Overseas Assignments: Costly but Manageable
By Douglas J. Gillert
American Forces Press Service
YOKOTA AIR BASE, Japan, Aug. 5, 1996 If an apple in the commissary sells for $1, that's high, but is this really what a service member pays for the fruit?
Not if you take into consideration the generous cost of living allowance service members stationed here receive, said Air Force Lt. Col. Kevin Krejcarek, a U.S. Forces Japan spokesman.
Generous, indeed. For example, an Air Force staff sergeant stationed here with 10 years' service, a spouse and two children gets an additional $611 a month in his paycheck. The figures vary by grade and location, Krejcarek explained. They're based on price surveys, buying habits and market basket indexes.
"What this means is, if I pay 25 cents for an apple in the states and that same apple costs a dollar in Japan, the government gives me 75 cents to offset the difference," Krejcarek said. "Unfortunately, when people go to the store they say, 'My gosh, it's a dollar, I'm not going to buy it. People begin to think of COLA as part of their regular pay, which isn't the case at all. It's really a subsidy."
The Defense Department pays tax-free cost of living allowances to U.S. service members at nearly every overseas location, according to Leonard Pomeroy of the Defense Per Diem, Travel and Transportation Allowance Committee, Washington. Pomeroy's committee establishes the allowance levels for service members.
"Defense finance and accounting offices at the overseas locations provide us the information for the annual adjustments," he said. "Then we look at currency exchange rates each pay period, or 24 times a year. For countries like Japan, where the exchange rate fluctuates a lot, the COLA rate fluctuates as well."
The State Department manages the federal civilian cost of living allowance, Pomeroy said. "They use the same forms we do, but by law, all civilian COLA is based on market price indexes for Washington. As a result, civilians typically get lower COLA than service members."
Is the allowance service members receive adequate? Krejcarek said he thinks so and added it goes a long way toward reducing the expense of assignments to high-cost foreign nations such as Japan.