COVID-19: If our NHS is at War, then Compensate them like they’re in a War. £60,000 is a start, but is it enough?

At first glance Matt Hancock’s announcement that relatives of NHS staff and carers that succumb to COVID-19 will receive a £60k lump sum is quite a gracious offer. I can’t speak for other countries but its certainly a good move by the UK Government.

I’d like to extend a virtual thank you to all serving in unprecedented times.

Being from a forces family it did make me think what happens when service personnel fall in combat, and the schemes below indicate that these are paid for whatever reason for their death. The numbers below relate to which year a new scheme was created, so 1975, 2005 and 2015, with AFPS standing for “Armed Forces Pension Scheme”. Credit to the Forces Pension Society for summarising:

Links to Schemes:
AFPS 75
AFPS 05
AFPS 15

The value of these schemes has reduced over time but service personnel do not contribute to these, the public pays for all of it. There’s a lot more here which includes some of the other schemes such as the Gurkhas scheme etc. There are also some extra grants that are paid towards funeral costs as well along with assistance from the branch of service they were in from an Officer trained in bereavement and counselling.

I’m an accountant but even I found the above very difficult to quantify into an actual sum, so I’ll leave it to the Forces Pension Society to explain the above in real terms:

“Toby joined the RAF on 1 April 2004 – his 18th birthday. He was a married man who died on 31 March 2019 as a Sergeant. This gives him 11 years in his ‘old’ scheme (either AFPS 75 or AFPS 05) and 4 years in the ‘new’. His Final Pensionable Pay (FPP) is £40,000 and his AFPS 15 pension is £3,600pa. From AFPS 15 his wife would receive:

– a lump sum worth four times pensionable pay (£160,000);

– Toby’s annual pension would have been £3,600. His enhancement is half of the 27 years he could have served until 60 multiplied by his average pension (13.5 x £900=£12,150) but he is entitled to only 4/15th of that (£3,240). Toby’s adjusted entitlement would have been £6,840 (£3,600+£3,240). His wife’s entitlement is 62.5% of his adjusted entitlement – so £4,275 pa.

Had his earlier service been as an AFPS 75 member, Toby’s entitlement would be based on his pension as if he had retired ‘normally’ with 11 years’ reckonable service (£5,319.77) plus 11/15 of the difference between the 15 year pension rate of pension for his rank (£7,254.30) and the 15 year invaliding rate for his rank (£9,232). His total entitlement would be £5,319.77 plus £1,448.85 (£1,975.70 x11/15) totalling £6,768.62, so his wife would receive £3,384.31pa in addition to her AFPS 15 pension.”

The quote continues but you get the general idea, its a very comprehensive scheme that does far more than just giving a lump sum out at the time of death.

Why is this relevant? If you call them Heroes, treat them like Heroes.

Quite simply, the government have told us we are at war with COVID-19 and that our Doctors and Nurses are on the frontlines; we even have a “war cabinet”. Thus, if they have to pay the ultimate sacrifice, surely they should be paid like they have been serving on said frontlines? It looks like there are schemes where the spouse gets a lump sum from a healthcare worker’s pension pot but does that truly recognise the extraordinary times we live in?

I’ve also tracked down that scheme’s details here which confirms to me that pension related payments appear to be in the 33-50% range depending on which scheme someone is involved in, not the 67% we see with service personnel. Pensionable pay is also just 2x lump sums in most cases.

1995 Pension Scheme that would apply for those who joined the service between 1995 and 2008
More recent revisions – these are certainly less beneficial than service personel

As noted above, there is a definite disparity between what the Services receive and the NHS will receive. We’ve seen healthcare workers who have contributed for years and years succumbing on the “frontline” whose families would’ve been entitled to far more than £60,000 for their sacrifice and grief.

Matt Hancock has made a decent start, but I would argue its not truly reflective of what the NHS is going through. The above payments made to families of the Armed Services are made regardless of the reason – the lads and lasses who have cleaned up the government’s mess in terms of logistics could receive 3 or 4 times more than those working directly with patients in the hospitals that they are delivering PPE to. I’m not saying this sort of scheme should be in force 24/7, but in a time of pandemic, where you’ve been letting down various trusts in terms of PPE as reported by Panorama (some of it the government’s fault, some of it I believe is supply chain shock, but its essential viewing), where you call them to arms in the wards, is £60,000 truly fair for the sacrifice we are asking? Especially if there are others who are in far less dangerous situations whose families and dependants would receive far greater compensation – I’d love to know if this £60k is truly “bridging the gap”.

In simple terms, a trainee nurse’s family would receive far more than £60k, probably nearer £90k along with some long standing benefit payments. A trainee nurse and younger staff would not be able to accrue large pensions, by virtue of being younger, and thus I would argue their families are being relatively shortchanged.

And let’s not forget the mental cost this will have on the majority that make it through unscathed, and the cost to families who are unlikely to receive the same care those forces families have access to. There is no mention of grants towards funeral costs, something the forces do get.

It makes you wonder that if the schemes for NHS death in service benefits were far more comprehensive (i.e expensive) in times of Pandemic (to reflect the increased danger staff face), would the government have made more of an effort to protect them (sorry did someone say shut down international travel in January? No? OK). I would think post this disaster a revision of NHS policy in times of Pandemic to bring benefits in line with armed service payments would be a decent conversation to have.

Essentially, if you call them Heroes, treat them like Heroes. £60k on top of the original scheme is a good start and I suspect a way of attempting to bridge the gap, but the government can and should go further to secure livelihoods that will be adversely affected by this disaster.

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