WASHINGTON: The Defense Department released today the 2023 Continental United States Cost-of-Living Allowance (CONUS COLA) rates, which take effect Jan. 1, 2023. In 2023, $8 million will be paid to approximately 5,000 service members stationed within CONUS.
CONUS COLA is a supplemental allowance designed to help offset higher prices in the highest-cost locations in CONUS that exceed the average costs within the CONUS. 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.
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 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. An index above 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).
This year, four MHAs will begin receiving CONUS COLA; two MHAs will receive an increase in CONUS COLA; one MHA will receive a decrease in CONUS COLA; and three MHAs will no longer receive CONUS COLA.
For non-MHA areas (non-metropolitan counties), 20 counties will lose CONUS COLA.
Military housing areas with the highest CONUS COLA rates:
New York City, NY 8%
Martha’s Vineyard, MA 3%
Staten Island, NY 3%
Military housing areas with the largest decreases:
Long Island, NY 3% to 0%
San Francisco, CA 3% to 1%
Nantucket, MA 2% to 0%
The total amount of CONUS COLA a Service member receives varies based on geographic duty location, pay grade, years of service, and dependency status. Payments per CONUS COLA percentage point range from $33 to $59 per month for members with dependents, and from $22 to $45 per month for members without dependents.