Corporate report

Armed Forces Compensation Scheme Quinquennial Review 2023 - headline findings

Updated 21 March 2024

Introduction

1. The second Quinquennial Review (QQR) of the Armed Forces Compensation Scheme (AFCS) began in Spring 2022 on the appointment of an external, independent reviewer and is due to report in Spring 2023 as per the Terms of Reference (Annex A).

2. The purpose of the QQR is to ensure the Armed Forces Compensation Scheme (AFCS) remains fit for purpose, providing appropriate recognition and financial support to those members of the Armed Forces who are injured, become ill or die as a result of service, and identifying opportunities for policy improvement.

3. The reviewer has conducted the first round of evidence collection through document analysis, review of existing data and stakeholder engagement, including government officials, third sector representatives and claimants. Based on the evidence, there are several concerns with (a) processes and (b) policies which will be addressed by the AFCS QQR 2022/23.

4. It should be noted that there are many elements of the AFCS which function well and the following does not negate this. Nevertheless, it is the purpose of the review to focus specifically on areas for improvement.

Processes

5. As with any scheme, there are a variety of processes involved in AFCS, including policy-making and amending, the processing of claims and resolution of appeals, and processes for refining communications. The evidence suggests there are concerns with these processes associated, particularly with the underpinning assumptions and priorities in the deployment of resources.

Assumptions

6. This section addresses the differing assumptions made by, on the one hand, officials and, on the other hand, claimants and their representatives regarding (a) the purpose of compensation and (b) the meaning of ‘no fault’ in the context of the AFCS.

7. The consequence is a discrepancy in the expectations of the process, and therefore the perceptions of how effective the claims process is, between stakeholders. Recommendations will focus on providing clearer guidelines to standardise expectations and improve accountability.

Policy-making process

8. The focus of the review in the policy-making space will be on safeguarding independence and transparency and the proactivity in making routine improvements to the AFCS.

9. Independent Medical Expert Group (IMEG). Although the IMEG has a clear function— to provide independent medical advice at the policy-making stage— and its utility is not in question, there are a lack of in-built safeguards to guarantee its independence and diversity as much as is reasonable. Recommendations will focus on:

• creating further separation between the IMEG and MoD medical advice.
• entrenching diversity among the IMEG membership.

10. Use of data. Although some data is collected to inform an annual report on AFCS statistics, the quality and lack of granularity of the data is concerning as good data aids in the identification of trends to proactively and robustly improve policy. This is hindered further by the lack of digitalisation to date, although it is recognised that digitalisation is in train. Recommendations focus on:

• Identifying how the quality and granularity of the data collected can be improved.
• Establishing a process for enabling policy teams to proactively use data to inform policy improvements.

11. Tariff Uprating. Although GIP payments are uprated in line with inflation, there is no process for uprating lump sum payments. Options for a process for regularly up-rating lump sum payments are explored in this section.

Claims process

12. On submission of a claim to Veterans UK (the organisation which administers AFCS claims), a claimant, perhaps with the help of a charity or superior, submits medical evidence to support both the claim that the injury exists and that it is predominantly attributable to service. However, evidence suggests the process is overly burdensome and even distressing for the claimant due to unreasonable timeframes and a lack of transparency.

13. Evidence collection. Respondents indicate that the amount and nature of the evidence required by Veterans UK on submission of a claim is unclear. Particularly as concerns claims for mental health conditions, the claims process is often prolonged due to insufficient evidence. Recommendation will focus on:

• Identifying reasonable timeframes for the processing of a claim to be communicated to claimants upon receipt of a claim.
• Formalising an evidence checklist to provide claimants with certainty.

14. Claimant-caseworker relationship. Many claimant respondents and third sector representatives raised concerns that the relationship between the MoD and claimants becomes adversarial during the claims process. The review is thus considering:

• How to improve engagement with claimants, including the way in which caseworkers make contact with claimants and mechanisms for claimants to contact their caseworkers.
• How training can be employed to provide caseworkers with the best skills to avoid an adversarial relationship with claimants.
• Whether changes in the recruitment of caseworkers can have an impact on the nature of the relationship between caseworkers and claimants.

