Select Committee on Defence Minutes of Evidence




  1.1  The paper argues that as a modern welfare state provides a wide range of financial, medical and other support, we should change the system. It ignores completely the status of War Pensioners and War Widows and is seeking to put the ex-Serviceman/woman on the same level as civilians/those injured in criminal activities. This belief is the fundamental flaw in what follows—levels of compensation, no mention of a welfare service, no priority in the NHS for those injuries received as a result of service. The Government expects that our Armed Forces will be available at anytime, to go anywhere and to carry out a wide range of diverse tasks from helping civil authorities at home to engaging in high intensity operations for sustained period. This and other like conditions emphasise the need to be different and to be treated differently. This principle should underpin everything.


  2.1  The Ministry of Defence (MoD) have proposed a single scheme whereby both the Service Attributable Pension and the War Disablement Pension are incorporated into one scheme. This will also encompass those schemes applicable to widows.

  2.2  We feel to accommodate two schemes into one would be to the detriment of those it is designed to benefit because amalgamation of necessity will lead to compromise. At present the DSS and the MoD apply different criteria when deciding entitlement and it is clear from the document that the proposals would require the adoption of MoD criteria to decide future entitlement. This would have an adverse effect on future awards.

  2.3  The MoD in their document refer to the alleged complexity and anomalies created by the two schemes. We believe this is overstating the case and removes an individual's statutory right granted in the Service Pensions Order.

  2.4  The MoD also suggest their proposed scheme might also provide an alternative means of settling claims where negligence is an issue. We firmly disagree that litigation is too stressful to the individual. We are also concerned with emphasis on the term seriously disabled, which implies possible neglect and second class treatment for all others.


  3.1  Compensation for injury or disease due to service would be paid by a lump sum (Armed Forces Attributable Award (Triple A payment)). This would be tied to the severity of the injury. This lump sum would be in 15 levels and based on the Criminal Injuries Compensation (CIC) scheme. Although the Tariff levels are exemplary, the paper states at paragraph 5.5 that the scheme should not be too far out with awards made in civil life under the CIC. Again, the status of ex-Servicemen/women is called into question. However, the principle of not paying twice for an injury is a legitimate one so the ability to abate either the Triple A by the amount of other compensation or vice versa is acceptable.

  3.2  The compensation for lost earnings could either be a lump sum or a lump sum amortised in a Guaranteed Income Stream (GIS). This payment would be related to the same tiers as the new Armed Forces Pension Scheme (AFPS) Service Invaliding Pension (SIP). We believe that it would be fundamentally wrong to pay a lump sum as the compensation for lost earnings as opposed to an income stream. There is ample evidence, which the Review Team is aware of (and do not mention) that the South Atlantic Fund (SAF) paid out large lump sums after the Falklands war and the money was wasted quickly by a considerable number of individuals. Those with mental afflictions would be in a worse state, not least because of the really quite low level of disability at which inability to work and employability cuts in. We are slightly surprised that the paper did not mention the doubts already within the Services. Once the lump sum is gone, individuals would fall back on means tested DSS benefits (the State will be paying again) and the Ex-Service charities, which can ill afford to pay out to cover what the individual has wasted.

  3.3  The GIS for those longer serving personnel who are medically discharged (or die—Guaranteed Income Stream for Widow(er)s (GISW)) could be quite small. The loss of earnings is only worked out to the age of 55. Consideration must be given to the tax status of the SIP (which would offset this factor if tax free for attributable awards) or to factoring in loss of earnings to the pension age of 65 for those worst disabled and who are unable to work.

  3.4  The burden of proof would change to be the modern burden of proof ie the balance of probabilities. The qualifying period would be three years and individuals would only have one year to claim after the condition was confirmed. These aspects represent worsenments. However, it is hard to argue against these as these are the "modern" time constraints.

  3.5  There will be difficulties during the transition stages. There will be a mismatch between the Compensation Scheme and the old AFPS—this was mentioned in the AFPS comment. Anyone with an injury prior to the introduction of the Compensation Scheme will claim on the War Pensions Agency (WPA). This mismatch is only significant for those who are injured under the old system, but die or are medically discharged having opted for the new AFPS. The new AFPS has no attributable benefits, which are appropriate for these two categories.

  Although in time this will go, the mismatch could linger for a considerable time for some individuals.

  3.6  Should the serviceman/women be medically discharged there will be a GIS (tax-free we think) based on the severity of the injury. Those that serve on or who leave normally will not receive this element but they, of course, will be earning their pension under the AFPS. The GIS is where the three Tiers come into focus again. Tier 1 would have no GIS (and would not receive an SIP, although they may have earned an immediate pension). The GIS would suffer some abatement by a lump sum equivalent amount of the SIP, but some of the SIP does reflect what is earned in the normal way. The GIS would be index linked. It is very difficult to estimate the value of the GIS. The formula (paragraph 6.7) is not exposed to us.

