Awards under the Armed Forces Compensation Scheme

The Armed Forces Compensation Scheme (AFCS) is a government-established, no-fault compensation scheme that awards payments to military personnel who have experienced an injury or illness caused by service on or after April 6th 2005. Whether you are you are serving, a veteran or reservist, the AFCS could entitle you to a lump sum, and also, in more serious cases, guaranteed income payments that are index-linked and tax-free for life.

For those seeking clarity on the awards available, this guide explores how payments made under the AFCS are calculated, how the AFCS tariff table works and what might influence your final award. Understanding the tariff levels and how Guaranteed Income Payments (GIP) payments are assessed can give you a clearer picture of what you may receive.

What Does the AFCS Provide?

The AFCS provides two main forms of compensation to personnel who experience an injury or illness caused by service:

• A tax-free lump sum payment, based on the severity of the condition and how long it will last.
• An additional GIP, awarded in more serious cases, offering lifelong monthly payments paid as a percentage of final salary at discharge.

These awards are available to all serving members of the armed forces, as well as veterans and reservists. The AFCS tariffs are set out in nine tables, as follows:

• Table 1 - Burns
• Table 2 - Injury, wounds and scarring
• Table 3 - Mental disorders
• Table 4 - Physical disorders, including illnesses and infectious diseases
• Table 5 - Amputations
• Table 6 - Neurological disorders, including spinal, head or brain injuries
• Table 7 - Sensory damage, including blindness or hearing loss
• Table 8 - Fractures and dislocations
• Table 9 - Musculoskeletal disorders

The AFCS operates on a no-fault basis. This means you do not have to prove negligence. If your injury was caused by service, including during training or deployment, you may be eligible to make a claim.

How Tax-Free Lump Sum Payments Are Calculated

There are 15 tariff levels for lump sum awards. These tax-free lump sum payments are one-off awards intended to reflect the pain and impact of the injury or illness. The highest tariff is Level 1, the lowest is Level 15.

The seriousness and impact of your condition will be calculated according to the evidence, and placed in one of the 15 tariff categories below:

Which tariff is awarded is based upon the descriptors set out in the nine tables listed above, relating to the duration of effects of the injury. These describe the seriousness of different forms of injury or illness, and highlight the tariff level you may receive for each one.

How the Guaranteed Income Payment (GIP) Works

The GIP is a lifelong, tax-free monthly payment awarded through the AFCS in addition to a lump sum. It is only available to those with injuries or illnesses assessed at tariff levels 1 to 11.

Unlike the lump sum, which compensates for pain and suffering, the GIP payment is intended to reflect long-term loss of earning capacity due to an injury or illness caused by service. It is paid for life and is index-linked, meaning it increases in line with inflation.

GIP is awarded at 30%, 50%, 75% or 100% of the person’s final salary at discharge. The percentage level of GIP awarded depends upon the tariff level. 

An age factor is also applied - for example, someone discharged due to a tariff level 6 injury at age 30 may be entitled to higher monthly GIP payments than someone injured at age 50, due to the longer potential loss of income. The GIP is separate from the standard military pension, but if you have a pension for a condition that you were medically discharged for and are making an AFCS claim for the same condition, then you must give 100% credit for your pension against any GIP. If the pension is for a different condition than the one you have claimed for under the AFCS, then credit is 75% against GIP.

This payment can make a significant difference to long-term financial stability. If you are unsure how much you could be entitled to, or believe your award has been calculated incorrectly, legal advice can help clarify what you may be entitled to.

Other Factors to Consider

In addition to the above, there are several other factors to take into account when considering how much you will receive under the AFCS:

Armed Forces Independence Payment (AFIP)

If your GIP payment level is 50% or higher based on the tariff awarded, you are automatically entitled to the Armed Forces Independence Payment (AFIP). This is a separate benefit designed to help with the extra costs of long-term illness or disability resulting from service. If you already receive PIP, then AFIP will replace this benefit. 

AFIP is paid in addition to your GIP payment and lump sum, and does not affect your entitlement under the AFCS.

If your injury has not reached an endpoint, or you are still having treatment

An interim award can be made until your injury or illness has stabilised. If you have not recovered or are still having further treatment, your award may be made interim with a review at the end of a specified period, usually 1 or 2 years. This is to ensure the correct tariff level and, if applicable, the right GIP payment is applied based on your long-term prognosis.

Other sources of compensation

If you’re receiving payments for the same injury through another avenue, such as a civil settlement, the lump sum damages will be taken into account, as you cannot be compensated twice for the same condition. Also, any loss of earnings claimed would be taken into account when determining GIP eligibility. However, each case is assessed individually.

Conversely, the Armed Forces Compensation Scheme is entirely separate from other forms of cover such as personal accident insurance or life insurance. These policies are private and do not affect the value or validity of your AFCS award. Any personal accident cover you hold is not considered when determining an award under the Scheme.

Am I Eligible For an AFCS Fast Payment?

The fast payment option allows the most seriously injured personnel to receive an upfront payment without needing to complete the full claim process. It is intended to offer financial reassurance and early support during the early stages of treatment and recovery.

You may be eligible if:

• You are still serving in the armed forces.
• Your injuries occurred on or after May 9th 2011.
• At least one of your injuries would, if claimed through the full process, be assessed between AFCS tariff levels 1 to 8.

The fast payment amount is currently £61,800. This is a tax-free lump sum and is paid in advance of the final assessment, to help you manage immediate costs following a serious injury caused by service.

Can I Challenge the Amount I Receive Through the AFCS?

If you believe the amount awarded under the AFCS does not reflect the seriousness of your injury or illness caused by service, you have the right to challenge in certain circumstances.

There are several ways to do this, depending on your circumstances and the stage of your claim:

• Reconsideration: if you disagree with the initial decision made by Veterans UK, you can apply for Reconsideration. This allows your claim to be reviewed again by a different caseworker. Most people begin the challenge process here. There is a strict one-year deadline starting from the date of the decision letter that you wish to challenge. 
• Appeal: if you remain dissatisfied after a Reconsideration, you can submit an Appeal to an independent tribunal. There is a one-year strict deadline from the date of the Reconsideration letter in which to Appeal. The tribunal can increase your award or uphold the original decision.
• Service Termination Reviews (STR): this is only available after leaving service. If you left in the last 12 months, have had an award in the previous seven years, and the injury has worsened, then you have one year from the last day of service to apply for an STR to reopen and review the award. This is a strict deadline.
• Exceptional Circumstance Reviews: This can be used while still serving and is available in certain specific circumstances:
• There must have been an award in the previous 10 years.
• The condition must have deteriorated.
• Deterioration must be unexpected and exceptional.
• The application is made within one year of the start of the deterioration.

Challenging your AFCS tariff level, GIP payment or the rejection of certain injuries can be complex. Legal advice can help you understand what supporting evidence is needed and increase your chances of receiving a fair award.