What ill-health retirement is, and what it is not
In shortIt is a pension benefit paid by the Civil Service Pension Scheme, not a sickness or capability process, and it is separate from sick pay and injury benefit.
Ill-health retirement is a pension benefit, not a sickness or capability process.
It is paid by the Civil Service Pension Scheme (CSPS), which covers HMPPS staff in England and Wales and Scottish Prison Service staff, to a scheme member whose health has permanently broken down so that they can no longer work in the way the scheme defines.
Cabinet Office is the scheme manager, and since 1 December 2025 the administrator has been Capita, which took over from MyCSP (the date in the Cabinet Office announcement reported by Civil Service World).
- Sick pay
- Paid by your employer while you are absent and has nothing to do with the pension.
- Capability or attendance process
- An HR procedure that can end in dismissal, and dismissal does not by itself give you ill-health terms.
- Injury benefit
- Under the Civil Service Injury Benefits Scheme: a different scheme with different tests, covered in our injury benefits guide. You can qualify for neither, one or both.
Where our facts come from
The scheme rules matter more than any summary, including this one.
Our facts come from the alpha regulations (SI 2014/1964, regulations 72 to 76), the CSPS Medical Reviews and Appeals guide, the Northern Ireland alpha guide section 05D (July 2026, which restates the same regulations in plain language) and the CSPS ill-health pages, all opened on 3 October 2026.
Where we could not confirm something we say so and send you to Capita or your HR team.
Who qualifies: the tests in plain English
In shortYou must be an active member with two years' qualifying service, and the Scheme Medical Adviser must find a permanent breakdown in health.
The CSPS guide defines a breakdown in health as ill health caused by a recognised medical condition that gives rise to the incapacity. Incapacity means unable to work because of that breakdown. “Permanent” means the SMA expects the incapacity to continue until your prospective normal pension age.
The three tests
- You are an active member (still employed and in the scheme)
- You have at least two years of qualifying service
- You satisfy the Scheme Medical Adviser that you have suffered a permanent breakdown in health
| Lower tier | Upper tier | |
|---|---|---|
| Health test | Permanent breakdown in health | Permanent breakdown in health |
| Work test | Prevents you doing your own job or a comparable job (unable to attend regularly at the same or equivalent grade) | Prevents your own job and any gainful employment (functional ability to do any reasonable paid work impaired by more than 90%) |
| Partially retired? | Allowed (lower tier only is available) | Not allowed: you must not be partially retired (regulation 73) |
| What is paid | All accrued alpha pension, unreduced, paid immediately | Lower tier pension plus an enhancement (top-up) for the years to prospective pension age |
| Reviewed? | No. Paid for life | Yes, at least every five years until pension age; can drop to lower tier |
| Who decides the tier | The Scheme Medical Adviser, not the employer | The Scheme Medical Adviser, not the employer |
Sources: regulations 72 and 73; CSPS Medical Reviews and Appeals guide, section 2 and Annex A; NICS alpha guide section 05D (July 2026). The definition of “incapable of other gainful employment” is from the CSPS guide Annex A.
Why “permanent” is demanding for younger officers
Under current law, alpha normal pension age is the later of 65 and your State Pension age, so an officer born in 1986 has a prospective pension age of 68 (GOV.UK State Pension age timetable, with a third review still open as at 3 October 2026).
The SMA is asking whether, on the balance of probabilities and taking account of standard treatment and the chance of recovery, you will be unable to do the job for the next 25 years or more.
A serious but treatable condition with a good prognosis is therefore unlikely to qualify, while a progressive or irreversible condition often will.
“Prevents” and reasonable adjustments
The CSPS appeals guide explains that “prevents” means a significant incapacity, not unwillingness or inconvenience, and that the employer will already have taken occupational health advice on adjustments.
Ill-health retirement is considered only when the employer concludes that reasonable adjustments are, on balance, unreasonable or unfeasible. The Equality Act 2010 (and the equivalent in Northern Ireland) governs what counts as a reasonable adjustment, which is one reason to involve your union early.
