Fair play: Boosting BAH for singles - Military Housing, rentals, home buying, real estate, VA home loans - Navy Times

Fair play: Boosting BAH for singles

The current system of Basic Allowance for Housing payments is split between haves and have-nots — those with families and those without.

So, for example, if a member without dependents and a married couple without children each rent similar two-bedroom apartments, the single member ends up paying more out of pocket, a Pentagon-sponsored study recently concluded.

That’s unfair, the 10th Quadrennial Review of Military Compensation said in its final report, issued March 12. And after conducting a “top-to-bottom” review of the Basic Allowance for Housing tables, it recommends narrowing that gap so that the without-dependents rate can grow over a four-year period to 95 percent of with-dependents rates.

READ MORE: Study suggests raising partial BAH

Living within the allowance:

Air Force

Army

Marine Corps

Navy

MORE RESOURCES: BAH calculator

The proposal would affect about 234,100 single service members who draw BAH at the without-dependents rate.

At the moment, all single BAH rates are at least 75 percent of the with-dependents rates, under a recent Defense Department policy change, with most in the 80 percent to 85 percent range.

In terms of pure dollars, the biggest increases under the QRMC proposal naturally would be seen in high-cost areas. In San Diego, an E-4 without dependents who does not live in government housing is paid $1,374 monthly, while his with-dependents counterpart receives $1,820. If the single member’s BAH was boosted to 95 percent of the with-dependent rate, it would mean an increase of $355 a month.

Those in lower-cost areas would get less but would still see an increase. In the Fort Polk, La., area, without-dependents E-4s would gain an additional $111 — an 18.4 percent increase over the $603 they currently receive.

In its proposal, the QRMC deliberately left the 5 percentage point gap between with- and without-dependents BAH rates.

“If [the gap] were completely closed, we would in fact be overcompensating the singles because of differences in things like utilities and insurance,” said retired Air Force Brig. Gen. Denny Eakle, executive director of the 10th QRMC.

Single members likely use less utilities, so paying them an equal allowance would amount to overcompensation, she explained.

The rationale for boosting the without-dependents BAH rates, according to the 10th QRMC’s final report, is that while federal law requires BAH payments to be based on the cost of adequate housing for civilians in the same area with “comparable income,” recent research suggests single service members face “significantly higher out-of-pocket costs” for housing than their with-dependents counterparts.

The research found that with-dependents rates generally are fair, but when the total cost of housing is considered — including utility costs — the rate for those without dependents was still “substantially less.”

That means a single O-3, for example, spends 16 percent more than his housing allowance to rent an apartment comparable to what his civilian peers live in, while a married O-3’s BAH covers virtually all costs, the study says.

The QRMC study says boosting the without-dependents rates would reduce the “marriage incentive” embedded in the BAH program, which leads some service members to marry mainly to draw two BAH payments in order to obtain nicer housing than they otherwise could afford.

That could “possibly lower dependency rates,” the QRMC study says, and fewer spouses and children would mean lower costs for health care and education.

Generating such savings would also enable the Pentagon to devote more money to repairing or rebuilding substandard base housing, Eakle said.

The Pentagon is spending $17 billion this year on BAH, mostly to service members living in nongovernment housing. It is designed to fully cover the average cost of rental housing in which comparably paid civilians reside. If the 95 percent target were reached, BAH costs would increase by about $535 million annually, the QRMC said.

The Pentagon took the first step toward reducing the disparity in with- and without-dependents BAH rates in January, when it adopted an early QRMC proposal to have all without-dependents rates equal at least 75 percent of the with-dependent rates for all paygrades and locations.

Previously, BAH for some single members was as little as 52 percent of with-dependents rates, Eakle said.

Once the 95 percent rate for those without dependents was reached, the QRMC said the Pentagon should go to one BAH rate table for everyone and pay the without-dependent rate at 95 percent of the with-dependent rate in all cases.

The idea is worth debating, said Steve Strobridge, director of government relations for the Military Officers Association of America.

“There’s a legitimate issue to say, ‘How much difference is there?’” in the BAH rates for single members and those with dependents, Strobridge said.

But it’s too early to say whether the Pentagon will accept the QRMC recommendation and, if so, whether Congress will agree to it. Congressional aides declined to comment until the Pentagon sends a formal proposal.

Insiders say one possible issue is that a blanket increase such as one the QRMC calls for fails to take lifestyles and family size into account when comparing BAH rates.

For instance, a retired Defense Department official familiar with the housing compensation issue said it is one thing to compare without-dependents rates for troops in their mid-20s or older to that of young married couples — one military and the other a dependent — without children, because the service member and the young couple likely would seek the same sort of housing — a one- or two-bedroom apartment.

But the retired official said it’s another thing to pay young service members enough to rent such a residence when they might opt for a larger place with several roommates who all split the cost. In that case, the member would be overcompensated for his housing.

Eakle called that argument “a bit specious.” She said the QRMC’s research updated the 1998 Pentagon study using the most recent Bureau of Labor Statistics data, which compared BAH rates with housing costs of civilians of similar age, education, income, family status and geographic area.

“The law requires that we pay housing based on comparable rental rates being paid by civilians,” Eakle said. “That’s what the study says. That’s actually how it works out. Is it possible they could get a roommate? Yes. Is it possible they could do it in the private sector, too? Yes. And by the way, there are multifamily houses.”

The Pentagon is still weighing the QRMC proposals and has not yet taken a position on them, said Sheila Earle, the Pentagon’s principal director for military personnel policy.