Army families to avoid excess mortgage fees if posted overseas
Government help to buy ISA
Good news for families claiming JSA after an overseas posting
Lady Grover’s Fund
Why is Longer Separation Allowance (LSA) taxable?
Armed Forces Pension Scheme 2015
Home to duty travel (HDT)
Marriage Allowance: a step in the right direction
Forces Help to Buy (FHTB) – Frequently Asked Questions
Tranche 4 Forces Help to Buy (FHTB) Redundancy Scheme
Forces Help To Buy: Home Purchase Loan Scheme Rules
Mortgage barriers for Armed Forces families
Justice for widows: a success story
Changes to Housing Benefit
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
AFF is thrilled that after a great deal of campaigning, Army families posted overseas could be able to rent out their homes without facing higher mortgage charges or having to change their existing mortgage deal, saving them time and money.
At present, many Army families who rent out their homes during an overseas posting have to change their residential mortgage to a buy-to-let mortgage, often incurring new product charges and an increased rate of interest.
Support from the big six
The new agreement is with the UK’s big six banks; Barclays, HSBC, Lloyds Banking Group, Santander UK, Royal Bank of Scotland and Nationwide. Families will need to check with their mortgage provider as to whether they are a subsidiary of one of the big six or have signed up to this deal as an independent.
The next steps
AFF intends to capitalise on this momentum and will push for this offer to extend to postings within the UK – after all, a move from Sterling to Salisbury can be just as much of an upheaval for families.
Further support from financial sector
AFF continues to report on challenges families face when applying for mortgages s; these include the negative impact of multiple moves, and BFPO addresses. We are working closely with the Armed Forces Covenant team to help encourage our financial institutions to respond to these issues.
Your evidence is vitally important, so, if you are experiencing any difficulties securing or changing a mortgage as a result of Service life, contact our Employment Training Allowances and Money Specialist Laura Lewin at firstname.lastname@example.org
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 Housing Benefit (HB), then they would be subject to a non-dependent 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.
Unfortunately, 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 email@example.com
The points which AFF has considered in this argument:
- The 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.
- All 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.
- Families might face financial difficulties if Housing Benefit is reduced due to under occupancy and a room is retained for their soldier.
- Should serving personnel contribute to the family finances, then they would effectively be paying twice for accommodation.
- Social 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 Services.
- Whilst 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.
Update Feb 2014: AFF has been made aware that some Army families have been successful in overturning the initial decision of local authorities relating to Housing Benefit at tribunal.
This has resulted in Armed Forces personnel being included in the calculation of the number of persons occupying the property. Click here to read about one Army family’s success with an appeal.
Good news for first time buyers: you could save up to £200 a month towards your first home with a Help to Buy ISA, and what’s more, the government will boost your savings by an extra 25 per cent - that’s an additional £50 bonus for every £200 you save.
If you save £12,000, the government will boost your total savings to £15,000 when you purchase your first home, and you can earn up to 4 per cent tax-free.
Providers are free to set their own interest rates so, as with any savings product, it’s a good idea to compare and shop around for the best option for you.
Find out more about the scheme and which providers you can apply to for your Help to Buy ISA online, by telephone or in branch.
For more information, click here.
AFF is delighted with the Department for Work and Pensions (DWP) announcement that spouses and children (up to 21 years) returning to the UK after accompanying Service personnel on overseas assignments, will be exempted from the three month residence rule required to claim income-based Job Seekers Allowance (JSA).
AFF identified that Army families returning from overseas assignments would be disadvantaged by the requirement to be resident in the UK for three months before claiming Job Seekers Allowance, introduced in January 2014. Since then we have lobbied for Armed Forces families to be exempt.
Habitual Residency Test for military families
AFF can now also confirm that anyone returning to the UK and wanting to apply for income-based JSA will still be asked to answer a series of questions about their circumstances during a ‘Habitual Residence Test’ interview – a test to ensure all JSA claims are legitimate.
However, as a military dependant, you can apply as soon as you return to the UK.