What you actually get: lower tier
In shortLower tier pays everything you have built up straight away with no reduction for early payment, with two timing exceptions.
- Early-payment reductionNoneLower tier is paid unreduced
- Ordinary early pension at 55 (pension age 68)0.512Of the full amount on the 2019 GAD factors; historic, replaced for retirements from 1 November 2026, so an illustration of scale only
- Lump sum swap (regulation 84)£12 for £1Of annual pension given up, within HMRC limits
- Lump sum allowance 2026/27£268,275Far above what most officers would take
A lower tier ill-health pension is made up of the total alpha pension you have built up to the date you retire, plus the items listed below. All of it is paid without any reduction for early payment.
- Any effective pension age (EPA) portions
- Any added pension you have bought
- Any alpha pension from benefits transferred in from another scheme
That is the real prize
An ordinary early pension taken at 55 with a pension age of 68 would be cut permanently by around half on the 2019 GAD factors (0.512 of the full amount at exactly age 55).
Those factors are historic and are being replaced for retirements from 1 November 2026, so treat the figure as an illustration of scale only.
Two timing exceptions
Added pension that you bought by a lump sum in the year before you retire, and any transfer in made less than two years before you retire, are not paid out under ill-health terms; they are preserved and can be claimed later, with the usual early-payment reduction if claimed before pension age.
If you are planning a transfer in or a lump-sum added pension purchase and your health is deteriorating, speak to Capita and a financial adviser before committing money, because the timing rule could leave it locked away.
Swapping pension for a lump sum
In alpha, regulation 84 gives you £12 of lump sum for every £1 of annual pension you give up, within HMRC limits. The maximum lump sum is shown on your quote.
Any lump sum you take reduces your pension for life, so use our pension lump sum calculator and think about your running costs before deciding. Capita will send a quote and claim forms; the pension cannot be paid until you return them.
What you actually get: upper tier and the enhancement formula
In shortUpper tier pays the lower tier pension plus an enhancement of accrued pension times A divided by B (regulation 76).
Upper tier pays everything in the lower tier pension plus an enhancement for the service you would have built if you had carried on until your prospective pension age.
Regulation 76 works it out by taking the “earnings-related part” of your accrued pension (the part not attributable to transferred-in pension) and multiplying it by an enhancement fraction of A divided by B.
- A
- Your assumed period of pensionable service: the years from the day after your service ends to the day before your prospective normal pension age.
- B
- The shorter of your period of continuous service in years and the number of scheme years for which an amount of earned pension was recorded in your account.
| Step | Calculation | Result |
|---|---|---|
| Accrued alpha pension at retirement date (assumed) | Input | £11,000 a year |
| Years of scheme service (B) | Input | 18 years |
| Average yearly build-up | £11,000 ÷ 18 | £611.11 a year |
| Years from leaving to pension age (A) | Age 44 to 68 | 24 years |
| Enhancement fraction | 24 ÷ 18 | 1.333 |
| Upper tier top-up | £11,000 × 1.333 | £14,666.67 a year |
| Total upper tier pension | £11,000 + £14,666.67 | About £25,667 a year |
| Lower tier pension for comparison | Accrued pension only | £11,000 a year |
Illustrative arithmetic only, before CPI revaluation, tax and any lump-sum swap. Real awards are calculated by Capita from your account.
In everyday terms
Divide the pension you have built up by the number of years you have been in the scheme to get your average yearly build-up, then multiply that average by the number of years you have left until pension age. The Northern Ireland alpha guide (July 2026) states it that way.
Nothing in the formula involves your final salary, a halving, or a cap at a fixed number of years. If you are on a fixed-term appointment, the end of the term replaces pension age in the calculation. The enhancement also stays subject to the same lump-sum swap, and no early-payment reduction is applied to it.
The “50%” conflict: what the regulations say versus a GAD summary
In shortThe scheme regulations control; a GAD summary describes the enhancement differently, so ask Capita to show the working behind any quote.
While researching this guide we found two descriptions of the upper tier enhancement that do not match.
