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What if the worst happens after I leave the Armed Forces…?

Whether you die with a pension in payment or with preserved or deferred benefits, your family have clear cut entitlements.  In this article, we set out those entitlements scheme by scheme and any criteria that apply. 

Looking first at adult benefits.  It is pretty obvious that Veterans UK will require a death certificate but what may be less clear is that they will be asking for documentation to prove a marriage or civil partnership too.  Dealing with a bereavement is very distressing and demanding, and Forces Pension Society members will know that we recommend a “Just in Case” file where important documents and contact details are kept.  If you have such a file, make sure your marriage or civil partnership documents are in it!

AFPS 75 pays pensions to the spouse or civil partner of the member.  If you are not married or not in a civil partnership, your partner will not normally receive anything from AFPS 75.

If the member dies with his or her pension in payment the family pension is paid in two stages.  First is the Short Term Family Pension (STFP).  This means the family receives the member’s full pension in the immediate aftermath of the member’s death for 91 days, if there were no eligible children, or 182 days, if there were.  After the STFP the spouse/civil partner pension reduces to 50% of the member’s entitlement and this pension is payable for life.

If the member dies within 12 months of retiring with a pension in payment, AFPS 75 will pay a lump sum to the estate equal to three times the representative rate of pay for the deceased’s rank, less the amount paid as a pension lump sum and any commutation lump sum taken.

When the member dies with a preserved AFPS 75 pension (that is a pension not yet in payment), the spouse or civil partner entitlement is 50% of the member’s pension entitlement (so, no STFP entitlement).  The member’s preserved benefits would include a lump sum of three times the pension and it is paid, automatically, to the spouse or civil partner.  If there is no spouse or civil partner, the lump sum is paid to the children.  If there are none, it is paid into the deceased’s estate.

AFPS 05 and AFPS 15 pay adult pensions to the member’s spouse, civil partner or eligible partner.  The eligible partner is an unmarried partner of either sex, who lives with the member and can demonstrate  financial dependence or interdependence.  Examples of the sort of financial evidence that Veterans UK will be looking for could include:

  • a joint bank account,
  • a joint rent book,
  • evidence of bill sharing, or
  • a Will which names the unmarried partner as the beneficiary. 

This list is not exhaustive ….. and there is something the member can do to help Veterans UK make their decision.  Submitting an AFPS Form 2 nominating the partner as the recipient of any lump sums that might be due in the event of the member’s death provides evidence of the member’s intention to make financial provision for the partner.  The form is available on JPA.  It only takes a minute or two to complete BUT, if you are going to complete it, it is vital that you keep it under review because Veterans UK will comply with the wishes expressed on it.  A nomination will only lapse if:

  • The nominee dies before the member;
  • The nominee was the member’s spouse or civil partner and the relationship has been legally dissolved (but the member can re-nominate the ‘ex’ after the relationship has been dissolved);
  • The member marries or enters into a civil partnership after 1 December 2018 – if you married before this date, you should check that any nomination you made still meets your wishes.
  • The nominee is convicted of the murder or manslaughter of the member (and potentially any other offences relating to the nominee’s involvement in harming of the member). 

So if your personal circumstances have changed, perhaps you have a new unmarried partner or are just no longer with the old one, you must review your nomination form or the wrong person may get what could be a sizeable lump sum.

AFPS 05 adult pensions are normally 62.5% of the member’s pension entitlement – for members with more than 37.33 years reckonable service, the pension would be limited to 62.5% of the pension based on 37.33 years reckonable service.  AFPS 15 adult pension are always 62.5% of the member’s pension entitlement.  Again, these pensions are payable for life. 

If the member dies within five years of his or her AFPS 05 or AFPS 15 pension being in payment, Veterans UK will work out how much five year’s pension is worth, subtract the amount of pension and lump sum which have been paid, and pay any balance to the spouse, civil partner, eligible partner or, if none, to the deceased’s estate.

If the member dies with a preserved AFPS 05 pension, part of the entitlement is a lump sum of three times the pension.  This will be paid to the nominee or, if there is  no nomination, to the spouse, civil partner or eligible partner.  If there is nobody eligible to receive the lump sum, it will be paid to the deceased’s estate.

If the member dies with a deferred (means the same as preserved) AFPS 15 pension, the nominee will receive a lump sum of three times the pension and, if there is no nominee, it will be paid  to the person eligible to receive the adult pension or, if there is no eligible adult, to the deceased’s estate.

Turning now to children’s pensions.  First the qualification criteria for each scheme:

AFPS 75 rules require the child to be:

  • under the age of 17; or
  • under the age of 23 and in full time education or vocational training. 

If the parents are unmarried the child must be born during the member’s service. If the parents are married, the child must be the child of a marriage which took place before the member left the service.  In the case of an unborn child, he or she must be born within 9 months of the member’s death. 

AFPS 05 and AFPS 15 rules require the child to be:

  • under the age of 18; or
  • under the age of 23 and in full time education or vocational training. 

There is no marriage criteria for AFPS 05 or AFPS 15 children’s pensions.  In the case of an unborn child, he or she must be born within 12 months of the member’s death.

For all schemes, a child’s pension is only payable beyond age 23  if the child is unable to undertake gainful employment due to mental or physical disability suffered before age 23.

Having established who might be entitled to a child’s pension, let’s have a look at what they might receive:

For AFPS 75, where there is an adult pension in payment, the remaining 50% of the member’s entitlement is available to be shared by the eligible children.  For AFPS 05 and AFPS 15, 37.5% remains available for the eligible children.  In each scheme, where there is an adult pension in payment, no child can receive more than 25% of the member’s entitlement.

In all three schemes, where there is no adult pension in payment, and the children are not living with a parent or step-parent, the whole pension is available to be divided between the children, with no child receiving more than 33.33% of the member’s pension entitlement.

Finally, remember, if you have membership of more than one scheme, your family could have entitlements for each scheme.

If you are a member of the Forces Pension Society and have any questions on abatement or any other pension-related issue, contact us on pensionenquiries@forpen.co.uk.  If you are not a member but would like to learn more about us, visit www.forcespensionsociety.org  .

Author: Mary Petley, Forces Pension Society –  26 July for August 2021 Pathfinder

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