WASHINGTON, December 23, 2022 -The Defense Department released today the 2023 Continental United States Cost-of-Living Allowance (CONUS COLA) rates, which take effect Jan. 1, 2023. In 2023, $8 million will be paid to approximately 5,000 service members stationed within CONUS. 

CONUS COLA is a supplemental allowance designed to help offset higher prices in the highest-cost locations in CONUS that exceed the average costs within the CONUS. Rates can increase, decrease, or remain the same, depending upon the non-housing prices in a duty location as compared to non-housing prices in average CONUS.

By law, a contractor provides the Department civilian cost data from each military housing area (MHA) and non-MHA for the following categories: transportation, goods and services, federal income taxes, sales taxes, and miscellaneous expenses.  Data is adjusted to account for Basic Allowance for Subsistence, an allowance meant to offset the costs for a member's meals, and for cost savings gained from shopping at commissaries and exchanges. 

This information is compared to the same cost data for average CONUS, which serves as a benchmark; the resulting ratio is called an index. By law, a CONUS COLA rate is only prescribed when the index meets a threshold of 108 percent, meaning the costs for non-housing types of goods and services in a particular location are at least eight percent more expensive than average CONUS costs.  An index above 108 percent would qualify for CONUS COLA (e.g., a location that is 10 percent more expensive would qualify for a 2 percent COLA index). 

This year, four MHAs will begin receiving CONUS COLA; two MHAs will receive an increase in CONUS COLA; one MHA will receive a decrease in CONUS COLA; and three MHAs will no longer receive CONUS COLA.   

For non-MHA areas (non-metropolitan counties), 20 counties will lose CONUS COLA.