How a War Pension affects means-tested benefits

Which payments this page covers

The War Pension Scheme pays a weekly war disablement pension at 20% disablement or more, a one-off gratuity below 20%, and allowances on top in more serious cases: Constant Attendance Allowance, Exceptionally Severe Disablement Allowance, the War Pensioners' Mobility Supplement and Unemployability Supplement. All of it is tax-free compensation, and all of it turns on the injury or illness being caused by service before 6 April 2005.

That date is the border, and it matters because the two compensation schemes are not treated identically in the benefit rules. Later service falls under the Armed Forces Compensation Scheme, which pays a tariff lump sum and a Guaranteed Income Payment instead. Our AFCS versus War Pension page explains which side you are on.

Benefit by benefit: how the pension is treated

This is the weekly pension itself. The allowances come next, because several of them are ignored in full and the pension is not.

Universal Credit is the outlier for a structural reason rather than a generous one. Its regulations set out a closed list of what counts as unearned income, a war disablement pension is not on that list, and the catch-all at the end reaches only taxable income, which this is not. The three legacy benefits at the foot of the table are being replaced by Universal Credit but are still in payment for some people. On Housing Benefit both age groups can do better than £10, but only if the council decides to allow it, which is dealt with further down.

That split produces a change at state pension age. On Universal Credit the whole pension is left out of account. On Pension Credit the same award, unchanged, counts as income apart from £10 a week.

The £10 disregard, and why it is worth less every year

The £10 is written into each set of regulations as a flat cash sum. It is not a percentage, it is not linked to the pension, and no uprating provision is attached to it. The war disablement pension is index-linked and rises every April with the previous September's CPI, which was 3.8% for the April 2026 uprating. The gap widens every year, automatically, without anyone deciding to widen it.

One line shows the size of it. At 100% disablement the pension is £248.10 a week from April 2026, on the War Pension rates for Other Ranks. For Pension Credit, £10 of that is ignored and £238.10 counts as income, and because Pension Credit works by topping income up to a guaranteed minimum, income counted at that level is largely offset pound for pound.

Do not plan on it changing. DWP's position, restated in the Commons in March 2026, is that most forms of income have to be taken into account to keep the means test consistent, and a private member's bill on the subject fell in 2026 without ever being debated.

The allowances that are ignored in full

The £10 attaches to the pension. Several allowances paid alongside it are left out of the calculation altogether, which matters most at the higher assessments. The table is the position for Pension Credit, for Housing Benefit where you are over the qualifying age for Pension Credit, and for the prescribed pensioner Council Tax Reduction scheme in England, all of which use the same wording.

The wording matters if you ever have to argue it. The regulations disregard "the whole of any amount included in a pension" in respect of the claimant's need for constant attendance or their exceptionally severe disablement, and give the mobility supplement its own paragraph. Unemployability Supplement gets neither, so on the face of the rules it is part of the war disablement pension here and shares the same £10.

For working-age Housing Benefit and for Income Support the mobility supplement is also ignored in full, and Income Support ignores Constant Attendance Allowance in full, because its rules define attendance allowance to include a payment based on the need for attendance made as part of a war disablement pension. Since the breakdown decides what is ignored, give DWP what your award is made up of rather than one weekly total.

A below-20% gratuity is capital, not income

An assessment below 20% pays a one-off gratuity instead of a weekly pension, roughly £3,945 at 1 to 5%, £8,770 at 6 to 14% and £15,339 at 15 to 19% on an indefinite assessment. A one-off payment is not income, so the £10 never touches it. It is capital, and each of these benefits disregards "any payment made in consequence of any personal injury" as capital. What differs is how long for.

Two veterans with the same gratuity, both on Housing Benefit: the one over pension age keeps the disregard for life, and the one of working age loses it after 52 weeks, after which the money counts as capital. The 52 weeks can stop earlier still if it has been spent or turned into an asset.

Housing Benefit and Council Tax Reduction: the local layer

Two of these awards are run by your council rather than DWP, and that changes the answer in a way the regulations alone will not tell you.

For Housing Benefit, on top of the £10, the Social Security Administration Act 1992 lets an authority "modify any part of the housing benefit scheme administered by the authority ... so as to provide for disregarding, in determining a person's income ... the whole or part of any prescribed war disablement pension". Read that "may" carefully. The power is permissive: nothing obliges a council to use it, or to tell you that it exists.

