{"id":420,"date":"2014-12-17T23:16:41","date_gmt":"2014-12-17T23:16:41","guid":{"rendered":"http:\/\/blogs.oregonstate.edu\/veterans\/?p=420"},"modified":"2014-12-17T23:16:41","modified_gmt":"2014-12-17T23:16:41","slug":"bah-rate-cuts","status":"publish","type":"post","link":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/2014\/12\/17\/bah-rate-cuts\/","title":{"rendered":"BAH Rate Cuts"},"content":{"rendered":"<h1 class=\"entry-title\">BAH Rate Cuts: 99% BAH \u2013 The New Reality &amp; The Future of BAH<\/h1>\n<div class=\"entry-content\">\n<div class=\"pf-content\"><a id=\"dd_start\"><\/a><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-full wp-image-5126\" src=\"http:\/\/cdn.themilitarywallet.com\/wp-content\/uploads\/2014\/12\/bah-rate-cuts.jpg\" alt=\"BAH Rate Cuts\" width=\"300\" height=\"225\" \/>The DoD recently announced the there would be\u00a0<a title=\"2015 military budget\" href=\"http:\/\/themilitarywallet.com\/proposed-2015-military-budget\/\"><strong>BAH Rate cuts in the 2015 budget<\/strong><\/a>. Instead of the 100% BAH rate which has been the norm since 2005, the Department of Defense announced they would reduce BAH to 99% of expected costs. This is part of a larger, long-term goal of implementing\u00a0BAH Rate cuts to cover only 95% of expected costs.<\/p>\n<p>Don\u2019t fret about this change yet. BAH Rate Protection protects your BAH Rates, so you shouldn\u2019t see an immediate decrease in your BAH check each month, except under a few circumstances, which will will cover in a bit. Let\u2019s take a look at the new 99% policy, why it has come to be, and discuss BAH Rate Protection.<\/p>\n<h2>Why Move to 99% BAH?<\/h2>\n<p>The DoD, along with the rest of the government, is hurting for money. They are looking for places to cut back spending. And since BAH affects majority of the military population, it is a prime target for cuts. This 1% cut is expected to save the government approximately $200 million per year.<\/p>\n<p>The 2015 defense budget called for plans to cut BAH to 95% of expected costs over the next several years. So this is only the first step. While many servicemembers and their families will start seeing more money out of pocket in the coming years, this is still a much better situation than the 1990\u2019s, when BAH only covered 80% of expected housing costs.<\/p>\n<h2>BAH Rate Protection<\/h2>\n<p>We have a <strong><a title=\"BAH Rate Protection \u2013 What You Need to Know About BAH Changes\" href=\"http:\/\/themilitarywallet.com\/bah-rate-protection\/\">full-length article covering BAH Rate Protection<\/a><\/strong>, but here are the basics. Your BAH Rate is protected from the time you arrive on your installation, until you leave, with the exception of three circumstances:<\/p>\n<p><!-- Quick Adsense WordPress Plugin: http:\/\/quicksense.net\/ --><\/p>\n<div style=\"margin: 10px 0px;text-align: center;float: none\">\n<div style=\"margin: 10px 0px;text-align: center;float: none\">\n<hr style=\"border: currentColor;height: 1px;color: #cccccc;background-color: #cccccc\" \/>\n<p><ins id=\"aswift_0_expand\" style=\"margin: 0px;padding: 0px;border: currentColor;width: 468px;height: 60px;background-color: transparent\"><ins id=\"aswift_0_anchor\" style=\"margin: 0px;padding: 0px;border: currentColor;width: 468px;height: 60px;background-color: transparent\"><\/ins><\/ins><\/p>\n<hr style=\"border: currentColor;height: 1px;color: #cccccc;background-color: #cccccc\" \/>\n<\/div>\n<\/div>\n<ul>\n<li>Permanent Change of Station (PCS)<\/li>\n<li>Reduction in paygrade<\/li>\n<li>Change in dependent status<\/li>\n<\/ul>\n<p>In other words, your BAH rates can only increase, not decrease, unless you move to another base via a PCS, you receive a reduction in paygrade, or your dependent status changes from with dependents to without, or vice-versa. For the rest of your assignment, your BAH will be the higher of the published BAH Rate on January 1, or the BAH Rate you held on December 31 of the previous year.