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Pacific edition, Friday, August 31, 2007

SEOUL — Increased American inflation means U.S. troops in South Korea will see a drop in their cost of living allowances this fall.

The COLA rate will drop four points by November, following a two-point cut on Oct. 1 and another two-point cut on Nov. 1. The drop comes as the cost of living is increasing in the United States at a faster rate than in South Korea.

“That’s really what’s driving this,” said Maj. Sean Anderson, director of centralized pay and accounting for the 175th Financial Management Center, during an interview Wednesday.

COLA allowances vary per person, and are based on rank, years of service, location and the number of family members. For a single E-4 in Seoul, the allowance will drop from $627.20 to $558.90 a month. For an O-3 stationed at Camp Humphreys with two family members, the allowance will decrease from $788.01 to $656.75.

The change is based on two surveys — the Living Pattern Survey that studies where the troops shop and what they buy and the Retail Price Schedule that measures how much those items cost at those stores.

U.S. Forces Korea conducted a Living Pattern Survey in 2006 but not in 2007 “due to the high participation rates and quality of previous results,” according to an Internet message posted Wednesday afternoon by U.S. Forces Korea commander Gen. B.B. Bell. The 2006 survey indicated an overall increase in prices in South Korea but price spikes in only two of 120 items — gasoline and off-post alcohol, probably due to a new South Korean tax on alcohol, Anderson said.

Teams conducted Retail Price Schedules in April and May 2007 in Seoul, Pyeongtaek, Daegu and Chinhae.

The allowance is designed to equalize the cost difference between living in the United States and abroad.

Kristy Cox, whose husband is a major with the 18th Medical Command, said her family watches its money closely, so the allowance drop shouldn’t be a problem for them, though it might be for other families “just catching up and starting their life over here.”

Cox lives at Hannam Village and called the drop “ridiculous” because the military pays for employees to live in pricey off-post housing in Seoul.

“They’re willing to pay $4,000 for people to live in off-post apartments, but they’re going to cut your COLA?” she said.

To calculate your overseas Cost of Living Allowance, go to http://perdiem.


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