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Living Conditions Allowance (LCA): An outdated method that often fails to reflect reality on the ground!

Michael Steffens, Helen Conefrey

USHU believes there is a need to review and overhaul the LCA methodology that was adopted in December 2014 to ensure that it better reflects the reality on the ground in 2024. Data used by the EEAS for this exercise may be incomplete and/or out of date and this potentially compromises the results.


Serving in an EU Delegation is rewarding but it inevitably comes with sacrifices. In the vast majority of places of work outside the EU, living conditions are worse than within the EU and several adjustments are needed to live safely and soundly in challenging environments. This is true for both individuals and for their families. Life as we know it may play out much differently in each host country and every-day activities like going to the cinema or theatres can be challenging. Critical issues like accessing quality health care or finding an adequate school for our children is all part of living in a third country. Expatriates in EU DEL receive a living cost allowance (LCA) as a recognition of the hardships and risks they encounter on a daily basis whilst serving outside the EU.


This allowance is principally a well-being measure to ensure that the difficulties that expatriates experience are compensated to ensure that EU Delegations remain attractive places of work despite the varying levels of hardship.


Article 10 of Annex X to the Staff Regulations for staff serving in third countries allows for the payment of an allowance to staff serving outside the EU in countries based on the following parameters:


·      Health and hospital environment;

·      security;

·      climate;

·      degree of isolation;

·      other local conditions.

This is an annual exercise to assess these parameters across all countries with EU Delegations. The allowance itself varies from 10% to 40% depending on the level of the performance results in each of these parameters. The current Decision on the Methodology for the LCA was adopted in early 2014 and USHU believes it does not adequately address crisis situation nor ensure that outcomes are based on quality inputs. In exceptional cases, where major changes or sudden and persistent difficulties arise during the year, the appointing authority may grant an increase in the LCA with retroactive effect.


The LCA is clearly part of the working condition of expatriates and can represent an important recognition of hardship in the form of a financial incentive for colleagues who work in EU Delegations. Reductions in LCA hit colleagues hard and must be fully justified and not simply part of a cost-cutting exercise at the expense of expatriates. Staff representatives participated in the LCA working group and have repeatedly requested an overhaul of the LCA mechanism and greater emphasis on recent quality data and a better feedback mechanism to staff. Expatriate staff have literally no idea why the LCA decreases or increases from one year to the next and are simply informed of the final Decision.


Colleagues have a right to feedback to better understand the decisions taken by the administration and be informed of the reasons for changes (increases/decreases) that impact on them financially.


Expatriates themselves must also ensure that they become involved and contribute towards the completion of the EU DEL LCA Survey, which focuses on the parameters of “local conditions” and “isolation”.  Often Heads of Administration are left to do the job alone and surveys could be of higher quality if more expatriates would contribute actively and by the agreed deadlines.


Over recent years, there has been great variations in results from one year to the next. In 2021, for example, there were increases in the LCA for 10 countries and no decreases. In the 2024 Decision, there were increases proposed for 4 locations and decreases for 9 locations. Any expatriate who is dissatisfied with the annual results, may choose to challenge the LCA Decision with an individual Article 90 complaint or by hiring a lawyer to assist in mounting an individual/collective challenge in the courts. Some recent challenges have been successful and once again, this demonstrates how the LCA is a very important and sensitive issue among staff as it directly affects income and well-being.


For 2024, staff representatives were heavily engaged in the process and had to undertake a damage limitation exercise as the Administration proposed to decrease the LCA for far more countries with little substantive evidence to back their proposal. The opinion of the Central Staff Committee is sought but is not binding and is often simply ignored.  


The LCA methodology for the future needs to be responsive to ever-increasing crises and ensure that only recent, quality data is assessed in relation to all parameters.


USHU requests the EEAS to re-establish the working group on the revision of the LCA methodology in order to make improvements.


New elements such as pollution (air and water) and climate change needed be clearly on the agenda and fully assessed.

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