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The Overseas Cost-of-Living Allowance will decrease for Ramstein Air Base and other bases in the Kaiserslautern Military Community in November.
Decreases will be implemented in two increments, with the first half of the total decrease effective on Nov. 16, and the second half of the decrease effective on May 16, 2024. The increments are intended to allow service members and families time to financially adjust to the change.
The allowance rates vary based on rank, years of service, number of dependents, and currency exchange rates. For example, using current OCOLA and currency exchange rates, payments to a technical sergeant, who resides off base in the KMC with 10 years of service and 3 dependents would receive $270 per pay period. The same service member — without considering currency exchange rate fluctuations – would receive $232 and $193 per pay period after the November and May OCOLA rate decreases, respectively.
The purpose of the OCOLA program is to maintain economic parity between service members stationed in and outside the continental U.S. to offset higher costs of living while stationed overseas.
The National Defense Authorization Act for 2023 enforces specific limitations on OCOLA decreases, ensuring they occur no more than once every six months or when a member arrives at a new overseas permanent duty station. This limitation introduces greater stability and predictability in financial allowances for military personnel stationed abroad.
The OCOLA program takes factors such as inflation rates and currency fluctuations into account. Data collected from the 2021 Living Pattern Survey indicated to the Office of the Secretary of Defense that the combination of inflation and the U.S. dollar strengthening warrants a decrease in the OCOLA rate.
Because OCOLA is not a fixed amount and fluctuates regularly, DoD officials advise service members to base their fixed expenses, such as rent and car payments, on what they can afford without relying on OCOLA. This approach ensures service members maintain stability in their finances regardless of OCOLA rates.
Ramstein leaders also encouraged members of the Kaiserslautern Military Community to participate in the next Living Pattern Survey, which is available to take in September 2024, to ensure their purchasing habits are accurately captured.
“I understand OCOLA is an important part of Airmen and Guardians’ financial readiness, and I am committed to continue to advocate accordingly,” said U.S. Air Force Gen. James B. Hecker, U.S. Air Forces in Europe – Air Forces Africa commander.
Hecker encouraged military members to review their Leave and Earnings Statements regularly and take advantage of the various financial planning resources offered to ensure financial success.
Additional information on the OCOLA program can be found by visiting https://www.travel.dod.mil/Allowances/Overseas-Cost-of-Living-Allowance/.
