While being medically retired allows an individual to withdraw from their pension pot before they turn 55, we aim to explore through this article if you can claim benefits while being medically retired. We will discuss the possibility and eligibility criteria for the benefits one may be able to claim as well as receive other forms of support that they can expect due to their medical condition.

Can You Claim Benefits If You Are Medically Retired?

Yes, you can claim certain benefits if you are medically retired. These include the following:

  • Statutory Sick Pay
  • Employment Support Allowance
  • Universal Credit

You may also be able to claim Personal Independence Payment and Council Tax Reduction in certain cases if you are medically retired.

While each benefit has its eligibility criteria, you will need to provide documents to declare information regarding the following financial aspects:

  • Savings 
  • Income (this includes payslips belonging to the claimant and their partner)
  • Expenses (this includes rent, mortgage, and childcare payments)
  • Existing benefits and pensions (this includes the details of anyone else who lives with you)
  • Council tax bill

If you are medically retired, you can claim Statutory Sick Pay for £99.35 per week. This is paid by the employer for a maximum of 28 weeks after an employee is declared too ill to work.

Since the limit for receiving statutory SIck Pay is limited to 28 weeks and individuals who take early retirement from work for medical reasons will need extended support, you can check if you are eligible for Employment and Support Allowance. However, this benefit has been replaced with Universal Credit in many areas.

You can claim Universal Credit to top up your income when you are sick and require medical care. However, if you intend to claim both SSP and Universal Credit, the amount that you claim through SSP will be taken into account by the DWP when you file a claim for Universal Credit.

If you are getting your weekly payment of £99.35 for SSP and need financial support to meet your housing costs, you can claim Housing Benefit (this is being replaced with Universal Credit) for expenses such as rental payments.

In addition to this, you may be able to qualify for a council tax reduction based on your health condition and being on a low income. This will help to get you a discount on your annual bill for council tax payments.

If your health condition prevents you from performing everyday tasks, you can claim Personal Independence Payment. Since this is a non-means-tested benefit, your claim of other benefits or your income will not affect your eligibility for PIP.

If you need someone to take care of you while you are unwell and you are claiming Personal Independence Payments, the person taking care of you can be eligible for Carer’s Allowance.

While you cannot claim State Pension if you are medically retired, you can claim your pension from a private pension scheme. In some cases, pensioners can claim a higher amount due to their medical condition.

How Do You Claim Benefits If You Are Medically Retired?

If you need to claim New Style Employment and Support Allowance. You can qualify for the benefit if you have been making National Insurance contributions for the past two to three years and are currently employed. This means that you should be participating in some form of work activity even if it is for a few hours each day. 

To claim ESA for the 2022/23 tax year, claimants should be earning a minimum of £123 a week, £533 a month or £6,396 a year for the previous two full tax years. If you are expected to return to work in the future, you will be assigned the “work-related activity group” and receive £77 a week, or £61.05 if you’re under age 25 for one year. If your health condition prevents you from returning to work you will be placed in the “support group” and get £117.60 a week for an unlimited time.

If a claimant does not qualify for ESA (this is usually due to fewer National Insurance contributions made than the eligibility criteria demand), you can apply for Universal Credit. If you need help with housing costs or if you are also responsible for a child, you can claim additional elements to your Universal Credit claim. 

If your health condition prevents you from being active and mobile enough to perform basic tasks and take care of yourself, you can claim Personal Independence Payment. The amount that you receive will depend on the severity of your condition and could range between £24.45 and £156.90 a week for 2022/23.

In some cases, early retirement will affect your previously claimed income-related benefits. These include the following:

  • Housing Benefit
  • Income Support
  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance
  • Pension Credit
  • Universal Credit

What Other Support Can You Claim If You Are Medically Retired?

You can claim additional support if you qualify for Universal Credit and meet the below-listed eligibility criteria:

  • you receive universal credit and you have no earnings
  • you receive universal credit and the earnings as per your last assessment were £435 or less
  • you receive universal credit, your earnings are equal to or less than £935 and you are assigned the “limited capability for work” or “limited capability for work-related activity” group for universal credit 

If you qualify for any of these conditions, you will be able to get free prescriptions from the NHS.

Alternatively, if you are on a low income due to your health condition, you can apply for financial support through the NHS Low Income Scheme. You can file your claim through an NHS hospital or your nearest JobCentre to claim free prescriptions, and dental and eye care.

Conclusion:

The above discussion helps to conclude that benefits such as Statutory Sick Pay, Employment Support Allowance, Universal Credit, Personal Independence Payment and Council Tax reduction may be claimed if you are medically retired. However, one would need to fulfil the eligibility criteria and provide relevant evidence to support their claim.

FAQs: Can You Claim Benefits If You Are Medically Retired

What happens if you are medically retired from the NHS?

In case of being medically retired from the NHS, you will be able to claim a Tier 2 pension once you provide the required evidence. 

What happens if you have to retire early due to ill health?

If you have to retire early due to ill health, you can claim your private pension early. Your benefits will generally remain unaffected whether you apply for them post-retirement or were receiving them before.

Do I pay National Insurance on my private pension if I retire at 55?

No, you do not pay National Insurance on your private pension if you retire at 55. You will also not have to make NI contributions from State Pension or workplace pension (if you get any).

Does council tax reduce when you retire?

No, council tax does not reduce simply because someone has retired. However, in the case of low income or ill health, individuals may claim for a council tax reduction. 

How can I make money after retirement?

There are different ways to earn money after retirement. For instance, one could tutor others, start working freelance, consider remote jobs, rent out space or even become an entrepreneur.

References:

Ill-health retirement: early medical retirement | MoneyHelper

Early retirement on health grounds | unbiased.co.uk

Check what benefits to claim if you’re sick or disabled – Citizens Advice

Early retirement pension

Benefits if you’re under State Pension age – NHS