Memorandum submitted by the British Limbless Ex-Service Men's Association (17 September 2001)
1. BLESMA as a sponsored ex service charity of much experience, has dealt with matters that concern its members at parliamentary and government level many times in its 70 year history. BLESMA has a reputation for being focused, never extreme, always constructive but always concerned for the wellbeing of its Members. Looking to the Members of the future we have reluctantly concluded that both the Pension and Compensation Reviews are, as they presently stand, significantly flawed.
2. We see both matters as being linked; thus our contribution to the pension debate is properly relevant. Our concerns in this area reflect those already aired by the Forces Pension Society but there are points of emphasis that we wish to highlight. Clearly though our, overriding concern is the Compensation Review. Matters that we have bought to the attention of the MoD in respect of both reviews are:
(a) Pension Review
(1) The reduction in value from 2/3 final salary to 62.5 per cent.
(2) There is a mismatch between Pension and Compensation Schemes.
(3) Those medically discharged in Tier one are at risk of being significant "losers" unless invaliding income provision is made.
(4) Tax status of Service Invaliding Pensions to be determined.
(5) Preserved Pension early payment should be allowed as now.
(6) Even accrual rates penalise those forced to leave the Service early (eg at 22 year point).
(b) The Compensation Review
(1) The underlying philosophy fails to recognise the district status of ex service men and women.
(2) We are deeply concerned about the proposed levels of awards and their linkage to the Criminal Injuries Compensation Scheme. They are too low and the apparent linkage is inappropriate.
(3) The significant differences between types of amputation are not recognised.
(4) "Average" deterioration is not applicable to amputees. The reality needs to be addressed.
(5) The War Pension Agency should administer any new scheme alongside the old, with a fully independent body set up to monitor and judge.
(6) Aftercare aspects such as priority treatment for War Pensioners, and the continued existence of the War Pensioners Welfare Service need to be addressed.
3. For ease of reference the above points and more are fully discussed in the two documents submitted to the MoD on 22 July under BLESMA reference SAC/B32/18. There are attached for consideration:
Armed Forces Pension Scheme (AFPS)Consultation Document. Dated 22 July.
Compensation ReviewConsultative Document. Executive Summary and Detailed comments dated 22 July
4. BLESMA officials are ready to discuss concerns with the Defence Committee at any time. BLESMA has the highest number proportionally of seriously injured ex service men and women belonging to it of any ex service organisation, and is therefore a major contributor to the ongoing debate surrounding the issues of Pensions and Compensation.
Copy of submission submitted from BLESMA to MoD Review (22 July 2001)
COMPENSATION REVIEW EXECUTIVE SUMMARY
Thank you for the opportunity to comment on the Ministry of Defence's Compensation Review. We thought it might be helpful to preface our detailed remarks with an Executive Summary. The logic and detailed thoughts are in our main paper.
Regretfully we have to say that the Compensation Review proposals, in their current form as a package, are unacceptable unless certain key areas are improved. Our membership (we are a genuine democracy) would expect nothing less for those Servicemen and women of the future and they would expect them to be as well looked after in the future as in the immediate past.
The main areas requiring recognition and improvement are:
Status. The paper completely ignores 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 much of what follows in the paperlevels of compensation, no mention of a welfare service, no priority in the NHS for those injuries received as a result of service. The status of individuals as War Pensioners or War Widows is important to society and its significance should not be underestimated.
Levels of Award. We believe that it is fundamentally wrong to put injuries received in war/action on a par with those received in criminal actions. Here again, the stauts of ex-Servicemen/women is called into question. The levels need to be increased to reflect this. Linkage to the Criminal Injuries Compensation (CIC) scheme will give the wrong signals, especially as it has been largely discredited. We strongly believe that the awards are too low. The Law Commission has called for a doubling of current rates in the compensation arena at the top end and a rise by half at the bottom end of the scales: eg total blindness to increase from £105K to £220K. This has had a considerable effect on compensation levels generally. The tariff only recommends £75K, which shows how low the figures are and seemingly reflects your lack of acceptance of the Status of those who die or are injured in the service of their Country. Furthermore, since the Law Commission's action, any award should also take account of the decision by the Lord Chancellor on 27 June 2001 to change the discount rate under the Damages Act 1996 to 2.5 per cent reflecting the lower returns on awards. There also seems to be no index linking.
