Telegraph, 28.04.2000

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The Ministry of Defence has drawn up proposals to compensate those who sustain minor injuries in service with a one-off lump sum rather than a system of on-going payments. They will be responsible for investing the money wisely to ensure that they have a sustainable future income.

The plan, which follows a two-year review, will mean the biggest shake-up in military compensation and war pensions since the First World War.

It does not affect the ordinary occupational pensions retired servicemen receive but is intended to streamline compensation. Veterans retirement pensions are the subject of a separate review. 

Tories said it was an insult to loyal soldiers, sailors and airmen who have been willing to risk their lives for their country. However, ministers believe that the MoD should become more like the private sector and give injured personnel greater independence.

"The new system will be less nanny state and make people masters of their own destiny," one senior MoD source said. Servicemen who have serious injuries and the widows of those killed in action will continue to receive a war pension, on top of a one-off immediate payment.

The new scheme, covering injuries sustained during training or on operations, will replace a complicated arrangement which includes compensation systems administered by different Government departments.

Compensation will also be payable to people who are still serving, rather than only to those who have been forced to retire, as at present. The "burden of proof" is expected to shift so that servicemen will no longer be responsible for demonstrating that an injury was caused by military service in order to receive compensation.

Although every case will be assessed individually, an informal tally is likely to be set up indicating what level of compensation is appropriate for particular injuries. Ministers ordered a complete overhaul in December 1997 because confusion and lengthy delays were occurring and they believe the new single scheme will be "faster, fairer and more streamlined".

 At the moment, servicemen injured on duty receive an on-going pension from the War Pensions Agency, which is part of the Department for Social Security. If they are killed, their widow receives the war pension.

Soldiers wounded in Northern Ireland through a "terrorist act" are paid by the Criminal Injuries Compensation Board. The MoD also has its own invalid pension.

There is a separate scheme for compensating somebody injured through the MoD's negligence - if, for example, training equipment is faulty. Ministers admit privately that any changes will be controversial but they insist that reform is necessary. The results of the review, which were due to have been announced last summer, have already been long delayed because of the sensitivity of the issue.

lain Duncan Smith, the shadow defence secretary, said: "This is a mess. People will be very concerned about losing the automatic right to a pension. I cannot see that this is anything other than a direct attempt to shave away the costs."