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Housing, Meal Allowances Increase This Month
By Eric W Cramer
Army News Service
January 07, 2005

WASHINGTON - Soldiers will see an increase in their basic allowance for housing, designed to reduce or eliminate their out-of-pocket housing costs, with their first January paychecks.

The meal allowance for Soldiers is also set to increase.

Col. Gerald Barrett, chief of the Compensation and Entitlement Division in the Department of the Army's G-1, said the increases have already been "loaded" in to the Defense Finance and Accounting System.

"The goal was to achieve average zero out-of-pocket by '05," Barrett said, "and we've been able to do that."

Lt. Col. Rick Tillotson, a compensation analyst in Barrett's division, said the allowance is based on local median housing costs.

"Say we've surveyed the area and found that, for a warrant officer 3, who is entitled to a three-bedroom house, the housing costs near a given installation average $1,000 a month. If he rents a house for $950, he will still get $1,000. If the house he chooses to rent costs $1,200, he'll have to pay $200 out of his own pocket," Tillotson said.

Tillotson said the rates don't decrease as the former Variable Housing Allowance once did.

"It used to be, a Soldier living off post would be authorized, say, $1,000 a month, and then find a place for $950," Tillotson said. "Then, when the next survey came around they'd turn that data in and the VHA would reduce to that lower amount. It gradually decreased the housing allowance. It was a "death spiral' that led Soldiers toward substandard housing."

Barrett said the median housing estimates are done by installations in conjunction with Runzheimer International, an international management consulting firm that works with installations to establish median values each year. Rates are then calculated for each pay grade.

Data are collected annually for about 400 Military Housing Areas in the United States.

"The individual commands participate in the process; for example, they can exclude an area from the cost survey because it is a bad neighborhood," said Deborah Holman, Barrett's deputy. "The local command can then be sure that the median isn't based on substandard housing."

Components included in the computation are: median rent in the market; average utilities including electricity, heat and water and sewer; and average renter's insurance.

On average, the housing allowance will increase by 8 percent in 2005, to cover a 4.5 percent increase in housing costs nationwide. An E-8 with dependents will receive about $60 more in his/her paycheck; E-4 with dependents will have about $47 more. Again, officials said that's an average increase and doesn't necessarily reflect what every individual Soldier may see.

An important part of the untaxed benefit is that it provides individual rate protection to all service members, officials said. No matter what happens to housing costs, an individual member will not see a rate decrease. This protects service members who have long-term leases or contracts if housing costs in their areas decrease.

"The BAH program is a very fair and effective program to allow Soldiers to live in the area to which they are assigned," Barrett said.

Holman said the BAS program has been through several changes over the years. In January, the rate increased by 5 percent to monthly rates of $267.18 for enlisted members and $183.99 for officers.

"It's been through several changes," she said. "Currently, increases are based on food prices determined by the U.S. Department of Agriculture."

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