Quote from Andrew Marshall on 07/09/2023, 15:43

1.0 Introduction

• When a member of the armed forces reaches their retirement age, they receive one of the most generous pensions available in the UK.
• This fairly reflects the unique sacrifice they have provided their country throughout their career.
  All members of the armed forces are automatically enrolled into the Armed Forces Pension Scheme (AFPS).
• It is also used as an umbrella term for a variety of pension schemes (outlined below).
• Unlike all other public schemes, members pay 0% in contributions each month.
• However, pension benefits are taken into account when your pay is assessed.
  The scheme is unfunded and paid from the public purse.

This article is not to be considered as legal or financial advice, and is written to provide an illustration of the current and legacy pension schemes in place.

1.1 Terms

• Defined Contribution (DC): These are occupational pension schemes where your own contributions and your employer’s contributions are both invested and the proceeds used to buy a pension and/or other benefits at retirement.
• Defined Benefit (DB): A pension scheme where the amount you are paid is based on how many years you have been a member of the employer’s scheme and the salary you have earned when you leave or retire. There are two types of defined benefit pension, final salary schemes and career average schemes. Final salary are based on how much you are paid at the point you leave the scheme or retire if you are still working for the employer. Career average are based on an average of your salary throughout your career.
• Normal retirement age: The normal retirement age for the member’s rank and type of commission or engagement.
• Pensionable service: Any period in which a member of the scheme is in employment and is receiving pensionable earnings or assumed pay.
• Accrued: The pension benefits or rights a member has built up at a particular date.
• Qualifying service: Is the service that a member gives that will count towards the minimum service needed for them to qualify to receive a pension.
• Reckonable service: Is every period of service where a scheme member received pensionable earning.
• Immediate pension: A pension paid immediately on leaving the Armed Forces after gaining enough qualifying service.
• Deferred pension: The benefits due to a member leaving a scheme after the minimum years of service and before the immediate pension point. Payable at the age of 60 for service before 06 April 2006 and age 65 for service after that date.
• Preserved pension: Has the same meaning as a deferred pension.
• Abatement(s): A pensioner member may be reemployed in the Armed Forces. The reemployed pensioner member may have their pension abated for the period of further employed service. This is unless the pensioner member was recalled under the Reserve Forces Act 1980/1996.
• Commutation: Pension commutation is an option for members to permanently give up some of their annual pension in exchange for a lump sum, which is normally tax-free.
• Inverse Commutation: Surrendering some or all of a lump sum to increase income is known as inverse commutation.
• Resettlement Commutation: Allows an eligible person to commute part of their pension to obtain an additional lump sum. Their pension is reduced as a result and then restored to full value when they reach age 55.
• Active member: A person who is in pensionable service, and unless otherwise state is a member of the Armed Forces.
• Deferred member: a person (other than an active, fixed protection or pensioner member) who has accrued rights under the Scheme; and (unless otherwise stated) was, on the person’s last day of pensionable service, a member of the regular Armed Forces.
• X Factor: A percentage included within the annual salary of Regular Service personnel (and Reserve personnel depending on commitment level), intended to reflect the differences between conditions of service experienced by members of the Armed Forces over a full career and conditions in civilian life, which cannot be taken directly into account in assessing pay comparability.

  • It is a pensionable addition to basic pay.
  • Current rates (as of April 2023):

    • 14.5% for Regulars, FTRS (FC), and mobilised Volunteer Reserves;
    • 11.5% for those adopting the restricted separation element of flexible service (Section 7.0).
    • 5.0% for part-time Volunteer Reserves and FTRS (LC); and
    • 0.0% for FTRS (HC) pre-career ray rates.

• Annual Indexation: The AFPS applies an annual indexation (effective 01 April each year) on the value of in-year (01 April to 31 March) Career Average Revalued Earnings (CARE) Pot inputs. This means simply that money being added to the pension value in any one full scheme-year is then increased on 01 April. Members who discharge partway through a scheme-year receive a partial indexation of their in-year CARE Pots inputs (FOI 2023/04453).

1.2 Types of Commitment

Benefits and allowances (including pensions) are related to the type of service commitment an individual is under:

• Regular Serving - Full Time.
• Part Time Regular Reduction 20%.
• Part Time Regular Reduction 40%.
• Full Time Regular Restricted Separation.
• Part Time Regular Reduction 20% and Restricted Separation.
• Part Time Regular Reduction 40% and Restricted Separation.
• Military Provost Guard Service.
• Full Time Reserve Service - Full Commitment (FTRS (FC)).
• Full Time Reserve Service - Limited Commitment (FTRS (LC)).
• Full Time Reserve Service - Home Commitment (FTRS (HC)).
• Part Time Reserve Additional Duties Commitment.
• Part Time Volunteer Reserve.
• Sponsored Reserve.
• Not Serving.

1.3 How is the Scheme Funded?

• The scheme is unfunded and paid from the public purse.
• There is no investment income for the APFS (FOI 2019/00481).
• The AFPS ‘in year’ cash is funded through a combination of employer contributions (Superannuation Contributions Adjusted for Past Experience) and a top up from the HM Treasury Consolidated Fund.
• A top is required as the AFPS is free to its members and therefore receives no employee contributions.
• As a result, the ‘in year’ income received from employer contributions does not cover the ‘in year’ pension expenditure.

1.4 Who is the Scheme Administrator?

Defence Business Services - Veterans UK (part of the Ministry of Defence (MOD)) is the scheme administrator for all Armed Forces pension schemes.

2.0 The Schemes

Once you become a veteran you may either be receiving a service pension, or waiting to receive it once you reach a certain age. How much that pension is, and when it is paid, depends on the pension scheme to which you belong. If you are not receiving any money you may also have an unclaimed pension.

• Armed Forces Pension Scheme (AFPS), for Regular Forces:

  • AFPS 2015 (or AFPS 15) (for both Regular and Reserve Forces) (current scheme)
  • APFS 2005 (or AFPS 05) (legacy scheme)
  • APFS 1975 (or AFPS 75) (legacy scheme)

• Reserve Forces Pension Scheme (RFPS), for Territorial Army/Army Reserve:
• RFPS 2005 (or RFPS 05) (legacy scheme)
• FTRSPS 97 (aka FTRS 97 or FTRSP 1997) (legacy scheme)
• Non-Regular Permanent Staff (NRPS) Pension Scheme (legacy scheme)
• Gurkha Pension Scheme (GPS) (legacy scheme)
• Royal Gibraltar Regiment Pension Scheme (RGRPS):

  • Royal Gibraltar Regiment Pension Scheme 1975 (RGRPS 75) (legacy scheme)
  • Royal Gibraltar Regiment Pension Scheme 2015 (RGRPS 15) (current scheme)

• War Pension Scheme (WPS) (legacy scheme)
• Armed Forces Compensation Scheme (AFCS) (current scheme)

Notes

• All of the above legacy schemes are now closed, meaning it is no longer possible to join or re-join these schemes.
• Please be aware that the pension rules that apply to you are those in force at the time of your discharge.

The table below highlights the main differences between the schemes.

Scheme	Who For?	Open/Closed	Minimum Service	Pension Details
AFPS 75	Regulars only	Entry closed on 05/04/2005	1. A minimum of two years’ service is needed in the scheme in order to be entitled to any pension. 2. Commissioned Officers can leave with immediate pension award entitlements after 16 years reckonable service (from age 21 or service start date, whichever is the later).	1. Non-commissioned personnel can leave with immediate pension award entitlements after 22 years reckonable service (from age 18 or service start date , whichever is the later).
AFPS 05	Regulars only	Entry closed on 31/03/2015	1. A minimum of two years’ service is needed in the scheme in order to be entitled to any pension. 2. The same rules apply to all Regular serving personnel.	1. No immediate pension payable to leavers under the age of 55, and those who leave before age 55 receive a preserved pension payable at age 65. 2. There is an Early Departure Payment (EDP) income stream and lump sum payable to leavers aged between 40 and 55 if they have completed 18 years’ service.
RFPS 05	Full Time Reservists only	Entry closed on 31/03/2015	1. Only one days’ service is needed to be entitled to this pension. 2. The same rules apply to all Full Time Reserve Service (FTRS) personnel. 3. Pensions are paid at age 60 for those who serve until age 60 or beyond. 4. No immediate pension is payable to leavers under the age of 60. 5. There are no EDP awards.	1. Personnel who leave before age 60, will receive a preserved pension payable at age 65. 2. All short periods of service are payable at the age of 60 if personnel leave full time Reserve service at that age.
AFPS 15	All Regulars and Reservists	Open from 01/04/2015	1. A minimum of two years’ service is needed in the scheme in order to be entitled to any pension. 2. The same rules apply for all Regular and Reserve personnel.	1. No immediate pension is payable to leavers under the age of 60, and those who leave before age 60 receive a deferred pension payable at their State Pension Age. 2. There is an EDP income stream and lump sum payable to Regular leavers only, aged between 40 and 60 if they have completed 20 years’ service.

2.1 Armed Forces Pension Scheme 2015 (AFPS 15)

• AFPS 15 was introduced under powers held by the Secretary of State through the Public Service Pension Act 2013.
• The scheme came into force on 01 April 2015, is open to all Regulars and Reservists, and is the current pension scheme.
• It is a Career Average Revalued Earnings (CARE) scheme, which is a type of DB pension scheme offered by employers.
• The detailed rules are set out in Statutory Instrument (SI) 2014/2336.
• Subsequent amendments are set out in SI 2015/466 and SI 2018/1111.
• SI 2014/2328 sets out the Early Departure Payment Scheme rules.
• JSP 905 guidance explains but does not supersede the contents of that SI.
• All new entrants on or after 01 April 2015 joined this scheme.

  • Service personnel who were members of AFPS 75, AFPS 05 or RFPS 05 and under a certain age (45 years old for Regulars and age 50 for Reservists) on 01 April 2012, were automatically transferred to AFPS 15 on 01 April 2015, and from that date AFPS 05 and RFPS 05 were closed to new members.
  • Personnel who were transferred into AFPS 15 retained accrued rights from their legacy pension scheme, which means that pension earned up to 31st March 2015 in their legacy scheme cannot be taken away.

• All personnel (including Reservists) who continue in service on or after 01 April 2022 do so as AFPS 15 members (regardless of age, rank, and whether you were previously offered Transitional (Full) Protection).