Two descriptions of the enhancement
Regulation 76 and the NI alpha guide
- An enhancement equal to your average annual accrual multiplied by all the years remaining to pension age
- The fraction is A over B, where A is the full assumed period to prospective pension age
- We confirmed the fraction in the published image of the regulation rather than relying on a summary
GAD 2024 valuation overview (23 June 2026)
- Summarises alpha upper tier in a comparison table as the lower tier benefit “plus 50% prospective service to NPA, multiplied by accrued average pension”
- A high-level overview that compresses the benefits of five schemes into one table and does not cite a regulation
- We have not found any amendment to regulation 76 that introduces a 50% factor
Our position
We re-opened both on 3 October 2026. The scheme regulations control, because they are the legal basis of the benefit and the CSPS and NICS member guides follow them.
We cannot rule out that a summary reflects a different intended policy or simply an error, and we cannot see how Capita applies the formula in practice. So do not treat our example as a promise.
Ask Capita to show you the working behind any upper tier quote, including the figures used for A and B, and raise any difference with your representative.
The process step by step
In shortYou apply while still employed, through your employer, on form IHR1; the SMA decides, then your employer and Capita act.
The CSPS ill-health pages and the NICS guide describe the same route. You apply while you are still employed, through your employer, who completes the employer part of the application.
Before it starts, the employer must investigate with occupational health (OH) support whether there are adjustments or alternative work that could keep you in a job.
If you are on long-term sick leave, that exploration is often the first point at which ill-health retirement is raised.
- Tell your line manager or HR that you want to explore ill-health retirement. Your employer should tell you of your right to apply and explain the stages. Ask your POA rep to be involved from the start.
- Expect an occupational health referral and a review of adjustments, redeployment and any phased return. You do not have to agree that adjustments would work if they would not; give OH an honest picture.
- Complete part one of IHR1 and give consent for the SMA to see your medical information. Make sure your employer completes part two and includes your job description, sickness record and OH reports.
- Gather medical evidence (see the checklist below). Specialist reports are expected where you have had specialist treatment, and the SMA almost always needs a diagnosis.
- The SMA assesses the application, may ask for more information or invite you to a consultation, and decides on the medical criteria and the tier. The SMA can award provisionally if they cannot decide.
- The SMA sends a certificate to your employer. Your employer then decides whether to accept the recommendation, tells you the outcome, and sets your retirement date, including any period of notice.
- Capita sends a quote and claim forms. You choose whether to take a lump sum, return the forms, and the pension starts. Keep copies of everything you send and receive.
The IHR1 form
The application form is IHR1, in two parts: part one is for you (including consent for the SMA to contact your doctors and specialists), and part two is for your employer, who sends the application to the SMA with information about your job, your sickness record and the OH advice.
All records passing between you, your doctors and the SMA are treated as confidential. The SMA may invite you for an assessment or ask for more medical information.
Evidence: what makes an application or an appeal strong
In shortThe SMA is deciding a medical question, so complete, current, specialist evidence decides the outcome.
The CSPS appeals guide is unusually specific about what helps. Medical evidence should be comprehensive, current (within the last three months), and detailed enough to show that the scheme definition is likely to be met. It should come from the clinicians who know your condition.
Reports must be complete: extracts or part reports are not acceptable, and for appeals, copies of reports already considered are not new evidence.
- Diagnosis in the clinician’s own words, with the date it was made and the tests or findings behind it.
- Treatment history: what has been tried, for how long, with what response, and what is left to try.
- A clear statement of the likely long-term outlook, and whether the condition is expected to last until your prospective pension age.
- The functional effects: what you cannot do reliably (standing, walking, restraint, shifts, dealing with prisoners, concentration, emotional regulation), not only the label of the illness.
- A report dated within the last three months, or a reason it is older, from a specialist where one is involved.
- Your OH reports, your job description (so the SMA understands the demands of operational duties) and your full sickness absence record.
- Complete reports, not extracts, and a list of what you have supplied so you can show what the SMA had.
- Anything that shows adjustments were tried and why they did not work.
