Military personnel at Naval Support Activity Bahrain were expecting a cut in their overseas cost of living allowance. But because of miscommunication, their pocketbooks may take a much larger hit than expected.
The allowance was adjusted in April by 14 index points, which for many sailors translates to about a 40 percent cut, said Cmdr. Bob Kennedy, base executive officer.
“There was little bit of shock and disbelief at first,” he said in a telephone interview.
The average overseas supplement is $300 per month, according to the Per Diem, Travel and Transportation Allowance Committee.
There will be a delay in the reduction, until mid-July, while the base conducts another survey of shopping habits to determine whether such a steep cut is called for.
COLA is designed to equalize purchasing power between personnel overseas and stateside residents, said Jeri Busch, acting compensation chief on the staff of the Chief of Naval Personnel, in a phone interview from Arlington, Va.
Bahrain’s cut “is primarily an adjustment that has been suspended for about five or six years,” said Cotton Bowen, the Navy’s representative to the military advisory panel of the per diem committee, in a phone interview from Arlington.
Bahrain initially was slated for a COLA cut in 1997 after a survey indicated that a 12-index-point decrease was in order, from 134 to 122.
“If you have an index number of 106, that would mean the cost of living in a particular location is 6 percent higher than the average cost of living in the [continental] U.S.,” Bowen said.
The 1997 cut was suspended so Bahrain could redo the survey. In 1998, a 2-point decrease was implemented. The next survey showed Bahrain was due for a 10-point decrease in 1999.
But before that went into effect, a worldwide freeze was ordered on servicemembers’ COLA reductions. Smaller reductions as a result of currency exchange rate fluctuations continued.
Bowen said the freeze took place until 2003 so the system could be reviewed and computered.
A fall 2003 survey in Bahrain showed that the 132 index in place for several years should decrease by 14 points.
That reduction, implemented at 2 points per month, started April 16.
Kennedy said the per diem committee initially told the base that one index point equals one percentage point change. So the base advertised that the 14-point index drop meant a 14-percent decrease in money. In reality, it was about a 40 percent cut in dollars.
“There was a little bit of misfire in terms of the understanding,” he said. “ … For the May 1 paycheck, the amounts we were coming up with were a 6.3 percent reduction [per month over seven months, to add up to 44 percent overall].”
Busch said it’s difficult to translate index points into dollar amounts because COLA varies based on grade, years of service and number of dependents.
Kennedy said to make sure such a cut is justified, Bahrain warrants another survey, which is a two-part process.
Accompanied military personnel voluntarily complete a living-pattern survey online that asks where they shop on and off base.
The second part is a market-basket survey. Command representatives go to the locations indicated in the online survey and price 120 items a family would buy for everyday living: clothes, food, child-care products, entertainment and household goods.
The information is submitted to the per diem committee in Alexandria, Va., which looks at what personnel pay compared with the cost of similar items in the States.
The living-pattern survey is done every three years; the market-basket survey is annual.
However, Bahrain wanted to do another survey after just one-third of the population completed the fall survey.
Lt. Garrett Kasper, base spokesman, said 100 percent of the approximately 300 families in Bahrain completed the spring survey.
