Screenshot of the front cover of the LOA poster from MOD.

Monday 29th March 2021

Updated: 29 March 2021 (MOD People Transformation)

From 1 July 2021, the way in which the Armed Forces’ Local Overseas Allowance (LOA) is calculated will be changing. From 1 April 2021 however, this will include a new Overseas Private Vehicle Provision for Service personnel who are permanently assigned overseas and receive LOA.

Overseas Private Vehicle Provision (OPVP) assists personnel with access to a private motor vehicle in a LOA area. The provision will be an additional but separate contribution to the new LOA; due to be implemented from 1 July 2021.

The OPVP will be paid up to a (capped) lump sum on proof of expenditure of a vehicle. This will replace the old Car buy/Sell contribution that was paid in most Main Station locations where contributions were spread across the course of an assignment. The change has been introduced to better support Service personnel with significant one-off costs when they need it most.

The rate of OPVP is capped at £975. Depending on the circumstances of the Service person, OPVP can be claimed on assignment into and, with effect from 1 July 2021, out of the overseas location. This means that in some cases Service personnel will be able to claim up to a total of circa £1950 (e.g. £975 into the overseas location and £975 out of the overseas location). Service personnel returning from an overseas assignment cannot claim OPVP until 1 July 2021.

View the Directed Letter – Version 2

For more information about OPVP read the OPVP Directed Letter.

More detail explained…

The following video explains more information about some of the key things you need to know about the new OPVP.

View this video in Google Chrome for best usability or access through YouTube.

Find out more

More information about LOA changes can be found on defnet and GOV.UK.

General LOA changes

Info initially shared: 1 Feb 2021

The changes will make the allowance more transparent, fairer to all Service personnel, and improve oversight. The changes are not a saving measure but designed to be cost neutral. This modernisation means that Service personnel around the world will find that the amount of LOA they receive may either increase, decrease or remain broadly the same. Rates will be published in June 21. The changes will be fully implemented over a three-year transition period.  

We hope this will be positive for many Armed Forces personnel, especially those of lower ranks or with young families.

Find out what this could mean for you:

LOA will still be paid automatically alongside the monthly salary and will continue to contribute towards the additional local cost of day-to-day living when Service personnel are required to serve overseas. One of the most significant changes will be the introduction of a single band for all Service personnel regardless of rank, removing the previous rank-based banding system. 

The new the LOA package will provide better support to Service personnel. This is achieved by targeting contributions, through auditable payments, towards private vehicle and respite costs, which are currently included in the daily rate and spread throughout the term of an assignment. As such, when comparing the new LOA with the current it is important to compare the overall package rather than making a straight comparison between daily rates.

Why is this happening now?

The changes to LOA are the result of a thorough review of the current methodology, which has taken more than three years to complete. The new methodology is based on commercially available data used by multi-national corporations like Shell and BP, as well as the Foreign, Commonwealth and Development Office (FCDO), and is needs based. The structural changes will reinforce the underpinning rationale for LOA, strengthen its governance, and improve equity in the treatment of all Service personnel wherever they are serving overseas.

When will this change happen?

The new LOA package will be implemented on 1 July 2021 and will be delivered as a phased transition process lasting until 2024. Rates will be available to Service personnel from June 2021. Access to the Overseas Private Vehicle provisions will be available from 1 April 2021.

How do I find out more?

To find out more search LOA on GOV.UK.

Source: Ministry of Defence 1 Feb 2021

Contains public sector information licensed under the Open Government Licence v3.0.

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