YONGSAN GARRISON, South Korea — U.S. civilians in South Korea will see their post allowance double, but servicemembers won’t see an increase in their cost of living allowance, officials said Monday.
Effective Oct. 16, the post allowance rate will go from 5 percent to 10 percent of spendable income, as determined by the State Department’s Office of Allowances.
Post allowance is additional money given to civilian employees intended to make up the difference between cost of goods and services in Washington, D.C. versus a foreign post. When the cost of goods and services is three percent higher than Washington, D.C., post allowance starts.
The index tends to get higher as the dollar becomes weaker against the won. Monday, $1 bought 1,121 won at Yongsan Garrison’s Community Bank. The Office of Allowances uses a three-day average of exchange rates from military banks, which is lower than the Korea Exchange Bank rate.
Post allowance varies by a person’s salary and family size. For example, a civilian with two dependents making between $51,000 to $54,999 per year would get $2,790 yearly under the new rate, up from $1,395.
Servicemembers receive a cost of living allowance (COLA). After years without COLA, servicemembers in Korea began receiving it in June based on their rank, family size and where they live.
Most locations in Korea received an adjustment July 1, two weeks after the COLA was instituted, while a few areas remained the same. According to the Oct. 1 figures posted by the Defense Department’s Per Diem Committee, COLA rates will remain the same.
COLA is paid when the average cost of living in an area outside the United States exceeds the average cost in the United States. It’s based on spendable income and the amount spent on the local economy for goods and services.
Surveys determine where servicemembers buy products off post and how much those goods cost compared to the same items in the United States. Indexes are weighted and summarized to determine a location’s COLA index.
In April, civilian employees also began receiving post differential — separate from post allowances — compliments of the State Department. Post differential is given when an overseas assignment has harsher conditions than conditions in the United States. The rate for civilians in South Korea is 5 percent of base pay and is taxable. The rate is evaluated periodically, and the U.S. embassy provides information on South Korea.
Choe Song-won contributed to this report.
