GI Bill Housing Allowance Increases Due to New Law


Thanks to a little known provision of the law, everyone receiving a Monthly Housing allowance (MHA) with their Post-9/11 GI Bill just got a raise and didn't have to do anything for it. Many people were confused when they saw the extra money in their payments, since there was no formal announcement from the VA.

Since its inception, the GI Bill housing allowance has been the same as the military's BAH for an E-5 with dependents, it is based on the ZIP code of the school's location.

Last year, a portion of the 2015 National Defense Authorization Act changed the way that the Department of Defense (DoD) calculated the military Basic Allowance for Housing (BAH), this resulted in a smaller increase of the monthly payment than in past years. However, that same law also exempted the VA from the new computation rules, basically saying DoD will calculate the BAH one way, and the VA will compute the Post-9/11 GI Bill Housing Allowance in the older, different way.

The military uses many factors to determine the BAH rates, but the major factors in the computation are rental and utility costs. Effective January 1, 2015 the DoD removed renter's insurance from the BAH calculation. This was one of the factors that resulted in the smaller BAH increase than normal. So for current and future housing allowance calculations, DoD will not consider renter’s insurance as a factor in housing costs while VA will.

Prior to August 1 of this year, the GI Bill housing allowance and the military's BAH were the same, however August 1 of this year the GI Bill housing allowance for a full-time student went up to $16 more than the corresponding BAH. This is because the military changes its BAH on January 1 of each year (the calendar year), while the VA changes the Post-9/11 GI Bill housing allowance on August 1 of each year (the academic year). So, effective January 1, the DoD is using the new calculations, but effective August 1, the VA is using the old BAH calculations, which include renter's insurance.

Clear as mud, right? Well of course, it can always get more confusing. What happens if the BAH decreases for your area, will your GI Bill housing allowance go down? The answer is - not normally. If you keep going to the same school or have less than a six-month break in your schooling the VA will pay you the higher housing allowance rate.

So, based on all the calculations, the current Post-9/11 GI Bill housing allowance for a full-time student will be $16/month more than the military BAH until at least July 31, 2016. After that, the rate will change once more and it could be more or less depending on how the calculations are done, or if the law changes again. Stay tuned.


Show Full Article