On this page
There follows a brief description of the types of pensions and payments covered elsewhere on the page. It is not an authoritative statement on armed forces pensions and payments, but an outline of them.
Your armed forces pensions and payments affect benefits in different ways, depending on why and when they were awarded. The DWP (who decides and pays social security benefits) and local authorities (who decide and pay housing benefit) may not always accurately identify what pensions or payments you are getting or treat them correctly.
You should disclose all pensions, payments, and capital you receive when claiming benefits. Seek expert advice if in doubt about whether you are getting your full benefit entitlement.
There are several pension schemes for people who have served in the British armed forces. These include pensions similar to occupational pensions paid when people retire from their job. They are usually based on your length of service, and your rank and pay. They include the 1975, 2005, 2015 armed forces pension schemes and the reserve forces scheme.1 Here, we refer to these as the 'armed forces pension schemes' (AFPS). They are administered by Veterans UK on behalf of the Ministry of Defence.
AFPS pensions are normally taken into account in full as income when working out how much means-tested benefit you can get. This is similar to the treatment of civilian 'occupational' or work pensions.
Your spouse, civil partner (or in some cases a surviving cohabiting partner) may get a (taxable) pension and, in some cases, a lump sum when you die. These payments are usually referred to as 'survivor pensions' or 'dependant’s benefits'. Here, we use the term 'survivor pensions'.
An AFPS survivor pension can be paid regardless of whether death was a result of your service.
These survivor pensions are normally taken into account in full as income when working out how much means-tested benefit you can get. This is similar to the treatment of civilian 'occupational' or work pensions paid to the surviving spouse, civil partner, partner or dependant of someone who has died.
You might get a payment because of injury, illness or disability resulting from your service, or because your spouse or partner died as a result of their service. The type of payment you get depends on the date the injury or death happened.
If injury, illness, disability, or death is caused during service before 6 April 2005 and can be attributed to (in other words, was caused or made worse by) your service, and you have left the armed forces, you can be compensated under the War Pensions Scheme (WPS). This applies even if you left the armed forces on or after 6 April 2005. If your spouse, or an eligible partner died as a result of service before 6 April 2005, you might qualify for a war widow(er)’s pension.
There are two main types of war pension awards:2
If you get a war pension, you may also get additional payments, called supplementary or additional allowances.3 Some of these additional allowances 'overlap' with one another and with certain social security benefits. This means that you cannot get both the supplement and the benefit at the same time or get both paid in full.
The following shows which supplements overlap with which social security benefits. (There is a full list of war pension allowances/supplements, and information about them on GOV.UK.) If you meet the qualifying conditions for both the allowance/supplement and the benefit, you should seek advice on which ones to claim.
Veterans UK can abate (that is, reduce) your award by the amount of some social security benefits paid for the same condition, injury or expenses as your armed forces compensation. If this happens, seek expert advice. You should always tell Veterans UK about any social security benefits you get, to avoid overpayments.
You can read about allowance for a lowered standard of occupation (ALSO) on gov.uk. It overlaps with:
The rule about overlapping may not apply to you if you have been getting ALSO continuously since before 6 April 2009. This is because the rule was introduced from that date.4
Constant attendance allowance (CAA) overlaps with:5
Unemployability supplement (UnSupp) overlaps with:6
War pensioners mobility supplement overlaps with:7
War widow(er)'s pension is paid to a surviving spouse or civil partner, and in some cases, to a surviving cohabiting partner.8 In contrast with AFPS survivor pensions (above), they are paid only where death resulted from service. The rate at which your war widow(er)'s pension is paid depends on your age, whether you have children, and the rank of your spouse or partner when they died and whether you get certain other social security benefits.9 You may be able to get additional allowances- for example, for children or for your rent.10 War pension, war widow(er)’s pension and the supplementary/additional allowances are tax free.11
If you were injured or became ill as a result of your service between 31 March 1973 and 5 April 2005, and were medically discharged as a result, you may get a payment under the Armed Forces Attributable Benefits Scheme (AFAB).12 This type of payment is usually referred to as a 'service attributable pension' or 'SAP'.13 It is tax free.14 This can be paid on top of a war pension. If your spouse's or civil partner's death resulted from their service during this period, you might also get a payment under this scheme.
If you were discharged from the armed forces for medical reasons and the injury or illness responsible for your medical discharge was not attributable to your service, you may get a tax-free lump sum and an immediate pension. This pension may be described as a 'non attributable' pension or a 'Service Invaliding Pension' (SIP). The amount you get is based, among other things, on your length of service, and is taxable. A decision may be made later that your injury or illness was caused by your service. This can mean that your SIP is no longer taxable. Such pensions are sometimes referred to as 'non-taxable attributable service invaliding pensions'.15
The Armed Forces Compensation Scheme (AFCS) replaced both the War Pension Scheme and the AFAB scheme from 2005. If injury, illness or death is caused by service on or after 6 April 2005, compensation can be paid to you (or your widow/widower/surviving civil partner or child in the event of your death) under the AFCS.16
There are two main components of an AFCS award:
It is not necessary for you to have left the armed forces for you to get an award.
If you get a GIP at the rate of 50 per cent or more, you may be eligible for armed forces independence payment (AFIP), an award for serving or former service personnel who have been seriously injured as a result of service. This is paid at the same rate as the enhanced rate of both components of personal independence payment. AFIP is intended to help with the extra costs resulting from disability. It is administered by Veterans UK but paid by the DWP.