This is not a small effect. When the Royal British Legion surveyed British councils in late 2022 it found four in five of them counted military compensation as income, and it has since worked with more than 50 councils to change that. DWP said in April 2025 that there are no plans to make the scheme anything other than discretionary.

So ask. Put two questions to your council in writing: does its Housing Benefit scheme apply a full war pension disregard, and can it send you the published scheme document. If the answer is no, that is not an error you can appeal. It is a policy choice the council is entitled to make.

Council Tax Reduction works the same way, only more so. Council Tax Benefit was abolished on 1 April 2013 and there has been no national scheme since. Over the qualifying age for Pension Credit in England, a prescribed scheme every billing authority must include gives you the same £10, with no £20 cap, plus full disregards for the constant attendance and exceptionally severe disablement elements and the mobility supplement. Of working age in England there is no equivalent at all: each authority designs its own scheme, some disregard the pension in full and some do not, and the only reliable answer is that council's published document. Council Tax Reduction is devolved, so this is England, and Scotland and Wales should not be assumed to match.

Your AFPS service pension is counted in full

None of this applies to your armed forces pension. AFPS 75, 05 and 15 pay an occupational pension, not compensation, and there is no disregard for it anywhere in these rules. It counts in full as income for Pension Credit, Universal Credit, Housing Benefit, Council Tax Reduction and the legacy benefits, and the AFPS lump sum is capital. Our guide to tax on armed forces pensions covers another way the two sides of your money differ.

One crossover sits on the AFPS side. DWP set out in April 2025 that for Housing Benefit a Service Attributable Pension is treated like a War Pension, so it gets the £10 and the local discretion, while a Service Invaliding Pension gets no disregard at all. If either describes your pension, confirm which category the decision maker has used.

Care home fees are assessed under completely different rules

In England, when a council assesses what you pay towards care, whether that is a care home place or care in your own home, the rules are the Care and Support (Charging and Assessment of Resources) Regulations 2014. Since 10 April 2017 they disregard a war disablement pension paid to a veteran in full.

The exception: Constant Attendance Allowance

The full disregard has one carve-out and it is the provision most likely to catch someone out. The paragraph that disregards a war disablement pension expressly excludes "any award of constant attendance allowance", so that allowance alone is taken into account when a council works out what you can afford to pay. It keeps a disregard where you are a temporary resident rather than a permanent one. The Care Act statutory guidance gives the reason: War Pension Scheme payments to veterans must be disregarded "with the exception of Constant Attendance Allowance which is specifically intended to pay for care".

Whether the allowance then picks up the small residual £10 disregard that survives elsewhere in these regulations is not something we can answer. No source we have found says so, and the statutory guidance does not list it. Ask the council doing your assessment to show you how it has treated the allowance.

So the same pension, the same veteran, the same week: disregarded in full when a council charges for care, and disregarded to the tune of £10 when DWP works out Pension Credit. Neither is a mistake. They are two regimes written separately and never reconciled. For a care home assessment the personal expenses allowance a permanent resident keeps is £31.80 a week from April 2026, and the upper capital limit is £23,250.

This section is England. The Welsh regulations also disregard a war disablement pension, but the detail differs and we have not established how Constant Attendance Allowance is handled there. We have not researched Scotland or Northern Ireland.

Checking your own position

The rules above are the rules as written. What they produce depends on which benefits you claim, your age, what your award is made up of and, for two of them, where you live.

• Give DWP the breakdown of your award, not just the weekly total, so the allowances that are ignored in full actually are.
• Ask your council in writing whether its Housing Benefit scheme disregards war pension income in full, and ask for the scheme document.
• If you are of working age in England, read your council's own Council Tax Reduction scheme. There is no national answer to fall back on.
• If a gratuity is coming and you are of working age on Universal Credit or Housing Benefit, take advice before it arrives, because the clock starts on the first payment.
• If a care assessment is happening, ask specifically how Constant Attendance Allowance has been treated.
• Keep War Pension, AFCS and your AFPS service pension separate in your own paperwork. Decision makers conflate them.

Veterans UK can put the breakdown of your award in writing, which is usually the document that settles an argument. Free independent benefits advice is worth using before a claim rather than after a decision.