Continuing with our Resettlement theme, and following on from our column in the last issue of Pathfinder Magazine on the Early Departure Payment, in this article we talk about the rules around the Resettlement Grant.
Some people think that the RG is something to do with paying for resettlement courses or training – this is wrong. The RG is a tax-free lump sum intended to help Regular Service personnel settle into civilian life. There is no stipulation as to what you can spend it on BUT you need to remember that there are breaks in service to be observed and, if you take up another military post too quickly, you might have to repay some or all of your RG.
The RG is payable to personnel who give a certain number of years paid service and leave with preserved AFPS 75 or AFPS 05 pensions, or deferred AFPS 15 pensions. The terms ‘preserved pension’ and ‘deferred pension’ both mean the same thing – you cannot claim them until a later date! If individuals reach a point where they receive either a pension payable straight away or EDP benefits, or they are discharged with a Tier 1 ill-health lump sum, they do not receive the RG. Only Regular service counts towards the qualification criteria for the RG - neither periods of Full Time Reserve Service (FTRS), which includes Additional Duties Commitments, nor service with the Part Time Volunteer Reserve (PTVR) counts towards the RG.
The periods of service required to qualify for an RG are as follows:
AFPS 75: Officers must give at least 9 years reckonable service from age 21 and Other Ranks (OR) must give at least 12 years reckonable service from age 18. If an Officer reaches his or her 16 year point, he or she is awarded the Immediate Pension (IP) instead of the RG. If an OR reaches his or her 22 year point, he or she is awarded the IP instead of the RG. If an Officer or an OR is awarded an invaliding pension the RG is not payable.
AFPS 05: The criteria requires that the individual should give at least 12 years relevant service (so, paid service) and leave before EDP benefits are payable. EDP benefits become payable when an individual leaves having given at least 18 years relevant service and having reached at least the age of 40 (the 18/40 Point). Further, if an individual leaves in receipt of a pension payable immediately, perhaps an invaliding pension, or a Tier 1 ill-health lump sum the RG is not payable. The criteria does not differentiate between Officers and ORs.
AFPS 15: Again, the criteria does not differentiate between Officers and ORs. It requires that individuals must give at least 12 years qualifying service (again, this means paid service) and leave before EDP benefits are payable in order to qualify. For this scheme, EDP benefits become payable when an individual leaves having given at least 20 years qualifying service and having reached at least the age of 40 (the 20/40 Point). Again, if an individual leaves in receipt of a pension payable immediately or a Tier 1 ill-health lump sum those benefits are paid instead of the RG.
Most of you will have been transferred from AFPS 75 or AFPS 05 to AFPS 15 on 1 April 2015 and will be waiting to find out what the MOD are planning to do in respect of the Court ruling that the transitional rules were discriminatory. Luckily this has no bearing on your RG entitlement as the RG is one of the features of your ‘old’ scheme that were protected. Only those who joined or re-joined the Regular Armed Forces after 1 April 2015 will received the AFPS 15 RG.
Some of you will have left with preserved AFPS 75 benefits and re-joined the Armed Forces after 6 April 2005, thus becoming AFPS 05 members. In these circumstances you are entitled to count both periods of service towards your AFPS 05 RG. You do not have to formally aggregate them (join them together) for them to qualify (as is the case for qualification for the AFPS 05 EDP). A few of you might have left AFPS 75 or AFPS 05 with preserved benefits only (ie. No other pension, lump sum or EDP in payment) and re-joined the Regular Armed Forces on or after 1 April 2015. In these circumstances, and providing you re-joined within 5 years of your previous discharge date, you will be able to count the period of that earlier service towards qualification for the AFPS 15 RG – again, no formal aggregation is necessary in order to qualify.
The sums of money we are talking about are worth having:
AFPS 75 Officers’ RG is £16,272*
AFPS 75 ORs’ RG is £11,121*
AFPS 05 and AFPS 15 RG is £11,423*
…… and remember it is tax-free cash!
*these are 20019/20 rates as the 2020/21 rates had not been published at the time of writing.
If, having received an RG, you re-join the Regular Armed Forces or accept an FTRS post you need to remember that, in order to keep the RG, certain breaks in service are required:
For AFPS 75 the required break is 121 days if you are re-joining the Regular Armed Forces and 30 days if you are joining the FTRS. If these breaks are not observed you will be liable to pay back some or all of the RG. So, for example, if you re-joined the Regulars 60 days after leaving with an RG, you would have to pay back just over half (approx. 50.4%) of the RG. If you join the FTRS within 30 days the whole RG must be repaid.
For AFPS 05, the required break is 31 days. If you re-join the Regular Armed Forces or join the FTRS within that period, the whole RG must be repaid.
For AFPS 15, if you re-join the Regular Armed Forces or join the FTRS within 31 days of leaving with an RG, you must repay the whole RG.
For all schemes, the RG is not affected by joining the PTVR
If as a result of further service you leave at a point which qualifies you for an RG (so, before any pension payable immediately, EDP benefit or Tier 1 ill-health lump sum becomes payable) you may still qualify for RG:
If you received an RG and did not have to repay it because you observed the required break in service, you will not be entitled to a second RG, even though you are not entitled to any other benefits payable immediately;
If you repaid a proportion of your AFPS 75 RG on re-joining as an AFPS 05 member, you will be entitled to a proportion of the RG for AFPS 05. So, using the example above, an individual who repaid 50.4% of his or her AFPS 75 RG on re-entry would be entitled to 50.4% of the RG payable at the date of leaving for the second time.
If you repaid the whole RG, you will be entitled to the full RG for your new scheme.
If you are a member of the Forces Pension Society and have any questions about your own particular situation contact us on email@example.com. If you are not a member but would like to join click here
Author: Mary Petley , for the October issue of Pathfinder Magazine