Select Committee on Defence Appendices to the Minutes of Evidence


Supplementary memorandum submitted by the Ministry of Defence




  1.   Additional information was offered on the Joint Personnel Administration Project and the further work necessary to ensure that the IT and other structures are in place to ensure that it is possible to implement the new pension and compensation arrangements by 2005 [QQ134-135]. It would also be helpful to know the estimated costs of this work.

  The implementation proposals for the Joint Personnel Administration (JPA) are still under internal scrutiny. However, we expect to start implementation in 2004, and the new systems and processes are not currently expected to be in use across all three Services before the latter part of 2005. Precise rollout dates will be dependent on the outcome of the JPA Strategy Study Main Gate Business Case, including decisions on commercial delivery options. The case is expected to be considered in autumn 2002. It is not yet possible to provide estimated costs relating to the implementation of the new pension and compensation arrangements, as the requirements have not been finalised. However, it is recognised that if an existing commercial pension package could be adapted it would offer a cost effective solution.

  2.   Additional information was offered on comparator pension schemes [QQ137-148].

  The evidence available for pay comparison supports the suggestion that the Armed Forces Pension Scheme (AFPS) is a very good scheme and is more valuable than that offered in comparable employments. The pay abatement is currently set at 7 per cent of comparator pay showing that the AFPS benefits are significantly more generous than those offered in many other schemes, notwithstanding the fact that only half of the value of IP before age 60 is included in the comparison calculations.

  During the review, the Department was keen to gather information on how the Armed Forces scheme compared with both other public sector schemes and also with those offered in the private sector. Against the background of the potential headroom of Inland Revenue limits within which the scheme would need to operate. This information was considered when each element of the scheme design was discussed. This approach meant that comparisons were not collated as a single document. However, the Department has identified some relevant material and the following has been provided:

    —  Annex A. This provides a summary of the public sector arrangements. This summary is now a little out of date but it shows that the scheme compares well with all the main schemes with the exception of the arrangements provided for the Police and Fire service (which we understand have been the subject of a separate review). When comparing against the Police and Fire schemes, it should be noted that both services have career structures which tend to produce lengthy periods of service. Although the exit ages are different, it would therefore be more valid to compare the AFPS Officers rate with those for the Police and Fire service, rather than the overall AFPS average including Other Ranks. Many Other Ranks leave after only a few years of service and this reduces the average value of their pension. Officers generally remain in service for longer and offer therefore a better comparison with the Police and Fire services. If such a comparison is made, the AFPS scheme therefore compares reasonably with these arrangements;

    —  Annex B. This draft paper looked at a comparison with private sector arrangements. This paper was not worked up for formal distribution but was used to inform the review team. It demonstrates that in many of the key aspects the AFPS compares favourably with private sector practice. The recent further trend towards shutting defined benefit schemes in the private sector would be expected to show that the AFPS remains a generous and attractive scheme to members;

    —  Annex C. This shows a table setting out a summary of ill-health benefits provided by other employers which was used to assist in considering the ill-health benefit structure.

  3.   If pension benefits improved, the percentage by which pay is abated would presumably increase to reflect this. It could be argued therefore that this method of clawing back pension enhancement through abatement of pay provides a built-in mechanism for ensuring cost neutrality of the overall pay and pension package. What are your comments on this?

  The level of "pension abatement" is a matter for the Armed Forces Pay Review Body (AFPRB) to consider. However, it is reasonable to assume that any additional pension benefits funded by the Department would be considered by the AFPRB as part of their overall review of the remuneration package. Whether, and to what extent, the AFPRB would reflect any change in pension benefits in the abatement of comparator pay would depend on their wider assessment of what Service pay levels were necessary to meet recruitment and retention needs. Should the AFPRB decide to abate comparator pay to the full value of the additional benefits, it is expected that the overall cost to the Department would be neutral. However, the different timings of any abatement and incurring of pension scheme costs would need to be taken into account, and the precise effect would depend on the AFPRB's valuation of the particular benefits. Given the importance of the headline rate of pay for recruitment and retention, the Department would wish to take a view on the case for increasing pension benefits at the possible expense of pay.


  4.   It would be helpful to have details of the definition of unmarried partners used by the Australian armed forces [Q180].

