Select Committee on Defence Third Report



Current Arrangements

72. In addition to ill-health benefits available from the Armed Forces Pension Scheme, there is separate provision to compensate Armed Forces personnel who are injured or become ill in the course of their military service. There are different arrangements for compensating Service personnel whose illness or injury has a direct causal link with their military service (known as attributable invalidity) and those who leave the Services due to injury or illness which arises from some other cause (non-attributable).

Compensation for Attributable Illness and Injury

73. Under the present arrangements, financial provision can come from two main sources. Under the War Pensions Scheme, administered by the War Pensions Agency (WPA), Service personnel disabled as a result of their service can be awarded a war pension.[113] The WPA decides whether there is a direct causal link between an individual's service in the Armed Forces and an injury or illness resulting in invalidity (ie, whether it is attributable). Those assessed as disabled by 20 per cent or more by their service currently receive a tax-free war pension. War pensions are increased annually; since April 2001 annual increases have been in line with the Retail Price Index.[114] War pensions may be claimed for any medical condition and at any time after leaving the Armed Forces. Those adjudged to have attributable injuries or illnesses may also be entitled to benefits currently administered under the Armed Forces Pension Scheme. These supplement the war pension with a further index-linked attributable pension; the size of the payment is related to rank and the degree of disability. Both war pensions and invaliding benefits from the Armed Forces Pension Scheme are payable only after discharge from military service.

74. Current rates of war pension range from about 1,250 per year for 20 per cent disablement, to about 6,250 for 100 per cent disablement. Payments to other ranks are calculated and paid on a weekly rate; for officers the amount is calculated on an annual basis. [115] Apart from this, there is no differentiation by rank. Less than five per cent of claimants receive the 100 per cent disablement rate; 80 per cent of awards are at the 50 per cent rate or below.[116] Total expenditure on war pensions in 2000-01 was 1.213 billion.[117]

75. A range of allowances and supplements is available, depending on individual circumstances. These include: an unemployability supplement of 3,861 per year; constant attendance allowance, up to 4,717 per year; severe disablement allowance of 1,179 per year; and a mobility supplement of 2,249 per year.[118] At the end of March 2001, there were 251,000 allowances in payment.[119]

76. For disability assessed at between one and 20 per cent, a lump sum 'war gratuity' is payable under the War Pensions Scheme, with the level of payment again determined by the degree of disability. The range is from 316 to 7,406.[120] No additional benefits would normally be paid from the AFPS for those in receipt of a war gratuity, although the status of other payments under the scheme may be reassessed and made tax-free and index-linked.

77. A War Widow(er)'s Pension is paid to the spouse of a service man or woman who has died as a result of their military service. Annual payments range from about 1,130 at the lower rate (paid to childless claimants under the age of 40), to around 5,000 for the standard rate.[121]


Compensation for Non-Attributable Illness and Injury

78. Service personnel who are invalided out of the Services, but whose injury or illness is assessed as not being attributable to their service, do not receive a war pension but are eligible for benefits under the Armed Forces Pension Scheme. The level of payments depends on length of service and rank, and is not dependent on the degree of disablement. Anyone with five or more years' service from the age of 18 receives an immediately payable, index-linked invaliding pension and a tax-free lump sum equal to three times the annual rate of pension. For officers, the invaliding pension begins at 12 per cent of full career pension for those with the minimum qualification rising to100 per cent after 31 years' service. For other ranks, the lowest level is 27.5 per cent, rising to 100 per cent after 34 years.


Criminal Injuries Compensation Schemes

79. Armed Forces personnel can claim compensation under the Criminal Injuries Compensation (CIC) Scheme if they are injured as a result of a violent crime in England, Scotland or Wales, including for injuries resulting from terrorist activities. A separate but similar scheme operates in Northern Ireland; and the MoD has established a CIC (Overseas) Scheme, which it administers and funds, for Service personnel injured when they are serving overseas.[122] Claims must be submitted within two years of an incident. Compensation is based on a tariff of 25 levels, level 25 being for the most serious injuries, such as quadriplegia, with a payment level of 250,000, down to level 1, which includes minor injuries such as temporary deafness, for which compensation is 1,000.[123]


Reasons for change

80. The MoD believes change is necessary because the current compensation arrangements are complicated and confusing to those they are intended to help; the complexity creates anomalies which work against some claimants whilst in other cases disproportionate awards may be made; and claims often take a long time to process. The War Pensions Scheme uses different criteria to the Armed Forces Pension Scheme when assessing claims, which the MoD believes leads to similar claims sometimes being treated differently.[124] They believe present arrangements could also be criticised on the grounds that they do not provide claimants with sufficient initial funding to cover special arrangements needed to cope with being disabled.[125]

