Ill Health Retirement Frequently Asked Questions


Answers to common queries concerning ill health retirement including definitions, possible outcomes and affects on your pension.

What is ill health retirement?

If you are unable, through illness, to work in your present job and your condition is permanent, you may be able to retire early and take your pension benefits without actuarial reduction. This is known as a Tier 1 (lower tier) award.

If, in addition to the above, you are unable to do any regular employment of a similar duration to your current duties you may be able to retire early and take your pension benefits without actuarial reduction and with enhancement. This is known as a Tier 2 (upper tier) award.

How do I apply to retire on ill health grounds?

If you are an active member of the scheme:

You need to contact your employer/Primary Care Organisation for an application form. This needs to be completed and returned with as much supporting relevant medical evidence as possible.

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 form AW8 plus form 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 a deferred member of the scheme

You will need to contact the relevant pension agency for the required form:

  • If you are contributing to the NHS pension scheme (England and Wales) you need to complete form AW240.
  • If you are contributing to the NHS Superannuation Scheme (Scotland) you need to complete form AW8 MED (Preserves).
  • If you are a contributing to the Health and Social Care pension scheme (Northern Ireland) you need to complete form AW240.

By completing the forms you are simply applying for ill health retirement. You are not required to state which level of benefits you are applying for. The pension schemes’ Medical Examiners will decide whether you qualify for ill health retirement and what level of benefits are payable.

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.

What are the qualifying conditions for ill health retirement?

There are two tiers of ill health retirement benefits. The benefits you get will depend on the severity of your condition and the likelihood of you being able to work again.

To qualify for ill-health retirement benefits you must:

  • have at least two years calendar membership, and
  • retire from pensionable employment due to illness or injury, and
  • be permanently incapable of efficiently carrying out the duties of your employment because of illness or injury - Tier 1 (lower tier) pension, and
  • be permanently incapable 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 pension scheme normal pension age (age 60 in the 1995 Section and age 65 in the 2008 Section)

Can I apply for ill health retirement if I am over the scheme normal pension age?

Ill health retirement is only available to members who have not yet reached the normal pension age. The only exception is when a member has life expectancy of less than 12 months. The normal pension age is 60 for members of the 1995 section and 65 for those who are in the 2008 section.

Unless you are terminally ill on reaching your normal pension age there is no additional benefit from applying for ill health retirement.

If I am terminally ill how do I apply for ill health retirement?

If you are under the scheme’s normal pension age, 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 over the scheme’s normal pension age, 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.

  • If you are contributing to the NHS pension scheme (England and Wales) you need to complete form AW341(a).
  • If you are contributing to the NHS Superannuation Scheme (Scotland) you need to complete form AW8 and AW8 Med.
  • If you are a contributing to the Health and Social Care pension scheme (Northern Ireland) you need to complete form AW240.

If I am terminally ill what benefits are payable?

If you are under the scheme’s normal pension age you will be awarded Tier 2 (upper tier) benefits which you are able to convert to a lump sum payment.

If you are over the scheme’s normal pension age you are able to convert your retirement benefits to a lump sum payment.

The lump sum is calculated from your standard NHS benefits. Firstly you commute pension to provide the maximum lump sum available under HMRC rules. Each £1 of pension converted will provide £12 of lump sum. Once you have reached the HRMC maximum lump sum each further £1 converted will provide £5 of lump sum.

  • Further information, which is applicable to all members, is available via the NHS Pensions guide (PDF)

What is a Tier 1 (lower Tier) ill health pension?

If you are assessed as being permanently incapable 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.

What is a Tier 2 (upper Tier) ill heath pension?

If you are assessed as being permanently incapable of carrying out the duties of your own job and additionally of engaging in regular employment of like duration you will be entitled to the retirement benefits you have earned to date, enhanced by 2/3rds of your prospective membership up to the scheme’s normal pension age.

What does “retire from pensionable employment” mean?

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.

What does “Permanently incapable” mean?

You need to demonstrate 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.

In looking to establish permanence, the agencies use the civil burden of proof, i.e. the balance of probabilities.

What does “regular employment” mean under the Tier 2 (upper tier) ill heath pension criteria?

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

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

What does “like duration” mean for tier 2 (upper tier) ill heath pension?

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

What is the enhancement for Tier 2 (upper Tier) ill health retirement?

If you are a member of the 1995 section, you will receive a membership enhancement of 2/3rds of your prospective membership to age 60. If Tier 2 (upper tier) retirement is granted before 31 March 2016 the enhancement is a minimum of four years capped at the amount of service you could have achieved by age 60. From 1 April 2016 there will be no minimum enhancement.

