Letter from the Secretary of State to
the Chairman
You will be aware that the Government has been
considering the package of benefits provided when Service men
and women die or are killed in service. Today, I announced at
the international Veterans Summit that we are hosting in London
that, as a result of this review, we have decided to increase
the tax-free, lump sum death-in-service benefits paid under the
current pension scheme. With effect from 6 April this year, this
benefit will rise from the current rate of between one and one
and a half times the representative rate of pay for the deceased's
rank to three times, at least doubling the benefit. For widows
and widowers, this payment is in addition to the enhanced short-term
family pension available under the current scheme.
Changes to tax law meant that we are no longer able
to offer the short-term family pension for the new pension scheme.
The new scheme will therefore provide a death-in-service benefit
of four times pay. Although the approaches differ slightly for
the two schemes, we judge that the two packages are broadly comparable.
For any deaths-in-service in the next year, during the transition
to the new pension scheme, dependants of those currently in service
will be given the best benefits from the new or old pension schemes.
This improvement, which places death benefits for the Armed Forces
at the top end of the range for public services, should allow
those deploying to the Gulf and to other operational theatres
to do so with the confidence that they enjoy a good package of
benefits that will offer a high level of security to their families.
It also compares very favourably with other nations' pension scheme.
You will have seen that I also took the opportunity
to announce an increase of £2 per week in the War Widows'
Supplementary Pension, which will be over and above the increase
for inflation; this is paid to pre-1973 War Widows to reflect
the fact that they did not benefit from the occupational pension
scheme improvements introduced in the early 1970s. Both measures
respond to widely expressed concerns about the more vulnerable
widows, not least during the passage last year of the Armed Forces
(Pension and Compensation) Act 2004. The measure affecting pre-1973
War Widows, which will be affective from 6 April 2005, will also
benefit a number of widows of those who fought in World War II.
The government considers this a timely acknowledgement of the
very considerable debt owned to that generation of veterans, in
a year when the nation will be celebrating a number of important
World War II anniversaries. While it will not be able to pay the
increase immediately with April pension payments, the increase
will be paid as soon as possible and will be back-dated.
I know you have taken a personal interest in these
issues and I hope this addresses the concerns you have raised.
March 2005
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