17 Sept - Changes to Housing Benefit
19 Jun - Revised Pension Calculator & an Update on the Future Armed Forces Pension Scheme
Government proposals to help with childcare costs
MoneyForce - Get Money fit!
Resettlement Grants and the new Armed Forces Pension Scheme
Great news for those trying to claim Maternity Allowance overseas
High Income Child Benefit Charge
Redundancy and Long Service Advance of Pay (LSAP) and Early Termination
Workplace Pension Scheme
Parent’s Guide to Money
Save money at the Supermarket
Financial top tips for Service personnel
Sure Start Maternity Grant - Overseas Applications
The Money Advice Service health check
Improved Armed Forces Compensation Scheme comes into effect
Moving back to the UK? Think about MONEY
The Welfare Reform Act 2012 resulted in changes to Housing Benefit (HB). From April 2013, the size criteria rules that already existed for private tenants were extended to working age tenants in the social sector. This means that HB entitlement can be reduced where the household is deemed to be under occupying their home. Decisions are based on the number of bedrooms in the property. The reduction is worked out based on your eligible rent, not on your HB. Your HB could be reduced by 14% of the eligible rent if you have one extra bedroom and 25% of the eligible rent if you have two or more extra bedrooms.
In response to concerns raised by Members of Parliament and the public about the impact on different social groups, the Government announced changes to this reform in the Housing Benefit (Amendment) Regulations 2013. HB tenants whose adult children are members of the Armed Forces, but continue to live with them and not in Single Living Accommodation (SLA), are allowed a bedroom for that adult child under the size criteria rules. If that adult child is deployed on operations, their parents are allowed to retain their bedroom if they intend to return home. In addition the non-dependant deduction (i.e. that any adult child is normally expected to make towards their living expenses) ceases and does not restart until they return home. Your HB entitlement should therefore increase when your adult child is deployed on operations.
Whether or not a member of the Armed Forces lives at home with their parents is a matter for the Local Authority (LA) to decide based on all the available facts. It may be that someone living in SLA is treated as living at home but equally SLA can be treated as a permanent home. Adult children judged by the LA to be living permanently in SLA are not treated as living at home with their parents during periods of deployment.
If the LA decides that the permanent home is with the parents and the parents receive HB, then they would be subject to a non-dependant deduction which could extinguish HB entitlement. This is because all working non-dependants are expected to contribute to their living expenses and there is no exception for Armed Forces personnel unless they are deployed on operations.
AFF has investigated the changes to Housing Benefit Regulations and whether Army families face any disadvantage in comparison to other families. There was not enough evidence to determine the overall impact on Army families and state our view on this issue. We therefore encourage families affected by the changes or with their own view on this matter to contact us at firstname.lastname@example.org. The points that AFF has considered in this argument are outlined below:
publicised amendments for families of serving personnel assist only a small
minority of families. These could include Reservists or those who choose not to
live in Single Living Accommodation (SLA) because their parents live nearby. This was poorly communicated to families.
parents have difficult choices to make about downsizing once their children
move away from home. This applies should you own your own home, rent privately
or claim Housing Benefit.
might face financial difficulties if Housing Benefit is reduced due to under
occupancy and a room is retained for their soldier.
serving personnel contribute to the family finances, then they would
effectively be paying twice for accommodation.
housing is scarce. Where families are able to downsize to smaller properties,
this could increase the availability of suitable social housing for those
families leaving the Service.
there has been considerable upgrading of SLA, some serving personnel do not
have a room of their own and instead share multiple occupancy rooms. It could
be unfair to judge this accommodation as a permanent home. DIO recognise there
is still much work to do to upgrade SLA.
- Special consideration might be required for families until personnel have successfully completed Phase 1 and 2 Training.
- There is clearly disparity across areas, as Local Authorities have the final decision whether a soldier’s home is classed as with his parents or in SLA.
The online pension calculator has been upgraded so that it now produces forecasts for the Armed Forces Pension Scheme 15 (AFPS 15) formerly known as the Future Armed Forces Pension Scheme (FAFPS). Almost all Service personnel will automatically transfer to the AFPS15 on 1st April 2015. The upgraded calculator will allow the majority of Regular personnel to forecast their future pension entitlements and model scenarios to see how different lengths of service or promotions could affect the eventual pension that they receive. The new version initially looks very similar to the original calculator, but the results screen has been significantly improved and will allow a variety of scenarios to be explored. It will show both accrued rights to pension benefits under existing schemes, and benefits that could be accrued under the new scheme from 2015.