  • Under the AFPS 15 remedy (McCloud) (Section 2.2.1), on 01 April 2022 all serving Regular and Reserve personnel who were allowed to remain in their legacy scheme, due to the transitional protection arrangements, became members of AFPS 15 and all legacy schemes (AFPS 75, AFPS 05 and RFPS 05) closed.

• All paid service counts towards pension (from first day of paid service).
• The MOD adds an amount equal to 1/47th of an individual’s pensionable earning for that year to their pension pot, which is inflated by Average Weekly Earnings index.
• If an individual has at least 2 years qualifying service and they serve until age 60 they will be entitled to claim their pension immediately.

  • A deferred pension is paid if an individual leaves before age 60, from state pension age.
  • Claim at your state pension age, or age 55 at a reduced rate.
  • Early departure payment (EDP) is an additional benefit which is entirely separate to the pension - for Regular personnel who have served for 20 years or more and reach at least age 40.
  • The Resettlement Grant is paid to Personnel who leave after 12 or more years of service (not those who receive immediate pension or EDP) to help them adjust to civilian life.
  • Some Service Personnel when they leave the Regular Forces, join the Army Reserve. Those receiving an immediate pension or are in receipt of an EDP will be subject to rules (detailing Pension Abatement) which are explained in the AFPS Re-Employment Booklet (refer to Publications section below).
  • Under flexible service, the adoption of restricted separation will see the x-factor reduced from 14.5% to 11.5%

• Serving personnel aged 45 or over on 01 April 2012 remain in their ‘old scheme’ but anyone else has been transferred to AFPS 15.
• Minimum service to qualify for AFPS 15: two (2) years reckonable service, with no minimum age requirement.
• AFPS 15 does not provide an automatic pension lump sum but the member can surrender up to 25% of the value of the pension pot in order to generate one.

  • This is called commutation.

• Armed Forces Redundancy Scheme (AFRS) 2010:

  • The AFRS 2010 applies only for personnel who remain solely in AFPS 75.
  • If members have transferred to AFPS 15 then AFRS 2020 applies and provides a proportionate level of compensation depending on the time they have spent in each scheme up to the point of redundancy.

2.1.1 Remedy 2015 (McCloud Pension Remedy)

• In 2015 the government introduced reforms to public service pensions. Most public sector workers were moved into reformed career average pension schemes.
• In 2018, the Court of Appeal found that the rules put in place in 2015 to protect older workers by allowing them to remain in their original scheme were discriminatory on the basis of age.
• Personnel who were in service both on or before 31 March 2012 and on or after 01 April 2015 with any break in service of less than five (5) years will have the option to elect whether they wish to receive legacy benefits or equivalent AFPS 15 benefits for the remedy period (01 April 2015 to 31 March 2022).
• On 01 April 2022 all serving personnel became members of AFPS15, and all legacy schemes closed on 31 March 2022.
• The AFPS 15 Remedy (McCloud) for public sector pensions will be delivered in two stages:

  • The prospective remedy saw all serving personnel move onto AFPS 15 on 01 April 2022.
  • The retrospective remedy gives Service personnel an opportunity to choose, when they access their pension or Early Departure Payment (EDP), which pension benefits they wish to receive (legacy scheme, or the equivalent AFPS 15 benefits) for the remedy period.

• Due to the complexities of the remedy, HM Treasury and Public Sector schemes are still working through outstanding policy and amending scheme legislation.
• Public Sector Pension Schemes require to complete this work, to implement the remedy, by 01 October 2023.
• · The Forces Pension Society has further details.

2.2 Armed Forces Pension Scheme 2005 (AFPS 05)

• AFPS 05 was introduced under powers held by the Secretary of State through the Armed Forces (Pensions and Compensation) Act 2004.
• The scheme came into force on 06 April 2005 and was for Regulars only.
• It closed to new entrants on 31 March 2015.
• It was a final salary pension scheme; the pension based on how much you earn when you leave service.
• The detailed rules are set out in Statutory Instrument (SI) 2005/438.
• Subsequent amendments are set out in SI 2006/1438, SI 2006/717, SI 2007/2608. SI 2008/229. SI 2009/544, SI 2011/1364. SI 2011/3013, and SI 2013/2914..
• JSP 764 guidance explains but does not supersede the contents of that SI.
• The scheme administrator is Veterans UK.
• This scheme is for Regular members of the Armed Forces.
• All new entrants and re-joiners from 06 April 2005 joined this scheme, and from 06 April 2006 for serving personnel who elected to transfer from AFPS 75 as a result of the offer to transfer (Section 13.0).
• All paid service counts towards pension.
• Claim age 65 or age 55 at a reduced rate.
• Minimum service to qualify for AFPS 05: two (2) years reckonable service, with no minimum age requirement.
• AFPS 05 provides an automatic tax free pension lump sum of three times the pension.

  • It is open to the member to give up some or all of the tax free lump sum in order to improve their taxable pension.
  • This is called inverse commutation.

• It is payable on discharge with an ill-health pension, discharge at or after age 55 or age 65 if discharged before age 55.
• Inverse commutation may increase the member’s tax bill as it increases ‘earned income’.

2.3 Armed Forces Pension Scheme 1975 (AFPS 75)

• Pension scheme for Regular members of the Armed Forces introduced in 1975 and was closed to new entrants on 05 April 2005.
• Reckonable service is service after age 18 as an Other Rank (after age 21 as an Officer) in this scheme.
• It was a final salary pension scheme; the pension based on how much you earn when you leave service.
• Claim at age 60 for benefits earned up to and including 05 April 2006, and age 65, for earnings after that date.
• Minimum service to qualify for AFPS 75:

  • 01 April 1975 to 31 March 1978: at least five (5) years reckonable service* AND at least age 26 on discharge.
  • 01 April 1978 to 05 April 1983: five (5) years reckonable service.
  • 06 April 1983 to 05 April 1988: five (5) years paid service.
  • 06 April 1988 onwards: two (2) years reckonable service after age 18 as an Other Rank (after age 21 as an Officer).

• National Insurance Modifications will be applied to pensions earned before 01 April 1980.
• AFPS 75 provides an automatic tax free pension lump sum of three times the pension.
• Those leaving with an immediate pension having given 22 years reckonable service after age 18 as an Other Rank or 16 years reckonable service after age 21 as an Officer can choose to buy another lump sum and pay for it from their pre-tax pension between their retirement and age 55.

  • This is known as resettlement commutation and can be tax-efficient as it reduces ‘earned income’.
  • This is not available to those leaving with an invaliding pension.

• Armed Forces Redundancy Scheme (AFRS) 2010:

  • The AFRS 2010 applies only for personnel who remain solely in AFPS 75.
  • If members have transferred to AFPS 15 then AFRS 2020 applies and provides a proportionate level of compensation depending on the time they have spent in each scheme up to the point of redundancy.

Did you know personnel who retired before 1975, and who served less than 22 years, receive no pension whatsoever.

2.4 Reserve Forces Pension Scheme 2005 (RFPS 05)

• The RFPS 05 was introduced under the powers held by the Defence Council through the Reserve Forces Act 1996, via the Reserve Forces Pension Scheme 2005 Regulation.
• You may have joined RFPS 05 if you undertook:

  • A Full Time Reserve Service (FTRS) commitment;
  • An Additional Duties Commitment (ADC);
  • Full time mobilised service between 06 April 2005 and 31 March 2015; or
  • To accept an offer to transfer from FTRSPS 97.

• Personnel called out for service under section 32, 43, 52, 54 or 56 of the Reserve Forces Act 1996 (or corresponding section of the Reserve Forces Act 1980) from that date could choose to become members of the scheme.
• It closed to new entrants on 31 March 2015.

2.5 Full-Time Reserve Service Pension Scheme 1997 (FTRSPS 97)

• If you undertook a FTRS commitment or an ADC before 06 April 2005, you may have joined FTRSPS 97.
• It was introduced in 1997 and closed to new entrants from 06 April 2005.

2.6 Non-Regular Permanent Staff (NRPS) Pension Scheme

• If you undertook a Non-Regular Permanent Staff appointment (previously under Chapter 9 of TA Regulations 1978) you may have joined the NRPS pension scheme.
• However, because NRPS appointments are no longer made the scheme has closed to new members.

2.7 Gurkha Pension Scheme (GPS)

• All Gurkhas who served in the Brigade of Gurkhas from 01 January 1948 up to March 2007 were members of the GPS.

  • The last serving member of the scheme was discharged in 2014.

• Since the GPS was based on the Indian scheme it was well suited to the needs of Gurkhas who would retire back to Nepal.
• In 2007, with the implementation of British TACOS (terms and conditions of service) for the Brigade of Gurkhas, all Gurkhas now serve on normal British Army TACOS.
• The GPS was closed as a scheme in 2007, and all serving Gurkhas and those who retired after 01 July 1997 were given the option to transfer to the AFPS.
• The 01 July 1997 date is significant because that is when Gurkhas ceased to be a Far East based force and became based in the UK.
• Under the GPS Gurkhas qualified for an immediate pension after 15 years’ service, typically in their early 30s; whereas most British personnel on the AFPS did not serve for the 22 years necessary to qualify for an immediate pension, and instead have a preserved pension payable at the age of 60, or age 65 for service after 2006.
• This means, typically, Gurkhas will have been receiving pension payments for over 25 years before most British soldiers of the same rank and length of service qualify for any payments under the AFPS.
• Gurkha pensions, like basic pay, remain linked to that of the Indian Army and have special features to reflect the unique nature of Gurkha service.
• In particular, the immediate payment of pensions on discharge in Nepal at the 15 year point and, in the event of the death of a Gurkha pensioner, the ability to transfer the pension not just to the surviving spouse and children, but to parents and dependant siblings.
• This arrangement reflects local circumstances because, unlike the UK, Nepal does not have a sophisticated system of state benefits and support.
• You can find the Gurkha Pension Manual here.

