Tuesday, January 7, 2014

Calculate your BAH - 2014

ΒΑΗ is a great benefit, and by ΒΑΗ, we mean the US-based allowance that enables military members to live off-base comfortably and comparably to their civilian counterparts.

That it does, because when you PCS within the fifty states and you are determined to live off-base, well, you have some important personal and practical choices to make such us the kind of housing you want to rent, and in which neighbourhood you want to live. They closely with the command leadership in the military housing office at each base in the military housing area to establish the median costs of local civilian rental housing to help members make those choices.

Before you calculate your BAH, keep in mind that the rate is determined through an extensive collection of information in the local area and reflects the cost of comparable and situation appropriate housing in current rental markets. BAH rates are based on housing markets that are within a reasonable commuting distance of your duty station. And that distance generally speaking is approximately an hour drive in rush hour traffic. Your individual rate is based on your pay grade, dependency status and duty station location, and it's updated once a year. Even if BAH rates in your zip code go down next year, the good news is that your rate stays the same. If BAH rates in your area go up, your rate will go up. As long as the members eligibility is uninterrupted, which means that they stay at the same duty station, don't have a change in dependency status, and don't have a change in rank. Military calls that "rate protection".

Now you may be wondering how BAH rates are calculated. Well, they look at how the civilians in your income range and area live. Such as the size and type of their residences. Since there are so many options about how people live we simplified it and created six housing profile types. Each profile is matched up to a specific pay grade called an anchor. For pay grades that fall between two anchors, the percentage is used to determine that members BAH. And a corresponding scale is used for members with dependants. It's important to know that BAH is not designed for expenses associated with home ownership. BAH is specifically designed to cover local average rental costs including rent, utilities and renter's insurance. BAH may not cover all housing costs for all members: For instance, if a member chooses to rent above the median or housing profile, they will have out-of-pocket expenses, and if you choose to spend less, that's money you can save or use for other expenses. BAH is all about choices. You have the complete freedom to decide how to allocate your income. For example, if your duty station is located downtown, near the city center, you can choose to trade-off a longer commute to work for either a larger or less expensive house in an outline area. Or, a member may choose to use all their housing allowance to rent a smaller, more expensive appartment downtown that may be only ten minutes to work. The choice is yours. For more information to figure out your basic allowance for housing rate by duty station, you can use our BAH calculator, 2014 rates included.

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