Third Tier Ill Health Retirement

This factsheet contains information for members of the LGPS who have been retired on grounds of ill health under Tier 3 since 1 April 2014.

In accordance with the LGPS Regulations 2013 to qualify for any ill health pension if your employment is terminated due to illness you need to satisfy the following conditions:

• Have been a member of the Scheme for the qualifying period of at least 2 years
• Be permanently incapable of carrying out the duties that you are employed to do until your Normal Pension Age
• Be immediately incapable of undertaking gainful employment (see definition below)

Your employer will make their decision whether you satisfy the criteria based on the facts of the case, including the opinion of an Independent Registered Medical Practitioner (IRMP) appointed by them.

If you have been granted Tier 3 ill health the medical assessment will also have determined that you are likely to be capable of undertaking gainful employment within 3 years of leaving employment, or before normal pension Age if earlier.

3rd Tier Pensions Payment

You will receive a pension of the benefits accrued to the date of leaving employment without any ill health enhancement or reduction for early payment. The pension is payable from the day after your last day of employment for a maximum period of 3 years, with a review being held at 18 months.

If you obtain gainful employment or are assessed as fit to obtain gainful employment, before the expiry of 3 years, your pension will be suspended from the date you commence such employment or are deemed fit to undertake gainful employment. If an overpayment has occurred, these payments will need to be recovered and paid back into the pension fund.

Details regarding the re-instatement of your pension are given to you at the time it is suspended.

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. The gainful employment test is the capability and fitness to obtain this work and not the requirement to have obtained any such employment. Any previous work pattern is not a factor which is considered when making the assessment.

This benefit is an interim pension only, until you return to other work and is not payable if gainful employment is found. You are required to inform your former employer if you have found work and payments will stop if the employer considers that this is gainful employment.

If you do enter any employment the information you must give your former employer is the number of hours a week that you are working and the terms of the contract for your new role.

If your employer decides that you have obtained gainful employment they will notify the pension team that payments must be stopped.

The employer’s 18 month review

Your former employer is required under the regulations to check your employment and health status where payments have continued for 18 months.

Payments will stop if you have obtained gainful employment. If it is found that you are not in gainful employment at the review, there is a requirement for your former employer to check the latest medical position to determine whether you are capable of gainful employment.

Your pension will either stop or continue for the rest of the 3 year period.

If it is found that you have obtained gainful employment before the 18 month review and your pension has continued to be paid, you will be required to repay any overpayment of pension.

Possible uplift to second Tier

If your medical condition deteriorates a further medical consideration would be needed. In some cases, your employer may then be able to award an enhanced 2nd tier benefit if the medical assessment justifies this and this would then be paid for the rest of your life. You may request this review during the payment of your 3rd  tier pension and up to 3 years after the pension ceases to be paid.

This uplift could be considered at the 18 month review, or the employer can arrange a review at any other time throughout the three year period if there is new medical evidence.

The regulations are clear that it is the initial condition only which resulted in an ill health 3rd tier payment that is considered when assessing a possible uplift to a 2nd tier pension.

It is not possible for a 3rd  tier pensioner to be uplifted to a Tier 1 benefits.

It is important to note that if you have previously been granted an ill health pension, prior to the one being considered for the uplift, any enhancement may be capped.

Further information on ill health retirement can be found in the full and brief guides available on the pension website. 

Disclaimer

Please note: this is intended as a broad guide to your benefits in the local Government Pension Scheme. It does not seek to cater for every different circumstance and no decisions should be taken based on its contents. You are strongly advised to consult our website and/or contact us for more detailed and individual information before taking any action in  relation to your pension. Nothing on this page overrides the regulations which govern the LGPS and which are subject to amendment from time to time.