Do armed forces’ perks deserve the criticism?

Armed services’ housing may have come under fire from the British media, but perks issues are at the front line of MoD thinking, says Nick Golding

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Of late, benefits that are awarded to the armed forces have hit the headlines for all the wrong reasons. Instead of attracting new recruits to the military, some perks have been criticised by members of the forces and their families for being shoddy and under-invested.

Not only have many servicemen and their families been complaining about poor living conditions, but feathers have been ruffled by the fact that troops have had to continue to pay taxes on their salary while on dangerous operations, a practice which contrasts with that adopted by many other countries which do not expect their forces on active service to pay taxes. Even when the government intervened with a bonus for troops serving in Afghanistan, this was criticised because it was deemed to be a repayment of the tax staff had already paid.

Housing perks

Douglas Young, chairman at the British Armed Forces Federation (BAFF), explains: “British personnel in Afghanistan were in a significantly worse position than that of their foreign colleagues, in that they were paying tax on their earnings, whereas other nations who had troops in Afghanistan, in particular the American troops, were working tax free. So we wanted to make the point that British troops were worse off but were conducting the same work.”

The BAFF has also been campaigning for changes to be made around the living conditions of troops, both at home and abroad.

Housing is available for all serving members of the armed forces. Although there are costs involved, these are small in comparison to buying a house or paying rent outside of the military. According to the BAFF, the amount of rent and tax payable in lieu of council tax is dependent on the condition of the home. “Rent is supposed to be subsidised and should reflect the condition of the accommodation. [So], in the worst cases, some [staff] pay no rent at all,” says Young.

However, after years of neglect, the government is now looking to invest in housing facilities. This is, in part, due to a campaign carried out by the BAFF, which attracted media attention when it invited employees to post pictures of their accommodation online.

“The point is that there are plenty of good houses, but the amount of sub-standard [ones] is unacceptable, and now money is being invested in upgrading,” says Young.

He would like to see the cash which is set to be injected into the housing fund also cover internet access for each home.

This will enable more members of the armed forces to access the online voluntary benefits scheme that is offered to all military personnel. The website is free to use and offers members discounts on a variety of products such as 47% off Bupa healthcare and 10% off British Airways flights.

Peter Raith, sales and marketing manager at Crest Publications which administers the scheme, explains: “It is a very well-used site, and is available to the entire defence community from the day they join.”

The scheme can be accessed through the military website, and the discounts are also extended to employees’ families.

Military sector pay, meanwhile, is regularly assessed by the Armed Forces Pay Review Body (AFPRB), which benchmarks salary levels against other sectors to ensure the right levels of pay are offered.

“Pay is reviewed by the experts at the AFPRB and in-depth investigations are made into other sectors. A recommended wage is then taken to the Ministry of Defence (MoD) for agreement,” explains Young.

However, certain areas appear to be undernourished when it comes to pay, particularly for more junior staff, which is another issue that BAFF is looking to address.

“We certainly believe that the most junior ranks are in need of a pay increase. We’re not saying that anyone else is overpaid, but entry-level employees need a pay increase [which] is clearly having an effect on recruitment and retention.”

Currently, the lowest-paid army private earns a salary of £14,323, compared with the lowest-paid sergeants and captains that receive £29,751 and £33,795 respectively.

Recruitment issues

This could explain the current recruitment problems the MoD is experiencing, which has forced the army to increase its maximum entry-level age to 33 years from 26 years in order to increase its recruitment pool.

Given the often physical nature of the work that is carried out by the military, it is important that it provides an effective healthcare programme for staff.

As far as employees’ physical health is concerned, troops are offered basic primary care, which includes free medical and dental care wherever they are based in the world.

There are also benefits in place for those who are mentally and psychologically affected by their day-to-day work. Dr Roderick Orner, author of Second World War veterans with chronic post-traumatic stress disorder, explains: “When someone signs up for the military service, they also sign a contract which says that they are putting their lives on the line. These people are subject to possible trauma and some will be more affected than others.”