For example:

In the 1995 section, where the normal pension age is 60, if you are granted Tier 2 (upper tier) ill health retirement at age 55 you will receive 4 years enhancement. This is despite the fact that 2/3 of your prospective service is 3 and 1/3 years. If you are granted Tier 2 (upper tier) ill health retirement at age 57 you will receive 3 years enhancement. This is because you are capped at the amount of service you could have achieved by age 60.

If you are a member of the 2008 section, you will receive a membership enhancement of 2/3rds of your prospective membership to age 65. There is no minimum enhancement.

Do I need to apply for ill health retirement before I leave my employment?

It is to apply while you are in pensionable employment. Your application to retire on health grounds will be considered differently if it is made after your last day of pensionable employment.

If the application is made before your last day of pensionable employment, it will be assessed against the criteria of both Tier 1 (lower tier) and Tier 2 (upper tier) and the appropriate benefits will be paid.

If the application is made after your last day of pensionable employment, it will be assessed against the Tier 2 (upper tier) criteria but if successful will result in the payment of Tier 1 (lower tier) benefits.

I made my application to retire on health grounds while employed but have since left my employment and my application was unsuccessful. Will the payment of my pension benefits be backdated to the last day of my pensionable employment if my appeal is successful?

Yes. The payment of your pension benefits will be backdated to your last day of pensionable employment.

My NHS employment was terminated on health grounds but I have not applied for ill heath retirement prior to leaving. Can I apply retrospectively?

Yes. 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 please contact the BMA Pensions Department.

I have preserved pension benefits in the scheme. When will my pension benefits become payable if my application is accepted?

Your pension benefits will become payable from the date specified on the application form for retirement benefits.

Do I need to be on sick leave to apply for ill heath retirement?

No. You are not required to be on sick leave to apply for ill health retirement.

However 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.

Do I need my employer’s consent to apply for ill heath retirement?

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.

What are the possible outcomes of my application for ill health retirement?

The pensions agencies may:

  • award benefits under Tier 1 (lower tier)
  • award benefits under Tier 1 (lower tier) with the opportunity to ask for a review to award Tier 2 (upper tier) within three years of the decision
  • award benefits under Tier 2 (upper tier)
  • defer the decision pending the submission of additional medical evidence (usually given where there are outstanding treatment options)
  • reject the application

What are my options if my application is not successful?

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 (IDR) 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.

My application to retire on health grounds has been rejected and I am in the process of appealing this decision. Can I claim my pension benefits under the Voluntary Early Retirement arrangement while awaiting the appeal outcome?

No. Once retirement benefits have been paid it is not possible to change the basis on which they were claimed.

My application to retire on health grounds was accepted under Tier 1 (lower tier). Can I claim the Tier 1 (lower tier) benefits and appeal at the same time?

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.

My application was accepted under Tier 1 (lower tier) with a review for Tier 2 (upper tier) within three years. If I am awarded Tier 2 (upper tier) on review, will this be backdated to my retirement date?

No. Unlike a successful appeal, if, on review, you are awarded Tier 2 (upper tier) benefits these are payable prospectively from the date this is granted.

Is there a time limit to claim my pension benefits once my application to retire on health grounds is accepted?

Yes. If you are contributing to the NHS pension scheme in England & Wales or Northern Ireland and are successful in applying for ill health retirement it is necessary to submit your application for payment of retirement benefits within 12 months of the decision date.

If you are contributing to the NHS Superannuation Scheme (Scotland), you will be required to specify an expected retirement date when submitting an application for ill health retirement. You are not required to retire before being advised whether your application has been successful.

I am paying towards an added year’s contract. How will this be affected if I retire on health grounds?

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.

I am paying towards an unreduced lump sum contract. How will this be affected if I retire on health grounds?

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.

I am paying towards an additional pension purchase contract. How will this be affected if I retire on health grounds?

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.

I have an Additional Voluntary Contribution (AVC) or Free Standing Additional Voluntary Contributions (FCAVC) contract. How will these be affected if I retire on health grounds?

You should approach your AVC/FCAVC 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.

Will retiring on ill health grounds prevent me from working again?

No. However, you are unable to return to exactly the same role from which you have retired. You can return to the same role in a reduced capacity (working fewer hours) or an alternative post. However, returning to work will have implications for your benefits and you will need to consider the restrictions listed below.

What are the implications for my Tier 1 (lower tier) ill health pension if I return to NHS employment?

If you retire under Tier 1 (lower 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 exceed the earnings margin, your NHS pension will be abated.

I have exceeded my earnings margin and my pension has been abated. I have now stopped working or reduced my earnings to within the earnings margin. Will my pension be restored to its previous level?

Yes. Your pension will be restored from the date that your post retirement NHS earnings fall below the earnings margin.