  The Australian Armed Forces policy on recognition of de facto marriages is attached at Annex D—there is an addendum at the end which reflects a revision of the policy which was promulgated on 20 March this year. The Australian definition is as follows:

    "De Facto Spouse—in relation to a member, means a person of the opposite sex to the member, who lives with the member as husband or wife of that member on a bona fide domestic basis, although not legally married to the member."

  The Department's work on extending benefits to unmarried couples raises a number of complex issues and it may take some time before recommendations on this matter are made. In considering the matter, the Department is looking at the practice of Other Government Departments, the private sector and other Armed Forces. In view of EU legislation, any extension of benefits to unmarried partners in the Armed Forces would include same-sex partnerships.

  5.   We would be grateful for information on what work has been carried out to date to asses the number of Service personnel who have unmarried partners [Q180].

  The Department is about to commence a fact-finding survey among 5,000 unmarried and separated personnel within the three Services with the aim of identifying social and domestic trends (the Domestic Trends Survey of Non-Married Armed Forces Personnel). This survey will form a key part in the formulation of policy. The survey will take place in April and, following a detailed analysis, the results are due to be presented to the Departmental Working Group in July this year.

  6.   The Committee have been told that "focus groups" will be used to gather views of Service personnel on extending benefits to unmarried partners [QQ183-184]. Further details would be helpful on how the focus groups will operate and when their work will begin.

  As explained above, the Department has established a Working Group to develop a policy on unmarried partners and possible entitlements. This Working Group agreed that, in advance of the results being available from the Domestic Trends Survey of Non-Married Partners, it was appropriate to establish a representative view of Service personnel's thoughts on provision of survivor benefits to unmarried partners under the AFPS.

  In our memorandum to the Committee, the Department set out the criteria required of public service pension schemes in respect of provision of benefits to unmarried partners. The planned focus groups are designed to gain both qualitative and quantitative information, in particular on the key questions of whether scheme members would support benefits being extended to unmarried partners and, if the answer was yes, whether they would be willing to pay a contribution to cover the costs of these benefits. The Department's pension review team is planning to conduct focus groups at two or three units for each Service. Focus group will be limited in size to around 12, with a range of ranks, ages, trade groups and length of service. It is intended to provide background information to those selected to attend the focus groups as well as a brief, anonymous questionnaire on pensions issues.

  The focus groups were originally due to start earlier this year, but had to be delayed due to preparation for the Committee's evidence session. These focus groups will now be conducted during April/May and will take up to four weeks to complete.

7.   Would a contributions system to cover unmarried partners have any effect on the AFPRB calculation of abatement of pay which reflects the value of the AFPS?

  This is a matter for the AFPRB and depends on what is happening in civilian comparator pension schemes. However, if the member contributions were to cover additional benefits, not already available in the current scheme, we would not expect the improvement in benefits to affect the abatement of comparator pay.


8.   Time limits for claims: statistics were offered on the range of time which elapses between individuals leaving Service and making a claim for a War Pension [QQ214-215].

  Information on how long it takes individuals to claim a War Disablement Pension after leaving the Armed Forces is shown in the table below. This offers an analysis of claims received from January to December 2001. It is notable that there is a significantly higher number of claims within the first year of leaving the Armed Forces, than in any of the following years. From nine years onwards, there is a generally steady but low level of claims, but a high number of claims are made 27 years or more after leaving service. This pattern has long been observed in war pensions claims, and may relate to such factors such as commemorations and reunions. Where there is a long time interval between service and a claim for service-related ill-health or injury, evidence gathering and decision on entitlement may be both prolonged and complex. In general, claims lodged within a short time from service termination are more likely to be successful than those made later, since, for most types of conditions for which compensation might be paid, the causal event is unlikely to have a delayed effect.

Timescales for first claims for War Disablement Pensions received within the 12 month period January-December 2001

Number of claims

Time from date of discharge to date of claim


Under 1 year


1 year


2 years


3 years


4 years


5 years


6 years


7 years


8 years


9 years


10 years


11 years


12 years


13 years


14 years


15 years


16 years


17 years


18 years


19 years


20 years


21 years


22 years


23 ears


24 years


25 years


26 years


27 years and over

9.   Statistics were offered on the number of War Pension claims which are currently processed within a few weeks of claims being made [QQ251-252].

  One of the triggers for the present review of compensation arrangements was dissatisfaction with the often complex, and protracted, nature of War Pensions evidence gathering and determination. Claims determination taking in excess of two or three years was by no means uncommon, until the last few years during which the War Pensions Agency (now Veterans Agency) made considerable strides in improving the effectiveness of its processes and reducing the time taken to process claims.