For more information about the Habitual Residency test, click here.
Lady Grover's Fund provides support to officer’s dependants during times of illness or recovery.
The fund supports:
- Dependants of officers of all three services, whether serving or retired
- Widows or widowers of officers
- Divorced wives or husbands of officers, (for their own benefit or that of their children)
- Descendant carers of officers
- Financial support towards nursing and domestic help whenever needed
- Quick and speedy help in an emergency at home
- Help with high and unexpected costs of illness
For more information, visit www.ladygrover.org.uk
LSA has always attracted a liability for income tax and national insurance contributions (NICs) since it was first introduced in 2005. The reason why LSA attracts tax is due to Treasury and HMRC rules. Armed Forces' pay, which includes pay, pensions and other earnings (such as certain allowances) is taxable as employment income and is subject to PAYE. Only certain allowances/expenses, such as food, travel, messing or disturbance expenses are not taxable. To put it simply, if an allowance enhances a salary (such as LSA) then it will be taxable. This is also how civilian employers work. Of course, some allowances, such as Operational Allowance, are by their very nature not taxable and this dispensation has been granted by the Treasury because of the incredible danger that soldiers can face in some deployments. Remember, you can receive LSA on top of Operational Allowance.
Did you know that, since the new Armed Forces Pension Scheme 2015 (AFPS 15) was introduced on the 1 April this year, 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.
Find out more
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 firstname.lastname@example.org
AFF has received a number of queries from families regarding claiming tax relief on HDT.
In some circumstances, your soldier can claim the HDT tax relief, and it is actually relatively easy to do. Provided that you meet the criteria of the 2015DIN01-005 – your soldier can find this on the defence intranet (DII) - and can use the HMRC website, you will not need to use a company to claim this tax relief.
If eligible, your soldier is entitled to claim Mileage Allowance Relief (MAR) based on HMRC limits of £0.45 per mile for the first 10,000 miles and £0.25 per mile thereafter, less any payment of HDT or similar mileage allowance.
Tax is a personal issue, if you wish to engage the services of a private company, then you do so under your own preference. Individuals are, however, recommended to consider the contents of the DIN on tax issues related to HDT, before taking any action.
The main points of the DIN are as follows:
- Claims to MAR may be allowed where your soldier’s place of duty is deemed by HMRC to be a “temporary workplace” i.e. a place where a serving person’s necessary attendance is expected to last 24 months or less.
- In order to be entitled to MAR, there must be a significant effect on your soldier’s normal home to duty journey i.e. the journey that is made and the cost of that journey.
- The value of the tax relief you receive from HMRC depends on your soldier’s total income and personal tax allowance.
How to make a claim
Please check the DIN for full details, including how to contact HMRC.
Want to know more?
For general enquiries relating to HDT, speak to your Unit Admin Office.
If you’re a working Army spouse, earning less than £10,600 a year, the announcement of the Government’s new Marriage Allowance could spell good news for your family.
With spouses facing barriers to employment due to the mobile nature of Army life, the Marriage Allowance is a welcome tax break allowing you to transfer some of your personal tax allowance to your serving partner.
As long as your soldier earns less than £42,385 a year, this new allowance could reduce their tax by up to £212.
More to be done
However, many Army families are still facing second-income disadvantage. AFF would like to see more being done for Army spouses who are more likely to face barriers to employment, or underemployment, than our civilian counterparts.
For more information go to www.gov.uk/marriage-allowance and register your interest. HM Revenue & Customs will be in touch to tell you when you can make a formal claim.
Are you hoping to use the FHTB scheme to purchase your own home on civvi street? Since the scheme launched in April 2014, over 400 people have used it to do just that.
AFF has received lots of questions from families about FHTB. To help you, we have compiled a list of answers to these frequently asked questions.
If you have any questions, comments or further suggestions then please contact AFF Employment, Training, Allowances and Money Specialist, at email@example.com or 0775 504 5955.
