ILL HEALTH EARLY RETIREMENT

With effect from 1st April 2008 the basis upon which the ill health pension is calculated has been changed and it is now less generous than before.

The level of ill health pension awarded will depend upon an individual’s length of pension scheme membership, their NHS income and level of incapacity at the point of claim.

The there are two levels of incapacity, Tier One and Tier Two

Tier One Incapacity

Under this definition a scheme member is assessed as being unable to carry out their normal NHS duties, but not so badly affected as not to be able to carry out another NHS role.
They will be awarded an ill health pension based upon their accrued pension at the time of incapacity but with no up lift.

Tier Two Incapacity

This definition covers the more serious forms of incapacity whereby an individual is unable to carry out any work on behalf of the NHS. Here an ill health pension as defined under Tier One will be granted, with the benefits being up lifted by 2/3rds of the service that the individual could have archived had they retired at their normal retirement date.

Example

Scheme member aged 40, income £60,000
(17 years service at the point of incapacity)

Tier One-ill health pension
£12,750 income plus £38,250 lump sum

Tier Two-ill health pension
£22,740 income plus £68,220 lump sum

Given that these new terms represent a reduction in the levels of the ill pensions now being awarded, it is recommended that you now review your financial position in case you are forced to take early retirement through ill health.

For specialist advice about your own protection needs, contact us

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