Autumn Statement 2014: Lump sums provided under the Armed Forces Early Departure Scheme

The Early Departure Payment Scheme is being introduced alongside the revised Army Pension scheme from April 2015.

Early Departure Payments are unique to the Armed Forces and are not pensions. They allow for the payment of a lump sum and periodic payments when membership of the Regular Forces ceases and certain conditions relating to age and service as a member of the Regular Forces are met.

The government is legislating to ensure that lump sum payments made under the Early Departure Payment scheme are exempt from income tax and NICs. This change will take effect from 1 April 2015, when the new scheme is introduced.

This measure demonstrates the government’s ongoing commitment to support the armed forces.