Smart Clinic

Accessing your benefits on the grounds of ill health (ill health retirement)

A guide for members contributing to a local government pension scheme

This guide describes the rules surrounding ill health pensions and the procedure involved if you think you may meet the conditions for retiring early on the grounds of ill health. This information is only relevant if you are an employee currently paying into the local government pension scheme.

We’ve kept jargon to a minimum, but there are certain terms you’ll need to be familiar with, so we have explained these in a glossary.

The law

This guide is based on the Local Government Pension Scheme Regulations (2013), and is correct at the time of publishing (June 2022). The sections specific to ill-health retirements are regulations 35, 36 and 39, as well as regulation 12 of the Local Government Penson Scheme (Transitional Provisions, Savings and Amendment) (2014).

The law is complicated, and this guide will only provide an overview of what you need to know, not a comprehensive explanation. If you dispute any decisions, you may wish to seek legal advice as it is the appropriate legislation that will be used to reach a decision.

Eligibility for ill health retirement

In the Local Government Pension Scheme (LGPS) you can apply to your employer by asking them to pay your pension benefits early on health grounds. This can be requested at any age, but to be considered you must be eligible for an ill health pension and meet certain criteria. It is important to understand these criteria before making your application.

To be eligible for an ill health pension under the LGPS you must:

  • Be under normal pension age. For current scheme benefits this is 65 years or your State pension age if later. You can find your state pension age at: https://www.gov.uk/state-pension-age
  • Be dismissed from employment by your employer due to your ill health
  • Fulfil the ‘two-year requirement’. This means at the date you leave employment you must have paid in for two years or more. There may be exceptions if you have brought in a transfer of any type.
  • Meet the LGPS criteria for retiring on ill health as set out below.

Criteria and consultation

Your employer will need to refer you to Smart Clinic to consult with a specially qualified doctor. Our doctor will be independent with no prior involvement in your case, and will assess you against two main conditions. Both must be satisfied for you to be eligible.

  1. You are permanently incapable of doing your current job. This means you have a medical condition which will, on balance of probabilities, prevent you from carrying out your job until normal pension age. 
  2. You are not immediately capable of carrying out any type of gainful employment. Gainful employment is defined as paid employment with any organisation, of at least 30 hours a week for a period of at least 12 months.

The ‘balance of probabilities’ is a key term used to define the likelihood of recovery before your normal pension age. It means that it would need to be more likely than not (in other words greater than 50% probability) that you would not recover sufficiently before your retirement age to a point where you can complete your job role.

If you are assessed as fulfilling these criteria, the doctor will then give an opinion on if and when you are likely to be capably of returning to any gainful employment in the future. You will then be classed as a tier 1, 2 or 3 ill-health case.

If you are assessed as not fulfilling the criteria this means that you cannot retire on ill-health grounds. An example of this would be if you have a physically demanding job that you are permanently unable to do, but you would be fit enough to carry out a less demanding job that would prevent you retiring on ill-health grounds.

Awaiting or undergoing treatment

If you are waiting for treatment, or are currently undergoing treatment for a health condition, this could mean that you would be capable of employment in the future if the treatment is successful or effective. This is particularly relevant for health conditions that can commonly be treated, or the effects can be managed with treatment.

In such instances the doctor will assess what the likelihood of you being able to work will be once the treatment has been concluded, irrespective of whether you choose to accept this treatment or not.

There can be uncertainty around this, so it is recommended that your employer waits until you have completed and recovered from the treatment before considering you for ill-health retirement.

Dismissal vs ill-health retirement

The criteria used in the LGPS to consider ill-health retirement is not the same criteria that your employer will use to determine whether they should dismiss you based on medical grounds.

You may be dismissed from employment, but not be eligible for ill-health retirement. For example if your health condition has caused an unacceptable level of sickness absence, but there is a likelihood that you would be able to work again in such a role in the future, you would not meet the criteria for ill-health retirement.

Considerations such as length of service or your financial position have no effect on deciding whether you are eligible to retire on ill-health grounds.

Being referred to an approved doctor

You will be referred to an approved doctor at the Smart Clinic, sometimes called an independent registered medical practitioner. This is necessary because your employer is not a medical expert, and the LGPS rules dictate that the opinion of an approved doctor should be sought. The approved doctor would typically be registered with the General Medical Council, and also have a further qualification in occupational health.

