Pensions

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Death after leaving NHS FAQs

This FAQ relates to individuals who have left NHS pensionable service with deferred benefits. 

What is payable to my dependants if I die with a deferred NHS pension?
How much lump sum death gratuity is payable if I die with a deferred NHS pension?
What is a qualifying partner?
Who can receive the lump sum death gratuity?
Is the lump sum taxed?
What is payable to my qualifying partner if I die within 12 months of leaving NHS pensionable service?
What is payable to my qualifying partner if I die more than 12 months after leaving NHS pensionable service?
What is payable if I marry after I leave NHS pensionable service?
Will my children receive benefits if I die after leaving NHS pensionable service?
What is payable to my child or children if I die within 12 months of leaving NHS pensionable service?
What is payable to my child/children if I die more than 12 months after leaving NHS pensionable service? 

What is payable to my dependants if I die with a deferred NHS pension?

A lump sum death gratuity and a qualifying partner and/or child allowance is payable.

 

How much lump sum death gratuity is payable if I die with a deferred NHS pension?

A lump sum of three times your deferred pension is payable for members of the 1995 section.

A lump sum of 2.25 your deferred pension is payable for members of the 2008 section.

A lump sum of 2.025 your deferred pension is payable for members of the 2015 CARE scheme.

If you transitioned to the 2015 CARE scheme from either the 1995/2008 sections and then left service the lump sum will only be based on your 2015 CARE scheme accrual.

 

What is a qualifying partner?

A qualifying partner can be your spouse, registered civil partner or a nominated partner (you must nominate your partner and be free to marry or enter into a registered civil partnership for your nomination to be valid).

If you ceased NHS pensionable service before 1 April 2008 a qualifying partner can only be your spouse or registered civil partner.  Benefits for unmarried nominated partners are only available for those with pensionable service after 1 April 2008.

 

Who can receive the lump sum death gratuity?

The lump sum can be paid directly to your qualifying partner. 

If you do not want the payment to go to your qualifying partner you can nominate another person(s) or institution to receive the payment.  A form, available from the relevant pensions agencies at the following links, will need to be completed:

The lump sum will be paid to the nominees automatically without waiting for Grant of Probate or Letters of Administration.

If no election is made a payment will still be due and the money will be paid into your estate and will potentially be subject to Inheritance Tax.

 

Is the lump sum taxed?

The lump sum death gratuity is not subject to income tax.

If the payment is made to your spouse or civil partner it is free of inheritance tax. 

If you are single and have nominated an unmarried qualifying partner the sum could potentially be liable for inheritance tax. 

However, in all circumstances if the payment causes you to exceed the Lifetime Allowance (LTA) then the excess will be subject to a tax charge.  Please refer to the Lifetime Allowance FAQ for more information on the charges payable.

Whenever a lump sum is payable, the relevant pensions agency will inform your legal representative of the amount and percentage of the standard Lifetime Allowance represented by the payment.  Your legal representative is responsible for notifying this figure to the HMRC if there has been a LTA charge.

Your beneficiary is legally responsible for paying any LTA charge that may be due.

The death lump sum must be claimed and paid within 2 years of your death otherwise it becomes an “unauthorised” payment under HMRC rules and is subject to 40% tax.

 

What is payable to my qualifying partner if I die within 12 months of leaving NHS pensionable service?

Whilst no short-term pension is payable, your qualifying partner will receive a pension from the date of your death.

If you left NHS pensionable service before 1 April 2008 benefits will only be payable to a spouse/registered civil partner as nominated unmarried partner benefits only became available, from 1 April 2008, to those with pensionable service after this date and who made such a nomination.  

The method used to calculate benefits depends on which section of the NHS pension scheme you were previously a member of:

1995 section of the NHS pension scheme:

  • benefits will be based on half of the Tier 2 (upper tier) ill health retirement pension that you would have received had you retired on health grounds as at the date of death.  A Tier 2 (upper tier) pension is usually enhanced by 2/3 of your prospective service, until your normal pension age (60), and means that the pension will be based on an enhanced amount.

A widower or surviving registered civil partner/unmarried partner (if your service continued beyond 1 April 2008 and a nomination was made) will receive the same proportion of benefits as detailed above but based only on service since 6 April 1988.

2008 section of the NHS pension scheme:

  • benefits will be based on 37.5% (secondary care doctors) or 70/187th (primary care doctors) of the Tier 2 (upper tier) ill health retirement pension that you would have received had you retired on health grounds as at the date of death. A Tier 2 (upper tier) pension is usually enhanced by 2/3 of your prospective service, until your normal retirement age (65), and means that the pension will be based on an enhanced amount.

In the 2008 section qualifying partner benefits are based on all membership. There is no restriction in relation to service accrued before 6 April 1988.

2015 CARE scheme:

  • benefits will be based on 33.75% of the Tier 2 (upper tier) ill health retirement pension that you would have received had you retired on health grounds as at the date of death. A Tier 2 (upper tier) pension is usually enhanced by 1/2 of your prospective service, until your State Pension Age, and means that the pension will be based on an enhanced amount.

 

What is payable to my qualifying partner if I die more than  12 months after leaving NHS pensionable service?

Whilst no short-term pension is payable your qualifying partner will receive a pension from the date of your death.

If you left NHS pensionable service before 1 April 2008 benefits will only be payable to a spouse/registered civil partner as nominated unmarried partner benefits only became available, from 1 April 2008, to those with service after this date and who made such a nomination.  

The method used to calculate benefits depends on which section of the NHS pension scheme you were previously a member of:

1995 section of the NHS pension scheme:

  • benefits will be based on one half of the deferred pension payable had you retired on the date of death. 

