DoD Releases 2018 CONUS COLA Rates

by | 25Dec2017 | COLA | 0 comments

The Defense Department released its 2018 Continental United States (CONUS) Cost of Living Allowance (COLA) rates, which will take effect on January 1, 2018. Approximately $28 million will be paid to 28,000 service members stationed in CONUS in 2018; $13 million less than last year. Approximately 50 members will now receive CONUS COLA, 1,100 will see an increase in their CONUS COLA payments, 8,200 members will see a decrease, 7,200 members will no longer receive CONUS COLA and 17,800 will see no change.

CONUS COLA is a taxable supplemental allowance designed to help offset higher prices in the highest cost locations in CONUS that exceed the costs in an average CONUS location. Rates can increase, decrease, or remain the same 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 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 2018, the total number of Service members receiving CONUS COLA will decrease from approximately 35,000 to 28,000.

This year, 2 MHAs will now receive an index, 2 will receive a CONUS COLA index increase, 11 will receive a decrease, and 16 will no longer receive CONUS COLA in 2018. Additionally, 6 MHAs will receive no changes. For non-MHA areas (non-metropolitan counties), 2 counties will start to receive an index in 2018, 5 will have an increase in their index, 8 will have no change, 27 will receive a decrease and 36 will lose CONUS COLA.

MHAs with the Highest CONUS COLA rates:

  • Atlantic City, N.J. 7%
  • Staten Island, N.Y. 7%
  • New York City, N.Y. 6%
  • San Francisco, Calif. 5%

MHAs with the Largest Increase in CONUS COLA:

  • Atlantic City, N.J. 1% to 7%
  • Nantucket, Mass. 0% to 2%

MHAs with the Largest Decrease in CONUS COLA:

  • Staten Island, N.Y. 14% to 7%
  • Westchester County, N.Y. 5% to 1%
  • Philadelphia, PA/Camden, N.J. 7% to 3%

The total amount of CONUS COLA a service member receives varies based on geographic duty location, rank, years of service and dependency status. Service members can calculate their CONUS COLA rate at http://www.defensetravel.dod.mil/site/conusCalc.cfm.

Additional information about COLA can be found on the Defense Travel Management Office (DTMO) website at http://www.defensetravel.dod.mil/site/conus.cfm.

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