81. According to the Review document: 'One of the most serious shortcomings of the schemes is the failure to provide adequate compensation for injury or death arising from warlike activities'.[126] This refers particularly to the limitations of the Criminal Injuries Compensation (CIC) schemes. A soldier injured in a criminal assault in Germany can expect compensation from the MoD CIC (Overseas) Scheme. Similarly, a soldier injured in a terrorist attack in Northern Ireland will receive compensation from the Northern Ireland Office CIC Scheme. But criminal injuries compensation is not payable to Armed Forces personnel where the situation is deemed to be war-like, as has recently been demonstrated in the well-publicised case of Sergeant Walker, who was injured on peace-keeping duties in Bosnia when a Serbian tank shelled a UN observation post. He was unable to claim from the CIC (Overseas) scheme because the incident was deemed to have occurred during war-like activities. As he remained in the Services, the other forms of compensation which ex-Service personnel can claim (war pension and AFPS benefts) were not available to him, and he is pursuing his case in the courts.[127]


The New Proposals

82. The Review document says that the overall aim was to propose arrangements which are simpler and fairer than those currently in place.[128] It sets out the principles which it believes should underlie any new scheme as follows:

  • Fairness for all those entitled to compensation and in particular recognising the needs of those most seriously disabled.

  • The arrangements should be easy to understand and administer and decisions on claims should be made within a few weeks of their submission.

  • The arrangements should meet the best modern standards.

  • Compensation should be fixed at realistic levels and provide lifetime financial support for those most seriously injured, who may not be able to work again.

  • Awards should not work as a disincentive to work for those who are able to.

  • Arrangements should be consistent with the Government's commitment to human rights and to being a modern and fair employer.

  • The arrangements should be cost effective, affordable and fair to the taxpayer.[129]

83. The new scheme proposed in the consultation document would replace both the War Pensions Scheme and the attributable benefits payable under the Armed Forces Pension Scheme. Compensation would be payable on a 'no fault' basis but the applicant would be required to show that illness or injury has resulted from their service. Benefits include:

  • a tariff-based lump sum payment to compensate for pain and suffering (on similar lines to the Criminal Injuries Compensation scheme) to be known as the Armed Forces Attributable Award ('Triple A payment') with awards banded at 15 levels;

  • for those more severely disabled, an additional sum would be paid to cover potential loss of earnings. This would be calculated as a lump sum but paid in instalments as a guaranteed income stream (GIS);

  • for widow(er)s, a guaranteed income stream payable for life, based on 60 per cent of the spouse's lost earnings (WGIS), plus a death in service gratuity and an attributable bereavement grant.[130]

Ill health benefits for non-attributable illness and injury were considered as part of the pension review, rather than the compensation review, and the proposal is that that provision will remain part of the Armed Forces Pension Scheme.

84. The major changes are that, under the new proposals, all attributable injuries arising from service will be treated in the same way, including those arising from terrorism or warlike activities;[131] and Service personnel will be able to claim while they are still serving members of the Armed Forces. We welcome these developments. However, as we discuss in detail below, the new scheme reduces access to compensation in comparison with the current arrangements by fixing shorter time periods in which claims can be made and shifting the burden of proof on to the claimant. In addition, there is no provision in the new scheme for the payment of supplementary allowances which form an important part of the War Pensions Scheme.

85. We asked the MoD for examples showing how individuals will fare under the new scheme, compared with the current arrangements. As with the pension proposals, there are winners and losers.

  • A colonel who is medically discharged after 20 years at age 43, with complete blindness, would receive an increase in benefits which, if calculated as a capital figure, gives an increase to 1.21 million under the new arrangements, from 870,000 under the present system. His GIS would be 39,725 per year compared to a war pension of 13,757.[132]

  • In the case of a captain, aged 30, with 6 years' service, married but with no children, who dies as a direct result of service (attributable), the capital figure available to his spouse under the new scheme will be 509,000, compared to 426,000 under the old arrangements.[133]

  • A serviceman who claims for a mental condition (tariff level 8) within three years of retirement would do significantly better under the new scheme. He would receive a GIS of 6,480 a year (in addition to a lump sum award of 25,000), compared with, under the present system, a war pension of 2,492 a year. Calculated as a capital figure, benefits would therefore be worth 127,000 compared to 39,000 under the current arrangements. [134]

