To qualify for ill health retirement, you must:
• have at least two calendar years pensionable membership, and
• retire from pensionable employment due to illness or injury (NHS employment must be terminated for health reasons only)
• be permanently incapable (up to the schemes relevant normal pension age) of efficiently carrying out the duties of your employment because of illness or injury – (tier 1/ lower tier pension)
• be permanently incapable (up to the schemes relevant normal pension age) of engaging in regular employment of like duration to your current duties because of the illness or injury – (tier 2/ upper tier pension)
•be under the  schemes normal pension age (age 60 in the 1995 section, age 65 in the 2008 section and State Pension Age in the 2015 scheme).

On application the pension schemes’ medical examiners will decide whether you qualify for ill health retirement, which tier has been achieved if you do and whether you meet the HMRC severe ill health condition test to avoid any potential annual allowance tax charge.  As the award of a tier 2/upper tier pension results in payment of enhanced benefits there is a risk that an annual allowance charge will be due.  

It is possible that the medical advisers will request additional medical evidence and on rare occasions they may wish to meet with the applicant.

Most cases are decided on the basis of the medical evidence submitted with the original application, so it is important that as much supporting and unambiguous medical evidence is submitted at this time.

• If you are contributing to the NHS pension scheme (England and Wales) you need to complete form AW33E.
• If you are contributing to the NHS superannuation scheme (Scotland) you need to complete forms AW8 and AW8 MED.
• If you are a contributing to the Health and Social Care pension scheme (Northern Ireland) you need to complete form AW33.
• If you are an active member of the 2015 scheme but no longer have a final salary link to earlier legacy scheme benefits (due to a break in pensionable service of 5 years or more) then you will need to apply for those benefits as a deferred member as well as applying for the 2015 scheme benefits on an active basis. 

• If you were contributing to the NHS pension scheme (England and Wales) you need to complete form AW240P. 
• If you were contributing to the NHS superannuation scheme (Scotland) you need to complete form AW8 (P) and AW8 MED (Preserved) 
• if you were a contributing to the Health and Social Care pension scheme (Northern Ireland) you need to complete form AW240.  

Where a member has life expectancy of less than 12 months. Benefits can be applied for in the form of a lump sum payment rather than an annual pension.

If you are under the normal pension age:

• You will be awarded tier 2 (upper tier) benefits which you are able to convert to a lump sum payment.
• You need to apply for ill health retirement as detailed above, providing medical evidence to demonstrate that your life expectancy is less than 12 months.
• If you are contributing to the NHS pension scheme (England and Wales), you also need to complete form AW341.
• It is vital that employment has ceased for a terminal ill health pension rather than Death in Service benefits to become payable.  Untaken annual leave can extend a period of employment beyond the last day worked.  Speak to your HR department to clarify when your employment ends.    
• The pensions agencies can fast track applications.  Please contact the BMA Pensions Department if you are concerned as to the applications progress.

If you are over the normal pension age:

• You are able to convert your retirement benefits to a lump sum payment. 
• You need to apply for age retirement benefits and in addition you will need confirmation from your doctor that your life expectancy is less than 12 months.
• You will need to complete the forms listed above dependent on your pension scheme.
• It is vital that employment has ceased for a terminal ill health pension rather than Death in Service benefits to become payable.  Untaken annual leave can extend a period of employment beyond the last day worked.  Speak to your HR department to clarify when your employment ends.    
• The pensions agencies can fast track applications.  Please contact the BMA Pensions Department if you are concerned as to the applications progress.

There are some specific issues relating to residents applying for ill health retirement.

As you are on rotations with a fixed end term it is important that your employer informs NHS Pensions that the contract is terminated on capability grounds and not due to the end of the fixed term contract.

Failure to do this can lead to an ill-health retirement being declined and can place you in the difficult position of not being well enough to take up your next rotation and not being eligible for ill health retirement. Please contact the BMA pensions department for assistance.

If you are assessed as being permanently  incapable (up to the schemes relevant normal pension age) of carrying out the duties of your own job you will be entitled to the early payment of the retirement benefits you have earned to date, paid without any actuarial reduction.  No enhancement will be applied to the benefits.

If you are assessed as being permanently incapable (up to the schemes relevant normal pension age) of carrying out the duties of your own job and additionally of engaging in regular employment of like duration, as an active member of the 2015 scheme you will be entitled to the retirement benefits you have earned to date in that scheme, enhanced by half of your prospective membership up to the scheme’s normal pension age.  As an active 2015 scheme member any legacy benefits also payable from the 1995/2008 sections on health grounds will be paid unreduced and unenhanced.

