Upper Tribunal (Administrative Appeals Chamber)

[2009] UKUT 51 (AAC) (16 March 2009)

Decision of the Upper Tribunal
(Administrative Appeals Chamber)

As the decision of the Pensions Appeal Tribunal (held in London on 18 May 2007 under reference SD/00282/2005) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decision is RE-MADE.

The decision is: the claimant is not entitled to an allowance for lowered standard of occupation, as decided by the Secretary of State on 6 December 2004.

Reasons for Decision

1. This case began as an appeal by the claimant to a Pensions Appeal Tribunal, followed by an appeal by the Secretary of State to the Pensions Appeal Commissioner with the leave of Mrs Commissioner Jupp (now Upper Tribunal Judge Jupp). The Commissioner's jurisdiction was transferred to the Upper Tribunal by the Transfer of Tribunal Functions Order 2008 (SI No 2833). This has not affected the decision.
2. Judge Jupp directed a hearing of the appeal for 24 February 2009. Unfortunately, she was taken ill. I took the hearing in her place and had the pleasure of hearing high quality arguments on an interesting issue. The Secretary of State for Defence was represented by Keith Morton of counsel (instructed by the Treasury Solicitor). The claimant attended and was represented by Adam Baradon of Lovells LLP.

A. The issue

3. The claimant has a Service Attributable Pension (a SAP). The issue is: was he also entitled to an allowance for lowered standard of occupation (an ALSO) under the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983?

B. How the issue arises

4. The claimant was born on 26 September 1949. He served as a sergeant in the Territorial Army from 16 April 1976. At that time, his civilian occupation was as a bricklayer. He was medically discharged on 18 November 1984 as a result of lower limb problems. He was no longer able to work as a bricklayer and became self-employed as a taxi driver. He was awarded a disablement pension under the 1983 Order, with a disablement assessed first at 40% and then, from 1992, at 80%. He was also awarded a SAP. In 1994, he was awarded an ALSO under the 1983 Order. On 6 December 2004, the Secretary of State decided on review that the claimant was not entitled to the ALSO as well as his SAP.
5. The claimant exercised his right of appeal and the tribunal decided in his favour that he was entitled to both the SAP and the ALSO. The tribunal's reasons can only be understood in the context of the legislation.

C. The SAP

6. This is payable as part of the armed forces occupational pension scheme. It was introduced for regulars from 31 March 1973 and was extended to reservists from 1 April 1980. It is now governed by the Reserve Forces (Attributable Benefits) Regulations 2001, which are available on the Ministry of Defence website.
7. The conditions of entitlement are set out in regulation 3:

'3 Eligibility for attributable benefits

(1) The Secretary of State may decide to award benefits to a person under this Part of these Regulations (referred to in these Regulations as "attributable benefits") if-

the person has been a member of any reserve force;

he has been required to retire or has been discharged from that force on the grounds that he is medically unfit to continue in service;

the injury or condition which gave rise to his being unfit to continue in service-

(i) is attributable to his service in that force; or

(ii) where the injury or condition existed before or arose during his service, has been aggravated by his service in that force;

he suffered the injury, or (as the case may be) the condition was first diagnosed, on or after 1st April 1980;

an assessment has been carried out for the purposes of Part III of the 1983 Order under which the degree of disablement due to the injury or condition has been assessed as being 20% or more; and

he has been awarded retired pay or a pension under Part III of the 1983 Order, and the commencing date of the award is no later than the day after the date of his medical discharge.

(2) For the purposes of these Regulations, where the retirement or discharge of the person was caused by more than one injury or condition, any reference to "the degree of disablement due to the injury or condition" shall be to the total degree of disablement due to every such injury or condition.'

8. The SAP is payable at a higher and a lower rate. The applicable rate is determined by Schedule 1 to the Regulations:

'SCHEDULE 1

PART I - GENERAL

1. There shall be two annual rates of attributable pension (referred to in these Regulations as "the higher rate" and "the lower rate").

2. A person shall be entitled to be paid at the higher rate if the injury or condition in respect of which the attributable pension is paid has substantially affected the person's ability to work.

3. For the purposes of paragraph 2, a person's ability to carry out work is to be regarded as having been substantially affected by an injury or condition if, by reason of that injury or condition, he is unable to carry out any particular profession, trade or occupation (excluding service in a reserve force but including any unpaid domestic duties) which he was accustomed to carry out-

before he suffered the injury or condition; or

where he was required to retire or was discharged because an existing injury or condition was aggravated by service, before the injury or condition was so aggravated.

4. A person who is not entitled to be paid at the higher rate shall be paid at the lower rate.

5.-(1) Subject to sub-paragraph (2), a person's entitlement to be paid at the higher or lower rate shall be determined by the Secretary of State when the award of attributable benefits is first made to the person concerned.

