Coronavirus Bill: Pensions of returning NHS staff will not be reduced

Recently retired NHS staff who return to work to help in the fight against COVID-19 will not have their pension reduced, the government has confirmed.

Changes to the NHS pension scheme, confirmed in the Coronavirus Bill: health and social care measures, will ensure that staff and social workers pensions’ are protected should they return to work to “help manage COVID-19”.

Existing rules of the scheme mean that someone who has started to receive their pension may have it reduced or abated if they return to NHS employment before pension age.

Clauses 43 to 45 of the Bill will suspend these rules, allowing recently retired healthcare professionals to return to work, or increase their hours, without any negative impact on their pension.

The government stated: “It is important that restrictions on returning to work whilst in receipt of a pension do not act as a disincentive for healthcare professionals who wish to re-enter the workforce in order to assist the healthcare response to covid-19.

“The bill will therefore suspend certain rules that apply in the NHS Pension Scheme in England and Wales so that healthcare professionals who have recently retired can return to work and those who have already returned can increase their hours without there being a negative impact on their pension entitlements.”

The Bill has also included a number of employment law protections for workers who choose to take emergency volunteering leave (EVL).

This includes provisions to ensure that a workers pension are not adversely affected, with the government emphasising that a worker who takes EVL is entitled to return to their work in “the same position as if they had not been absent”.

The NHS Pension Scheme gained attention over the last year after tax issues stemming from the tapered annual allowance saw a number of NHS staff retiring early or cutting back hours, and NHS providers warning of a potential "exodus of NHS leaders".

Whilst the government undertook a review of the taper earlier this year, many industry experts were disappointed when it confirmed plans to increase the earnings threshold for the taper, rather than scrapping it completely, describing this as a "missed opportunity".

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