Continuing our summary of additional benefits under the Scheme, here we review some of the benefits available on the death of a member.
The 2015 NHS Pension Scheme will pay out a lump sum and also dependant pensions in the event of your death. In a further edition of the Learning Zone we will look at exactly what you will get depending upon the timing and situation of your death.
Lump Sum Death Benefit
You are able to nominate who you wish to receive the lump sum death benefit. You are able to change you mind and change your nomination at any time. If you are not married you are able to nominate a 'qualifying nominated partner'.
If you do not nominate anyone the lump sum will automatically be paid to your spouse. Any lump sum payments made to your spouse are free from inheritance tax, however this may not be the case if you nominate someone else to receive the lump sum.
The Lump Sum Death Benefit must be claimed and paid within two years of the members' death being notified to NHS Pensions. If you die after reaching the age of 75, then the lump sum is subject to a special tax charge of 55% which would be deducted from the lump sum before payment.
Dependant's pensions are payable for life from the date of your death. They are usually payable to your spouse or qualifying nominated partner. If you are not in a legally recogniseable relationship you can apply to NHS Pensions to get your relationship legally recognised in the event of your death. There are certain criteria which must be met before your partner can receive death benefits.
Ordinarily, children's pensions can be paid up to the age of 23. However children's pensions can be paid indefinitely if the child has a condition which prevents them from earning a living - this condition must have existed at the date of your death.