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
Compensation for Attributable Illness and
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.
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. 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
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. 
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.
Total expenditure on war pensions in 2000-01 was £1.213 billion.
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.
At the end of March 2001, there were 251,000 allowances in payment.
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.
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
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.
Compensation for Non-Attributable Illness
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
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.
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.
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
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
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
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.
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
- The arrangements should be cost effective, affordable and
fair to the taxpayer.
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
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;
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.
- 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.
- 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. 
- 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.
- 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.
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.
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
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
MoD says that the proposal for the three-year limit 'is in line
with that used for civil claims for personal injury'.
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.
89. Those who represent ex-Service personnel
are opposed to such time limits. The Royal British Legion told
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.
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
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.
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.
We asked the MoD for more information about the timescale for
lodging claims for war pensions at present.
Timescales for first claims for War Disablement
received from January to December 2001
Time from date of discharge to date
Number of claims
Up to 1 year
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.
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.
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.
Combat Stress echoed this view and also highlighted
the problem of late onset psychological conditions.
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.
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.
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'.
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. 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'.
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'.
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.
The Director General, Service Personnel Policy, told us
What we are proposing is to adopt a much
more common burden of proofwhich 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.
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.
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.
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.
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.
The Royal British Legion pointed out that war
pensions are not given away lightly under the present arrangements,
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).
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.
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.'
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.
We explored with the MoD witnesses the current position on military
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.
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
Report on War Pensioners for 2000/2001, Section 2 Back
War Pensions Agency, Leaflet 9, Rates of War Pensions and Allowances
War Pensions Quarterly Statistics, March 2001 Back
Report on War Pensioners for 2000/2001, Section 3 Back
War Pensions Agency, Leaflet 9, Rates of War Pensions and Allowances
Compensation Review document, op cit, paragraph 3.11 Back
A Guide to the Criminal Injuries Compensation Scheme (2001),
Compensation Injuries Compensation Authority, Issue No. 1 Back
Compensation Review document, op cit, paragraph 4.3; see
also Ev 118, paragraph 14 and Ev 139 Back
Compensation Review document, op cit, paragraphs 4.5 Back
Compensation Review document, op cit, paragraph 4.2 Back
Q 46 Back
Compensation Review document, op cit, paragraph 4.6 Back
Compensation Review document, op cit, paragraph 2.1 Back
Compensation Review document, op cit, Section 6 Back
Compensation Review document, op cit, paragraph 8.4 Back
Ev 135 Back
Ev 56 Back
Ev 57 Back
Ev 58 Back
Ev 136 Back
Ev 83 Back
Ev 88, paragraph 22; Ev 110 Back
Compensation Review document, op cit, paragraph 8.16 Back
Ev 42 Back
Compensation Review document, op cit, paragraph 8.17 Back
Q 23 Back
Ev 43, paragraph 16 Back
Q 212 Back
QQ 214-215 Back
Compensation Review document, op cit, paragraph 8.16 Back
Ev 87, paragraph 15 Back
Q 23 Back
Ev 84 Back
Q 231 Back
Compensation Review document, op cit, paragraph 3.3 Back
Compensation Review document, op cit, paragraph 4.4 Back
Ev 139 Back
Ev 118, paragraph 14 Back
Compensation Review document, op cit, paragraph 1.3; Ev
Ev 42 Back
Q 221 Back
Q 218 Back
Q 225 Back
Ev 116, paragraph 11 Back
Ev 79 Back
Q 16 Back
War Pensions Quarterly Statistics, March 2001, Table 2.5 Back
Seventh Report from the Defence Committee, Session 1999-2000,
Gulf Veterans' Illnesses, HC 125, paragraph 50 Back
HC Deb, 5 December 2001, c 344w Back
HC 125, Session 1999-2000, op cit, paragraph 52 Back
The MoD have provided information on medical records in the Gulf
and on operational medical records, see Ev 129-133 Back
Q 221 Back