Select Committee on Defence Appendices to the Minutes of Evidence


Submission from the Forces Pension Society to MoD Review on Compensation (July 2001)



  1.  The Forces Pension Society (FPS) (formerly the Officers' Pensions Society) submitted full and carefully researched evidence at the start of the Review process in 1998 (Reference A). That evidence remains extant and this document should be read in conjunction with it.

  2.  This Society welcomes the invitation to comment further on the Joint Consultation Document issued by MoD in March 2001 (Reference B). Where appropriate our comments in this document are cross referenced to the relevant section of the Consultation Document.

  3.  This Society has, throughout its 55 year history represented principally the pension interests of all ranks of all three Services, both serving and retired, to Governments. Its recent decision to admit all ranks to membership and to change its name makes explicit who it represents, which is the whole Service community, both serving and retired.

  4.  This Society fully supports the more detailed and expert comments submitted by the Royal British Legion and other specialist Service charities. In this document we concentrate on major matters of principle, leaving detailed issues to other more expert parties.


  5.  The aim of this paper is to set out the Forces Pension Society's views on the Joint Compensation Review as described in the Consultation Document.


  6.  The FPS focuses on the interests of both current and future beneficiaries of the AFPS and their dependants, who make a Unique commitment to their Country. Because the demands placed upon them throughout their service by the Government are unlimited and of a different order of magnitude from those of any other public servants, Armed Forces personnel are deserving of exceptional treatment both in retirement and in any compensation arrangements. The Unique nature of service in the Armed Forces and the fundamentally hazardous nature of the occupation, demand that any compensation scheme should be at the very top end of modern best practice standards and should err on the side of generosity and inclusivity.


  7.  The proposals made in the Consultation Document seek to put Service personnel on a par with other citizens and to equate Service compensation arrangements with common practice elsewhere, particularly the Criminal Injuries Compensation Scheme (CIC). We believe that this is a fundamental error. The principal difference between Service personnel and others is that the employer of the Armed Forces (Government) deliberately puts them at risk as part of the job. They are required to take life threatening risks as an integral, not incidental, part of their reason for existence. They cannot be fully protected by normal legislation when required to defend the Country's national interests. Furthermore training for these extreme operational situations also often has to be on the very limits of safe practice in order to prepare men and women adequately for the ultimate challenge. All of this is ordered by the Government, which therefore bears responsibility over and above that of other employers.

  8.  Essentially therefore, whilst it may be appropriate to evaluate the cost of coping with similar injuries comparably, an extra element is required, both in terms of the amount to compensate for the deliberate nature of the circumstances and the criteria for judging eligibility.

  9.  All our comments are therefore based upon:

    —  (a)  The Unique and hazardous nature of Service commitment.

    —  (b)  The inappropriateness of attempting to equate Service compensation arrangements with practice elsewhere.

    —  (c)  The exceptional responsibilities which the Government bears.

  10.  It is also necessary for our comments in this document to be read in conjunction with our comments on the Review of the Armed Forces Pension Scheme (AFPS) (Reference C) as the two Reviews are interlinked.


  11.  Single Scheme.  The proposed move to a single scheme (paragraph 1.2) amalgamating the War Pension Scheme and the attributable elements of the AFPS, all owned and operated by the MoD appears sensible, however we have a number of concerns.

  12.  Administration.  The current WPA and Pensions Appeals Tribunal (PAT) arrangements are widely admired and trusted by the clients and must not be degraded in any way. The traditional approach of the MoD is not so well admired by claimants, and will need to be modified to satisfy their legitimate expectations. The expertise of the WPA and PAT should be used to the maximum extent.

  13.  Fairness.  MoD will become both employer and the arbiter of compensation claims. This is a conflict of interest. Independent and transparent systems for judging admissibility of claims and amounts which involve the claimants, and an independent appeals process are vital; particularly if it is to have the confidence of widows and their representative organisations.

  14.  Burden of Proof.  This is set to shift onto the claimant (paragraph 1.3), which is wholly inappropriate. This is our most important single comment. There is no justification for making the criteria for eligibility any more onerous than currently.

  15.  Costs.  The proposals are said to be cost neutral (paragraph 1.5) and we detect that improved benefits for the more seriously disabled will be funded at the expense of the less seriously disabled. This straitjacket of cost neutrality is also inappropriate as it places the dictum of affordability about the principles of fairness and best practice. Any reduction of benefits is deplored.




  16.  Tax Status.  Clarity is required on the tax status of the various elements. There should be no worsenment.

  17.  Loss of Earnings.  Calculation should be to the end of a full working life (65), not just Service normal retirement age (55).

  18.  Eligibility.  Inclusivity should be the guiding principle eg:

    —  (a)  Sporting Injuries.  (paragraphs 8.9 to 8.11) The ethos and operational effectiveness of the Armed Forces are based upon high levels of physical fitness and motivation. Physical training and challenge pursuits of almost all kinds are fundamental. Individuals are encouraged to take responsibility for their own fitness. No sport injury should be excluded from compensation simply because it was incurred privately, unless the claimant is shown to have acted irresponsibly.

    —  (b)  Home to Duty Travel.  (paragraph 8.12) Service people often have no choice about where they are posted or where they may be required to live. Injuries incurred getting to duty, often under own arrangements, are causal and excluding them would create perverse and odious anomalies.

  19.  Welfare Support.  No mention is made of the approach to cradle-to-grave support which MoD claims as a guiding principle. Welfare of injured and disabled ex-Service people and their dependants is a key element. MoD do not have a good track record in this area and rely heavily on charities to plug the gaps. The WPA should have the remit of providing welfare support for all Service widows.

  20.  Guaranteed Income Stream (GIS).  (paragraph 7.2).

    —  (a)  The GIS should be tax free.

    —  (b)  The investment rate of return should be guaranteed.

    —  (c)  The residue of the lump sum should be part of the estate upon the death of the claimant.


  21.  Whilst the proposals offer many encouraging improvements the FPS has some major concerns:

    —  (a)  Service people and their dependants should not just be treated like other citizens because the Government has an extra and higher level of responsibility given the Unique and hazardous occupation.

    —  (b)  Cost neutrality has been allowed to dominate the logic rather than fairness or appropriateness. There should be no worsenment of benefits to fund improvements.

    —  (c)  Credibility of the new scheme with claimants will rest upon adopting the best of the current WPA practices, and wholly independent and transparent processes for judging eligibility and amounts and for appeals.

    —  (d)  Burden of proof must not be allowed to become more onerous.

    —  (e)  Eligibility should be based upon the principle of inclusivity.


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