Dual Military BAH Cut

In the Senate’s National Defense Authorization Act (NDAA) for Fiscal Year (FY16), the Senate Armed Forces Committee is seeking to cut dual-military married couples’ Basic Allowance for Housing (BAH). The purpose of this blog post isn’t to discuss whether this cut is good for our military members who are already facing unique financial issues or whether the politicians and senior Defense leaders continue to choose taking risk to save money with their personnel instead of focusing on large fraud/waste procurements and programs. For a complete breakdown of the impact of this measure, please read this amazing story by the US Naval Institute.

The purpose of this blogpost is to help dual-military married couples prepare for the potential cut. To date my single most popular blogpost is when I helped prepare military members for the FY15 Reduction in Force (RIF) and I hope this blog post helps others as well.

The Proposed Cut

Currently, dual-military married couples without children both receive the “without dependent” BAH rate. For the dual-military married couples with children, the higher ranking members receive with “with dependent” BAH rate and the lower-ranking receives the “without dependent” BAH rate.

The proposed cut allows the couple to receive only one BAH rate. The highest ranking will receive “with dependent” rate regardless if they have children or not. Mathematically, this is unfairly attacking dual-military married couples because if each military member married a civilian, then both members would be receiving the “with dependent” rate. These dual-military married couples were actually saving the military money.

Prepare Now

Dual-military married couples should prepare now by taking the following steps; instead of burying their head in the ground and praying this cut doesn’t happen, like many military members did during the RIF cuts.

1.      Assess your current situation – Can you afford this cut if it were to happen right now? The Senate Armed Forces Committee called this entitlement a “windfall” of money without considering all expenses dual-military married couples go through on a day-to-day basis. Would this reduce the money you currently save or would this cause a shortfall in your finances?

2.      Start looking at the market now – If this cut happens in FY16 and you are forced to leave your current place, start looking at the market now. Some states (like Louisiana) have strict zoning restrictions which prevent kids from attending schools outside the current zone. Will your kids be impacted now if you can’t afford your current market?

3.      Create a soft landing – Deviate slightly from your current financial goals by saving as if this was actually going to happen. You may have to save for the initial deposit or to pay for the difference in rent or mortgage you wouldn’t be able to cover if the cut happens. Either way, starting or increasing your emergency savings account is a great idea.

If you read the US Naval Institute’s article, it describes in-depth examination described this cut as “regressive, discriminatory and costly.” The best thing to do is to prepare now so you aren’t caught by surprise if this cut makes it into the FY16 NDAA.