In Focus: Future Reserves 2020 A Consultation PaperThis article is featured in the latest In Focus.
What worries many employers about Reservist mobilisation is the additional costs they may incur. But since April 2005, a simple and effective scheme has been in place which enables you to claim financial assistance to cover certain costs of replacing a Reservist if they’re mobilised.
What you can claim for
Financial assistance additional costs
You don’t have to continue to pay your Reservist employee whilst they’re mobilised as they’ll be on military pay. (If you did choose to continue paying your Reservist whilst they are on mobilisation the MOD will not be able to reimburse you for this.)
You can claim financial assistance to cover additional salary costs incurred. Such additional costs may include, for example:
- overtime, if you use other employees to cover the work of the Reservist;
- salary costs of a temporary replacement, if they exceed the usual cost of the Reservist employee’s salary.
The maximum amount you can claim for additional costs is currently set at £110 per day, which is roughly equivalent to £40,000 a year. The MOD will pay this award for every working day that your employee is mobilised, and this will normally be paid monthly in arrears.
Financial assistance non-recurring costs
You can also claim for certain one-off costs including:
- agency fees, if you use a recruitment or employment agency to find a temporary replacement
- advertising costs to find a temporary replacement
There’s no maximum amount you can claim for such non-recurring costs, but you must be able to support your claim with invoices or bills.
Financial assistance for re-training
You can claim for any re-training that your Reservist employee needs when they return if it is essential for them to carry out their duties properly. In order to make a claim you’ll need to be able to demonstrate that the Reservist needs the training as a result of having been mobilised - the MOD won’t pay for training that would have been carried out anyway. There’s no cap on the amount you can claim, but you will have to provide evidence of the costs.
A Reservist who is called out is entitled to remain a member of their occupational pension scheme. Provided that they agree to continue to pay their own contributions, the MOD will pay the employer contributions that you would have made. This payment is made as part of an award to the Reservist - you don’t need to submit a claim for it. If a Reservist chooses to stay a member of their occupational pension scheme they will have to provide details of the pension provider and amounts of the contributions.
How to make a claim for financial assistance
To see where to submit a financial assistance claim and the kind of information to include click here.
What you can’t claim for
Reservist's salary or benefits
You don’t have to pay your Reservist's salary or benefits in kind while they’re mobilised. If you do choose to continue paying them, you can’t claim for this.
Loss of profits, turnover or goodwill
You can’t claim for any of these. If you believe losing your Reservist employee will do serious harm to your business, you should seek exemption, deferral or revocation of mobilisation.
The Financial Assistance Regulations
For full details view The Reserve Forces Financial Assistance Regulations 2005, which can be downloaded as part of our 'Legal Aspects pack' (click download now on the right and enter your details).