What the SMA wants from reports
The guide says the SMA does not need opinions from consultants on ill-health retirement itself, but wants clear information on what treatment has been given, how you responded, whether treatment options remain, and a clear opinion on the likely long-term outlook and the probable impact of future treatment.
In conditions where clinical signs are softer, such as psychiatric and some musculoskeletal cases, or where a condition is less than fully explained, reports from more than one specialist may be needed. You can send evidence in a sealed envelope marked for the SMA.
Mental health and PTSD cases
Psychological conditions are assessed on the same criteria as physical ones. The CSPS guide singles out psychiatric cases as ones where more than one specialist report may be needed. Records that show diagnosis, a treatment course, and a clear prognosis from the treating psychiatrist or psychologist carry weight. A GP note alone is thinner.
Be open with your clinicians about work incidents and their effects on you. Our guide to trauma and PTSD for prison officers covers support and what to document.
Musculoskeletal and chronic pain cases
Injuries from restraint, assault or years of shift work often involve soft-tissue findings. The SMA looks at objective findings, imaging, treatment attempts including physiotherapy, injections and surgery, and whether more treatment is realistically available.
Records from physio and pain clinics that show a plateau despite treatment help. A single outlier report that contradicts the rest of the file may raise questions, so ask your clinician to address inconsistencies.
If you are refused, or awarded lower tier: how appeals work
In shortYou must appeal in writing within three months of your employer telling you the SMA's conclusion, and new medical evidence is what makes an appeal work.
- Appeal window3 monthsIn writing, from the date your employer notified you of the SMA's report
- FormAPP1The employer should send it with the decision
- Stage 1 target10 working daysSMA aim to clear stage-one cases
The CSPS Medical Reviews and Appeals guide (CSPS2564_B6GDM36_V0.7) sets out the ill-health appeal process. It covers a decision to refuse ill-health retirement and a decision to award lower tier benefits where you think upper tier applies.
The appeal has three stages, although you do not automatically progress to stage three and it can be upheld at any stage. A successful appeal against a refusal gives you ill-health retirement benefits, backdated if your service ended before the appeal concluded.
| Stage | Who decides | Time limits and targets | Notes |
|---|---|---|---|
| Stage 1 | A physician (where possible the original decision-maker) | Appeal within 3 months of employer notifying you of the SMA report; SMA aims to clear in 10 working days | Appeal with or without new evidence; without it, progress beyond stage 2 is unlikely |
| Stage 2 | A senior physician with no prior involvement | 10 working days initial review; 20 working days after new evidence; 3 months to remedy deficiencies | You source and pay for further medical evidence the SMA asks for |
| Stage 3 | Independent Medical Appeal Board (chair plus a second specialist) | Chair nominated within 5 working days of stage 2 finishing; at least 2 weeks’ notice of consultation | Decision completes the medical appeal. Lower tier upheld by the Board is final on that issue |
| After the appeals | Internal Disputes Resolution (IDR) | Set by the IDR procedure on the CSPS website | Covers how the process was run, not the medical decision |
Deadline and who can appeal
You can appeal with or without new medical evidence, but the guide says that without it the case is unlikely to progress beyond stage two. If you are too unwell to appeal personally, a relative, friend or trade union representative may, with your consent, appeal for you during the three months.
If you cannot meet the deadline because of delays beyond your control, your employer may ask the scheme administrator to consider an extension, so tell them quickly.
The three stages
At stage one, a physician reviews the evidence plus anything new and recommends whether to uphold. The SMA aims to clear stage-one cases within 10 working days of receipt.
At stage two a senior physician with no earlier involvement decides whether a reasonable case exists; if there are gaps you have three months to fill them, and the SMA aims to complete the initial review in 10 working days and any further review after new evidence in 20 working days.
If doubt remains, stage three is an Independent Medical Appeal Board chaired by an accredited occupational medicine specialist with no earlier involvement; you get at least two weeks’ notice of a consultation where practicable and may bring a relative, friend or union official, though they should not expect to take part.
If you decline or miss two appointments the Board decides on paper.
