Armed Forces Pension and Compensation Arrangements

HL Deb 12 February 2003 vol 644 cc122-3WA

Lord Morris of Manchester

asked Her Majesty's Government:

Whether, in light of the difficulties troops deploying or about to deploy to the Gulf are experiencing in securing life assurance cover, they will expedite the introduction of the enhanced death-in-service benefits proposed in their current review of the Armed Forces Pension Scheme; and whether the enhancement will apply to troops now on or deploying for active service. [HL1311]

Lord Bach

We have no plans to enhance the current death-in-service benefits ahead of implementing the findings of our reviews of the Armed Forces pension and compensation schemes. Current attributable benefits paid to a widow under the Armed Forces Pension Scheme (AFPS) and the War Pensions Scheme (WPS) are among the more generous of the public service schemes. While the current rate of death-in-service benefit is low at between one and one-and-a-half times the individual's representative rate of pay, it needs to be seen in the context of the other benefits available under our compensation arrangements.

Where the member dies in service from attributable causes and leaves a widow, widower and/or dependent child, a short-term family pension, equal to the service person's annual rate of pensionable pay, is payable for up to 182 days. The short-term pension maintains the household income level in the early months of bereavement. In addition to the basic death-in-service lump sum, an attributable gratuity is also payable equal to the annual rate of a full career pension. Thereafter, a long-term widow's or widower's, and children's pensions are paid. Attributable widow(er)'s pensions are significantly enhanced, index-linked and paid for life, regardless of whether the widow(er) remarries or cohabits. The attributable widow's and widower's pension is 90 per cent. of the member's full career pension, less an abatement to reflect the amount by which the War Pensions Scheme war widow's or widower's pension exceeds the basic state widow's pension. Attributable children's pensions are also enhanced, index-linked and are paid until age 17 and may continue if higher education is undertaken. Apart from these valuable occupational pension benefits, the WPS provides additional compensation for families of those service personnel whose death is attributable to their service. This includes a tax-free War Widow's Pension.

The department's reviews of the Armed Forces pension and compensation arrangements have included consideration of the level of death-in-service benefits. We expect to finalise proposals for the new AFPS and make a public announcement of the key proposals, early this year. However, the new schemes are not expected to be available before 2005–06.

In the meantime, should service personnel consider that the AFPS and WPS benefits do not meet their personal circumstances, they should continue to make personal life insurance provision. As I indicated in the House on 29 January 2003 (Official Report, cols. 1129–32), we recognise that some service personnel who are being deployed to the Gulf are having difficulty in securing new life assurance cover in order to enhance their families' financial security. Insurance cover is still available but the Government are examining options should this situation change.