Cuts to Cost-of-Living Allowances 'Make It Hard Just to Exist,' Military Families in Germany Say

When the Pentagon announced significant cuts to cost-of-living allowances this summer for service members and their families stationed in Germany, many stared at stacks of bills and were utterly confused.

Spouses in Germany say it is not an affordable place to live right now as the country is being hit by skyrocketing utility costs, decreased access to child care and gas prices comparable to the United States -- all caused by the lingering effects of the coronavirus pandemic, as well as Russia's unprecedented invasion of Ukraine.

"I've never heard [service members or their families] talk about the job being too hard," a military spouse at Ramstein Air Base, who spoke on condition of anonymity for fear of reprisal, told Military.com. "It's always these day-to-day things the Pentagon makes way too difficult. They make it hard just to exist, just to survive."

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The Pentagon announced last week that there will be a reduction in the overseas cost-of-living allowance -- otherwise known as COLA -- for families in the Kaiserslautern Military Community starting June 1 because prices in the continental United States are now higher than those in Germany.

With approximately 50,000 service members and families, Kaiserslautern is the largest military community outside the continental United States. It is made up of Air Force facilities located at Ramstein, Einsiedlerhof, Pirmasens, Vogelweh and Kapaun Air Station, along with Army facilities at Sembach, Kleber, Panzer and Daenner Kasernen; Landstuhl; Kirchberg; Miesau Depot; Kaiserslautern Industrial Center; Rhine Ordnance; and Pulaski Barracks.

Cost-of-living rates are, in part, determined by input from service members and their families. The most recent increase in the Kaiserslautern Military Community was based on a survey from the fall of 2021, well before Russia's invasion of Ukraine and widespread inflation in the U.S.

Additionally, spouses told Military.com that the survey came amid the Afghanistan evacuation, when service members were working around the clock to relocate and transport refugees.

"We were in a situation with 30,000 people on base," the Ramstein spouse told Military.com. "No, we were not participating in a survey."

Stars and Stripes reported that the military services will slowly reduce the COLA through the summer until October, a more gradual approach than outlined in last week's announcement. The Pentagon did not respond in time for publication to multiple questions sent earlier this week regarding the scope of the cuts.

Non-taxable COLA allowances exist to make living overseas more affordable for service members by offsetting the cost of daily expenses to make them comparable to costs stateside. With rising prices in the United States, the gap has diminished, leading to the cuts, according to the Pentagon.

"When the strength of the dollar increases against the euro, and as the cost of goods in the U.S. rise compared to the cost of goods in the Kaiserslautern Military Community, service members can expect COLA payments to decrease," the release said.

Those cuts mean service members will have anywhere from $200 to $500 less to work with every two weeks to offset their expenses.

Fears are also growing that Russia may cut off the gas supply to Europe. Germany depends on Russia for 40% of its gas supplies, according to Bloomberg, and utility hikes in the country, as well as across Europe, have spiked since the invasion.

Spouses said Kaiserslautern utility SWK announced in a letter to their customers that natural gas will cost 21% more because of Russia's aggression in Ukraine. Gas charges from SWK are up nearly 50% from 2020.

The Pentagon, however, has said service members should rely on their utility allowances instead of their cost-of-living funds to address the energy price hikes.

"Although we have seen [a] significant increase in utility costs as a result of the conflict in Ukraine, COLA surveys also do not account for utility costs. Members receive a utility allowance to address utility costs," the Pentagon said in a press release.

But one military spouse at Ramstein told Military.com that their family's utility allowance hasn't reflected changing prices and using COLA has become essential to cover the gap.

"Our utility allowance hasn't changed in the three years that we've been here," the spouse told Military.com on condition of anonymity. "So, to have this variable income, such a significant portion ... that's a big thing to say, 'Oh, you should just budget better for it.'"

Spouses are already facing an employment crisis. Limited affordable child care combined with an extended unemployment rate of 20% over the last two years have plagued military families, according to a recent study from the nonprofit Blue Star Families.

But those rates can significantly increase when a service member is deployed overseas as spouses face complicated Status of Forces agreements that sometimes include outright bans on spouse employment, convoluted foreign tax laws, language barriers and less access to affordable child care.

As a result, military spouses often are unemployed when living in foreign countries, and the COLA allowance becomes critical to supplement household income.

A Ramstein spouse told Military.com she wishes the Pentagon would recognize and fix the hardships families are facing.

"It's going to be challenging for the DoD, I think, to hear some hard truths," the spouse said. "This is one of those hard truths. ... I fear what this does to mental health. I fear what this does for food insecurity."

-- Thomas Novelly can be reached at thomas.novelly@military.com. Follow him on Twitter @TomNovelly.

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