ESA and Lower Standard of Ocupation (War Disablement Pension)

Our client recently received a letter confirming the removal of his “Lower Standard of Occupation” due to his Employment Support Allowance .He had been awarded Lower Standard of Occupation prior to 2009.

In April 2009, certain amendments were made to the law relating to War Pensions under the Service Pensions Order. The changes made were because Lower Standard of Occupation was classed as an ‘income replacement’ allowance. Hence it could not be paid with certain other benefits/pensions. The changes saw anyone already claiming Lower Standard of Occupation in April 2009 (and is continuing to receive it) could continue to receive it as well as the relevant overlapping income replacement benefit.

We were informed by Veterans UK that under new instruction from their policy department, that because he was awarded LSO prior to 2009, it is classed as old rules.  This means that the complete payment of LSO is abated so no payments of LSO will be made. They will not seek to claim back the 11 years of LSO that he has received.

When questioned again they stated that-

Since the introduction of ESA in 2008 there have been two legislative amendments impacting on the relationship between ALSO and ESA:

• Amendment of Article 15(2)(iii) (bb) of the Naval, Military and Air Forces (Disablement and Death) Service Pensions Order effective 6 Apr 09 determined that if ESA was in payment ALSO could not be paid.
• Further amendment of Article 15(2)(iii) (bb) of the Naval, Military and Air Forces (Disablement and Death) Service Pensions Order 9 Apr 18 determined that if an award of ESA included payment of a work-related activity component or support component ALSO could not be paid.

The legislation however, does not cover LSO awards when the commencing date of the LSO award pre-dates 06 Apr 09. Public accounting principles are clear that individuals should not be compensated twice for the same purpose. To address the clear overlapping benefit issues between LSO and ESA in these cases, legal advice was taken on the correct course of action to take. The advice received was, that Article 52, of the Naval, Military and Air Forces (Disablement and Death) Service Pensions Order may be used and applied. Article 52 is the legislative framework that enable the Secretary of State to consider abating an award if he/she sees fit. We are using Article 52 to adjust the LSO award.

If this is correct then this will see thousands of ex service who currently receive LSO and ESA contacted and lose their LSO.

Any comments welcome.