The overall Basic Allowance for Housing rates will increase an average of 3.8 percent effective Jan. 1.
The Department of Defense released information on the rate increase Monday. For military members with dependents, average increases in BAH are about $60 per month. A typical E-6 with dependents, for example, will find his/her BAH about $60 per month higher than last year, while an O-3 with dependents will receive about $55 more than last year.
In areas where rates will decrease, the decrease will only apply to members newly reporting to those locations. Members are protected by individual rate protection which ensures those already assigned to a given location will not see their BAH rate decrease, however, they will receive the increase if the rate goes up. This assures 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.
Three components are included in the BAH computation: median current market rent; average utilities (including electricity, heat, and water/sewer) and average renter's insurance.
Total housing costs are calculated 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 estimated $20 billion will be paid to more than 1 million service members in 2013.