2.8 Royal Gibraltar Regiment Pension Scheme (RGRPS)

• RGRPS 75 and RGRPS 15 (from 01 April 2022).
• What tax you pay on your RGRPS pension will depend on age and working status.
• Non-Working Pensioner:

  • If you are aged 60 or over, your pensionable income is taxed at 0%. This means that, effectively, your pension income does not generate a tax liability.
  • If you are aged below 60, your pension will be subject to income tax. You should ensure that you have an updated tax code so that the correct amount of tax is deducted from your pension.
  • If you were compulsory retired at age 55, having worked in essential services, eg Royal Gibraltar Police, Fire Services, Royal Gibraltar Regiment etc., your pension from this employment will be taxed at 0%.

• Working Pensioner:

  • Although pensionable income is taxed at 0%, any income derived from employment will continue to be taxed in accordance with your tax code.
  • Old Age/State pensions and Community Care payments are tax exempt.

• RGRPS 75 members had the option to transfer (OTT) to the AFPS 15 with accrued rights.

2.9 War Pension Scheme (WPS)

• The WPS compensates for any injury, illness or death which was caused by service from the start of World War I until 05 April 2005.

  • Also termed a War Disablement Pension.

• The are two main types of award, which depends on an individual’s level of disablement:

  • A gratuity: A lump sum payment for disablement less than 20%; or
  • A pension: an ongoing payment paid weekly or monthly for disablement more than 20%.

• If an individual’s condition is Noise-Induced Sensorineural Hearing Loss and their disablement is less than 20%, the WPS will not be able to pay them a pension or lump sum.
• The rules of the scheme and the value of the payments awarded are set by Parliament. The value of the payments increase each year in line with the consumer price index (CPI).
• The Armed Forces Compensation Scheme (AFCS; Section 2.10) provides compensation for any injury, illness or death which is caused by service on or after 06 April 2005.
• Additional and supplementary payments and allowances associated with WPS are discussed in Section 5.0 below.
• For war pensioners, and in certain cases veterans, there may be other help you may be entitled to.

  • For example, all veterans in England, Scotland, and Wales are entitled to priority access to the National Health Service (NHS) care (including hospital, primary or community care) for conditions associated with their time within HM Armed Forces (service-related).
  • There are currently no arrangements with Health Authorities in Northern Ireland. Their aim is that all patients should have access to treatment within a reasonable timescale.
  • Refer to Section 15.2 for further details.

• Medical discharge:

  • If you are medically discharged from the Armed Forces, your service documents may be referred to Veterans UK.
  • In certain circumstances, they will automatically consider whether you are entitled to an award under the scheme - you do not have to do anything.
  • They will consider any injury, illness or disease identified as the main reason for your medical discharge, and any associated conditions.

• Replaced by the Armed Forces Compensation Scheme (Section 2.10).

2.10 Armed Forces Compensation Scheme (AFCS)

• The AFCS was introduced on 06 April 2005, replacing two separate compensation arrangements under the Armed Forces Pension Scheme 1975 (Armed Forces Attributable Benefits) (Section 2.11) and the War Pensions Scheme (Section 2.9).
• The AFCS compensates for any injury, illness or death which was caused by service on or after 06 April 2005.
• There are 2 main types of AFCS awards:
• A tax free lump sum payment for pain and suffering; and
• A Guaranteed Income Payment (GIP) which is a tax free, index linked monthly payment.
• The rules of the scheme and the value of the payments awarded are set by Parliament and are calculated by reference to a tariff of injuries.
• It is entirely separate from any other personal accident cover, such as Personal Accident (PAX) or Life Insurance (LI).
• Any accident cover that you may already hold is not considered when determining an AFCS award.
• The AFCS is designed to provide compensation, irrespective of fault, across the full range of circumstances in which illness, injury or death may arise as a result of service.
• It does not seek to affect the right to make a civil claim if you think that the injury, illness or death was caused by the Department’s negligence.
• If you are no longer serving and your disablement was caused or made worse as a result of service in the armed forces before 06 April 2005, you can claim under the War Pension Scheme (Section 2.9).
• Eligibility:

  • The AFCS covers all regular service personnel, the Royal Gibraltar Regiment and members of the reserves for all 3 services (British Army, Royal Air Force, and the Naval Service (together the Royal Navy and Royal Marines)).
  • You can claim whether you are still serving or have left the Armed Forces.

• Free independent advice:

  • You do not need a paid representative such as a solicitor or claims management company to apply for compensation.
  • Free independent advice is available from the Veterans Welfare Service or other charitable organisations.

• Time limits for claims:

  • Claims for injury or illness must be made within seven (7) years of the earliest of the following dates:

    • The date of the incident leading to the injury or illness;
    • The date on which an injury or illness not caused by service was made worse by service;
    • In the case of illness, the date of first seeking medical advice for that illness; or
    • The date of discharge.

  • While there are time limits, above all you should submit a claim for compensation at a time which is best for you.
  • There are certain circumstances when a claim will be accepted outside the time limits above such as being prevented from claiming due to ill health or your illness occurs later.

• Medical discharge:

  • If you are medically discharged from the Armed Forces, your service documents may be referred to Veterans UK.
  • In certain circumstances, they will automatically consider whether you are entitled to an award under the scheme - you do not have to do anything.
  • They will only consider any injury, illness or disease identified as the main reason for your medical discharge.
  • If they have considered a claim for your principal condition(s), they will not review them again automatically. However, you may be able to apply to Veterans UK for a review of this award once your service has ended.

• Tariff Levels:

  • The AFCS is governed by The Armed Forces and Reserve Forces (Compensation Scheme) Order 2011, which outlines compensation amounts based on the type and severity of injury.
  • The compensation amounts are tariff based with 15 levels reflecting the seriousness of the injury or illness.
  • Tariff level one is associated with the most serious injuries and tariff level 15 is the least serious.
  • Each tariff level has a corresponding level of lump sum.

    • The compensation lump sums available range from £1,236 to £650,000.
    • A GIP (see below) is payable when an award has been made and the injury/illness is awarded at tariff levels 1 to 11.

  • Each type of injury has its own tariff table graded by the severity of the injury, which shows the tariff level you would receive.
  • To find out how much compensation you could be awarded, you must:

    • Find the correct table for your injury type;
    • Look for the descriptor that best fits with your injury;
    • Make a note of the tariff level for that type of injury; and
    • Check against the tariff levels table to see how much compensation you could be awarded.

  • It can be quite complicated to work out your award. For example, there are a lot of descriptors to read through and digest. There are also some other factors that affect the amount you will be awarded.
  • For instance, some types of injuries entitle you to a supplementary award on top of the lump sum payment. For example, if you have been left incontinent or infertile because of your injury, you could receive a supplementary award of £60,000 in addition to your lump sum payment.

• Guaranteed Income Payment (GIP):

  • GIP is another financial benefit of using the AFCS.
  • If your injury or illness has long lasting effects and impacts your earnings in terms of salary and pension, you are able to secure lifelong tax-free income.
  • The amount of GIP you are awarded depends on your future ability to work.
  • Survivor Guaranteed Income Payment (SGIP) is also available through the AFCS.
  • This is a regular income paid to dependents of military personnel who have died in service.

• Civil claim versus AFCS claim:

  • Civil military claims tend to attract higher awards of compensation, because unlike AFCS claims, civil claims find the MOD at fault and compensation amounts are not capped by a tariff.
  • However, the process usually takes longer than claiming through the AFCS and does not allow you to claim GIP or SGIP.
  • It is worth seeking legal advice regarding whether a civil claim may be a better option for you.
  • You can progress both a civil claim and an AFCS claim at the same time.
  • However, as you are not able to be compensated twice for the same injury or illness you would have to give credit in any civil claim for any compensation received from the AFCS, including any GIPs.

2.11 Armed Forces Attributable Benefits (AFAB) Scheme

• The attributable benefits payable under AFPS 75 were replaced by AFAB during 2008 to create a stand alone compensation scheme for injuries, illnesses, and deaths caused by service on or before 05 Arpil 2005.
• AFAB was introduced to continue to provide cover to service personnel if they were medically discharged from the Armed Forces (regardless of whether they were members of AFPS 75 or AFPS 05) and their surviving dependents.
• The Scheme provides ill health benefits to those discharged from the Armed Forces on medical grounds in respect of injury or illness caused by service on or before 05 April 2005, who have been awarded a benefit under the War Pensions Scheme (Section 2.9) and whose degree of disablement due to the disabling condition is 20% or more.
• Replaced by the AFCS (Section 2.10).

3.0 Annuities and Additional Pensions for Holders of Gallantry Awards

3.1 Victoria Cross and George Cross Holders

• The Victoria Cross is awarded to military personnel for gallantry in the presence of the enemy. It may be awarded posthumously and awarded to civilians.
• The George Cross is awarded to military personnel for those acts for which military honours would not normally be granted, such as acts of gallantry not in presence of the enemy. It may be awarded posthumously and awarded to civilians
• If a person receives both the Victoria Cross and the George Cross, they are entitled to an annuity for each.
• In 2014, the annual annuity for holders was £2,129. However, in the 2015 Summer Budget Summer the then Chancellor announced an uplift to £10,000 per year (MOD, 2021). This was funded by a grant of £3m London Interbank Offered Rate (LIBOR) funds to the Victoria Cross and George Cross Association for the purposes of support to widows, events and administrative costs. These LIBOR funds are anticipated to run out in 2027.
• In 1959, the annual annuity was £10, although the Government was proposing to increase it £100 (Hansard, 1959).

3.2 Additional Pension for Gallant Conduct

Prior to 07 September 1993, the following awards entitled the holder to an additional pension:

• The pensioner member (members whose pension is in payment) is a holder of the Victoria Cross, and when they received that decoration they were not an officer; or
• The pensioner member (members whose pension is in payment) was awarded any of the following awards:

  • The George Cross (other ranks only);
  • The Military Cross (other ranks only);
  • The Distinguished Flying Cross;
  • The Distinguished Conduct Medal;
  • The Conspicuous Gallantry Medal (Naval);
  • The Conspicuous Gallantry Medal (Flying);
  • The Distinguished Service Medal;
  • The Military Medal; or
  • The Distinguished Flying Medal.

Those awarded the above on or after 07 September 1993 are not entitled to an additional pension.

For those who do receive the additional pension it is paid annually (as a gratuity) at £9.10 (for 2014/2015), £9.12 in leap years (or £0.025 per day, although the Secretary of State can award a greater amount). The payment is increased annually inline with the consumer price index (CPI) rate of inflation.

Both the annuity and additional pension are exempt from income tax under section 638 ITEPA 2003.