If your spouse, civil partner, or someone whose dependant you were has died as a result of service on or after 6 April 2005, you may be able to get a (taxable) Survivor's Guaranteed Income Payment (SGIP).
The difference in the way that armed forces pensions and payments are treated for universal credit (UC) and the benefits it replaced ('legacy benefits') can mean that veterans and their families are much worse off on those legacy benefits or pension credit. Getting a benefit check can ensure you are getting the right amounts. This is particularly important if you are nearing state pension age.
The lump sum gratuity paid with war disablement pension, and the lump sums paid with AFCS should be treated as personal injury payments. They are ignored when working out your benefit, for a period of 12 months. If paid into a trust, they can be disregarded indefinitely. Lump sums taken out of the trust may be treated as capital and are no longer ignored.18
Your AFPS pension counts in full as income for UC, as does any taxable non-attributable service invaliding pension you get.
War pension and its various supplements – none of which are taxable are ignored in full as income for UC.19 This also applies to tax-free invaliding pensions and attributable pensions paid under the armed forces attributable benefits (AFAB) scheme.20
If you get a war pension and you claim UC, you are not automatically treated as though you have limited capability for work (or limited capability for work-related activity). You might be expected to take part in work-related activity until a work capability assessment is arranged for you. Your work coach at the jobcentre can agree to excuse you from any work-related activity while you wait for your work capability assessment, however.
War widow’s and widower’s pensions are not taken into account as income for UC. If you get one of these pensions, you are exempt from the benefit cap.21 The benefit cap can reduce the amount of UC you get, so if you’ve had a benefit reduced because the benefit cap was wrongly applied to you, or you have now started getting one of these payments, you should get advice on how this might affect your UC.22
A GIP, whether for you or for a survivor, is disregarded as income for UC.23 SAPs and attributable SIPs, both of which are tax-free, are also disregarded in full.24
Armed forces independence payment (AFIP) is disregarded as income for UC.
Unemployability supplement (UnSupp) is not taken into account as income for UC. You are not usually treated as having limited capability for work or limited capability for work-related activity when you first claim, however. Instead, you may be asked to attend a work capability assessment and provide fit notes.25
Universal credit is replacing income support and income-related ESA, as well as housing benefit for people under pension age. It has already replaced tax credits. This process is called managed migration. It means that it is no longer possible to make a new claim for income support or income-related ESA. You can make a new claim for housing benefit only if you are pension age or are in temporary accommodation, a homeless hostel, a refuge or certain other types of accommodation – for example, accommodation provided to you so that you can receive care.
If you still get one of these benefits, at some point the DWP will write to you to say that they will stop, and that you must claim universal credit if you want to keep receiving support. Your benefits will stop by the given deadline whether or not you claim universal credit, so you should not ignore this letter.
You must tell Veterans UK if you are awarded universal credit. This is because it may affect some of your disability compensation. If you do not notify Veterans UK, you may be overpaid money which you will be asked to repay.
You can seek advice from Citizens Advice, the Royal British Legion, Legion Scotland or similar organisation to make sure that your universal credit award is correct, and for advice about any adjustments to your armed forces compensation which Veterans UK make.
The lump sum gratuity paid with war disablement pension, and the lump sums paid with AFCS pensions should be treated as personal injury payments and ignored.26
For income-related ESA and income support, war pension, war widow’s and widower’s pensions are taken into account as income, but £10 a week of these payments is ignored.27 Getting one of these pensions means you are exempt from the benefit cap.28 The benefit cap can reduce the amount of HB you get.22 If your benefit was reduced because the benefit cap was wrongly applied to you, or you have now started getting one of these payments, you should get advice on how this might affect your HB.
For HB, local authorities can ignore more than £10, and many ignore all such payments.29 They have the discretion to ignore the various supplements and allowances paid with war pensions and war widow’s/widower’s pensions, and not just the pension itself.30
Constant attendance allowance, exceptionally severe disablement allowance, severe disablement occupational allowance and war pension mobility supplement (supplements paid with war pensions) are not taken into account as income for any of these benefits.31
AFCS GIPs are treated in the same way as war pensions for income related benefit purposes: £10 a week is ignored but any more than this counts as income.32 For housing benefit, local authorities have the discretion to ignore all of your GIP/survivor’s GIP.33
Getting a GIP, or a survivor’s guaranteed income payment (for yourself or a child of the deceased) also means you are exempt from the benefit cap.28
Taxable, non-attributable SIPs are taken into account in full as income.
Your AFPS pension is taken into account in full as income for pension credit.
War pension, war widow’s and widower’s pensions are taken into account as income, but up to £10 a week of these payments is ignored.34 Constant attendance allowance, exceptionally severe disablement allowance and war pension mobility allowance (supplements paid with war pensions) are not taken into account as income, however.35
Up to £10 of any Guaranteed Income Payment (GIP) or survivor’s GIP you get can be disregarded as income for pension credit.36
The lump sum payment with a war pension or GIP is treated as capital but should be disregarded on the basis that it is compensation for personal injury. This does not apply to lump sums paid to you as a widow/widower/survivor, however, since the compensation is not in respect of a personal injury to you.37
CPAG gives advice to frontline advisers and support workers. This page also gives details of how to find advice about your own situation.
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