New housing allowance guidelines won't result in pay cut

  • Published
  • By Army Sgt. Sara Wood
  • American Forces Press Service
WASHINGTON (AFPN) --  Defense officials are eliminating the "geographic rate protection" clause that ensures servicemembers moving to a new area receive the same housing allowance as those already living there.

Geographic rate protection is expiring in January because basic allowance for housing rates have reached a level where servicemembers no longer have to pay out-of-pocket expenses for housing, said Col. Virginia Penrod, the Defense Department director of military compensation.

Colonel Penrod stressed that the housing allowance rate is set at the average housing cost for the area. Rates are further set based on military rank, with each pay-grade level having a set acceptable standard of housing.

Servicemembers may still have to pay some out-of-pocket expenses if they choose to live above that level. Conversely, if servicemembers choose to live below the average level, they will still receive the same BAH rate.

Servicemembers still have "individual rate protection" as long as they stay within the same geographic area. If average housing costs in a given geographic area go down, people already living in that area continue to receive the higher amount.

However, servicemembers moving into that area receive the lower amount. Geographic rate protection was a temporary protection put into effect to prevent people of the same pay grade living in the same area from getting different amounts of housing allowance.

Rate protection was instituted in 2000 to ensure BAH rates were the same among like-pay grade individuals living in the same area while troops were still paying part of their own housing expenses, Colonel Penrod said. Now that housing allowance rates are high enough to cover servicemembers' entire housing expenses, geographic rate protection is not necessary, she said.

"It was a short-term program," she said. "We always had in our minds that we would eliminate the protection once the out-of-pocket (expenses) went to zero."

Under the new BAH guidelines, a servicemember moving to a new area will receive the appropriate allowance rate for that area, regardless of whether troops already living there are receiving a higher rate, the colonel said.

Colonel Penrod said the change makes financial sense.

"We're adjusting rates to where they should be," she said.

Each year, BAH rates are adjusted with input from military housing offices in the area. If it is determined the rate needs to be increased, all servicemembers living in that area will receive the increase.