Military service members at some locations outside the continental United States (OCONUS) may see some pretty large changes to their Cost of Living Allowances (COLA) during the next few months.  The COLA index, which is used to calculate a location’s COLA, has dropped for most locations in Hawaii and the United Kingdom, and Cape Town, South Africa.  It has increased for about half of Italy, the countries of Kuwait and Niger, and the island of Hawaii in Hawaii.

Each year, local area authorities conduct Retail Price Surveys, which help to determine the COLA for each location.  Based upon the prices found in the most recent Retail Price Surveys, COLA is adjusted so that the service member’s actual buying power remains relatively constant.  In cases where there is a big drop in COLA in a specific area, the decrease in rates may be spread out across a few months.

The biggest losers in this round of COLA adjustments are the Hawaiian islands of Kauai, Maui, and Oahu, the Cheltenham/Innsworth area of the United Kingdom, and Cape Town in South Africa.  In each of these areas, COLA will be decreased by 8%.

An 8% drop in COLA can equal several hundred dollars a month, depending on the service member’s rank, location, years of service, and number of dependents.  You can use the Overseas COLA calculator to see current and historical COLA rates for each location, but it doesn’t show how the changes will affect your COLA.  I am trying to find the instructions on how to calculate the change, but I’m not having any luck and I don’t want to tell you the wrong formula.

In any case, if you are in one of the areas who will be having a large drop in COLA this summer, start looking at your budget and figuring out where you can make some cuts.  The good news is that these changes are occurring because the data shows that costs have decreased in your area, relative to the cost of goods and services in the United States.  But that isn’t going to help if you’re stretched thin!

If you need help with your spending plan, be sure to reach out to the many resources available, including financial specialists at your base family service center (Airman and Family Readiness Center, Marine Corps Community Services, Army Community Services, or Fleet and Family Readiness Center) and telephone counseling through Military One Source.


About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • There is a petition on whitehouse.gov to get the attention of policy makers and give us back the COLA! Paychecks have been reduced by 85-400 dollars per month! Sign here… https://petitions.whitehouse.gov//petition/raise-

    • Kate

      milspouseoahu, I’m curious about the idea behind this petition. Is there a dispute about whether the cost of living has actually changed? COLA rates are calculated using data provided by military families. Assuming that the military families are providing accurate information (and they’d be pretty silly not to), then there’s not much to protest.

      I’m also curious about the statement that paychecks have been reduced by up to $400 per month. Using the COLA calculator, I ran a bunch of calculations and the largest decrease I could create was $302, for a senior officer with five dependents. Can you please share more information with me so I can learn? Thanks!

  • Trisha

    Curious as to what data military families are providing? Is there a survey that we submit? Just curious..not being sarcastic, cause I have never been offered to fill anything out about prices or the economy in my area. I have lived on Oahu for two years now. We have seen a decrease of $343.60 since December 2014 to this month and we have 4 boys E8. Yes it is starting to effect us. I don’t see Hawaii prices going down.. I actually see groceries going up. For example, eggs at the Commisary $4.32 for a 18 pack, now $6.00, sausage links I use to always buy $.99 a box, now $1.15 and I’m not going to even start with produce. The sad thing is, Commissary is suppose to “help” the military “save money”.. sometimes I find better deals at Target for groceries.

    • Kate

      Trisha, I’ve filled out several COLA surveys during our times living overseas. The notice to fill out the surveys usually comes to me through a key spouse/ombudsman or from the command itself. I also once acted as the contractor for the survey at a remote location.

      The cost of living surveys include much more than just groceries and include all spending that falls within the range of a usual family.

  • Kelly

    We are also on Oahu. Prices still going up here. I never saw a survey come out. We are also out close to $400 a month. Yes, we are cutting where we can. We are a family of 5, E6. We have never had cable here. We use Netflix. I will say that the interent did finally drop. We were paying almost $100 a month, and it dropped to around 50. But, everything else has stayed the same or gone up. I wonder if the surveys here may not have been distributed very well and thats why? Not sure. I’m an FRG Leader here, and am seeing lots of families suffering from the massive cuts.

  • kurt

    Im with 25th in Hawaii im an e6 with less then 10 years of service and me and my wife get by fine we have 2 kids that are chow hounds. I see more people complain about the cola change with rank above e7 and above. most people choose to come here, not saying all but some have no choice. so you know what your getting yourself into. Costco sells in bulk, take a day and go fish its free minus the cost for gear one time. buy produce at the swap meet and framers markets..its more fresh then the commissary. if your kids are in public school by now maybe as a spouse get a job, they are out there my wife got hired at tripler before we got there and many postions are there. I like when things like this happens a lot of people get humbled by it. suck it up we get base pay still get bas…discounts everywhere. we have more fun at the attractions that are free.