(2) The Secretary of State may review a person's entitlement to be paid at the higher or lower rate; and, where he determines that the person should be paid at the different rate, he shall be paid at that different rate from the date of the decision on the review.'

9. There is provision for reducing the amount of the SAP to take account of civilian pension benefits (regulation 5), benefits under the armed forces pension scheme (regulation 6) and the unemployability allowance (regulation 7).

D. The ALSO

10. This is governed by article 21 of the 1983 Order:

'21 Allowance for lowered standard of occupation

(1) Except in the case of a member to whom paragraph (1B) applies, where a member of the armed forces is in receipt of retired pay or a pension in respect of disablement the degree of which is less than 100 per cent and the disablement is such as to render him incapable, and likely to remain permanently incapable, of following his regular occupation and incapable of following any other occupation with equivalent gross income which is suitable in his case, taking into account his education, training and experience, he may be awarded an allowance at a rate not exceeding the appropriate rate specified in paragraph 9 of Part IV of Schedule 1, so, however, that the aggregate rate of his retired pay or pension together with the allowance under this article shall not exceed the rate of retired pay or pension which would have been appropriate in his case if the degree of his disablement had been 100 per cent.

…

(1B) This paragraph applies in the case of a member who submits a new claim for an allowance under this article—

(a) on or after the date he attained the age of 65; or

(b) where the degree of disablement is assessed at less than 40 per cent.'

E. Payment of the ALSO and the SAP

11. The Secretary of State relied on article 55 of the 1983 Order to justify removing the claimant's award of the ALSO:

'54 Interpretation of Part VI

(1) In articles 55, 56, 59, 60, 61, 62 and 64 the expression "pension" means any retired pay, pension, allowance, grant or other continuing benefit under this Order or a 1919 to 1921 instrument and the expression "gratuity" means any gratuity under this Order or any of those instruments.'

'55 Adjustment of awards in respect of other compensation

(1) Where the Secretary of State is satisfied that compensation has been or will be paid to or in respect of a person to or in respect of whom a pension or gratuity is being or may be paid or that any compensation which has been or will be paid will benefit such a person, the Secretary of State may take the compensation into account against the pension or gratuity in such manner and to such extent as he thinks fit and may withhold or reduce the pension or gratuity accordingly.

…

(3) In this article "compensation" means-

(a) any periodical or lump sum payment in respect of the disablement or death of any person, or in respect of any injury, disease or incapacity sustained or suffered by any person, being a payment—

(i) for which provision is made by or under any enactment, Order in Council (including this Order), Warrant, Order, scheme, ordinance, regulation or other instrument; or

(ii) which is recoverable as damages at common law; …'

F. The nature of the appeal

12. What is the nature of the appeal against a decision taken under article 55? This question arises because the appeal is against the Secretary of State's exercise of a discretion. It was answered by Mr Commissioner Rowland in R(AF) 3/07:

'8. … Proceedings before a tribunal are in the form of an appeal (not limited to a point of law) rather than a review and so the tribunal had to substitute its own judgment for that of the Secretary of State (although its decision might have been to the same effect) rather than merely reviewing the reasonableness of the Secretary of State's judgment (which might have involved accepting that the Secretary of State's approach was reasonable even though it would itself have taken a different approach). The distinction is important and, although it is possible that the tribunal did in fact agree with the Secretary of State's approach, the language used in the decision leaves open the possibility that it merely reviewed its reasonableness. …'

13. In R(H) 6/06, a Tribunal of Commissioners (of which Mr Commissioner Rowland was a member) decided that for some discretions an appeal had to be limited to judicial review grounds:

'39. … a right of appeal against an exercise of discretion that is non-justiciable because the relevant considerations cannot be discerned must be limited to points of law. …'

14. The reconciliation of these two cases is found in the obvious purpose of article 55, as identified in R(AF) 3/07:

'14. The purpose of article 55 of the 1983 Service Pensions Order and, now, article 52 of the 2006 Service Pensions Order is plainly to prevent the duplication of payments …'

The identification of a double payment is a justiciable issue.

G. The tribunal's reasons

15. The tribunal's reasons contain a detailed analysis of the legislation governing both. It decided that the Secretary of State had no power to take account of the SAP under article 55, as it was not 'compensation within the meaning of the Service Pensions Order'. It took into account that:

•    The 2001 Regulations took account of the 1983 Order.

•    They did not define the SAP as being either compensation or as paid in respect of disablement or … incapacity'.

•    A press notice issued on 9 May 2002 said that in addition to the occupational pensions scheme 'a separate scheme operates to provide compensation for service personnel injured or killed during military service, in the form of the War Pension Scheme.'