  In the Department's memorandum to the Committee, it was explained that it was thought reasonable to set an objective for processing the majority of claims in the new scheme within a few weeks of their submission. However, based on the War Pensions experience, it was also recognised that, where cases were more complex or where further medical evidence was required claims might take longer.

  Information provided below by the Veterans Agency confirms that we have set ourselves an ambitious task. However, discussions with the insurance industry, the Criminal Injuries Compensation Authority (CICA) and Jobcentre Plus concerning industrial injuries lead the Department to conclude that the simpler, less discretionary, arrangements of the proposed scheme should assist our task of reducing average processing times. The Department recognises that the more detailed evaluation work, which will be conducted once the broad terms of new scheme are approved, will be key to enabling us to set realistic but demanding targets for processing claims. Realistic, but demanding target times should be welcomed by future claimants.

First claims to disablement only—Current Invaliding and First Claims for a Disablement Pension, April 2001-February 2002

Number of cases cleared

Within the following weeks






















over 40

  10.   Information was offered on the accuracy and completeness of military medical records and the effect, under the new scheme, which missing or incomplete records would have on claims based on "balance of probabilities" [QQ221-225].

  Since the Gulf crisis, much work has been done to improve the medical records of Service personnel including in 1999 the introduction of Operational Medical Record, F Med 965. This is expected to result in significantly improved accuracy and completeness of medical records. More detail on Gulf medical records are provided at Annex E. Annex F provides a detailed note on how the F Med 965 should be used and maintained.

  For the longer term, the Surgeon General is developing an Information Strategy which will link electronic and paper records for both peacetime and on operations, thereby providing up-to-date and readily accessible personal medical records. The system will be compatible with NHS systems and in line with the Government information strategy on electronic medical records. The Compensation Scheme will be introduced at a time when there have been significant improvements in the management of medical records and the Department is confident that the same difficulties that arose following the Gulf crisis will not recur.

  11.   At Q248 the Committee asked for a summary of the enhanced benefits available under the new compensation scheme for those medically discharged with attributable injuries, compared with the present arrangements.

  The Committee requested further comparative examples of the current and proposed compensation arrangements for the Armed Forces. These are provided at Annex G and include an additional example of a death-in-service with children from the Other Ranks (Annex F, Example 1c in the Department's memorandum did show figures for the death of an Officer with children), as well as some higher tariff level awards and some at the lower tariff end. The Committee will wish to note that, based on the experience of recent claims against the War Pension Scheme (WPS), the Department would not expect a significant proportion of claims to be at the high tariff levels and that the overwhelming majority can be expected to be at the middle to lower tariffs. Annex H shows how awards made over the last three years of medical discharges might have been categorised under the new tariff system. As the Committee will no doubt recognise, under the proposed compensation scheme there will be cases where a claimant, who would have been successful under the WPS, will not qualify. The examples provided in response to Question 14 below demonstrate the effects of the different burdens of proof. The Committee will also wish to note that the examples have used the benefits proposed under the new AFPS in the comparisons, which in the case of the higher tariff levels will show the enhanced ill-health retirement package, and at the lower end of the tariff will show the move away from the payment of ill-health pensions for minor injury or ill-health toward a one-off gratuity with preserved pension.

  The Committee recommended the inclusion of War Pensions Allowances and the civilian equivalent provided by the Department of Work and Pensions (DWP) to be included. It was not through oversight that these allowances were not included in the original examples but it is recognised that a footnote should have explained the decision to omit them.

  There are a number of reasons for not including allowances. Both in civilian and WPS allowances, different levels of allowance may be payable dependent on case specific circumstances which may vary with time as well as personal circumstances, such as income level where allowances are means tested. There is no obvious illustrative level that could be quoted for each case. Where there are WPS and civilian allowances payable for the same disabling effects (such as for mobility or care) both benefits cannot be paid simultaneously. The matter is further complicated by the differing eligibility criteria for WPS and civilian allowances. Access to DWP allowances is often easier, as the WPS allowances require the problems to arise from the accepted disablement and a threshold assessment must be met for the allowances to be paid. The DWP allowances are based on overall disablement and there is no assessment threshold. Individual circumstances may mean that a War Pensioner may not be eligible for a WPS allowance but be able to receive the civilian equivalent.