Q. Is my soldier eligible for FHTB? Click here to show answer
Answer: : According to the Defence Internal Notice (DIN), to be eligible for the scheme personnel must fulfil the following criteria:
- Be in Regular service
- Have served for two years and be on the trained strength, whichever is the later
- Have at least six months left to serve at the time of application
- In the last twelve months, not have owned a property within 50 miles of the proposed house purchase
Q. We want to use FHTB. Is there a list of mortgage lenders that accept the scheme? Click here to show answer
Answer: : The MOD has stated that mortgage companies were expected to be ready to accept mortgage applications for those with a FHTB loan from 1 April 2014 when the scheme went live. The MOD has confirmed that most mainstream mortgage providers are supporting Service personnel by offering mortgage products in conjunction with a FHTB advance. However, they will not release this list of lenders as they don’t want to be seen to be endorsing particular companies. AFF has asked them to reconsider as the Government Help to Buy Scheme does list which lenders have signed up to the scheme. In the meantime, AFF has confirmed the following lenders:
- Royal Bank of Scotland
- Newcastle Building Society
Santander is one exception to this; they are not accepting FHTB as a source of deposit.
You should always check with potential mortgage providers before applying for a mortgage and declare their intent to use FHTB upfront. This includes, if using a mortgage broker, ensuring that your broker declares use of FHTB to potential lenders and confirms that they accept the scheme. In instances where there is a lack of certainty, you may wish to confirm all of this in writing with their mortgage provider.
If you come across a lender who says they are unaware of the FHTB scheme then please either let AFF know or email the FHTB team direct at perstrg-NEM-Mailbox@mod.uk
The MOD can then work with the Council of Mortgage Lenders to identify why the scheme is not being taken up.
Q. Up to how much can we borrow with FHTB? Click here to show answer
Answer: : Eligible personnel may borrow up to 50% of their annual salary (including specialist pay), capped at £25,000 for higher earners.
The loan will normally be repaid over a period of up to ten years, and the monthly repayment amount will be calculated on this basis. The loan limit has been set to ensure personnel do not borrow beyond their ability to repay.
Remember, approval for a FHTB loan is no guarantee that a mortgage lender will advance a mortgage.
Q. How far in advance can you apply for the scheme? Click here to show answer
Answer: : You have to be eligible (as per the DIN) and to have found the property you wish to purchase. You must have spoken to a mortgage provider and obtained the services of a legal representative. You are then in a position to apply for FHTB through JPA (or, in exceptional circumstances via a JPA Form E035 if you have no access to DII).
All applications must be received by the FHTB Section a minimum of sixweeks before the expected purchase completion date to ensure that payment deadlines are met. However, ensure you speak to your mortgage provider and solicitor at the earliest opportunity to make them aware of your intent to use a FHTB loan, even if you have not yet applied.
Q. Are you no longer entitled to Single Living Accommodation (SLA) if you have used the scheme? Click here to show answer
Answer: : If you purchase a property using a FHTB loan and the property is within 50 miles of the current assignment location (or next assignment, if already confirmed) then you will not be entitled to either SLA or SFA at that location.
But, if the purchased property is located more than 50 miles from your current or next assignment location then you will be entitled to use SLA but not SFA.
If subsequent assignments are more than 50 miles from the purchased home, you will again be entitled to SLA and SFA.
However, if any subsequent assignment is within 50 miles of the purchased property, entitlement to SLA and SFA will again be relinquished and you will be expected to live in your own property.
Q. Will we be able to move back into SFA if my soldier gets posted away from the house we intend to purchase using the FHTB loan? Click here to show answer
Answer: : You can move back into SFA but only on a posting and only if you are posted more than 50 miles from the house purchased.
Q. Do I have to buy near my duty station? Click here to show answer
Answer: : No, you can buy anywhere in the UK (or the Republic of Ireland if you were recruited there or have Irish parentage). If the purchased property is located more than 50 miles from your current or next assignment location then you will be entitled to use SLA but not SFA.
