The Armed Forces Compensation Scheme (AFCS) can offer a Guaranteed Income Payment (GIP) which is a tax-free monthly payment that can be awarded in addition to any AFCS lump sum payment. It is generally payable where your injury or illness has long-term lasting effects and impacts your earnings in terms of salary and pension. It is intended to provide lifelong financial stability for those injured during service.
How are GIPs calculated?
GIPs are based on an individuals age and basic salary at the date they leave service. The GIP calculation also takes into account the severity of the injury sustained. A series of assumptions are used to determine the lifelong loss of earnings. The level of GIP awarded is intended to reflect the overall impact of the individual’s future ability to earn
In the case of the most severe injuries all of an individual’s future loss of earnings is compensated by the GIP payments. Where the injury is less serious a percentage calculation is used to reflect the fact that the individual will have some capacity to earn after leaving service. In the case of tariff level 12 to 15 awards, no GIP will be payable. For more serious injuries the following bands apply:
| Band | Tariff levels | Future loss of earnings paid |
|---|---|---|
| A | 1, 2, 3 & 4 | 100% |
| B | 5 & 6 | 75% |
| C | 7 & 8 | 50% |
| D | 9, 10 & 11 | 30% |
Other key facts about GIPs
It will not be paid until the individual leaves service as until this date they will receive their salary
It increases annually in line with inflation
It is adjusted to take into account any Armed Forces pension payments
Armed Forces Independence Payment
The Armed Forces Independence Payment (AFIP) is a form of additional financial support paid through the Department of Work and Pensions (DWP). Introduced in 2013, it applies where the injury occurred in service on or after 9th May 2011.
Rather than being related to any loss of earnings, the AFIP is intended to cover extra costs that may be incurred as a result of more serious injuries.
It is only available to those who qualify for a Band C or above GIP, but applicants do not need to undergo any further DWP assessment. There is no time limit for claiming and the rates paid are the same as the enhanced rates paid by the DWP for Personal Independence Payments (PIP) & Disability Living Allowance (DLA), although an individual cannot receive PIP or DLA in addition to the AFIP.
What are Fast Payments?
Fast payments are interim awards that can be paid quickly, soon after injury to provide some immediate financial reassurance for the injured person. The application process is designed to be simple and can be made separately to the full AFCS application.
There are a few criteria that must be met in order to receive a fast payment:
- the application must be made within 6 months from the date of the incident that caused the injury
- the injury must have occurred in service after 9th May 2011
- It must be ‘beyond doubt’ that the injury was caused by service; and
- It must be beyond doubt that the injury will qualify for a tariff level 1 - 8 award
If accepted, an interim payment of £60,000 will be made from any final lump sum award under the scheme.
