Ill-health retirement
An ill-health retirement allows you to retire before your normal pension age due to ill-health. Your employer must firstly decide whether you meet the rules for an ill-health pension before you can go down the ill-health retirement process.
It's only possible to receive an ill-health pension if you're dismissed from your job because of your health. If you choose to voluntarily leave your job, you don't qualify for an ill-health pension.
Rules you must meet
If you've been in the scheme for two years, you could get an ill-health pension. If you're dismissed from your job because of ill-health, your employer will decide if you meet the following rules for an ill-health pension:
- As a result of ill-health or infirmity of mind or body, you are permanently incapable of discharging efficiently the duties of the employment you were engaged in
- As a result of ill-health or infirmity of mind or body, you are not immediately capable of undertaking any gainful employment.
Your employer's decision is based on a report from an independent registered medical practitioner (IRMP).
What benefits could I get?
The amount of retirement pension you could get if you meet the above rules is set by which of the three benefit tiers apply to you. The decision about which tier you meet is made by your employer after they've had an medical opinion from an IRMP.
The three tiers are:
Tier 1
If you've no reasonable prospect of being capable of obtaining gainful employment before normal pension age, ill-health benefits are based on the membership you would've had if you'd stayed in the scheme until normal pension age.
Tier 2
If you're unlikely to be capable of obtaining gainful employment within three years of leaving, but you may be capable of doing so before normal pension age, then ill-health benefits are based on your membership built up to leaving plus 25% of your prospective membership from leaving to normal pension age.
Tier 3
If you're likely to be capable of obtaining gainful employment within three years of leaving, or before normal pension age if earlier, ill-health benefits are based on your membership at leaving. Payment of these benefits will be stopped after three years, or earlier if you are in gainful employment or become capable of getting such employment.
If you are awarded tier 3 benefits you must tell your previous employer when a new employment is found giving them details, including pay and working hours. The employer would then stop payments if this was ‘gainful employment’.
A review is undertaken by your former employer after 18 months of a tier 3 benefit being in payment and stopped if gainful employment has been found.
What does 'gainful employment' mean?
Gainful employment means paid employment for no less than 30 hours a week for a period of no less than 12 months. If you're part-time, any extra membership awarded due to ill-health retirement will be reduced to reflect your part-time hours at leaving. Any reduction in hours due to your illness wouldn't be considered.