Commander Steve Young of the Future Armed Forces Pension Scheme Team said ‘It is now more important than ever that Service personnel better understand their own personal finances and their future pension entitlements. We reached final agreement on the design of AFPS 15 in October last year and have been working since then to upgrade the calculator, which is now more interactive and educational than ever before. We remain on track to transition to AFPS15 in 2015; everyone should use the new calculator to see how the changes affect them.’
The upgraded calculator is available, with other calculators, at: www.mod-abc.co.uk
The upgraded calculator can also be used by those with transitional protection who will remain on their current Armed Forces pension scheme.
Click here to watch a series of videos on the Armed Forces Pension Scheme 15. There are ten videos; they cover how to use the online Pension Calculator, key features of Armed Forces Pension Scheme 2015, and look at the Career Average Re-valued Earnings Pension Scheme, the Deferred Pension, and the Early Departure Payment. Service personnel should view the videos before using the calculator.
Further detailed information is available to serving personnel within the Defence Internal Brief 2013DIB/34, available on the Defence Intranet.
The Government has announced new proposals to help with the cost of childcare. How will this affect you as Army families? Caroline Mayne and Lucy Scott have been looking into this.
Education and Childcare Minister Elizabeth Truss said, “it will make it much simpler for parents than the current system” and “it’s based on a per child rather than a per household basis” Full details of this new scheme will be proposed in a consultation before being finalised. In a nutshell, with relevance to Army families, the proposals include:
- This new scheme will come in to effect in 2015.
- Armed Forces Service personnel who already claim Sodexo Armed Forces Childcare Vouchers may continue to do so, but the current scheme will be closed to new claimants when these proposals are finalised.
- It will work with online vouchers and the government’s proposal is for every 80p families pay in, the government will put in 20p up to the annual limit on costs for each child of £1,200. This will be claimed back retrospectively.
- It is proposed that Army families will be able to use the new online vouchers for any Ofsted regulated childcare or equivalent including regulated SCE childcare overseas.
- The scheme will initially only be open to pay for children under five.
- Spouses who opt for staying at home to look after their children may not be included in these new proposals however, the soldier will have the option to continue claiming with the existing scheme.
- It appears that Self Employed spouses will be included which is good news for those who run their own businesses from home.
These new proposals look to be good news for Army families and will encourage spouses to consider working as a financially viable option which may not have been the case before. AFF will monitor and contribute where necessary to this consultation and the proposals to secure a fair deal for Army families.
On 12th March Mark Francois, Minister for Defence Personnel Welfare and Veterans launched the MoneyForce website which is an exciting new training programme and website designed to help improve the financial awareness of members of the Armed Forces.
The website is unique and is specifically tailored towards the needs of the Armed Forces and their families. It is designed to equip Service personnel with the best information and tools to help them manage their finances better and to make informed financial decisions about their future.
The MoneyForce website at www.moneyforce.org.uk covers topics around:
- Managing money – information on borrowing, saving, budgeting and spending, as well as planning for the future.
- Your career – information specific to the military audience –pay and career structures, allowances and bonuses, and steps to take to protect assets when on deployment or moving between postings.
- Life and family – information on marriage, family life and setting up home together.
- Managing crises – information and guidance to help people through tough times.
- Get help now – a reference guide to organisations that can provide advice and assistance on issues ranging from alcohol and drug problems, debt and emotional issues, to war pensions and compensation.
MoneyForce is delivered by the Royal British Legion in partnership with the Ministry of Defence and with the support of the Standard Life Charitable Trust, who have funded the project.
Mark Francois said: “We know that military life often presents unique challenges for our troops and their families which can sometimes affect their financial management. That is why I am delighted that we have worked with Royal British Legion and Standard Life Charitable Trust to create a brand new platform that provides the best financial advice for our Armed Forces.”
“MoneyForce is an excellent example of the Armed Forces Covenant in action. It demonstrates how we can all work together to help tackle some of the disadvantages of Service life.”
If you require any further information then please contact AFF’s Employment, Training, Allowances and Money Specialist, Caroline Mayne email@example.com.
