Does Your Pension Stop if You’re In The Hospital?
This is a highly complex question. Your pension plan stops if you are out for over three months, but if it’s just one month in the hospital and then you’re discharged, your pension would continue to be paid as usual. There could also be other situations where your pension will stop during a hospital stay, including:
- If you have been employed by an employer who pays into the DB (defined benefit) scheme within or outside of Scotland
- You cease employment with that employer due to ill health before attaining retirement age
- If your income drops below £20 per week at any point while receiving unemployment benefits because of illness
- If there are no further contributions from both employees and employers
- If your employer is insolvent and there’s no other pension scheme, they are required to pay into it.
Many different things need to happen for you not to be entitled to a pension, but the most important thing is that if it’s just one month in the hospital, your finances will stay the same as when you left.
State Pension When In Hospital
Let’s get started:
If you’re over 65 and retired from work, then it doesn’t matter how long you’re in the hospital. The amount of money the state will give you won’t change as a result.
Suppose you’re under 65 and receiving benefits (including Universal Credit1) or earning less than £120 per week. In that case, the income is likely reduced while ill because there’ll be no entitlement to statutory sick pay. So if someone is on Employment Support Allowance² (£73 per week), their benefit would reduce by £398, so they’d only have £375 left each month after paying rent (£130). And if someone earns just enough before the absence.
Here’s the truth:
You would only be entitled to your pension plan if you’re absent from work for more than 90 days within any 12 months and it doesn’t qualify for long-term sickness, or under the age of 50 and in receipt of either statutory sick pay (SSP) or income support.
If you are absent from work for more than 90 days within any 12 months and don’t qualify for long-term sickness or under the age of 50, you will be entitled to pension credit.
Pension credit is income-related, so if your annual income before tax is less than £27,700 (in 2016/17), this might give some protection against poverty in retirement. Your eligibility for Pension Credit depends on how much money you have coming into each week after housing costs. There’s also an entitlement based on lifetime contributions made to National Insurance – i.e., your NI credits – which entitles people with low incomes who don’t qualify as ‘pensioners’ to support.
In Cases Of Terminal Illness
If an individual is diagnosed with a terminal illness, they may apply for an early retirement pension.
This would be advantageous if they want to retire before the age of 65 or cannot work because of their illness (or both). This only applies when the diagnosis is given by a medical team and not an informal opinion from another individual such as spouse/partner. The earliest an application can be made for this is six months after diagnosis, so individuals must talk to their GP or specialist to ensure that they obtain the right information.
It is also important for individuals to be aware of any restrictions on what can and cannot be claimed under this early retirement pension, such as obtaining a certain income level from other sources (e.g., investments) to make ends meet.
If an individual reaches age 65 then falls ill with a terminal illness, there are still options available because they will qualify automatically for Income Support – which provides up-to-the-minute financial support for those who are sick or disabled. Applicants have the option within two months after diagnosis if it’s likely that benefits would otherwise cease before reaching state pension age (currently 66). The maximum amount payable is £114 per week, but there may be a gradual reduction in the amount paid as the pension age is reached.
Benefits That Stop Being Paid If You Go Into Hospital.
You can’t receive:
- Jobseeker’s Allowance
- Employment and Support Allowance, Income Support, or Universal Credit
- Housing Benefit
The only benefit that will continue to be paid is the Personal Independence Payment. This might not seem important, but if you’re in the hospital for over a month, then it means your income won’t drop below £20 per week. It also includes providing personal care components, paying for transport costs, buying medicine from pharmacies, etcetera. It doesn’t take much before people start feeling the pinch financially, so this helps! What would happen on average with someone who has been out of work due to illness? The answer is obvious – they are living off their savings which quickly dwindle.
The Personal Independence Payment should be expanded to other benefits, so they can continue to pay bills while in hospital for an extended period. This would also help people who might have been out of work due to illness and unable to get a new job yet – having the money keeps them afloat until they find employment again!
Best of all,
Disability benefit would be a great addition on top of that, as well! It won’t take much before they start feeling the pinch financially, which helps them out! What would happen with someone unable to find employment because of their disability issues? The answer is obvious – they are living off their savings which can be depleted quickly. Disability benefit would help provide a buffer between that person and their savings to pay for anything they need – food, clothes, or even paying the bills in
Got Questions? Check These First
What happens to my pension if I am in hospital for a long time?
This depends on what type of benefits your employer provides. Some employers may pay an amount while you are off work similar to the original salary; some might provide a percentage.
Employees must get advice about their situation and how best to manage it because they will need this when making decisions about retirement and other matters such as whether they want private medical insurance or not after retirement age.
Do you have to notify DWP (Department for Work and Pensions) if you are in hospital?
No. You do not have to notify DWP if you are in hospital, but it is a good idea because some changes are needed when making decisions about your pension pot and benefits.
How long can you be in the hospital before it affects your benefits?
The length of time you can be in hospital before it affects your benefits will depend on the type and level of benefit.
What happens to your state pension when you die?
If there are no children or a partner, the pension might be paid out in lump sum form. If there are dependent children and/or a partner, it will depend on their entitlement and any other entitlements they may have received from DWP (Department for Work and Pensions).
And that’s it!
Many things can happen to your pension when you’re in a hospital. Your employer may be able to make payments on it or ask for a deferral of up to six months from the date of discharge. However, if there is no company policy available and the employee has been off work for over two years before starting their period of sickness absence. They will lose any entitlement under their contract.