US Troops Overseas Face Cuts to Cost-of-Living Allowance Amid Soaring Inflation

Service members at some of the most expensive duty assignments are set to receive a cut in a monthly allowance designed to offset high costs of living.

The Defense Department will make a second round of cuts to troops' overseas cost-of-living allowances (OCOLA) next month, with the final cut coming on Nov. 15 and affecting members' Dec. 1 paychecks.

The cuts will also impact troops stationed in areas outside the contiguous U.S. such as Alaska and Hawaii, two duty locations with notoriously high costs of living.

According to a report from Military.com, an E-4 with one dependent stationed in Alaska can expect to lose out on about $129 a month, while a major with four dependents will see a decrease of about $464.68 per month.

The cuts come as inflation has continued to drive prices higher in the continental U.S., diminishing the gap between the cost of living for troops in typically expensive locations and their counterparts serving in the contiguous 48 states.

Commanders at overseas duty locations have the ability to protest the changes in their areas, but such protests must be accompanied by documentation of how the Pentagon's calculations do not match the realities troops face.

Senior defense officials have also pointed to this year's 4.6% pay raise in basic pay for troops, arguing the bump will help offset any reductions in the OCOLA allowance.

"Even [for] those locations where OCOLA rates will start to decline, pay in 2023 is still higher than it was in 2022," a senior defense official told Military.com.

"So, most service members will still have a higher take-home pay even with OCOLA reductions than what they had in 2022."