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News | May 2, 2023

New Process for Overseas COLA Adjustments

The Department of Defense will implement Overseas Cost-of-Living Allowance (OCOLA) decreases effective May 15 and November 15, 2023. Rate reductions based on the annual cost-of-living assessment (greater than two index points) will be implemented in 50% increments while OCOLA decreases based on currency fluctuations will be implemented in full each cycle. OCOLA increases will continue to be implemented when warranted during the year.

Whenever possible, the Department will notify Combatant Commanders (CCMDs) and overseas points of contact (POCs) at least 30 days prior to implementation of the first 50% reduction of an approved OCOLA decrease (for decreases based on data) to ensure Service members have time to prepare financially for the changes. In the case of the May 15 reductions, CCMDs and overseas points of contact were notified of the new rates prior to March.

The Department will keep CCMDs/POCs abreast of the potential effects of currency fluctuations on OCOLA rates throughout the year as the implementation dates approach.

On December 8, 2022, the Department implemented a 90-day pause to OCOLA reductions to provide relief to Service members stationed outside the contiguous U.S. (OCONUS) experiencing OCOLA decreases due to high CONUS inflation and a strengthening U.S. Dollar. Service members stationed OCONUS did not sustain computed OCOLA decreases during this time; however, OCOLA increases continue to be implemented.

  • OCOLA decreases on hold since December 8, 2022 will now be effective May 15, 2023. Service members in affected OCONUS locations will see the decreases in their June 1, 2023 paychecks. The Department will continue to implement OCOLA increases when warranted throughout the year. 

The Department will continue to implement OCOLA increases when warranted throughout the year.

For more information, see the related documents below, read more about the OCOLA program.