# The Armed Forces Early Departure Payments Scheme Order 2005, Note: Explanatory note


(This note is not part of the Order)
This Order is made under the Armed Forces (Pensions and Compensation) Act 2004 (c. 32) and establishes the Armed Forces Early Departure Payments Scheme (“the Scheme”). This is a new scheme for making payments to members of the armed forces leaving service before they are entitled to retirement pensions or other benefits from the Armed Forces Pension Scheme 2005 (“the pension scheme”). The Scheme replaces existing arrangements for such payments for persons joining the armed forces on or after 6th April 2005 or in service immediately before that date and transferring to the Armed Forces Pension Scheme 2005 (which also only applies on or after that date).
Article 1 provides that the Order comes into force on 6th April 2005.
Article 2 provides for the establishment of the Scheme and provides that it is to be known as “the Armed Forces Early Departure Payments Scheme”.
Article 3 sets out general definitions.
Articles 4 and 5 explain the meaning of “relevant service” and “calculation service” respectively. Relevant service is the service as a member of the armed forces that a person must be in to qualify for benefits under the Scheme. Calculation service is the service used for calculating the amount of benefits under the Scheme. It includes all relevant service and also other periods that count in calculating pensions under the pension Scheme, like added years bought by voluntary contributions and periods credited from other pension schemes.
Article 6 explains the meaning of “final relevant earnings”, which are the earnings used in calculating benefits under the Scheme, and article 7 provides for adjustments for inflation in determining their amount.
Articles 8 to 13 deal with early departure payments.
Article 8 provides that a person is eligible to become entitled to such payments if when he leaves service he is at least 40 but under 55 and has completed at least 18 years' relevant service.
Article 9 provides for entitlement to arise on leaving service to an immediate lump sum payment and periodical payments payable until the person is 65.
Article 10 makes provision about how the amounts of the payments are to be calculated. It provides for the rate of the periodical payments to rise by up to 50% when the person reaches 55.
Article 11 secures that increases for inflation are made.
Article 12 deals with the case where a person who is entitled to early departure payments rejoins the armed forces or enters certain reserve forces service. It provides for the payments to cease during the new service. After short breaks part of the lump sum may be repayable.
Article 13 provides that where a person has to continue in service because of an emergency he is treated for the purposes of the early departure payments provisions as if he had left when he would otherwise have done so.
Articles 14 and 15 make provision for the payment of resettlement grants, which are lump sums payable immediately where a person leaving the armed forces with at least 12 years' relevant service is not entitled to early departure payments under article 9 or pension scheme benefits. Under article 15 there is an obligation to repay a resettlement grant on rejoining the armed forces or entering certain reserve forces service less than 30 days after leaving the former service.
Article 16 provides for the payment of lump sums to persons who when they leave the armed forces after at least 2 years' service are unfit for service and not entitled to any other benefits under the Scheme or the pension scheme.
A full regulatory impact assessment has not been produced on this instrument as it has no impact on the costs of business, charities or the voluntary sector.

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Source: https://www.legislation.gov.uk/uksi/2005/437/note (the official version)
Page: https://openlegislation.uk/armed-forces-early-departure-payments-scheme-order-2005/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.