Local Overseas Allowance to be Overhauled

From July 2021, local overseas allowance (LOA) payments will no longer be based on rank and will instead be tailored more to soldiers’ individual living circumstances.

For example, the part of the old LOA package that supported all personnel in running a private vehicle abroad has been removed and will instead be claimed only by those who own a car.

The changes mean that some troops’ payments could increase, while others might receive less or not see much difference.

Lieutenant Colonel Jonny Hooper (RA), from the Army’s remuneration policy team, emphasised that the review, which began in 2015, was not intended as a money-saving exercise. “It aims to ensure the tax-free allowance remains justifiable against the public purse, now and in the future,” he said. “The argument against a rank-based system is simple: it doesn’t cost a corporal less to buy a box of cornflakes than it does a brigadier. “We listened to concerns about the requirement to entertain.” “But it is important to remember that LOA is there to contribute to the cost of living overseas, not to cover everything associated with the career choices individuals make in opting to serve abroad.”

Due to be published in June 2021, the updated rates will be calculated using commercial data on employment conditions in different parts of the world, as well as Office for National Statistics figures on the average cost of shopping.

“This means they can be adjusted more quickly to account for fluctuations, rather than being wedded to a military LOA review, when teams travelled between locations to compare the cost of common items,” added Lieutenant Colonel Hooper.

In February 2021, the Ministry of Defence announced that personnel will retain the ability to split their pay between UK and overseas bank accounts without incurring charges.