When will my pension stop being subject to abatement?

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

If you are a doctor with MHO status abatement will continue to apply until age 60, even if your normal pension age is 55.

Are there any restrictions if I am awarded Tier 1 (lower tier) and I return to non-NHS employment?

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

What are the return to work restrictions if I am awarded Tier 2 (upper tier)?

If you are awarded Tier 2 (upper tier), you may be at risk of losing your Tier 2 pension if you work in the NHS for more than 12 months, or if your earnings exceed the lower earnings limit for National Insurance contributions regardless of who you are employed by.

What are the restrictions if I am awarded Tier 2 (upper tier) and I return to NHS employment?

There are two restrictions which you need to consider:

  • You cannot work for more than 12 months in the NHS and keep your tier 2 ill health pension. For this purpose ‘work’ will include any unpaid honorary posts or unpaid work which may confer employment status.
  • Your gross earnings in any tax year cannot exceed the lower earnings limit (LEL) for primary class 1 National Insurance contributions for that tax year.

The LEL is set by HMRC and the value for any given tax year can be found in the following location on the HMRC website.

Additionally your pension may be subject to abatement.

What is the return to work restriction if I am awarded Tier 2 (upper tier) and I return to non-NHS employment?

If you return to non-NHS employment after retiring with a Tier 2 (upper tier) ill health pension, your gross earnings in any tax year cannot exceed the lower earnings limit (LEL) for primary class 1 National Insurance contributions for that tax year. This can include earnings from overseas employment.

How will my Tier 2 (upper tier) ill health pension be affected if these restrictions are exceeded?

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 annual LEL

How will the pensions agencies determine whether I have exceeded the LEL if I have a Tier 2 (upper tier) ill health pension?

At the end of each tax year, the pensions agencies will review the earnings and employments of all pensioners in receipt of Tier 2 (upper tier) ill health pensions. You are however 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.

Can I apply to restore my Tier 2 (upper tier) ill health pension after it has been replaced with Tier 1 (lower tier)?

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 gross earnings exceed the LEL, you can apply for the reinstatement of your Tier 2 (upper tier) pension if you fulfil all of the following criteria:

  • You must be under normal scheme pension age (NPA)You must stop working altogether
  • You must provide new medical evidence to show that your medical condition still satisfies the criteria necessary for a Tier 2 (upper tier) ill health pension. The new medical evidence must be submitted before the end of the 12 months starting from the date you exceeded the LEL. If you exceed the LEL while working in the NHS the new medical evidence must be submitted within 12 months of your re-employment.

All the conditions must be satisfied.

The decision to restore your pension to Tier 2 (upper tier) rests with the pensions agencies and your pension will be restored from the day after you terminate your re-employment.

If you successfully apply to restore your Tier 2 (upper tier) benefits and again return to work and exceed the restrictions you will not be able to apply to restore your Tier 2 (upper tier) benefit a second time.

I was awarded Tier 2 (upper tier) ill health retirement but have since returned to work and my Tier 2 pension was replaced by a Tier 1 (lower tier) pension. How will my potential dependants’ pension be calculated?

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) then your dependants’ 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 Lower Earnings Limit then the dependants’ benefits will be based on your Tier 1 (lower tier) pension.

If you were to die within 12 months of returning to NHS employment then your dependants’ benefits will be based on your 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 returning to NHS employment then the dependants’ benefits will be based on your Tier 1 (lower tier) pension.

I am planning to leave the UK permanently following my Tier 2 (upper tier) retirement. Will the return to work restrictions still apply?

Yes. The restrictions will apply until you reach your normal pension age.

Do the Tier 2 (upper tier) return to work restrictions cease to apply when I reach the scheme normal pension age?

No. The restrictions continue to apply regardless of age.

If you are in receipt of a substitute Tier 1 (lower tier) award as a result of returning to NHS employment for more than 12 months then this reduction is permanent.

If you are in receipt of a substitute Tier 1 (lower tier) award as a result of breaching the LEL and you are not in the position to apply to restore your Tier 2 (upper tier) pension then this reduction is permanent.

I am a deferred member and my application to retire on health grounds has been accepted. What are the restrictions if I return to work?

These will be the same as for members retiring with a Tier 1 (lower tier) ill health pension.

I retired on health grounds prior to 31 March 2008. How will my pension be affected if I return to work?

If you retired prior to 31 March 2008, the Tier 1 (lower tier) return to work restrictions will apply. However the whole of your pension can be abated if you exceed the earnings margin.

Your earnings margin is calculated using the following formula:

Pre-retirement income less your ill health pension = your earnings margin.

My application to retire on health grounds has been accepted. How do I claim my pension?

