Armed Forces Pension Scheme (Hansard, 19 November 2003)

§ Lord Bach

After the introduction of the Armed Forces Pension Scheme (AFPS) in 1973, the Royal Air Force has, for the purposes of awarding pensions, been reviewing War Pension Scheme decisions on whether injuries, ill-health or deaths were due to service using the normal civil standard of proof ("balance of probabilities"). The War Pension Scheme uses a "beyond reasonable doubt" standard in favour of the claimant for the first seven years after leaving service. This interpretation of AFPS scheme regulations was challenged in a complaint to the Pensions Ombudsman who found in favour of the claimant, Mrs Hulme. The ombudsman's decision was upheld on appeal in the High Court and has today been further upheld in the Court of Appeal on the basis that the relevant regulations required AFPS administrators to accept the decision on attributability taken under the War Pension Scheme. We have decided that the Ministry of Defence will not seek leave to appeal the Court of Appeal judgment further to the House of Lords.

Following this decision, the department will now review previous decisions on entitlement to attributable pensions for those conditions that led to invaliding or to death-in-service where AFPS administrators have previously not accepted War Pension Scheme decisions on attributability. Awards will be backdated and the department will consider compensation to reflect the effect of inflation on the value of pensions over the period of non-payment. We expect to make a further announcement on this matter early in the New Year.

Initial research indicates that the incorrect interpretation of the regulations is likely to have affected Royal Air Force compensation payments since soon after 1973, and Army and perhaps some Royal Navy claims since 2000.

We do not know how many pensioners are likely to have been affected or the likely cost. However, a substantial number of pension award decisions will need to be reviewed to ensure that all those at risk are identified. At present, we expect it to take around a year to complete this review. Payments will be made as soon as possible. We will also be using appropriate advertising to publicise to the ex-service community those categories of pensioner who might be affected and how claims can be lodged. We will consider these as quickly as possible. The judgment does not affect the benefits paid under the War Pension Scheme.

The department will abide fully by the Court of Appeal decision with respect to claims from the past or 308WA where a decision is still pending. However, we have decided that, for the future, as soon as the relevant changes can be made to secondary legislation, the department should establish the right of AFPS administrators to take a second decision on attributability, using the balance of probabilities standard of proof. This is the standard of proof used for other public service occupational schemes, as well as for decisions in the civil courts and for the recently proposed new Armed Forces Compensation Scheme.