Ill-health Retirement Tier 3 Review
These pages are for employer use only. Member information can be found on the home page.
What is a Tier 3 pension
The Tier 3 pension is a temporary payment paid on the grounds of ill-health, for three years. The Tier 3 pension will stop at any point when gainful employment is found. Your former employee should inform you, as their former employer, that they have found gainful employment. The LGPS definition of ‘gainful employment’ means any paid employment for not less than 30 hours in each week for a period of not less than 12 months.
The 18 month review
A Scheme employer is required to undertake a review after a Tier 3 pension has been in payment for 18 months. If at the 18 month review, an employer found that the member was now capable of undertaking ‘gainful employment’, the pension would be suspended.
Following the 18 month review, if the member remained incapable of undertaking gainful employment, in certain circumstances, their pension can continue to be paid for up to three years from the date their employment ceased.
No further reviews are needed but the employer can look at the case again in light of new medical evidence. It is also possible after the review for the employer to award Tier 2 benefits, although a further medical opinion would be required to support this decision.
The IRMP can be the same the same IRMP who provided the original certificate.
What decisions should an employer make at the 18 month review?
1. To continue payment of Tier 3 benefits for the remainder of the three year period
2. To cease benefits if it can be determined that gainful employment can be obtained
3. To upgrade benefits to Tier 2 if:
- the member is permanently incapable of discharging the duties of the employment they were engaged in, and either
- is unlikely to be capable of undertaking gainful employment before Normal Pension Age
- is unlikely to be capable of undertaking any gainful employment within 3 years of leaving the employment, but is likely to be able to undertake gainful employment before reaching normal pension age.
Please contact the Pensions Team if employers are unsure which certificate should be provided to the IRMP.
For further information please click here to read the Frequently Asked Questions on ill-health retirement.