PARLIAMENTARY WRITTEN QUESTION
(24 June 2026)

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.

Asked by:
Rebecca Smith (Conservative)

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 Government remains committed to the principles of the Armed Forces Covenant and to ensuring that those who have served are not disadvantaged as a result of their service. That commitment is reflected in Universal Credit.

Answered by:
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