A recent comment caused me to realize that perhaps we were due for a couple of Dual Military BAH Warnings here at The Paycheck Chronicles. There is lots of confusion regarding Basic Allowance for Housing (BAH) for couples where both spouses are on active duty, or one is active duty and the other is a reservist or serves in the National Guard. I’m pretty sure we’ve cleared up all the confusion in Dual Military BAH and Dual Military and Not Co-Located: BAH. However, there is one thing that we haven’t discussed, the non-regulation but just being smart aspect of being dual military and receiving BAH. There’s also the regulation side of the house which can cause all sorts of problems.
If you are not co-located, dual military couples without other dependents are each considered single service members for housing purposes. However, if you are dual military without other dependents, and you are co-located, you are able to receive BAH as if you were married to a non-military member or otherwise had a dependent. Here comes the warning:
Do Not Making Housing Decisions Based Upon Both Members BAH. Do not go out and rent the nicest apartment in town just because you are receiving BAH without dependents times two. Do not buy a McMansion that requires both BAH to pay the mortgage. This is a bad, bad idea.
“But Kate”, you ask, “why?” Because even my 9 year old knows that there is nothing permanent about Permanent Change of Station orders. Unexpected orders come through pretty regularly in the military. Getting stuck with a lease that you can’t afford, and can’t break because one of the lease signers is still stationed locally, is no fun. Even less fun is having a mortgage you can’t afford.
For sake of this conversation, let’s consider my friends Luke and Laura. (Not their real names, though people of a certain age will get the joke.) Luke and Laura are a married couple, both on active duty, and stationed in the same area. One of them receives a $1200 housing allowance, while the other receives $1000. Wow – $2200 a month will buy or rent a lot of house in most areas of the country. Luke and Laura have a few choices: they can rent a house that costs about one housing allowance, or they can rent a house that costs both housing allowance. Keep in mind that we’re talking about a couple who has no other dependents. There’s no reason that they need more than a few bedrooms, or to be in the best school district in town.
If Luke and Laura are smart, they’ll choose to live in a home where the cost is closer to one of their housing allowances. The obvious reason is because they will then get to save, or spend, the other housing allowance. The less obvious reason is because there is always the chance that one of them will have to move unexpectedly, and they probably don’t want to get caught paying $1000 a month out of pocket for rent.
The second warning in this post is about keeping your respective finance offices up-to-date about the status of your spouse. If you are a dual military couple who is receiving BAH solely because you are co-located, and one of you PCSes, then be sure to let your finance office know about the change in your status. Yes, it would be lousy to lose your BAH and your spouse at the same time, but it would be more lousy to continue to receive BAH and then owe the government a huge debt when the discover the situation. Similarly, couples with a reservist have to ensure that the full-time servicemember’s BAH accurately reflects the current status of the reservist.
There are tremendous benefits to being a dual military couple, but there are also lots of pitfalls. Being knowledgeable and smart is the best way to make the most of your situation.