Q. Do I have to live in the purchased property or can I rent it out? Click here to show answer
Answer: : The DIN states: If, after purchasing your home, you are posted more than 50 miles from where the property is located you can let your property and will be entitled to either SLA or SFA, depending on your needs (as long as this is not for a reassignment you were already aware of and that starts within six months of obtaining the loan). If you choose to rent out your property then, as with Long Service Advance of Pay (LSAP), interest (at standard HMRC rates, currently 4%) will be applied to the loan.
However, if a subsequent assignment places you within 50 miles of the property you will be required to live in it; you will also need to speak to both your Commanding Officer and your mortgage lender to get their approval to let a property.
Q. I already own my own home. Can I use FHTB to make improvements, such as an extension, to my property? Click here to show answer
Answer: : You can only use FHTB to extend/modify an existing property if there is a change in family circumstance such as if you have had another child or if there are medical reasons why your current home is unsuitable.
Q. Is there a list of mortgage lenders who are more understanding of the Armed Forces lifestyle? Click here to show answer
Answer: : Most high-street lenders should understand Armed Forces life (overseas postings, BFPO addresses etc.)
However, if you encounter any problems then please let AFF know. AFF urges families looking to get a mortgage to look at the MOD’s Guidance for Service Personnel Applying for a Mortgage: www.gov.uk/government/uploads/system/uploads/attachment_data/file/265796/12122013Guidance_mortgage2013.pdf
Q. I am looking for some advice and clarification on married unaccompanied allowances. We are thinking of purchasing our first home. We have young children and my soldier will turn 37 in September. The JSP  is a nightmare to try and understand as to what allowances he may be entitled to claim. He has spoken to his Admin Clerks but is getting different answers. We want to buy near my family, about 200 miles away from where my soldier is based. Also, he has only four years left to serve. Click here to show answer
Answer: : Your soldier should be eligible for Get You Home (Travel) allowance, the Army Over 37 Provision and the Forces Help to Buy Scheme (up until his last six months of service). Your soldier's RAO department will help them with this.
Q. My soldier is medically downgraded but not on a permanent basis. Is he still eligible for FHTB? Click here to show answer
Answer: : He would be eligible if he is Medically Fully Deployable (MFD) or Medically Limited Deployable (MLD) when he applied for FHTB, or has been assessed by his Unit Medical Officer (UMO) as likely to be MFD or MLD within six months of the application.
It will be your soldier’s Unit Admin or Unit Medical Officer who will make the call when the Application for FHTB is processed – they will look at his Medical Status on JPA. The section in JSP 464 about how you apply for FHTB on JPA covers medical issues:
For soldiers who are graded MLD Temp or MND (Medically Non-Deployable), the UMO will need to certify that, in their opinion, the soldier will be in a permanently deployable medical category within six months of the date of the UMO assessment.
Irrespective of their medical category at the time of the FHTB application, the soldier will have to acknowledge on the application form that, should they later have a medical condition that leads to invaliding or discharge from the Service, then recovery of the FHTB loan may only be waived following submission of casework to the PACCC.
Any other outcome of the UMO assessment will result in the application being rejected and returned to the applicant through the Unit HR. Where applicants in this situation are still able to obtain a mortgage offer in principle, an exceptional case may be made through their CO and SPVA to PACCC (who may consult with CDP (Service and Veteran’s Welfare)). A FHTB loan is only likely to be granted in these exceptional cases where it would be able to be recovered from terminal benefits due to the applicant.
Q. I am a Foreign & Commonwealth soldier. Can I access the FHTB scheme? Click here to show answer
Answer: : Foreign & Commonwealth serving personnel are eligible for the Forces Help to Buy Scheme as long as:
- The house you wish to purchase is in the UK (for those recruited in the Republic of Ireland or of that parentage, then the RoI)
- They meet all other criteria of the scheme (which they can find in JSP 464 Chapter 12)
Q. Can I use FHTB to purchase a property outside of the UK? Click here to show answer
Answer: : No. The qualifying criteria of the scheme currently states: (Para 1214e) The property to be purchased is situated in the UK or, for those recruited in the Republic of Ireland, or of Republic of Ireland parentage, the Republic of Ireland.
