Pentagon to cut cost-of-living stipend for tens of thousands of troops in 2022

The Pentagon is planning to eliminate cost-of-living allowances for tens of thousands of active-duty troops living in 15 metro areas and 21 non-metro counties in the continental U.S. beginning on Jan. 1, according to an announcement.

Known as Continental United States Cost-of-Living Allowance (CONUS COLA), the stipends are “a supplemental allowance designed to help offset higher prices in the highest-cost locations in CONUS that exceed the average costs within the CONUS,” the Defense Department announcement said.

“Rates can increase, decrease, or remain the same, depending upon the non-housing prices in a duty location as compared to non-housing prices in average CONUS,” it adds.

The change means that around 48,000 troops will now miss out on the allowance, Stars and Stripes reported. Meanwhile, around 6,000 military members will still receive the allowance, budgeted at $8.5 million for the 2022 fiscal year.

The DoD announcement further explained:

By law, a contractor provides the Department civilian cost data from each military housing area (MHA) and non-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 average CONUS, 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 eight percent more expensive than average CONUS costs. 

On the list for the stipend next year: Six metropolitan areas including Nantucket, Mass., Boulder, Colo., San Francisco, New York City, Long Island, and Staten Island, as well as 20 non-metro counties.

Allowance cuts this year included the Washington, D.C., area, where military members had been receiving a 1 percent supplement beginning last year, as well as Boston and Worcester, Mass., where troops were given a 4-percent stipend.

The allowance is highest in New York City at 6 percent, but that is down from 7 percent last year.

The monetary amount of the allowance depends on a number of factors including the geographic location of the military member, his or her pay grade, years of service, and whether or not the member has dependents.

The DoD noted that monthly allowances range from $33 to $59 per month for members with dependents, and between $22 and $45 per month for those who don’t have dependents.

Congress passed the National Defense Authorization Act — the annual Pentagon budget — earlier this month. Additional spending in this year’s budget includes studies of “unidentified aerial phenomena” — formally known as UFOs — as well as the medical condition known as “Havana Syndrome.”

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