Item Welcome to the NHS Business Services Authority Knowledge Base, the place to ask us anything you need to know

Document If I am awarded a tier 2 ill health pension will this be tested against the Annual Allowance?

Yes. Because the tier 2 ill health pension benefits you receive will increase your pension growth it must be tested against the Annual Allowance.
 
HM Revenue & Customs (HMRC) has confirmed that if you meet their Serious Ill Health Condition (SIHC) test then you will have no growth for that tax year.
 
To meet the SIHC test you have to be unlikely do any type of gainful work in any capacity, other than in an insignificant way, before state pension age (SPA). Our medical advisers will confirm whether or not you meet the SIHC test.
 
If the growth in your NHS Pension Scheme benefits (including Tier 2 ill health benefits) is more than the Annual Allowance and you meet the SIHC test, you will be exempt from any Annual Allowance charge.

If the medical advisers confirm you do not meet the SIHC test and the growth in your NHS benefits is more than the Annual Allowance then you may be liable to an Annual Allowance charge and we will provide you with an Annual Allowance pension savings statement.
Fields
Description:
tier 2 ill health, tested against aa, tested against annual allowance
See also...

Need more help?

If this doesn't answer your question please contact us directly or search again. Search Again

Rate this answer