The MOD has produced a notification to clarify that the introduction of the new Armed Forces Pension Scheme in April 2015 will not impact upon the Resettlement Grant.
Resettlement Grants are NOT being reviewed as part of the changes to the new pension scheme; there will be NO changes to the current Resettlement Grant system as a result of the transition to the new pension scheme.
Some may be under the impression that the Resettlement Grant is a ‘Half Pension’. This is not the case and the two are not linked. Regular Service personnel do not have to be a member of an Armed Forces pension scheme to be eligible for the Grant. Regular Service personnel who are transferred to the new pension scheme in 2015 will still be entitled to the same Resettlement Grant, at exactly the same time that they would have expected had there been no new pension scheme.
Resettlement Grants assist those leaving the Regular Armed Forces to resettle into civilian life after completing a substantial period of service. It is not a pension, but a tax-free lump sum paid to Regular Service personnel, who, at the time they leave the Services, are not eligible for Early Departure Payment benefits or an Immediate Pension (or any other immediate pension benefits), and who meet Resettlement Grant qualification criteria.
Current Resettlement Grant rules will continue to apply after April 2015. This means that any Regular Service person in receipt of a full, or partial, Early Departure Payment or Immediate Pension (or any other immediate pension benefits) will not receive a Resettlement Grant.
The Pensions Calculator (www.mod-pc.co.uk) will be updated in 2013 and more details will be published in due course. The Calculator will also include details of Resettlement Grants for those who leave Regular Service before the Immediate Pension or Early Departure Payment points.
All Regular Service personnel are eligible for some form of resettlement provision, even if they do not qualify for a Resettlement Grant. Further information is available in JSP 534 on the Defence Intranet.
Service Personnel should see 2012DIB/67 on the Defence Intranet for full details, including a summary of Resettlement Grant qualification criteria.
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. This policy has recently been updated and improved in consultation with the Department for Work and Pensions.
The Department for Work and Pensions restrict 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 partners Unit HR staff. Defence Information Note 2012DIN01-220 provides further guidance on how to do this; this is available to serving personnel and Unit Admin staff on the Defence Intranet.Back to top
AFF is concerned at how the changes to Child Benefit might affect army families. We are monitoring the situation and will be reporting back to Covenant Reference Group.
What to do if you are affected by the High Income Child Benefit charge
If you are liable to the High Income Child Benefit charge, you need to decide whether to keep getting Child Benefit payments and declare them, or arrange to stop the payments instead. Although letters should have been sent out to everybody detailing the nature of the changes, many families have not received the letter on time. It is important to act now though and make a decision about whether or not to continue claiming.
As from 7th January 2013, if one member of a household earns more than £50,000pa and either they or the person they live with claims Child Benefit, then they will have to pay a High Income Child Benefit charge. This means that if you are affected by the charge and don’t opt out of claiming, you will still receive the same monthly Child Benefit but will have to pay a tax charge (essentially pay part or all of it back) and will have to fill out a self-assessment tax return.
If you earn between £50,000 and £60,000pa you will be entitled to receive a part payment of the Child Benefit but again will receive it in full and pay back what you are not entitled to in a tax charge at the end of the financial year.
It is important to note that if you are not working and you elect not to get Child Benefit payments, because you don't want to be liable for the tax charge, that it is very important to still fill in a Child Benefit claim form because your entitlement to Child Benefit allows you to qualify for credits to protect your State Pension.
If you missed the 7th January deadline to opt out of Child Benefits payments (which would ensure that for the rest of this tax year you won’t get a bill), you can opt out before the end of March 2013 so that you won’t pay tax on the next financial year.
AFF can confirm that Living Overseas Allowance and Operational Allowance are non-taxable and therefore will not be taken into account when calculating your annual income. However, Overseas Loan Service Pay (OLSA) is taxable. For details please refer to JSP 752, Section 13. If you receive any allowances you are not sure about then please refer to JSP 752 or contact your RAO and the HMRC Tax Helpline on 08453000-627.
AFF strongly urges families who have concerns and queries about the High Income Child Benefit Charge to speak to the HMRC Child Benefit Helpline on 0845 3021444 or to go to the HMRC website page. Please also refer to the following HMRC webpage that describes how claiming child benefit can protect your state pension: www.hmrc.gov.uk/childbenefit/start/claiming/protect-pension.
