WWA Committee statement on war widow pension lump sum announcement

Campaign 300 Pension Images

You will know that our Association has been campaigning for many years for the reinstatement of the War Widows’ Pension following the change to the regulations in 2015, whereby widows could retain their pensions for life if they remarried or cohabited.  However, whilst this change was very welcome a small group of ladies were left behind – those who had already remarried before April 2015.

Our campaign was called ‘Campaign 300’ – to reflect the approximate number of ladies who would seek reinstatement.

Throughout the discussions with the MOD and Treasury they have held fast to the principle that pensions could not be reinstated as there was a significant risk of read-across to other public sector pensions, which would be unaffordable. During this time they had made a number of alternative suggestions – including the payment of a one-off lump sum.  But the amounts were ridiculously low and we discounted them at the first opportunity.

We had heard nothing from the MOD or Treasury since June 2022, so the announcement of last week took the Association Committee of Trustees as much by surprise as anyone.  We were not consulted on it before, nor invited to comment before the offer was to be made.

The first we knew was an advance message to the Chairman – under normal government ’embargoed’ notice rules – ie she could not disclose it to anyone until the formal announcement had been made the day after.

The full announcement on Wednesday 17th May was itself short on detail and simply announced the government’s intention to make an offer of £87,500 and that a process for application would be available later in the summer. 

First, let me emphasise it is not for the Association to ‘accept’ or ‘refuse’ this offer.  We can only express an opinion as to its suitability or appropriateness and recommend; ladies who wish to accept it will have to apply to Veterans UK, and the process for that is not yet clear.

It is only in the last few days we have begun to understand the full implications of the offer and identify what issues we need to take back to the MOD and Treasury.

First is the issue of taxation of the award.  Our crude calculations suggest that the award announced at £87,500 may only be as little as £54,000+ once tax and personal allowances are taken into account.  This payment would push recipients into a higher tax band for one year – possibly necessitating the submission of  tax returns, and would impact upon Pensioner Tax Credits in a way the War Widows’ Pension would not.

There is potential for this to affect other benefits in a way which is not yet clear, but which might reduce the received amount even further.

The War Widows’ pension is paid tax-free and for this to be taxed when it is offered in lieu of reinstatement seems grossly unfair.

The MOD assertions of ‘unacceptable precedent’ are not valid in relation to ex gratia payments.  In 2000 £10,000 was paid to surviving Far Eastern Prisoners of War – with the specific criteria that it would be paid tax free and not affect other benefits.  Also, the payment of the lump sum in lieu of the War Disability Pension for terminal conditions consequent to Service-related asbestos exposure is treated as a War Pension for tax purposes and thus not liable for income tax.

To return to the issue of how widows may apply for the payment.  We believe that Veterans’ UK does not differentiate between death and remarriage when a War Widows’ pension is stopped.  So they have no way to identify anyone who may be eligible for this lump sum.  Then, even if they could identify the individual, they would have no way to know where they lived today based upon the fact that the pension may have stopped many years ago.  It is also not clear whether Veterans UK retains records after the Pension has been stopped and this too we are investigating.  Finally, we need to understand what happens if the lump sum is paid and the widow’s subsequent marriage/cohabitation ends. Is her pension reinstated?  Is there an abatement against the lump sum?  We don’t yet know any of this.

So, we hope that you can see that the situation is very confused and we continue to try and get clarification from the MOD, the Treasury and Veterans’ UK. 

But we are not helped when media outlets – and even politicians – make statements that are inaccurate and misleading.  But again, they do not consult us first and often we find out only when you do. 

We are seeking further discussions with the MOD and Treasury and we will press most strongly for the removal of the tax burden.  We believe we have a strong argument against  ‘precedent’ – but it is going to take some time for the fog to clear on all these matters.

This letter is intended to explain the situation and reassure you that the Association has not ‘given in’ and we are continuing to press the case on your behalf. 

A lump sum offer may be the only offer the Government will make in the face of a complete refusal to reinstate the Pension, but we will continue to fight to make it the best we can.

This letter will be posted on Facebook and the Association website – and posted to anyone who requests a copy. 

Comments on the Facebook page have been suspended to prevent misleading information being posted thereby causing further confusion.  We ask that if you have a comment or questions, that you use the Members’ area of the website, email info@warwidows.org.uk,  or write to the Association at its postal address – War Widows Assoc Mail, PO Box 29265, Dunfermline, KY12 2FH.

Finally, please remember The Committee of Trustees is a group of volunteers trying to deal with a fast-changing set of circumstances and we may not always be able to react as quickly as you may want us to.  But we have not ‘accepted’ this offer and we continue to fight on your behalf.

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