The decision on if you can return to work if you’re receiving an ill health pension depends on your tier.
Tier 1
If you’re receiving a Tier 1 ill health pension, you can return to non-NHS work.
If you want to return to work in the NHS before your Normal Pension Age (NPA) and your earnings exceed a certain limit, some of your pension will be subject to abatement.
If you decide to complete unpaid voluntary work, your scheme benefits will not be affected. You must declare that you’re doing voluntary work on any forms you receive from NHS Pensions.
This includes if you have a 1995 Section ill health pension awarded under the pre 1 April 2008 arrangements.
Tier 2
You must complete an Annual Declaration of Earnings form to check if you can continue receiving a Tier 2 ill health pension.
Your gross earnings must be below the Lower Earnings Limit (LEL) for primary class 1 National Insurance contributions for any tax year.
If your earnings are higher than the LEL, your Tier 2 ill health pension will change to a Tier 1 ill health pension. If this happens, your original lump sum will not be affected.
To move back to a Tier 2 pension, within one year of exceeding the LEL you must:
- be under your NPA
- have stopped working
- provide supporting medical evidence to show that you meet the Tier 2 condition.
You can only regain your Tier 2 ill health pension once after being moved to a Tier 1 ill health pension.
Continuing to work in the NHS
You cannot work for more than 12 months in the NHS and keep your Tier 2 ill health pension. The start of the 12-month period is the first day you start work in the NHS after your retirement. This includes bank work.
If you continue to work in the NHS after this 12-month period, your Tier 2 ill health pension will be changed to a Tier 1 ill health pension.
You cannot move back to a Tier 2 ill health pension once you’ve worked more than 12 months in the NHS. You would also be subject to abatement.
Continuing to work outside of the NHS
Any voluntary or unpaid work, will not affect your scheme benefits. You must declare that you’re doing voluntary work on any forms you receive from NHS Pensions.
Abatement restrictions apply if you’re taking your Tier 2 benefits as an ill health pension. If you’ve exchanged your ill health benefits for a one-off lump sum due to terminal illness, abatement will not apply. This includes if your condition improves and you return to work.
Read more information on ill health retirement and returning to work on our website.