Basic Allowance for Housing paid to 956,000 service members living off base in the United States will climb modestly Jan. 1, an average of only 0.7 percent or $10 a month, as an allowance-dampening formula enters its fourth year.
Actual Basic Allowance for Housing increases for individuals will vary widely based on where they are assigned, pay grade and whether they have family. But military folks assigned to 128 of 301 of military housing areas will see no housing allowance increase in 2018 because local rates will fall.
Thanks to a rate protection rule, no current recipients will see their allowance fall in the new year, unless they move to a new locale, are demoted or they see their dependency status change.
"We do not penalize members who have already gone to a location, signed a lease and then rates happen to decrease," said Summer Britford, allowance branch chief for the Defense Travel Management Office in Alexandria, Va.
Across 173 housing areas stateside Basic Allowance for Housing rates will rise or be unchanged. Rates for 2018 can be found online at: www.defensetravel.dod.mil/site/bahCalc.cfm
For a fourth straight year, adjustments will not quite keep pace with the rise of rents and utility costs because the Defense Department is implementing a five-year plan to hold down the cost of stateside housing allowances. The dampening of rates by 1 percent a year will continue through 2019 when recipients will be paying 5 percent of off-base rental expenses out of pocket.
The 4 percent "absorption" rate in 2018 means monthly housing allowances will be $51 to $117 short of covering average rent and utility costs. The impact on individuals depends on rank, dependency status and assignment location. The range of out-of-pocket costs forecast for 2017 was $37 to $85 a month
Defense officials had urged Congress to allow dampening of allowances through next year so that millions of compensation dollars could be diverted to other readiness needs in tight times for defense budgets. Besides the plan to raise member out-of-pocket rental costs to 5 percent, officials saved another 1 percent on the allowance starting in 2015, by excluding rental insurance from rate calculations.
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