Armed Forces Compensation Scheme: Quinquennial review 2023

The Armed Forces Compensation Scheme

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

The armed forces compensation scheme (ACFS) 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.

The scheme was introduced in 2005 and is subject to a formal quinquennial (five years) review.

Main findings of the review

On 17 July 2023 the Government published the second quinquennial review. 

The review finds the scheme appears to work well where a claim is made for an acute injury or illness (for example an injury or illness from which the claimant recovers with little or no lasting side effects), and claims pertaining to death attributable to service.

However, the review finds that the vast majority of the issues raised concern the handling of complex cases by the MOD. The review found that “it is those with injuries with longer term impacts, illnesses and disorders for whom it appears the Scheme is least effective if not detrimental.” Most claimants told the review that they felt the relationship between claimants and their caseworkers “was an adversarial one”.

The review concludes the objectives of the scheme were not being met because there is:

• A perceived lack of empathy on the part of the MOD in making decisions.
• Inefficiency with regard to the effective but fair use of resources.
• Inconsistency (therefore, unfairness) within the Scheme.
• A lack of effort to ensure and safeguard transparency and independence in both the policy and decision-making processes.
• A lack of resilience as the Scheme is insufficiently flexible in its ability to incorporate developments.

The review also criticises Veterans UK, the MOD agency, whose helpline agents “are specifically trained to act as a barrier between claimants and their caseworkers”.

The review makes 67 recommendations. 

The Government’s response

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.

About this paper

This briefing summarises the general findings and main recommendations of the 2023 quinquennial review, and the Government’s response.

The Library briefing on the Armed Forces Compensation Scheme (CBP-7923) Information on what the scheme does, eligibility, types of awards and criticisms of the scheme can be found in Library briefing Armed Forces Compensation Scheme