Anticipation of rising dollar lowers COLA in Europe
October 4, 2006
KAISERSLAUTERN, Germany — The cost-of-living allowance for most U.S. servicemembers stationed in Europe dropped slightly starting this month due to an anticipated strengthening of the dollar.
It is the first change in the allowance in nearly five months.
Army Staff Sgt. Jaime Osune, 33, who is stationed in Chievres, Belgium, said the allowance dip is a little surprising.
“The cost of living has stayed the same or it’s gone up, I think,” said Osune, who is married with three children.
The government pays the stipend to servicemembers when the cost of living overseas is higher than in the United States.
The average supplement is $300 a month and affects 320,000 members living at 600 locations overseas, including Alaska and Hawaii. It currently costs the Department of Defense about $1 billion a year.
The amount a servicemember receives every paycheck varies, depending on the location, years of service, rank, number of dependents and whether he or she is living in base barracks.
For example, a servicemember in Kaiserslautern, Germany, at the E-6 pay grade with six years’ experience and three family members would lose a little more than $50 a month. That same servicemember stationed in Rota, Spain, would lose more than $100 if stationed in either Rota or Klein Brogel, Belgium.
Most bases across Europe saw a drop. But the COLA rate in the United Kingdom remained steady.
“I just served in Germany before coming here and I know the COLA impact for troops in Germany is less significant than it is here,” said Master Sgt. Sean Raymond, 35, of Tampa, Fla., who was shopping at the RAF Lakenheath BX. “The cost of living here is so much higher than in Germany, plus the taxes and high utilities.”
New rates became effective at the beginning of the month.
Master Sgt. Roland Domingsil, 42, who is stationed at Ramstein Air Base in Germany, said a smaller allowance shouldn’t affect him and his family too much. But it could hit those in the lower pay grades with family members overseas.
“To me, it’s basically the same,” he said. “But some people count on that.”
Steve Bridges, director for finance operations with the Germany-based 266th Finance Command, said the Per Diem, Travel and Transportation Allowance Committee figures out the allowance, or COLA, based on annual surveys and the exchange rate. The allowance went down for most of Europe because the dollar is expected to strengthen, Bridges said.
That hasn’t happened, yet, however. The U.S. dollar has actually stayed relatively steady against the euro the past four months but is weaker than in February.
An additional adjustment to the allowance could come in the next three months due to new survey results.
Members of the per diem committee currently are making their rounds of overseas military bases educating members on what the committee does, how overseas allowances are set, and how members can participate in the decision-making process.
They can participate in the annual Retail Price Surveys, which, in part, help set the COLA supplement military members receive.
“Local communities have a lot of impact into those calculations, from where we shop to what we spend to what we buy,” said Cmdr. Jeff Jackson, the executive officer at Naval Support Activity Naples, Italy, encouraging members to get involved.
“If you’re asked to participate, do so, and do so honestly, thinking well beyond the commissary and exchange.”
Reporters Sandra Jontz and Bryan Mitchell contributed to this report.
A little less cash
The cost-of-living allowance for the U.S. servicemembers living in Europe dropped this month for most locations. A look at the daily COLA rate for an E-6 with six years’ service and three dependents who lives off-base:
Daily Cola Rate