The Defense Department released today its 2017 Contiguous United States (CONUS) Cost of Living Allowance (COLA) rates, which will take effect on January 1, 2017. Approximately $41 million will be paid to approximately 35,000 Service members stationed in CONUS in 2017; $9 million more than last year. Approximately 16,000 members will now receive CONUS COLA, 5,000 will see an increase in their CONUS COLA payments, 4,000 members will see a decrease, 5,000 members will no longer receive CONUS COLA and 10,000 will see no change.
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 2 percent COLA index).
In 2017, the total number of Service members receiving CONUS COLA will increase from approximately 25,000 to 35,000.
This year, 13 MHAs will now receive an index, 7 will receive a CONUS COLA index increase, 5 will receive a decrease, and 3 will no longer receive CONUS COLA in 2017. Additionally, 10 MHAs will receive no changes. For non-MHA areas (non-metropolitan counties), 27 counties will start to receive an index in 2017, 23 will have an increase in their index, 16 will have no change, 6 will receive a decrease and 1 will lose CONUS COLA.
The total amount of CONUS COLA a Service member receives varies based on location, rank, years of service and dependent status. Service members can calculate their CONUS COLA rate at http://www.defensetravel.dod.mil/site/conusCalc.cfm.