To deal with psychological illness, the armed forces offer employees a full, free occupational health service and access to the stress website, Combat Stress, for ex-members who suffer from post-war trauma. Serving sufferers, meanwhile, are provided with access to the specialist hospital The Royal Centre for Defence Medicine in Birmingham.

“The Royal Centre for Defence Medicine is the one proper trauma hospital, and it is free for all employees to use,” explains Young.

A defined benefit (DB) pension scheme is also available to all employees in the military sector, including new members, and is considered an effective retention tool.

Alan Grant, consulting director at Jardine Lloyd Thompson, explains: “It is a big retainer if you have a DB scheme. There aren’t many places that will give you another one, so in this respect it is very useful.”

The plan is a non-contributory scheme that underwent several changes in April 2005, when the Armed Forces Pension Scheme (AFPS) 75, also a DB scheme, was closed to new members, and the AFPS 05 was opened for new recruits.

The updated version of the scheme has implications for employees’ families in the event of their death, as dependants may still receive a payout if the member does not die in active service. Major Lesley Wilford, SO1 pension projects and future requirements at the Armed Forces Personnel Administration Agency, explains: “The old scheme would pay out to a partner of marriage, civil partners and partners only where the death was due to service, whereas the new scheme reflects modern society more as all dependent survivors, including partners where the death is not due to service, are eligible to receive benefits.”

Where death-in-service benefits are concerned, the new plan pays dependants a tax-free lump sum of four-times pensionable pay, as opposed to an approximate amount of three-times salary under the old scheme.

The new scheme also operates a system of auto-enrolment from the first day of paid service, regardless of age or rank. Previously, staff were only eligible to join from the age of 21 years for officers, and 18 years for all other ranks.

“As we believe that the scheme is a very good one, we do try to encourage all personnel to be involved. Although a tiny percentage do opt out, the facility is available for them to opt back into the scheme at a later date,” explains Wilford.

Since November last year, a pensions calculator has been available to pension scheme members, to help generate interest and allow them to better understand the current and future value of their pension pot. “It is a new idea and, since its launch, we have had 42,000 hits to the website which we are pleased with,” Wilford adds.

Family-friendly benefits are also high on the agenda for workers in the military sector, and the MoD appears to recognise the fact that spending long periods of time away from family can have an effect on troops. Programmes such as Get You Home offer paid-for trips home. If a member has a young family, for example, they are entitled to up to four return trips annually.

Staff with children can also take advantage of help with boarding school fees, up to a total of £4,872 per child per term, where parents pay a minimum of 10% of the fees.

There is also a range of other allowances and bonuses linked to rank and skills.

While the current conflicts around the world continue, the benefits package for the armed forces is sure to remain in the spotlight.


  • Military housing has come under the spotlight in recent months. Although all serving members of the armed forces are eligible for the benefit, some of the accommodation is sub standard, and a government cash injection is expected in 2007.
  • A defined benefit (DB) pension scheme was closed to new members in April 2005, when a new modernised DB scheme was opened to new joiners. The new scheme operates a system of auto-enrolment to encourage staff to make pension provision.
  • Serving members are granted free access to an occupational healthcare scheme, and to The Royal Centre for Defence Medicine, which specialises in conditions relating to trauma.
  • Members of the armed forces have access to a voluntary benefits scheme, which offers discounts on healthcare providers such as Bupa and reductions on flights with airlines such as British Airways and Air New Zealand.

Case study: Perks in HR’s armoury

Nick Arkle, a weapons instructor in the Royal Navy, has chosen not to take advantage of accommodation that is available to him.”It’s a personal decision really. Some of the messes are dreadful and some are ok, but I wanted to get a mortgage and start paying it off,” he explains.

However, he also finds the armed forces’ slow-to-modernise nature frustrating. Although he has been with his girlfriend for five years, they are not married, and so do not qualify for the lucrative married quarters, which is a cheaper option. Financial assistance, however, is offered to members of the armed forces should they move from a mess to their own home. “They do offer interest free loans of £10,000 and also pay for the cost of removal, but only one time,” he says.

Arkle is also a member of the armed forces pension scheme, and uses the online pensions calculator, which is available via the forces’ intranet system.