There is nothing more shocking than finding out that you are incapable of continuing work in the classroom. You are a teacher and always wanted to be a teacher. Therefore, to be told that you are no longer well enough to teach, or an injury makes you incapable of teaching, can be extremely shocking. However, you are then faced with worries over finances. Here we look at how you can apply for ill-health retirement to ease these monetary burdens.
Qualifying for benefits
At any point in your career, you can apply for your ill-health retirement benefits. To apply for ill-health retirement, you need to be under your Normal Pension Age (NPA), and you have completed at least two years of service. However, if you began your service before 1988, then you must have two years’ qualifying service after 5th April 1988 or five years at any time.
The qualifying criteria in depth
Depending on the severity of the illness or injury and whether you in-service or out-of-service will impact whether you are part of the Tier 1 group or Tier 2. Your incapacity must be considered permanent or at least expected to last up to your NPA.
If you are judged to be within Tier 1, this means your ill-health pension will be based on your accrued benefits. This will be payable if you are assessed as being incapacitated and likely to be so permanently. You are judged unlikely to return to the classroom, but you might be able to do other work. If you are judged to be Tier 2, this offers an enhancement. You will meet the total incapacity condition, as you are permanently judged to be unable to teach and unable to enter into any other form of employment.
What if I do not qualify?
If you haven’t qualified for retirement benefits, due to short service, you can apply for Short Service Serious Ill-health Grants. You could benefit if you are under 75 and have not qualified for your pension benefits in the scheme and you have a shortened life expectancy. Therefore, if you have 1 to 2 years of qualifying service and a life expectancy of fewer than 12 months, you could receive a one-off payment. You must apply for this within six months of leaving pensionable service.
This grant will be calculated differently if you are in the Final Salary arrangement than if in the Career Average arrangement. If you are a member of the Final Salary scheme, then your grant will be calculated as a 1/12th o your average salary multiplied by the length of your reckonable service. This will count the whole years and fractions of years. In the Career Average scheme, you will receive two months of your final pensionable earnings or the total amount of your contributions with a 3% interest – whichever is highest. This grant is tax-free.
For those below one year of pensionable service, you can apply for a repayment of your contributions. You may also be entitled to Incapacity Benefit, which is available to anyone who is unable to work and has contributed enough National Insurance Contributions.
The content in this article was correct on 12th September 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.