Memorandum submitted by the War Widows Association of Great Britain (September 2001)
The two reviews should be looked at together as the issues for this group overlap: therefore the timing of the implementation of the reviews needs to be synchronised. If this was not done it would be possible to have a future widow whose husband had not joined the new AFPS, but who would be compensated under the new Compensation scheme. Likewise it could happen that someone is widowed under the new AFPS, but if the new Compensation scheme is not in place there would be a mismatch of provision.
Would it not be simpler for all future widows to automatically be provided for under the new scheme regardless of that decision being made by the member of the Armed Forces?
ON POINTS OF GENERALITY
We entirely agree that widows and widowers should have the same pension provision (for widows now read widows and widowers).
We entirely agree that compensation arrangements for The Territorial Army and Reservists are the same as those for regular serving personnel.
We do not agree that the Armed Forces Pension Scheme should continue to be regarded as non-contributory when to all intents and purposes it is contributory.
The benchmark for benefits for this unique group of widows should be "best practice" with comparable schemes.
ADMINISTRATION OF SCHEME
The significant change centres around those widows currently receiving an enhanced "attributable pension", and called "war widows". These widows are the joint responsibility of the MoD and the War Pensions Agency (now part of MoD), receiving a part of their pension from each organisation. The proposals are that future service widows should be the sole responsibility of the MoD. The logic of this is irrefutable.
However it does raise some important concerns
Loss of status and title "War Widow"although it can be argued that many widows in receipt of an attributable pension are not "war" widows, there are many widows who will quite definitely still be "war" widows. How will this be reconciled? How will the unique nature of these widows be acknowledged and publicly recognised?
Currently the War Pensions Agency, through the War Pensions Welfare Service picks up the welfare role for all attributable deaths, and in the early stages, for all deaths in service. The Services, despite what they say, have not been good at this. The cradle to grave concept gives little comfort to widows whose troubles start after the Last Post. I propose that the WPA has the remit of providing welfare support and information for all service widows in the future.
How is the decision on entitlement to an attributable pension made?
1. The issue of Governance: we are concerned that there is no independence in the administration of the scheme and the principles of good governance are therefore not adhered to.
2. At present the WPA is the first arbitrator for the decision as to whether a widow should be awarded a war widow's pension. The criteria are, as explained in the Review, quite different to those used by MoD's Discretionary Awards Panel in deciding whether to award an attributable pension. In shifting the test of eligibility to the "normal civil law test of the balance of probabilities" as is the case in MoD, there will be a detrimental effect on the group of widows who under the current rules would pass the test for a DSS war widows pension, but not an MoD attributable pension. Under future arrangements this group could be losers.
3. The processes used by WPA and the subsequent Pensions Appeal Tribunal (PAT) are open, independent and include the widow. Above all they are seen to be fair and have the confidence of the widows.
4. By contrast the Discretionary Awards Panel is conducted in private, the panel members are not disclosed to the widows, the information/evidence used is not disclosed and, whatever the claims made by MOD, this process is not seen to be open, independent and easily accessed. Therefore it is extremely important that as the responsibility for determining the status of widows is to be the sole preserve of the MOD then the body making the decisions to whether the death was attributable or not, must include independent members who have nothing to do with MOD. The process must be open, independent and easily accessed by widows. Above all it must have the confidence of the widows and their representative organisations. (Access to the Ombudsman is a last resort and not acceptable as an appeal process.)
5. WPA should administer the new entitlement and appeals scheme and this should mirror the PAT.
6. All new widows should automatically have their case assessed by the WPA with an independent member on the panel.
We fully support the view that:
a widow's pensions should be for life;
we assume that all widows, regardless of whether their husband has transferred to the new scheme or not, will have a pension for lifea further argument for all widows to be transferred onto the new scheme;
we must ensure that all those currently in receipt of a Forces Family Pension receive that pension for life and that the change in rules is not just for those widowed after the date of the change. Were that to happen we would have a disadvantaged group whose benefit was out of line with new widows and with present attributable widows (the thrust of the review is to give all the same pension). This is not retrospective entitlement;
that all widows should have the same rate of pension (half the level of the Tier 3 ill-health pension) with Attributable widows having an enhanced gratuity, a guaranteed income stream (GISW) and an attributable widows compensation.
Proposal to raise this from 1.5 times pensionable salary to three times pensionable salary. This seems to be the minimum acceptable level of gratuity to be in line with other employers. Some public sector employers pay four and five times salary.
This does not fit in with the concept of a "final salary" scheme as pensionable salary is often not final salary as it does not take into account specialist eg flying pay.