If you don’t feel satisfied with the advice you get from the HMRC then seek private financial advice.
Long Service Advance of Pay (LSAP) is an interest free loan up to £8,500 which is available to all serving military personnel with four years service who wish to purchase a property in the UK. The repayment terms are worked out according to the length of time the soldier expects to be serving for.
When a soldier puts in his forms to Terminate (normally 12 months notice) there should be consideration at that point by his local chain of command of whether he is on LSAP or not and how he/she will pay it off. (The JSP says that Termination is not normally allowed if LSAP is outstanding unless arrangements have been made to repay it in full by the time he/she leaves the service). Although in depth advice is given about the LSAP loan, it is up to individuals to manage their own financial affairs and it is their legal responsibility to ensure that it is paid back. It is important that soldiers look ahead to consider how the loan will be paid off prior to Termination.
Upon notification of selection for redundancy, LSAP claimants must make arrangements for the full repayment of their outstanding balance prior to discharge, either by paying a lump sum, increasing monthly repayments, or by requesting that repayment is deducted from any terminal benefits that are due. JSP 752 para 02.0428 refers. Under current policy, personnel who have applied for, or who have been given notice of, redundancy may still apply for LSAP to assist them with their initial house purchase costs, providing they still have 6 months left to serve and meet all other qualifying criteria. JSP 752 para 02.0409c(5) refers.
Please contact Caroline Mayne, the Employment, Training, Allowances and Money Specialist for further information.
It is more important than ever before to save up for our retirement and not to rely solely on our soldier’s pension. You could be retired for twenty years and you need to think now about how you’ll fund it. Starting from October 2012, employers will enrol workers into a workplace pension, if they meet the criteria detailed on the DWP website. When you pay into your pension, your employer and the government will contribute too. For information on how this affects you, the benefits and when this will happen visit direct.gov.uk.
Parent’s Guide to Money from the Money Advice Service, free and unbiased money advice you can trust.
The Money Advice Service has revamped its Parent’s Guide to Money and it’s now a handy pocket-sized booklet supported by a much more comprehensive web offering.
The booklet sets out three easy ways for expectant parents to make the most of their money before the baby arrives and signposts to the revamped parents section of the Money Advice Service website.
The Money Advice Service has reviewed all its information and advice to ensure that parents get the most out of their content by making it more intuitive and interactive. The site includes the new Baby Cost Calculator and advice on many other money issues.
The Baby Cost Calculator will help parents work out what they will need to spend before and after the baby arrives. It offers handy tips and advice on how to make the most of their money at this important time so they can be savvy and start planning and prioritising. Click here to try the Baby Cost Calculator.
Money Advice Service help is of course still available to everyone, whether they have access to a computer or not - parents can call Money Advice Service Money Advisers (0300 500 5000) to get free, unbiased advice on money matters.
In these tough economic times, it is more important than ever to make sure families get access to free, unbiased money advice they can trust and more information for expectant parents can be found at www.moneyadviceservice.org.uk and our telephone helpline on 0300 500 5000 is open Monday to Friday 8am –6pm.Back to top
‘Martin’s Money Saving Expert’ offers some great tips on how to make your money go further and a good range of discount coupons. As Forces families see their disposable income reduce due to the pay freeze we all need to be Money Saving Experts. Click here for advice on Supermarket Shopping and many other tips.Back to top
A series of 'top tips' offering Service personnel practical advice on financial issues has been produced by the Government and representative bodies from the financial sector.
As part of its commitment to the Armed Forces Covenant, the MOD is working with several organisations to improve the ability of Armed Forces personnel to gain access to a wider number of commercial products and financial services, and lessen associated difficulties that are often experienced because of their unique lifestyle.
Anyone experiencing difficulties should contact AFF on 01264 382324 or email firstname.lastname@example.org.
The original instruction from the MOD stated that Sure Start Maternity Grants (SSMG) for those living overseas should be claimed from the Department for Work and Pensions (DWP) through a single point of contact. This address has since changed and applications should go through the DWP Social Fund department.