  3.7  The Tariff Scheme proposed by the MoD, consisting of some 15 areas for specific compensation, appears in tables attached to the consultation document, which clearly shows the financial disadvantage in the longer term of lump sum payments as opposed to ongoing pensions for the same disablement.


  4.1  The document proposes an appeals system but favours the Pensions Appeal Tribunals (PAT) rather than the existing Internal Disputes Resolution Procedure (IDRP) required by the Pension Act of 1995 which is an in-house system.

  4.2  All parties accept that the DSS and MoD operate different criteria for entitlement. We suggest that the present number of appeals on MoD decisions are insignificant compared to the total handled in any given year by the PAT. The PAT operate on statutes based on DSS criteria for eligibility but it is not clear how the present MoD proposals could be reconciled to the existing Tribunal procedures. Furthermore the MoD document refers to "appeals against lump sum awards" which implies that only this aspect of the new arrangements are challengeable in court.

  We feel that if PAT are to be the Court of Appeal their remit must include all MoD decisions in this area.


  5.1  This is in levels one-15, one being the worst injured. These levels are in Annex B and relate to CIC. Although the title in the Annex is "Exemplary", the paper does state at paragraph 6.3 that the awards will broadly be in line with the CIC Scheme. They are too low. The Law Commission has called for a doubling of current rates at the top end and a rise by half at the bottom end of the scales eg total blindness to increase from £105,000 to £210,000. The tariff only recommends £75,000, which shows how low the figures are. There seems to be no index linking. The CIC system has been discredited.

  5.2  The paper fails to mention the CIC (NI) scheme, which exceeds the normal CIC schemes by 20 per cent (this is important as presumably if a person selects the CIC scheme for their "compensation" they may not have access to the MoD compensation").

  5.3  The paper argues that the awards allow for average deterioration. However, many will suffer more significant deterioration than the average and this should be either reflected in the initial award or be subject to later need/review. In the case of psychological injury the degree to which deterioration will occur and time of onset cannot be predicted, and therefore there is a need to put in place procedures for deterioration review for this type of disability.


  6.1  The paper states at paragraph 6.13 that the Scheme would be owned and administered by the MoD. We believe that consideration could be given to the WPA running the Scheme on behalf of the MoD. The WPA has ample experience and we are sure their Medical Staff, who have a lot of experience, could cope with the two differing systems. This would have the benefit of being separate from the MoD (although the MoD would still bear the costs) and would allow access to the War Pensioners' Welfare Service (WPWS)—see below. As an aside, the WPA should not become part of the MoD. We note that there is also an interesting phrase in paragraph 6.13 "fully consistent with the cradle to grave principles of the Armed Forces Overarching Personnel Strategy". The MoD has never accepted any responsibility for the ex-Servicemen/women other than for pensions. It always understood that the "grave" meant either a death in service or the retirement/discharge of the individual. The MoD have consistently stated that Other Government Departments (OGD's) hold this responsibility for personnel once discharged. This last factor becomes very important when we consider Welfare and the NHS priority system later.

  6.2  During the transition proper, it is essential that an independent arbiter oversee the implementation of any new scheme to enhance the confidence of serving personnel and the ex-Service organisations. Multiple injuries that often happen in war (eg blindness and amputation) should have an additional oading (multiplier) to reflect this. the Appeal Mechanism would be independent of the MoD—the paper suggests a modified PAT system.

  6.3  There are a number of areas of concern:

    (a)  The criteria for entitlement varies considerably between the DSS and the MoD.

    (b)  This is likely to continue for at least the next 30 years whatever the new arrangements because of the number receiving war pensions from the DSS. It would take many years for the expertise held by the WPA to be assumed by any other Department.

  6.4  It does not seem to allow for any aggravation of medical conditions that themselves are not attributable, although it is supposed that claims could still be made, but aggravation to ordinary injuries produce a considerable number of war pension claims.

  6.5  Levels one to 11 will qualify for both an SIP and a GIS:

    (a)  Most of the injuries between 12-15 will not really affect the level of someone's employment, although one of two might; eg Severe damage to tendons—continuing disability. We believe that it might be preferable to pay a small GIS rather than no income at all. Alternatively the AFPS should pay a small SIP as opposed to a lump sum gratuity. The SIP should be made tax free.


