Armed Forces Compensation Scheme
Commons · Question 12993 · Tabled 24 Jun 2026 · Department for Work and Pensions · Official record
Answered 1 Jul 2026
Question
Asked by Rebecca Smith
To ask the Secretary of State for Work and Pensions, whether he has made an assessment of the impact of treating Armed Forces Compensation Scheme payments as income for means-tested benefit assessments.
Answer
Answered by Sir Stephen Timms, 1 Jul 2026
Lump sum compensation from the Armed Forces Compensation Scheme is not treated as income, rather as capital which Universal Credit disregards for 12 months and may be disregarded indefinitely when it is held in a trust or used to purchase an annuity. The ...