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Finance Tag

The Ministry of Defence has produced a guide to expenses and allowances for Serving personnel and the support families could receive.

 

This booklet, accessible here, holds a wealth of information to help both regular and reserve members of all three Services to better understand some of the most common expenses, allowances and other provisions that are available.

 

Introducing the categories of entitlements, explaining the common terminologies, and the claiming process, it can also signpost you to the correct departments and appropriate chapters in JSP 752 (primary authority). You can also find a FAQ in form of scenarios that are most commonly experienced by our Serving people.

 

Please note that this document is for guidance only, do always refer to JSP 752 and contact your Unit HRs.

 

Posted on: 19th September, 2018

The Naval Families Federation shared the announcement made by the Government last year (2017), that spouses and civil partners of Service personnel will be able to apply for a new type of National Insurance (NI) credit to protect their State Pension, if they have accompanied their partner overseas. However, the BBC reported yesterday that fewer than 4,000 people have applied for this so far. Steve Webb, director of policy at Royal London, insisted that not enough people are getting what they deserve, saying: “this is a very good scheme to recognise the service of military wives over the years, but the take-up so far has been very poor”.

The payments could be worth up to £30,000 over the course of retirement so if you believe you are eligible, please ensure that you apply.

 

How do you know if you’re eligible to apply for the new credits?

Service spouses and civil partners will be eligible to apply for the new Class 3 NI credits if they:

  • reach State Pension age on or after 6 April 2016, that means they were born on or after 6 April 1953 (if a woman) or 6 April 1951 (if a man); and
  • are or have been married to/ in a civil partnership with a member of the Armed Forces; and
  • have accompanied their spouse or civil partner on a deployment outside the UK at any time since 6 April 1975; and
  • at the time of the posting their spouse or civil partner must have paid, been treated as having paid or been credited with UK National Insurance.

You can still apply if you are now widowed, divorced or have had your civil partnership dissolved, provided you were married or in a civil partnership at the time you accompanied your partner abroad. Some Service spouses or civil partners who meet the above criteria will not have a gap in their NI records and so will not need to apply for the new credits. For example, you may not have a gap if you:

  • were working in a job during the accompanied assignment where you paid UK NI contributions
  • were self-employed and paying self-employed Class 2 NI contributions throughout the accompanied assignment;
  • received certain benefits such as Employment and Support Allowance (previously called Incapacity Benefit or Invalidity Benefit) or Child Benefit for the whole of the accompanied assignment(s)outside the UK.

 

How do I apply?

There is no time limit in applying for Class 3 NI credits, although if you apply after you reach State Pension age any increased State Pension might not be paid for periods before the date of your application. For information about applying for the new Class 3 credit visit here.

 

The Class 1 NI Credit: A wider range of benefits for deployments since April 2010

The new Class 3 credits do not replace the existing Class 1 NI credit for those who have accompanied a partner on a posting since April 2010, and which contribute not only towards entitlement to new State Pension, but also towards Employment and Support Allowance, Jobseeker’s Allowance and Bereavement Benefits (to be replaced for new claimants by Bereavement Support Payments in April 2017).

 

More information

Further information about NI credits for Service spouses and civil partners is available online at here.

 

Posted on: 7th December, 2017

Policy Announcement

Under existing rules, living accommodation provided to members of the Armed Forces is free from a benefit-in-kind tax charge. The Future Accommodation Model (FAM) is still under development, however it plans to provide Service personnel with an accommodation allowance to help them rent or maintain accommodation in the private housing market in the United Kingdom. This does not affect members of the Armed Forces serving overseas.

The accommodation allowance will not be subjected to National Insurance contributions (NICs). A Class 1 NICs disregard will be introduced through regulations after Royal Assent to Finance Bill 2017-18.

This measure was announced at the Autumn Budget 2017.

 

Operative date

The measure will have effect after the date of Royal Assent to Finance Bill 2017-18, once regulations have been laid to impose conditions on the types of allowance that qualify for the exemption.

 

Current law

Service personnel are subject to income tax on the full amount of cash received as earnings from an employment under Part 2 of ITEPA 2003.