16. The tribunal went on to deal with other issues, but these were unnecessary given its decision on the application of article 55.

H. The Defence Council Instructions

17. The SAP for reservists was originally paid under the authority of Defence Council Instructions of 1980 and 1984. The Secretary of State was unable to trace these until after the tribunal had made its decision. In case they may be relevant in later cases, I have added them as an Annex to this decision. The Instructions contemplated that Regulations would be made, but (I was told) that was not done until 2001.
18. In refusing leave to appeal, the tribunal's chairman complained that the Secretary of State, by referring to these Instructions, was seeking to rely on evidence that had not been put to the tribunal. Mr Baradon took the same position. I consider that the Secretary of State was entitled to rely on the Instructions. They were made under the Royal Prerogative and were, as such, a form of legislation. They are relevant as they were the authority under which the claimant was awarded the SAP. They were relevant to the interpretation of the 2001 Regulations in the same way as earlier legislation may help to interpret later legislation that consolidates or amends it. I doubt whether they are evidence, but if so, they are not subject to the rule that evidence that was not before a tribunal cannot be used to show that the tribunal went wrong in law. They represent the previous law and may be cited as such.
19. Having said that, they have not affected my analysis, although they are consistent with it and supportive of it.

I. The argument for the Secretary of State

20. In short, Mr Morton argued that: (i) the tribunal had misinterpreted article 55; (ii) the SAP was 'compensation' within the definition in article 55(3); and (iii) the press notice was not relevant, because it was not admissible as an aid to interpretation and, anyway, it was concerned with the occupational pension scheme and not with the SAP. I accept those arguments.

J. Analysis

21. In order to interpret and apply article 55, I have to ask two questions. First: are the circumstances of this case within the scope of the discretion under that article? The second question only arises if they are: was this an appropriate case in which to exercise the discretion? My answer to both questions is: yes.

Are the circumstances of this case within the scope of the discretion?

22. The SAP was 'compensation' as defined by article 55(3):

•    It paid to the claimant and it was paid at intervals. It was, therefore, a periodical payment.

•    The claimant was receiving a pension under the 1983 Order. That pension is paid in respect of the claimant's 'disablement, injury … or incapacity'. It is one of the conditions of entitlement to a SAP under regulation 3 of the 2001 Regulations that the claimant must be receiving a pension under the 1983 Order. The other conditions serve to identify a subset of those who are receiving such a pension. Although those other conditions must be satisfied, the SAP is payable as a direct result of the claimant's disablement attributable to service. In those circumstances, the SAP is paid in respect of the claimant's disablement.

•    The SAP was initially paid under the Defence Council Instructions, which are a 'scheme … or other instrument' for the purposes of article 55(3)(a)(i). It was latterly paid under the 2001 Regulations, which are a 'scheme' or 'regulation' for the purposes of that provision.

Is this an appropriate case in which to exercise the discretion?

23. This issue arises on Mr Commissioner Rowland's analysis in R(AF) 3/07:

'13. Although article 55 of the 1983 Service Pensions Order and its successor, article 52 of the 2006 Service Pensions Order, are expressed in discretionary terms, the discretion must be exercised in a way that furthers the purpose of the legislation and is rational rather than arbitrary. The Secretary of State is entitled to have a policy that indicates how he will approach the exercise of discretion, provided that the policy does not fetter his exercise of the discretion so that he cannot exercise it properly. Indeed, it is desirable that he should have a published policy so that it can be seen that his decision-making is not arbitrary. While, on an appeal, a tribunal is not bound by the policy, it must exercise the discretion conferred by the legislation judicially which, again, means exercising it in a way that furthers the purpose of the legislation and is rational and, moreover, it should have regard to the Secretary of State's policy and explain any departure from it.

I have already quoted paragraph 14, in which Mr Rowland identified the purpose of article 55 as being 'to prevent the duplication of payments'.

24. It is clear from the terms of the Defence Council Instructions and the 2001 Regulations that a SAP is a form of minimum income guarantee, which is payable to reservists who are no longer able to pursue their civilian employment. Paragraph 3 of Schedule 1 to the Regulations sets out the conditions for the higher rate in terms that are very similar to article 21 of the 1983 Order. In those circumstances, the SAP and the ALSO are paid in respect of the same eventuality – reduced earning capacity as a result of service.

K. Mr Baradon's arguments

25. Mr Baradon presented a series of ingenious arguments on behalf of the claimant. I now explain why I have not accepted them.

