WASHINGTON — Soldiers and families paying unusually high living costs may qualify for a short-term increase in their housing allowance from October through December 2021, finance officials said Thursday.
To receive the payout, Soldiers in designated areas will need to apply through their unit S-1s and show they have incurred higher housing costs, said Larry Lock, chief of compensation and entitlements for the Army’s G-1 office.
Once approved, payouts should kick in within weeks, Lock added.
The temporary increase in Basic Allowance for Housing, or BAH, will apply to 56 of the over 300 Military Housing Areas, or MHAs, with five areas receiving a 20% increase, 11 receiving a 15% increase, and the rest slated for a 10% increase over current rates, said Vincent Gallman, a BAH compensation analyst for G-1.
Because of COVID-19, the rental market has faced scarce housing shortages and ballooned rental costs, especially in metropolitan areas, Lock said.
The announcement follows concerns across the military from service members who have experienced financial strains, he said.
“They were complaining about the housing shortage due to the COVID-19 pandemic,” Lock said. “As we continued to receive inquiries the question obviously became: What is the Department [of Defense] doing about it?”
In response, DOD senior leaders assembled a working group across the military branches, including Lock and his team who represented the Army.
“As part of that team, we had a department-wide discussion in terms of feasible alternatives to address the issue,” he said. Although answers didn’t come overnight, the nature of the issue demanded they come quickly.
“We came up with a proposed solution within three weeks, from the time we assembled [and got] to work, to getting a decision from the secretary [of defense] is really a testament to the Department of Defense, our sister services and the leaders of those services to take this issue seriously and do something about it,” Lock continued.
Although qualifying factors vary, in short, Soldiers who moved on or after March 13, 2020, in designated areas and have paid living expenses that surpass their current BAH rate may be entitled, Lock said.
Another scenario may be if a Soldier has renewed their lease in the allocated MHAs, and is now paying abnormal out-of-pocket living expenses. Regardless of that Soldier’s rank, all qualified individuals will receive the same percent increase based on their MHA.
The rates expire on Dec. 31 and do not provide members rate protection, as BAH rates are typically adjusted at the first of every year. However, Soldiers receiving BAH in 2021 will not see a decrease in their rates below those implemented on Jan. 1, 2021, unless there are unusual circumstances, such as a demotion.
Only Soldiers taking on abnormal costs in designated areas are eligible for the increased BAH rates. The DOD-wide push could assist up to roughly 200,000 service members, including a significant amount of Soldiers, Lock said.
With maximum participation, the cost estimates for the military overall are expected to be close to $160 million, Lock said.
The increase is not just for rental and mortgage costs, but also utility expenses, Lock said. For example, with so many people teleworking during the pandemic, utility bills may have gone up.
In some areas, delivery fees for propane gas have increased during the pandemic as well as a consumption tax being imposed by local power companies because of a shift in demand and usage.
With situations varying from family to family, Lock said there are multiple factors to determine who qualifies.
Couples with two military members may be eligible for temporary increases to their BAH. However, housing expenses used to certify one Soldier’s request for a temporary BAH rate increase cannot also be used to certify another Soldier’s request.
Eligibility for retroactive payments for the first month when qualified costs are established is possible, but not earlier than October 2021, as the ability to establish housing costs for a month occurs after the fact, he said.
For instance, if a Soldier submits documentation of qualifying costs to an approving official in November for expenses from October they should be paid the higher rate for October because of how the payments are made, he said.
Soldiers will not need to resubmit documentation monthly, unless their status changes, like if they are promoted, demoted, or experience a change in dependent status, Lock said.
The Army team is still sorting through data to pinpoint individuals who are likely impacted based on their location, Lock said. Once that is determined, he expects that officials will soon notify Soldiers via a SmartDoc email to begin the certification process.
“We'll tell them what we're going to do in terms of moving forward, and the documentation they will have to provide to their supporting resource management office,” Lock said.
This way, Soldiers will not go to different sources for information.
“We are requesting for [Soldiers] to submit a packet with the supporting documentation,” said Maj. Criseida Almanza, a program analyst for the Army’s G-1.
Documentation includes monthly expenses, lease and mortgage agreements and other related details.
“Once the S-1 receives that packet and [ensures] the Soldiers make the criteria, [like] an increase in their utilities and on the actual agreement, then it will be sent to their battalion commander for a signature and the accommodation,” she added.
Before that happens, the Soldiers must understand the criteria they need.
"Our intent is [for Soldiers] to go to their personnel office and get the information,” Gallman said, adding the offices will soon have more details on the Army guidelines, application process, and eligibility criteria.
Even if a Soldier lives in a designated zip code that does not immediately qualify them for an increased BAH, especially if they’ve had no out-of-pocket expenses since March 13, 2020. For instance, Soldiers in a long-term lease or have a mortgage rate that was already established prior to March 13.
Also regarding homeowners, Soldiers who have had higher housing expenses since March 13, 2020, because of refinanced mortgages, adjustable-rate mortgages, or home equity loans are unrelated to the pandemic and do not qualify.
Homeowners paying more for a house that is not occupied as a primary residence of the Soldier and/or their military dependent during an approved period also do not qualify.
Another example may be Soldiers who have experienced increased housing expenses since March 13, 2020, but cannot show that their housing expenses exceeded the current BAH rate. Soldiers in privatized housing are also ineligible.
“Helping Soldiers and their families in a pinch is more than just addressing complaints, it's the right thing to do,” Lock said, which “is consistent with the Army's intent of putting people first.”