 

Proposed revisions

Legislation in the Finance Bill 2017-18 will introduce a new section in Chapter 8 of Part 4 of ITEPA 2003 which will provide that accommodation allowance payments to members of the Armed Forces are not liable to Income Tax.

The new legislation defines the accommodation allowance as an allowance paid for or towards the cost of accommodation for a member of the Armed Forces.

Regulations will be laid at a further date after Royal Assent to Finance Bill 2017-18 that will set out the conditions on the types of allowances that will qualify for the exemption. These conditions will be confirmed once the Ministry of Defence has taken its final decision on the types of accommodation allowance it will provide.

To find out more, please click here.

 

Feedback

We welcome your comments and feedback on The Future of Accommodation Model and we will continue to take your views forward. You can email us at contactus@nff.org.uk.

 

Posted on: 23rd November, 2017

When we speak to families they tell us that navigating allowances can be difficult. To make life a little easier we have pulled out some useful information that could have an impact on family life. There are various allowances that Service Personnel may become eligible for in certain circumstances or at different qualifying points in their career, such as a new Assignment. Advice can be taken from your family member’s Unit Personnel Office (UPO) and up to date information can also be found here.

This article aims to highlight a few of the allowances that your family member may be entitled to, and which have to be claimed for and assessed for eligibility by your family member’s UPO rather than paid automatically, of which you may not have been aware and some will require evidence, such as proof of address. Reservist’s eligibility for some allowances will be based on the type of their commitment so regulations should always be checked.

Travel Allowances

1. Home to Duties – (HTD) – An allowance paid to personnel who travel to work daily based on the mileage travelled. If the serving person lives in privately owned or rented accommodation they must contribute for the first nine miles before they are eligible to claim; if personnel live in Service Family Accommodation the allowance starts after the first three miles. It is paid automatically at a daily rate for shore side personnel but it is paid on a manual basis for personnel serving onboard a Ship. Personnel can also claim for travel on Public Transport, which will also be claimed manually.

2. Get You Home (Travel) – GYH (Travel) – Payable to personnel who live at work in Single Living Accommodation (SLA) or a Residence at Work Address and travel home at weekends. To be eligible you need to live over 50 miles away. This allowance cannot be paid alongside allowances such as HTD or Longer Separation Allowance. If you are temporarily serving at a different location for 10 days or more, then you can claim this allowance for the distance between the permanent and temporary duty station.

3. Get You Home (Sea goers) – If you are serving on-board a Ship then you are entitled to 10 warrants per leave year in order to travel to an eligible nominated address, such as Next Of Kin, Spouse or Parent. You could also transfer up to six warrants per year to your immediate family, a Spouse or Dependent Child, to travel from their home to the family member’s place of duty. When your Ship is deployed, up to six warrants per year can also be transferred to close family such as a Grandparent, Parent or Sibling, as long as the travel is to visit the Spouse, or to the Spouse/Child in order to visit either set of Parents.

4. Railcards – All personnel are entitled to apply for an HM Forces Railcard at a cost of £19. The card saves 1/3 of the cost of most rail fares in the UK and is valid for a year. Spouses and Dependent children are also eligible for a card. Please note that expenses for a duty or GYH journey can’t be claimed for if that journey is undertaken using an HM Forces Railcard.

Education Allowances

If you and your family change location due to assignment, then you may be able to claim the Continuity of Education allowance.

1. Continuity of Education (CEA) – There are several parts to this allowance to take in individual circumstances, including Boarding School and children with Special Educational Needs. To be eligible in most cases, the family must be living with the Service Person unless they are serving on board a Ship at sea, or are deployed in an Operational Area where families are not allowed to accompany them.

Relocation Expenses and Allowances

Moving home due to a new assignment? Help is available with those extra costs involved.

1. Disturbance Expenses – If you are assigned a new Unit then you can claim Disturbance Expenses, though you cannot claim if you are moving on board a Ship. The allowance is paid at different rates depending on the type of accommodation such as SLA or SFA (Service Family Accommodation) and the location, for example UK or Overseas.

