Medical Discharge Pension
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But I think it is tax-free
It has to be 'Attributable' (Other key phrase is PIC - Primary Invaliding Condition)
I have reluctantly become a bit of a font of knowledge on this subject
I don't own this space under my name. I should have leased it while I still could
A disability war pension is certainly tax free. I am guessing but a medical pension is different. The war pension is awarded for incapacity attributable to service.
A medical discharge for reasons of, say, back injury from ejection would qualify for a war disability pension if the injury affected you.
A medical discharge for say diabetes is not attributable to service and would not, I would have thought, been eligible for payment free of tax.
A medical discharge for reasons of, say, back injury from ejection would qualify for a war disability pension if the injury affected you.
A medical discharge for say diabetes is not attributable to service and would not, I would have thought, been eligible for payment free of tax.
PN has indicated above the situation for pre April 2005 injuries which fall under the War Pension Scheme.
If the injury is post April 2005, then it would fall under the newer Armed Forces Compensation Scheme (AFCS). The AFCS provides for a no fault compensation scheme and can pay out a lump sum for injury sustained and in more serious cases an ongoing guaranteed income payment for life (GIP).
The schemes are very different, with differing burdens of proof and for example an AFCS lump sum award (however not any GIP) can be paid whilst still in service whereas a War Pension can only be put into payment once one has left the services. Any GIP awarded under AFCS comes into payment once one leaves the services..
Although there are some changes are in the pipeline for both schemes, none are major changes.
Sadly in answer to your question, neither a War Pension or AFCS award/GIP can be commuted.
You can get further details of both schemes from the Service Personnel and Veterans Agency tel 0800 169 2277 or via the veteran UK website: Pensions and Compensation
Peter
(Veterans Advisory & Pensions Committee member)
If the injury is post April 2005, then it would fall under the newer Armed Forces Compensation Scheme (AFCS). The AFCS provides for a no fault compensation scheme and can pay out a lump sum for injury sustained and in more serious cases an ongoing guaranteed income payment for life (GIP).
The schemes are very different, with differing burdens of proof and for example an AFCS lump sum award (however not any GIP) can be paid whilst still in service whereas a War Pension can only be put into payment once one has left the services. Any GIP awarded under AFCS comes into payment once one leaves the services..
Although there are some changes are in the pipeline for both schemes, none are major changes.
Sadly in answer to your question, neither a War Pension or AFCS award/GIP can be commuted.
You can get further details of both schemes from the Service Personnel and Veterans Agency tel 0800 169 2277 or via the veteran UK website: Pensions and Compensation
Peter
(Veterans Advisory & Pensions Committee member)
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PN has indicated above the situation for pre April 2005 injuries which fall under the War Pension Scheme.
If the injury is post April 2005, then it would fall under the newer Armed Forces Compensation Scheme (AFCS). The AFCS provides for a no fault compensation scheme and can pay out a lump sum for injury sustained and in more serious cases an ongoing guaranteed income payment for life (GIP).
The schemes are very different, with differing burdens of proof and for example an AFCS lump sum award (however not any GIP) can be paid whilst still in service whereas a War Pension can only be put into payment once one has left the services. Any GIP awarded under AFCS comes into payment once one leaves the services..
Although there are some changes are in the pipeline for both schemes, none are major changes.
Sadly in answer to your question, neither a War Pension or AFCS award/GIP can be commuted.
You can get further details of both schemes from the Service Personnel and Veterans Agency tel 0800 169 2277 or via the veteran UK website: Pensions and Compensation
Peter
(Veterans Advisory & Pensions Committee member)
If the injury is post April 2005, then it would fall under the newer Armed Forces Compensation Scheme (AFCS). The AFCS provides for a no fault compensation scheme and can pay out a lump sum for injury sustained and in more serious cases an ongoing guaranteed income payment for life (GIP).
The schemes are very different, with differing burdens of proof and for example an AFCS lump sum award (however not any GIP) can be paid whilst still in service whereas a War Pension can only be put into payment once one has left the services. Any GIP awarded under AFCS comes into payment once one leaves the services..
Although there are some changes are in the pipeline for both schemes, none are major changes.
Sadly in answer to your question, neither a War Pension or AFCS award/GIP can be commuted.
You can get further details of both schemes from the Service Personnel and Veterans Agency tel 0800 169 2277 or via the veteran UK website: Pensions and Compensation
Peter
(Veterans Advisory & Pensions Committee member)
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SFAIK the lump sum is tax free at all times and as a concession to the ill/infirm the pension is paid tax free but this information, such as it is, is many years out of date. Please do NOT rely on it to make vital financial decisions! The link in post#6 looks very authoritative!
Last edited by A2QFI; 30th Aug 2011 at 05:27.
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K1rbs
Can only speak wrt AFP75, Gratuity is always tax free. The pension can either be a Service Invaliding Pension (SIP) which is paid in full and index linked from day 1. This pension is taxable. Or a Service Atributable Pension (SAP) paid in full and index linked from day 1 and may or may not be paid tax free. If you have a SAP and your Primary Invaliding Condition (PIC) is classified for War Pension purposes 20% or above and attributable to service, your SAP WILL be paid free of tax. If your PIC is classified between 1%-19%, your SAP MAY be paid free of tax, but you'll have to fight for it. If your PIC is classified at 0%, even if attributable you WILL pay tax on it.
If you disagree with the initial award, begin the appeal IMMEDIATELY, there is a time limit. Join the RBL, they will fight on your behalf, and also the Pension Society.
I speak as one screwed over by the system (tax wise), don't let it happen to you.
Can only speak wrt AFP75, Gratuity is always tax free. The pension can either be a Service Invaliding Pension (SIP) which is paid in full and index linked from day 1. This pension is taxable. Or a Service Atributable Pension (SAP) paid in full and index linked from day 1 and may or may not be paid tax free. If you have a SAP and your Primary Invaliding Condition (PIC) is classified for War Pension purposes 20% or above and attributable to service, your SAP WILL be paid free of tax. If your PIC is classified between 1%-19%, your SAP MAY be paid free of tax, but you'll have to fight for it. If your PIC is classified at 0%, even if attributable you WILL pay tax on it.
If you disagree with the initial award, begin the appeal IMMEDIATELY, there is a time limit. Join the RBL, they will fight on your behalf, and also the Pension Society.
I speak as one screwed over by the system (tax wise), don't let it happen to you.
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tax and pensions
I agree the above about not wasting time
I have an aquaintance who was denied a pension for some years
and only started a serious challenge late on
He was eventually granted the pension and it was backdated to
his first challenge. The tax man then insisted on regarding the large accrued lump sum as paid in one year and he lost much of it in tax
I have an aquaintance who was denied a pension for some years
and only started a serious challenge late on
He was eventually granted the pension and it was backdated to
his first challenge. The tax man then insisted on regarding the large accrued lump sum as paid in one year and he lost much of it in tax
