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The extra cash U.S. servicemembers and civilians receive to cover the higher cost of living in Europe is dropping in some locations.

When the dollar gains ground on the euro, the amount of extra compensation paid to government employees stationed overseas usually drops, and vice versa when the value of the greenback slips.

On Aug. 5, the dollar was worth .6767 euro, but rose to .6911 by Aug. 20.

Because the dollar rose against the euro, this extra pay – known as cost-of-living allowance for troops and post allowance for civilians – will be a little less the next paycheck. That’s because there is about a two-week lag time.

But as of Monday, the dollar has slipped back to .6794 euro, so in all likelihood COLA and post allowance will slide the other way in mid-September.

"This is a very small hit, compared to what we’ve had in the past," said Army Capt. Shawn Schulze, a finance policy officer for U.S. Army Europe.

Servicemembers stationed in Germany, which has the largest concentration of U.S. personnel in Europe, will experience no change, Schulze said. Those based in Italy and England will take a bit of a hit. For the next paycheck, an E-6 with 10 years of experience and two dependents, for example, should notice about a $26 drop in their COLA reimbursement. Folks in Belgium stand to lose a few dollars more.

The COLA reimbursement exists "to make sure you have the same amount of purchasing power as the soldiers in the States," Schulze said.

And that’ll depend on some variables, such as where you are assigned.

The civilian side of the house involves an entirely different program but operates on roughly the same premise. Civilians in most areas of Italy and Germany should see their post allowance drop by about 17 percent, according to a U.S. Consulate official in Frankfurt, Germany. Places such as Netherlands and Turkey face no change.

This week’s post allowance changes in Germany and Italy were the result of the exchange rate, according to the State Department Web site.

For more information on post allowance rates, go to: http://aoprals.state.gov/content.asp?content_id=216&menu_id=95

For more information on COLA rates, go to: http://www.defensetravel.dod.mil/perdiem/.

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