The following answers to COLA Frequently Asked Questions are provided by the Department of Defense's Per Diem, Travel and Transportation Committee.
1. What is the intent of CONUS COLA?
ANSWER: Since the cost of living varies greatly across the U.S. the military has developed a Cost-of-Living Allowance (COLA) to make up for the inequity caused to service members who live in extremely expensive locations. The Basic Allowance for Housing (BAH) is designed to compensate military members for higher housing costs in expensive locations, while the COLA is designed to assist with higher expenses in other categories, such as food, utilities, etc.
2. How much does a 1% CONUS COLA put in the average member's paycheck monthly?
ANSWER: CONUS COLA varies by pay grade, years of service, and whether or not the member has dependents. For example, for calendar year 2020, at a location with 1% CONUS COLA, an E-6 with dependents and 10 YOS would receive $40/month; an O-3 with dependents and 10 YOS would receive $50/month.
3. How is CONUS COLA calculated?
ANSWER: The CONUS COLA program covers non-housing expenditures. Housing rental, rental insurance and utilities are covered by BAH. A contractor working for DoD determines the cost of purchasing a sample shopping basket of goods in locations across the country. These prices are compared and the locations that have significantly higher costs receive COLA.
4. How are the costs determined?
ANSWER: The sample shopping basket contains items such as: transportation, goods and services (which includes food at home, food away from home, tobacco, alcohol, furnishings and household operations, clothing, domestic service, medical care, personal care, and recreation), and sales taxes are compared to those of the nationwide average, resulting in a relative percentage. Deductions are made for commissaries and exchanges, if available. An additional adjustment is made for the Basic Allowance for Subsistence (BAS), since the BAS is an allowance for food for the military member.
The total expenditures less deductions for the area are divided by the adjusted total expenditures for the national average, which is also adjusted for deductions. The results are the CONUS COLA index for that location.
5. What areas are analyzed in determining CONUS COLA?
ANSWER: All areas in CONUS where service members are assigned are considered in determining which locations would receive CONUS COLA.
6. Does living on or off base play a factor in the CONUS COLA formula?
ANSWER: Residing on or off base makes no difference. CONUS COLA is based on average, not individual, purchasing patterns by members.
7. Do transportation costs consider insurance or taxes on a private vehicle?
ANSWER: Yes, and maintenance costs, financing costs, cost of gasoline, and all other major costs of owning and driving a private vehicle.
8. If public transportation is available, is it considered in determining transportation costs?
ANSWER: No, except for New York City and Staten Island in conjunction with owning one private vehicle. Two vehicles are considered for all other locations.
9. Will CONUS COLA be paid as a daily rate? i.e., for 28 (or 29) days in February, but for 31 days in October and 30 days in June?
ANSWER: No. CONUS COLA is a monthly entitlement based on a 30 day month, the same as BAH.
10. How often are the CONUS COLA rates updated?
ANSWER: By law (37 USC 403b), CONUS COLA will be updated once a year. New rates go into effect January 1.
11. Does a member have to be receiving BAS to be entitled to CONUS COLA?
ANSWER : No.
12. Why is CONUS COLA paid to members without dependents living in barracks/aboard ship at 100%?
ANSWER: These members must also purchase items like food, gasoline and other staples which are more expensive in certain areas. Since they have higher costs than those stationed elsewhere, they are entitled to COLA.
13. Why is CONUS COLA taxed while overseas COLA is not?
ANSWER: Overseas COLA was implemented around 1947, prior to legislation requiring a tax on new allowances. Since 1986, all new allowance programs must be taxed. To offset this, CONUS COLA rates incorporate a 13% increase to cover the average income tax.
14. By law, a member with a reserve component is not entitled to CONUS COLA for the first 139 days of a call or order to active duty. Does this also apply to reserve members serving on active duty?
ANSWER: Yes, unless the call or order to active duty is in support of a contingency operation. The law is clear that 140 days on active duty is required. However, the call or order to active duty in support of a contingency operation may allow reservists to qualify for CONUS COLA.
15. Why isn't the actual number of dependents of the member used instead of "with" and "without dependent"? when paying CONUS COLA rates?
ANSWER: Most allowances, such as BAH, are based on "with" or "without dependent" rates, rather than the actual number of dependents. However, cost-of-living data is purchased for CONUS COLA based on a family size of 4. This provides a slight benefit to junior enlisted members who normally have smaller families, but are more disadvantaged by assignments to high cost areas
16. Will CONUS COLA be paid when the member and the family are in different locations (e.g., Exceptional Family Member, arduous sea duty)?
ANSWER: CONUS COLA is generally paid at the "with dependent" rate based on the location of the member's permanent duty station, as with BAH. When the family does not reside with the member, CONUS COLA may be based on the residence of the member's primary dependent if (a) the member is serving an unaccompanied tour outside CONUS or (b) the member's PDS is in CONUS, but a Secretarial determination is made that, because of conditions at the member's PDS, the dependent must reside separately from the member.
17. What do you mean by "primary" dependent?
ANSWER: Primary dependent is defined by law (37 USC 403b) and includes the member's spouse, or, if there is no spouse, then one of the member's dependent children designated by the member.
18. Is CONUS COLA payable based on the location of the primary dependents who go away to college or to a boarding school?
ANSWER: There are two key points to consider in answering this question. First, the student must meet the definition of primary dependent for the member to qualify for CONUS COLA at the "with dependent" rate. Second, the separation must be due to (a) the member serving an unaccompanied tour outside CONUS or (b) if the member's PDS is in CONUS, a Secretarial determination is issued indicating that because of conditions at the member's PDS, the primary dependent must reside separately from the member. In such cases CONUS COLA may be based on the location of the primary dependent at school. It would be payable at the "with dependent" rate.
19. When the member is stationed outside of CONUS and the family remains in the CONUS, is the member authorized CONUS COLA for the dependents in addition to any overseas COLA the member may be authorized at the overseas PDS?
ANSWER: Yes. Generally, the member would draw CONUS COLA at the "with dependent" rate if the primary dependent resides in a designated high cost area within CONUS. The member is also entitled to overseas COLA at the "without dependent" rate. The family remaining at the CONUS COLA location must include the primary dependent.
20. If a member is assigned to a PDS located in a high cost area and the family resides in a non-high cost area, does this affect the member's CONUS COLA entitlement?
ANSWER: The member will draw "with dependent" CONUS COLA for the location of the PDS, regardless of where the primary dependents are located, unless, because of conditions at the member's PDS, the dependents must reside separately from the member.
21. Does CONUS COLA remain in effect during periods of field duty?
ANSWER: Yes. CONUS COLA remains in effect, without change, during all periods of TDY, including periods of field duty.
22. Is CONUS COLA paid during terminal leave?
ANSWER: Yes, as with BAH.
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