How BAH Works
BAH is money given to you by the government to help you pay for housing. In most cases, you can’t live in government quarters to qualify. The government determines BAH based on several factors: your pay grade, whether you have dependents, and the median housing cost for the geographical area where you’re stationed or where your family is living. BAH generally will not cover all your housing costs, but it should meet about 80 percent. The more dependents you have, the higher your BAH will be. If you're stationed away from your family, such as if you're on active duty, BAH is intended to cover their housing costs even though you're living on base.
Effect of Divorce
If you and your spouse have no children together, and if you are the service member, you’ll continue to receive BAH post-divorce, provided you don't move into single-unit government housing. If you continue living off-base, you’ll receive the BAH-WITHOUT rate rather than the BAH-WITH rate because you no longer have a dependent -- your spouse.
Effect of Custody
The issue becomes more complicated if you have children. You'll continue to receive BAH, but at either the BAH-DIFF rate or the BAH-WITH rate, depending on your custody arrangement and where you live post-divorce. If you move into single-unit government housing after your divorce and your ex has custody of your children, you'll receive BAH-DIFF if your child support obligation is at least as much as that calculated amount. If you live off-base, you can still claim your children as dependents and qualify for BAH-WITH, even if you don’t have custody. However, your child support obligation must be equal to or greater than the BAH-DIFF rate you would have received if you lived in single-unit government housing. If you do have custody, your children are your dependents, regardless of the fact that, in most cases, you would not be paying child support.
Two Military Parents
If your spouse is also in the military, the Department of Defense mandates that only one of you can receive BAH-WITH authorization. You can’t both claim the same dependent children for this rate. The BAH-WITH designation goes to whichever of you provides more than half of your child’s support.
Effect on Child Support
The Internal Revenue Service doesn’t tax BAH as income, but most states will include your BAH payments as income for purposes of calculating child support when you divorce. The higher your overall income, the higher your support obligation usually is. The law requires that your child support obligation must be at least as much as your BAH-WITH post-divorce to qualify for that rate if you don't have custody of your children.