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Medically unfit for work

My husband has been advised by his gp that he should give up his current job due to ill health. He had been off work since 27th Sept 2010 with a rotator cuff injury to his shoulder and also suffers from rheumatoid arthritis. We would like some help on knowing what to do next, he is still receiving ssp from his employer and has a pension which is frozen as the company stopped this a couple of years ago, so he now had a stakeholder pension. Any help would be great, have rung the citizens advice they just said look on the internet and also spoke to the pensions advisory service who said his pension might be included as income if any benefit he gets is means tested. Never claimed anything before so am at a complete loss. Thanks for any help.


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I an sorry to hear of your husband's health issues. Without further information, it is difficult to advise. His age is particularly critical. OPAS are correct in that any means-tested benefits would be reduced by any income or lump sums. However, deferred pensions would be ignored. You say that the company pension stopped a couple of years ago. Was that a Final Salary pension? If so, there may be some special provisions for retirement in Ill-Health, such as reduced or no reduction for early payment. He needs to check this out with the company. He might have to retire from sick leave in order to qualify. Once it is known what his entitlement to pension is, his entitlement to benefits can be checked. Do this on the basis of him taking the pension and on him not. If there is an Ill-Health clause, he could get benefits checked out on 3 bases because he could also get it on the basis of taking the company pension now and the Personal Pension at State Pension Date, whenever that will be. He should also get a State Pension forecast. Mike

Thsnk you for you answer to my question, sorry but I started a new thread to give you more information as I have not used this site much before. I got firmly told off by another user and told how to reply etc. My husband has been with this company since 1971 he left for a couple of years then went back to work for them in 1979. He will be 55 on the 13 Feb and his company pension which is on hold is a final salary related pension. The company are also looking for redundancy's so he might be able to get this rather than leave on medical grounds. I am not sure which is best, I have spoken to the pensions office and they have given me the details to get a pension forecast so am awaiting an activation code. Thank you again for your help Regards Chris

Chris 55 is the earliest age at which occupational pensions can be taken. In your husband's case that means the Company Pension and the Personal Pension. However, Ill-Health pensions can be taken before then. He really does have a complicated set of options, so he needs to get all the information together and see which is best. With over 30 years service, the redundancy payment is likely to be substantial. If this is over £30,000 the tax bill could be cut by paying the extra into the Personal Pension. However, the £30,000 could severely limit entitlement to state benefits. More could be put into the Pension to avoid that or your mortgage paid off, if appropriate, Ill-Health options under Final Salary schemes can be quite generous. It could mean Early retirement with no reductions for early payment which would be a big improvement 10 years early (assuming 65 was the Normal Retirement Age under the scheme). State benefits are not generous but do pay for the minmum. Pension Credit is payable from the Female State Pension Age, whatever that will be at the time. Does your husband have 30 years of contributions to get the full Basic State Pension? If not then he needs to get enough credits to make up the difference. Registering for benefits should do that even if he does get anything. Unfortunately, this is not a suitable place to go into specific details and comparison of quotations. Once you have all the information, you could try OPAS again. Better still would be your Citizens Advice Bureau, especially if they have a pensions expert on their panel of volunteers. We can help here if you have specific questions. Good luck. Mike

Mike Thank you for the information, it does make a bit more sense now, but as you say a complicated set of options. I am going to read through the pension information tonight and get all the paper work together before contacting CAB & OPAS again. I am sure he has over 30 years of contributions but will check on the pension forecast site when i get the activation details. Will let you know how we get on so thanks again. Chris

Dear Mike Sorry to bother you again but I now have more details on my husbands pension scheme. it was a final salary pension but due to financial implications the company decided to stop future pension build up from 31st March 2009, with active members of the scheme becoming entitled to a deferred pension. This pension scheme was with Scottish Widows. My husband joined the scheme on 13/08/1979, this is when he rejoined the company after leaving for two years. He also has a stakeholder company pension but this only started in May 2009 so really not sure what to do with this. Thanks very much for your time, I appreciate it. Chris

If they wound up the scheme then there wouldn't be an ill-health option (apart from the ability to take an even more reduced pension from before 55). He would have had paperwork to notify that. If they just stopped further accrual and issued a statement of benefits, all options in the scheme would remain open. Many schemes remained in the second category because the schemes didn't have enough reserves to pay for all the entitlements. The company would have had to find the extra which was usually beyond there resources in a single year. The Stakeholder Pension is just an added complication, but it can be used as a tax haven and protection from means testing. I presume that the benefits from that would not be very high yet. Mike

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