The Overseas Cost of Living Allowance (OCOLA) is a financial entitlement provided to U.S. military servicemembers stationed outside the contiguous United States (OCONUS) where the cost of living is higher than in the continental United States (CONUS). Although Hawaii is a U.S. state, it is considered an overseas duty location for military pay and benefits purposes. This leads to the eligibility of Hawaii-based servicemembers for Hawaii COLA (we drop the “O”).

Hawaii COLA & How It’s Calculated

For Hawaii servicemembers, COLA aims to mitigate the elevated living expenses associated with the state’s higher cost of living. The benefits of COLA for Hawaii servicemembers include additional financial support to help cover various living costs, such as housing, utilities, transportation, and other daily expenses.

The amount of COLA granted to an individual depends on several factors, including their rank, dependency status (whether they have dependents such as spouses or children), and the specific location within Hawaii where they are stationed (each island is different). The allowance is designed to assist military personnel in maintaining a standard of living similar to what they would experience in the continental United States (CONUS).

What Changed with Hawaii COLA in 2023?

In 2023, the Department of Defense announced that Hawaii servicemembers would see a reduction in COLA implemented on their May 15, 2023 and November 15, 2023 pay periods. Why? According to the DoD’s OCOLA FAQ document, “data indicating that CONUS inflation increased at a greater rate than an OCONUS location would warrant a decrease in the OCOLA rate.”

Yet, the DoD asserted that “It’s important to acknowledge that in January 2023, service members received a 4.6% increase in basic pay, as well as an approximately 11.2% increase in basic allowance for subsistence,” a senior official said. “And even those locations where COLA rates will start to decline, pay in 2023 is still higher than it was in 2022, so many service members will still have a higher take-home pay even with OCOLA reductions than they received in 2022.”

Current COLA & Qualifying for a VA Loan

Lastly, the DoD states that COLA increases will continue to be implemented when warranted throughout the year. Therefore, servicemembers should continually refer to official military sources for the most up-to-date information on COLA rates and policies.

When qualifying for a VA loan, Hawaii BAH, BAS, and COLA, and all military-related sources of income should be listed in the statement of service. This includes, but is not limited to, parachute pay, special duty pay, and flight pay. If this seems like a lot of information, don’t worry! We have our seasoned VA Loan Specialists to help you get all your ducks in a row to become a Hawaii homeowner. Contact us at 808-792-4251 or fill out our secure online loan application.