This means that your employment must be terminated on the grounds of ill-health only. Should your employer cite a different reason for the cessation of employment, for example dismissal, you would not be able to receive ill health retirement benefits.

The sole reason for your retirement must be permanent ill health.

You need to provide medical evidence which demonstrates that there are no further treatments or medication which can be explored to enable you to return to your role before your normal pension age.

To establish permanence, the agencies use the civil burden of proof, i.e. the balance of probabilities.

This means that in addition to being permanently incapable of undertaking your own NHS job, you would be permanently incapable of similar alternative employment. This is irrespective of whether or not such employment is available to you, taking account of your:

• mental capacity
• physical capacity
• previous training
• previous practical, professional and vocational experience. 

This means that the assessment for regular employment under tier 2 will take into account whether you are working whole-time or part-time in your NHS job.

Yes.  However, applying as an opted out member means you will only receive payment of a Tier 1/lower award if the criteria is met.  The Tier 2/upper tier award is only available to active pension scheme members who meet the criteria.

Yes – if your NHS employment was terminated on health grounds and you did not apply prior to leaving it is possible to ask for your application to be treated as though you were applying as an active member.  You will need to submit medical evidence contemporaneous to the time you were active in the scheme.  Evidence obtained only since ceasing NHS employment will not be helpful on its own.

It may be possible to make an application retrospectively if it is confirmed that the only reason for leaving employment was ill health. For further assistance on retrospective applications and the supporting evidence required please contact the BMA pensions department. 

Whilst it is not necessary for your employer to consent, they will need to confirm that ill health is the only reason for your retirement.

Greater emphasis is now given to rehabilitation and to making reasonable adjustments to enable you to return to work. If your employer is able to facilitate your return to your current duties this may make an application less likely to succeed.

If, however your employer is able to facilitate a return to work in a different role or working fewer hours in your existing role this might mean you are able to apply to for ill health retirement from your original position which could result in a tier 1/lower tier pension being payable.

You are not required to be on sick leave to apply for ill health retirement.

Any ill health retirement pension is likely to be lower than your NHS earnings, even if you are receiving half sick pay.

Once your application for ill health retirement has been approved it may be beneficial to use as much of your contractual sick pay as possible before retiring on health grounds. This will need to be agreed with your employer.

If your application is not successful or you do not agree with the outcome you can appeal against the decision under the pensions agencies internal dispute resolution procedure. The BMA pensions department can assist you in submitting an appeal.

It is important to note that fresh medical evidence is required to be submitted with an appeal.

Whilst it is possible to appeal a decision to decline or to award a Tier 1/lower tier pension it is not common to appeal the award of a Tier 2/upper tier pension.  Members awarded a Tier 2/upper tier pension who are faced with an annual allowance tax charge and wish to avoid this may look to appeal for Tier 1/lower tier award but should be aware that this can risk  the loss of the payment of an ill health pension altogether

If you appeal and are successful, the payment of your pension benefits will be backdated to your last day of pensionable employment.

Yes. You have retired on the grounds of ill health and are seeking to appeal the tier awarded rather than to change the reason for your retirement.

If an appeal is successful, your revised award will be backdated to the date of your retirement.

No.  If you have been awarded a tier 1/lower tier pension and apply for a review within three years if, on review, you are awarded tier 2/upper tier benefits these are payable prospectively from the date this is granted and not retrospectively.

To claim your pension benefits, you must:

• retire from your NHS employment for at least 24 hours
• complete the relevant retirement application forms.

You can get the required application forms from your employer.

GPs in England must return their applications via PCSE who are regarded as their employer for this purpose.  GPs in England need to ensure that all of their records with PCSE are up to date, and any end of year certificates required have been correctly submitted.  Failure to do so will result in delays in awarding your benefits.  

The pensions agencies may take several weeks to process the retirement application forms. You may therefore wish to consider this when arranging to leave employment to avoid having a period without income.

Yes. If you are contributing to the NHS pension scheme in England and Wales or Northern Ireland, a common-sense approach is adopted which should allow for those on sick leave to fully utilise their paid sick leave entitlement before retiring.  It is not expected that you can retire on the basis of being approved for ill health retirement more than 12 months ago.  However, if circumstances beyond your control and related to your health have caused the delay please contact the BMA Pensions Department who can assist you.

