BAH Updates and Changes for 2023
The topic that is always relevant for military families is the Basic Housing Allowance or BAH. With the economy trending upward, the government revisited the BAH allotment not just once this year, but twice. Despite efforts to offset the recent cost of living increases across the U.S., the market still relentlessly climbs and so, it seems, does the need for budgetary adjustments.
Home prices still sit higher than we’ve seen in recent years, interest rates are spiraling upward, and rental prices seem just out of reach. But the cost of housing isn’t the only category that financially strains military families. Prices of everything are rising.
Cue the government’s temporary relief.
In 2022, the Department of Defense attempted to offset the extreme increase in housing costs. The DOD released a Temporary Relief taking effect in October 2022, offering a BAH increase for Military Housing Areas (MHA) that saw more than a 20% spike in rental rates in 2022. In addition to the housing increase, the measure promised to decrease costs at commissaries to save military members 25% off their grocery bill compared to the local market (more on this in a minute).
As we walk through this year's BAH updates, remember that the BAH allowance isn’t meant to pay for 100% of your housing expenses; it’s designed to cover 95%. And depending on where you live, that 5% gap might feel much larger than it has in the past.
What is BAH based on?
BAH is based on factors such as location, pay grade, and the number of dependents a service member has. The numbers are calculated using the average living expenses of approximately 300 Military Housing Areas (MHA). The government accounts for varying home types and sizes in its calculations to accommodate various ranks and family sizes to appropriately meet each family’s needs.
You may also receive a COLA (Cost of Living Allowance). When applicable, COLA offers a cushion to help ease your budget and maintain your standard of living in higher-cost-of-living locations. Military members stationed overseas who are not living in government housing are eligible to receive the OHA (Overseas Housing Allowance). While it’s usually not enough to rework your finances, you shouldn’t overlook it before analyzing your budget. Learn more from the Defense Travel Management Office.
To see if you’re eligible and to find your rate, use the CONUS COLA Calculator here and the OCONUS COLA Calculator here.
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How did BAH change from 2022 to 2023?
On average, BAH increased 12.1% for 2023, totaling $26.8 billion. However, there are only marginal changes between the automatically increased rates in late 2022 and the 2023 BAH. Some did not change and are similar or identical to the increase many military members saw in October.
Areas with a significant increase from 2022 to 2023 BAH rates include:
- Twentynine Palms (60% increase)
- Vandenburg SFB (45% increase)
- US Southern Command (38% increase)
- Newport Naval Station (37% increase)
Note: Each of these increases listed from the year 2022 to 2023 is equal to the increased rate that took effect in October 2022.
Other Budget Changes for Military Families
Now, let’s revisit the temporary relief introduced in September 2022. This effort, as discussed, temporarily increased BAH for a handful of MHAs. But the relief extended beyond the topic of BAH. Understanding that general costs continue to rise, the DOD made a few additional adjustments to ease the financial burden for military families.
Some of the military budget changes:
- Create a Basic Needs Allowance for eligible service members starting January 2023. Service members must apply for the BNA and have dependents. Approval is based on gross household income.
- Increase servicemembers' pay by 4.6% starting January 1, 2023.
- Cut prices at the commissaries.
- Increase Temporary Lodging Expenses (TLE) coverage from 10 to 14 days for CONUS areas.
- Allow up to 60 days of TLE for members PCSing to an MHA with a housing shortage.
- Increase Dislocation Allowance (DLA) for servicemembers E-1 to E-6.
- Improve Childcare Development Programs to ensure quality care and facilities.
- Add seven additional occupational licensure interstate compacts with organizations representing multiple professions.
- Better utilize non-competitive, direct hiring authorities for military spouses in the DOD to increase remote work and telework options.
- Launch a new career-accelerator pilot initiative designed to match military spouses with paid private-sector fellowships for various career paths (taking effect in January 2023).
- Increase the number of partners in the Military Spouse Employment Partnership (MSEP) by 10 percent before January 2023.
For a comprehensive list, visit the Department of Defense.
To find your current 2023 BAH rate, use the DOD BAH calculator here.
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What other military allowances changed for 2022?
Basic Allowance for Subsistence
The 2023 Basic Allowance for Subsistence increased 11% from 2022:
- Enlisted: $452.56 per month (a $45.58 increase from 2022)
- Officer: $311.68 per month (a $31.39 increase from 2022)
BAS is designed to offset the cost of meals for service members.
Note: this Allowance does not account for family members.
Cost of Living Adjustments
Cost of Living Adjustments (COLA) are meant to offset increasing prices to help keep living expenses proportionate to income. Starting in January 2023, beneficiaries will see an 8.7% increase from 2022.
- Retired Military Veterans
- Disabled Veterans
- Veterans’ Pension Benefits
- Survivor Benefit Annuitants
- Surviving Families of Veterans
- Social Security Recipients
- Federal Civilian Retirees
- Supplemental Security Income (SSI)
- Social Security Disability Insurance (SSDI)
- Eligibility for Medicare Extra Help and Medicaid
- Federal & State Food and Housing Assistance Programs
Armed with this information, you can set your budget for success wherever you're stationed.
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