  • A member of the Services (Other Ranks) injured at age 30, after 10 years' service, but not invalided out of the Services, with injury assessed at level 13 would fare worse under the new arrangements. He would receive only a 5,000 lump sum payment, compared to a gratuity of about 700 and a war pension of 1,246 a year at present, giving a capital figure of 21,000.[135]

  • A corporal with 12 years service, medically discharged at age 30, with an attributable injury leading to discharge (dislocated shoulder with full recovery) would receive benefits which, calculated as a capital figure, would provide 71,000 under the new scheme compared to 104,000 under the present arrangements. All the benefits available to him under the new arrangements, apart from a 7,500 lump sum, come from the Armed Forces Pension Scheme, not the compensation scheme.[136]

86. Those who represent ex-Service personnel disagree with the principle of funding higher awards for more severely disabled people at the expense of the less disabled. Combat Stress (the Ex-Services Mental Welfare Society) believes that this would be unjust, and that awards should be appropriate to the degree of disability.[137] Lawyers with experience in representing ex-Service personnel do not support taking funds away from those with moderate claims, and believe that all those injured in service should be treated equally.[138]


Does the proposed new scheme recognise the special status of the Armed Forces?

87. We have a number of concerns about the way in which the MoD's proposals might limit access and exclude claims which are currently accepted.


Access to compensation

Time limits on claims

88. Under the current system, a war pension may be claimed for any medical condition and at any time after leaving the Armed Forces. Under the new scheme, there will be a time limit for making claims of three years from when the incident giving rise to the illness or injury occurs, with exceptions for certain conditions.[139] The MoD says that the proposal for the three-year limit 'is in line with that used for civil claims for personal injury'.[140] A one year limit on actually making the claim once a condition has been diagnosed is also envisaged as this approach is common in insurance schemes and social security benefits.[141]

89. Those who represent ex-Service personnel are opposed to such time limits. The Royal British Legion told us—

We do not agree with introducing a period of three years from the time when the illness is diagnosed ... because so many of those who become unwell due to their service ... either do not know that they can make a claim or choose not to make a claim ... We would strongly disagree with the three-year rule.[142]

The Association of Personal Injury Lawyers (APIL) believe the time limits are too rigid and restrictive and point out that the rules in civil claims are more flexible in that the limitation period begins either on the date on which the injury occurred, or on which the victim became aware of the injury, and that it might be attributable to the defendant. The court also has discretion to extend the period depending on the particular circumstances.[143]

90. The Minister acknowledged that 'in certain circumstances' this new time limit on claims might mean that some people lost the opportunity to make a claim.[144] He went on to explain that the MoD's motivation in imposing time limits was 'to encourage people to claim within a reasonable time scale' but that minds were not closed on this subject and that representations would be listened to.[145] We asked the MoD for more information about the timescale for lodging claims for war pensions at present.

Table 3

Timescales for first claims for War Disablement Pensions

received from January to December 2001

Time from date of discharge to date of claim

Number of claims

Up to 1 year


1 year


2 years


3 years


4 years


5 years


6-10 years


11-15 years


16-20 years


21-26 years


27 years and over


Source: Ev 115

This demonstrates that, of the 9,754 claims received by the War Pensions Agency from ex-Service personnel last year, 2,957 were from Service men or women who had left the Services within the last three years: only 30 per cent of claims.

91. One of the key issues in relation to placing time limits on claims is the lack of flexibility this would permit in dealing with conditions which are slow to emerge. The Review document specifies that certain conditions, including some cancers, asbestos-related diseases and psychiatric illnesses, will be included in the list of conditions to which time limits would not apply.[146] Clearly what this list includes will need to be properly defined before any new scheme is introduced and there must be scope for adding to it as new conditions emerge and knowledge about existing illnesses develops. The Association of Personal Injury Lawyers (APIL) believe that any such list should be regularly reviewed to ensure it keeps pace with medical knowledge.[147]

92. There is a particular issue around psychological conditions. The Royal British Legion told us—

... many who suffer from mental illness reject the idea themselves and they do not want to advertise it by making a claim until their situation deteriorates to such an extent that they become so unwell that they have to.[148]

Combat Stress echoed this view and also highlighted the problem of late onset psychological conditions.[149] The MoD's response to our questions about how mental conditions would be dealt with was—

