‘Military compensation should never cost veterans their benefits’

The Armed Forces Covenant is a simple promise that no one who serves, or their family, should be worse off because of their service. Successive governments have recognised this, but it now falls to this Labour Government to deliver the promise in full.

Right now, only some public bodies are required to follow the Covenant. The UK Government exempted itself, even though it controls key policies that most often affect the Armed Forces community, such as welfare, pensions, healthcare, and housing. For veterans and their families, this exemption has had real consequences.

A clear example is the way military compensation is treated. Payments from the Armed Forces Compensation Scheme or War Pensions are meant to recognise injuries, illness, or loss of life from service, rather than to replace income. Yet all too often, they are counted as regular income when deciding a veteran’s eligibility for welfare benefits like Pension Credit.

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This unfairness is made worse by inconsistency. Some local authorities rightly disregard compensation when calculating benefit entitlements, but others do not. As a result, there is a postcode lottery where fairness depends on where a veteran or their loved one lives.

The Government’s Armed Forces Bill had its Second Reading in Parliament this week, and it is welcome progress that it legislates to strengthen the Covenant in law. 

However, the Labour Government must now go further and legislate so that all military compensation payments are disregarded when calculating welfare entitlements, nationwide. This would ensure no veteran or bereaved family loses out on support. 

Defence Secretary John Healey pledged to “back those who sacrifice so much”. If the Labour Government is to uphold the values of fairness, dignity, and justice for our Armed Forces, it must take responsibility and hold Whitehall to the same standards as other public bodies. 

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At Help for Heroes, we know this is not only the right thing to do, but also that it has the public’s backing. Almost 300,000 people have signed our petition to remove unfair barriers to veterans’ compensation and benefits.

Ending the postcode lottery in welfare provision and ensuring no veteran is left worse off by the very compensation meant to support them would be a lasting legacy for this government.

The Covenant was never meant to be symbolic; it was meant to deliver. As a country, we must now ensure that it really does.

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