Provisional awards, reviews and what happens if you get better
In shortLower tier is paid for life; provisional and upper tier awards are reviewed, and can fall to lower tier with three months' notice.
If the SMA cannot decide whether you meet the criteria, they can recommend a provisional award at the tier most appropriate at the time. Capita then pays that tier, and the SMA sets a review date up to five years after the original decision.
At a review the SMA can confirm the decision or change it. If the change is a reduction or removal, you get three months’ notice before payments change; if the SMA recommends an increase it is backdated to the date of the review.
You can appeal a decision to change a provisional award, normally with new medical evidence, within time limits that come with the decision letter.
Practical points
- Keep your medical records up to date and attend any review consultation
- Upper tier depends on you being unable to do any gainful employment, so ask Capita and your adviser how any paid work or training would be viewed before you take it on
- Tell the SMA about material changes in your health or work capacity when asked
- Once you reach your alpha normal pension age, the ill-health terms end and the pension continues as an ordinary pension
Lower tier and upper tier over time
Lower tier
- Paid for life
Upper tier
- Reviewed regularly by the SMA, at least every five years, with reviews stopping when you reach your alpha pension age
- If your health improves and you no longer meet the upper tier conditions, the pension drops to lower tier with three months’ notice
- You can appeal that decision: a two-stage process (the SMA, then an independent Medical Appeal Board), in writing within three months of the scheme administrator’s notification
- Before concluding that the test is no longer met, the SMA will already have offered you a consultation and a senior physician will have considered the case
Timing traps: leaving, dismissal and other decisions to take advice on
In shortThe biggest trap is leaving too early: alpha has no ill-health retirement for deferred members.
The biggest trap is leaving too early. Alpha provides no ill-health retirement for deferred members.
If you resign or are dismissed and become a deferred member, you cannot apply for ill-health terms; you can only claim your preserved pension early from the minimum pension age (55 now, 57 from 6 April 2028) with an early-payment reduction.
The CSPS pages describe an early-payment route for ill health only for former members of the classic section (EPPA). So if ill-health retirement may be possible, do not resign, and ask your representative to raise it before any capability or attendance process reaches dismissal.
- Partial retirement: if you have partly retired you can only qualify for lower tier.
- A transfer in or lump-sum added pension in the last two years or the last year respectively: these are preserved rather than paid.
- McCloud remedy: many officers who were in classic, premium, classic plus or nuvos before moving to alpha have a remedy-period choice between legacy and alpha benefits. The CSPS appeals guide refers to separate guidance for reassessments in remedy cases, and we have not been able to confirm how ill-health terms interact with that choice in detail, so ask Capita directly. See our McCloud remedy guide.
- Dates: ill-health terms are unavailable once you reach alpha normal pension age. If you are near it, a normal retirement is the route.
- If you are within weeks of a pay change, promotion or the end of a scheme year, ask whether the timing of your retirement date changes the numbers, because the pension is built year by year and revalued each 1 April.
Terminal illness, tax and what happens to your family
In shortA life expectancy of under 12 months opens a one-off lump sum option that is irreversible, so take advice; your family's protection also needs checking.
- Lump sum allowance 2026/27£268,275GOV.UK rates page
- Lump sum and death benefit allowance£1,073,100Applies to serious ill-health and death cases
If your doctors confirm, and the SMA agrees, that you have a life expectancy of less than 12 months, you can apply to exchange all of your pension benefits for a one-off lump sum.
The NICS guide (July 2026) says the payment is five times your annual pension and that you will get no further annual pension if you take it.
- It is available to active members and those with a preserved pension.
- You must ask before you receive any pension payments, and dependants’ pensions are unaffected.
- The total may be higher if you do not take these terms, so take advice.
- Contact Capita, who will guide you through the process; speak to a financial adviser and your family if you can, because the choice is irreversible.
Tax
Tax on lump sums depends on HMRC allowances. We have not summarised the tax rules for every case here. Ask Capita and HMRC or an adviser how your own payments will be taxed. The income from an ill-health pension is taxable income like other pension.