4.0 Types of Pension and Allowances

Those not eligible for an immediate pension, maybe entitled to a resettlement grant (Section 7.0).

• Early Departure Payment (EDP).
• Immediate Pension (IM).
• Deferred Pension.
• War Pension.
• Ill-Heath Pension.

4.1 Early Departure Payment

The aim of the EDP Scheme was (in part) to provide:

• A retention incentive to draw personnel through to at least age 40 and 18 years’ relevant service; and
• Compensation to those to whom it is not possible to offer a career to the normal retirement age of 55.

These payments were available to AFPS 05 members and those who had opted out of AFPS 05 or the AFPS 75.

• The AFPS 05 EDP scheme provides an automatic tax-free lump sum normally worth three times the pension.

  • To qualify, individuals must have given at least 18 years’ service and must be at least age 40.
  • There are no options in respect of this lump sum.

• The AFPS 15 EDP scheme provides an automatic tax-free lump sum of 2.25 times pension.

  • To qualify, individuals must have given at least 20 years’ service and must be at least age 40.
  • The whole EDP lump sum - all or nothing - can be surrendered to improve EDP income which may increase tax liability by increasing ‘earned income’.

4.2 Immediate Pension

• Members of the scheme that leave service having reached the immediate pension point are entitled to an immediate pension.
• This may consist of an annual taxable pension and a pension lump sum (usually tax-free).
• Immediate pensions, associated lump sums, and ill-health pensions are paid automatically.

4.3 Preserved Pension

• Also known as a deferred pension.
• Scheme members who leave paid service before reaching their immediate pension point may claim payment of their deferred pension rights on reaching their pension benefit age.
• Scheme members of more than one scheme (e.g. AFPS 75 and AFPS 05) may have more than one pension benefit age.
• For example, those who left the Armed Forces without reaching the immediate pension point are eligible to receive a deferred pension at age 60 in relation to service up to and including 05 April 2006 and age 65 for service thereafter.
• Deferred pension entitlements and any associated lump sums are not paid to a person unless they make a declaration in writing to the Pension Scheme Administrator stating their entitlement to receive them and the date on which they became so entitled.

  • The dates the pension due is notified to them in the award letter on discharge and will be at age 60/65.
  • However, if a child is entitled to receive benefits, the declaration may be made by the person who is eligible to receive payment of these benefits on the behalf of the child.

• Deferred pensions are not automatically paid, you must claim the pension using AFPS Form 8 (on the Veterans UK website).

4.3 Family Pensions

• Spouses, civil partners and dependants may be entitled to benefits from the pension scheme of a deceased service person.

  • The death need not be related to service.

• All three schemes (AFPS 75, 05, and 15) offer spouse and civil partner pensions to those who meet the criteria.
• The rules may be more complicated if marriages or civil partnerships took place after leaving service.
• Only AFPS 05 and AFPS 15 provide pensions to unmarried partners.
• To qualify for an AFPS 75 children's pension, the child must be born of a marriage which took place before leaving the Armed Forces.
• For more recent schemes, this marriage requirement does not exist, but there are age, education and infirmity stipulations for all schemes.

4.3.1 Family Pensions (Adult Dependents)

The AFCS 05 compensates surviving adult dependants (spouses, civil partners, partners lived with as spouse or civil partner) for death caused by service in the armed forces on or after 06 April 2005. Specified pensions and allowances in respect of death due to service, payable to dependants, are exempt from income tax. These may be available to dependants of persons who died on or after 06 April 2005 if it is due to illness or injury that occurred in service before that date. To be exempt from tax, the pension must meet one of the following criteria:

• It is payable in respect of death due to service in the armed forces, wartime service in the merchant navy or war injuries, and paid by or on behalf of the MOD under a specific Regulation, Scheme or Order.
• It is payable by the MOD in respect of death due to peacetime service in the armed forces of the Crown before 03 September 1939 and subject to similar conditions and rates as a pension above.
• It is payable under the law of a country other than the UK and is substantially similar in character to either of the above pensions.

The amount of pension or allowance payable under any one of these provisions may be withheld because of another pension or allowance. Where that happens an amount of the other pension or allowance equal to the withheld pension is exempt from tax instead. The specific Regulations, Schemes and Orders referenced above are:

• Defence (Local Defence Volunteers) Regulations 1940
• War Pensions (Coastguards) Scheme 1944
• War Pensions (Naval Auxiliary Personnel) Scheme 1964
• Pensions (Polish Forces) Scheme 1964
• War Pensions (Mercantile Marine) Scheme 1964
• Order by Her Majesty concerning pensions and other grants in respect of disability or death due to service in the Home Guard
• Order by Her Majesty concerning pensions and other grants in respect of disability or death due to service in the Home Guard after 27 April 1952
• Order by Her Majesty concerning pensions and other grants in respect of disability or death due to service in the Ulster Defence Regiment
• Personal Injuries (Civilians) Scheme 1983
• Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983.

You read more about Dependents benefits in this Forces Pension Society article.

4.3.2 Family Pensions (Child Dependents)

• A pension will generally be paid to a spouse, civil partner, or ‘eligible partner’.
• An ‘eligible partner’ is someone who is cohabiting with the member (both must be single) and can demonstrate financial dependence or interdependence (evidence includes a joint bank account, joint ownership of property, and/or evidence of shared billing).
• With the AFPS 05 and 15 an individual can nominate another to receive benefits after their death, which can include children.
• Read the Forces Pension Society article above to gain further information.

4.4 Divorce

• During divorce, all pensions will be taken into account, regardless of whether they were accumulated pre-marriage or post-separation.
• Generally, pension assets should be shared equally, though there are legal arguments that a spouse or civil partner can make to depart from that starting point.
• For example, if a case relates to a short marriage and one spouse (or civil partner) made considerable pre-marital contributions to an armed forces pension, they may seek to ring fence those contributions.
• Each case is fact-specific, so it is important to take legal advice on your unique circumstances.
• There are different ways to deal with pension sharing on divorce, but a common method is where a percentage of one spouse’s (or civil partner’s) pension fund will be transferred out of their existing pension scheme and into a pension in the other spouse’s (or civil partner’s) name.

  • Generally known as a Pension Sharing Order.
  • To start this process, the Cash Equivalent Transfer Value (CETV) of your pension must be obtained.
  • This is stated on your annual pension statement.
  • The CETV can be misleading in terms of the annual income that the pension will produce in retirement - this is often the case with defined benefit schemes.
  • Therefore, to achieve equality of income on retirement, it is not as simple as adding up the parties’ respective pension CETVs and dividing the total figure in half.
  • It is therefore common to instruct a pension on divorce expert - often a pension actuary - to produce a pension report and advise on pension sharing options to achieve a particular objective.

• The treatment of pension assets in divorce cases is a complex issue, and you are strongly advised to seek appropriate legal/financial advice.
• The Pensions On Divorce or the Dissolution of a Civil Partnership document provides useful information on the topic.

4.5 Ill-Health Benefits

Under AFPS 15, ill-health benefits are available for those whose career is cut short by illness or injury provided they have completed at least 2 years’ qualifying service.

If you are unable to work full time due to permanent physical or mental ill-health, you can apply to receive your pension early.

Lump sums paid to individuals who leave the armed forces due to ill-health or another condition which has not been caused mainly by their service may be tax-free. A lump sum paid from an early departure payments scheme is exempt from income tax providing the scheme has been established by either the (refer to Section 640A ITEPA 2003):

• Armed Forces Early Departure Payments Scheme Order 2005; or
• Armed Forces Early Departure Payments Scheme Regulations 2014.

ITEPA 2003 refers to the Income Tax (Earnings and Pensions) Act 2003.

4.5.1 Combined Service and Disability Pensions

• Where a member of the armed forces is invalided out in circumstances which qualify them for both a disability pension (caused by service) and a service pension, the combined pension should be regarded as exempt from income tax under Section 641 ITEPA 2003.
• Where a member of the armed forces retires, not because of a disability but because, for example, their period of service has ended, and after retirement establishes a claim in respect of a disability caused by service, any additional disability pension awarded will be exempt from income tax under Section 641 ITEPA 2003.
• However, the service pension will remain taxable.

5.0 Associated Payments and Allowances

As part of your pension, you may be entitled to a minimum payment or additional/supplementary payments, such as:

• Payments You Must Claim:

  • Industrial Injuries Disablement Benefit (IIDB) Constant Attendance Allowance (CAA)
  • Disability Living Allowance (DLA) or Personal Independence Payment (PIP)
  • Armed Forces Independence Payment (AFIP)
  • War Pensioners Mobility Supplement (WPMS)
  • War Pension Scheme: Constant Attendance Allowance (CAA)
  • War Pension Scheme: Unemployability Supplement (UnSupp)
  • War Pension Scheme: War Widows/Widowers Pension (WWP)
  • War Pension Scheme: WWP Supplementary Allowances
  • War Pension Scheme: Allowance for Lowered Standard of Occupation (ALSO)
  • War Pension Scheme: Treatment Allowance
  • War Pension Scheme: Part-Time Treatment Allowance
  • War Pension Scheme: Clothing Allowance

• Refer to Section 2.9 for an overview of the War Pension Scheme (WPS).
• It is also important to note that some of the above allowances (e.g. ALSO, clothing allowance, CAA, UnSupp, and WPMS) overlap with social security benefits.

  • Where this happens, you will not be able to receive both payments.

• Allowances Paid Automatically to Eligible Veterans (Section 5.12):

  • Exceptionally Severe Disablement Allowance (ESDA)
  • Severe Disablement Occupational Allowance (SODA)
  • Invalidity Allowance
  • Age Allowance
  • Comforts Allowance

• An outline of the rates for the various additional/supplementary payments for 2022-2023 can be found here.

5.1 Guaranteed Minimum Payment

• A guaranteed minimum payment (GMP) is the minimum pension which an occupational scheme such as the AFPS must provide as one of the conditions of contracting out.
• The AFPS is contracted out of the Second State pension, previously known as State Earnings Related Pension Scheme (SERPS).
• If you, or your deceased spouse, were employed in the Services and a member of AFPS 75 between 06 April 1978 and 05 April 1997 you will have earned a GMP.
• GMP is not a separate benefit paid in addition to your AFPS pension but the pension the MOD pay you must equal or exceed the GMP.
• HM Revenue and Customs work out the level of your GMP.
• Your GMP comes into force normally when you ask for your State pension to be paid to you.
• There are circumstances when the GMP comes into force at a later date but the effect on your AFPS pension is the same.