Lump Sum Principle. 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. The proposal to have a Guaranteed Income Stream (GIS) is to be welcomed.
Amputations. Amputations of limbs seem to be equated and the Review does not differentiate between the length of amputation except those Above the Knee and Below the Knee. The Tariff should reflect the current practice of the War Pensions Agency in differentiating on the length of residual stump.
Deterioration. The Review seems only to allow for average deterioration. We feel it does not fully take into account that deteroriation, especially in amputees, can be more marked over time.
Linkage between the Compensation Review and Armed Forces Pension Review (AFPS). There is a mismatch between the Compensation Review and the AFPS Review in the interim period when some personnel will receive attributable benefits from the Compensation Review and their pension benefits from the old AFPS and vice versa. There needs to be some sort of interim arrangement to ensure no one suffers unnecessarily.
Tax Status of Service Invaliding Pension (SIP) in AFPS. The GIS for those longer serving personnel who are medically discharged (or dieWGIS) 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) and to factoring in loss of earnings to the pension age of 65 for those worst disabled and who are unable to work.
Scheme Administration. Consideration should be given to the WPA running the Scheme on behalf of the MoD, especially now as the WPA has joined the Mod from the DSS. The WPA has massive experience and we are sure their Medical Staff could cope with the two differing systems. We would also suggest the use of an Independent Body to oversee the Scheme, certainly in its early years. This would give both the Serviceman and Ex-Service community confidence that the Scheme would work. Certainly any Appeal Mechanism should be independent of the MoD. It is also 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.
Aftercare. We mentioned 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. Once a person is a War Pensioner or War Widow, this allows access to the War Pensioners' Welfare Service (WPWS), which is an excellent nationwide 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 is 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; the WPWS must continue. Secondly, the Priority Treatment in the NHS principle must continue and this latter point is essential in allowing War Pensioner amputees to receive second limbs in the NHS Disablement Service Centres.
There are some other points that are fully explained in our main paper.
We hope that the foregoing is of a constructive nature, as we do believe that the Armed Forces of the future must be as well looked after as those in the immediate past.
1. Thank you for the opportunity to comment on the Ministry of Defence's Compensation Review. Before we provide our thoughts on the Compensation Review, we do have a major concern in relation to its linkage with the Review on the Armed Forces Pension Scheme (AFPS). Currently the War Pension Scheme and the AFPS are interwoven, especially for those who are medically retired/discharged or die in service. The same will apply to some extent in the future schemes but there is a mismatch between the Pension and Compensation Schemes. Those on the:
(a) old AFPS and the current WP Scheme; and
(b) those who are on or elect to join the new AFPS and who benefit by the new Compensation Scheme for death and injury,
<jf35>will be logically catered for (subject to sorting out any particular problems in either scheme). However, those injured before the introduction of the Compensation Scheme, and who opt to move to the new AFPS have a mismatch as the attributable death and disability awards are under the WP Scheme and the old AFPS, whilst their non-attributable benefits are in the new AFPS. Likewise, those on the old AFPS and who are injured/die after the new Compensation Scheme is introduced, will have a similar mismatch. This will mainly affect those who suffer medical retirement/discharge. 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 mismatch will disappear, the mismatch could linger for a considerable time for some individuals. An amputee is a good example, he may be injured at age 25, but serve on for some 10-20 years until his amputation worsens and he is forced to be discharged. The current General Secretary of BLESMA and Sgt Walker (if medically discharged at a later date) are classic examples of this category. You have stated that individuals cannot have elements of the old and new AFPS, but to avoid personnel dropping through the net, there needs to be some sort of interim arrangement to ensure no one suffers unnecessarily.
2. Turning now to the Compensation Review, we believe that the paper bases its main principle on the argument that as a modern welfare state provides a wide range of financial, medical and other support; we should change the system (Paragraph 4.3). In making this point, the paper completely ignores 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 much of what follows in the paperlevels of compensation, no mention of a welfare service, no priority in the NHS for those injuries received as a result of service. The status of individuals as War Pensioners or War Widows is important to society and its impact should not be underestimated. It is an issue that then leads on naturally to after Service Welfare and Priority Treatment in the NHS for the former for their accepted disabilities. The Government expects that our Armed Forces to be available at any time, 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 periods. This and other like conditions emphasise the need to be different and to be treated differently. This principle is still very apparent in other Nations and should underpin everything. We understand that the Services are aware of this point and it is a pity the paper fails to cover this. Whilst not wishing to be melodramatic, the Services are the only group in society that has to lay its life down for the State without consideration of any risk. Whilst the Police and Fire Service face dangers, in many cases they will be able to conduct risk assessments and can withdraw and can exercise control in most risk situations. In action, the Services cannot do this. In appreciating a military situation, casualties are considered but the primary risk element is operational effectiveness, not the life of individuals. The WPA has consistently accepted this point. We return to this fact later when highlighting some of the areas that must be improved.
3. We fully understand that compensation for injury or disease due to service would be paid by a lump sum (Armed Forces Attributable Award (AAA payment)). This would be tied to the severity of the injury. We note that this lump sum would be in 15 levels and based on the Criminal Injuries Compensation (CIC) Scheme. Although the paper states on one hand that the Tariff Levels are exemplary, it also states at Paragraph 5.5 that the scheme should not be too far out with awards awarded in civil life. The CIC scheme is discredited (the Potts case, amongst others) and is less than the NI CIC scheme, which the paper makes no mention of. There is also no form of index linking to allow for inflation. We believe that it is fundamentally wrong to put injuries received in war/action (and the training thereof) on a par with those received in criminal actions. Here again, the status of ex-Servicemen/women is called into question. However, we accept the principle of not paying twice for an injury is legitimate, so the ability to abate either the Triple A by the amount of other compensation or vice versa is acceptable. We discuss the types of injury below.
4. We note that you discuss the consideration whether the compensation for lost earnings, for those who are medically retired/discharged, or die in service, could either be a lump sum or a lump sum amortised into a Guaranteed Income Stream (GIS). 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 we believe that you are aware of, but 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. 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.
5. You state that the GIS/GIS(W) would suffer some abatement by a lump sum equivalent amount of the SIP from the AFPS, but some of the SIP reflects what has been earned in the normal way. Whilst the GIS could be abated by any enhancements under the AFPS, it should not be abated by the earned element.
6. Awards in cases for compensation for injuries which have gone to the Courts, reflect very much larger sums than the CIC tariff. If the present CIC rates are adhered to, not only will this comparison cause deep resentment, in this litigious age it could well lead to cases of judicial review. It will be to no one's advantage for the Ministry of Defence to be perceived as failing properly to look after disabled ex-Servicemen and women.
7. We have touched earlier on the linkage between the AAA awards and the CIC. We strongly believe that the awards are too low. The Law Commission has called for a doubling of current rates in the compensation arena 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 £220,000. The tariff only recommends £75,000, which shows how low the figures are and seemingly reflects your lack of acceptance of the Status of those who die or are injured in the service of their Country. There seems to be no index-linking.
8. We have specific comments related to those who suffer amputations, about which we feel strongly and, which are based upon our long experience:
(a) Amputations of limbs seem to be equated. Attached is a diagram showing how the WPA work out the percentage rates for amputation. The Tariff puts the loss of both eyes, legs, arms and hands as the same (Level 3). It is, perhaps, a little low for this type of serious injury. Loss of both eyes and legs/arms at the higher points should be in Level 2;
(b) The Review does not differentiate between the length of amputation except Above Knee (AK) and Below Knee (BK). Those amputated at the hip are very much worse off (the WPA gives 100 per cent for this). It is also well known that if the remaining stump of an AK amputee is less than six inches, he/she will always have considerable trouble in wearing a prosthesis for the rest of his/her life (difficulty of purchase). The same applies to Above Elbow (AE) arm amputees who have little residual stump;
(c) The known deterioration that occurs in leg amputees' other leg (including osteo-arthritis which can occur in both hips) and spine is not taken into account. The paper does not specify what is meant by average deterioration but states that average deterioration has been factored in. We doubt that. Deterioration is very much an individual matter but it does need including in the figures. After all, if the injury had not occurred, the chances of these additional effects would be much less. An alternative approach would be to allow for later reviews;
(d) The arm amputation figure is also very low, especially when a War Pensioner can have a car adaptation grant every three years of up to £1,500 each time. He could apply for some 20 grants over his lifetime. This group also receive other concessions like free dental treatment. Any compensation figure needs to take account of these current concessions;
(e) Multiple injuries that often happen in war (eg blindness and amputation) should have an additional loading (multiplier) to reflect this.
Therefore there should be some differentiation between groups of amputees.
GENERAL COMPENSATION POINTS
9. The Compensation Review appears not to allow for any aggravation of medical conditions that themselves may not be attributable. We would like to be assured that claims could still be made and accepted for payment, since aggravation to ordinary injuries produces a considerable number of claims.
10. Levels 1-11 will qualify for both an SIP and a GIS:
(a) Levels 1 to 5 fall into the severe category, but we would expect those with hip amputations to find work very difficult. This group should be in Level 5.
(b) Levels 6 to 11 should be encouraged to work, even allowing for their injuries. However, whether they will be able to work until the age of 65 is debatable and this should be factored into the calculations of the GISperhaps loss of earnings element should be increased at the age of 60.
11. In our comment on the AFPS we expressed concern over those who suffer injuries that lie in Tier 1 in the AFPS (Levels 12-15 in the Compensation Review) and who suffer a medical discharge. Most of the injuries between Levels 12 and 15 will not really affect the level of someone's future employability, although some might: eg severe damage to tendonscontinuing disability (this will especially affect junior ranks in the more active parts of the three Services, eg Infantry/RM). To pay these groups two gratuities ie a "tariff" based gratuity from the Compensation element and another gratuity (the special gratuity) from the AFPS Tier 1, with no income provision whatsoever is a defect that needs to be addressed. While it is accepted that most of the lower injuries are probably correctly "tiered", the principle of invaliding income provision needs to be extended to include all those medically discharged in Tier 1 and not just Tiers 2 and 3 as presently suggested.
12. The GIS for those longer serving personnel who are medically discharged (or dieWGIS) 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) and to factoring in loss of earnings to the pension age of 65 for those worst disabled and unable to work.
13. 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, especially as the WPA has been moved across from the DSS to the MoD. The WPA has massive experience and we are sure their Medical Staff could cope with the two differing systems. This would have the benefit of being slightly separate from the MoD (although the MoD would still bear the costs) and would allow access to the War Pensioners' Welfare Service (WPWS)see paragraph 14(a) below. 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". In the past, the MoD has never accepted any responsibility for the ex-Servicemen/women other than for pensions. We always understood that the "grave" meant either a death in service or the retirement/discharge of the individual. You have consistently stated that Other Government Departments (OGDs) hold this responsibility for personnel once discharged. This last factor becomes very important when we consider Welfare and the NHS priority system later. Perhaps this will now change.
