LGBT Financial Recognition Scheme closes on 12 December 2026, as veterans pushed to resign take the rules to court

The deadline, and how long applying takes

The scheme opened on 13 December 2024 for 24 months. MOD guidance says it is open "until 11:59pm, 12 December 2026", and that no applications will be accepted after it closes. The non-financial measures, such as a letter of apology, replacement service items and a restoration ceremony, close to new applications at the same time.

There are two ways to apply:

• Online, through the Defence Gateway. You register first, and the MOD says the account "could take up to 10 days" to be issued. The set-up emails expire after 7 days if you do not act on them. Once you have submitted, you can change an online application for 2 weeks.
• On paper. Ask the Veterans UK Helpline for a form and a return envelope: freephone 0808 1914 218 (UK) or +44 1253 866 043 (overseas), 8am to 4pm, Monday to Friday, or email [email protected]. Send copies of your evidence, not originals.

The scheme's own address is [email protected]. Put your service number and current surname in the subject line, with your surname in service in brackets if it was different. The Royal British Legion (0808 802 8080) and Fighting With Pride (0203 981 3810) help with applications. You can use a solicitor if you want to, but any legal fees are yours.

The MOD says it must make every eligibility decision and payment by 1 April 2027, because of the limits of the Supply and Appropriations Act. Time limits tighten once the window closes. If the scheme asks you for something after 12 December and you do not reply within 2 months, your application will be closed. An appeal against a letter dated after 12 December has to be made within 2 weeks of the letter, not the usual 2 months.

Who gets which payment

The Impact Payment covers harm related to the ban, including physical and sexual assault, being investigated by the Service Police or your chain of command, and the lived experience of the culture the ban created. The panel decides the level from what you describe.

You do not need documents to prove what happened. Unless it finds evidence to the contrary, the MOD accepts what an applicant reports "if, on a balance of probabilities, they are more likely to have occurred than not". It says this reflects the historical problems with how records were kept and destroyed.

Some people are outside the £50,000 payment by design. The rules exclude anyone who left at the end of a contract, bought their discharge, chose not to extend, resigned by giving notice, or left under redundancy or another workforce programme. They can still apply for the Impact Payment.

Relatives cannot apply on behalf of a veteran who has died. If an applicant dies after applying, any payment goes to their estate. Terminally ill applicants, and those facing court action over repossession, eviction or bankruptcy, are prioritised.

The court challenge over veterans who resigned

That resignation rule is what is in court. Mark Shephard, 49, who served in the RAF, and Steven Stewart, 55, a former Royal Military Police corporal, say they were forced out because of their sexuality, but their exits were recorded as resignations. The Guardian reports they received Impact Payments of £5,000 and £7,000 rather than the £50,000.

Their lawyers at Irwin Mitchell say veterans who were formally discharged or dismissed get £50,000 "while many who were forced to resign after facing discrimination, bullying or pressure to leave are limited to significantly lower awards", and that this is unlawful. The case is backed by Good Law Project and Fighting With Pride. A permission hearing is listed at the Administrative Court in London on 28 October 2026, where a judge will decide whether the claim can go to a full hearing. Irwin Mitchell says the court has acknowledged the importance of resolving it before the scheme closes.

The Defence Secretary, Wes Streeting, told the Guardian on 23 October: "We do want to get this right so we'll keep the conversation going and see if there's a way forward that doesn't require legal action." The Guardian reports that he stopped short of promising to change the rules or confirming a settlement. Other veterans in the same position, including the former Army musician Louise Lingard-Snape, have met the Veterans Minister, Calvin Bailey, the BBC reported on 26 October.

Tax and benefits

Income tax. HMRC has agreed that the payments are exempt from income tax. Keep your decision or determination letter, because HMRC may ask to see it.

Means-tested benefits. Since 28 February 2025, the Social Security (Income and Capital Disregards) (Amendment) Regulations 2025 have disregarded the payments as capital for Pension Credit, Universal Credit, Housing Benefit, Income Support, income-based JSA and income-related ESA. Northern Ireland has done the same, and the MOD describes the disregard as indefinite. Councils are asked to ignore the payments in care charging assessments, and Scotland ignores them for Council Tax Reduction from 2 June 2025.

Keep the letter for DWP as well, since it may ask for evidence that the money came from the scheme. Regular War Pension and AFCS payments are treated differently, as income, which is the subject of a separate campaign covered in our post on the Defence Secretary's comments on the means test.

If you were dismissed, check for a preserved pension

The scheme is clear that it "is not a compensation scheme which seeks to compensate for pecuniary losses". A payment does not make up lost pay or pension, and it has no connection with AFCS or the War Pension Scheme.

The review that led to it, by Lord Etherton, made a separate recommendation on pensions. It asked the MOD to invite veterans dismissed or discharged under the ban "to seek clarification as to their entitlement to a Service pension where the veteran has not received any pension but believes they were entitled to one". The government's response in December 2023 pointed them to the pensions pages on GOV.UK.

Whether you have a preserved pension depends on the rule in force on the day you left, and the ban period runs across every change to those rules:

A preserved pension is not paid automatically. You claim it on AFPS Form 8, and if you are not sure whether you have one, a forecast on AFPS Form 14 will tell you. Our guide to preserved pensions explains how they are worked out.

How many have applied

As at 7 September 2026, the MOD had received 1,184 applications for the £50,000 payment, 1,435 for the Impact Payment and 1,203 for the non-financial measures. People can apply for more than one. By 15 September it had paid out more than £58 million, past the £50 million minimum it committed to, against a £75 million budget. It says any unspent money will be considered once the scheme has closed and every application has been assessed. Streeting told the Guardian on 23 October that more than £60 million had now been paid.

Fighting With Pride estimated in June that more than 1,000 eligible veterans had not yet come forward.