  In addition to the non-means tested benefits, there are other income-related benefits available (such as the Jobseeker's Allowance, Income Support, Housing Benefit, Council Tax Benefit, Disabled Persons' Tax Credit and Working Families Tax Credit). The payment of these benefits will depend on their personal and family circumstances and it would be difficult to judge whether these should be included in any examples. In conclusion, it is difficult to make a judgement on what allowances and at what level they might be paid in hypothetical cases. While it is recognised that in some cases there may be some variations, overall the Department believes the impact of these allowances on the costings provided are not significant and their inclusion would over-complicate the comparisons.

  12.   Please provide a table setting out how the current War Pension categories of percentage disability compare with the exemplary tariff levels as set out in the consultation document (ie, which tariff levels equate to 20 per cent disability, which equate to 30 per cent, and so on).

  The approach to assessment in the two Schemes is quite different. It is therefore not possible to provide a table directly comparing current war pension percentage disablement with the exemplary tariff. Under the War Pensions Scheme, awards may be paid for any disablement accepted as causally related to service. Assessment in the WPS dates back to 1914, and the treatment possibilities of that time. It reflects not the particular injury or medical disorder underlying disablement, but the resultant loss of function of the disabled person compared with a normal person of the same age and sex. In broad terms the loss of function relates to the particular faculty affected (sight, hearing or limb) rather than to overall body-mind capability. To support consistency and equity, the legislation contains a list of statutory scheduled assessments (SSA). These are important as defining the levels of disablement for the listed conditions, and also provide benchmarks for determining disablement levels for all other accepted conditions. The SSA provide that loss of a limb or sight or hearing attracts 100 per cent assessment.

  Assessment under the WPS does not therefore provide a measure of overall impairment; rather it provides a scale against which to determine appropriate award levels. The maximum 100 per cent assessment represents total disablement for pension purposes, but does not necessarily denote complete helplessness.

  Today there remains no complete consensus on disablement assessment for compensation purposes, but the world-wide published peer-reviewed American Medical Association (AMA) Guides to permanent impairment are most frequently used. That Scheme expresses medical disorders/injuries in percentage organ/limb impairments and then as percentage whole body impairment. In contrast to the War Pensions Scheme, here an assessment of 100 per cent means 100 per cent whole body impairment (wbi) or "near death".

  Examples of the differing approaches of the War Pensions Scheme and AMA Guides include:





lower limb—loss of leg below knee

40-60 per cent

28-32 per cent wbi

lower limb—loss of leg above knee

70-90 per cent

32-40 per cent wbi

total deafness

100 per cent

35 per cent wbi


  In absolute levels and relative positions the tariff approach would aim to reflect the AMA approach of measuring disablement against whole body function (wbi).

  A final difference limiting direct comparison between the WPS assessment and the proposed tariff is the review facility. The WPS has wide gateways to review. The new proposals, in line with the civil courts and insurance schemes, will normally make full and final settlements, with review restricted to situations where not to do so would breach natural justice.

  13.   Your response to previous written questions said that, unlike civil negligence claims, the new compensation package makes no provision for the costs of medical or nursing care and that the expectation is that this would be provided from the normal NHS and social services provision. What is the justification of excluding the costs of care from GIS calculations?

  The most appropriate route for treatment/welfare care for those with disabilities accepted under the new scheme has been carefully considered during the review.

  Since 1948, successive Governments have taken the view that the provision of medical/nursing care for War Pension accepted disablements should be the responsibility of the NHS. In the 1950s Ministry of Pensions Hospitals were absorbed into the NHS and, in exchange, the system of Priority Treatment for war pensionable disablements was introduced. Based on the decision of the clinician in charge, Priority Treatment is available to War Pensioners for the management of their accepted disablements.

  As was explained in the Department's memorandum response to the Committee's Question 18, careful consideration of the evidence confirms that all appropriate medical management, care and rehabilitation for disorders likely to be seen in the new scheme is available from National Health and social services. Though the issue of how such support for the disabled should be provided is currently under discussion within the UK, it is likely that the emphasis for this group will remain on community based care, and that residential facilities will be appropriate only on an occasional basis or for those most severely disabled. The Department therefore concludes that the current arrangements for attributable benefits under the War Pensions Scheme and the AFPS which do not provide for separate funding of medical or nursing care should be maintained. Apart from the arrangement for Priority Treatment, this is broadly the same position as for other public sector no fault compensation schemes.

