Overseas COLA Overview
The Overseas Cost of Living Allowance is a supplement designed to equalize purchasing power between members overseas and their CONUS-based counterparts. The basic measurement is a comparison of CONUS shopping behavior and the aggregate shopping behavior at each overseas location. It is paid to over 250,000 members at approximately 600 locations overseas, including Alaska and Hawaii. The current cost is approximately. $1.7 billion annually.
Two overseas surveys are conducted to determine overseas costs:
Spending for Federal income taxes, shelter expenses, gifts and contributions, life insurance, and savings are not part of COLA.
Data derived from the BLS data provides the aggregate amount families spend on COLA goods and services varying by income level and family size.
COLA is paid as percentage of spendable income. An index of 110 would result in an annual COLA of 10 percent of the spendable income corresponding to the member’s grade, years of service, and family size.
Current spendable income table updated October 2006, effective 1 January 2007 using BLS and CES data released in 2006.
Factors that affect COLA: