If you are unable to work as a result of illness or injury, your absence will be managed by Magnox Human Resources through the Attendance Support Procedure. If the Company’s Medical Officer agrees that you are eligible for ill-health retirement, EPAL will write to you with details of the benefits payable.
If you are given ill-health retirement benefits you will be required to provide evidence periodically to support continued payment of the benefits.
From 6 April 2011 HMRC changed the tax treatment of pension benefits and contributions.
In simple terms, if you are unable to perform your own job and are given enhanced pension benefits as a result of ill-health retirement, but medical evidence would support you completing any alternative work, then HMRC may impose a tax charge at the time you retire.
If, according to medical evidence, you will not be able to perform work of any type in future or have a very limited life expectancy, there should be no additional tax charge if you retire as a result of ill-health.
You should be aware that any pension in payment is subject to income tax under the PAYE system.
EPAL will provide information concerning potential tax charges when they provide quotations for ill-health retirement.