What options will exist to buy in extra death in service gratuity?
This should somehow be reflected in the final pension and death in service pension. Many young deaths happen to those drawing specialist pay: the idea of subsidised AVCs is worth consideration as long as it does not put the pension package above the IR limits and therefore lead to a reduction in "contribution" later in their career.
£20,000 compensation for attributable widows
There is no mention of the tax status of this nor how it will be reviewed and increased. This must be tax free and should be at least index linked. To say it will be "updated occasionally" is not acceptable.
GUARANTEED INCOME STREAM
In principle the GISW is a sensible idea but a few points need clarification:
1. Basing compensation on expected loss of earnings to 55 may have a logic for living personnel who have the option to find alternative remuneration, but it is impossible to seek further work once dead so the loss of earnings extends way beyond 55rather to 65.
2. The scheme takes no account of trauma, emotional stress etc, therefore 60 per cent of expected loss of earnings may be too low. We would like to see worked examples showing how for various ages and ranks this sum (minus the SIP"to prevent double counting") compares with the actuarial projection of the DSS War Widows pension for the same widow.
3. The GISW payments are based on a lump sum calculated as described. It is not acceptable to say that this lump sum is "notional".
4. The widow should have the choice of taking the lump sum or having a guaranteed income stream or a combination of the two ie have the option to commute.
5. As the GISW is compensation then it should be part of that widow's estate should she die prematurely. This would be difficult with a notional lump sum.
6. The GISW should be tax free.
7. Presently the DSS war widows pension is tax free. Invaliding pensions under the AFPS and gratuities for service personnel are tax free.
TROUGHS AND CATCH UP POINTS
The affect of troughs on a widows pension is greater than that on a retirement pension as the widow normally draws her pension for longer.
Could we install catch up points eg bring a widows pension into line with the pension that would be paid to her equivalent present day widow at say age 55-60 years and again at 80 years? This would prevent long-term inequalities and minimise the serious situation of a pension paid to long-term widows being severely eroded by not being linked to pay rises or wage indexes.
The improved gratuity should not be seen as compensating for the removal of the short-term pension. The short-term pension should remain as the widow is often faced with immediate and significant expenses. If IR rules say this is illegal then the spouse's full pension could be paid for at least three to six months along the same lines as is proposed for post-retirement deaths. Alternatively the widow could receive a "short-term income stream" to the same amount;
Deaths in service can be complicated. Where a body is "lost at sea" the time taken to even get an interim death certificate can be several weeks. During this period insurance companies will not pay up etc;
Children may be in boarding schools and only entitled to the next term's Boarding Schools Allowance. As death may occur mid-way through the year, the widow normally feels obliged to keep the children at that school, to minimise disruption to them, while she decides where she is to live;
A widow based overseas or far from home is faced with having to make speedy decisions as to where to live and often needs to purchase or rent a home with considerable upfront costs;
The short-term pension has meant a welcome and necessary financial cushion at a very difficult time, a time when the widow faces many challenges, and often a significant drop in standard of living. In our experience the widow is always worried about how much money she will have to live off and how she will manage.
1. These should be tax free as they are really maintenance. In losing the DSS tax free dependant's pension it seems that children of attributable widows will be worse off in the future.
2. A general disquiet about the rate being capped at four children; but the reasons are apparent and no change is recognised here.
3. However as children of attributable deaths currently receive a pension from WPA, what is being put in its place or will this be a downsizing in pension provision?
4. Children of bona fide partners should have access to a pension. The law makes no distinction between inheritance rights of children born within or without marriage.
Pensions should be extended to partners who fit within certain criteria. Subsidised AVCs may be a consideration.
Home to duty travel
This is not as straightforward as it seemsservicemen are often "called out" in a hurry at unsociable hoursit does not equate to normal civilian occupations. (Where this does happen eg NHS the employer takes out special insurance to cover such deaths/accidents).
Circumstances may force the serviceman to live miles off base, posing a strain on home to duty travel.
Allowance should be made for each case to be assessed individually.
Sports related deaths
It is often impossible to draw the line between what is related to work and what is not. The service expects and demands a standard of fitness that necessitates regular exercise.
Allowance should be made for each case to be assessed individually.
Time limit on claims
Initially to ensure that all widows get the advice they need each death should automatically be assessed by the WPA/DAP (with an independent person on the panel). The onus should not be on the widow to submit her case for considerationmany are too traumatised at this time.
Pensionprovision for children of post-retirement marriages
Any enhancement is welcome. What provision is there to prevent abuse of this system eg death bed marriages/multiple adoption?
Is the widows pension unaffected by any previous commutation?