14. There should also be an Independent Body to oversee the Scheme, certainly in its early years. This would give both the Serviceman and Ex-Service community the confidence that the Scheme would work. Certainly any Appeal Mechanism should be independent of the MoD.
15. It is also 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. 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. This latter point is essential in allowing War Pensioner amputees to receive second limbs in the NHS Disablement Service Centres.
(a) After Service Welfare. Once a person is a War Pensioner or War Widow, this allows access to the WPWS (mentioned above in paragraph 11), 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, is 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. Charities such as ourselves do not have the resources to fill this gap, especially if we are to lose the revenue generated from the WPA for Convalescence Breaks (and in some areas Rehabilitation (Article 26)).
(b) Priority Treatment in the NHS. 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. This priority works in the Limb Centres and all War Pensioners also receive a second limb. To 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!
(c) Medical Costs Overseas. 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, especially as insurance for these conditions is likely to be unavailable. If these are not to be replaced, the Tariffs must allow headroom for this type of expenditure.
(d) Inheritance Tax. Although clearly laid down in Inland Revenue legislation, 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.
17. We note that the figure to be used for the W(GIS) will be 60 per cent of the spouse's lost earnings capacity, abated by the non-attributable pension paid under the AFPS. However, in the same way as we mentioned earlier in paragraph 5, above, the abatement should not reflect the element of the pension that has been earned.
18. 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 otherwise its value will decrease over the years.
19. You are looking for specific feedback in certain areas:
(a) How should Sporting Injuries be Treated? The current WPA approach is not an unreasonable approach. What must be borne in mind is that the Services need to be very fit. One of the greatest weaknesses in the British Army in the Boer War was that it was pretty unfit. Part of this was caused by malnutrition at the time and part by a lack of exercise in society. This was why the Government of the Day introduced compulsory sport in the schools. It could be surmised that by 1914, the Army was much fitter and the results were obvious to see (arguably these fitness enhancing conditions have been allowed to lapse again in our schools). 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 an approach along the lines of Option C to be the correct approach: ie if the CO believes that individuals must maintain a required standard, injuries in those activities should be considered attributable. These should include official adventure training.
(b) Home to Duty Travel. This is a thorny question, but we believe that the Compensation Review should follow WPA practice and each case should be judged on its merits.
(c) Time Limit on Eligibility. 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. Whilst for many cases, three years would be a reasonable time, care must be taken where apparently less severe injuries still end up later as a major disablement: eg this does happen in the case of amputations caused later by ulcers and Caissons Disease. Great care is also 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 a certificate thereof. This must include the information on time limits for claims.
20. 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.
It is appreciated that the Forces Pensions Society (FPS) will probably cover most of the deeper philosophical pension points and we support the thrust of their arguments. However, BLESMA feels we need to emphasise certain points about which we feel strongly. We should mention these as most, but not, all relate to those who leave as a result of their injuries:
It is disappointing that all the explanations of the current AFPS inform the Serviceman/woman that a full pension is worth of their representative rate of pay. The Armed Forces have consistently been informed of this in the basic pension documentation and this point was highlighted during questions on many occasions during the Redundancy Presentations given during Options for Change over the period 1992-94. We note that the new AFPS is only going to give an equivalent of 62.5 per cent of final pay and we find this shortfall unsatisfactory.
There is a mismatch between the Pension and Compensation Schemes. Those on the [MISSING COPY] of pay when they are forced to leave the Services. This would mainly apply to those officers on medium term commissions who do not/or are not allowed to extend and the group of Warrants Officers/SNCOs, mainly in the Army and RM, and those in the other Services who have to leave at the 22 year point. They are on lower increments in the new pay system and would, in many cases, have lower pensions than now. For these groups the new AFPS should follow the current practice that there should be a faster accrual rate to the 22 year/age 40 point as they are not allowed to serve on.
We hope that the foregoing is of a constructive nature, as we do believe that the Armed Forces of the future must be as well looked after at least as well as those in the immediate past.