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Claims for better pensions due to Gurkha settlement

Prior to 1997, the Gurkha pension was designed to support settlement in Nepal and these pension payments compare extremely well against Nepali public service salaries.  Given that, at the time, the Brigade of Gurkhas was based in the Far East, with some temporary assignment to the UK, there was minimal demand and aspiration for retiring Gurkhas to settle in the UK.  The pre-1997 package was therefore deemed to be a good deal and very fair.  

Several Gurkha pressure groups have argued that the pension arrangements should be changed to reflect the new immigration settlement arrangements, where many retired Gurkhas arriving in the UK are quite old, lacking in family support and unlikely to be able to find work.  Many of those arriving are not in receipt of a Gurkha pension as they did not serve long enough to qualify for one.  However, the majority of retired Gurkhas who move to the UK are eligible for the full range of welfare benefits, including housing allowances and pension credits.  

It has been suggested that payments are made to Gurkhas to stay in Nepal but it would be wrong to seek to induce retired Gurkhas who have moved to the UK since the rule changes of 2009, to return to Nepal through payment of pensions to which they are not entitled.  

It would also raise challenges from other groups in a similar situation eg the large group of British servicemen who served less than 22 years before 1975 who did not qualify for a preserved pension.

The British Government also has a general policy not to introduce improvements to public service pension or compensation schemes retrospectively.  Making retrospective changes to pension schemes would have financial implications across the wider public sector, and would potentially lead to demands from other public service pensioners or veterans.  The general policy of successive British Governments that there should be no retrospective improvements to public service pension benefits was explained by the then Minister for the Armed Force in a debate  on Armed Forces pensions: 

“It is a legal principle that individuals receive benefits in accordance with the scheme rules that were in place at the time of their retirement.  It is a principle of public sector pensions policy, and one that has been upheld by successive Governments, that improvements to pension schemes are not made retrospective.  If the changes were made retrospective, it would add significantly to the cost to the taxpayer, not least because the issue is common to other public service schemes, not just that for the armed forces.”