If you are contributing to the NHS superannuation scheme in Scotland, you must give an expected retirement date when submitting an application. You do not need to retire before being advised whether your application has been successful.

On ill health retirement you are credited with your full intended purchase. Your added year’s contract will be adjusted to reflect periods of part-time working.

The exception to this will be where your added years contract was to age 65 and you have applied for ill health pension on or after 1st April 2022 and after reaching 60 but before 65. You will be credited with the amount of added years purchased at retirement which will then be actuarially reduced to reflect its early payment.

If you are an active member having voluntarily terminated your added year’s contract in advance of your application for ill heath retirement, you will be credited with the amount of added years purchased at termination of the contract. This will then be actuarially reduced to reflect its early payment.

If you are a deferred member, you will only receive the added years you have actually purchased, with appropriate actuarial reduction.

Any female member with service prior to 6 April 1988 purchasing the unreduced lump sum (in order to restore their 1995 section benefits further to electing to increase the pension payable to their potential widower) should contact their relevant pension agency as the need to have made this purchase is no longer valid further to the Goodwin case and a refund of contributions with interest could be payable.

If the contract has been in place for less than 12 months, you will receive a refund of the contributions paid.

On ill health retirement you will be credited with your full intended purchase providing the contract has been in place for at least 12 months.

If the contract has been in place for less than 12 months, you will receive a refund of the contributions paid.

You should approach your provider for advice if you wish to claim the benefits early.

If you have no ongoing employment you are not able to contribute to these types of policies. You can defer taking the benefits until a later date.

If you have more than one NHS pensionable employment, you must retire from all posts to access your pension on health grounds.

Yes. If you retire on ill health grounds you are not automatically excluded from the annual allowance. You are more likely to exceed the threshold if you are awarded a tier 2/upper tier pension due to the enhanced pension or if you are purchasing added years or  additional pension.

HMRC have stated that their ‘severe ill health’ test must be met in order for an individual to be exempt from the annual allowance charge in the year that they retire on ill health grounds.

Although the NHS pension scheme tier 2/upper tier requirements do not automatically mean that you satisfy this rule, if you are unlikely to be able to undertake work (in any capacity) up to your state pension age, the scheme medical advisers can confirm this to enable you to be exempt from any charge.  It is possible to appeal a decision made by the scheme’s medical advisers that the SIHC has not been met but the outcome needs to be successful in the same tax year as the charge.

If you are terminally ill you will satisfy the severe ill health test and the scheme medical advisers will confirm this to exempt you from any charge.

If you retire under tier 1/lower tier or tier 2/upper tier and return to NHS employment before you reach the normal pension age, there will be a limit on how much you can earn without your pension being affected.
This is known as the ‘earnings margin’. If your post retirement NHS earnings from your pension and NHS income exceed the earnings margin, your NHS pension will be abated. Abatement ceases to apply after your normal pension age. 

If you are in receipt of a tier 1/lower tier pension and exceed the earnings margin but then reduce your hours or earnings, your pension will be restored from the date that your post retirement NHS earnings fall below the earnings margin.

If you are in receipt of a tier 2/upper tier pension and exceed the earnings margin your tier 2/upper tier pension can only be restored if you reduce your post NHS earnings below the earnings margin within 12 months of starting the work.  However, you cannot work in the NHS for a period longer than 12 months.  If you do then the tier 2/upper tier pension is permanently lost and replaced with a tier 1 lower/tier pension. 

Only the portion of your pension which exceeds that which would have been paid to you had you retired on voluntary early retirement grounds with an actuarially reduced pension can be abated.  For tier 1/lower tier benefits this means that the amount paid to bring your pension up to that which you had accrued at the point of retirement can be reduced and additionally for tier 2/upper tier benefits the enhanced element can also be reduced.   

Your pension ceases to be subject to abatement when you reach the normal pension age of the scheme.

For more information please see our guidance on abatement.

Your pension will not be affected if you return to work with a non-NHS employer.

These same restrictions also apply to deferred members.

If you are awarded tier 2/upper tier pension, in addition to the abatement restriction above, you risk losing it if:

• you work in the NHS for more than 12 months
• your earnings exceed the lower earnings limit for primary class 1 national insurance contributions regardless of who you are employed by.

There are two restrictions which you need to consider.

1. You cannot work for more than 12 months in the NHS and keep your tier 2/upper tier ill health pension. Your tier 2/upper tier pension will be replaced by tier 1/lower tier after 12 months.
   
