The MOD Remuneration team has recalculated the Continuation Education Allowance (CEA) rates to factor in the impact of Independent Schools being subject to VAT from 1 Jan 25. The recalculated rates have been announced in a Directed Letter from the Armed Forces Remuneration (Allowances).
The Letter reads:
Following the announcement in October that AF Rem would carry out a in-year re-calculation of rates, I am directed to inform you of the termly rates of Education Allowances for the remaining period of academic year 2024/25.
…Service Personnel should note that these rates will be effective from 1st December 2024.
Re-calculated CEA rates for 2024/25
The impact of introducing VAT charges on private school fees has caused CEA Claimants and their families a great deal of uncertainty. It is hoped the recalculated rates will provide the financial clarity you have sought.
| Education Allowance | 1 Jul 24 | 1 Dec 24 |
|---|---|---|
| CEA (Board) Senior | £9,080 | £10,211 |
| CEA (Board) Junior | £7,489 | £8,730 |
| CEA (Day) Senior | £5,456 | £6,136 |
| CEA (Day) Junior | £4,242 | £4,945 |
| CEA SENA SP | £13,566 | £15,256 |
| CEA SENA (Day) | £8,710 | £9,795 |
| CEA Guardians per day | £10 | £10 |
| Day School Allowance North Wales | £7,585 | £8,196 |
If you have any questions about the new rates of CEA, please see the CEA updated rates 1st December 2024 FAQs document >
Work undertaken to minimise the impact to Service Families Armed Forces Community
The MOD Remuneration Team, since the change in Government and intimation that Private School fees would include VAT (as confirmed in the Budget to take effect from Jan 25), have been working with single Service Pay Colonel and Families Federation staff to deliver a Ministerial Submission which sought to negate/minimise the impact to Service Families. The resultant direction was to apply extant policy and methodology to recalculate the up to 90% contribution CEA rate in order to capture the differing treatments being applied by Private Schools to manage the VAT costs they will incur from the Spring 2025 Academic Term. The case was made that this will not fully exempt Service Families from the impact of introducing VAT to school fees and that, as a result, personal contributions are in most cases likely to rise.
The extant CEA rate setting methodology applies an average weighting of the Private School Fees charged by circa 60 sample schools (which includes the most popular Private Schools used by Service Families) to gain a representative 90% figure of private school fees (noting that there are currently over 250 Private Schools in the UK). The standard, start of the academic year, re-calculation of the CEA rate (in Aug 25) will still occur which should capture those schools who have elected to defer any elements of the VAT increase in the fees they charge until the next academic year.
The main limiting factors when making a case for an exemption-based policy amendment were as follows:
- the idiosyncratic arrangements Private Schools already have with Military Families which makes it harder to implement a timely policy change which would cover all circumstances,
- the potential for unintended consequences in how Private Schools treat Military families and how this could disproportionately increasing the CEA budget when not all schools are planning to pass on the VAT increases within their school fees and,
- the need to comply with Government policy.
