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Air Force makes changes to BAH policy

By Staff Sgt. C. Todd Lopez

WASHINGTON (Dec. 16, 2005) -- Beginning in January, the Air Force and the other military services will eliminate geographic rate protection for the basic allowance for housing.

Over the last five years, geographic rate protection meant BAH rates around military communities could never drop, even when estimates for median housing costs in an area suggested they should.

Under the current system, new arrivals at an installation would receive the protected BAH rate, even if housing rates in the area had dropped and adequate housing was available for them at a lower cost.

In 2006, BAH rates will fluctuate yearly based on housing cost estimates made from data collected regionally by military housing offices. The budget-conscious move by the Department of Defense is designed to save money at a time when resources are tight.

Under the new system, people who remain in an area will never see a lowering of their individual BAH rate. That policy, called individual rate protection, is designed to ensure Airmen and other military members who have already established homes aren't faced with a cut in their BAH rate.

Individual rate protection is designed to protect Airmen when the median housing rates in an area drop but landlords don't lower rents to match them.

Individual rate protection ensures Airmen will always receive ample funding to remain in the homes they have established, and at the same time provides DOD a common-sense way to fund that allowance.

But the policy will create situations where two military members of the same rank and with the same dependent status may receive different BAH rates. Individual rate protection allows in-place members to keep their BAH rate for a region while BAH rates in the area may fall. So a newcomer can get the same quality of housing at a lower cost.

"When you signed your lease, you were locked into a rate in a housing market that had a higher cost, on average," said Capt. Charles Parada, chief of the Air Force's basic allowance for housing program. "But a newcomer could face a lower-cost market."

Captain Parada says whatever BAH rate a member receives at a new duty station will be fair.

"The new BAH program will always allow you to afford adequate housing for your grade and dependency status in the current market," he said.

Captain Parada also said that all members in a region are entitled to increases in the BAH rate as they occur.

Besides changes to rate protection, there are two additional changes to BAH coming for the Air Force and other services in the 2006. The first is the elimination of the BAH differential for members living off base. The second is a change to in-transit BAH rates for new Airmen.

"What members will be paid now is a BAH rate with dependents, versus the BAH differential," Captain Parada said. "In most cases, the new rate will be an increase for members, though in some areas it may be lower."

The BAH differential is a flat rate, based on grade, paid to members who are paying court-ordered child support. In 2006, the differential will no longer exist for members residing off base. Instead, they will receive the BAH with-dependents rate, even if they have no dependents in their home. Because the BAH with-dependents rate fluctuates region to region, some members in low-cost housing markets may receive less money than they had with the flat-rate BAH differential, though the situation occurs in few areas, Captain Parada said.

The BAH differential rate will also be eliminated outside the United States. But there, members receive an overseas housing allowance, or OHA, instead of the Stateside BAH. Like in the United States, with the elimination of the BAH differential, members overseas residing off base will begin receiving the OHA with-dependent rate. But unlike in the United States, overseas members do not always receive the full OHA. Instead, they receive only that amount they spend on rent. For those members, it will be impossible to extract the extra benefit provided by an OHA with-dependent rate to use toward child support.

Captain Parada said the move was the best possible solution found by DOD to provide the best benefit to the most members.

"All four services had to come to an agreement on these issues, to find a solution most equitable for the most members," he said. "This was the best solution to benefit most members."

Under the new plan for BAH differential, members entitled to the differential will continue to receive it if they live in government quarters.

A final change to military BAH policy involves new military members who are traveling from their initial training location to their first duty station.

When new accessions to the Air Force travel from their initial training location to their first duty station, they are said to be "in transit." Most new Airmen who are single receive the BAH II rate, commonly called "BAH in transit." Like the BAH differential, BAH II is a flat rate, tied only to a member's rank.

Today, almost all new unaccompanied Airmen receive the BAH II rate as they travel to their first duty station. That group of Airmen includes officer training school graduates (non-prior service) and basic trainees. The exception has been Airmen coming out of the Air Force Academy. Those new officers, upon graduation, received the full BAH rate based on housing costs in Colorado Springs, Colo., the location of the school.

In 2006, Air Force Academy graduates will begin receiving only the BAH II rate until they arrive at their new duty station. That change was based on what other services were paying to their service academy graduates and on a general perception of equity among all military members, Captain Parada said.

"All accessions will now be treated equally across the Air Force and across all services," Captain Parada said. "DOD decided to unify the policy so everybody was doing the same thing. They decided they will pay the Academy folks the BAH II rate in line with other services and other accessions."

Captain Parada said that under the new policy, new members with dependents continue to be entitled to full BAH.

Members with questions on BAH payments should visit the BAH website at:

https://secureapp2.hqda.pentagon.mil/perdiem

Members with questions on the process used to set BAH rates should contact their local housing office. An e-mail account has been set up to take questions: BAH.hotline@pentagon.af.mil.