Military veterans newly diagnosed with asbestos-linked cancer will be offered the choice of lump sum payments, the Government has announced.
A loophole means civilian mesothelioma victims are eligible to receive a lump sum while such an option does not exist under the war pensions scheme, which instead offers regular payments to veterans.
But defence minister Mark Lancaster told the Commons this will be changed by April 2016 - or sooner if possible - to give veterans diagnosed from today a choice of regular payments or a one-off £140,000 payment.
Campaigners wanted a change to ensure ex-service personnel with terminal conditions are able to receive full compensation and do not lose out due to their illness.
Speaking during the committee stage of the Armed Forces Bill, Mr Lancaster told MPs: "We recognise that mesothelioma is a devastating disease that changes the lives not only of the people who are diagnosed but of those who care about them - their families and loved ones."
He said the military victims are all owed "a debt of profound gratitude", adding: "Therefore I am pleased to announce that any veteran diagnosed with mesothelioma from today will now be offered the choice of receiving a £140,000 lump sum or receiving the traditional war pensions payments.
"Currently the necessary legislative changes will come into force from April 11 2016, however I am keen to look at options to bring this timeframe forward.
"Claimants choosing this option will continue to receive a monthly payment until all the lump sum is paid. The veterans welfare service will be on hand to help claimants understand this new option."
Mr Lancaster said the issue of whether to apply the changes retrospectively - and therefore include veterans already diagnosed with mesothelioma - is complex and has been subject to discussion.
He added: "I have directed my department to continue to review the options to support these claimants in a similar manner."
Shadow armed forces minister Kevan Jones, in a statement released outside the Commons, said: "Thanks to campaigning by the Royal British Legion and our work throughout the passage of the Armed Forces Bill, Labour has helped secure a better deal for veterans who are victims of mesothelioma disease."
He added: "We are delighted that this pressure has finally forced the Government into action."
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