5.2 Armed Forces Independence Payment

• The Armed Forces Independence Payment (AFIP) is an additional allowance which provides financial support for service personnel and veterans who have an AFCS GIP which is in Band A-C.
• AFIP is paid at the same rate as the combined enhanced daily living and mobility components of PIP.
• You could be eligible for AFIP if:

  • You were injured on or after 06 April 2005, and
  • You are given an AFCS GIP which is in Band A-C.
  • If you are eligible, you will get the payment for as long as you are entitled to this level of GIP.

• You will not be reassessed in the future.
• You cannot get AFIP at the same time as the following benefits:

  • DLA or PIP
  • WPMS
  • CAA
  • IIDB CAA

• Veterans UK will automatically issue a claim form to those who have an AFCS GIP which is in Band A-C.

5.3 War Pensioners Mobility Supplement

• War Pensioners’ Mobility Supplement (WPMS) is paid with War Disablement Pension (Section 2.10) to help with extra mobility costs due to service caused disability. Anyone who gets WPMS can use their payment to cover the cost of a vehicle through the Motability Scheme.
• If you get WPMS, there are other kinds of help you may be entitled to, for example:

  • You do not have to pay road tax
  • You may be entitled to a Disabled Persons Railcard
  • You may be entitled to a blue badge for car parking

• To be eligible for WPMS:

  • A war pension must be in payment for the amputation of one or both legs (through or above the ankle), or
  • Your war pension must be 40% or higher, and
  • The conditions that your war pension is for are the main reason you are unable to walk, or why you find walking difficult, or
  • The conditions that your war pension is for are the main reason why trying to walk could put you in danger or seriously damage your health, or
  • You cannot walk outside without someone’s help and your war pension is for loss of vision assessed at 90% or more and hearing loss at 80% or more.

• You cannot get WPMS if you receive any of these payments:

  • DLA higher rate mobility component
  • PIP enhanced rate mobility component
  • AFIP

• To apply for WPMS, you must complete a claim form.

5.4 War Pension Scheme Constant Attendance Allowance

• Constant Attendance Allowance (CAA) is an extra allowance which has four different levels which link to the amount of care needed for the condition a war pension is being paid for.
• You do not need to be paying the person who is looking after you to get this allowance.
• If you are awarded CAA, you may be entitled to other additional allowances.
• Eligibility:

  • You may be able to get this allowance if your war pension is 80% or higher and you need regular care because of the conditions you receive a war pension for.
  • Care could mean assistance from another person with dressing, washing, shaving, eating or using the toilet and care could also include needing someone to supervise and prompt you to complete these activities.
  • However, care does not include shopping, preparing meals, cooking, cleaning the house or similar activities.

• If you are admitted to hospital and receive free in-patient treatment for more than four weeks, payment of CAA will be withheld from the 28th full day of treatment until the date of discharge.

  • If you are discharged and re-admitted to hospital within 28 days, the days of admission will counted as continuous.
  • If you permanently go into a local authority funded care home, your payment of CAA will be suspended from the day after the 28th day of residence in the care home.

• If you get any of these payments, they will be adjusted against CAA:

  • DLA higher rate care component
  • PIP enhanced rate daily living component
  • AFIP

• To apply for CAA, you must complete a claim form.

5.5 War Pension Scheme: Unemployability Supplement (UnSupp)

• Unemployability Supplement (UnSupp) is an extra allowance which is payable to eligible war pensioners whose condition prevents or severely restricts them from working.
• If you receive UnSupp, you may be eligible for other allowances.
• You may also be entitled to extra allowances for your family and dependants.
• To be eligible:

  • You must be getting a war pension at the 60% rate or higher, and
  • You must be under the age of 65 when you make your claim, and
  • The conditions you get a war pension for must prevent you from working.

• If the condition(s) you get a war pension for is not the only reason you cannot work, it must be bad enough by itself to prevent you from working, or a big part of the reason you cannot work.
• You may be able to do therapeutic work and retain your UnSupp provided that the work:

  • Is considered therapeutic;
  • Is not detrimental to your health;
  • Is not more than 16 hours per week; and
  • Does not exceed a set earnings limit.

• UnSupp cannot be paid when any of the following are in payment:

  • War Pension Scheme Allowance for Lowered Standard of Occupation (ALSO) (Section 5.8)
  • Employment and Support Allowance (ESA)
  • State Retirement Pension

• To apply for UnSupp, you must complete a claim form.

5.6 War Pension Scheme: War Widows/Widowers Pension

• War widows pension (WWP) or war widowers pension (WWP) are paid at different rates depending on your age and circumstances.
• The payments are tax free and can be made to an eligible bereaved wife, husband or civil partner.
• You may be eligible for war widows or widowers pension if your wife, husband or civil partner died as a result of their service in the Armed Forces before 06 April 2005, although you may be eligible if they died of an illness or injury later.
• One of the following must apply, your wife, husband or civil partner:

  • Died as result of their service in the Armed Forces before 06 April 2005;
  • Was a civil defence volunteer or a civilian and their death was a result of the 1939 to 1945 war;
  • Was a merchant seaman, a member of the naval auxiliary services, or a coastguard and their death was a result of an injury or disease they got during a war or because they were a prisoner of war;

    • Died as a result of their service as a member of the Polish Forces under British command during the 1939 to 1945 war, or in the Polish Resettlement Forces;
    • Was getting a War Pensions Constant Attendance Allowance at the time of their death, or would have been had they not been in hospital; or
    • Was getting a war disablement pension (Section 2.10) at the 80% rate or higher and was getting Unemployability Supplement (Section 5.5).

• You may be entitled to a pension if you lived with a partner as husband and wife or as civil partners.
• If your partner was injured, developed an illness or died as a result of service on or after 06 April 2005, you may be eligible to claim through the AFCS.
• If you are awarded a WWP, you may be be eligible to claim for other allowances.
• You may be eligible to claim for assistance towards funeral expenses.
• To apply for WWP, you must complete a claim form.
• A change in circumstances:

  • You will continue to get your pension if you marry, form a civil partnership or start living with a partner on or after 01 April 2015. If this happened before 01 April 2015, you will still get a pension if both:

    • Your late spouse or civil partner left service before 31 March 1973; and
    • Your new relationship started on or after 06 April 2005.

  • If your pension stopped, you may be able claim your pension again if:

    • You become widowed again;
    • You divorce or separate;
    • Your civil partner dies;
    • Your civil partnership ends; and/or
    • You stop living with the person as their partner.

  • If your pension has been stopped and you would like to claim your pension again, contact Veterans UK.

5.7 War Pension Scheme: WWP Supplementary Allowances

• If you are receiving WWP (Section 5.6), you may be entitled to extra allowances.
• If the veteran was discharged from service before 31 March 1973, you may be entitled to a Supplementary Pension.

  • The pension is automatically paid to compensate eligible survivors of individuals who served before this time as they do not benefit from the improvements made from that date to occupational survivors’ pensions under the AFPS.

• Age Allowance is paid to eligible war widows or widowers automatically at age 65.

  • This allowance increases at age 70 and 80.

• You may be paid temporary allowances if your husband or wife had CAA (Section 5.4), UnSupp (Section 5.5) or had underlying entitlement to UnSupp with ALSO (Section 5.8).

  • You can only have this allowance for 26 weeks after your husband or wife dies.
  • You will be paid this allowance based on the rate of your your husband’s or wife’s pension.
  • If your husband or wife was getting some allowances, they will be used to work out how much you are paid.
  • The amount of money you are paid is normally more than a WWP (Section 5.6).

• Children may be entitled to child allowance if their parent’s death was a result of his or her service.

  • Child allowance may be paid with WWP (Section 5.6) or to a parent or guardian.
  • This allowance usually stops at age 16.
  • However it may be paid for them over this age if the child is still going to school, college, university or is in an apprenticeship.
  • If you want to apply for the allowance after the child is 16, contact Veterans UK for a claim form.

• You can be paid rent allowance with a WWP if you are maintaining a home for a child.

  • If you are eligible for child allowance, rent allowance will be paid for as long as you are eligible and will continue to be paid for 26 weeks after the child allowance stops.

5.8 War Pension Scheme: Allowance for Lowered Standard of Occupation

• The Allowance for Lowered Standard of Occupation (ALSO), paid under the War Pension Scheme (Section 2.9), is an extra allowance payable to eligible War Pensioners whose service caused disability permanently prevents them from working in their regular occupation or other work of a similar standard.
• To be eligible:

  • You must have a War Pension at the 40% rate or higher but less than 100%;
  • Your service caused disablement must make you permanently unable to do your regular occupation or work of a similar standard (this can include you trade or profession whilst in service); and
  • You must be under 65 years of age when you make a claim.

• ALSO cannot be paid if you get any of the following:

  • Unemployability Supplement (Section 5.5)
  • Treatment Allowance (Section 5.9)
  • Limited Capability for Work or Limited Capability for Work Related Activity components of Employment Support Allowance (ESA) or Universal Credit.

• If you change your job, you need to inform Veterans UK because this can change the amount they can pay you.
• To apply for ALSO, you must complete a claim form.

5.9 War Pension Scheme: Treatment Allowance

• Treatment allowance is a temporary allowance which can be paid in place of basic War Pension (Section 2.9) and Allowance for Lower Standard of Occupation (ALSO; Section 5.8) payable at the rate of a 100% war pension.
• You may be entitled to this allowance if you are employed and suffer a loss of earnings because you are receiving or recovering from necessary treatment for the condition(s) you get a war pension for.
• For the allowance to be considered it must be treatment for the condition(s) you get a war pension for and not the condition itself that prevents work for eight (8) days or more.
• If you are having medical, surgical or rehabilitative treatment in a hospital or at home, you may be entitled to Treatment Allowance if the treatment:

  • Is for the condition(s) you get a war pension for;
  • Stops you working for more than eight (8) days; and
  • Causes you to lose earnings.