Pensions and periodical payments

26. Mr Baradon argued that the SAP was not a periodical payment, because the legislation distinguished between periodical payments (in article 55(3)(a)) and pensions (in article 54, where they are described as a continuing benefit). I do not follow this argument. The fact that a pension is continuing benefit does not mean that it cannot be a periodical payment.

The relationship between the SAP and the ALSO

27. Mr Baradon asked why it was necessary to have both a SAP and an ALSO if the latter could be taken away under article 55. The answer is that the conditions of entitlement are not the same. There are circumstances in which a claimant may be entitled to one but not the other.
28. A SAP is the only payment for reduced earning capacity in certain circumstances:

•    If the claimant's disablement is between 20% (the minimum for a SAP) and 40% (the minimum for an ALSO).

•    If the claimant's disablement is 100%, because the ALSO tops up the amount payable under the 1983 Order to the equivalent for that percentage.

•    If the claimant's incapacity is not permanent or is not sufficient to satisfy the equivalent gross income test, both of which are requirements for an ALSO but not for a SAP.

•    If for some reason the claimant decides not claim an ALSO.

29. An ALSO is the only payment for reduced earning capacity in certain circumstances, if the injury was not sufficient to require the claimant to leave the service.

The nature of SAP and ALSO

30. Mr Baradon argued that the nature of a SAP and an ALSO were fundamentally different so that there was no potential for duplication of payment. He went so far as to argue that they were so different that the SAP did not come within the scope of discretion under article 55 at all. I reject his argument.
31. In part (see paragraph 18(c) of his skeleton argument), this argument focused on the language of article 55 by considering whether the nature of a SAP amounted to compensation. To the extent that his argument so depended, it is fallacious. The use of 'means' in article 55(3) shows that it provides an exhaustive definition of 'compensation'. The word 'compensation' is merely a symbol that must be read wherever it appears in the article as having the meaning specified in the definition. The choice of 'compensation' as a symbol was not arbitrary. The person who drafted the provision naturally sought a word that would, to some extent at least, convey the essence of what was contained in the definition. However, the choice of word has no effect on the meaning that must be given to the words of the definition or to the article as a whole. In principle, any symbol could have been used without affecting the meaning. It could have been a similar word of general import, such as 'payment'. It could even have been a letter, such as 'X'. But the choice would not have changed the meaning of the definition or of the article as a whole. The result is that it is not permissible to carry any connotations from the choice of symbol into the definition.
32. However, the essence of Mr Baradon's argument depended more on the nature of the SAP as compared with the ALSO. He argued that there was a distinction between a pension and compensation for an injury. A pension was a reward for service, which represented deferred salary for which the employee paid either directly by contributions or indirectly by earning a reduced salary. Pension schemes often provided for early retirement on health grounds with enhanced benefits. That was different from compensation for an injury, which represented consolation for the injury and payment for the disabling consequences. The SAP properly belonged within the occupational pension scheme and was, he argued, of the nature of a pension, whereas the ALSO properly belonged within the disablement scheme and was of the nature of compensation. I accept Mr Baradon's broad analysis about the nature of pensions and compensation, but I do not accept that the categories are mutually exclusive. In identifying overlap in the deployment of public funds, it is necessary to focus on the substance rather than the form. And there is a clear overlap between the circumstances in which payments are made of the SAP and the ALSO.
33. If both are in payment, the effect of article 55 as operated by the Secretary of State is this:

•    If the SAP is more than the ALSO, the ALSO is not payable.

•    If the SAP is less than the ALSO, the ALSO is payable but only to the extent that it exceeds the SAP.

This represents an appropriate allocation between the SAP and the ALSO. Reduced earning capacity is covered by the SAP as a supplement to the occupational pension scheme rather than by the disablement scheme under the 1983 Order. The latter only applies to the extent that the former does not. Article 55 operates to prevent duplicate payment in those circumstances where both are available.

34. There is nothing in the nature of payments in recognition of reduced earning capacity that makes them more appropriate for an occupational pension scheme or a disablement scheme. The SAP is an example of the former. The ALSO is an example of the latter, as is reduced earnings allowance, which is payable to those who have reduced earning capacity as the result of an accident or disease arising out of and in the course of their civilian employment. The essence of the basis for the payment remains the same regardless of the nature of the scheme through which the payment is delivered.
35. Where payment is available through both types of scheme, it is appropriate that there should not be double payment from public funds. Article 55 has been operated to focus payment wherever possible in the occupational scheme and to prevent overlap. This is a more appropriate location for preventing duplicate payment than the 2001 Regulations. The amount of the ALSO varies with the extent of the claimant's disablement. This can easily be accommodated within the disablement scheme, which has adjudication arrangements that allow for regular adjustments as a claimant's circumstances change. An occupational scheme, in contrast, is not designed for such regular adjustments to entitlement. Given a choice between the 2001 Regulations and the 1983 Order, the latter was the better place for taking account of the duplication of payment.
36. There is also this consideration. If the nature of an occupational pension is, as Mr Baradon argued, that it is bought, it is more appropriate for any adjustment for duplicate payment to be made in the disablement scheme, which is not paid for in the same way.

