Labour MP for Southport Patrick Hurley has backed a cross-party call for Chancellor John Healey to end what campaigners describe as the unjust treatment of military compensation in the benefits system, joining fellow MPs in a letter urging change in Wednesday's Budget.
The letter, coordinated with the Royal British Legion and signed by more than 100 MPs from 11 parties, asks the Chancellor to amend benefit regulations so that compensation paid for injury, illness or bereavement caused by military service is no longer counted as income when entitlement to means-tested support is assessed.
Veterans left no better off
Around 144,000 veterans and their families receive military compensation. MPs warn that because some of those payments are treated as income, some of the most financially vulnerable veterans end up with less support, even though they are living with the consequences of their service.
The Royal British Legion has calculated that, as of March 2026, 4,120 veterans and widows and widowers receiving compensation could claim Pension Credit if their awards were fully disregarded, meaning thousands may currently be no better off despite being compensated for service-related injury or illness.
The letter cites the case of Staff Sergeant Pauline Cole, whose Pension Credit fell from £77 to around £11 a week once compensation awarded for conditions arising from her service was taken into account. MPs also point to inconsistencies in how compensation is treated across different means tests, which they say can disadvantage some of the poorest members of the Armed Forces community.
The campaign draws on the Armed Forces Covenant, which commits that those who serve or have served, and their families, should face no disadvantage compared with other citizens in accessing public and commercial services.
Hurley: 'The very real impact this can have'
Hurley said: "I fully support this call to reform a system that can leave veterans financially worse off simply because they have received compensation for injuries or illness resulting from their service."
"Cases like that of Staff Sergeant Pauline Cole show the very real impact this can have. Military compensation exists to recognise the sacrifices people have made in serving our country; it should not then result in some of the most vulnerable veterans losing other support they would otherwise receive."
Looking ahead to the Budget, he added: "The Government has an opportunity to address this issue and ensure our benefits system reflects the principles of fairness set out in the Armed Forces Covenant. I hope the Chancellor will give these proposals serious consideration."