2. Movement and Storage of Personal Effects – This is to enable personnel to move home at Public Expense when assigned to a new Unit at a new location or after an authorised Mid-Assignment move. In the majority of cases, Removals and storage provision is to be delivered by the MOD contractor. The maximum volume of Personal Effects that can be moved or stored is 67.92 CuM. This allowance cannot be claimed when a couple are first setting up a home after marriage or Civil Partnership.

Accommodation Allowances

There are several accommodation allowances to support personnel with charges they may incur due to the nature of their assignment.

1. Lodging Allowance – To enable personnel in the UK to rent accommodation when single public accommodation is not available.

2. Overseas Rent Allowance – If you are assigned overseas and there is no suitable Service accommodation available, then you can access an allowance to reimburse you with the cost of rent and utilities for rented accommodation.

3. Overseas Furniture Provision Scheme – If you are moving to unfurnished publicly rented accommodation or foreign government quarters, then this allowance will help with the provision of furniture and furnishings.

4. Council Tax Relief – (CTR) – This allowance is for personnel who pay council tax in the UK and are serving abroad on specified operations or assignments. It is paid for each day that the person is on the qualifying assignment and includes time spent out of theatre on Rest and Recuperation. It is not paid to personnel who have already negotiated a discount with their Local Council. The allowance will be paid automatically to personnel living in SFA unless the qualifying person is living in a Married Quarter and is not the PSTAT 1/2 partner (they are not the one paying SFA and Council Tax charges) in which case they will have to claim separately as if they were living in private accommodation. The daily rate for CTR is based on the average Council Tax per dwelling in England.

Remember –

There are many different allowances that cover countless differing situations, so it is always wise to consult your Unit Personnel Office with any queries, particularly when proceeding on a new Assignment.

More information

The MOD has produced a guide to expenses and allowances for Serving personnel and the support families could receive. Find it here.

If you are due to be assigned overseas, please visit this page for further information on Local Overseas Allowance (LOA).

Posted on: 9th November, 2017
Updated on: 29th November, 2018

Before choosing any kind of insurance, you may want to seek advice from your unit administrative staff, and also check the Services Insurance and Investment Advisory Panel (SIIAP).

 

SIIAP is a panel that is recognised by the Ministry of Defence. It is made up of individuals and firms who are insurance and independent financial advisers specialising in providing services to members of HM Forces.

 

All Member Firms must be authorised and regulated by the Financial Conduct Authority (FCA) in the UK, offer compensation rights to customers and adhere to the SIIAP Code of Practice.

 

Finding the right insurance company

SIIAP’s members directory can help you find an insurance company according to your location and/or the type of insurance required.

 

Posted on: 29th April, 2016
Updated on: 18th March, 2019

The Ministry of Defence works closely with three credit unions under the banner of Joining Forces and has facilitated direct salary sacrifice via JPA to encourage saving and to make loan repayment simpler. The Department also provides up to date information in respect of pay, pensions and allowances to MoneyForce – the Royal British Legion’s money advice service. Money Force is a joint venture between the Royal British Legion, MOD and the Government’s The Money Advice Service.

 

Both Joining Forces and MoneyForce are proactively providing impartial financial advice through visits to units and bases across the country and most importantly strive to offer the most appropriate product to Service personnel. Credit Unions are not there to make a profit and have a proven track record of ethical lending and better in many instances levels of interest for savings.

 

Because credit unions are not-for-profit, the annual percentage rate (APR) is much lower than banks or payday loan lenders. Typical APR for a credit union is around 12 per cent, whereas for a payday loan it can be up to 1,500 per cent.

 

Service personnel who have taken out a payday loan or are considering doing so can seek advice from any of the Joining Forces credit unions, all of whom have signed the Armed Forces Covenant, or via Money Force.

 

The three service providers are:

 

Posted on: 12th February, 2019
Updated on: 26th June, 2019

If you’re looking for free and impartial advice, the Monday Advice Service is government-run and can help you improve your finances, using tools and calculators to keep track and plan ahead, they also provide support over the phone and in person.

 

The Military Foundation is run by Forces Financial and can provide confidential, free financial advice and debt counselling.

 

MoneyForce can offer advice on borrowing, saving, budgeting and planning. The also offer assistance on pay and allowances specific to the Armed Forces, managing crises and debt to war pensions and compensation.

 

Posted on: 29th April, 2016