Key Points

New financial assistance regulations for reservists and their employers came into force on 14 April 2005. The new regulations are the result of a comprehensive review of the financial assistance given to reservists and their employers that started in July 2004. The new provisions are as follows:

• Reservists whose civilian pay is higher than their service pay receive an additional payment to make up the difference between the two. This is subject to an overall cap of £;548 per day (equivalent to around £;200,000 a year). For those serving as Medical Consultants, the cap is £;822 per day (equivalent to around £;300,000 a year).
  
  
• Reservists are also able to claim the cost of replacing certain benefits in kind where these are suspended by their employer on mobilisation, such as health insurance or educational fees for a dependent child. Any payments to the reservist for these purposes count towards the overall cap.
  
  
• Where a company car is withdrawn by an employer and that car was available for use by the Reservist's spouse, partner or dependants, and no other car is available, the Reservist can claim flat rate allowance of £;10.70 per day. This sum also counts towards the cap.
  
  
• Reservists can also claim for certain additional expenses that they incur when they are mobilised. These include, for example, costs associated with childcare and the care of dependent relatives. They are not included in the payment cap.
  
  
• Employers of reservists are also able to claim the additional costs associated with employing a temporary replacement, subject to a cap of £;110 per day (equivalent to approximately £;40,000 a year). In addition they can reclaim in full any one-off or non-recurring costs of replacing a Reservist, such as agency fees. A re-training payment can also be claimed if the reservist needs to regain or maintain skills required in their civilian employment that have been lost as a result of their mobilisation. There is no payment cap on these awards.
  
  
• To avoid the value of the caps on the payments to Reservists and employers being eroded over time, they will be subject to annual review from April 2006.

...back to 16 June 2005

Source:
The Reserve Forces (Call-out and Recall) (Financial Assistance) Regulations 2005
Changes to payments of financial assistance to Reservists and their employers during mobilisation

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