House of Commons Library

The Armed Forces Compensation Scheme

Published Thursday, March 23, 2017

This Commons Library briefing paper looks at the Armed Forces Compensation Scheme and Government plans for a new compensation scheme for combat injuries and deaths.

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The Armed Forces Compensation Scheme provides financial compensation to serving or former serving personnel who were injured, become ill or die as a result of their service in the armed forces. It is a no-fault scheme which means payment is made without admitting fault.

The Government proposed in late 2016 a new compensation scheme for those injured or killed in combat. The Government is currently considering responses to a consultation.

This briefing examines the current compensation scheme and the proposed new combat compensation scheme.

What is the Armed Forces Compensation scheme?

The Scheme was introduced in 2005 and applies to those whose illness, injury or death was caused as a result of service after 6 April 2005. Claims for injuries or illnesses prior to this date are made under the War Pensions Scheme or the ‘attributable’ benefits payable under the old Armed Forces Pension Scheme which the Armed Forces Compensation Scheme (AFCS) replaced.

The Armed Forces Compensation Scheme provides a lump sum payment for pain and suffering. The sum payable is based on the tariff level of the injury(ies) and ranges from £1,200 to a maximum of £570,000. In addition, individuals whose injuries cause a significant loss of earning capacity may be eligible for a regular tax-free ‘Guaranteed Income Payment’ (GIP). Eligible partners and children of those killed in service may claim survivors’ benefits.

Over 38,000 claims have been awarded for injury/illness caused by service, 2% of whom were also awarded a GIP.[1] 340 survivors’ claims have been awarded.[2]

Reviews of the scheme

The scheme had a major review in 2010 and a further review in 2017. The Government has yet to publish its response to the 2017 review.

2010: review of the scheme

Criticisms of the scheme prompted the then Labour Government to ask the former Chief of the Defence Staff, Lord Boyce, to review the scheme. The Government subsequently accepted all of the review’s recommendations when it was published in early 2010. 

February 2017: Quinquennial review published

The Government commissioned a review of the scheme in 2016 to see whether it was ‘fit for purpose’. The resulting ‘Quinquennial Review’ was published in February 2017. While it found the scheme ‘remained on track’ it made several recommendations including:

  • Lump sum awards to be automatically uprated for inflation in line with the Consumer Price Index on an annual basis
  • Increase the top tariff level 1 from £570,000 to £650,000
  • increase the maximum tariffs for mental health
  • Conduct further study into Non-Freezing Cold Injuries
  • Improve communication and wording of the scheme, particularly for veterans who may experience late-onset symptoms and Reservists
  • Create an additional supplementary award for those who experience the highest degree of dependency on others to remain alive.
  • The Government has yet to publish its response to the Review.

Proposed new ‘Enhanced Compensation Scheme’ for combat injuries/deaths

The Government has proposed a new compensation scheme for those injured or killed in combat. This would work in parallel to the AFCS.

The new scheme is tied to Government plans to enshrine the principle of combat immunity into law.[3] Doing so would prevent individuals from seeking financial compensation for injuries (or their families in the event of death) through the Courts. There has been extensive litigation from individuals injured or killed in combat resulting in courts awarding compensation exceeding that available under the AFCS. The Government therefore believes a new ‘enhanced compensation scheme’ is needed that could, if eligible, award claimants an amount equivalent to that which a Court might have awarded. The scheme would operate on a ‘no fault’ basis so negligence would not have to be proved.

A consultation on these new proposals ran from December to February 2017. The Government has yet to publish the results of this consultation.

However a number of bodies, including the Law Society, have published their concerns with the proposed new scheme. Particular areas they highlight include:

  • The removal of the right of affected individuals to pursue the Ministry of Defence in court
  • The proposal that the MOD assesses eligibility of claims
  • The independence of the assessors of claims
  • The presumption that claimants would not need legal advice
  • The appeal process
  • The presumption that those lodging claims are solely seeking financial compensation
  • Lack of public scrutiny of MOD decisions and opportunities for lessons learnt would be lost.

The Law Society says the proposed scheme lacks the transparency and impartiality of courts and says the choice of going to the courts “should not be denied.”

War Pensions Scheme

The War Pensions Scheme was replaced by the Armed Forces Compensation Scheme. It applies to injuries or deaths before 6 April 2005. The War Pensions Scheme is not the subject of this paper but a brief explanation of the scheme is included here.

[1]     Armed Forces Compensation Scheme biannual statistics, 6 April 2005 to 30 September 2016, published 8 December 2016

[2]     2,139 individuals were in receipt of a GIP; 297 spouses/eligible partners and 321 children were in receipt of a Survivors’ Guaranteed Income Payment as at 30 September 2016

[3]     Combat immunity is not the subject of this briefing paper.

 

Commons Briefing papers CBP-7923

Author: Louisa Brooke-Holland

Topics: Armed forces, Armed forces welfare, Defence policy, Sickness, disability and carers' benefits, Veterans

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