Sydney's controversial cost-of-living allowance will be removed by the start of the 2017 season but the AFL will compensate the Swans with a new rent subsidy, which the league will pay directly to footballers earning less than the average players' wage.

However, Greater Western Sydney appears to have been successful in its push to retain an additional $1 million in its salary cap, which the AFL will continue to support in recognition of the unique challenges faced by the Giants as they battle to establish themselves. GWS players will also receive the rental subsidy from the start of 2017.

The cost-of-living allowance that affords the two Sydney-based clubs an extra 9.8 per cent worth of salary cap room will be phased out - in the Swans' case over 2015 and 2016 - with all existing contracts, including Lance Franklin's, to be honoured going forward.

Instead the AFL will directly allocate an estimated $15,000 to every player on the lower side of the wage spectrum. By 2017 the qualification ceiling for rent subsidy is expected to include all footballers earning below an annual $300,000.

While the Swans were disappointed at the dilution of their salary cap allowance they have now accepted as inevitable the gradual reduction of their extra total player payments money. Sydney has put all contract talks on hold until after the June 4 meeting of all 18 clubs.