[2025] UKUT 250 (AAC)

Discussion and conclusion

The answer on this appeal, with respect, is obvious and can be stated quite shortly. It is the one the FTT gave.

The wording of the statutory scheme plainly and clearly provides that a Guaranteed Income Payment is only payable once service ends. That is what the words of article 16(10) of the AFCS Order say. To have awarded the appellant (that is, made payable to him) the Guaranteed Income Payment for the period before his service in the Armed Forces ended on 12 July 2019 would be contrary to article 16(10) and, accordingly, unlawful as having no statutory basis. No recourse is needed to the Explanatory Notes because, per R(O), when considered on its own and in the context of the statutory scheme as a whole, the wording of article 16(10) is clear and unambiguous and does not create any statutory absurdity. For all members of the Armed Forces – regular as well as reserve members, see article 2(1)(c) of the AFCS Order – if they qualify for a Guaranteed Income Payment it can only become payable from when their service ends. All the Explanatory Notes do is to confirm the plain meaning of the statutory text.

Moreover, the context provided by the rest of the relevant provisions in the AFCS Order reinforce, and are obviously consistent with, the direction in which article 16(10) clearly points. No distinction is drawn by the AFCS Order in terms of ‘service’ between service as a regular member of the Armed Forces and service in the reserve forces: article 2(1)(c). Further, the calculation of the Guaranteed Income Payment is based on the service member’s salary on the day when their service ends. If the Guaranteed Income Payment were to be payable before the end of service, it is unclear what the statutory basis would be for calculating the Guaranteed Income Payment for the period before the service in fact ends.

Nor does article 64(2)(c) of the AFCS Order point persuasively against the Guaranteed Income Payment only becoming payable from the point service in the Armed Forces ends. Firstly, the appellant’s case came within article 64(2)(b) and, as a result, and for that reason alone, article 64(2)(c)’s opening words of “in any case where sub-paragraph (a) or (b) does not apply”, precluded sub-paragraph (c) from applying. Secondly, Article 64 must be read consistently with the rest of the provisions in the AFCS. So read, article 64(2)(c) cannot confer a right to be paid the Guaranteed Income Payment from a date of claim where that claim was made before the end of service as such a reading would plainly be inconsistent with article 16(10). What article 64(2)(c) is therefore addressing is cases not covered by sub-paragraphs (a) or (b), but this benign fact alone cannot mandate a reading of sub-paragraph (c) to confer payment of a Guaranteed Income Payment which is expressly precluded by the rest of the statutory scheme. In fairness, Mr Cheetham accepted before me that the appellant’s reliance on article 64(2)(c) was not sustainable given the terms of article 16(10) of the AFCS Order.

I may add, though I heard little or no argument on this, that it may be difficult to read the language of section 1(1)(a) of the Armed Forces and Pensions Act 2004 as providing the vires for an AFCS Order conferring a benefit to be payable in respect of a period before termination of service or retirement. However, it may be said that all section 1(1)(a) is concerned with is the point at which the benefit may be payable rather than from when it is payable.

Given the clear meaning of the wording in the statutory scheme, I do not consider general arguments about fairness assist in construing that wording. In any event, it may be thought fair that both regular and reserve members of the Armed Forces are treated in the same way in terms of when a Guaranteed Income Payment becomes payable.

Nor do I find the argument around the Guaranteed Income Payment being an ‘income replacement’ benefit of any great help in construing the statutory words of the AFCS Order. The intention as to how that income replacement was to be effected still has to depend on construing the words in their relevant statutory context. And the income replacement ‘purpose’ or ‘intendment’ is rationally consistent with the Guaranteed Income Payment being (i) calculated based on the service member’s income, and (ii) compensating for the loss of income once that person has left, or had to leave, service.

Lastly, I do not consider the appellant’s argument based on his being released from call out for service on 5 August 2014 assist him as he returned to service (including serving in Afghanistan) after this date. I pressed Mr Cheetham on this point at the hearing and about what ‘service ends’ means in the context of being released from call out. He (rightly) accepted it could not just mean when the call up ends, as the reservist may continue (and continue to be able to continue) to be in service as a reserve member of the Armed Forces long after this release date. The appellant’s argument was that the release from call up would have to coincide with the reserve service member no longer being capable of carrying out their functions as a reserve forces member. However, that circumstance is covered by article 64(2)(a) of the AFCS Order and so removes the need to read article 64(2)(b) as also covering this situation. Given this, article 64(2)(b) of the AFCS Order must be covering a different situation, and that situation is where the (reserve) service member ends their service in the Armed Forces, here by the appellant retiring. Moreover, if the appellant’s ‘release from call up’ situation was intended to allow the Guaranteed Income Payment to become payable the AFCS Order (i) could have said so, (ii) would need to be modified so as to explain how the Guaranteed Income Payment was to be calculated in such a circumstance.