Unfortunately, becoming ill is a fact of life but the NHS Pension Scheme offers excellent benefits for those unfortunate enough to become long-term sick.
If you are unable to do your own job through sickness, and your condition is considered permanent - then you should be able to take your ill-health retirement pension. This is broadly your accrued NHS Pension rights taken unreduced and is known as a Tier One Ill Health Pension.
In addition to above, if you are ill enough to not be able to do any work at all of like duration to your current role - then you should be able to take the unreduced ill-health pension as above PLUS an enhancement for your prospective membership to your normal pension age. This is known as Tier Two Ill Health Pension. In the 1995 Section of the NHS Pension Scheme the enhancement is 2/3rds of your prospective membership up to the age of 60. If you qualify for Tier Two after 55 you would get 4 years prospective membership and then 3 years at 57 and so on.
For those doctors who took out private income protection policies and are now within 10-15 years of their normal retirement age - please review the small print. Many income protection policies will reduce the pay-out by any NHS ill-health retirement pension. And so you may be paying for something that you will not ever benefit from.
If you are an active member of the NHS Pension Scheme, in order to apply for your Ill Health Retirement Pension, please contact your employer for an application form. It would be adviseable to enclose as much supporting information as possible about your condition.
If you are a deferred member of the NHS Pension Scheme, you need to apply to NHS Pensions for your Ill Health Pension using form AW240. This application will then be assessed by the NHS medical examiners.
Conditions Required For Ill-Health Retirement
- You need at least 2 years qualifying membership in the NHS Pension Scheme
- You need to have retired from NHS employment through sickness (this has to be sickness not for any other reason)
- You need to be permanently incapable of carrying out your duties due to sickness (Tier One). Therefore the medical examiner must come to the conclusion that on the balance of probabilities you will not be able to return to work before your normal pension age.
- You need to be permanently incapable of carrying out any regular employment of like duration due to sickness (Tier Two). Therefore the medical examiner must come to the conclusion that on the balance of probabilities you will not be able to return to work before your normal pension age.
- You must also be under your normal pension age
There are time limits in applying for your Ill Health Pension benefits. Once your employer has formally signed you off as retired through ill-health then you have 12 months to apply for your benefits.
For doctors with Added Years contracts on ill health retirement you will be credited with your full intended contract.
Returning To Work After Ill Health Retirement
If you return to NHS employment after having previously retired through ill-health there will be limits on the amount you can earn. In some cases your ill health NHS pension maybe capped - this is known as abatement. Once you reach your Normal Pension Age then abatement will cease.
If you return to work with a non-NHS employer then your NHS ill-health pension will not be affected - abatement will not apply.
Terminal Illness Benefits
In addition to the application requirements stated above, you need to provide medical evidence that you have a life expectancy of under 12 months. If you are an active member of the NHS Pension Scheme you need to complete form AW341 (a).
The terminal illness benefits payable would then be a Tier Two Pension converted into a lump sum payment. The lump sum is calculated by commuting your NHS Pension. at the rate of £1 for every £12 of lump sum until HMRC caps are met and thereafter £1 for every £5 of lump sum.