The operation of SAP and ALSO

37. Mr Baradon also argued that the way in which the SAP and the ALSO operated in their respective schemes showed that there was no overlap. To quote from his skeleton argument:

'The Appellant is wrong to submit that the payment of both an ALSO and a SAP constitutes double recovery. ALSO operates as a minimum income guarantee on the disability pension payable under Article 10 of the SPO and decreases with the severity of the injury because of the 100% disablement cap imposed under Article 21. A SAP, in contrast, increases as the Article 10 pension increases (with the severity of the disablement), and is disregarded for the purposes of the Article 21 cap.

'A SAP is therefore (like other benefits paid under the Regulations) designed to provide payments over and above those provided under the SPO, except insofar as explicitly provided for in the legislation (for example in Regulations 7 and 22).'

38. I accept that the SAP and the ALSO operate differently within their respective schemes. However, that does not mean that there is no potential for double payment, nor that it is inappropriate to use article 55 to prevent that overlap.

Exhaustive coverage in the 2001 Regulations

39. The amount of the SAP is reduced under regulation 7 of the 2001 Regulations when the claimant has been awarded the unemployability allowance. Mr Baradon argued that the Regulations had been devised with the 1983 Order in mind. That is clearly correct. He then argued that the absence of any provision to reduce the SAP when the claimant had also been awarded an ALSO showed that no reduction was intended. I reject that argument. What is shows is that no reduction of the SAP is intended. The difference between the unemployability allowance and the ALSO is that the former is treated as essentially a matter for the disablement scheme under the 1983 Order while the latter is treated as essentially a matter for the occupational scheme. The presence of regulation 7 in the 2001 Regulations reflects that policy decision. It does not indicate that those Regulations are exhaustive of any provision for overlap.
40. I have already explained why the adjudication arrangements for the disablement scheme are more appropriate as a means of preventing duplicate payment than those for the occupational scheme.

Absurdity

41. Finally, Mr Baradon argued that the interpretation sought by the Secretary of State, which I have accepted, produced absurd results and that article 55 had to be read narrowly in order to avoid them. He identified two absurdities. First, payments under the 1983 Order could be offset against themselves. Second, pensions under the Order could be abated in respect of any SAP, since it is always conditional on receipt of the pension under the Order. As to the first, as Mr Morton pointed out it is not absurd. In R(AF) 3/07, Mr Commissioner Rowland used article 55 to reduce a pension awarded on appeal in order to allow recovery of the amount of a gratuity that had already been paid. More generally, this argument overlooks the fact that article 55 is discretionary. It is not mandatory and will only operate, as Mr Rowland explained, in order to further its purpose. It has not been used to remove entitlement to a SAP in all circumstances.

L. Disposal

42. I allow the appeal and confirm the decision of the Secretary of State under article 55 of the 1983 Order.

Signed on original on 16 March 2009

Edward Jacobs Upper Tribunal Judge

ANNEX

DEFENCE COUNCIL INSTRUCTIONS 1981 AND 1984

ATTRIBUTABLE BENEFITS FOR RESERVISTS (U)

RN J 266/81
Army J 125/81
RAF J 110/81

[D/NPP/23/1/23]

43. It has been decided that the provision for reservists invalided from the reserve forces because of an injury or disease attributable to or aggravated by Service will, from 1 April 1980, be brought into line as closely as possible with that made for regular members of the forces. Similarly provisions for the widows and orphans of reservists whose death is attributable will be aligned as closely as possible with that made for the widows of members of the regular forces. For the purposes of this DCI the term reservist includes both regular and volunteer reserves, part time members of the Ulster Defence Regiment and members of the cadet forces who are accepted by the Department of Health and Social Security (DHSS) as members of the armed forces while on duty and to whom that Department would pay attributable benefits.
44. The position of regular reservists who might receive an attributable injury or contract an attributable disease while recalled to Service has since 1973 been somewhat unclear. The principles which now apply to both regulars and reservists will apply also to regular reservists or retired regulars.
45. The essential feature of the present attributable provision for regulars which remains entirely unchanged is that it is in effect a minimum income guarantee scheme according to rank and degree of disability. The beneficiary receives either the normal rate of invaliding retired pay or pension as a tax free attributable retired pay or pension or the minimum rate of attributable award whichever is the higher. This principle will now be applied to reservists with any invaliding pension which they may receive from their civilian employer in respect of their attributable injury or disease being taken into account in the same way as is the regular's invaliding retired pay or pension.
46. However, it is only where the reservists [sic] loses his civilian job as a result of the attributable injury or disease that his position is comparable to that of a regular who is invalided from the Service for attributable causes. Consequently special arrangements will apply to reservists who are invalided from the reserve but are still able to continue with their civilian employment.
47. For ease of reference members of such reserves as the RNR, TA, RauxAF, part time members of the UDR, etc, are referred to a 'volunteer reservists', while members of the regular reserves (RFR, RARO, RAF reserve, etc,) and including officers on the Retired List are referred to as 'regular reservists'. As this is only an outline it must not be taken as giving any entitlement to an award which is not provided for in the full regulations.
48. Volunteer reservists