... we need to give more thought to the detail of the new arrangements that we incorporate. Clearly it will be necessary for any arrangements we set up to be flexible enough to cope with the sort of circumstances you have outlined.[150]

We welcome the assurance that the MoD is willing to look again at restrictive time limits. It is, however, regrettable that the issue of time limits, like many other aspects of the compensation proposals, were not sufficiently developed before the consultation document was published. While we would regard three years as an acceptable period in which to claim for a straightforward injury, it is too short a period for more complicated conditions or those which develop slowly, particularly given that 70 per cent of claims currently fall outside a three year timescale. We recommend that any time limit which the MoD imposes should relate to the date of the injury or the date of diagnosis of the condition. This practice would reflect limitation rules in civil cases.


Burden of Proof

93. The MoD describes the way causation is treated under the current War Pensions Scheme arrangements as 'unusual and generous', in that the normal civil test of balance of probabilities, with the onus on the claimant to prove his case, does not apply; there only has to be a reasonable possibility of a causal link for benefits to be awarded.[151] For claims made within seven years of leaving the Armed Forces, it is for the Secretary of State to show beyond reasonable doubt that service has not played a part in causing or worsening the condition for which a claim is made.

94. The MoD asserts that 'this generosity means that War Pensions are sometimes lawfully awarded for conditions only tenuously linked to service'.[152] We asked to see the evidence on which this contention is based but were told that records are not kept of cases in which a war pension has been granted but an invaliding pension has been refused due to the more stringent rules applied for claims for attributable benefits under the AFPS. What the MoD has offered is three examples, none of which involves a medically discharged member of the Regular Forces.[153] No proper audit of claims accepted and rejected has been undertaken to establish the scale of the problem because this would 'involve a major exercise beyond currently available resources'.[154] We find it impossible to accept that the MoD has carried out a proper review of the current compensation arrangements when they have no reliable data to show the scale of problems which they have identified as reasons for change.

95. Under the new compensation scheme, the burden of proof will be on the claimant and the normal civil test of balance of probabilities will be used as this 'is already a feature of the AFPS attributable benefits and reflects modern practice in the civil courts'.[155] The MoD told us that the burden to disprove a claim was placed on the Government when the War Pensions Scheme was established because, at that time, there was no developed social welfare system and medical understanding of the causes of illness were much more limited. As the circumstances are now different, it was decided that the new scheme should adopt modern practice and require a burden of proof based on a balance of probabilities.[156] The Director General, Service Personnel Policy, told us—

What we are proposing is to adopt a much more common burden of proof—which is the one that is used virtually universally elsewhere in the United Kingdom— which is quite simply that the individual should demonstrate that on the balance of probability his condition is attributable.[157]

The Minister thought it likely that people would prefer the current system because it is open-ended but believed that, if there was no change in time limits, other possible enhancements would be lost.[158] When asked if these changes were likely to result in fewer successful claimants, the Minister response was—

Yes. I do not think there is any other answer than yes, because of the new approach we are adopting.

But he believed that this would also result in better targeting of compensation payments to attributable injuries, which would be an enhancement on the current arrangements.[159] The MoD have confirmed in written evidence that—

... under the proposed compensation scheme there will be cases where a claimant, who would have been successful under the WPS, will not qualify.[160]

The Confederation of British Service and Ex-Service Organisations (COBSEO) told us—

We are concerned that the gateway and burden of proof for qualification for compensation have been made more difficult, with the inevitable result that ... there will be losers.[161]

The Royal British Legion pointed out that war pensions are not given away lightly under the present arrangements,[162] and this is borne out by the statistics. Of the 7,333 first claims for awards received by the War Pensions Agency in 2000-01, 949 were rejected (13 per cent); and 3,899 (53 per cent) were assessed at between one and 19 per cent disability and received only a war gratuity, not a war pension. Out of 3,191 claims for war widows' pensions in the same period, 1,651 were rejected (52 per cent).[163]


Medical Records

96. One of the issues which concerns us, if the burden of proof is to shift to the claimant, is the completeness of military medical records and the access which Service personnel will have to these records, particularly after they have left the Services. Our predecessors examined problems experienced by Gulf veterans in gaining access to their military medical records in their Report of April 2000. The MoD had accepted that there were inadequacies in the maintenance of medical records during the deployment to the Gulf and had acted to put improvements in place. The Committee commented—

It is essential that full and up to date medical records are maintained for all individuals in the Armed Forces throughout their service careers and including any medical treatment received during deployments.[164]

