If you have a least 2 years’ qualifying service in the LGPS, or have transferred in pension benefits from another scheme, you are entitled to the immediate payment of pension benefits if an approved and Independent Registered Medical Practitioner has certified that:
- you are permanently incapable of carrying out the duties of your job, and
- that you are not capable of undertaking any gainful employment
Gainful employment is defined as ‘paid employment for not less than 30 hours per week for a period of not less than 12 months.’
Ill health benefits can be paid at any age and are not reduced for early payment. An enhancement may be applied to your benefits, depending on the degree of your incapacity.
Tier 1
If you are unlikely to be capable of undertaking gainful employment before normal pension age (i.e. equal to state pension age, or at least age 65), ill health benefits are calculated on:
- any membership built up to 31 March 2014, plus
- the amount of pension built up from 1 April 2014 (or your date of entry into the LGPS, if later) to your date of termination, plus
- the pension that would have been built up if you had been in the main section of the Scheme from date of termination to normal pension age
Tier 2
If you are unlikely to be capable of undertaking any gainful employment within 3 years of leaving, but are likely to be able to do so before reaching normal pension age, then ill health benefits are calculated on:
- any membership built up to 31 March 2014, plus
- the amount of pension built up from 1 April 2014 (or your date of entry into the LGPS, if later) to your date of termination, plus
- 25% of the pension that would have been built up if you had been in the main section of the Scheme from date of termination to normal pension age
Tier 3
If you are likely to be capable of undertaking gainful employment within 3 years of leaving, your benefits for:
- any membership built up to 31 March 2014, plus
- the amount of pension built up from 1 April 2014 (or your date of entry into the LGPS, if later) to your date of termination
will be released without enhancement and payable until either you commence gainful employment or for a maximum of 3 years.
Your case will be reviewed after 18 months by your previous Employer to asses if your condition has either improved or deteriorated. Your pension would cease if you are deemed capable of undertaking gainful employment, or, if your condition has deteriorated, they may determine that a tier 2 pension may be awarded.
If you become re-employed within the 3 year period, you must inform your previous Employer and provide details of your new employment, so that they can make an assessment as to whether the employment meets the criteria of gainful employment.
Please note that ANY overpayment of pension will be recovered accordingly.
If you reach normal pension age (i.e. equal to state pension age, or at least age 65) before the end of the 3 year period your pension benefits will continue in payment.
If you were in the LGPS on 31 March 2008 and were aged 45 or over on that date, there are protections to ensure your ill health retirement benefits are no less than they would have been under the Scheme as it applied before 1 April 2008.