Your employer will need to submit a partially completed ill-health medical certificate to the doctor, who will complete this with further information on whether you meet the ill-health retirement criteria. The doctor may need access to further medical reports as part of the assessment. The referral from your employer will also need to include details about you and your job role, along with any previous copies of medical reports that they have obtained about you.

The referral may also include any changes to your job role that have been made as a result of ill-health, such as reduced hours, receiving less pay or any workplace adjustments.

The doctor’s assessment

The doctor will use all the information submitted as part of the referral, including previous medical reports and job descriptions as part of their assessment. Using their medical expertise and knowledge around the LGPS ill-health retirement criteria they will form an opinion on whether you are eligible.

This assessment can take many forms, it may be a face-to-face appointment, video appointment, telephone appointment or paper case review depending on your circumstances. This will be communicated with you by the medical team.

How you can help

It is in your interest to help the doctor fully understand your medical condition and the impact it may have, so you should be as involved and cooperative as possible with gathering the information relevant to your case. There are things that you can do to help and speed up the process. These include:

  • Providing your consent for the doctor to write to your general practitioner or any other medical professionals involved in your care. You do not have to provide your consent for this, but by doing so promptly it allows the doctor to obtain more medical evidence about your condition.
  • Providing access to any medical letters or reports that you have. In some instances you will already have copies of the necessary information. If you produce these early on, this may mean that the doctor doesn’t need to obtain any further evidence, saving the cost and significant delay involved in gathering a response from your medical care team.
  • Making yourself available for an appointment as required. If the doctor needs an appointment with you, you will need to attend this. Often this can be done remotely, but may need to be by video. You should be proactive about accommodating this, ensuring that you can be available for the appointment in plenty of time.
  • When describing your case to the doctor and your employer, try to think about how you expect your medical condition to affect you until your normal pension age, and how it may affect your ability to work in the future (not just your current job role). Requesting information about this from your medical care team and referencing this will help.

After the assessment

The doctor will form an opinion and will complete a medical certificate, which may also have an accompanying report. With your permission this will be returned to your employer, who will then use this to decide whether or not to release your pension benefits early, typically following the doctor’s recommendation.

On occasion there may be conflicting opinions from the medical professionals, and your employer will need to decide which advice to follow. Typically they should follow the advice of the doctor who has completed the ill-health retirement assessment.

Your employer will need to take note of the Statutory Guidance issued by the Department for Communities and Local Government and any non-medical factors that will affect your ability to carry out employment.

Your employer will write to you with a decision and will notify your pension fund. If your application has been approved they will also confirm whether you are classed as tier 1, 2 or 3.

If you do not agree with the outcome you can appeal the decision, and the letter from your employer will detail how to do this.

Appealing the decision

You have a right to challenge your employer’s decision if you disagree with it.

If the decision is that you do not qualify for an ill-health pension, your appeal against the decision would need to demonstrate that a suitable and correct process has not been followed, or that there is new medical evidence to consider which has not previously been looked at by the doctor. You would also need to have been dismissed on ill health grounds.

If you have been approved for ill-health retirement but disagree with the tier, you would need to demonstrate that there is new medical evidence to consider which has not previously been looked at by the doctor.

To appeal the decision there are two stages:

  • Stage 1 – refer the matter to the specified person at your employer. This should be done in writing and within six months of the date of the decision letter. Your employer should respond within two months of your appeal letter.
  • Stage 2 – refer the matter to your pension fund. This should be once you have attempted stage 1, and had an unsatisfactory decision, no decision, or a failure to respond within the specified timeframes. This should be done within six months of the Stage 1 decision (if applicable) and you should supply as much information to your pension fund in writing as possible.

The 3 ill-health tiers

Tier 1: You are unlikely to be capable of carrying out gainful employment before your normal pension age.

Tier 2: You’re unlikely to be capable of carrying out any gainful employment within three years of leaving, but it is likely you will be capable of doing so before your normal pension age.

Tier 3: You’re likely to be capable of carrying out gainful employment within three years of leaving, or before your normal pension age if sooner.

How long does it take?

This is difficult to answer because each case is different, and reliant on external factors. Typically the Smart Clinic will complete their actions within two weeks. However it may be necessary to write to your general practitioner or other medical specialist, and in such instances it will depend on your response time. On average this is around 6 weeks but can be dramatically longer or shorter on occasion. For this reason if you have medical reports already please submit them, as this could speed up the process significantly.

Smart Clinic

We are a specialist occupational health provider and experts in handling the medical aspects of an ill-health retirement. For more information, or to refer an ill health retirement case to us, please get in touch.