In addition: (Para 1214f) The property to be purchased is one on which a mortgage lender (authorised by the Financial Conduct Authority (FCA)) is willing to advance a mortgage. This applies even if a mortgage is not required; in these circumstances, a FHTB application would need to be supported by a valuation report that demonstrates a mortgage would be available on the property.
The Council of Mortgage Lenders (CML) has confirmed that the FCA does not have a remit to regulate mortgages arranged outside of the UK (England, Scotland, Wales and Northern Ireland). A mortgage on a property outside of the UK would therefore not be regulated by the FCA. This criterion is in order to ensure that FHTB funds are used for mortgages which are subject to FCA rules and regulations which safeguard both the FHTB money provided by the MOD and the individual SP who has a mortgage agreement with a reputable and legally regulated provider.
Q. We are currently in our own house and want to use FHTB to move somewhere bigger. My RAO told us that, as the house we want is within 50 miles of our current one, we can’t use FHTB. Click here to show answer
Answer: : We have been approached by a number of families who are in your situation and so AFF contacted the FHTB team for more clarification on the 50 mile rule. They said: "The aim of the FHTB Scheme is to get SP on the property ladder to help them stay on the property ladder (for example if they GENUINELY need a bigger or differing style house to accommodate a growing family or medical issue). The scheme is NOT to help SP progress up the property ladder. It is a benefit and not an entitlement and would not be endorsed by the taxpayer otherwise. The scheme needs to have strict eligibility criteria."
If you can prove that you need to move for very specific reasons then the Forces Help to Buy Team would review you case.
Q. Will my Continuity of Education Allowance (CEA) eligibility will be affected by a FHTB loan? Click here to show answer
Answer: : The Desk Officer for FHTB Policy provided the following response:
One of the key principles of CEA is that the claimant must be accompanied by their family at their duty station. However, the rules of the FHTB policy state that: “The property to be purchased is intended for the applicant’s own immediate occupation or that of their immediate family. In the case of single personnel who will be unable to occupy the property during the working week, occupation at weekends and/or during periods of leave is deemed to qualify.” In practice, this means that if a SP purchases a property which is greater than 50 miles away from the assignment when they received the FHTB advance, their spouse would be required to live in it and they would probably live in SLA and weekly commute. Therefore, they would not be accompanied, so not be entitled to claim CEA. The property would be classed as a Selected Place of Residence (SPR).
If the FHTB property is more than 50 miles away from their next (second FHTB) assignment, a SP’s entitlement to SFA is reinstated. They can therefore move into SFA, and rent the FHTB property out (with the permission of their mortgage lender and CO). If a SP occupies SFA when they are unable to occupy the FHTB property and is likely to move again in the next four years, they may be entitled to claim CEA.
If SP are living in the FHTB property and commuting daily (the FHTB property is classed as a Residence at Work Address (RWA)), they are accompanied and can apply for CEA. However, entitlement would also be dependent upon the SP’s Career Manager stating that they were likely to move again within 4 years.
So, in a nutshell, if subsequent assignments are more than 50 miles from the purchased property and SFA is taken up, CEA will not be affected.
Q. How can we contact the FHTB team? We need to get information from them quickly. Click here to show answer
Answer: : There is a direct fax to FHTB – 02393702506 Try emailing perstrg-NEM-Mailbox@mod.uk - it is best to entitle message something like “urgent call back please needed for immediate completion of a house sale.”
Also try the JPAC enquiry centre on: 94560 3600 Option 4, or alternatively, 0141 224 3600, option 4.
Q. My mortgage provider has asked for a PIN as a matter of urgency. What is a PIN and how do I get this? Click here to show answer
Answer: : The PIN is a Personal Information Note; this is the proof of FHTB deposit. To get your PIN you need to contact the FHTB team on 0141 224 3600, option 4.
