Military allowances

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Contents

01   Changes to Local Overseas Allowance

From 1 July 2021, the way that Local Overseas Allowance (LOA) is calculated is changing.

LOA is intended to contribute towards the additional local cost of day-to-day living when Service personnel are required to serve overseas on permanent assignment, temporary duty or exercise. Eligibility will remain the same and it will still be paid alongside the monthly salary. Please note that the new LOA package will not be applied to Defence Attachés and their support staff.

What are the changes?

One of the most significant changes will be the introduction of a single band for all Service personnel regardless of rank, removing the previous rank-based banding system.

The elements of the old LOA rate that related to support for an overseas private vehicle and respite (travel and accommodation) costs, have been broken out of the LOA daily rates. These two provisions can now be claimed when Service personnel incur the costs, rather than being included in the daily rate, and will be accessible only to Service personnel on permanent assignments overseas.

The changes that are being made mean that some Service personnel around the world will see an increase in the value of their LOA package, while for others it will remain broadly the same or decrease.

When will the changes take place?

All Service personnel receiving LOA on 30 June 2021 will automatically transfer to the new LOA package on 1 July 2021. Any locations that see a significant change in the daily rate of LOA will have their rates changed gradually over a period of up to three years (1 July 2021 to 1 July 2024).

The overseas private vehicle provision will be available from 1 April. 

When will the new rates for my location be released?

The rates were released on 11 June and are being shared with Service personnel through their chain of command. The new rates will not be in the public domain – for more information, please ask your soldier to speak to their unit admin team for details on where they can access this information.

Pay and overseas bank accounts – Updated 10 Feb

On 9 February 2021, the MOD announced that it had reversed its 1 February 2021 decision to remove the split net pay facility, due to factors such as the impact of Brexit on bank charges and transfers. The new LOA package will now have no impact on personnel being able to access the split net pay facility, which will continue to be made available to those Service personnel in receipt of LOA.

How do I find out more?

A video has been released explaining the changes in more detail:

To find out more, click here

The MOD has also written FAQs on LOA which can be found here.

If you would like to provide any feedback about LOA, please contact money@aff.org.uk

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02   Overseas Private Vehicle Provision

Overseas Private Vehicle Provision (OPVP) is being introduced as part of the changes to Local Overseas Allowance (LOA) which take effect from 1 July 2021.

What will it replace?

Currently there are two schemes which assist Service personnel with the cost of a private vehicle when they are assigned overseas:

  • shipping vehicles to qualifying locations in receipt of Small Station LOA (SSLOA)
  • a car buy/sell (CBS) allowance paid as part of the daily rate of Main Station LOA (MSLOA) to most MSLOA locations.

This will change and both schemes will be replaced with Overseas Private Vehicle Provision (OPVP) as part of the changes to LOA.

What is the new Overseas Private Vehicle Provision?

OPVP will help families on overseas postings with the cost of accessing a private vehicle in an overseas location. Depending on the circumstances, it can be claimed on assignment both into and out of the overseas location.

What can it be used for?

Service personnel can use the provision to:

  • contribute towards administrative and vehicle depreciation costs when selling and buying a vehicle. The Service person must be able to demonstrate that two separate financial transactions have taken place. This will be called Overseas Private Vehicle Provision – Selling/Buying (OPVP(S/B)) or,
  • contribute towards the charges incurred when required to cancel a vehicle lease agreement. This will be called Overseas Private Vehicle Provision – Cancelling Vehicle Lease (OPVP(CVL)), or
  • contribute towards the cost of privately shipping one vehicle to and from the permanent overseas assignment location.This will be called Overseas Private Vehicle Provision – Shipping (OPVP(S)).
What are the rates?

The current rate is set at £975 as of April 2021 and will be reviewed on an annual basis.

When will it be available?
  • Service personnel assigned to an overseas location: OPVP will be available to Service personnel permanently assigned to an overseas location from 1 April.
  • Service personnel assigned from an overseas location: It will be available to Service personnel assigned from an overseas location from 1 July.
What if we wish to drive?

Service personnel have the option to drive their personal vehicle to eligible countries (Germany, France, Belgium, Denmark, Luxembourg and the Netherlands) and claim Motor Mileage Allowance and one day’s subsistence as a contribution towards this journey. From 1 April, Italy, Spain, Portugal and Gibraltar will also be added to this list.

What if we have two cars?

There has also been an introduction of a greater rate of LOA which will be available to accompanied service personnel who can demonstrate that they are running two private vehicles at the overseas location, with effect from 1 July 2021. 

Transitionary arrangements

Transitionary arrangements have been made for Service personnel that were in receipt of the CBS element of MSLOA, on the old system. This is because it is recognised that, as at 1 July 2021, those serving at these locations will have received different amounts of financial contribution depending on the length of time they have been assigned to the location.

For more information on OPVP and the transitionary arrangements, see the directed letter.

Where can I get more information?

More details can be found in JSP 752 v46 Chapter 9 section 4. Any queries should be directed to the Service person’s Unit HR admin. If you would like to provide any feedback about OPVP, please contact money@aff.org.uk

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03   What allowances can a soldier in a long-term relationship claim when moving on assignment from one surplus SFA to another?

Generally for cohabitation with your LTR partner, you are not eligible to receive any additional allowances in support of your cohabitation. However, changes to policy confirmed by the Army allowances team mean that Service personnel in the UK who are in a registered long-term relationship on JPA can get the SFA rate of Disturbance Expense on a qualifying move (e.g. on assignment to a new duty station), when occupying surplus SFA in a non-FAM area.

They can also claim UKPASH – the UK Private Arrangements Self-Help Scheme (UKPASH). This is a private removal arrangement that could help pay towards the cost of hiring a van. We would advise that the soldier contacts the unit HR admin team to discuss this. Please note that UKPASH applications must be pre-approved by unit HR admin staff and receipts provided.

For example, if a single soldier in a long-term relationship were to move from London to Catterick and successfully applied for surplus SFA, the SP would be entitled to Disturbance Expense at £1,041 and could claim UKPASH up to £240.48 (correct as of April 2021).

NB:  If you are in a Future Accommodation Model pilot area, the benefits you may be eligible for will differ. See discovermybenefits.mod.gov.uk/army/future-accommodation-model-fam

If you are having problems claiming these allowances or would like to share your views on allowances for those in long-term relationships, contact money@aff.org.uk

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04   Discover My Benefits - new online tool for Service personnel and families

The MOD has launched an online tool to help Service personnel, their families & anyone interested in joining the Armed Forces discover the range of support & benefits available to them. For more details visit Discover My Benefits

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05   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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06   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 2022. AFF is pleased that the extension is now for a period of 3 years allowing families the certainty to plan ahead.

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.

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 Money & Allowances Specialist at money@aff.org.uk or 07593 130364.

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07   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 Work 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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