In order to qualify for an award of attributable retired pay or pension a reservist must be invalided from the reserve because of an injury or disease which the DHSS accept as being attributable to service and which they assess as representing a degree of disablement of 20 per cent or more. The award will be at a higher or lower rate depending on whether or not the reservist loses his civilian job as a result of the injury or disease:

a. If the reservist loses his civilian job the award will be the minimum rate of attributable retired pay or pension plus the additional attributable gratuity appropriate to a member of the regular forces of the same rank and with the same degree of disability (see ANNEX A) abated in respect of any pension benefits which he receives from his civilian employer as a result of the disability, or, in the case of non-pensionable employment or self-employment, any pension paid as a result of the disability for which tax relief has been given in respect of contributions paid under the retirement annuity payments scheme. The abatement will be determined from the formula set out below:

A. is the officer's or rating's annual civilian pension,

B. is his civilian lump sum.

0.75 (A+B/9).

The amount of abatement in respect of pension benefits from earlier employments and self-employed pension schemes, will be at the discretion of the Secretary of State for Defence.

b. If the reservist is still able to continue with his civilian job the award will, irrespective of rank, be at the rate set out in ANNEX B to this DCI.

49. Regular reservists

A regular reservist who is recalled to Service either in time of peace or national emergency and retains his civilian job while on recalled Service and who receives an injury or contracts a disease which is accepted by the DHSS as being attributable to his recalled Service, and where the degree of disablement is assessed at 20 per cent or more may be awarded Service attributable retired pay or pension provided that his disability is such that, if he were a regular member of the forces, he would be invalided therefrom. The award will be at a higher or lower rate depending upon whether or not the reservist loses his civilian job on account of the attributable disability;

a. If the reservist loses his civilian job he will be awarded the rate of attributable retired pay or pension plus the additional attributable gratuity appropriate to a regular member of the forces of the same rank and with the same degree of disability, abated by such part of any pension received from his civilian employer as a result of the disability; or in the case of non-pensionable employment or self-employment, any pension paid as a result of the disability for which tax relief has been given in respect of contributions paid under the retirement scheme, which does not reduce the attributable award below the level of the rate of any invaliding retired pay or pension for which the reservist may have title. The abatement will be determined from the formula set out below:

A. is the officer's or rating's annual civilian pension,

B. is his civilian lump sum.

0.75 (A+B/9)

The amount of abatement in respect of pension benefits from earlier employments and self-employed pension schemes, will be at the discretion of the Secretary of State for Defence.

b. If the reservists is still able to continue with his civilian job the award will, irrespective of rank, be at the rate set out in ANNEX B to this DCI.

50. Widows of regular and volunteer reservists

Where the death of a regular or volunteer reservist is accepted by DHSS as being attributable to Service and where, in the case of a regular reservist he gave full pay Service on or after 31 March 1973, and, in the case of a volunteer reservist, he was a member of a reserve force on or after 31 March 1980 or could be included under para 9 of this DCI, the widow and/or dependent children will be eligible for awards of attributable family pensions and gratuities as set out in ANNEX C, abated in respect of any pension benefits paid by the member's civilian employer as a result of his death, or in the case of non-pensionable employment or self-employment any pension benefits payable as a result of his death, for which tax relief was given in respect of the contributions paid under the retirement annuity payments scheme. In the case of the widow of a regular reservist the widows attributable pension will not be so reduced below the rate of any forces family pension for which she is eligible. The abatement will be determined from the formula set out below:

A. is the widow's civilian pension,

B. is her civilian lump sum.

0.75 (A+B/18)

The amount of abatement in respect of pension benefits from the husband's or father's earlier employments and self-employment pension schemes, and in respect of children's pension benefits will be at the discretion of the Secretary of State for Defence.