<\/p>\n<p>I will say it again: Your BAH Rate will not drop during the middle of your assignment, even if the rates for your location decrease in any given year.<\/p>\n<p><strong>Note about a PCS moves<\/strong>: If you live in an area with two bases close to each other and you receive a permanent change of station assignment to the other base, you could possibly remain in the same home, but still face a decreased BAH because it would officially be a PCS move.<\/p>\n<h2>How Much Will This Cost Me When I Move?<\/h2>\n<p>At the time of this publication, the DoD hasn\u2019t announced exactly how the cuts will take place. They could do one of several actions, including decreasing BAH 1% across the board, calculating the total cuts across the entire DoD and applying an average cut to everyone who receives BAH, or some other calculation.<\/p>\n<p>Andrew Tilghman <a href=\"http:\/\/www.airforcetimes.com\/story\/military\/benefits\/2014\/12\/10\/bah-cuts-details\/20187553\/\"><strong>of the MilitaryTimes reported<\/strong><\/a>,<\/p>\n<blockquote><p>\u201cMilitary officials do not want to create a new incentive for troops to prefer rural areas over costly urban ones, so it is likely that the Pentagon will calculate some sort of single across-the-board cut for all BAH checks.<\/p>\n<p>For example, they might take the average of all 1 percent reductions nationwide and use that to determine a single dollar amount to shave from every BAH check. For example, regardless of the location and actual BAH rates, each service member may face a reduction of about $200 a year.\u201d<\/p>\n<p><!-- Quick Adsense WordPress Plugin: http:\/\/quicksense.net\/ --><\/p>\n<div style=\"margin: 10px 0px;text-align: center;float: none\"><!-- Quick Adsense WordPress Plugin: http:\/\/techmilieu.com\/quick-adsense --><\/p>\n<div style=\"margin: 10px 0px;text-align: center;float: none\">\n<hr style=\"border: currentColor;height: 1px;color: #cccccc;background-color: #cccccc\" \/>\n<p><ins id=\"aswift_1_expand\" style=\"margin: 0px;padding: 0px;border: currentColor;width: 336px;height: 280px;background-color: transparent\"><ins id=\"aswift_1_anchor\" style=\"margin: 0px;padding: 0px;border: currentColor;width: 336px;height: 280px;background-color: transparent\"><\/ins><\/ins><\/p>\n<hr style=\"border: currentColor;height: 1px;color: #cccccc;background-color: #cccccc\" \/>\n<\/div>\n<\/div>\n<\/blockquote>\n<p><strong>Let\u2019s look at an example:<\/strong>\u00a0We\u2019ll look at two different BAH rates for an E-5 with dependents. The first is the rate used for the Post-9\/11 GI Bill when you take classes exclusively offered online (in-residence classes are\u00a0based on the ZIP code for your school). The other BAH Rate is an E-5 in Chicago, chosen to illustrate the difference in a high-cost of living location:<\/p>\n<ul>\n<li>E-5 with Dependents Rate (non-location, used for Post-9\/11 GI Bill):\u00a0$714.50, *99% = New Rate of $707.36, a difference of $7.14\/month, or $85.68\/year<\/li>\n<li>E-5 with Dependents Rate (Chicago): Current Rate: $1,977.00, * 99%, New Rate = $1,957.23. Difference of: $19.77\/month, or $237.24\/year.<\/li>\n<\/ul>\n<p>When put in the context of a monthly cut, $7 \u2013 $20 is noticeable, but not a massive cut. Especially if you don\u2019t see it due to BAH Rate Protection. When you PCS to your next base, you should have a good idea of the BAH in your new area and can use that BAH when setting your budget for your new location.<\/p>\n<h2>BAH Rates Can and Do Change for Other Reasons<\/h2>\n<p>It\u2019s also important to note that BAH Rates change when cost of living in a local area changes. In general, the BAH should increase as the cost of living increases, and the BAH may decrease when the cost of living in an area decreases. Falling BAH Rates were common after the real estate markets crashed in 2007-2009. This is when BAH Rate Protection was helpful for many servicemembers. It\u2019s also possible that you may see increased BAH payments, even with BAH paid out at 99% of the calculated rate. The important thing to remember is that your BAH Rates should not decrease, regardless of what happens to the published rates. Your rates should only increase throughout the duration of your tour.