Local Overseas Allowance is changing – new rates published for Service personnel:
From 1 July 2021, the way in which the Armed Forces’ Local Overseas Allowance (LOA) is calculated will be changing. The changes will make the allowance more transparent, fairer to all Service personnel, and improve oversight.
Why is LOA changing?
The new model will mean that all Service Personnel claimants of LOA, and their families, will receive a fair and sustainable contribution towards necessary additional living costs when serving overseas.
What is changing and what is staying the same?
LOA changes explainer video
For more detail and explanation of the policy changes in detail, go here.
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.
There are some changes with the new LOA which mean that Service personnel around the world will find that the amount of LOA they receive may either increase, decrease or remain broadly the same. For example, respite and vehicle provisions will no longer be parts of the core LOA. These will be claimed separately at the time of expenditure. 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 as well as the Foreign, Commonwealth and Development Office (FCDO), and is needs based.
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. The revised LOA rates were published under a Directed Letter to single Service Pay Colonels on 11 June 2021.
How do I find out more?
For further information see GOV.UK, alternatively search LOA on GOV.UK. Service personnel can also ask their local unit admin office for more information.