The Armed Forces Compensation Scheme

Current and former armed forces personnel can claim compensation for any injury or illness which was caused by service. Family members may claim for compensation for personnel whose death was caused by service.

There are two main schemes. The Armed Forces Compensation Scheme (ACFS) applies from 6 April 2005, while the War Pensions Scheme applies to claims for injuries or illnesses prior to that date.

The Armed Forces Compensation Scheme

The AFCS applies when the illness or injury was caused as a result of service on or after 6 April 2005.

The AFCS provides a lump sum payment for “pain and suffering.” For those who suffer significant loss of earning capacity, the scheme also offers a regular tax-free ‘Guaranteed Income Payment’ (GIP), payable for life.

It is a no-fault scheme which means payment is made without admitting fault. Receiving a payment does not preclude an individual from bringing a claim through the common law damages route, although an individual cannot be compensated twice for the same injury.

All current and former members of the UK armed forces, including reservists, may submit a claim for compensation. Time limits apply.

Commentary on the scheme

The administration of the scheme has been criticised by veterans, veterans’ charities and MPs.

The Royal British Legion is calling on the Government and local authorities to disregard compensation income when means testing for certain benefits.

Review of the scheme 

The scheme is subject to a formal quinquennial review. On 17 July 2023 the Government published the second quinquennial review.

The review identifies a perceived lack of empathy on the part of the Ministry of Defence in making decisions, inconsistency and unfairness within the scheme, inefficiency, inflexibility and a lack of transparency and independence. Together, the review finds these concerns are having a “detrimental effect on some of the most vulnerable claimants to the scheme.”

The review made nearly 70 recommendations to improve the administration, fairness and transparency of the scheme.

Government response to the review

The Government published its response to the review on 21 March 2024.

The Government accepted recommendations to improve communication of the scheme. It identified some recommendations it would consider how to take forward in legislation during 2024 to 2025.

However, the Government rejected some of the review’s main recommendations, including those relating to the method of calculating awards, changing time limits and redesigning the caseworker workplan.

A summary of the review’s main findings can be found in Commons Library briefing Armed Forces Compensation Scheme: Quinquinnial Review 2023.

The War Pensions Scheme

The War Pensions scheme (WPS) provides compensation for any injury, illness or death which was caused by service before 6 April 2005. This is separate to the armed forces pension scheme.

War Pensions can be claimed at any time after leaving the Armed Forces, but the rules regarding the burden of proof are more restrictive if the claim is made more than seven years after leaving service, and an award will usually only start from the date of the claim.

The scheme is calculated on a percentage basis, relating to the severity of the disablement. A gratuity is a lump sum payment for disablement less than 20%, for disablements more than 20% a weekly or monthly ongoing payment is made.

Supplementary allowances may apply if the award reaches a threshold of 40, 60 or 80%.

A War Widow(er)’s Pension is paid to the surviving spouse or civil partner of someone whose death was due to, or hastened by, their military service. In some circumstances an unmarried partner can also qualify. 

Further information

The schemes are administered by Veterans UK, which sits within Defence Business Services in the Ministry of Defence.

Statistical data about the schemes are published annually can be found on Gov.uk:

• Armed Forces Compensation Scheme statistics
• War Pensions Scheme statistics

Information about the scheme how to make a claim, are available on Gov.uk: Free help with compensation claims for injury in the armed forces and on Veterans Gateway.