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Suspension of NHS pension rules due to Covid extended until October

by Beth Gault
16 March 2022

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The Government has confirmed that rules that were suspended to allow retired staff to return to the NHS during the pandemic without their pension being affected will continue until the end of October.  

The rules that were suspended, including the 16-hour rule and abatement, were due to be re-introduced on 25 March 2022.  

However, the Department of Health and Social Care (DHSC) last month launched a consultation into extending these pension provisions after concerns from employers and trade unions due to the continuing workforce pressures within the NHS.  

Following the consultation, the DHSC has concluded that the measures will end on 31 October 2022, to ‘provide certainty to staff and employers regarding work arrangements’, but this date will be kept under review.  

Measures temporarily suspended: 

  • The 16-hour rule in the 1995 Section – pension payments are temporarily suspended if an employee works more than 16 hours per week in the first month after retirement. 
  • Abatement for special class status holders in the 1995 Section – pension payments are reduced if an employee returns to work before age 60 and their earnings plus their pension exceed their pre-retirement earnings. 
  • Abatement in the 2008 Section and 2015 Scheme for those who have drawn down a portion of their pension – pension payments are reduced if an employee who has taken part of their pension earns more than 90% of their earnings before the draw down. 

Source: NHS Employers 

Calls for a longer extension 

Some responses to the consultation suggested extending the measures by 12 months to March 2023. However, the Government ruled this to be ‘inappropriate’.  

It said: ‘In considering whether to continue these easements the government must assess whether the period of extension is proportionate to the initial aim of the easements. 

‘Section 45 of the Coronavirus Act recognised that the pandemic would place pressure on the NHS workforce, and that measures would be required to boost available workforce capacity. From the outset, DHSC has been clear that these easements were directly linked to the period of pandemic response. 

‘Following on from the Omicron variant, the department believes that these specific easements should continue for a further 7 months as it provides certainty to staff and employers regarding work arrangements in the immediate future, while ensuring the easements remain temporary.’  

NHS Employers, which represents workforce leaders in the NHS, said: ‘The extension to these temporary easements will continue to support retirees to return to the NHS workforce without their pension being affected. 

‘Before the regulations come back into force, employers will need to talk to affected staff to agree any changes to their working patterns. In some cases, employees may need to reduce their working hours or earnings so that they can continue to work without any impact on their pension.’ 

It comes after changes to the amounts GPs and their staff will contribute to their NHS pension will be implemented in October as well, which was six months after the planned implementation date.  

Those changes will use actual annual rates of pensionable pay to determine members’ contribution rates, instead of members’ notional whole-time equivalent pay, among other changes.  

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