Q. Will the FHTB loan make an imprint on our credit score? Click here to show answer
Answer: : FHTB is not credit scored as it is a non-taxable employee benefit in kind. It therefore won’t make an imprint on your credit score.
Q. We have bought our own home using the FHTB scheme, however, we are serving in Europe and we cannot afford the removals (over £3000) as there is no assignment/posting order in place. Why can’t we have future removals brought forward to now to enable me to move? Click here to show answer
Answer: : An assignment order is the authority for removals. Sadly, without an assignment order there is no eligibility for removals at public expense.
AFF is aware that this is a huge issue as is BFG and PS10. We have submitted a brief for Early Removals to help families using FHTB to get on the property ladder; we are still waiting for a resolution on this issue.
In the meantime, we urge all families looking to utilise the FHTB scheme to ensure you can cover the cost of removals back to the UK when you are budgeting for the house purchase. Your soldier may be able to apply for Early Mover Status (EMS) if you move into your own home within 12 months of the posting date. Your soldier should speak to his/her Unit Admin or refer to JSP 752 Chapter 7, Section 9 for further details.
Q. I want to use FHTB to buy, but need to know what are the rules regarding timings from receiving keys to my house to moving out of my SFA? Click here to show answer
Answer: : A: The policy is:
- A property for which FHTB has been claimed must be intended for the Service person’s own immediate occupation, or that of their immediate family.
- For a self-build, occupation should take place within 12 months of the full FHTB application approval and during the assignment which the FHTB advance was awarded.
That said, a grace period to allow move out once completion on the property was complete would be reasonable. Beyond that, they effectively become an irregular occupant and may be subject to ‘damage for trespass’.
DIO state that the minimum legal notice to request someone to vacate a property is 28 days. It appears reasonable that SP plan to vacate SFA in that timeframe, unless there is specific welfare casework (for example relocating to an SPR, but a child may wish to finish that school term), or there is a significant change in personal circumstance.
Further Information and Links
FHTB is part of the New Employment Model (NEM) programme; an initiative that aims to offer more stable home lives for the majority of Service personnel and their families. Further information can be found on the NEM intranet page (accessed on a military terminal only).
For further advice on options for home purchase, you can visit the Joint Service Housing Advice Office intranet site (accessed on a military terminal only) or the Homes and Communities Agency and Help to Buy websites.
- defenceintranet.diif.r.mil.uk/ORGANISATIONS/ORGS/TRISERVICES/JSHAO/Pages/JSHAO.aspx (accessed on a military terminal only)
Details for the FHTB scheme for Service Personnel (SP) leaving on Tranche 4 Redundancy have been released in DIB2014/09.
This is great news for families affected by T4 who wish to purchase their own homes. Both applicants and non-applicants can apply for a short-term loan of up to 90% of their redundancy lump sum or £68,000, whichever is the lower. The loan amount will automatically be recovered from their redundancy lump sum when they leave the Service. The loan can be used by those who wish to buy their first home, modify their existing one or move locations.
AFF believes that this scheme will greatly help the transition to civilian life for those who wish to buy their own home before the SPs discharge date. Moreover, the purchase of a home using a FHTB T4 loan will not affect entitlement to SLA/SFA which will extant until the SPs exit date.
Personnel leaving through this final Tranche of the Armed Forces Redundancy Programme will be sent FHTB T4 application forms as part of the redundancy notification process. Application forms will also be available on the JPA forms page, but must be printed and posted to Service Personnel and Veterans Agency (SPVA). Applications cannot be made until written notification of redundancy is received, so this scheme will launch on 12 Jun 14.
For detailed information and full rules for the general ‘Forces Help to Buy’ (FHTB) scheme as well as the new FHTB scheme which relates specifically to Service Personnel leaving as part of Tranche 4 redundancies (FHTB T4), go to Joint Service Publication (JSP) 464.Back to top
The eligibility criteria and a summary of the policy rules for the new ‘Forces Help To Buy’ (FHTB) scheme have been published. The scheme will be launched on 1 April 2014.