In addition to failures which occur in keeping records, the Committee found that some Gulf veterans and their general practitioners had also encountered problems in trying to access their medical records. The Minister for Veterans' Affairs informed the House that: 'the policy of the MOD for some years has been that no medical records should be withheld except where legislation so requires.'[165] Under the Access to Medical Records Act 1990, anyone may seek access to their medical records compiled after 1 November 1991. The Act allows for disclosure prior to this date if this is essential to understanding the records.[166] We explored with the MoD witnesses the current position on military medical records.[167] The Director General, Service Personnel Policy told us—

There are, indeed, problems with medical records ... Clearly in a case where medical records are not available that is an issue that would have to be taken into account, just as it is a factor that the courts will take into account if a case ended up there because there was an issue of negligence.[168]

97. The MoD, as the keeper of individuals' medical and service records, is in the position of holding all the relevant evidence on which a claim will be based, so it seems fair that the MoD should also retain the burden of disproving a claim. We would regard any reduction in the number of successful claims for injuries and illness which was caused by additional administrative obstacles as undesirable. There are criteria in place at present which ensure that war pensions are not given away lightly. To impose increased restrictions on claims, in the form of time limits and additional requirements for evidence, without any evidence of current abuse, would be a disservice to the Armed Forces and a very poor reflection of the value which the country places on them.


113   The War Pensions Agency was renamed the Veterans' Agency at the end of March; see HC Deb, 18 March 2002, c 56w. The administration costs of the WPA in 2000-01 were 35.6 million.  Back

114   Report on War Pensioners for 2000/2001, Section 2 Back

115   War Pensions Agency, Leaflet 9, Rates of War Pensions and Allowances 2001-2002 Back

116   War Pensions Quarterly Statistics, March 2001 Back

117   Report on War Pensioners for 2000/2001, Section 3 Back

118   War Pensions Agency, Leaflet 9, Rates of War Pensions and Allowances 2001-2002 Back

119   ibid Back

120   ibid Back

121   ibid Back

122   Compensation Review document, op cit, paragraph 3.11 Back

123   A Guide to the Criminal Injuries Compensation Scheme (2001), Compensation Injuries Compensation Authority, Issue No. 1 Back

124   Compensation Review document, op cit, paragraph 4.3; see also Ev 118, paragraph 14 and Ev 139 Back

125   Compensation Review document, op cit, paragraphs 4.5 Back

126   Compensation Review document, op cit, paragraph 4.2 Back

127   Q 46 Back

128   Compensation Review document, op cit, paragraph 4.6 Back

129   Compensation Review document, op cit, paragraph 2.1 Back

130   Compensation Review document, op cit, Section 6 Back

131   Compensation Review document, op cit, paragraph 8.4 Back

132   Ev 135 Back

133   Ev 56 Back

134   Ev 57 Back

135   Ev 58 Back

136   Ev 136 Back

137   Ev 83 Back

138   Ev 88, paragraph 22; Ev 110  Back

139   Compensation Review document, op cit, paragraph 8.16 Back

140   Ev 42 Back

141   Compensation Review document, op cit, paragraph 8.17 Back

142   Q 23 Back

143   Ev 43, paragraph 16 Back

144   Q 212 Back

145   QQ 214-215 Back

146   Compensation Review document, op cit, paragraph 8.16 Back

147   Ev 87, paragraph 15 Back

148   Q 23 Back

149   Ev 84 Back

150   Q 231 Back

151   Compensation Review document, op cit, paragraph 3.3 Back

152   Compensation Review document, op cit, paragraph 4.4 Back

153   Ev 139 Back

154   Ev 118, paragraph 14 Back

155   Compensation Review document, op cit, paragraph 1.3; Ev 42 Back

156   Ev 42 Back

157   Q 221 Back

158   Q 218 Back

159   Q 225 Back

160   Ev 116, paragraph 11 Back

161   Ev 79 Back

162   Q 16 Back

163   War Pensions Quarterly Statistics, March 2001, Table 2.5 Back

164   Seventh Report from the Defence Committee, Session 1999-2000, Gulf Veterans' Illnesses, HC 125, paragraph 50 Back

165   HC Deb, 5 December 2001, c 344w Back

166   HC 125, Session 1999-2000, op cit, paragraph 52 Back

167   The MoD have provided information on medical records in the Gulf and on operational medical records, see Ev 129-133 Back

168   Q 221 Back

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