STRIPPING back allowances for "warlike" service in Afghanistan and the Middle East has been described as "perfectly reasonable" by Tony Abbott.

"The nature of service ... has changed," the Prime Minister told 2GB today.

"Until the end of last year a lot of our forces in Afghanistan were in the field."

Mr Abbott said he supported the decision, but it was made by "military brass" not him.

He praised the work of soldiers who take big risks and are prepared to go anywhere for their country.

But admitted "even in the very best of jobs and noblest of vocations there have got to be rules".

Most Australian troops serving a six-month tour of duty in the Middle East will be up to $19,000 worse off under a pay cut to be announced today.

The Abbott Government will save millions of dollars by dividing Operation Slipper into three separate missions covering Afghanistan (Slipper), maritime operations in the Arabian Gulf (Operation Manitou) and support operations in the Gulf States (Operation Accordion).

Only the Operation Slipper part will be designated "warlike" and troops serving in Afghanistan will keep their campaign allowance of $200-a-day tax free.

But only those venturing outside the wire to live rough will be eligible for the additional $60-a-day tax-free "field allowance".

It will cease once they return to base and eligibility will be assessed on a case-by-case basis.

Defence personnel living in air conditioned huts on fresh rations at Al Minhad air base near Dubai or in navy vessels in the Gulf do not get field allowance but they will see their tax-free campaign allowance slashed from $125 to $60-a-day.

About 1200 of the 1400 Australians due to be serving in the area of operations from March 1 will suffer the pay cut of $19,000 over six months saving the government about $20 million.

All salaries paid to anyone serving in the Middle East Area of Operations will remain tax free.

"A review of living and working conditions in the Middle East Area of Operations (MEAO) has identified that very few ADF members are currently serving in conditions that meet current policy requirements for the payment of the Field Allowance," a government spokesman said.

"This has been brought about by the substantial investment in facilities, amenities and support services."

Diggers serving on the front line and living rough have long complained that their comrades living easy with fresh food and hot showers were paid almost the same as them.

It is understood that the new arrangements bring Australian forces into line with US troops still serving in the region.

Australian soldiers remain under strict orders not to discuss pay and conditions with their American or British comrades because the Australian pay and conditions are so much better.

The National Security Committee of Cabinet (NSC) signed off on the changes in November.

It is understood that they were not opposed by Defence Chief General David Hurley who earns about $800,000-a-year or $15,300-a-week.

The new arrangements will also affect medal eligibility and only those serving outside the wire will remain eligible for the Australian Active Service Medal (AASM).

The remainder will receive the Australian Service Medal (ASM). Up to now everyone serving in the MEAO has been awarded the AASM.

There will also be a negative impact regarding eligibility for the health care gold card but that impact is not clear at this stage.

- additional reporting by Jennifer Rajca