Military allowances

Contents

01   Making sense of military allowances

AFF is pleased that the MOD has recognised that military allowances can be complicated, and have produced this helpful, easy-to-read guide for soldiers and their families. The booklet provides information about the various expenses and allowances your soldier can claim. Take a look here.

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02   Brexit and your overseas posting

Are you posted overseas and have concerns about Local Overseas Allowance (LOA) and exchange rates as a result of Brexit?

The purpose of the allowance is to contribute to the difference between the cost of living in the UK and your overseas location. The Defence Business Service (DBS) and the Pay Colonel’s staff calculate LOA rates during overseas visits; the rates are regularly reviewed, meaning you should not be out of pocket because of your posting.

DBS track the value of the pound to see if a change to the Forces Fixed Rate (FFR) of exchange is necessary; any changes are published on the first of each month. If the FFR is reduced, the LOA you receive will increase, as more Sterling is needed to buy the same goods than before. However, if the FFR is increased, the LOA you receive will reduce, as less Sterling is needed to buy the same goods than before.

For further queries about allowances or money, contact our Employment, Training, Allowances and Money at etam@aff.org.uk

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03   Armed Forces Pension Scheme 2015

Did you know that, since the new Armed Forces Pension Scheme 2015 (AFPS 15) was introduced, it now takes up to 30 working days from the day of your soldier’s discharge for all pension and compensation payments to be processed?

If your soldier has recently discharged from the Army you may be concerned that their pension, lump sums and any compensation payments are not being processed in the time you expected; this could impact on rent deposits or other costs associated with your move to civvy-street.

All Service personnel who are members of an Armed Forces pension scheme, and who will be serving beyond April 2015, will be automatically transferred to AFPS 15 unless they qualify for transitional protection i.e. were within ten years of the normal pension age for their respective scheme on 1 April 2012.

For more information on AFPS 15, click here

Tell AFF your view

Is the new increased 30-day payment process affecting you? Do you feel the timeframe should be returned to the 10-20 days it previously was? AFF wants to hear your views and experiences – contact us at etam@aff.org.uk

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04   Forces Help to Buy (FHTB) scheme

The Forces Help to Buy (FHTB) scheme is an advance of salary scheme, which is available to help Service personnel who want to buy their first home and to enable the option to self-build amongst eligible Service personnel.

Since 2014, Regular Service personnel have been able to take an advance of up to 50% of their gross annual salary (capped at £25,000), interest free, to purchase their own home.

The scheme aims to address low levels of home ownership in the Armed Forces, overcoming the disadvantages that mobility brings in line with the principles of the Armed Forces Covenant. It supports greater lifestyle choice and retention of personnel.

The pilot was initially planned to run for three years, but due to its popularity it has now been extended until 2018. AFF is currently seeking clarification on what will happen to the popular scheme at the end of the pilot and will communicate to families when we know more.

The loan is repaid through the Service Person’s monthly salary, over a period of 10 years. You will be expected to live in the home whenever Service needs allow. It is taxable and soldiers should seek advice on the impact this will have on their monthly income.

Currently, payments have been made to over 13,000 applicants, totalling around £197 million, an average of approximately £15,100 per claim.

For more information, please read the full government guidance here www.gov.uk/guidance/forces-help-to-buy. Further information can be found in JSP 464 Chapter 12.

If you have any questions, comments or further suggestions, then please contact AFF’s Allowances and Money Specialist at etam@aff.org.uk or 07799 045 955.

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05   MOD Ex-Gratia Payment in lieu of Maternity Allowance

If you are accompanying your spouse/civil partner overseas and fall pregnant, you may be entitled to an Ex-Gratia Payment in lieu of Maternity Allowance if you are prevented from claiming the normal Maternity Allowance. The MOD Ex-Gratia Payment in lieu of Maternity Allowance policy applies to eligible spouse/civil partners who accompany their Service spouses overseas to countries outside the EEA and where there is no reciprocal benefit agreement.

The Department for Work and Pensions restricts payment of UK Maternity Allowance to those who are living, and have worked, in the UK. If you do not meet the criteria for UK Maternity Allowance because you are not resident in the UK at the time of application, or your qualifying work was undertaken within the EEA, or in a country where there is a reciprocal benefit agreement, your claim will be dealt with by that country.  However, if you lived and/or worked in a country outside the EEC and one without a reciprocal agreement, the MOD may consider the payment of an ex-gratia payment in lieu of Maternity Allowance. There is no automatic entitlement and payment is at the discretion of the MOD, however the intent is to consider such requests favourably.

In all cases, regardless of where you live or have worked, the first application for Maternity Allowance should always be made to the Department for Works and Pensions. They will determine your entitlement to Maternity Allowance and will notify you how to proceed. If you receive notification that you may be entitled to an ex gratia payment from the MOD, you will need to claim via your spouse/civil partner’s Unit HR staff. Defence Information Note 2018DIN01-026 provides further guidance on how to do this; this is available to serving personnel and Unit Admin staff on the Defence Intranet.

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