01 / 4 / 2015 Midnight
The following guidance is designed for employers and outlines what pension benefits are payable in situations concerning a terminal ill health diagnosis:
Pension lump sum
If you become terminally ill you may claim your benefits immediately as a serious ill health lump sum, they will not be tested against the annual allowance limits. To claim a serious ill health lump sum members need to complete a form which you can access from the NHS Pensions website. The application will be subject to acceptance by the scheme’s medical advisors.
If the member is age 75 or over, the serious ill health lump sum will be subject to a charge of 55%, payable by the member. This tax charge is deducted from the lump sum before payment.
Members under normal pension age - an active member who is under their normal pension age at retirement and has at least two years membership must complete two forms to apply for an exchange of their ill health pension benefits for a one off lump sum payment. The forms can be downloaded from the NHS Pensions website.
Members over normal pension age - an active member who is over their normal pension age is ineligible to apply for ill health pension benefits but they can exchange their pension benefits for a one off lump sum payment. The member must complete two forms to apply for an exchange of their pension benefits. The forms can be downloaded from the NHS Pensions website.
Deferred members - deferred members can make an application using available information on the NHS Pensions website.
Members with benefits in the 1995/2008 Scheme and the 2015 Scheme - a member may need to make separate applications for consideration of entitlement to benefits in each scheme. However this is only necessary when there has been a break in scheme membership of more than five years resulting in deferred 1995/2008 Scheme benefits.
NHS Pensions have further information relating to applications for terminal ill health retirement, this includes an employer fact sheet and the relevant forms. Applications of this nature are processed promptly by NHS Pensions.