Your family’s protection
Death benefits in alpha depend on whether you are an active member, a deferred member or a pensioner at the time of death. For someone receiving an ill-health pension, survivors’ pensions are based on the pension and tier in payment.
Our guides to death in service benefits and the survivor pension explain the rules, including the lump sum death benefit nomination, which is worth checking and updating now.
Money while you wait, and who can help
In shortSick pay rules apply while you are employed, injury benefit may sit alongside, and different advisers help with different problems.
Waiting for a decision is often the hardest financial period. Your employer’s sick pay rules apply while you remain employed, and our sick pay guide and sick pay calculator show how your pay changes over time.
Ill-health retirement does not happen automatically when sick pay ends, so ask HR what will happen to your employment and pay while the application is processed and any appeal is pending.
- Civil Service Injury Benefits Scheme
- If your condition arose from your work, your employer or Capita should consider it. It can pay an annual allowance and a lump sum on top of the pension if the SMA assesses your earning capacity as impaired. See our injury benefits guide.
- State benefits and debts
- You may also have rights to State benefits, depending on your circumstances, and a cut in income may affect your mortgage or other debts, so contact lenders early. Our income protection and life insurance guide covers private cover you may already hold.
Who helps with what
POA representative and solicitor
- POA representative: can support you through capability and attendance processes and may help with forms and appeals
- Solicitor: worth considering if your application is contested, if you think your employer has not made reasonable adjustments, or if you have a claim arising from an incident
Financial and free help
- Independent financial adviser (check they are authorised by the FCA): can help you decide between lump sum and pension, plan household income and consider tax
- Free help is available from MoneyHelper for general pensions guidance
- The Pensions Ombudsman can look at complaints about scheme administration once the internal route is complete
Scotland, Northern Ireland and legacy sections
In shortScottish staff follow the same scheme; Northern Ireland has its own, and legacy sections are treated differently, so ask Capita for a statement.
Scottish Prison Service staff are in the same Civil Service Pension Scheme (alpha), and Northern Ireland Prison Service officers are in the NICS pension schemes, so the nation matters for procedures and contacts.
- Scotland
- Scottish Prison Service staff are in the same Civil Service Pension Scheme (alpha), and pensions are reserved to the UK Government, so the tests, tiers and appeal process here apply. SPS is the employer that handles the application and forwards it to the SMA. Check with SPS HR for local procedures and contacts.
- Northern Ireland
- Northern Ireland Prison Service officers are in the NICS pension schemes run by the Department of Finance, not the GB CSPS. Our research used the NICS alpha guide because it restates the same regulation wording in plain language, but the administrator, forms, contribution rates and some details differ. Do not assume that GB procedures, contacts or time limits apply to you; use the Department of Finance and CSP(NI) material and ask NIPS HR.
- Legacy schemes
- If you built service in classic, premium, classic plus or nuvos before moving to alpha, that part of your pension can be affected differently. The NICS guide, for example, explains that banked legacy benefits are paid in a particular way under ill-health retirement and are not enhanced. In Great Britain, the regulation text and CSPS guides for legacy classic include different ill-health terms (enhanced service, depending on age and length of service) that we have not extracted.
Frequently asked questions
How long do I need to have served to get ill-health retirement as a prison officer?
You need at least two years of qualifying service in the Civil Service Pension Scheme.
If you have under two years, you may be entitled to a refund of your contributions instead, and other routes (such as injury benefit if your illness or injury is work-related) are worth asking about. Ask Capita to confirm your service record so you know where you stand.
What is the difference between lower tier and upper tier ill-health retirement?
Lower tier applies when a permanent breakdown in health stops you doing your own job or a comparable job; it pays your accrued pension with no early-payment reduction.
Upper tier applies when you also cannot do any gainful employment, and adds an enhancement for the years to your prospective pension age. Only the Scheme Medical Adviser decides the tier.
Can I apply for ill-health retirement after I have left the prison service?
Not in alpha. There is no ill-health retirement option for deferred members, who can only claim a preserved pension early from the minimum pension age with a reduction.