51. If, irrespective of the date of retirement or discharge, personnel covered by this DCI die in retirement as a result of an incident (for example terrorist action) which took place on or after 1 April 1980 and which is accepted by the DHSS as being attributable to service, their widows and or children may be awarded an attributable family pension.
52. Pensions increases

Where no civilian pension benefit is taken into account in the assessment of the awards under paras 6, 7 and 8 the awards will be subject to increase in the normal way under the pensions increase measures. Where the civilian pension can be increased under Section 59 of the Social Security Pensions Act, 1975, and no part of any lump sum payment from the civilian employer has been annuitized increases to the MOD award will be made in the normal way. However where an annuitized lump sum is taken into account or where the civilian pension is not one to which the above mentioned 1975 Act applies the PI measure will be applied to the gross MOD award which will then be abated by the actual rate of civilian pension in payment and/or the annuitized value of any lump sum using the formula 0.75 (A+B/18).

[Annexes A–C contain rates of payment.]

ATTRIBUTABLE BENEFITS FOR RESERVISTS (U)

RN J 295/84
Army J 164/84
RAF J 149/84

[D/Sec 2(A)/66/24]

53. DCI RN J 266/81, Army J125/81, RAF J110/81 (time-expired) set out the new provisions, from 1 Apr 80, for reservists invalided from the reserve forces because of an injury or disease attributable to or aggravated by service and for the widows and children of reservists whose death is attributable, and brought benefits closely into line with those for members of the regular forces and their dependants. In the light of experience of the operation of the scheme the purpose of this DCI is to restate the provision made, incorporating agreed changes to the scheme, prior to its inclusion in the relevant permanent regulations. For the purpose of this DCI the term reservist covers 'regular reservists' including members of RFR, RARO, the Army regular reserve and Army long term reserve, the RAF reserve, and officers on the Retired List, and 'volunteer reservists' including the TA, RNR, R Aux AF and part-time members of the UDR. As this DCI is an outline it must not be taken as giving any entitlement to an award which is not eventually provided for in the full single-Service regulations.
54. The essential feature of the present attributable provision for regulars is that it is, in effect, a minimum income guarantee scheme according to rank and degree of disability. The beneficiary receives either the normal rate of invaliding retired pay or pension as tax-free attributable retired pay or pension, or the minimum rate of attributable award, whichever is the higher. This principle also applies to reservists, with any invaliding pension which they may receive from their civilian employer in respect of their attributable injury or disease being taken into account in the same way as is the regular's invaliding retired pay or pension. Where damages are received, in respect of the injury or death of a reservist for which an award of attributable benefits is made under this scheme, account may be taken of the amount of damages in assessing the attributable benefits. Rates of service attributable retired pay and pension are reviewed annually and promulgated by Commanded Letter.
55. It is only where the reservist loses his civilian job as a result of the attributable injury or disease that his position is comparable to that of a regular who is invalided attributably from the Service. Consequently, reservists who, although invalided attributably, are able to continue with their civilian employment will receive a lower rate of pension irrespective of rank. Unemployed reservists or their widows and dependants are eligible to be considered for attributable awards under the scheme. Whether the unemployed reservist receives the higher or the lower rate of pension depends on the extent to which the injury or disease would render him unfit to carry out what is considered, after investigation, to be his trade of normal civilian work.
56. Volunteer reservists. In order to qualify for an award of attributable retired pay or pension a reservist must be invalided from the reserve because of an injury or disease which the Department of Health and Social Security (DHSS) accept as being attributable to service and which they assess as representing a degree of disablement of 20 per cent or more. The award is made at a higher or lower rate depending on whether or not the reservist loses his civilian job as a result of the injury or disease:

a. If the reservist loses his civilian job the award is the minimum rate of attributable retired pay or pension plus the additional attributable gratuity appropriate to a member of the regular forces of the same rank, and with the same degree of disability. The pension will be abated in respect of any pension benefits received from his civilian employer as a result of the disability including preserved pension from the date it comes into payment. In the case of non-pensionable employment or self-employment the abatement will be in respect of any pension paid as a result of the disability for which tax relief has been given on contributions paid under a retirement annuity scheme. No account is taken of benefits from personal insurance schemes. The abatement is determined from the formula set out below:

(a) – is the officer's or serviceman's annual civilian pension.

(b) – is his civilian lump sum.

0.75 (A+B/9)

The amount of abatement in respect of preserved or existing pension benefits from previous regular service, and pension benefits from previous civilian employment or a self-employment scheme is at the discretion of the Secretary of State for Defence.

b. If the reservist is able to continue with his civilian job the award will, irrespective of rank, be one-third of the rate for a regular private according to the degree of disability (the lower rate referred to in para 3).

