Congress is targeting military housing stipends, and it could cost troops thousands

Senate lawmakers want to radically overhaul how military housing stipends are awarded and end the practice of troops pocketing extra cash from the payouts.

The plan is tucked into the Senate’s pending draft of the annual defense authorization measure, and hasn’t received the same attention as major military health care and acquisition reforms also included in the legislation.

But it has the potential to change housing stipend totals for nearly every service member in coming years, with some potentially losing hundreds of dollars a month. And it comes after a series of pay and benefits trims in recent years that have left advocates frustrated about increased financial strain on military families.
House lawmakers did not include any housing stipend provisions in their draft of the annual authorization bill, approved earlier this month. Last year, in conference committee work, they stripped out a Senate provision limiting payouts given to dual military couples, favoring the current system for now.

Pentagon officials oppose the idea of rigidly connecting the stipend exactly to housing costs. They responded to the Senate proposal by saying housing allowance is “simply another form of compensation.”

In a report on housing allowances delivered to Congress in March, the Defense Department said it would be “inappropriate to limit a member’s compensation by tying that compensation to actual expenses.” They describe the move as a potential retention problem, and say it unfairly penalizes dual military families and troops with roommates.

“While potential savings could be achieved ... providing a degraded compensation package to one member, solely because of that member’s status of being married to another member, and co-location, stands in direct conflict with the principle that a member is paid regular military compensation in exchange for his or her service,” the report states.

Given the limited attention this has received thus far, it is unclear whether the Senate proposal is aimed enacting changes now or using the congressional negotiation process to launch a more thorough re-examination in years to come.

Along with the dramatic changes, the Senate legislation includes a new report from the Pentagon, due next March, detailing not only how to implement a new system but also to look at “the impact of these changes on retention and overall military compensation.”

Last year, in its report to Congress, the Military Compensation and Retirement Modernization Commission argued BAH should not be dramatically altered, saying it “strikes an appropriate compromise between representing compensation to service members and assistance for their living expenses.”

Lawmakers have already targeted both military pay and housing allowances as sources of defense savings in recent years. BAH rates are scheduled to drop to 97 percent of expected area housing costs in 2017, and the proposed Senate pay raise for troops next year is below private sector wage estimates for the fourth year in a row.

If it becomes law, the new housing allowance payouts would not go into effect until January 2018, giving military officials at least a year to implement and explain the new system.