The Department of Defense has released the 2016 Basic Allowance for Housing rates. Basic Allowance for Housing rates will increase an average of 3.4 percent when the new rates take effect on January 1, 2016. An estimated $21 billion will be paid to approximately one million Service members. On average, Basic Allowance for Housing rates will increase approximately $54 per month.
Continuing to slow the growth in compensation costs, the 2016 Basic Allowance for Housing 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 two percent. The cost-sharing amounts incorporated in the 2016 Basic Allowance for Housing 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 two 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 United States, including Alaska and Hawaii. An important part of the Basic Allowance for Housing 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 Basic Allowance for Housing computation. Total housing costs are developed for six housing profiles (based on dwelling type and number of bedrooms) in each military housing area. Basic Allowance for Housing rates are then calculated for each pay grade, both with and without dependents.
An integral part of the Basic Allowance for Housing 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 Basic Allowance for Housing eligibility in a given location will not see his/her Basic Allowance for Housing 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 Department 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.
For more information on Basic Allowance for Housing, including the 2016 Basic Allowance for Housing rates and 2016 Basic Allowance for Housing rate component breakdown, visit https://www.defensetravel.dod.mil/site/bah.cfm. Service members can calculate their BAH payment by using the Basic Allowance for Housing calculator at: http://www.defensetravel.dod.mil/site/bahCalc.cfm.