§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)My honourable friend the Parliamentary Under-Secretary of State for Defence (Mr Ivor Caplin) has made the following Written Ministerial Statement.
I announced on 19 November (Official Report, vol 413, cols. 39–40WS) that the Ministry of Defence would not seek leave to appeal to the House of Lords the Court of Appeal judgment in the case of Mrs Hulme and the Pensions Ombudsman v the MoD. I also announced that, as appropriate, the department would review previous decisions on entitlement to pensions where death in service or injury that resulted in invaliding was due to service and where Armed Forces Pension Scheme administrators have previously not accepted War Pension Scheme decisions on attributability; that awards would be backdated; and that the department would consider compensation to reflect the effect of inflation on the value of pensions over the period of non-payment.
I can now advise the House that those pensioners, widows, widowers or their estates who will receive backdated pension benefits as a result of this judgment will also receive interest on those payments. Where the error occurred within the last six years, the interest will be based on the scheme's usual formula of simple interest. Where the error occurred beyond six years, interest will be based on a formula using the rate of RPI plus 2 per cent compounded. This is consistent with the formula used in compensating those who were affected by the Armed Forces Pension Scheme tax and related pension errors, which I announced to the House on 15 December 2003.
Work has begun on identifying the cases involved and we hope that back payments and interest will be paid within one year to those who were affected.