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Retired nurses could see pension penalty delayed for COVID-19 work

Consultation may see pension protection extended until October for retired nurses in England and Wales who responded to calls to help out during pandemic
Picture of an older woman in nurse's uniform

Consultation may see pension protection extended until October for retired nurses in England and Wales who responded to calls to help out during pandemic

The government is consulting on whether to extend emergency measures that allow recently retired nurses in England and Wales to work for the NHS without losing their pension benefits.

NHS pension abatement rules were temporarily suspended in March 2020 to enable retired and partially retired staff to return to work or increase their work commitments during the COVID-19 pandemic without being penalised by having their pension benefits suspended.

But these measures – made possible by the Coronavirus Act – are due to expire on 24 March. The government is now

Consultation may see pension protection extended until October for retired nurses in England and Wales who responded to calls to help out during pandemic

Picture of an older woman in nurse's uniform
Picture: Alamy

The government is consulting on whether to extend emergency measures that allow recently retired nurses in England and Wales to work for the NHS without losing their pension benefits.

NHS pension abatement rules were temporarily suspended in March 2020 to enable retired and partially retired staff to return to work or increase their work commitments during the COVID-19 pandemic without being penalised by having their pension benefits suspended.

But these measures – made possible by the Coronavirus Act – are due to expire on 24 March. The government is now consulting on whether to extend the suspension until 31 October for members of the NHS pension for England and Wales.

Consultation ends on 1 March but may have come too late for some

The move follows a decision to extend the suspension until 31 October in Scotland, confirmed by the Scottish Public Pensions Agency earlier this month.

The consultation document from the Department of Health and Social Care (DHSC) says the proposed extension ‘recognises the emergence of the Omicron variant, which means the pandemic response is expected to last longer than anticipated’.

But it adds that it would be right for abatement to return once things are back to normal ‘in fairness to all scheme members and the public purse’.

The consultation for England and Wales – which runs until 1 March – has been welcomed by financial experts but they say it may come too late for those who have already decided to return to retirement.

What is pension abatement and will it affect me?

Some members of the NHS pension scheme, including nurses with special class status, can retire at 55 without losing any pension. But if they return to work for the NHS their pension may be docked.

In short, their pension could be reduced pound for pound if their new salary – plus their NHS pension – adds up to more than they were earning before they retired. This is known as abatement.

Abatement was suspended as part of the government’s coronavirus action plan to help retired nurses return to work in the NHS without a hit to their pension, but the suspension is set to end on 24 March.

Financial planner Graham Crossley, an NHS pension specialist, said: ‘Sadly there will be some staff who have already left the NHS in anticipation of there being no change to these rules and it’s a shame it has taken so long to get here.’

Mr Crossley said the original plan to bring back abatement in March had already caused headaches with workforce planning in January and February. ‘By moving the deadline to October, it gives doctors and nurses very little sense of security and it risks similar job planning issues in August.’

Analysis by Mr Crossley suggests more than 7,400 recently retired healthcare staff across England and Wales could be adversely affected when abatement returns.

Northern Ireland is also currently consulting on a similar extension to 31 October. The consultation closes on 31 March and if the extension is agreed it will be implemented retrospectively.


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