Ill health benefits can be paid at any age. The benefits you have built up to the date you leave are not reduced for early payment. They may be increased to make up for your early retirement.
Qualifications
To qualify for ill health benefits:
- you must have more than 2 years membership in the scheme, and
- your employer, based on an opinion from an independent specially qualified doctor appointed by them, must be satisfied that you will be permanently unable to do your own job before your normal pension age and that you are not immediately capable of undertaking gainful employment.
Gainful employment is any paid employment more than 30 hours per week for more than 12 months. Your normal pension age is your State Pension age (SPa), but is at least age 65. Find out what your SPa is
Process
- Speak to your employer about retiring on ill health.
- Your employer refers you to an Independent Registered Medical Practitioner (IRMP).
- The IRMP issues an ill health certificate to your employer.
- You and your employer complete documentation and your ill health benefits are paid. Find out about the retirement process
Levels of benefits
You must meet the qualifications detailed above to qualify for ill health benefits. Then there are graded levels of benefit based on how likely you are to be capable of undertaking gainful employment after you leave. This is only available if you are permanently unable to do your own job. There are 3 levels, known as tiers:
Tier 1
If you have no reasonable prospect of being capable of undertaking gainful employment before normal pension age (NPA), ill health benefits are based on the pension you would have had if you had stayed in the scheme until NPA.
Tier 2
If you are unlikely to be capable of undertaking gainful employment within 3 years of leaving, but you may be capable of doing so before normal pension age, ill health benefits are based on your pension built up to leaving plus 25% of your prospective pension from leaving to normal pension age.
Tier 3
If you are likely to be capable of undertaking gainful employment within 3 years of leaving, ill health benefits are based on your pension at leaving. Payment of these benefits will be stopped after 3 years, or earlier if you are in gainful employment or become capable of undertaking such employment.
If the payment is stopped it will normally become payable again from your normal pension age.
Reduction in hours
If you reduced your hours due to your illness, any enhancement of your pension will be based on your assumed pensionable pay before you reduced your hours.
Paying Additional Pension Contributions (APCs)
If you paid additional pension contributions (APCs) for extra or lost LGPS pension, reductions may apply on the pension purchased.
Converting pension to lump sum
It is possible to convert some of your annual pension to provide an extra tax-free lump sum. Find out about converting some of your pension to a lump sum
Pre retirement course
We offer a free pre retirement course for those who have contributed to to the LGPS and are within 10 years of taking their pension. Find out about the pre retirement course