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New Overseas Cost-Of-Living Allowance Adjustment Announced

The Department of Defense unveiled new overseas cost-of living allowance (OCOLA) adjustment earlier this month. The new adjusted allowance should be reflected on paychecks starting June 1st, 2023.

Photo by Lance Cpl. Elizabeth Case | DVIDS ~ "The Department of Defense released updates to the OCOLA adjustment process today, detailing OCOLA adjustments for this year. These adjustments are based on the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023.

How OCOLA Rates Are Assessed The Department updates OCOLA rates based on an assessment of three primary data points:

  • The triennial Living Pattern Survey (LPS), which measures where Service members shop and the proportion of shopping that occurs on a military installation, such as at commissaries and exchanges, at local community outlets, and from online purchases;

  • The annual Retail Price Schedule (RPS), which measures the cost of a 150-item market basket of non-housing goods and services (e.g., groceries and clothing)—local differences in costs for utilities and housing are accounted for separately through the housing allowance—from the outlets where Service members indicate they shop; and,

  • For foreign locations, currency fluctuations, which affect the relative purchasing power in the foreign currency as compared to the U.S. Dollar.

Annually, the Department compares OCONUS LPS and RPS data to the same data collected in CONUS (average CONUS baseline) to establish OCOLA for the OCONUS location." ~

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