Officials with DoD's office of compensation said a new system now before Congress would create an allowance based on actual housing costs in area surrounding each military bases. This new variable housing benefit would replace basic allowance for quarters and variable housing allowance currently earned by most stateside service members. Instead of having a third of the allowance variable, the whole allowance becomes variable. It will be delinked from the pay raise. Under the old housing formula, DoD pays a basic quarters allowance based on pay grade and marital status to all personnel living in off-post private housing.
Military personnel living in high-cost areas also receive the variable housing allowance.
Housing survey data reported by troops living in about 305 areas such as New York, Los Angeles, San Francisco and Washington are used to compute area rates. The rates are determined for each pay grade and marital status. BAQ and VHA together cover about 80 percent of housing costs for the average member. However, defense officials said problems began emerging as housing costs increased. That reimbursement problem should no longer exist by Jan. 1, pending congressional approval.