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Ill Health Retirement (IHR) referrals

How the process works, how referrals are made to Occupational Health Service and how a decision is made for Ill Health Retirement.

Ill Health Retirement tiers

This applies to active members of the Local Government Pension Scheme only. (There is a separate process for early payment of deferred pensions).

We aims to support the health and well-being of its employees and will support you to remain in work wherever possible; however, some of you may no longer be fit to continue working as a result of ill health. Where this may be the case, your manager will follow an Ill Health Retirement (IHR) process or you may ask to be considered for Ill Health Retirement.

This guidance has been taken from the HR document: IHR What to Expect (DOC 240KB) 

Tier 1

You are unlikely to be capable of undertaking any gainful employment before reaching your normal pension age.

Ill Health benefits are based on your pension already built up at the date of leaving plus your pension is increased up to your normal pension age (NPA). This means that your pension is calculated as though you had continued to work until your NPA. This pension is paid for life.

(This generally applies to circumstances where the employee is terminally ill or has a serious medical condition and significantly affects the employee’s day-to-day functions).

Tier 2

  1. You do not meet the criteria for Tier 1.
  2. You are unlikely to be capable of undertaking any gainful employment within 3 years; and
  3. You are likely to be capable of undertaking gainful employment before your normal pension age.

Ill Health benefits are based on your pension already built up at the date of leaving plus an additional period of membership amounting to 25% of the membership that could have been accrued had you continued in employment until your normal pension age (NPA). . This pension is paid for life.

(This generally applies to circumstances where the employee has a condition, which may take some time to improve, or the treatment options are lengthy and / or recovery prolonged).   

Tier 3

You are likely to be capable of undertaking gainful employment within three years.

Ill Health benefits are based on your pension already built up at the date of leaving. There is no enhancement of your pension. Payments of benefits are stopped if you obtain gainful employment or after a maximum of 3 years. A Tier 3 pension is also subject to an 18-month review. Tier 3 pension payments will cease at the end of the 3 years or earlier if you obtain gainful employment or become capable of gainful employment provided you have not reached your NPA. In some cases, a Tier 3 pension may be uplifted to a Tier 2 pension.

(This generally applies to circumstances where the employee has a condition which means they are permanently unfit for their current role and also unable to work in an alternative role at the moment, but there are still treatment options to explore and/or they may recover sufficiently within 3 years).   

The Local Government Pension Scheme-Ill Health Retirement Regulations (LGPS)

The LGPS has criteria which must be met before IHR can be approved. These are:

  1. You must be an active member (including paying into the LGPS) immediately prior to the termination of your employment.
  2. You must have paid into the LGPS for at least 2 years.
  3. Your employment is terminated by the employer.
  4. Your employment is terminated on the grounds of ill health or infirmity of mind or body.
  5. Your termination takes effect before your normal pension age.
  6. You are permanently incapable of discharging efficiently the duties of your employment as a result of ill health or infirmity of mind and body.
  7. You are not immediately capable of undertaking any ‘gainful employment’ as a result of ill health or infirmity of mind and body.

‘Gainful employment’ means paid employment for not less than 30 hours in each week for a period of not less than 12 months. Non-medical factors such as your knowledge and skills to undertake certain types of work or the general availability of work in a particular area are not relevant. Also, the assessment would be made on the basis of whether or not you would be capable of undertaking gainful employment not whether or not you would actually want to or someone would employ you.