ex-servicemen face MoD pension blunder

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  1. Friday, 16 August, 2002, 10:03 GMT 11:03 UK
    MoD in another pensions blunder


    Some veterans may be owed up to £30,000

    The Ministry of Defence - already in the spotlight over wrongly charging some disabled ex-servicemen tax on their pensions - has made another pensions blunder.
    It has emerged that some pensioners affected by this original mistake may not have received their full pension.

    So far the MoD has discovered 355 cases where ex-servicemen have not been paid a "lump-sum gratuity", which is paid to many disabled ex-servicemen, including some of the most severely disabled.

    The compensation total for both mistakes could reach £30m.

    Compensation due

    The "lump sum gratuity" depends on the severity of the disablement and other factors such as rank.

    The MoD told BBC News Online that most compensation paid out so far had been below £10,000.

    In addition, 78 people had received payments between £10,000 and £20,000, with one payment reaching £30,000.

    It said failure to pay the lump-sum had been caused by a "breakdown in communication".

    Most of the errors took place recently, in the 1990s, but the MoD said cases could stretch as far back as 1973 when the Armed Forces Pension scheme began.

    A spokesman said: "We are going through the files at the moment. It's mostly the army files where the errors have been found.

    "But we are going through a similar process with the Navy and Air Force. It could take some time. "

    Tax blunder

    The MoD has so far found 1,005 people who have been affected by the original tax blunder.

    The Inland Revenue is now in the process of compensating the ex-servicemen.

    In cases where the original claimant has now died, the MoD said compensation would pass to the person's estate.

    "We would advise anyone who is a beneficiary to write in, so that we can trace it and have a look at it," the spokesman said.

    "The estate is owed whatever the pensioner would have been owed."

    In addition, widows are also being urged to contact the MoD, in case their husbands missed out.