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Tony

2016 CONUS Cost of Living Allowance Rates

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Tony

The Defense Department released its 2016 Contiguous United States (CONUS) Cost of Living Allowance (COLA) rates, which will take effect on January 1, 2016. Approximately $32 million will be paid to over 25,000 Service members stationed in CONUS in 2016; $7 million more than last year. Approximately 7,000 members will now receive CONUS COLA, 7,000 will see an increase in their CONUS COLA payments, 2,000 members will see a decrease, 400 members will no longer receive CONUS COLA and 10,000 will see no change.

CONUS COLA is a taxable supplemental allowance designed to help offset higher prices in high-cost locations in CONUS that exceed the costs in an average CONUS location. Rates can increase or decrease depending on the non-housing prices in a duty location as compared to non-housing prices in an average CONUS location.

By law, a contractor provides cost data from each military housing area (MHA) for the following categories: transportation, goods and services, federal income taxes, sales taxes, and miscellaneous expenses. Data is adjusted to account for the amount of Basic Allowance for Subsistence, an allowance meant to offset the costs for a member's meals, and for cost savings gained from shopping at commissaries and exchanges. This information is compared to the same cost data for an average CONUS location (standard city), which serves as a benchmark. The resulting ratio is called an index. By law, a CONUS COLA rate is only prescribed when the index meets a threshold of 108 percent, meaning that the costs for non-housing types of goods and services in a particular location are at least 8 percent more expensive than the standard city. An index in excess of 108 percent would qualify for CONUS COLA (e.g., a location that is 10 percent more expensive would qualify for a two percent COLA index).

In 2016, the total number of Service members receiving CONUS COLA will increase from 19,000 to 26,000.

This year, seven MHAs will now receive an index, eight will receive a CONUS COLA index increase, two will receive a decrease and three will no longer receive CONUS COLA in 2016. Additionally, eight MHAs will receive no changes. For non-MHA areas (non-metropolitan counties), twenty three counties will start to receive an index in 2016, two will have an increase in their index and twenty one will have no change.

For more information on CONUS COLA or to review the 2015 Payout Tables, go to http://www.defensetravel.dod.mil/site/conus.cfm

 


  

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