• If your war pension and ALSO add up to the 100% rate, treatment allowance will not financially benefit you.
• If you are not eligible for treatment allowance because your treatment only causes occasional interruptions to your employment but you do suffer a loss of earnings, you may be entitled to part-time treatment allowance (Section 5.10).
• Ideally you should contact Veterans UK before treatment begins so they can tell you what you might be entitled to and when to claim. However, Veterans UK realise an appointment may be offered at short notice and this may not be possible. If this is the case, contact Veterans UK or forward your treatment allowance claim form as soon as possible after the event.
• If you are a war pensioner and receiving treatment for your accepted condition or disablement, you may also be entitled to other help and support, including travelling expenses.
• To apply for treatment allowance, you must complete a claim form.

5.10 War Pension Scheme: Part-Time Treatment Allowance

• Part time treatment allowance is an allowance paid in addition to basic war pension.
• You may be entitled to this allowance if you suffer a loss of earnings because you are having necessary treatment for the condition(s) you get a war pension for.
• For the allowance to be considered it must be treatment for the condition(s) you get a war pension for and not the condition itself that prevents work for seven (7) days or less.
• If you are having medical, surgical or rehabilitative treatment in a hospital or at home, you may be entitled to Part Time Treatment Allowance if the treatment:

  • Is for the condition(s) you get a War Pension for;
  • Stops you working for seven (7) days or less; and
  • Causes you to lose earnings.

• If your treatment causes you to stop working for eight (8) days or more and you do suffer a loss of earnings, you may be entitled to treatment allowance (Section 5.9).
• Ideally you should contact Veterans UK before treatment begins so they can tell you what you might be entitled to and when to claim. However, Veterans UK realise an appointment may be offered at short notice and this may not be possible. If this is the case, contact Veterans UK or forward your treatment allowance claim form as soon as possible after the event.
• To apply for part-time treatment allowance, you must complete a claim form.

5.11 Clothing Allowance

• Clothing allowance is paid as an annual amount, recognising that some disablements cause exceptional wear and tear of clothing.
• You may be entitled to this allowance if you:

  • Are an amputee (regularly wear an artificial limb); or
  • Have exceptional wear and tear of clothing because of the condition(s) you get a war pension for.

• You must get a war disablement pension (Section 2.10) at the 20% rate or higher to be eligible to apply for this allowance.
• To apply for clothing allowance, you must complete a claim form.

5.12 Allowances Paid Automatically to Eligible Veterans

• The following allowances are available and will be paid in certain circumstances.
• If you are entitled to any of these allowances, they will be paid automatically; you do not need to submit a claim form.

  • Exceptionally Severe Disablement Allowance (ESDA): You may be entitled to this allowance if you are in receipt of CAA (Section 5.4) at one of the two highest rates. It is payable if you are in hospital.
  • Severe Disablement Occupational Allowance (SDOA): You may be entitled to this allowance if you are in receipt of CAA at one of the two highest rates and you are still able to work, provided that you are not in receipt of UnSupp (Section 5.5) or Treatment Allowance (Section 5.9).
  • Invalidity Allowance: You may be entitled to this allowance if you are in receipt of UnSupp and you have not reached the age of 60.
  • Age allowance: You may be entitled to this allowance if you are in receipt of a war disablement pension of 40% or more and you are aged 65 or over.
  • Comforts Allowance: You may be entitled to one of the rates of this allowance if you are in receipt of CAA or UnSupp.

• If you were in receipt of UnSupp and attained State Pension age between 08 April 2002 and 10 April 2006, there were some rule changes which may affect the rate of Basic State Pension you receive.

  • If this applies to you, and you think you may not be receiving the correct amount of State Pension, you should contact the Pensions Service claim line on 0800 731 7898 lines are open from 8:00 am to 6:00 pm Monday to Friday, except public holidays.

6.0 Taxation, Re-Employment, Transfers, and Overseas

6.1 Taxation

• Generally, a pension will be subject to income tax, although Sections 4.5 and 4.5.1 outline exceptions to this.
• The amount of income tax paid will depend on (for example):

  • The country of residence (e.g. England vs Scotland, or even overseas); and
  • The total income from all sources (e.g. your military pension and an occupational pension).

• Please also note that a new pension tax site has been launched through the MOD’s intranet site that provides further guidance and other useful information.

6.2 Re-Employment

• It is the policy of successive Governments that if you re-join the Armed Forces and have a pension in payment, it may be reduced to ensure that your pension and new salary combined does not exceed your previous salary.
• This is known as abatement.
• When you re-join either regular or reserve service with a legacy pension in payment, it could be subject to abatement.
• This is if the value of your new service salary and pension exceeds the value of your previous salary (adjusted for inflation).
• If you have an AFPS 15 pension, it is not abated when you re-join.
• However, if you are receiving a pension from a legacy pension scheme and an AFPS 15 pension, the AFPS 15 pension value will be included in the legacy scheme abatement calculation.
• Although AFPS 15 is not subject to abatement upon re-joining, the gap in service from leaving with an immediate pension must be greater than 28 days.
• Should you re-join service within 28 days of leaving with an AFPS 15 immediate pension, your AFPS 15 pension would cease, and you would be required to re-pay all of the pension and any lump sum received.
• Abatement applies to the following schemes:

  • AFPS 75
  • AFPS 05
  • RFPS 05
  • FTRSPS 97

• Abatement does not apply to the following schemes:

  • NRPS
  • AFPS 15

• There is also an effect on EDP depending on whether you were part of EDP 05 or EDP 15, your age, and type of service (Regular vs Reserve).

6.3 Transfers In and Out of the Schemes

6.3.1 Transfers Out

• From 06 April 2015 the Pension Schemes Act 2015 prohibited transfers from unfunded public service defined benefit schemes to schemes from which it may be possible to acquire a right or entitlement to flexible benefits such as funded defined contribution Pension Schemes.

  • Defined contribution: A pension pot based on how much is paid in.
  • Defined benefit: Usually a workplace pension based on your salary and how long you have worked for your employer.

• AFPS 75 is an unfunded public sector scheme and therefore transfers out are now only possible to schemes which have been approved by HM Treasury.
• There are different rules depending on whether you are requesting a transfer value payment to be made as a:

  • Public sector transfer (under Section 95 of the Pensions Scheme Act 1993); or
  • Non-public sector transfer (under Section 94 of the Pensions Scheme Act 1993).

6.3.2 Transfers In

• An active member (of AFPS 75) may apply for a transfer value payment in relation to some or all of the rights which they have accrued in another scheme or arrangement, to be accepted by the scheme.
• Chapter 4 of Part 4 of the Pension Schemes Act 1993 sets out the schemes and arrangements from which a transfer value will be accepted.

6.4 Overseas Pension Payment Mandates

Ministry of Defence (MOD) overseas pension mandates to be used in conjunction with Pensions form 1.

7.0 Pensions and Flexible Service

• Flexible Service (FS) became law on 01 April 2019, giving serving personnel the ability to ask to work part time and/or to restrict their separation from their home base.
• The reduction in working hours (either 20% or 40%) will result in a corresponding reduction in pay.
• The adoption of restricted separation will see the X factor element of pay fall from 14.5% to 11.5%.

  • These are the rates for regular personnel up to and including the rank of lieutenant colonel (OF-4).
  • Higher ranks who have a tapered X factor will see a corresponding reduction in the X factor element of their pay for restricted separation.

• Personnel can combine part time working and restricted separation and their pay will reflect both reductions.
• For example:

  • Someone with a full time salary of £50,000 who opts for a 20% reduction in hours and to have restricted separation would see their pay fall to £38,951.97.
  • £50,000 x 0.80 x 111.5/114.5 = £38,951.97.

7.1 Which AFPS Benefits are not Affected by Flexible Service?

• Although flexible service (FS) results in a reduction in pay some AFPS entitlements remain unaffected.
• As a general rule those benefits that are triggered by time served will still be available even if the individual switches to FS for part of their service:

AFPS 75 immediate pension (IP) qualification date	1. This requires eligible personnel to serve for 22 years from date of entering into service or age 18 (if later). 2. For Officers the IP point is after 16 years qualifying service (from age 21). 3. These qualification dates are not affected by FS although the value of IP itself will be reduced to reflect the period of FS as explained below.
AFPS 05 Early Departure Payment (EDP) qualification date	1. To qualify for AFPS 05 EDP eligible personnel must serve for 18 reckonable years and be aged 40 or more. 2. The date on which both these criteria are met is known as the 18/40 point. 3. This is a fixed date in time and qualification is not affected by FS. 4. As with AFPS 75 IP qualification, the level of benefits earned will be reduced to reflect periods of FS.
AFPS15 EDP qualification date	1. Personnel must serve for 20 qualifying years and be aged 40, as with AFPS 05. 2. Again the timing of the 20/40 point is not affected by FS but the resulting EDP and pension benefits will be reduced to reflect FS.
Resettlement Grant (RG) qualification dates	1. AFPS 05 and, AFPS 15 require 12 years of service to earn an RG entitlement. 2. In AFPS 75 the requirement is 9 years (Officers) and 12 years (ORs). 3. FS does not affect either the timing of the qualification or the amount payable.
AFPS75 time in rank requirements	1. To have your AFPS 75 benefits calculated based upon your higher rank you need to have served at the higher rank for at least 2 years (up to and including OF-6) or 1 year (OF-7 and above). 2. These qualification periods are unaffected by time in FS.
If benefits are calculated by reference to Final Pensionable Salary	For example AFPS 05 pension benefits), then these will be calculated on ‘Full time Equivalent Earnings’ rather than the FS earnings actually paid. This ensures that benefits are not unfairly reduced by a decision to adopt FS at the end of the SP’s military career.

7.2 Which AFPS Benefits are Affected by Flexible Service?

The extent to which someone’s AFPS benefits are affected by FS will depend upon the mix of schemes that provides their benefits.

