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Beginning May 1, servicemembers and their families based in Germany who receive funds through the Cost of Living Allowance program will receive less money.
The purpose of COLA is to ensure servicemembers have the same purchasing power at their overseas duty station as they would if they lived in the United States.
To maintain purchasing power, the Per Diem Committee in Washington, D.C., adjusts the COLA baseline annually dependent on where servicemembers shop and the prices of goods and services they buy. COLA is also adjusted as often as every two weeks based on fluctuation of the local currency relative to the dollar.
To ease the financial burden on recipients, reductions will take place over four months from May to August. As an example of the decrease, an E-5 with 10 years of service and two dependents will see daily COLA reduced from the current rate of $19.07 to $17.48 May 1 and finally to $12.71 on Aug. 1 – a drop of $190.80 per month. These projections do not consider any changes due to currency fluctuations.
For more information, visit the Per Diem Committee Web site at www.defensetravel.dod.mil/perdiem/allowcol.html.