57. Regular reservists. A regular reservist as defined in para 1, who is called out for service, including training in time of peace or national emergency and retains his civilian job during such service, who receives an injury or contracts a disease which is accepted by the DHSS as being attributable to this service, and where the degree of disablement is assessed at 20 per cent or more, may be awarded service attributable retired pay or pension. This will be provided that his disability is one which would have resulted in invaliding, if he had been a regular member of the forces. The award is made at a higher or lower rate depending on whether or not the reservist loses his civilian job as a result of the injury or disease.

a. If the reservist loses his civilian job the award is the minimum rate of attributable retired pay or pension plus the additional attributable gratuity appropriate to a member of the regular forces of the same rank, and with the same degree of disability. The pension will be abated in respect of any pension benefits received from his civilian employer as a result of the disability including preserved pension from the date it comes into payment. In the case of non-pensionable employment or self-employment the abatement will be in respect of any pension paid as a result of the disability for which tax relief has been given on contributions paid under a retirement annuity scheme, but which does not reduce the attributable award below the level of the rate of any invaliding retired pay or pension to which the reservist may have title. No account is taken of benefits from personal insurance schemes. The abatement is determined from the formula set out below:

(a) is the officer's or serviceman's annual civilian pension.

(b) is his civilian lump sum.

0.75 (A+B/9)

The amount of abatement in respect of preserved or existing pension benefits from previous regular service, and pension benefits from previous civilian employment or a self-employment scheme is at the discretion of the Secretary of State for Defence.

b. If the reservist is able to continue with his civilian job the award will, irrespective of rank, be one-third of the rate for a regular private according to the degree of disability.

58. Widows of regular and volunteer reservists

Where the death of a regular or volunteer reservist is accepted by DHSS as being attributable to service and where, in the case of a regular reservist he gave full pay service on or after 31 Mar 73, or, in the case of a volunteer reservist he was a member of a reserve force on or after 31 Mar 80 or could be included under para 8 of this DCI, the widow and/or dependent children are eligible for awards of attributable family pension and gratuity. The pension will be abated in respect of any pension benefits paid by the member's civilian employer as a result of his death, or, in the case of non-pensionable employment or self-employment, any pension benefits payable as a result of his death, for which tax relief was given on contributions paid under a retirement annuity scheme. No account is taken of benefits from personal insurance schemes. The abatement will be determined from the formula set out below:

(a) is the widow's civilian pension.

(b) is her civilian lump sum.

0.75 (A+B/18)

In the cases of widows and dependent children of reservists who previously gave service in the regular forces, awards of attributable family pension would be instead of, not additional to, any forces family pension for which they may be eligible on account of such service. An attributable pension abated under the terms of this paragraph will not be reduced below the rate of forces family pension otherwise payable. The amount of abatement in respect of pension benefits from the husband's or father's previous civilian employment or self-employed pension schemes is at the discretion of the Secretary of State for Defence.

Children's pensions from the civilian employer, being of limited duration, are not taken into account with the widow's pension under the aforementioned formula. Each child is considered separately with pension and lump sum benefits received from the civilian employer being entered in the formula in order to produce the amount by which the MOD attributable child's pension is abated. A short-term pension paid to the widow by her late husband's civilian employer is effectively a continuation of his pay and is not included in the calculation of the MOD attributable pension since the latter is a long-term pension. Apart from the MOD attributable gratuity no awards are made by MOD during the currency of the civilian employer's short-term pension. However, if the civilian employer's short-term pension is less than the sum of the civilian employer's long-term family pension and the MOD attributable pension, the difference may be paid to the widow.

59. If a reservist with no dependants dies from a cause which the DHSS accept as attributable to service, a gratuity may be payable to the estate.
60. If, irrespective of the date of retirement or discharge, a reservist, whether or not invalided out of the reserve forces, is injured or dies as a result of an incident (for example terrorist action) which took place on or after 1 Apr 80, and which is accepted by the DHSS as being attributable to service, an attributable award may be payable by MOD, in accordance with paras 4 to 7 and with the post-retirement/marriage conditions set out in the single-Service pension regulations.
61. Pensions increases

Where no civilian pension benefit is taken into account in the assessment of awards under paras, 4, 5, 6 and 8, the awards are subject to increase in the normal way under the pensions increase measures. Where the civilian pension can be increased under Section 59 of the Social Security Pensions Act, 1975, and no part of any lump sum payment from the civilian employer has been annuitised, increases to the MOD award are made in the normal way. However, where an annuitised lump sum is taken into account or where the civilian pension is not one to which the aforementioned 1975 Act applies, the PI measure will be applied to the gross MOD award which will then be abated by the actual rate of civilian pension in payment and/or the annuitised value of any lump sum using the formula 0.75 (A+B/9) for reservists and 0.75 (A+B/18) for reservists' widows.