance covers 100 percent of average rental costs in all locations — and defense officials stress the word average. Some service members still choose to pay out of pocket for a portion of their rent to get larger accommodations. Thus, out-of-pocket costs for all members will never be eliminated.

Allowance rates can go down as well as up in any given location from year to year. However, the BAH program features “individual rate protection”: A service member who arrives at a duty station and begins receiving BAH at that year’s rates will continue to get that rate for as long as he remains at that location, even if housing costs later decline in that area. Newly arriving members at that location will get the lower BAH rate, on the assumption that they will be able to find suitable housing at less cost.

Because BAH is based on the prevailing rental costs of the area where a member works, someone who changes duty stations that are fairly close together but does not change residences may see a change in the allowance rate.

See the Pay and Benefits chapter for more details on BAH.