   For this purpose ‘work’ will include any unpaid honorary posts or unpaid work which may confer employment status but does not include NHS work via a locum agency (which does not permit access to the NHS pension scheme) or if you channel your NHS earnings via a limited company.
2. Your gross earnings (from any employment) in any tax year cannot exceed the lower earnings limit for primary class 1 national insurance contributions for that tax year.
   
   At the end of each tax year, the pensions agencies will review the earnings and employments of all pensioners in receipt of tier 2 pensions. You are advised not to wait for the review and to notify the pensions agencies as soon as possible if you return to work to avoid your pension being overpaid.

Additionally, your pension may be subject to abatement if you return to NHS employment before your normal retirement age.

If you exceed these restrictions, your tier 2/upper tier ill health pension will be replaced with the tier 1/lower tier pension with effect from the first pension payment date after the earlier of:

• the first day spent working in the NHS after the 12 month period ended
• the first pension payment date after the date your earnings exceeded the lower earnings limit.

The restriction relating to the lower earnings limit still applies if you are planning to leave the UK permanently.

These two additional restrictions continue to apply regardless of age and do not cease at your normal pension age as abatement does.

Your ability to reapply for tier 2/upper tier is dependent upon which of the restrictions you have exceeded.

If you have worked in the NHS for more than 12 months, you will not be able to reinstate your pension to tier 2/upper tier under any circumstances.

If your earnings exceed the lower earnings limit, you can reapply for the tier 2/upper tier pension if you fulfil all of the following criteria.

• You must be under the normal pension age.
• You must stop working altogether.
• You must provide new medical evidence to show that your medical condition still satisfies the criteria for a tier 2/upper tier pension. The new medical evidence must be submitted before the end of the 12 months starting from the date you exceeded the lower earnings limit. If you exceed the limit while working in the NHS the new medical evidence must be submitted within 12 months of your re-employment.

The decision to restore your tier 2/upper tier pension rests with the pensions agencies. If they agree to do so, your pension will be restored from the day after you terminate your re-employment.

If your pension is restored to tier 2/upper tier and you again return to work and exceed the restrictions you will not be able to apply to restore your tier 2/upper tier pension a second time.

If you were to die in receipt of a substitute tier 1/lower tier pension but within the 12 month protected period (which starts from the date that your pay from non-NHS employment first exceeded the lower earnings limit or from when you were in NHS employment for over 12 months)  then your dependents’ benefits will be based on your original tier 2/upper tier pension.

If, however, you were to die whilst in receipt of a tier 1/lower tier pension outside of 12 months after first having exceeded the limit then the dependants’ benefits will be based on your tier 1/lower tier pension.

If you retired with a tier 1/lower tier pension you can rejoin the 2015 scheme straight away.

If you retired with a tier 2/upper tier pension you can rejoin after a period of one year has passed  beginning with the first day you return to employment.

If you are assessed as being permanently incapable (up to your state pension age)  of carrying out the duties of your own job you will be entitled to the early payment of the retirement benefits you have earned to date, paid without any actuarial reduction.

Both the 2015 benefits and 1995/2008 benefits will be paid unreduced and unenhanced.

If you are assessed as being permanently incapable (up to your state pension age)  of carrying out the duties of your own job and additionally of engaging in regular employment of like duration to your current role, you will be entitled to the retirement benefits you have earned to date in the 2015 scheme, enhanced by 50% of your prospective membership up to your state pension age.

Additionally, your 1995/2008 benefits will be paid unreduced and unenhanced.

The term ‘actuarial reduction’ refers to the actuarial tables used to calculate the reduction to your benefits if you retire before your normal pension age under voluntary early retirement.

1995 section benefits have the actuarial reduction applied separately to both your pension and lump sum. 

The 2008 section and 2015 scheme benefits have the actuarial reduction applied to your pension before commutation for the lump sum.

A final salary link refers to the retention of current pay in the calculation of benefits from the 1995/2008 section (for officer benefits) or to the retention of active dynamising (revaluation) of past accrued benefits in line with the consumer prices index plus 1.5% (for practitioner benefits). This link is lost if you have a break in pensionable service of 5 years or more.

The 1995/ 2008 section practitioner benefits keep up with inflation by being dynamised.

Dynamised income is increased in line with the consumer prices index increases plus 1.5%.

This means that if CPI (consumer price inflation) growth is nil or negative the dynamising factor applied to increase GP income will be 1.5%.

In the 2015 scheme the normal pension age is linked to an individual's state pension age, or age 65 if that is later.