Understanding BAH Rate Protection

In anticipation of the 2014 Basic Allowance for Housing (BAH) rates being announced soon, I thought it was exactly the right time to review the Department of Defense (DOD) policy on BAH rate protection.

Each year, the DoD uses a huge range of information to calculate the BAH rates for the upcoming calendar year.  Because BAH is based on market rates, BAH may go up or down in any location and for any ranks within that location.

Fortunately, the Department of Defense BAH has a rate protection policy that prevents service members from having their housing allowance lowered mid-tour.  Every new calendar year, service member who have not experienced a PCS move will receive the larger of the old rate or the new rate.  Service members BAH is protected from rate decreases, but service members do receive rate increases when they occur.

There are a few exceptions to this rule.  If a person is demoted, or experiences a change in dependency status, their new BAH will be calculated at the current levels.  However, if you are promoted, you are still guaranteed to get the higher of your old protected rate or the new, higher ranking rate.

The new rates only apply to people who move into an area, have a change in dependency status, or are demoted.  For people who are residing in an area that has a decrease in the BAH rates, it rarely actually affects you.

You can read more at the BAH Frequently Asked Questions page.

Still confused?  Ask questions!

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.

30 Comments on "Understanding BAH Rate Protection"

  1. Kate, thank you for clearing the BAH rate adjustment up. It is much appreciated! :-)

  2. Thanks Kate! My area, San Diego, did go down, but we don't PCS anytime in the near future. Thanks again for the info!

  3. Kate, any word on what will happen with COLA rates that went down? Ours went from $280 to $120 per month! Are there any 'rate protection' rules out there for COLA? Thanks!

  4. Bonnie Costigan | February 17, 2010 at 11:09 am |

    Thank you for this information, but there is some confusion when dealing with my finance office. Basically, my husband went active duty for a 4 year tour. During that time, I maintained the full BAH rate and he did not. He went back to being a traditional Guardsmen Oct 01, 2009. Now my finance office is telling me that since my daughter turned 21 in Jan 2010, that I lost my BAH and can get it again because my husband is my dependent but I have to get it under the new rate (I'm in an area where there was a decrease). I say that I should get it under the old rate because my husband was always my dependent. How can I resolve this?

  5. Wow, Bonnie. I don't know anything about that. I hope that our readers can help you.

  6. I am very new to this entire process. I have so many questions about the finances but don't know where to begin. My husband is currently deployed and now I am hearing about different financial avenues such as BAH. Am I, the wife, entitled to receive that money separate from my husband?

  7. Yes, Maddie, you continue to receive BAH even when your husband is deployed.

  8. My husband made E-6 were stayin in our area for a while and he wont be paid for it until after jan 1st of course will we get the new lower rate or the rate it was for 2010 because he was promoted in 2010? I am very confused.

  9. Maddie, I'm pretty sure I send you a private email, but just in case: if your husband has your properly enrolled in DEERS (Defense Eligibility and Enrollment Reporting System), then he is getting BAH with his regular pay. BAH is authorized to married military members to help provide housing for themselves and their families.

    Please, read more and ask questions. We're here to help.

  10. Change in dependency status…does that include having another child? So even if I don't PCS but I have another child, my BAH rate is going to change to the updated amount?

  11. Jared Thomasson | December 21, 2010 at 6:39 am |

    Where do Guardsmen and Reservists who are on orders fall in this?

  12. Bryon A. Stumph | December 21, 2010 at 7:31 am |

    I am on a CO-ADOS MOB this year that started in April and will go through Feb2012. We had a child (the 4th) in May, so because there was a change (but will still be on the assignment) my BAH will go down? Having a child causes the punishment of lower BAH?

  13. Bryon, Having a child does not result in a change in dependency status unless it is your first dependent. You were already receiving BAH at the "with dependent" rate and that will not change.

    Also, the way the rules are written, you will always receive the higher of the old rate and the new rate, unless you were to lose dependents (due to death or divorce), PCS, or be demoted. Basically, you will never be punished with lower BAH unless there is some action that makes that sensible.

    Jared, to the best of my knowledge, this applies to activated Guard and Reserves in exactly the same way that it applies to full-time active duty servicemembers.

  14. Our bah went down and I was at 1862, I moved onto post in December and moved back off the following march and my bah was lowered because of it. So rate protection from my understanding only applies if there are absolutely no change in status.

  15. So does that mean since we got to our new duty station at the end of Decemeber and did not get into a lease/rental agreement until the beginning of Jan, we get the lower of the two rates since the BAH for our location went down for 2011?

  16. What if we purchased a home on 12/12/13 in our new PCS location and the VA loan was basing our income on 2013 BAH rates in Washington but the 2014 rate is significantly lower? We don’t actually arrive to our new station until 2/15/13. Do we get shafted because of checking in after 12/31/13?

