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Our Top 10 Pension Q&A

At No. 6 we have Medical Discharge which features regularly as a topic of concern

Q: I am currently serving and could possibly be facing a medical discharge.  I am on a combination of AFPS 05/15.  Could I please get some advice on the medical discharge options?

A: Under AFPS 05 and 15 there are three levels of ill-health award that can be made if you are medically discharged, depending on the severity of your medical condition:

  • Tier 1:  A Tier 1 award is made if you are deemed to be unfit for Service in the Armed Forces because of physical or mental impairment, but your ability to obtain gainful civilian employment is not deemed to be significantly impaired.
  • Tier 2: A Tier 2 award is made if you are deemed to have suffered a breakdown in health, as a result of which, your capacity for gainful employment is significantly impaired and is expected to remain so until you reach age 55 for AFPS 05 and 60 for AFPS 15 (normal pension age).
  • Tier 3: A Tier 3 award is made for the most serious conditions and is granted if you are deemed to have suffered a permanent breakdown in health involving incapacity for any gainful full-time employment.

Tiers 2 and 3 are the only tiers that provide a medical pension. The medical discharge pension is paid at an enhanced rate based on time served, age and accrued benefit.  However, approximately 97% of medical discharges are Tier 1.  If your medical award is Tier 1 and you qualify for an Early Departure Payment (EDP) under either or both Schemes then your EDP will be your Tier 1 medical award.  The EDP is not tax-free even if your injury is attributable to service. If you do not qualify for an EDP because you have not reached your 20/40 point, you will receive a tax-free lump sum which is based on your length of service and a deferred pension payable at your State Pension age.

Check back later for No. 5 – Extension of Service

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