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NEWS BRIEF

Key Messages AFCS

The demands we impose on our Armed Forces are unique. When Service leads to death, injury or ill health, it is only right that there is a comprehensive compensation package in place for them.
Under the Armed Forces Compensation Scheme, which came into effect in April 2005, members of the Armed Forces who are injured due to service receive a lump sum award for pain and suffering. The most seriously injured are also awarded a Guaranteed Income Payment, which is a tax free, index-linked payment made every month from discharge for the rest of the individual’s life.
As AFCS is a relatively new scheme we have committed to keeping it under review in light of experience. While we believe that the structure of AFCS is sound and that the Guaranteed Income Payment provides appropriate lifetime financial security, we have taken the opportunity given by this Command Paper to review the level of the lump sum awards and whether they reflect the sacrifices being made and the injuries some of our Armed Forces are suffering.
The Government’s judgement is that we must double the lump sum awards for the most serious injuries, to raise the maximum lump sum payment from £285,000 to £570,000. More minor increases are appropriate for less serious injuries and, therefore, the proposition involves a sliding scale of increase down to 10%. We also believe it is only right that those that have claimed since the start of the Scheme in 2005 should benefit from theses changes.
To give an example, a 25-year-old very seriously injured soldier earning £22,000 a year may receive a £570,000 lump sum payment plus a Guaranteed Income Payment of some £19,000 per year tax free for life. By the age of 45, that individual will have received guaranteed income payments totalling £380,000 in addition to the £570,000 lump sum payment – by 65 in excess of £760,000, plus the now increased lump sum.

Q & A
When will this take effect?

It will take some months to implement these changes because we need to undertake a consultation exercise and lay legislation but the important point is that, because we are conferring additional benefits to those that have claimed since the start of the Scheme in 2005, no one will miss out.

This is welcome but what about more?

No amount of money can truly compensate for very serious injuries but we consider these proposals will properly reflect the sacrifices being made and the injuries some of our Armed Forces are suffering.

If unfavourable comparisons made with awards in the courts:
Direct comparisons cannot be made between common law awards and those made under AFCS which is a no-fault injury benefit scheme, awards a Guaranteed Income Payment as well as a lump sum, and operates in conjunction with other state benefits. The compensation paid in civil cases is determined by common law principles which take account of a range of heads of damages and award a single lump sum.

However, Service personnel have the right to separately pursue a common law compensation claim should they consider that their injury was the result of negligence on the part of the MOD regardless of any payment received under the AFCS.

What about a fundamental review of the Scheme?

We intend to conduct an evaluation of the Armed Forces Compensation Scheme at the five year point – i.e. in 2010. The evaluation will consider all of the evidence at hand, look back with the benefit of 5 years of data and ensure that as the scheme moves forward, it continues to meet its policy intent.

Is this new money or cost neutral?

Funding for the increase in lump sums will be in addition to the existing arrangements – it is not being offset by savings elsewhere in the Scheme.

Why change now?

AFCS is a relatively new scheme and we have always made clear our commitment to keep it under review in light of experience. We have taken the opportunity given by this Command Paper to review the level of the lump sum awards and whether they reflect the sacrifices being made and the injuries some of our Armed Forces are suffering.

What about increasing the Guaranteed Income Payment?

The Guaranteed Income Payment will remain unchanged.

If required:
The Guaranteed Income Payment provides compensation for loss of earnings capacity for the more seriously injured. This payment begins as soon as the individual is discharged from the Forces and is tax free, index linked and paid monthly for life; it has the potential to be worth many hundreds of thousands of pounds over a lifetime.

What about increasing Death benefits?

Death benefits will remain unchanged.

If required:
Where death is caused by service, either while in service or in retirement, AFCS may pay a survivors Guaranteed Income Payment to a widow, widower or partner, and a regular Childs Payment to eligible children. In addition a Bereavement Grant may be payable to a widow, widower or partner.

What about relaxing the standard and burden of proof?

No case should fail where there is reasonable, reliable evidence that injury is due to Service. The standard of proof used in the AFCS is based on the balance of probabilities. This is the accepted approach in other Schemes and in the civil courts.

What about injuries/death before 6 April 2005?

Injuries or death due to service before the AFCS came into force are covered by the previous arrangements provided by the War Pensions Scheme and the attributable benefits of the Armed Forces Pension Scheme 1975.

What about increasing the compensation available to the Emergency Services/July 7 bombing victims etc?

The demands we impose on our Armed Forces are unique. These obligations set them apart from others who serve and protect society or who are the victims of injury. We are determined to ensure that they are fairly treated.

Does this break the Government’s policy on not allowing retrospectives benefits?
No. We believe it is only right that we confer additional benefits to those that have claimed since the start of the Scheme in 2005 - such deserving cases should not be penalised for having claimed in the early years of the Scheme while we were still adjusting it to reflect the unique nature of Service in the Armed Forces.