This note looks at pension arrangements for GurkhasJump to full report >>
The Gurkha Pension Scheme was based on the Indian Army Model and provides an immediate pension at Indian Army rates those with at least 15 years’ service. The UK government says that these pensions were designed for retirement in Nepal, where the cost of living is significantly lower than in the UK.
In March 2007, the Labour Government announced the outcome of a Review of Gurkha Terms and Conditions of Service. Differences between Gurkhas’ terms and conditions of service and those of their British counterparts would be eliminated. For serving Gurkhas, and those with service on or after 1 July 1997, there would be an Offer to Transfer (GOTT) to the Armed Forces Pension Scheme. The reason for the 1 July 1997 cut-off, was that this was when the UK became the home base for the Brigade of Gurkhas and that changes in the immigration rules, backdated to 1 July 1997, meant there was an increasing likelihood of retired Gurkhas settling in the UK on discharge.
On 21 May 2009, following the high-profile Gurkha Justice Campaign, including Joanna Lumley, the Government announced a change in policy on Gurkha settlement rights. Gurkhas who had retired before 1 July 1997 and completed four years' service would have the right to apply to settle in the UK with their spouses and dependent children. There had been an agreement among parties to the discussions that there would be no direct read across to policy on pensions. However, campaigning to improve the pension rights of Gurkhas with service before 1997 has continued. In November 2013, an All Party Group launched a Gurkha Welfare Inquiry.
In response to the report of this Inquiry in January 2015, the Government said it would implement a number of measures which would mean greater financial and social support for Gurkha veterans, including the provision of £5 million of additional funding, which would be made available over the next five years to the Gurkha Welfare Trust (HCWS234, 29 January 2015).
The British Gurkha Welfare Society (BGWS) launched a legal challenge to the terms of the GOTT, regarding both the position of Gurkhas who retired before July 1997 and, for those who left after 1 July 1997, the treatment of service before that date. In July 2018 Defence Minister Mark Lancaster said that “legal challenges to the terms of the GOTT, up to the European Court of Human Rights, were rejected, with MOD's view that the transfer terms were fair and reasonable being upheld.” (PQ 162534, 17 July 2018).
The Government’s position remains that, in principle, an individual should qualify “for a pension according to the rules of that scheme at the time, and that improvements to public sector pension or compensation schemes should not be introduced retrospectively because of the burden such an approach would place on the Exchequer.”(PQ 32156, 30 March 2016).