  17. I think I'm understanding this correctly. I get promoted to E-6 on January 1st, I will take the new E-6 rate even though it is lower than last years, but higher than E-5?

  18. My husband is on AGR orders as of 12/10/13 our current BAH is 1468. his duty station is changing in the new year from one recruiter station to another,which are literally 5 minutes from each other but are in different zip codes, that being said will our BAH rate be based on the new rates, which are lower, or will it stay the same?

  19. I PCSd into a new base and fianance forgot to update my BAH. I got it corrected but they said it won’t take affect until January and I will get the new lower rate. I signed in to base in November. Is it calendar year or fiscal it’s based off of for getting the older rate.

  20. So, if I made rank and I have been in my current duty station since 2010, and the highest Bah rate for E-5 in that duty area was in 2012. Would I get that bah rate when I get paid for E-5? or would I get the 2013 rate?

  21. I bought a home based on my 2012 BAH rate for E-6 in washington area but I have orders for a base in the same area just different base will my BAH decrease?

  22. My name is cassy my husband is a E3 he’s station in fort hood Texas but I live in New Jersey he’s deploying for a year so do I get the New Jersey BAH or the Texas BAH

  23. 25YearMilWife | March 6, 2014 at 8:59 pm |

    How do we dispute being dropped out of grandfather clause when my husband was simply PCA'd to a different agency in the NCR (National Capital Region) which actually sent him to Iraq for a year? Our new BAH rate (a drop of nearly $900!!) matches nothing we can find published for our locale (still the NCR), my husband's rank (hasn't changed) or our dependent status (still "with dep's") . . . In the middle of the wait for him to go to Iraq, we had to move to another home in the NCR as the lease was up and not renewable on other home. There seems to be little recourse and the left behind family members now have no "finance office" to go to for help –even with a Power of Attorney.

  24. Hi everyone, guess my situation/question is this:

    I am stationed in Camp Pendleton, getting single w/o dependents, but moving to non-base facility in a secluded area in Texas.

    By the time I make the move, which is in 2 weeks, I should have Joint Custody, 50/50 of my child.

    So will I rate “BAH w/dependents” when I get to texas, if I have the right documentation, or will I still rate “w/o dependents?”

  25. You do not need joint physical custody of a minor child to qualify for w/dep rate of BAH .. you need only to be paying a certain amount of child support (based on your rank) in order to qualify for w/dep (meaning, you pay more than the rate requires). What you do NOT automatically qualify for is FSA (Family Separation Allowance) if away from your child .. unless you have physical custody of your child HALF of the calendar year.

    You will need the court document indicating you are ordered to pay support OR a notarized statement from the child's mother indicating you supporting the minor child while you two lived together (unmarried).

    You will need the birth certificate, a DA 5960 as well.

    SEE 37 USC 403 – Basic allowance for housing, section (g) Reserve Members

    I realize this is for Reserve Members on active duty orders, but the same rules apply to Active Duty.

  26. We bought a home out side of the camp pendleton area base. We got orders to go to 29 palms base and the BAH is $1100 compared to the BAH of $2300 we are currently getting. Is there some way we can keep our current BAH so that we don't lose our home?

  27. I'd like to get clarification on demotions and rate protection. Hypothetical rates used – if an E5 at an old rate of $2K gets demoted to E4 – they are eligible to lose rate protection. If the new rate for E4 is $1350 and the old rate for E4 is $1500 – which rate will they qualify for – the new or old E4 rate?

  28. I am AGR and was assigned a new duty station in which has a much lower BHA rate. This move was not volunteered nor for promotion. Do I have rate protection? If so where may I find that in writting? Thank you.

  29. hi, we are navy. My husband is a E-6 will PCS at May 1, 2015 and going to his C-School at Pensacola, Florida NLT May 19. Our kids and I will be staying at Misawa AFB, Japan till their schools are done mid-June. Then, we will pack out and go to his next duty station at Fort Meade, Maryland.

    While he would be getting the BAH of Pensacola, FL for 5 months, does Navy has any policy regarding to Housing on base of taking no more than the BAH allowed on member's LES? E.g. BAH for my husband is $980 at Pensacola, FL; roughly $2,300 in Fort Meade, Maryland.

    During our last PCS move 3 years ago, my husband went to C-school for 6 months, housing in Lemoore, CA charges the BAH rate from Pensacola, FL instead of the Lemoore BAH. (Pensacola has lower BAH than Lemoore's as well) I was just wondering if this is an Navy policy or that is an individual housing policy.

    Thank you in advance for the reply.

  30. Hi, my husband and I have just gotten married after 5 years of dating. He just graduated from AIT a few weeks ago and is getting deployed to Korea soon. Will I still be eligible to receive BAH while he is gone? Do we have to apply for BAH before he leaves or will he automatically begin receiving it once he registers me in DEERS? I am new to this so any information or advice would be greatly appreciated.

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