The FHTB scheme will enable Armed Forces personnel to apply for an interest free loan of up to 50% of salary, (capped at a maximum of £25,000), repayable over 10 years. Those leaving as a result of Tranche 4 of the redundancy programme qualify for a separate scheme, the details of which will be communicated shortly.
For the duration of the FHTB pilot, the existing Long Service Advance of Pay (LSAP) scheme will be frozen. Personnel with an existing LSAP arrangement can also apply for a FHTB loan, with the outstanding LSAP amount being consolidated into one arrangement under FHTB.
The FHTB scheme will be administered in a similar way to LSAP, with applications submitted via JPA. The application form will be available via JPA from 1 April 2014. Mortgage companies are expected to be ready to offer mortgages to those with FHTB loans shortly after the scheme goes live.
For more information please refer to 2014 DIB/07.Back to top
AFF has received a number of queries from families experiencing barriers when applying for a mortgage. We are keen to remove these disadvantages and we want lenders to understand that due to our Armed Forces lifestyle, our circumstances are different to civilians and therefore more understanding is required.
Whilst AFF recognises that frequent moves and BFPO addresses can make credit checking, for commercial products, difficult for lenders, we ask that they take this into consideration and work to remove disadvantage rather than precluding Armed Forces families from enjoying the same access to commercial products as civilians.
AFF is delighted that the Corporate Covenant is raising awareness amongst financial organisations about issues Armed Forces face compared to our civilian counterparts. AFF applauds Barclays Bank for signing the Corporate Covenant and agreeing to deal with mortgage applications manually (rather than automated) for serving soldiers. AFF is working with the Armed Forces Covenant team to help encourage other financial institutions to step forward and give a fairer deal to Army families.
The Armed Forces Covenant states: Those who serve in the Armed forces should not be disadvantaged because of their occupation. Mortgage applications will be treated fairly and consistently with civilian counterparts and will not be automatically rejected purely on the basis of a BFPO address. As part of its commitment to the Armed Forces Covenant, the MOD is working with several organisations to improve access to a wider range of commercial products and financial services for serving personnel.
The Government and representative bodies from the financial sector have produced guidance notes, on the GOV.UK website, offering advice, tips and practical help for Armed Forces personnel applying for personal unsecured and mortgages.Back to top
AFF welcomes the news that the Justice for Widows campaign has achieved its aim of ensuring that all widow/ers will be able to keep their pension if they re-marry or cohabit.
Unfair disadvantage for spouses
Under current legislation, widow/ers whose soldier was on a pre-2005 pension scheme, including thousands of spouses whose soldier is still serving, would have lost their pension if they had remarried or co-habited – they faced a dreadful choice of financial security or happiness.
Army spouses are likely to have reduced income and pensions of their own due to supporting the soldier, and their mobile lifestyle. Re-establishing their own career can be significantly challenging leading to a genuine need to retain their widows pension.
AFF in action
AFF has worked with the Forces Pension Society on this issue for the last year.
We have highlighted it to Anna Soubry MP, Minister Defence Personnel Welfare and Veterans during Covenant Reference Group meetings, the Families Federations meeting and most recently at AFF’s Big Debate where the Minister revealed that the Armed Forces Covenant may be used to resolve the issue.
We thank Major-General John Moore-Bick of the Forces Pension Society for his tenacity and enthusiasm in keeping the issue at the forefront of policy makers’ minds.
The Royal British Legion made it their number one priority in their most recent manifesto, demonstrating that the combined efforts of military charities has led to this significant announcement and that the Armed Forces Covenant can be used to drive policy change.
In the news
Read the media’s take on this important issue:
Want to know more?
For more information, contact AFF’s Employment, Training, Money & Allowances Specialist at firstname.lastname@example.org
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 email@example.com. 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 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 at firstname.lastname@example.org.
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 AFF 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 email@example.com.
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 Benefit Centre
Mail Handling Site ‘A’
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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