MOD clarifies financial protections and support for Veterans

The Ministry of Defence has reaffirmed that military compensation payments are not treated as income in means testing for key benefits, and outlined steps it is taking to support the financial resilience of service personnel and veterans.

In a written question to the Secretary of State for Defence, Helen Maguire MP (Liberal Democrat – Epsom and Ewell) asked what action was being taken to raise awareness that military compensation should not be considered as income when means-testing statutory support.

Responding on 27 March, Minister for Veterans Al Carns confirmed that the Ministry of Defence (MOD) works closely with the Department for Work and Pensions (DWP) to ensure the treatment of such payments is clearly communicated and understood.

“The DWP already applies different treatment for Armed Forces compensation payments across the benefit system in comparison to other groups. This reflects the nature of the payments to compensate those who have made significant sacrifices for our country,” Carns said.

He added: “Universal Credit fully disregards War Pensions and Armed Forces Compensation payments. This means that payments under these schemes do not impact the eligibility or amount of benefit to which individuals might be entitled.”

Carns noted that other benefits may partially or fully disregard such payments, depending on the benefit’s criteria.

In a separate question, Maguire also asked what the Ministry is doing to help improve financial resilience for both serving personnel and those leaving the Armed Forces.

The Minister said the MOD partners with several financial institutions, including three not-for-profit credit unions that make up the Joining Forces Credit Union initiative. This scheme provides service members and their families with financial awareness briefings and promotes a savings culture.

Carns also pointed to the Career Transition Partnership (CTP), which provides support to all service leavers, including access to the Financial Aspects of Resettlement (FAR) course. The one-day course includes guidance on long-term financial planning, tax, pensions, and benefits.

“There are 11 resettlement hubs around the UK, located in areas where the majority of Service personnel choose to settle,” he added.

The responses highlight ongoing efforts by the MOD to ensure veterans and their families are informed and supported as they transition to civilian life.