Pentagon announces they will CUT cost of living allowances for 48,000 troops

Pentagon announces it will CUT cost of living allowances for 48,000 troops because they don’t live in ‘expensive’ areas

  • DOD announced that troops in 15 metropolitan areas and 21 non-metropolitan counties a total of about 48,000 will have their cost-of-living allowance cut
  • A total of $8.5 million will be doled out to about 6,000 troops who are stationed in regions that still qualify as excessively expensive
  • Regions that still qualify include New York City and Long Island in New York, Nantucket, Mass., Boulder, Colo., and San Francisco, Calif. 


The Pentagon is dropping the cost-of-living stipend for thousands of U.S. troops come Jan. 1 as they have determined fewer regions have an excessively expensive cost of living across the U.S.  

The Department of Defense announced last week that troops in 15 metropolitan areas and 21 non-metropolitan counties in the continental U.S., a total of about 48,000 will have their cost-of-living allowance cut. 

A total of $8.5 million will be doled out to about 6,000 troops who are stationed in regions that still qualify as excessively expensive. 

Regions that still qualify include New York City and Long Island in New York, Nantucket, Mass., Boulder, Colo., and San Francisco, Calif. 

Regions cut from the pay boost include Washington, D.C., which had received a 1% cost of living adjustment (COLA) in 2021. Stipends for troops in Boston and Worcester, Mass. will also be cut. 

Troops in New York City will receive the highest COLA at 6%, down from 7% in 2021. 

Troops in New York City will receive the highest COLA at 6%, down from 7% in 2021

Regions cut from the pay boost include Washington, D.C., which had received a 1% cost of living adjustment (COLA) in 2021

Regions cut from the pay boost include Washington, D.C., which had received a 1% cost of living adjustment (COLA) in 2021

A location becomes eligible for COLA when non-housing costs exceed 8% above the national average. Troops are responsible for covering the first 8% in additional costs. 

The COLA rate is determined by a contractor that provides cost data for each military housing area, which is then compared to the national average, according to DOD. 

Categories that determine cost data include transportation, goods and services, federal income taxes, sales taxes and miscellaneous expenses. Housing and housing-related costs are part of the Basic Allowance for Housing (BAH) and are excluded from COLA. 

Each percentage point increase in living stipend ranges from $33-$59 per month with dependents or $22 to $45 per month without dependents. 

Weeks ago Congress authorized $770 billion in defense spending, about 5% more than 2021 and $25 billion more than requested by President Biden. That bill included a 2.7% pay increase for troops. Meanwhile, inflation surged 6.8% in November from one year ago, as determined by the Consumer Price Index. 

A standard service member at the E-6 pay grade with dependents and 10 years of service would receive an additional $40 per month for each percentage point increase. The would receive an additional $240 if stationed in New York City in 2022.