AFPS15 benefits only	1. AFPS 15 pension benefits are directly linked to the pensionable earnings in a scheme year, providing a pension of 1/47th of the monies earned between 1st April and 31st March the following year. 2. So the individual earning £47,000 pa will earn a pension of £1,000 pa for that year. 3. If they decide to reduce their hours by 20% this will reduce their pay and pension accordingly (£37,600 pay and £800 pension).4. As EDP is calculated as a percentage of the deferred pension FS automatically reduces EDP entitlement proportionately as well.
SP with AFPS 05 benefits only	1. This is the complicated one. AFPS 05 pensions are calculated as years of reckonable service x final pensionable salary/70. 2. As explained above, Final Pensionable Salary will be calculated on Full Time Equivalent Earnings rather than the actual FS pay, so in order to maintain proportionality reckonable service has to be reduced to reflect periods of FS. This reduces the service entitlement whilst on FS by the same proportion that 3. FS pay is reduced by comparison to Full time Equivalent Earnings. The ‘service reduction’ formula that captures this is: a. (A-B)/A b. Where A is the basic pay that would have been received if not serving under FS and c. B is the actual pay received for the period of FS. d. Thus: somebody serving for 1 year with 20% less hours (but no restricted separation) would earn 20% less than their full time counterpart. e. If they served for 23 years including this one year on FS then the AFPS 05 pension would be calculated as follows: f. Reckonable service x Final Pensionable Salary/70 where: g. Reckonable service = 22 + (1-0.20 = 0.8) years = 22.8 years. h. Final Pensionable Salary = Full time Equivalent salary
Calculation of EDP 05	1. As mentioned before, the 18/40 point is not affected by FS. 2. Neither is the figure used for Final Pensionable Salary. However as the EDP award is a percentage of the deferred pension the “service reduction formula ” used to determine the AFPS 05 pension will also feed through to an automatic and proportionate reduction in EDP 05.
Those with AFPS 75 benefits only	1. Those of OF-7 and above will have their AFPS 75 pension based upon the Final Pensionable Earnings (Full time Equivalent Earnings). 2. Those below the rank of OF-7 will have their pensions based upon the representative rate of pay for their rank. 3. There is no distinction for those serving on FS. As such, in order to maintain proportionality, the same “service reduction” formula is used to determine reckonable service for the purpose of calculating benefits. 4. Importantly, the service reduction formula will also apply when determining the addition of professional supplements for specialists such as Medical/Dental Officers, Professional Aviators, Nurses, and Clearance Divers. 5. Note that the service reduction formula which reduces reckonable service credit does mean that those on FS can still build up an entitlement, albeit at a slower rate, towards the maximum reckonable service entitlement (34 or 37 years).
Those with AFPS05/15 benefits	1. In order not to compromise the rule that previous accrual will not be impacted by the new FS options, the “service reduction” formula will not be applied to existing AFPS 05 benefits, so AFPS05 and EDP 05 benefits will not be impacted by FS. 2. However, AFPS 15 benefits (both pension and EDP) are automatically reduced to reflect periods of FS so no further adjustment is required.
Those with AFPS75/15 benefits	1. As with the AFPS 05/15 members, this cohort will have locked in their AFPS 75 service prior to the introduction of FS. 2. As such the service reduction formula does not apply. Instead, AFPS15 benefits will be automatically reduced to reflect any periods of FS.

Notes

• The situations described above refer to (relatively) ‘straightforward’ circumstances.
• However, for those on FS who are likely to be medically discharged or facing annual allowance or possible pension abatement issues because of FTRS are encouraged to seek qualified assistance so that their own individual circumstances can be explored.

8.0 Resettlement Grant

• Resettlement Grants assist those leaving the regular armed forces to resettle into civilian life after completing a substantial period of service.
• A resettlement grant is not a pension.
• It is a tax-free lump sum paid to regular service personnel, who, at the time they leave the services, are not eligible for EDP benefits, an immediate pension or ill health award (or any other immediate pension benefits) and they meet resettlement grant qualification criteria, which are:

  • AFPS 15 and AFPS 05: all personnel need to have 12 years’ relevant service (from date of entry);
  • AFPS 75: Officers to have at least 2 years’ commissioned service and have 9 relevant years of reckonable service from age 21; and
  • AFPS 75: Other ranks to have 12 relevant years of reckonable service from age 18.

• The value of the Resettlement Grant is (April 2023):

  • AFPS 05 and AFPS 15: £12,088
  • · AFPS 75 - please see the latest tri-service codes, published each year on gov.uk.

• The resettlement grant is increased each year at the same rate as armed forces pensionable pay.
• Only one (1) resettlement grant is awarded, for those who have service in more than one scheme.
• If personnel are re-employed (in the Armed Forces) after leaving they may have to re-pay some or all of the grant.
• A resettlement grant does not affect preserved pension rights.

9.0 Royal Hospital Chelsea

• Generally, when a pensioner is admitted to the Royal Hospital Chelsea their pension will cease.
• If they are later discharged, the pension will resume, having first been uprated in line with pension increases.
• However, if a RFPS 05 pensioner member is admitted to the Royal Hospital Chelsea their RFPS 05 pension will not cease.
• No benefit to which a person is entitled under the Scheme is assignable or chargeable with any person’s debts.
• This rule does not however affect any enactment or anything which may be done under or for the purpose of the Chelsea and Kilmainham Hospitals Act 1826.
• That is those individuals entering the hospitals will have their pensions suspended.

10.0 Armed Forces Pension Calculator

The Armed Forces Pension Calculator (AFPC) includes a projection of benefits from the Armed Forces Pension Schemes.

11.0 Governance Armed Forces Pension Board

The Pension Board is responsible for assisting the Secretary of State for Defence, as Scheme Manager, in ensuring compliance with the scheme regulations and other legislation relating to the governance and administration of the scheme and any statutory pension scheme that is connected with it.

12.0 Veterans UK

If you have been advised that you need to complete a form or view a detailed pension scheme guide, you can find these on the Veterans UK pensions forms page.

13.0 AFPS Consolidated Factors List

• The purpose of these tables is to set out in one place for convenience the actuarial factors provided by the Government Actuary’s Department (GAD) to the MOD from time to time in respect of the AFPS.
• Armed forces factor summary (XLSM, 838 KB).

14.0 Offer to Transfer

• When a new pension scheme is introduced active members of the ‘old scheme’ may be given the opportunity to move to the ‘new scheme’, known as an offer to transfer (OTT).
• When considering moving from one scheme to another, it is important to consider the pros an cons.

  • For example:
  • Schemes may have differing reckonable service and qualifying service criteria, such as AFPS 75 and AFPS 05.
  • Service prior to age 18 for other ranks and 21 for officers did not count under AFPS 75, but did under AFPS 05.

• It is important to consider the potential impact of these differences on pension benefits.

15.0 Forfeiture of Pension Benefits

A scheme member (or their dependents) may forfeit the whole or part of their benefits for a range of reasons, including but not limited to:

1. Conviction of one or more offences under the Official Secrets Act 1911 to 1989 for which they have been sentenced to a term of imprisonment of at least 10 years or two or more consecutive terms amounting in together to at least 10 years.
2. Conviction of treason.
3. Conviction for an offence in connection with the service which qualifies them to belong to the pension scheme, in respect of which a forfeiture certificate has been issued. Such offences include:

   • Assisting, aiding or communicating with the enemy in time of war;
   • Mutiny or incitement to mutiny in time of war or peace;
   • Failure to suppress a mutiny in time of war or peace;
   • Desertion in time of war or while on active service;
   • Sabotage in war or grave sabotage in time of peace; and/or
   • Grave breach of the Geneva Convention.

4. Has, after becoming a member of the scheme, incurred a monetary obligation to the crown as a result of a criminal, negligent or fraudulent act or omission by them which arises out of or is in connection with their service in the armed forces. They will be given a certificate showing any amount withheld and the effect of it being withheld on their benefits under the scheme.
5. If forfeiture is under one of the above (point 1 or 2), the whole of the pension may be forfeited. If it is under point 4, the amount forfeit will be the amount of the obligation which will be decided by a court or, in Scotland, an arbiter appointed by the Sheriff. This sum can only be deducted from benefits to which the member themself is entitled.
6. A dependant’s benefits may be forfeited if they are convicted of the murder or manslaughter of the member or any other offence which involves the unlawful killing of the member.
7. A person who has forfeited their pension will still receive the Guaranteed Minimum Pension (GMP), unless forfeiture is under one of the above (point 1 or 2) when the GMP may also be forfeit.

16.0 Miscellaneous

16.1 Directed Early Retirement Scheme

• The Directed Early Retirement (DER) Scheme enables the armed forces to pay compensation in specified circumstances when terminating a senior officer’s employment unexpectedly prior to the individual’s Normal Retirement Age (NRA).
• It applies to officers of 1-star rank and above (e.g. Brigadier or equivalent).
• If the relevant Service is able to demonstrate that there is no reasonable prospect of suitable employment becoming available for the officer within a reasonable timescale (due for example to a reduction in the number of posts available), then a Special Capital Payment (SCP) or Compensation Lump Sum (LCS) can be awarded.
• SCP/CLS is a tax free lump sum.
• Although the amount awarded will depend on the pension scheme the officer is a member of.

16.2 War Pensioners: Other Help You May Be Entitled To

• Help with NHS charges:

  • War pensioners living in the UK should be supplied with any aids, appliances or home nursing equipment certified to be necessary for the treatment or control of the condition(s) they get a war pension for by the NHS or social services.
  • War pensioners who would be expected to pay for prescriptions are issued with a prescription exemption certificate.
  • This means they do not have to pay for items on a prescription which are for the condition(s) they get a war pension for.
  • Veterans UK can only consider payment for necessary, medically approved items if you have to pay them yourself.

• Prescription Exemption Certificates:

  • If you are awarded a war pension and you are an English resident under the age of 60, Veterans UK can send you a certificate to exempt you from NHS prescription charges for any condition that you get a war pension for.
  • The certificate allows exemption from prescription charges providing the prescribed medication, aids, appliances or equipment are needed for the condition(s) you get a war pension for.
  • If you have paid prescription charges for the condition(s) you get a war pension for between the date of your claim and the date of your award of war pension Veterans UK can consider a refund.
  • Contact Veterans UK for an up to date prescription exemption certificate.
  • Once you reach the age of 60, any medicine prescribed by a doctor is free anywhere in the UK.
  • Prescription exemption certificates are not routinely issued to those still in service.
  • Prescription exemption certificates are also not routinely issued for residents in Scotland and Wales, due to the abolition of charges and pharmacists in Northern Ireland do not charge patients for prescriptions.

• Dental treatment:

  • A war pensioner who needs dental treatment because of the condition(s) they get a war pension for may be reimbursed the full cost of NHS treatment costs within the appropriate band (A,B or C).
  • Where NHS treatment is approved by Veterans UK but, the war pensioner chooses to attend a private dentist, any reimbursement is restricted to the cost for the same treatment through the NHS.

