Good news and bad news for U.S. servicemembers and government civil employees in the Pacific.
Depending on whether you buy goods off base with yen or won, your disposable income is about to expand — or shrink.
While tax-free allowances to offset the cost of living overseas for active-duty and civilian workers in Japan climbed considerably this weekend, they took a dive in South Korea.
The fluctuations are tied to local exchange rates, according to military officials.
In Japan, the U.S. dollar continues to hover below 100 yen, meaning it takes more dollars to buy goods and services off post.
The opposite is the case in South Korea, where the dollar has recently gained ground on the sliding won.
For servicemembers in Japan, the sluggish dollar has bumped COLA up by six points at most locations.
“Six points is a significant jump,” said U.S. Forces Japan locality coordinator Ron Stewart.
An E-6 living at Misawa Air Base in northern Japan with 12 years of service and three dependents will earn $79 more per 15-day pay period, or an added $158 per month.
Stewart said the COLA change, which goes into effect Tuesday for the next pay period, was based solely on the exchange rate.
The Pentagon’s Per Diem, Travel and Transportation Allowance Committee made the latest adjustment based on an exchange rate of 92 yen, according to a message posted on the committee’s Web site.
Stewart said the lowest he’s seen the exchange rate recently is 95; the committee will sometimes adjust the exchange rate in its calculations to catch up for periods when people are underpaid or overpaid, since COLA is evaluated just twice a month.
The military exchange rate Monday was 97 yen.
“Keep an eye on the yen rate,” Stewart advised. “If the dollar continues to drop, your COLA will go up. If the dollar gets strong, your COLA’s going to go down.”
Staff Sgt. William Boulware, 28, a project manager at Misawa, said Monday he’s doing just that.
“I notice every time it goes up and down,” he said.
With the yen so strong, “every little bit” helps, he said of COLA. “It helps with going out to eat and going shopping at the mall. Gas, too.”
Petty Officer 3rd Class Frank Rodriguez, of Sasebo Naval Base, said he was just promoted to his rank and has been depending on the pay increase to make up for the dollar’s lost buying power in recent months.
The COLA increase comes at a difficult time for servicemembers who do their spending off base, but even a greater increase in allowance pay might be needed, Rodriguez said.
“I want to say we could use a little more,” he said. “It is going to take a lot to catch up” to the strong yen.
Some servicemembers were already planning more nights out on the town with the COLA boost.
“Of course, I’m excited,” said Senior Airman Krystal Williams, with the 18th Wing Command Post at Kadena Air Base on Okinawa. “As far as the local economy’s concerned, they’re going to like it that I’m getting a COLA increase.”
Others, such as Tech. Sgt. Wesley Poindexter, also of Kadena, said he would sock it away for his children’s college funds.
“I know I’m not going to be here (in Okinawa) forever, so I try to be smart with my COLA,” he said.
Civilian workers in Japan also were enjoying similar increases in allowances.
For example, a single civilian employee making $45,000 at Sasebo Naval Base received an annual post allowance increase from $7,210 to $8,652, according to the U.S. State Department.
Increases in post allowance will be in the April 23 paycheck.
Post allowance for all eligible U.S. civilians overseas is set by the State Department.
Stars and Stripes reporters Travis Tritten and Natasha Lee contributed to this report.
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