Important updates to the Armed Forces Compensation Scheme: What the changes mean in practice

These amendments are intended to improve access to compensation, reflect modern clinical practice, and ensure that financial awards remain fair and meaningful for serving personnel and veterans.

Taken together, these updates represent a step forward for many claimants, particularly those with mental health conditions or those seeking a review of an earlier decision.

Increased weekly financial support

As part of the reforms, the Armed Forces Independence Payment (AFIP) has increased to £194.60 per week. This provides enhanced long term financial support for those whose injuries or illnesses have a serious and lasting impact on daily living.

For eligible claimants, this uplift offers greater recognition of ongoing needs and the challenges faced as a result of service related injury.

A major change to mental health claims

One of the most significant and welcomed changes concerns the way mental health conditions are diagnosed for AFCS claims.

Previously, the scheme required a diagnosis from a consultant grade psychiatrist or clinical psychologist, which did not always reflect how mental health care is delivered in reality. This often created delay or difficulty, even where a claimant was clearly receiving ongoing treatment from qualified professionals.

That requirement has now been removed.

Mental health conditions can now be diagnosed by a registered mental health professional, including:

•    A doctor,
•    Psychologist, or
•    Mental health nurse

provided they are working as part of a multidisciplinary mental health team overseen by a named consultant clinical lead.

This change was recommended in the most recent Quinquennial Review and is designed to reflect modern clinical practice. It is expected to make it easier for conditions such as PTSD, anxiety and depression to be recognised under the Scheme, reducing unnecessary barriers for those seeking compensation.

New recognised injury: coccyx fractures

The scheme has also expanded to include a new recognised injury relating to fractures of the coccyx (tailbone).

Compensation may now be awarded where:

• The fracture has required, or is expected to require, surgical treatment; and
• It has caused, or is expected to cause, significant functional limitations lasting longer than 26 weeks.

Increased lump sum compensation

The tariff lump sum awards payable under the AFCS have been updated across all levels. The maximum award has increased to £674,700, with uplifted figures applying throughout the tariff table.

An important change for reviews and reconsiderations

In addition to the headline increases, a key technical change affects how lump sum awards are calculated where a decision is reviewed or corrected at a later date.

The scheme can now apply the tariff rates in force at the date of the decision that determines entitlement, rather than always relying on the rates that applied when the claim was first made.

In practical terms, this means that where a claimant:

• Successfully challenges an earlier decision, or
• Has an award increased following a reconsideration,

they may now benefit from updated tariff rates, which can result in a higher lump sum than would previously have been available.

How we can help

These long-awaited changes represent a positive step forward, particularly in relation to mental health diagnosis, where call for change has long been recommended. 

The practical impact of the amendments will become clearer as the changes are applied in practice. We will continue to monitor any developments and are on hand to offer guidance and support where needed.  The uprating of awards is welcomed and will help ensure compensation more accurately reflects what individuals should be receiving in 2026.

While these changes will not affect every case in the same way, for some individuals they may make a meaningful difference to both entitlement and compensation levels.
If you are unsure whether these updates may affect you, or if you have an existing or historic AFCS decision that you would like reviewed, it may be worth taking advice. 

I regularly support serving personnel and veterans with:
•    AFCS claims,
•    mental health claims, and
•    reviews and reconsiderations of previous decisions.

Find out more about Irwin Mitchell's expertise in supporting personnel and veterans access compensation through the Armed Forces Compensation Scheme at our dedicated AFCS claims section.