DoD cuts COLA in 21 counties, reduces allowance in major cities
Changes to military cost-of-living allowances will take effect in January 2026. Some US service members will see their take-home pay drop as certain areas lose eligibility for the benefit. The adjustments follow a review of living costs across the country.
The allowances, known as CONUS COLA, help offset higher expenses in pricey locations. But next year, 21 counties in California and New York will no longer qualify for the extra payment.
CONUS COLA is a taxable allowance designed to cover the gap when local goods and services cost more than the national average. To receive it, a location’s non-housing expenses must exceed the US average by at least 7%. Payments also depend on rank, years of service, and whether the service member has dependants.
Nine military housing areas, including Boston and parts of California, will lose the allowance entirely in 2026. New York City will see its COLA rate cut in half, dropping from 8% to 4%. Meanwhile, eight areas, such as Seattle, will receive a higher allowance next year.
The total cost of CONUS COLA in 2026 is estimated at $99 million, supporting around 127,000 service members nationwide. Unlike housing allowances or retirement pay, this benefit focuses solely on daily living costs. As of late December 2025, the Department of Defense has not yet published the final list of affected cities on its official site.
The 2026 changes mean some military personnel will face a reduction in pay from January. Others in areas like Seattle will receive more support to cover rising costs. The adjustments reflect updated data on living expenses across the US.