A widower or surviving registered civil partner/unmarried partner (if your service continued beyond 1 April 2008 and a nomination was made) will receive the same proportion of benefits as detailed above but based only on service since 6 April 1988.

2008 section of the NHS pension scheme:

  • benefits will be based on 37.5% of the preserved pension payable had you retired on the date of death.

In the 2008 section qualifying partner benefits are based on all membership. There is no restriction in relation to service accrued before 6 April 1988.

2015 CARE scheme:

  • benefits will be based on 33.75% (secondary care doctors) or 70/187th (primary care doctors) of the preserved pension payable had you retired on the date of death.

If you transitioned to the 2015 CARE scheme from the 1995/2008 sections, the appropriate portion of those accrued benefits will also be payable.

 

What is payable if I marry after I leave NHS pensionable service?

The benefits payable will be no different to those detailed above unless you are a male who was previously a member of the 1995 section with service prior to 6 April 1978.  In this case the potential widow’s pension will only be based on your service from 6 April 1978 onwards.

The only exception to this is if you have remarried the person you were married to before leaving NHS pensionable service.  In this rare situation benefits will be based on all of your service.

 

Will my children receive benefits if I die after leaving NHS pensionable service?

A child allowance may be paid from the date of death to any child who was dependent on you both at the time of leaving the scheme and at the date of death.

If you had pensionable service in the NHS pension scheme after 1 April 2008 your child will need to be financially dependent on you and be:

  • under age 23 or,
  • over age 23 but unable to earn a living due to a permanent physical or mental condition present at the time of your death.

If your NHS pensionable service ceased before 1 April 2008 your child will only be considered a dependant child if they are under the age of 17 or in full-time education at the time of death.

If a child is born one year or less after you leave pensionable employment the child will count as being a dependant child if they are dependant on you when you die.A child can include your biological child, an adopted child, a step child, a child of your civil or nominated qualifying partner, a grandchild, any dependent child, and a nephew or niece.

 

What is payable to my child or children if I die within 12 months of leaving NHS pensionable service?

A child allowance is payable to your qualifying children.

The method used to calculate benefits depends on which section of the NHS pension scheme you were previously a member of:

1995 section of the NHS pension scheme:

  • If a payment is also being made to a qualifying partner then each child is entitled to 1/4 of the Tier 2 (upper tier) pension that would have been payable had you retired on health grounds as at the date of death.  A maximum of 1/2 of the Tier 2 (upper tier) pension is payable to two or more children.
  • Where no payment is being made to a qualifying partner then each child is entitled to 1/3 of the Tier 2 (upper tier) pension that would have been payable had you retired on health grounds as at the date of death. A maximum of 2/3 of the Tier 2 (upper tier) pension is payable to two or more children.

2008 section of the NHS pension scheme:

  • If a payment is also being made to a qualifying partner then each child is entitled to 18.75% of the pre-commutation Tier 2 (upper tier) pension payable had you retired on health grounds as at the date of death).  A maximum of 37.5% of the Tier 2 (upper tier) pension) is payable to two or more children.
  • Where no payment is being made to a qualifying partner then each child is entitled to 24.99% of the Tier 2 (upper tier) pension payable. A maximum of 49.98% of the Tier 2 (upper tier) pension is payable to two or more children. 

2015 CARE scheme:

  • If a payment is also being made to a qualifying partner then each child is entitled to 16.875% of the pre-commutation Tier 2 (upper tier) pension payable had you retired on health grounds as at the date of death).  A maximum of 33.75% of the Tier 2 (upper tier) pension) is payable to two or more children.
  • Where no payment is being made to a qualifying partner then each child is entitled to 22.49% of the Tier 2 (upper tier) pension payable. A maximum of 44.98% of the Tier 2 (upper tier) pension is payable to two or more children.

 

What if I die within 12 months of leaving NHS pensionable service, with less than the 2 years' service required to preserve a pension?

If you were to die within 12 months of leaving, and before a refund of scheme contributions could be made to you, your qualifying partner may receive either a refund of contributions paid or a Guaranteed Minimum Pension.

If your deferred service amounts to less than 10 years then the calculation of the child allowance will be based on a minimum of 10 years' service.

 

What is payable to my child/children if I die more than 12 months after leaving NHS pensionable service?

The method used to calculate benefits depends on which section of the NHS pension scheme you were previously a member of:

1995 section of the NHS pension scheme:

  • If a payment is also being made to a qualifying partner then each child is entitled to 1/4 of the pension that would have been payable had you retired at the date of death.  A maximum of 1/2 of the pension is payable to two or more children.
  • Where no payment is being made to a qualifying partner then each child is entitled to 1/3 pension that would have been payable had you retired on health grounds as at the date of death. A maximum of 2/3 of the pension is payable to two or more children.

2008 section of the NHS pension scheme:

  • If a payment is also being made to a qualifying partner then each child is entitled to 18.75% of the pension payable had you retired at the date of death. A maximum of 37.5% of the pension is payable to two or more children.
  • Where no payment is being made to a qualifying partner then each child is entitled to 24.99% of the pension payable. A maximum of 49.98% of the pension is payable to two or more children.

2015 CARE scheme:

  • If a payment is also being made to a qualifying partner then each child is entitled to 16.875% of the  pension payable had you retired at the date of death.  A maximum of 33.75% of the pension is payable to two or more children.
  • Where no payment is being made to a qualifying partner then each child is entitled to 22.49% of the pension payable. A maximum of 44.98% of the pension is payable to two or more children.

If your deferred service amounts to less than 10 years then the calculation of the child allowance will be based on a minimum of 10 years' service.