In 1915 the British Army in France was instructed that:

Shell-shock and shell concussion cases should have the letter W prefixed to the report of the casualty, if it was due to the enemy; in that case the patient would be entitled to rank as wounded and to wear on his arm a wound stripe. If, however, the mans breakdown did not follow a shell explosion, it was not thought to be due to the enemy, and he was to [be] labelled Shell-shock or S (for sickness) and was not entitled to a wound stripe or a pension. However, it often proved difficult to identify which cases were which, as the information on whether a casualty had been close to a shell explosion or not was rarely provided. Management
Acute
At first, shell-shock casualties were rapidly evacuated from the front line – in part because of fear of their unpredictable behaviour. As the size of the British Expeditionary Force increased, and manpower became in shorter supply, the number of shell shock cases became a growing problem for the military authorities. At the Battle of the Somme in 1916, as many as 40% of casualties were shell-shocked, resulting in concern about an epidemic of psychiatric casualties, which could not be afforded in either military or financial terms.Among the consequences of this were an increasing official preference for the psychological interpretation of shell shock, and a deliberate attempt to avoid the medicalisation of shell shock. If men were uninjured it was easier to return them to the front to continue fighting.
It is, however, considered that many of such cases could, after recovery, be usefully employed in some form of auxiliary military duty. Part of the concern was that many British veterans were receiving pensions and had long-term disabilities. By 1939, some 120,000 British ex-servicemen had received final awards for primary psychiatric disability or were still drawing pensions – about 15% of all pensioned disabilities – and another 44,000 or so … were getting pensions for ‘soldier’s heart’ or Effort Syndrome. There is, though, much that statistics do not show, because in terms of psychiatric effects, pensioners were just the tip of a huge iceberg. War correspondent Philip Gibbs wrote:

Something was wrong. They put on civilian clothes again and looked to their mothers and wives very much like the young men who had gone to business in the peaceful days before August 1914. But they had not come back the same men. Something had altered in them. They were subject to sudden moods, and queer tempers, fits of profound depression alternating with a restless desire for pleasure. Many were easily moved to passion where they lost control of themselves, many were bitter in their speech, violent in opinion, frightening. One British writer between the wars wrote:

There should be no excuse given for the establishment of a belief that a functional nervous disability constitutes a right to compensation. This is hard saying.