• Eye tests and glasses:

  • Veterans UK can help with the cost of eye tests and glasses if you need them because of the conditions you are paid a war pension for.
  • Ask your optician for a NHS voucher and send it with your receipt for the fee and glasses to the Veterans UK Treatment Group.
  • Veterans UK normally only refund the money for the eye test and the value of the voucher.
  • If you think you may be entitled to help towards the cost of your glasses and eye tests, write to the Veterans UK Treatment Group.

• Hearing aids:

  • Veterans UK will not pay for hearing aids.
  • In the UK, the supply of hearing aids is the responsibility of the NHS.
  • There is no specific hearing impairment for which the NHS cannot supply a hearing aid.

• Travelling expenses:

  • The WPS does not cover travel costs to go to NHS primary care providers such as a general practitioner, dentist or optician.
  • However, Veterans UK may consider travel costs for treatment for the condition(s) you get a war pension for when treatment is required at a secondary care centre such as a hospital or clinic following referral from a primary care provider.
  • You may be eligible to claim for travelling costs for attending for secondary treatment at the nearest facility which can provide the required treatment or at a centre of excellence when a doctor has made the referral.

• Wheelchairs:

  • If you need a wheelchair, your doctor will send you to your local wheelchair centre. If you are getting a War Pensioners Mobility Supplement (Section 5.3), you can use it to get a powered wheelchair.
  • You can also get help from Motability.

• Home nursing equipment:

  • Home Nursing Equipment is an aid or equipment needed by a severely disabled war pensioner because of the condition(s) they get a war pension for.
  • These items should be provided by the NHS or social services.
  • However, if there is likely to be delay in the supply of an item from the NHS or social services, Veterans UK may be able to provide assistance:

    • If the equipment is essential; and
    • There is a risk of worsening of the pensioner’s condition.

• Home Adaptation Grant (HAG): England, Scotland and Northern Ireland:

  • You can apply to your local council for assistance in adapting your home due to disability.
  • If your local authority assistance does not cover the full cost of your home adaptation and the adaptation is required because of the condition(s) you get a war pension for, you may be eligible to apply for a HAG.
  • The maximum amount payable in respect of a HAG is £750 (as at June 2023).
  • Grants towards the cost of adapting homes are administered by the Local Authority Social Services Authority.
  • It may be in a war pensioner’s best interest to approach social services to see if they can offer financial assistance.
  • As most social service grants are means tested it is unlikely a war pensioner will qualify for the full cost of an adaptation.
  • It is not necessary to confirm whether social services have been approached before considering eligibility for a HAG.

• Home Adaptation Grant (HAG): Wales:

  • As the Artificial Limb & Appliance Service (ALAS) in Wales holds separate budgets for war pensioners, funding for HAGs’ is provided through the NHS.
  • Applications should be referred, via the Veterans Welfare Service, to The Posture and Mobility Service, Croesnewydd Road, Wrexham, LL3 7NT.

• Convalescence care:

  • Convalescence care supplies short term nursing care for severely disabled war pensioners who are in need of a break and unable to stay in an ordinary hotel or guest house because of the condition(s) they get a war pension for.
  • You may be eligible for a convalescent break if you are a severely disabled pensioner who requires nursing care at the level provided by trained nursing staff in a registered nursing home, whilst away from home and the needs for that care are due to the condition(s) you get a war pension for.
  • When respite care is not available it can also be considered under convalescence care.
  • Respite care is normally considered by the local authority and provides a break for the war pensioner’s regular carer.

• Remedial treatment:

  • Veterans UK may pay for a period of remedial treatment by providers such as Combat Stress, who have long experience in providing support for former service personnel dealing with issues like post-traumatic stress disorder (PTSD), anxiety and depression.
  • Remedial Treatment is for veterans who have a medical need for a short period of non-NHS provided treatment or support for a psychiatric condition which they get a war pension for.

16.3 What was a Parents Pension?

• Parents pensions were first introduced during World War I (FOI 2018/09588).
• At that time, adult sons and daughters had a duty under the Poor Law to contribute towards the support of their parents if they were in financial need.
• The State accepted responsibility for replacing, within certain limits, the support which a son killed in action might have given to parents if they became incapable of self-support because of sickness, advancing age, or other adversity.
• This legal duty disappeared with the abolition of the Poor Law in 1948.

17.0 Useful Stuff

17.1 Websites

• Armed Forces Compensation Scheme (AFCS).
• Armed Forces Pension Scheme (AFPS).
• War Pension Scheme (WPS).
• Veterans Welfare Service (VWS).
• Armed Forces Independence Payment (AFIP).
• Veterans UK.
• Forces Pension Society (FPS).
• Veterans’ Gateway.
• Armed Forces & Veterans Portal (AFVP): Operated by the MODs Defence Business Services (DBS).
• Brigade of Gurkhas (Gurkha Pension Related Documents).
• Veterans Advisory and Pensions Committee.
• Discover My Benefits (MOD website).

17.2 Publications

• Joint Service Publication (JSP):

  • JSP 854: Explains the AFPS 7 scheme.
  • JSP 764: Explains the AFPS 05 scheme.
  • JSP 905: Explains AFPS 15 and EDPS 15.

• Gurkha Pension Manual (Amendment 21, December 2020).
• HMRC Employment Income Manual (EIM):

  • EIM50100: Tax Treatment of Armed Forces: Regular Forces.
  • EIM50110: Tax Treatment of Armed Forces: Reserve and Auxiliary Forces: Taxable Payments: Exempt Payments.
  • EIM50120: Tax Treatment of Armed Forces: Reserve and Auxiliary Forces: Expenses.
  • EIM74303: Pensions: Particular Occupations: Armed Forces: Exempt Pensions: Practical Issues (has been replaced).
  • EIM74307: Pensions: Particular Occupations: Armed Forces: Awards for Bravery (has been replaced).
  • EIM75920: The Taxation of Pension Income: Armed Forces Pension Payments.

• Guidance: War Disablement Pension Rates 2022. Outlines the rates for a variety of allowances, including:

  • War Disablement Pension.
  • Age allowance.
  • Gratuities for specified minor injuries.
  • Supplementary allowances.
  • Widows/widowers allowances.
  • Widow/widower pension.
  • ALSO.
  • Industrial disablement pension rates.
  • Article 59 cases.
  • Part-time treatment allowance.
  • Social security benefit rates.

• MMP/106 - AFPS 75 Your Pension Scheme Explained. Published by the Service Personnel and Veterans Agency (SPVA; now Veterans UK) in April 2008.
• MMO 116 - Armed Forces and Reserve Pension Schemes: Re-Employment (May 2023).
• MMP/124 - Armed Forces Pension Scheme 2005: Your Pension Scheme Explained (July 2020).
• Armed Forces Pension Scheme 1975: Your Pension Scheme Explained (July 2020).
• Thurley, D. (2015) Armed Forces Pensions - 2015. Briefing Paper Number SN05891, 24 August 2015. Available from World Wide Web: https://researchbriefings.files.parliament.uk/documents/SN05891/SN05891.pdf. [Accessed: 05 June, 2023].

17.3 Legislation

There is a range of legislation related to the AFPS, including:

• Reserve Forces Pension Scheme 2005: regulations and guidance
• Armed Forces Pension Scheme 1975 regulations
• Armed Forces Pension Scheme 2005 Order: Statutory Instrument 2005/438
• The Armed Forces Early Departure Payments Scheme Order 2005: Statutory Instrument 2005/437
• Armed Forces Pension Scheme 2006 Order: Statutory Instrument 2006/717
• The Armed Forces Pension Scheme etc. (Amendment) Order 2009: Statutory Instrument 2009/544
• The Armed Forces Pension Scheme 2005 (Amendment) Order 2011: Statutory Instrument 2011/1364
• The Armed Forces Redundancy Scheme 2006, the Armed Forces Redundancy Etc. Schemes 2010 and the Armed Forces Pension Scheme 2005 (Amendment) Order 2011: Statutory Instrument 2011/3013
• The Armed Forces (Transitional Provisions) Pensions Regulations 2015: Statutory Instrument 2014/2958
• The Armed Forces Pension Schemes and Early Departure Payments Schemes (Amendments Relating to Flexible Working and Miscellaneous Amendments) Regulations 2018: Statutory Instrument 2018/1111
• The Armed Forces Pension Regulations Statutory Instrument Order 2014 (PDF, 423 KB, 66 pages)
• The Armed Forces (Transitional Provisions) Pensions Regulations 2015: Statutory Instrument 2015/568
• The Armed Forces Pension 2015 Regulations Statutory Instrument Order 2014
• The Armed Forces Early Departure Payments Scheme Regulations 2014
• The Armed Forces and Reserve Forces (Compensation Scheme) Order 2011 (SI 2011/517)

  • Schedule 3: The Tariff and Supplementary Awards: Tariff Levels.

• The Armed Forces and Reserve Forces (Compensation Scheme) Order 2005 (SI 2005/439 (Revoked 09/05/2011)
• The Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order (SPO) 2006.

  • Sometimes shortened to The Service Pensions Order.

• The Reserve Forces Non Regular Permanent Staff (Pension and Attributable Benefits Scheme) Regulations 2011.
• The Armed Forces Pensions (Amendment) Regulations 2022.
• Armed Forces Redundancy Scheme 2006 (refers to APFS 05 members).
• Armed Forces Redundancy Scheme 2010 (refers to AFPS 75 members).
• Pension Schemes Act 1993.
• Pension Schemes Act 2015.
• Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
• The Gibraltar Regiment Act 1998.

  • Royal Gibraltar Regiment (Pension Arrangements) Notice 2022.

18.0 References

FOI 2023/04453 dated 28 April 2023.

Hansard. (1959) The Victoria Cross (Annuity). Available from World Wide Web: https://api.parliament.uk/historic-hansard/commons/1959/jul/28/the-victoria-cross-annuity. [Accessed: 03 June, 2023].

MOD (Ministry of Defence). (2021) MOD to Continue to Pay Annuities to Members of the Victoria Cross and George Cross. Available from World Wide Web: https://www.gov.uk/government/news/mod-to-continue-to-pay-annuities-to-members-of-the-victoria-cross-and-george-cross. [Accessed: 03 June, 2023].