15. Reconsiderations and appeals. Where a claimant does not agree with the outcome of their claim, they can apply for a reconsideration of the decision by the MoD and/or appeal to the independent Special Tribunal for War Pensions and the Armed Forces Compensation Scheme (government by HMCTS). This process is, however, lengthy and can be distressing for the claimant, especially where the decision is erroneous and exacerbates the claimant’s situation. Recommendations will focus on identifying where changes to process and commitments can be made by the MoD to:

• reduce timeframes in the reconsiderations and appeals process.
• reduce the number of reconsiderations requested and appeals lodged.^{[footnote 1]}

16. Medical Advice. The independence of medical advice arose as an area for concern among respondents, leading to a perception of a conflict of interest in the functions of Veterans UK as they are perceived as primarily safeguarding the MoD’s interests when making decisions on claims. The review will thus encompass:

• Improvements to independence between medical advice at the policy-making stage and medical advice on individual claims.
• An evaluation of the scope of the role of medical advisors in deciding on claims.
• An evaluation of the employment of evidence from treating physicians in deciding on claims.

17. Monitoring, Evaluating and Learning. To safeguard against issues arising in the claims process in future or the aggravation of existing issues, the review will also consider how a routine process for monitoring, evaluating and learning can be instituted.

Communications process

18. The evidence suggests that there is a distinct lack of understanding regarding many aspects of the AFCS among stakeholders, including many officials. The recommendations regarding ‘assumptions’ (paras. 6-7) should tackle the fundamental issues with communications, but the review will also consider how the AFCS is communicated at multiple levels, including:

• The underpinning ethos of communications (i.e. what and who is the primary beneficiary of different communications).
• The nature of the information in different communications.
• How the communications processes enable in-service personnel to remain informed about the benefits the AFCS confers.
• What processes are in place to communicate with veterans who are or have been in receipt of an AFCS award.

AFCS and the Armed Forces Covenant

19. In the Armed Forces Covenant, the government has made a general commitment to taking proactive steps to improve the lives of veterans and serving persons by liaising and collaborating across government and sectors to safeguard their interests.

20. The QQR considers where there are secondary impacts of an AFCS award to the claimant’s detriment (for example, it is considered income by a Local Authority impacting their Council Tax Benefits) and where the MoD could take action under the Covenant commitments to mitigate against these.

Policies

21. There are a number of specific policies embedded in the AFCS that pose challenges, some arising as a consequence of developments in the societal context in which the AFCS is applied and others due to how they are employed.

Tariff Descriptors

22. The level of award made is dependent on the claimants’ condition meeting the criteria set out in a tariff table descriptor. The table are categorised by condition type (e.g. Table 1 is for Burns) and each descriptor within the table describes a type of injury and level of severity. In turn, each descriptor is matched with an award level which is ascribed a pound sterling amount the claimant is entitled to.

23. This system is theoretically straightforward; however, complexity arises where there are multiple injuries, and the sum impact of the injuries is greater than the individual injuries. Additionally, there are a number of descriptors which, in some cases, are sufficiently broad to accurately describe a wide range of injuries but under-compensate the claimant considering the impact of the injury on the individual. This is particularly evident with mental health conditions, where the descriptors require, for example, functional limitation experienced or expected for five years but the directions on what functional limitation constitutes, and the significance of five years is unclear.

24. The review will thus consider the adequacy of the tariff descriptors and make recommendations with both the claimants’ experiences and the resilience of the Scheme in mind. This will include a focus on how complex conditions, particularly mental health conditions, are treated for the purposes of making an award under the AFCS.

Interim Awards

25. Interim Awards provide the MoD with a mechanism to award compensation to a claimant deemed eligible for compensation whilst delaying a final decision on the compensation amount. The mechanism exists to ensure claimants receive compensation as soon as they are deemed eligible but do not receive the wrong amount of compensation where, for example, the extent and permanence of their injury cannot yet be determined as the claimant is still in treatment.

