§ 48. Mr. Crouchasked the Secretary of State for Defence whether he has concluded his review of the rules governing the commutation of Service pensions; and whether he will make a statement.
§ Mr. ReynoldsThe following changes will apply to the commutation of Service pensions for those who are discharged on or after the 31st March.
- (a) Subject to medical fitness and to application within six months of discharge, commutation of 25 per cent. of the annual pension (i.e. excluding the terminal grant) or £1,000 whichever is the less (as against £600 at present) will be allowed as an initial amount without investigation of the purpose for which the money is required.
- (b) The minimum pension to be retained by a Serviceman will be 50s. a week but this minimum (and the 25 per cent. of pension rule) may be varied to ensure that a Serviceman may continue to commute up to the limit of £600 that he has a right to commute under the present rules.
- (c) The present rules of detailed investigation will continue to apply for any subsequent or greater commutation but applications for such further commutation for the purpose of house purchase, furniture or a car from men who have had the £600 to £1,000 will not be automatically barred as at present.
- (d) The minimum retired pay which an officer must retain after commutation will be increased from the present £150 per annum to £300 per annum. Officers will continue to be limited to the commutation of 50 per cent. of their pension.
- (e) Warrant Officers will continue to be awarded commutation under the same rules as Servicemen. The new rules operate less restrictively for Warrant Officers than would the general application of the rules for officers.