COLA in S. Korea to drop
SEOUL — The few U.S. servicemembers still receiving a cost-of-living allowance in South Korea will get even less of it this month, according to Department of Defense figures.
The COLA rate dropped eight points in Seoul — from 110 to 102 — on Monday and was eliminated in the rest of the country, following a yearlong plummet in the value of the won against the dollar.
The allowance is designed to offset the extra expense of living overseas, but the stronger dollar means troops and their families now have more purchasing power in South Korea.
COLA and the dollar-won exchange rates are reviewed every two weeks. They are updated when there are fluctuations, as there have been this year, said Lt. Col. Willie Drumgold, chief of financial policy for the 175th Financial Management Center at Yongsan Garrison.
"Since August, it’s been very, very volatile, and that’s why there’s been all this change," he said.
The allowance decreased to 104 at the beginning of November, increased to 110 in mid-November as the won gained strength, then dipped to 102, Drumgold said.
When the COLA was adjusted in mid-November, troops at Kimhae and Busan still received allowances of 104 points.
One dollar was worth 1,450 South Korean won on Tuesday. For much of the summer, the exchange rate was relatively stable at about 975 won per $1.
The COLA index is based on the purchasing power servicemembers have at their duty station compared to what their purchasing power would be in the continental United States. An index of 100 means purchasing power at the two locations is even. The Seoul COLA index of 102, for example, means a servicemember stationed there has 2 percent less purchasing power than in the States.
The allowance servicemembers receive is based on their rank and number of family members.
For example, an E-5 with 10 years’ time in service and two family members will see his COLA drop from $113.75 to $22.75 for the Dec. 1 to Dec. 15 pay period.
In Japan, COLA rates remained unchanged at most locations, except for Naval Air Facility Atsugi, Camp Zama and Misawa Air Base. Rates at those locations increased by two points on Monday.