<\/p>\n<h2>What is the Future of BAH?<\/h2>\n<p>Right now, we can only go from the information we have at hand, which is from the recent budget talks. The DoD wants to decrease BAH to 95% of the actual cost of housing, but Congress limited to cut to 1%. This 1% decrease could just be the first step. Right now we don\u2019t even have the full picture on the implementation. But going forward I would expect the decreases to continue on an annual basis for the near future. The DoD won\u2019t implement the full 5% overnight, and the BAH Rate Protection should protect a large portion of servicemembers over the next few years. The largest\u00a0impact to\u00a0most servicemembers probably won\u2019t be felt for the next couple years.<\/p>\n<p><a id=\"dd_end\"><\/a><\/div>\n<div style=\"margin: 0px;padding: 0px;height: 0px;line-height: 0px;clear: both;font-size: 0px\"><\/div>\n<\/div>\n<p><!-- end .post #wrap --><\/p>\n<div class=\"end_of_post\">\n<div class=\"end_of_post_social\">\n<div class=\"fb_like\"><a class=\"fb_share\" name=\"fb_share\"><\/a>Share<\/div>\n<div class=\"gplus\">\n<div id=\"___plusone_2\" style=\"margin: 0px;padding: 0px;width: 50px;height: 60px;line-height: normal;text-indent: 0px;font-size: 1px;vertical-align: baseline;float: none\">[googlemaps https:\/\/apis.google.com\/u\/0\/se\/0\/_\/+1\/fastbutton?usegapi=1&amp;size=tall&amp;origin=http%3A%2F%2Fthemilitarywallet.com&amp;url=http%3A%2F%2Fthemilitarywallet.com%2Fbah-rate-cuts%2F&amp;gsrc=3p&amp;jsh=m%3B%2F_%2Fscs%2Fapps-static%2F_%2Fjs%2Fk%3Doz.gapi.en.7QxRRLWDxdI.O%2Fm%3D__features__%2Fam%3DAQ%2Frt%3Dj%2Fd%3D1%2Ft%3Dzcms%2Frs%3DAGLTcCMooe2WmJtYOg6-mJFJfXkeYed0Vw#_methods=onPlusOne%2C_ready%2C_close%2C_open%2C_resizeMe%2C_renderstart%2Concircled%2Cdrefresh%2Cerefresh&amp;id=I1_1418857435534&amp;parent=http%3A%2F%2Fthemilitarywallet.com&amp;pfname=&amp;rpctoken=76671990&amp;w=100&amp;h=150]<\/div>\n<\/div>\n<div class=\"tw_share\"><\/div>\n<\/div>\n<div id=\"print\">\n<div class=\"printfriendly pf-alignleft\"><a href=\"http:\/\/www.printfriendly.com\/print?url=http%3A%2F%2Fthemilitarywallet.com%2Fbah-rate-cuts%2F\" rel=\"nofollow\"><img decoding=\"async\" src=\"http:\/\/cdn.printfriendly.com\/pf_button_sq_grn_l.png\" alt=\"Print Friendly\" \/><\/a><\/div>\n<\/div>\n<\/div>\n<p><!-- end .end_of_post --><\/p>\n<div id=\"modifydate\"><em><small><span style=\"font-size: small\">Date published: December 17, 2014. <\/span><\/small><\/em><\/div>\n","protected":false},"excerpt":{"rendered":"<p>BAH Rate Cuts: 99% BAH \u2013 The New Reality &amp; The Future of BAH The DoD recently announced the there would be\u00a0BAH Rate cuts in the 2015 budget. Instead of the 100% BAH rate which has been the norm since 2005, the Department of Defense announced they would reduce BAH to 99% of expected costs.&hellip; <a href=\"https:\/\/dev.blogs.oregonstate.edu\/veterans\/2014\/12\/17\/bah-rate-cuts\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":5125,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172503],"tags":[172501],"class_list":["post-420","post","type-post","status-publish","format-standard","hentry","category-information","tag-bah"],"_links":{"self":[{"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/posts\/420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/users\/5125"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/comments?post=420"}],"version-history":[{"count":1,"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/posts\/420\/revisions"}],"predecessor-version":[{"id":421,"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/posts\/420\/revisions\/421"}],"wp:attachment":[{"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/media?parent=420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/categories?post=420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.blogs.oregonstate.edu\/veterans\/wp-json\/wp\/v2\/tags?post=420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}