All applicants have been requested to annotate ‘HM Forces Staff’ on the personal details part of the form and also asked to try and include as much relevant information as possible. The completed application forms should go to:
Wembley Social BDC
Tel: 0845 6036 967Back to top
The Money Advice Service was set up by the government to help people take the right financial decisions and act on them. The Money Advice Service is here to help everyone manage their money better by providing clear, independent and unbiased money advice to help people make informed choices. We believe that this can make a difference to people’s lives, and when people take steps to manage their money better, they can live better too. The support and resources provided by the Money Advice Service are free, and are designed to help everyone with practical money advice, whatever their financial circumstances.
The Money Advice Service provides personalised advice online at www.moneyadviceservice.org.uk/healthcheck. Using the health check will help you get a high level assessment of your financial priorities and highlight where you can take action to build healthy financial habits. You will be able to get a personalised “action plan” which will help you prioritise your actions and link you to a wide range of other online tools and resources. To try the health check today click here.
You can also get free money advice over the ‘phone on 0300 500 5000, and face-to-face across the UK through a national network. For more information on this service visit the Money Advice Service website. The website also provides a comprehensive range of information, tools and calculators to help you manage your money.
The advice provide by the Money Advice Service is unbiased, independent and completely free. Because we’re not selling anything ourselves, or for anyone else, you can trust our advice.
Understand your money in minutesBack to top
The MOD is launching the revised Armed Forces Compensation Scheme (AFCS) which incorporates all of the recommendations made by Admiral the Lord Boyce, former Chief of Defence Staff, in his Review of the Scheme in 2010.
Service personnel who become injured or ill as a result of their service will now be able to benefit from an even more comprehensive compensation package including an increase, on average in excess of 25%, to all lump sum payments, except the top award which was recently doubled to £570,000.
The maximum award payable for mental illness has also increased from £48,875 to £140,000, in order to accurately reflect the impact of the most serious mental health conditions.
There has also been an increase to all Guaranteed Income Payments (GIPs), a tax-free monthly income stream which is paid to those who are seriously injured, for life. The increase reflects the lasting effect of more serious injuries on future promotion prospects and on the ability to work to age 65.
Minister for Defence Personnel, Welfare and Veterans, Andrew Robathan said:
“I am grateful for the recommendations made in Admiral the Lord Boyce’s Review of the Armed Forces Compensation Scheme last year. While the Review found that the Scheme was fundamentally sound, it made a number of recommendations for improvement – all of which will be implemented today.
We must do all we can for those who become injured or ill in service and ensure the care and support we give them is the best possible. This package of changes will result in a significant financial uplift for injured military personnel clearly and demonstrates our commitment to helping our wounded men and women for the rest of their lives.”
All those who have previously received an award from the scheme (since its inception on 6 April 2005) will have their awards uplifted in line with the new increases. Over the course of the next year the Service Personnel and Veterans Agency will be reviewing around 10,000 awards and informing previous recipients of the increases that they will receive.
The Boyce Review also recommended further, detailed examination of a number of types of injury and illness to ensure the AFCS was providing fair compensation in all cases. As a result of this, an Independent Medical Expert Group was set up and has produced a report which makes a number of recommendations. All of those relating to compensation have been implemented in the revised scheme.
One of the key recommendations made by the IMEG is that those who become infertile as a result of service are provided with a number of free cycles of IVF treatment. Given the complexity involved in delivering the recommendation regarding provision of IVF treatment, this is an issue we will continue to work on in conjunction with colleagues in the four health departments in England, Wales, Scotland and Northern Ireland.Back to top
If you are moving back to the UK after a stint overseas, it is worth thinking ahead to the changes in your finances that this will bring about. The following points give a general guide of what to expect:
- Loss of entitlement to LOA will mean less cash at the end of the month.
- If you have been in Germany you will no longer be entitled to receive Kindergeld on your return to the UK.
- If spouse was employed overseas, there may be a temporary loss of second salary until a UK job is secured.
- No more petrol coupons! Expect to pay high prices for fuel at UK pumps. It might even be worth considering changing to a more fuel-efficient car. Families with two cars are now reported to be £36.93 worse off every month than they were a year ago, based on the average distance travelled in a mid-sized, petrol-fuelled vehicle (April 2008).
- Loss of tax-free perks on weekly shop and other goods.
- Rising costs of electricity and domestic fuel.
And don’t forget…
You will now have the privilege of paying for a TV licence, road tax (also on the increase), higher childcare costs, tax on a new car……
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