The only post-leaving ill-health route we found is the early payment of a preserved award for former classic members. This is why timing matters, and why you should take advice before resigning.
How long do I have to appeal if ill-health retirement is refused?
You must appeal in writing within three months of the date your employer notifies you of the content of the SMA’s report, using form APP1.
If you cannot meet the deadline because of delays outside your control, your employer may ask the scheme administrator to consider an extension. New medical evidence is important, and you pay for it yourself.
Is there a separate form for a stage 3 ill-health appeal?
No. You start the appeal with part one of form APP1, returned to your employer, and send new medical evidence with it if you can. If stage one does not support you, the physician escalates the case to stage two themselves.
It only goes to stage three, an independent Medical Appeal Board, if the Scheme Medical Adviser decides a reasonable case has been made but doubt remains. There is no stage three form for you to fill in. Our appeal planner shows where you are and what comes next.
What should a medical report for an ill-health appeal include?
The CSPS appeals guide says the Scheme Medical Adviser does not need a specialist’s opinion on ill-health retirement itself.
It needs a clear diagnosis, the treatment you have had and your response to it, whether any treatment options remain, and an opinion on the likely long-term outlook and the impact of future treatment. Reports should be complete, not extracts, and written within the last three months.
Does ill-health retirement pay my full salary?
No. It pays a pension based on your alpha pension account, not your salary. Lower tier pays what you have built up at 2.32% of pensionable earnings per year, revalued by CPI; upper tier adds an enhancement.
For many officers the total is a fraction of salary, which is why injury benefit, State benefits and personal cover can matter. Use the calculator for an estimate.
Is ill-health retirement pension taxed?
Pension in payment is taxable income. A tax-free lump sum is possible if you swap part of your pension at £12 for every £1 a year given up, within HMRC lump sum limits (a £268,275 allowance for 2026/27).
Serious ill-health lump sums have separate rules. Take advice from Capita, HMRC or a financial adviser on your own position.
Can I get ill-health retirement for PTSD or other mental health conditions?
Yes, the criteria are the same for mental and physical conditions: a recognised condition causing a permanent incapacity. The CSPS guide notes that psychiatric cases may need reports from more than one specialist.
Evidence of diagnosis, treatment history and a clear long-term prognosis is key. Many officers also look at injury benefit where the condition is work-related.
Who decides, my employer or the medical adviser?
The Scheme Medical Adviser decides whether you meet the medical criteria and which tier applies. Your employer decides whether to accept the SMA’s findings, and if it rejects them it must give you a full explanation, but the guide states the final decision on the tier rests with the SMA, not the employer.
Sources
- legislation.gov.ukThe Public Service (Civil Servants and Others) Pensions Regulations 2014 (SI 2014/1964)
- legislation.gov.ukSI 2014/1964 regulation 72: lower tier payment threshold
- legislation.gov.ukSI 2014/1964 regulation 73: upper tier payment threshold
- legislation.gov.ukSI 2014/1964 regulation 76: annual rate of ill-health pension (enhancement fraction A/B)
- civilservicepensionscheme.org.ukCSPS: Medical reviews and appeals guide (CSPS2564_B6GDM36_V0.7), ill-health, upper tier and injury benefit appeals
- civilservicepensionscheme.org.ukCSPS: Ill health retirement (eligibility, IHR1 and APP1 forms, employer role)
- finance-ni.gov.ukNICS alpha scheme guide, Section 05D: Ill-health retirement (July 2026, Northern Ireland publication; same regulations text)
- assets.publishing.service.gov.ukGAD: Civil Service Pension Scheme (GB) 2024 Actuarial Valuation Overview, 23 June 2026
- gov.ukGOV.UK: Pension schemes rates 2026 to 2027 (lump sum allowance, lump sum and death benefit allowance)
- gov.ukGOV.UK: State Pension age timetable
- finance-ni.gov.ukGAD alpha early payment reduction factors, 1 August 2019 (NI Department of Finance; historic, replaced for retirements from 1 November 2026)
- civilserviceworld.comCivil Service World: Cabinet Office confirms Capita takes over CSPS administration from 1 December 2025