Military personnel from overseas who have served in the Armed Forces for at least 12 years could be allowed to settle in the UK for free.
A new public consultation to waive the visa fees has been launched by Home Secretary Priti Patel and Defence Secretary Ben Wallace.
The proposal by the Ministry of Defence (MOD) and Home Office would save each applicant £2,389 in fees.
Mr Wallace said: "We owe those who showed us loyal service our loyalty in return.
"It is right that we recognise their contribution by not only smoothing the pathway to residency and citizenship, but also by lifting the financial cost of doing so after 12 years of service."
If successful, the policy changes would come into effect from the start of the 2021/22 financial year.
Non-UK personnel would be able to apply for indefinite leave to remain if they have served the 12-year "initial engagement period" – the length of time all service personnel sign up to serve.
Both the Defence Secretary and Home Secretary visited personnel who could be affected by the consultation, with the MOD sharing a video of the two Cabinet members.
Watch as @BWallaceMP and @pritipatel visit non-UK service personnel who could be offered indefinite leave to remain in the UK for free under a new public consultation launched today 👇— Ministry of Defence 🇬🇧 (@DefenceHQ) May 26, 2021
Find out more here: https://t.co/D14jB4oVcWpic.twitter.com/VUtEN9AHnj
Ms Patel said: "I am immensely proud that brave servicemen and women from around the world want to continue to call the UK their home after their service.
"It is only right that those who continue to do extraordinary work on behalf of our country are recognised and rewarded, and I am determined to support them settle in our wonderful communities right across the UK."
More than 10,000 non-UK citizens are currently serving in the military from countries around the world including Australia, Canada, Fiji, Ghana, India, Jamaica, Nepal, New Zealand, Nigeria, St Lucia and South Africa.
The public consultation is expected to run for six weeks up until 7 July.
Jo Baker, Public Affairs and Campaigns Manager at the Royal British Legion (RBL), said "sizable" fees can mount up when an entire forces family applies for visas.
"It can be quite a barrier. We've had cases coming to the legion where people have been really struggling financially – put the fees on their credit card and have real serious financial problems," she explained.
"The Royal British Legion believes that the fee should be waived at four years," Ms Baker continued, regarding the length of service required to "apply for indefinite leave to remain".
"If that's the threshold for qualifying to make the application, then why should you have to serve longer in order to be able to waive the fees?"
In the military charity's third year of campaigning on the issue, Ms Baker added: "The consultation also doesn't propose to extend this to families, and that for us is a really key issue."
In March, England rugby union player Joe Cokanasiga announced he was backing a campaign to scrap visa fees for Commonwealth members of the Armed Forces after his father, who served in the Royal Logistic Corps for 14 years, faced applying for a visa to stay in the UK and paying £2,389 in fees.
He said: "The situation with dad's visa issues has caused our family a great deal of distress.
"In a year when we've all been affected by the pandemic, the uncertainty around his residency has been really traumatic."
The Labour Party has claimed the proposals to waive visa fees will help only 10% of British Army leavers in 2020.
Shadow Armed Forces Minister Stephen Morgan said: "The Government’s long-overdue proposals are frankly insulting, and will continue to prevent non-UK personnel from living in the country they have fought for.
"Commonwealth veterans have already paid for their citizenship once with their service to our country. This government shouldn’t be making them pay twice."
The Liberal Democrats' defence spokesperson has tabled an amendment to the Armed Forces Bill, calling for visa fees to be waived for Commonwealth personnel.
"The [Government's] proposals do not go far enough," said Jamie Stone.
"What is currently on the table offers nothing for the family members of veterans.
"As things stand, they will still face fees of over £1,500 per person.
"The Government has an opportunity to enshrine this in law, by supporting my amendment to the Armed Forces Bill which would scrap fees for service leavers and their families immediately."
Cover image: File photo of a British soldier (Picture: MOD).