  7.1  Mention was made earlier that the Review makes no mention of the status of those injured in the future and the spouses of those killed and we emphasised this. It is an issue that leads on naturally to after Service Welfare and Priority Treatment in the NHS for the former for their accepted disabilities.

  7.2  Once a person is a War Pensioner of War Widow, this allows access to the WPWS (mentioned above), which is an excellent nation-wide service provided by the WPA. There is no mention of any replication of this service. The MoD possesses no aftercare welfare, other than using the ex-Service charities. The modern welfare state leaves large gaps in its provision and our experience, mirrored by other charities that once the local DSS finds out the individual is an ex-Serviceman/woman, they often back off, generally with the excuse they have no funds, and leave it to the charities to pick up the pieces. This gaping hole must be filled; even if it were that the WPWS carry on.

  7.3  The receipt of a War Pension/Gratuity for disablement gives ex-Servicemen/women priority in the NHS for treatment relating to their accepted disability. This concession goes back to 1953 when the Ministry of Pensions handed over their hospitals to the NHS. The throw disabled, ex-Servicemen/women onto the NHS without this concession will reduce ex-Servicemen/women to the level of injured civilians, with long waiting lists. This would be seen as another example of the MoD abrogating its responsibility.

  7.4  Although not quite relating to Priority Treatment, the WPA does pay for all treatment resulting from the Accepted Disability (AD) when a War Pensioner is abroad, either on holiday, business or if he emigrates. The MoD will probably argue that the compensation would cover the first two areas and the third is the person's own choice. As an aside, one generally cannot get medical travel insurance for an AD, as it is a pre-condition to the time of travel.


  8.1  The Services Pensions Order Article 26 discretionary funding for rehabilitative treatment and for convalescence is not replicated in this scheme. In the case of rehabilitative treatment for the psychologically injured veteran such finding forms an essential income stream without which the specialist charity concerned could not afford to continue with its work.


  9.1  No mention is made of the Inheritance Tax Concession given for those who are killed in action or die later as a result of their wounds gained in battle.


  10.1  The figure to be used for the GISW will be 60 per cent of the spouse's lost earnings capacity, abated by the non-attributable pension paid under the AFPS. However, the abatement should not reflect the element of the pension that has been earned.

  10.2  An additional Gratuity of £20,000 would be paid, in addition to the gratuity under the AFPS. Nothing is mentioned whether this £20,000 would be uplifted to keep pace with earnings.


  11.1  The paper covers the eligibility criteria in Section 8. Most of this is understandable in the light of moving to the modern burden of proof and this latter point, allied to the difficulties that personnel may have when natural injuries are aggravated, will mean that fewer will earn attributable awards. It is impossible to gauge the effect of this change.


  12.1  The current WPA approach is given in paragraph 8.9. The MoD is concerned that this is too wide in coverage and may be causing envious eyes from the Emergency Services. What must be born in mind is that the Services need to be very fit. The Services are under extreme pressure in their working environment and individuals, in the main, have to maintain much of their own fitness in their own time. paragraph 8.10 gives the four approaches that could be considered. In the circumstances, we believe C to be the correct approach; ie if the CO believes that individuals must maintain required standard, injuries in those activities should be considered attributable.

  12.2  The preferred option is (iii) with the addition of all approved adventurous training activities and all organised sport.


  13.1  Depending on the individual case circumstances under the War Pensions Scheme certain accidents suffered by Service personnel on home to duty travel can be accepted as Service related. This approach dates back to the Second World War when it was decided that, for conscripts, home duty travel did not amount to a matter of personal choice. We consider that the present criteria as applied by the WPA should continue to operate in any new compensation scheme.


  14.1  The Paper recommends that the qualifying period for disablement to emerge should be three years except in cases where some listed conditions might take longer to emerge eg; some cancers and asbestos related diseases. The three-year time limit is on par with the modern compensation schemes. Great care is required with a group of the population who do not have an understanding of the concept. Therefore it is essential that all servicemen have this drawn to their attention in their discharge medical and sign and certificate thereof. This must include the information on time limits for claims. This could be the method of allowing for worsenment where other conditions that have a direct link emerge later in life eg spinal, osteo-arthritis, and hip and knee problems.


  15.1  The paper considers that they should be brought under the same scheme to cover any injuries they receive whilst on full time service. This, we believe, would be fair.


  16.1  It is very important that any new scheme is handled efficiently and should reflect the current targets that the WPA have set for death in Service Widows and those medically discharged.

  16.2  Whilst we understand that intention is an overall cost neutral exercise, the MoD should ensure that any saving operated by the higher eligibility is fed back into the scheme to ensure the higher level of benefits than the CIC levels proposed.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 9 April 2002