To claim your pension benefits, you must:

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

The required application forms can be obtained from the employer/PCO. The pensions agencies may take several weeks to process the retirement application forms and members may therefore wish to consider this when arranging to leave their NHS employment to avoid having a period of no pay.

Are there restrictions to the number of hours I can work following the 24 hour break?

No. The return to work restrictions mentioned in the previous questions must however be observed to avoid your pension being affected.

I am a secondary care doctor and I have more than one NHS pensionable employment. Do I need to retire and claim my pension benefits from all of them?

Yes. It is necessary to retire from all posts to claim the pension

I am a GP and I also have a secondary care post. Do I need to retire and claim my pension benefits from all of them?

Yes. It is necessary to retire from all posts to claim the pension.

I am a GP. Do I need to come off the medical performers list in order to access my NHS pension?

No. You are not required to come off the medical performers list to claim your pension benefits.

Can I rejoin the NHS pension scheme if I return to NHS employment following retirement on health grounds?

This will depend on which section of the scheme you were a member of on the date you retired, the type of ill health pension you are receiving and your age at the date of returning to employment. In all cases, members must be less than 75 years of age with less than 45 years calendar length service in the scheme and have not claimed terminal ill health lump sum.

I retired from the 1995 section under the pre-April 2008 ill health retirement arrangements. Can I rejoin the pension scheme?

If your application to retire on health grounds was received by the relevant pensions agency prior to 1 April 2008, your eligibility to rejoin the scheme would depend on your actual date of retirement and your age when you return to work.

  • Retirement date prior to 1 April 2008
    • Under age 50: You can rejoin the scheme
    • Age 50 and over: You cannot rejoin either section of the scheme.
  • Retirement date between 1 April 2008 and 30 September 2009
    • Under age 50: You can rejoin the 1995 section of the scheme straightway.
    • Age 50 and over: You can join the 2008 section of the scheme after a waiting period.

The waiting period is the longer of:

  • Two years from the date of your retirement or
  • The calendar length of the extra membership you received added to your retirement date.

For example:

If you retired on 30 April 2008 and you received three years extra calendar length membership and you returned to NHS employment on 30 June 2009, you would have been able to rejoin the 2008 section of the scheme on 1 May 2011.

If you only received one extra calendar length membership, you would have been able to rejoin the 2008 section of the scheme on 1 May 2010.

I applied for ill health retirement from the 1995 section after 1 April 2008 and I retired between 1 April 2008 and 30 September 2009. Can I rejoin the pension scheme?

Your eligibility to rejoin the scheme would depend on your age when you return to work and the tier you received.

  • Tier 1 ill health retirement
    • Under age 50: You can rejoin the 1995 section of the scheme straight away
    • Age 50 and over: You can rejoin the 2008 section of the scheme after two calendar years from the date of your retirement
  • Tier 2 ill health retirement
    • Under age 50: You can rejoin the 1995 section of the scheme after one year of returning to work provided you are still under 50 at that point.
    • Age 50 and over: You can rejoin the 2008 section of the scheme after a waiting period.

The waiting period is the longer of:

  • Two years from the date of your retirement or
  • One year from the date you returned to NHS employment.

For example:

If you retired on 30 April 2009 and you returned to NHS employment on 1 August 2009, you would have been able to rejoin the 2008 section of the scheme on 1 May 2011.

If you returned to work on 1 August 2011, you would have been able to rejoin the 2008 section on 2 August 2012.

I retired from the 1995 section after 1 October 2009. Can I rejoin the pension scheme?

This depends on the type of ill health pension you are receiving and your age at the date of returning to employment.

  • 1995 section members who retire with tier 1 pension
    • Under age 50: You can rejoin the 1995 section of the scheme straight away
    • Age 50 and over: You cannot rejoin the scheme.
  • 1995 section members who retire with tier 2 pension
    • Under age 50: You can rejoin the 1995 section of the scheme after one year of returning to employment provided you are still under 50 on that date
    • Age 50 and over: You cannot rejoin the scheme.

I have retired from the 2008 section. Can I rejoin the pension scheme?

This depends on the type of ill health pension you are receiving.

  • Tier 1 ill health retirement
    • You can re-join the 2008 Section straight away.
  • Tier 2 ill health retirement
    • You can rejoin after a period of one year beginning with the first day you return to employment.

Will my ill health pension be subject to the Annual Allowance limit in the year I retire?

Yes, unless you meet the HMRC severe ill health conditions. If you who retire under Tier 2 (upper tier) ill health retirement you are more likely to exceed the Annual Allowance limit because of the membership enhancement received.

Further information on the severe ill health test is available on the HMRC website

Will my ill health pension be indexed linked?

Yes. Your ill health pension is fully index-linked from the date of payment, for as long as it is in payment.