The Department of Defense has released the 2016 Basic Allowance for Housing rates.

The rates will increase an average of 3.4 percent effective Jan. 1. An estimated $21 billion will be paid to approximately one million service members. On average, BAH rates will increase approximately $54 per month.

Continuing to slow the growth in compensation costs, the 2016 BAH Program expands the member out-of-pocket expense. Based on the authority provided in the FY 2016 National Defense Authorization Act, the cost-sharing element was increased to two percent. The cost-sharing amounts incorporated in the 2016 BAH rates vary by grade and dependency status and range from $24 to $57 monthly. This means for 2016, a typical member will need to absorb two percent of the national average housing cost by pay grade. This rate computation change slows the growth of certain military pay and benefits.

Housing cost data are collected annually for more than 300 military housing areas in the United States, including Alaska and Hawaii. An important part of the BAH process is the cooperation from the services and local military housing offices in the data collection effort. Input from local commands is used to determine in what neighborhoods data is collected and to direct the data collection effort towards adequate apartment complexes and individual housing units.

Median current market rent and average utilities (including electricity, heat, and water/sewer) comprise the total housing cost for each military housing area and are included in the BAH computation. Total housing costs are developed for six housing profiles (based on dwelling type and number of bedrooms) in each military housing area. BAH rates are then calculated for each pay grade, both with and without dependents.

An integral part of the program is the provision of individual rate protection to all members. No matter what happens to measured housing costs – including the out-of-pocket cost sharing adjustment noted above, an individual member who maintains uninterrupted BAH eligibility in a given location will not see his/her rate decrease. This ensures that members who have made long-term commitments in the form of a lease or contract are not penalized if the area’s housing costs decrease.

For more information on BAH, including the 2016 rates and component breakdown, go to www.defensetravel.dod.mil/site/bah.cfm. Service members can calculate their BAH payment by using a calculator at: www.defensetravel.dod.mil/site/bahCalc.cfm.