26. However, evidence suggests that, rather than by exception, Interim Awards are deployed relatively frequently and particularly in mental health claims. This creates further instability due to the financial uncertainty it leaves claimants in and can further aggravate the claimants’ condition. Recommendations will thus focus on improving the guidelines for use of interim awards.

Other Issues

27. There are two provisions which apply in very specific circumstances which unnecessarily disadvantage claimants. Evidence suggests this is a result of the unintended and unforeseen consequences of implementing a new scheme which drew on and continues to work alongside a different compensation scheme applicable to injuries or death caused by service prior to April 2005 (War Pensions Scheme).

28. Claims for worsening of an injury. The AFCS covers claims for the worsening of an injury as a result of service. However, worsening claims cannot be made till the claimant has left service. Considering there is a seven-year limit to make AFCS claims, this precludes claims being made for worsening occurring prior to seven years before the end of service. Thus, a 2022 service leaver would not be eligible to make a claim for worsening of an injury occurring prior to 2015. The review will consider amendments to ensure those who remain in service for longer than seven years after the worsening of an injury are not disadvantaged.

29. Spanning. Regarding claims from claimants whose service spanned the period before the coming into force of the AFCS and there is not clarity whether an injury was sustained and/or worsened prior to or after April 2005, there is a persistent lack of understanding how decisions are made. The review will explore options for simplifying how spanning claims are decided and providing greater clarity to claimants on such decisions.

Annex A: Armed Forces Compensation Scheme Quinquennial Review - Terms of Reference

Purpose

The purpose of the Quinquennial Review (QQR) is to ensure the Armed Forces Compensation Scheme (AFCS) remains fit for purpose providing appropriate recognition and financial support to those members of the Armed Forces who are injured, become ill or die as a result of service, providing an opportunity for policy improvements.

Previous Reviews

The AFCS was first reviewed in 2009-10 and independently chaired by Admiral the Lord Boyce. Whilst finding the Scheme fundamentally sound, recommendations were made to significantly improve the AFCS, all of which were implemented. Lord Boyce subsequently concluded that, whilst future reviews of particular aspects of the Scheme could not be ruled out, a re-design of the Scheme should not be required. Consequently, a process to review the policy aspects of the Scheme on a quinquennial basis, as is common among government, academic, occupational and legislative authorities, was initiated. These are internal Ministry of Defence (MoD) reviews with external validation through consultation with the Central Advisory Committee (on Compensation).

The first QQR of the AFCS was published in 2017. The QQR team found that the AFCS remained broadly on track and that the aims of the Scheme were being met overall, making 43 recommendations for improvement whilst reiterating the continuing need for periodic reviews of the AFCS to ensure it continues to adapt to an inevitably changing environment. In 2018, the MoD released a report summarising the progress made based on the recommendations of the 2017 QQR one year on.

Scope of Current Review

Taking into consideration developments since the last QQR (published in February 2017), including improvements to the scheme and its administration and recommendations from the Independent Medical Expert Group (IMEG), the scope of the review will consider but not be limited to the following areas identified by the Ministry of Defence and external stakeholders:

1. Horizontal and vertical equity and the treatment of complex and/or emerging conditions for the purpose of making an award under the AFCS, including but not limited to back injuries, Mesothelioma, Mild Traumatic Brain Injury (mTBI), Musculoskeletal (MSK) Disorders, and so-called ‘Long-Covid’.

2. Treatment of mental health conditions, including Post-Traumatic Stress Disorder (PTSD), for the purpose of making an award under the AFCS, particularly with regards to whether and how these conditions are treated with parity to physical conditions.

3. Effectiveness of use of Interim Awards particularly in the case of mental health-based claims.

4. Effectiveness of the AFCS’s administration in processing and assessing claims, including efficiency and digitalisation, independence and use of Medical Advisors, transparency and the appeals process.

