The Treasury has made the Social Security (Contributions) (Amendment No. 4) Regulations 2026, a narrow but important amendment to National Insurance treatment within the armed forces pension remedy. The instrument was made on 24 June 2026, laid before Parliament on 25 June and comes into force on 20 July. It was made with the concurrence of the Secretary of State and the Department for Communities in Northern Ireland. The policy sits within the wider public service pension remedy following the unlawful age discrimination identified in the 2015 reforms. HMRC’s Tax Information and Impact Note said secondary legislation would be needed to make detailed technical changes so the remedy could operate smoothly. (gov.uk)
The amendment changes paragraph 10A of Part 6 of Schedule 3 to the Social Security (Contributions) Regulations 2001. In practical terms, it adds one more category of payment that must be left out when calculating earnings for Class 1 National Insurance contributions. The newly covered category is EDP 2015 equivalent benefits paid under the Armed Forces Pension Scheme 1975 where those benefits arise because an individual has made a section 6 or section 10 election in relation to remediable service. Those terms sit within the 2015 early departure scheme and the election framework established by the Public Service Pensions and Judicial Offices Act 2022. (gov.uk)
Section 6 and section 10 elections matter because the remedy does not treat every member in the same way at the same time. Under the 2022 Act, section 6 deals with cases involving pensioner or deceased members and takes effect retrospectively, while section 10 gives active and deferred members a later choice before benefits come into payment. HMRC guidance on the rectification tax rules describes the section 6 route as a retrospective new-scheme benefits election. (legislation.gov.uk) That distinction explains why this amendment is drafted so narrowly. It is not aimed at all AFPS 1975 members, or all early departure payments, but at the subset of cases where remediable service is being corrected and the member’s election produces benefits equivalent to EDP 2015.
AFPS 1975 is a legacy scheme set out through service-specific instruments for the Royal Navy, British Army and Royal Air Force, and official guidance says it broadly covers those who joined between 1 April 1975 and 5 April 2005. Separate Ministry of Defence material states that all serving personnel moved into AFPS 15 from 1 April 2022 as part of the prospective remedy. EDP 2015, meanwhile, is the early departure payment structure established alongside the 2015 scheme. (gov.uk) The 2026 instrument bridges those regimes. It ensures that where legacy-scheme service under AFPS 1975 is rectified, but the outcome of the statutory choice is a benefit equivalent to one from the 2015 early departure structure, National Insurance rules follow that outcome.
For affected personnel and scheme administrators, the immediate consequence is administrative rather than strategic. The Regulations do not create a new benefit, reopen the remedy window, or change pension eligibility. They deal with the NIC treatment of a payment once the underlying pension choice has already been made under the remedy legislation. That alignment matters because the 2022 Act defines new scheme benefits by reference to the benefits that would have been payable under the relevant Chapter 1 new scheme. Without matching contribution rules, a remedial pension election can produce avoidable friction in payroll and benefit processing. (legislation.gov.uk)
The affected cohort is likely to be small. It is limited to individuals with remediable service under AFPS 1975 whose remedy election results in EDP 2015-equivalent benefits, rather than the ordinary run of armed forces pension cases. In that sense, the instrument is characteristic of late-stage pension remedy legislation: narrow in drafting, but necessary to remove mismatches between scheme design and tax or NIC administration. (gov.uk) The cross-jurisdiction drafting is also notable. Because the regulation-making power sits across the Great Britain and Northern Ireland contributions legislation, the Secretary of State and the Department for Communities both concur, maintaining a single treatment for this class of earnings-related contribution issue.
The explanatory material points back to HMRC’s Tax Information and Impact Note published on 27 October 2021 and states that it remains an accurate summary of the impacts for this instrument. That note described the broader public service pension remedy package as having a negligible Exchequer effect and no significant macroeconomic impact. (gov.uk) For practitioners, the real significance is more immediate than the headline fiscal effect. From 20 July 2026, payroll teams, pension administrators and advisers handling armed forces remedy cases will need to ensure that these EDP 2015-equivalent payments are excluded when establishing liability to Class 1 National Insurance contributions.