Because of the TPA, prior to 2007 Gurkhas have always been treated as a separate group for their terms and conditions of service (TACOS). It is important to note, however, that the MOD has always seen the TPA as having a degree of flexibility.
Reviews of Gurkha TACOS have reflected this from time to time and, as a result, it has been possible to make significant improvements to Gurkha TACOS, although these changes have always remained within the spirit and terms of the TPA.
The result is that the arrangements under which the MOD employed Gurkhas became a unique mix of old and new arrangements, partly based on practices in both the Indian and British armies. Taken as a whole, they were different to, but not necessarily less favourable than, arrangements for British soldiers.
The British Government set out ‘Terms and Conditions of Service for Gurkha Forces serving in the British Army’ within the 1947 TPA (Part One Section J). Paragraph 11 of the Memorandum of Agreement dated 7 November 1947 between the United Kingdom and India states that: “the basic rates of pay admissible to Gurkha officers and soldiers serving HM Government shall approximate to those laid down in the present Indian Pay Code”.
However, the Memorandum of Agreement also allowed: "that a special allowance, to compensate for permanent services overseas and high cost of living, shall in addition be admissible to Gurkha officers and soldiers serving HM Government overseas." So the TPA provided a mechanism by which total pay could be substantially greater than that provided in basic pay. These “points of agreement” were expressly included in the Memorandum of 9 November 1947.
For pensions, Paragraph 7 of section IV of the 1947 Terms and Conditions document of the TPA states: “The payment of Gratuities and Pensions will be admissible to Gurkha soldiers, NCOs, WOs and King’s Gurkha Commissioned Officers with reckonable service in the Indian or British Armies under the Pension Regulations for the Army in India, 1940 applicable to VCOs and IORs , and amended from time to time…”
In practice this meant that from 1948 to 1997 the only expectation that Gurkhas could reasonably have had was service mainly in the Far East, and retirement in Nepal; all Gurkhas knew this, and the whole of the Gurkha Pension Scheme (GPS) was designed around this.
However, from 1997 onwards this began to change and more service in the UK led to different expectations, and that is why Ministers announced on 11 January 2005 a review of Gurkha TACOS.
The expectation was to be discharged in the UK and so pension arrangements were changed to meet this new requirement as part of the move to normal Army TACOS from 2007.