  A significant difference between the proposed compensation arrangements and civil claims is that in civil claims an award for care costs is a feature of some decisions. Proven negligence is always an issue in civil damages, while that is not the case in the proposed Armed Forces scheme. Service personnel will retain their right to pursue their cases through a civil claim where negligence is an issue. With regard to means tested social care, this policy applies to the current arrangements under the WPS and the AFPS.

  The recently published War Pensions Quarterly Statistics (up to December 2001) confirm that more than four out of five disablement pensioners have awards at the 50 per cent rate or less, with the majority at 20 per cent. Less than 5 per cent receive a 100 per cent pension rate. These figures relate to all disablement pensions in payment (Annex I Table 1). A recent survey of new medically discharged cases (for December 2001) confirms a similar pattern as set out in Annex I Table 2. These tables show the relatively small numbers of cases where care might be a significant issue. It should be noted that the percentage disablements rates used are for WPS assessment purposes only, and are not assessments of whole body impairment (as explained in answer to question 12 above).

  14.   In how many cases over the last 10 years have the WPA and the AFPS reached different decisions on claims?

  The information requested is not recorded, and could only be provided by undertaking a manual trawl of Service personnel records. This would involve a major exercise beyond currently available resources. However, at Annex J a number of examples have been provided which demonstrate the types of cases where the different burden of proof can affect a decision on attributability under the WPS and AFPS. The cases have been made anonymous for obvious reasons.

  15.   Can the MOD justify discriminating, in terms of compensation arrangements, between the serviceman and the civilian employee who might be working side by side in the storeroom, and who might receive the same injury?

  The provisions for compensation for Service personnel and civilian staff vary, as do their terms of employment and remuneration packages, to reflect the particular nature of the jobs and the different demands which, in broad terms, these entail. Issues of comparability are carefully considered when updating schemes, and all schemes are subject to periodic review.

  16.   The review document says that it was considered "sensible" for the new scheme to have "an independent and ECHR compliant appeals process". Is the current appeals process ECHR compliant?

  A comprehensive audit of war pensions legislation was undertaken to ensure that the WPS was ECHR compliant. A number of amendments to the appeals provisions were identified which required primary legislation. These centred mainly on the need to provide comprehensive appeal rights and to ensure that appeals are processed efficiently. The necessary changes were introduced into the Pensions Appeal Tribunals (PAT) Act 1943 by the Child Support, Pensions and Social Security Act 2000 and came into force in 2001.

  In common with other occupational pension schemes in both the public and private sectors, the AFPS provides no statutory right of appeal to the courts in respect of decisions of the administrators of the Scheme. However, in the context of the AFPS such decisions could be challenged by way of judicial review if the decision were made in error of law or if the administrators acted unreasonably. In addition, the AFPS provides for an internal disputes resolution procedure. Where an individual remains dissatisfied with a decision he or she may make a complaint to the Pensions Ombudsman. There is a further right of appeal on a point of law to the High Court. The current appeals procedure is being reviewed at present and the issue of ECHR compliance will be considered in detail in the context of that review.

  Should any issues relating to such compliance emerge from the review, steps will be taken to revise the appeals procedures.

  17.   What will be the future role of the War Pensions Agency?

  The Veterans Agency (formerly the War Pensions Agency) will continue to provide services to its existing client base, and will now operate a one stop shop Helpline and Website providing help and advice on a range of Veterans' issues (subsuming the Veterans Advice Unit helpline). The Agency's role under the new compensation scheme will be considered in due course when the details of the new scheme are finalised. Consideration will meanwhile be given to better integration of the wider services provided by the Department to veterans. Given the recognised strengths of the Agency, it is expected to have a key role in this work.

  18.   Will the War Pensioners' Welfare Service provide services for those covered by the new compensation arrangements, as well as continuing its provision for War Pensioners?

  The consultation document on the Joint Compensation Review did not make specific reference to a welfare service, but the Department had always intended that there would be a support system for those seeking or in receipt of compensation. The Department is well aware of the ex-Service community's high regard for the War Pensioners Welfare Service. The Department will need to consider the particular nature of the support required when the details of the new scheme have been finalised. The Department will, however, be making use of the expertise within the Veterans Agency in developing any proposals, as well as consulting with ex-Service organisations once there are more detailed proposals to discuss.

  The War Pensioner's Welfare Service will continue to provide services for current War Pensioners and War Widows.


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 May 2002