Cost of living adjustment is an allowance provided to a member at a posting location where goods and services are more expensive than in Australia. It has both the following purposes.
To help maintain the purchasing power of a member's income.
To provide the member with an equivalent standard of living at the overseas post to that in Australia.
The member is eligible for a cost of living adjustment for the duration of the posting period overseas.
The cost of living adjustment is paid to a member in each fortnightly pay.
Exception: If the member's post index is 100 or less the member does not receive a cost of living adjustment.
The cost of living adjustment is worked out using the steps in the following table.
|1.||Subtract B from A, where:|
|A||=||The member's fortnightly salary plus any of the following payable to the member.
a. Higher duties allowance
b. A salary non-reduction supplement provided under section 3.2.56.
Note: No other allowances are to be included.
|B||=||Pay As You Go tax and any levies withheld from the fortnightly salary calculated under A.
Examples: Medicare Levy, temporary budget repair levy, flood levy.
|2.||Apply to the result of Step 1 the spendable salary factor determined by a data service provider.
Note: The factor works out the spendable part of a member's salary for day-to-day living expenses.
|3.||Multiply the result of Step 2 by the following formula using the post index for the member's posting location.|
(post index – 100)
Note: The dual Commonwealth benefit rule does not apply to the cost of living adjustment. A member will receive this adjustment even if their spouse or partner also receives the adjustment or comparable benefit.
See: Chapter 12 Part 3 section 12.3.14A, Post index
Overseas conditions of service estimation tool
To help members estimate some of the allowances and contributions applicable to their individual circumstances an Overseas conditions of service estimation tool is available on the Defence Restricted Network at https://objective/id:AB32774353.
Application to Reservists: Yes, on continuous full-time service.