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For the second time this month, the OSD level Per Diem Committee is reducing the Cost of Living Allowance rate for the KMC and most other locations in Europe. The adjustment is due to a more favorable exchange rate for the U.S. dollar to the euro.
The rate that COLA was/is paid to servicemembers in the KMC is as follows:
• From May 16 to Aug. 31 – €0.62 per dollar
• From Sept. 1 to Sept. 14 – €0.6751 per dollar
• From Sept. 15 to the next change – €0.6866 per dollar
(Note that the rate at Community Bank Sept. 16 was €0.6835 per dollar.)
How will the COLA adjustment affect your pay? Effective Sept. 15, the COLA rate dropped by 5.88 percent for all military members assigned to the KMC. To find your new daily COLA rate, you can go to the Per Diem Committees Web page at http://perdiem.hqda.pentagon.mil/perdiem/ocform.html and enter specific information, like time in service and number of dependents.
As an example of the financial impact: the COLA payment for an E-5 with three dependents and 10 years of service, living off base, will be reduced by approx $1.61 per day.
When servicemembers design their budgets, it’s important to keep in mind the purpose of COLA. The Overseas Cost of Living Allowance is a supplement designed to equalize purchasing power between those of us who live overseas and our fellow servicemembers stationed in the United States.
COLA is designed to ensure that the amount of money we had available to us when stationed in CONUS is not eroded by exchange rate differences and by the higher prices for goods and services in a host nation. For those of us in the KMC, COLA makes up the difference in prices and exchange rates between Kaiserslautern, Germany, and the United States, so it can be affected by financial situations in either country.
When budgeting for COLA, a good rule of thumb is to ask yourself, “If I were living in the states, could I afford to take that vacation, go out to eat as often as I do or buy that new BMW?” While European vacations, Schnitzel and BMWs are not bad things (I enjoy all three), if you are using COLA to live a lifestyle that was not
possible when stationed in the CONUS, you will find that when COLA rates adjust you will likely be in a difficult financial situation.
The 435th Comptroller Squadron is providing this information via the KA and through command channels in order to prepare servicemembers for this second reduction. It’s important to make changes to your spending patterns now so you are not caught short when your pay is adjusted.