5. Collection and monitoring of data pertaining to the AFCS, including what data is held and how it is used for the purposes of improving the identification of trends in, for example, how many claims are withdrawn and why and changes in conditions being claimed for.

6. Effectiveness and adequacy of communications pertaining to the AFCS, particularly:

(a) Principles of the AFCS

(b) Access to information for potential claimants

(c) Availability of data regarding the AFCS

(d) Differentiation between the AFCS and related but distinct schemes such as the War Pensions Scheme (WPS).

7. Interaction of the AFCS with other public and private sector services (such as financial or welfare services) which may result in unintentionally detrimental outcomes for those in receipt of compensation.

Although not specifically addressed above, the impact of the Covid-19 pandemic will be considered in each of the above areas where relevant.

In addition, the review will provide an overview of developments since the 2017 QQR, including those resulting from the QQR’s recommendations.

Limitations

As per the above stated purpose of the QQR, whether or not the scheme remains fit for purpose and recommendations for improvements to its administration and implementation are in scope of this review. However, the following remain out of scope:

1. Purpose of the AFCS

2. Fundamental design of the AFCS

3. Medical determinations unrelated to policy and which fall under the remit of the IMEG

Implementation

The review is due to commence in 2022 and complete in Spring 2023. Recommendations arising from the review will be evidence-based, costed, sustainable, simple to administer and seek to enable the continued provision of compensation transparently and without undue burden or delay.

Resources and Funding

The Sponsor for the review will be the Head of Armed Forces People Support. The review will be constituted for a maximum of one year and conducted by the Lead Reviewer, who has been appointed externally to ensure independence from a policy perspective. The review lead will provide a report detailing costed, implementable and sustainable recommendations for the Director of Armed Forces People Policy and Head of Armed Forces People Support within one year of the review’s commencement.

The review lead will provide written and oral briefings, as required, by senior MOD colleagues and Ministers during the development of the recommendations and once the report is finalised.

The review lead will engage with internal and external stakeholders in order to provide clear, evidence-based conclusions which are implementable by DBS Veterans UK. The primary stakeholders providing support for the review will be:

• Armed Forces People Support, Ministry of Defence
• Chief of Defence People Medical Adviser
• Central Legal Services
• Defence Statistics
• Reserve Forces and Cadets
• Defence Resources
• Single Service Pay Colonels
• DBS Veterans UK
• Department for Work and Pensions
• Ministry of Justice
• Office for Veteran Affairs, Cabinet Office
• Advisory Committee on Compensation, Ministry of Defence^{[footnote 2]}
• Third Sector, including but not limited to Royal British Legion, Combat Stress and SSAFA

Funding of recommendations that may result in an increase to the overall cost of the AFCS will need the approval of Defence Resources.

Milestones, Deliverables and Timelines

The review lead will be responsible for developing a detailed programme plan. Regular progress reports will be provided to the Head of Armed Forces People Support. A draft report, detailing findings with initial recommendations, is to be provided to the Head of Armed Forces People Support no later than nine months after commencement; this will be discussed with Central Advisory Committee on Compensation (CAC) members to ensure agreement with direction the review is taking. A final report detailing recommendations that MOD should implement to ensure the AFCS is fit for purpose is to be produced no later than twelve months after the review’s commencement. The report will be published on the www.gov.uk website, following submission to the Minister for Defence Personnel and Veterans.

1. It should be noted that, as concerns the appeals process, it is the MoJ that owns the process thus the MoD only has the authority to adapt how it participates in the process rather than the process itself. ↩

2. Internal Members: Head – Armed Forces People Support, AFP Support Compensation and Insurance Policy Team Leader, Head of Vets UK, Deputy Head Vets UK, Army Pay Colonel, RAF Pay Colonel and RN Pay Colonel. External Members: Chair Independent Medical Expert Group, War Widows’ Association, Royal British Legion, RAF Families Federation, Naval Families Federation, Army Families Federation, SSAFA – The Armed Forces Charity, Combat Stress, British Limbless Ex-Service Men’s Association, Veterans Advisory Pension Committee (VAPC) ↩