Retiring on ill health

Retiring on ill health
If you have 3 months’ membership, your employer can award you ill health benefits at any age, as long as you meet various conditions. In assessing this, they will consult a specially qualified doctor, and will then make various decisions about the impact of your condition on your own job and your capability for other paid employment.

A 3 tier system
To retire you on ill health, your employer must decide that you are permanently unable to do your own job. If so, you will be awarded ill health benefits – in other words benefits without any early retirement reductions, and in some cases, based on extra membership too.

There are 3 ill health tiers, and in deciding which tier you fall into, your employer must consider what prospect of work you have now or in future.

Tier 1
No prospect of other work at any age before age 65. You will get a pension and normally a lump sum based on the membership you have built up so far PLUS all the extra membership you would have built up if you had remained a member to age 65.

Tier 2
No prospect of other work now or any time in the next 3 years, but there IS a good prospect before age 65.You will get a pension and normally a lump sum based on the membership you have built up so far PLUS 25% of the extra membership you would have built up if you had remained a member to age 65.

Tier 3
Good prospect of other work straight away or any time in the next 3 years.You will get your lump sum (if applicable) to keep. But your pension will only be paid for a limited time, and will be reviewed after 18 months.

It will stop either:

As soon as you take up paid work again
If recommended at the 18 month review, or
After 3 years has passedPlease note: We are still waiting for more detailed guidance from the DCLG who write the Scheme rules, but this website gives our current understanding of the ill health provisions.

Ill health FAQs
Click here if you are part time

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