In this section of the Learning Zone we turn our attention to some of the additional benefits available from the NHS Pension Scheme. Here we consider ill health retirement benefits.
If you are too ill to work in your present job then you may be eligible for ill health retirement pension and therefore be able to retire through ill health. There are 2 tiers of ill health retirement pension which you may be eligible for:
- Tier One; this is available if you are unable to do your current job due to permanent ill health. The ill-health pension is the amount of pension you have already built up and is paid out without reduction regardless of age.
- Tier Two; this is available if you are unable to carry out any employment of like duration to your NHS job due to permanent ill health. The amount of ill health pension you get is Tier One plus an enhancement based on 1/2 of your prospective pension to normal pension age.
Like NHS pensions paid out under normal circumstances, your ill-health pension will increase with inflation. It is also possible to move between the tiers whilst in payment depending up on the conclusions of NHS Pensions medical advisers.
Your ill health benefits may be reduced or withdrawn if you take up further employment after retiring early due to ill health.
Serious Ill Health Lump Sum
If you are diagnosed as terminally ill you are able to commute your entire NHS Pension Scheme benefits as a lump sum. If you are age over 75 this serious ill health lump sum will be subject to a serious ill health lump sum tax charge of 55% which is deducted from your lump sum before payment.