If you have a poor health condition that makes it difficult for you to work then you may be able to claim your pension before the age of 55. You will retire early in this condition.
However, to qualify for ill health retirement you have to meet a few strict criteria. Most importantly, you are required to take advice from independent financial advisors to ensure that you have plenty of money to support you for the rest of your retirement life.
So, if you are looking for what medical conditions qualify for ill health retirement then this article is for you.
Here, in this article, we are going to provide what ill health retirement, what conditions qualify for ill health retirement, whether can I claim my state pension early because of ill health?
What is Ill Health retirement?
Ill health retirement refers to the term as being medically retired. When you are allowed to draw your pension before the age of 55 or before the ordinary date of your pension scheme because of sickness, disability, or other medical conditions. Basically, it is the condition when you are not able to perform the tasks of your normal job.
Also, it is when you are not able to earn your normal income. Your pension scheme might also have some pre-set criteria as to what medical conditions you can draw your pension early.
You must remember that you have the right to ask your employer to consider reasonable adjustments so that you are disadvantaged at your work because of your health condition.
If these adjustments go on the path to make it possible for you you can continue working. So, you may not require early retirement.
But, there are various conditions where making this adjustment is not possible. In that case, you need to think about drawing your pension earlier than anticipated.
What conditions qualify for Ill Health Retirement?
There are various schemes of retirement in the UK that come with different rules and criteria for drawing a pension earlier. In general, you will need to:
- Establish that you are permanently incapable of continuing your work. It can be because of either physical or mental condition.
- Provide some documents that clarify that there are no certain treatments that can enable you to do your work further before your normal pension age. This may apply to your current role or any other employment. Pension schemes will also consider whether you are a part-time or full-time employee. Also, you can be suggested to work as a part-time employee as a solution.
- They will ask you to apply when you will be at pensionable employment to have the maximum benefits.
Schemes put greater emphasis on rehabilitation and reasonable adjustments to get you to return on your current job.
If your employer is also interested in facilitating your return to your present job role, then your application has a lesser chance of getting approved.
However, if your employer offers you a different job role and lower working hours still you can reapply for ill-health retirement from your present position.
Can I claim my State Pension early because of ill health?
It is not possible to draw your pension before your state pension age. Even if you are suffering from ill health or you have a shorter life expectancy, you will not be eligible to draw your pension. However, you can be able to receive help with your day-to-day living costs.
If you have a severe physical or mental health problem you can check whether you are entitled to state benefits such as Employment and Support Allowance, Statutory Sick Pay, or Universal credit. Each of the benefits has its own eligibility criteria and you will require the following documents to apply:
- Income/Pay slip, including your spouse
- Savings
- Council Tax bills
- Existing pensions and benefits including anyone who is living with you
- Outgoings that include rent, childcare payments, mortgage, etc.
What Benefits can I claim if I retire Because of Ill Health?
depending on your pension scheme, you can be entitled to draw your pension early, or even you can get higher payments and tax credits. If you have a workplace or personal pension then you can claim your full amount of pension tax-free while you meet the necessary criteria.
However, for a State pension scheme, you must reach at the age of your state pension age before receiving any benefits.
If you have little or no pension savings, then you can discover other state benefits such as Council Tax Reduction, Employment and Support Allowance that will help you to support your living costs.
What is the Process of Drawing my pension early because of ill health?
The procedure of obtaining your pension earlier due to ill health differs according to schemes. You need to ask your provider about what they ask from you. It is a good idea to ask for support from an independent financial adviser.
They will provide you with all the guidance through the process. The financial adviser ensures you know all your rights and the necessary steps.
Generally, these steps include:
- 1. You need to complete a copy of the ill health retirement application form from your pension scheme.
- 2. You need to have medical proof that conveys your medical condition. This may be a letter or a signature from a health practitioner on the form in the required field.
- 3. You need to get approval from your employer that your ill health or disability is the only reason for your early retirement.
You can submit your application form either your own or someone on your behalf can do this job. Once your application form is submitted, your employer either awards the benefits, can ask for some other evidence, or may cancel your application.
the scheme also requires you to provide all the details of why they have cancelled your application. If you don’t agree with their reasons for cancellation then you can put in a request.
If you go forward to appeal them again then you must do so within the allocated timeframe. also, you may be required to provide a piece of fresh medical evidence.
FAQ:
Can I get an ill-health retirement from a defined benefit scheme?
Ans: If you are suffering from permanent ill health, Most of the defined benefit schemes are likely to pay you the pension earlier. That means your pension will take less time to grow.
So, you will receive a reduced amount of your original pension. You can check your scheme with the specific terms and conditions applied.
Can I get an ill-health pension from a defined contribution scheme?
Ans: In the event of permanent ill health, defined contribution schemes are likely to pay your pension earlier irrespective of your age.
This scheme may offer you either to take the benefits as a pension, or a tax-free lump sum. You can choose any option according to your circumstances. When you are over 75 then your pension will be taxed in the normal way.
Can I apply for an enhanced annuity?
Ans: People who are suffering from qualifying conditions can make an application for an enhanced annuity.
This will pay you a higher rate of guaranteed income since your life expectancy is lower than the of normal people. Because of various health issues or disabilities, you may qualify to receive an enhanced annuity. To do so, you can seek advice from a professional financial adviser.
Conclusion:
This guide has explained all the details of early retirement due to ill health. This guide also includes the criteria for ill health retirement, how to apply, and some other state benefits that you can be eligible for.
Hope, this guide will get you covered in every possible way. If you are planning to apply for the benefits of ill health retirement then you can follow these above-mentioned instructions. Additionally, if possible you can take advice from an independent financial adviser.
