|When Iím Dead And Gone What Happens To My Pension?|
Regrettably nobody is immortal – we are all going to die at some point – for the majority, our deaths will occur long after we have left the Armed Forces and deep into our retirement from paid employment
What benefits do the Armed Forces Pension Schemes offer in the form of pension payable to the dependants we leave behind, where death has occurred after exiting the Services? Lieutenant Commander David Marsh from the Forces Pension Society responds...
Dependant’s pensions is such a large subject, with considerably different variables associated within each of the two Armed Forces Pension Schemes (AFPS75 and AFPS05), that space prevents me from covering both schemes here, so in this edition I will focus on the AFPS75 scheme and deal with the AFPS05 scheme next month.
Let’s begin by ascertaining who is eligible for a dependant’s pension following your death, and who is not. Once you have left the Armed Forces you must be in a marriage or civil partnership for your dependant to be entitled to receive any form of dependant’s pension; living with somebody as your partner – regardless of whether it is somebody of the same or opposite sex, or how long the partnership has been in existence – does not count.
It does not matter whether the marriage, or civil partnership, has taken place before or after leaving the Services, but in cases where a marriage took place after leaving; only the portion of service from 6th April 1978 counts towards a dependant’s pension. Children are also eligible for a child’s pension in certain circumstances too, which I’ll cover in more detail below.
On the date of your death your spouse or civil partner will (providing you left the Services on or after 31st March 1973) receive an income known as a “short term family pension”. (Retirement prior to this date does not attract this benefit.) A short term family pension is paid at an amount identical to what you were receiving on your date of death for the first 91 days following the day you died or, if you should leave 'eligible children', for the first 182 days following your death. In other words, there is no change to the family income stream in Forces Pension Scheme terms for that initial period of time.
Now, what is an 'eligible child'? An eligible child is a natural child or any child who is financially dependent upon the scheme member who is:
a. Under age 17 – quite straightforward.
b. Under age 23 and still in full time education or vocational training. This includes university, providing there is no more than a single gap year between the completion of ‘A’ Levels and the start of the university degree. If a child’s pension is in payment before the commencement of a gap year it will cease to be paid throughout the gap year but reinstated at the start of the university degree, providing those intentions were made clear at the end of the child’s ‘A’ Levels.
c. Is unable to undertake gainful employment due to mental or physical disability suffered before the age of 23. In such cases it does not matter what age the child is on your date of death, they will receive a child’s pension until the day they die.
d. Born of a marriage that took place before retirement from the Armed Forces. This is most important to grasp, particularly if you already have children from a partnership, or you intend to start a family after exiting the Services – marry the spouse before leaving military service and the children are covered; marry after leaving and they are not.
e. The stepchild of a spouse where the marriage took place before retirement from the Armed Forces. If your partner already has a child from a previous relationship and you marry them before leaving the Services, then their child – now your stepchild – is covered like any other; marrying them after leaving and they are not.
f. Adopted by you or your spouse before retirement from the Armed Forces and the marriage also took place before that retirement.
g. An illegitimate child of you or your spouse, born before, or within 9 months of your retirement, provided that where the child is the illegitimate child of the spouse the marriage to you took place before retirement.
Whether you have eligible children or not, as soon as the short term family pension period expires, the proper 'forces family pensions' will kick in. Your spouse or civil partner will receive a pension equal to 50% of your pension, ignoring any reduction made for commutation you may have taken. Also, if you die under the age of 55; all of the inflation-based increases that have occurred between you leaving the Services and your date of death are added to the original pension award before dependants’ pension awards are calculated.
In other words, your dependants do not have to wait until you would have been aged 55 before reaping the reward of those stored uplifts, as you would have done; they are payable from completion of the short term family pension period and the dependant’s pension is increased annually each April thereafter by the CPI uplift rate applicable to all Service pensions.
As far as eligible children’s pensions are concerned, where there is a widow(er)’s pension in payment, an amount equal to 50% of your pension is divided between all eligible children with no single child allowed to receive more than 25% of your pension. However, where there is no widow(er)’s pension in payment, and none of any eligible children are in the care of a parent or step parent, an amount equal to 100% of your pension is divided between all children with no single child eligible to receive more than 33.33% of your pension.
Widow’s; widower’s and civil partner’s pensions must be surrendered if, after they commence drawing their dependant’s pension, they elect to re-marry or cohabit. Members of the Forces Pension Society know just how dreadful a rule this is and the painful dilemma it creates. The Society is and has been lobbying the government vigorously to have the rule removed so that once a dependant’s pension is put into payment they will be allowed to keep it for the remainder of their lives.
If you would like to find out more about the issues raised in this article and you are a member of the Forces Pension Society, you can find more information on the Society’s web site or call the dedicated help line on 020 7820 9988. If you are not a member, the cost is modest and benefits include an expert help line, numerous discounts on a range of useful products and services and the assurance that a dedicated organisation, independent of the Government, is championing the pension interests of the Forces and their families.
For more information about joining the Society please go to www.ForcesPensionSociety.org
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