Locums are becoming a vital part of increasingly pressurised general practices, yet the NHS benefits they’re entitled to are not always as fair as they could potentially be. While locums can contribute to the NHS pension scheme, one critical benefit is not always available: death in service.
If we were all clairvoyants with a crystal ball, we would know exactly when we were going to die and plan accordingly. Suffice to say we’re not and that’s where the difficulty arises; particularly for locums whose contract status on death makes a big difference to the NHS benefits their loved ones receive.
If you’re a locum ‘in service’ when you die
As a GP locum, if you die when in contract i.e. you either have a long-term locum post or a short Monday to Friday locum contract, you are entitled to the following standard NHS pension scheme benefits:
- An initial 6 months pension for your spouse, registered civil partner or nominated qualifying partner, equal to your pensionable pay before death.
- Followed by an ongoing pension based on your uprated ill-health retirement pension (Tier 2).
- Twice your total average uprated (dynamised) earnings paid as a lump sum.
Children are also awarded their own dependant’s pension up to the age of 23 if they are in full-time education, but only two are recognised at any one time. If you have more children, as one graduates and becomes financially independent, another can take its place for pension purposes.
If you’re not ‘in service’ when you die
The system breaks down though if you die at any time outside of your contracted hours. If you’re not ‘in service’ when you die, you will not receive the above NHS death in service benefits.
For example, if your contracted locum hours ran Monday at 8am until 6pm on Wednesday each week, and you died at 7pm on a Wednesday evening, you would not be deemed to be ‘in service’ and therefore not eligible for NHS death in service benefits.
You may consider this harsh, and there are legal test cases on this matter but, as it stands, that’s how the rules are laid out.
Death in service vs death gratuity benefits
You may still be granted a death gratuity if you die within 12 months of your last service (you’ll be treated as a ‘deferred member’), but the method used to calculate this is different to the one used for death in service.
Death gratuity benefits are calculated as a multiple of your annual pension accrued to date at the time of death. The multiple varies according to the pension scheme version you were in at the time of death.
- For the 1995 scheme, it is a multiple of 3
- For the 2008 scheme, it is a multiple of 2.5
- For the 2015 scheme, it is a multiple of 2.025
Whilst a death gratuity is better than nothing, it may fall short compared to twice your dynamised annual pensions pay that is payable under death in service.
If you die out of contract, there is also no continuation of income for 6 months; the spouse/civil partner/qualifying partner’s pension is payable on the first day after death.
The dependent children’s pension remains the same however.
Standalone life assurance policy
There are clearly some key differences, and the uncertainty and worry this brings is often understandably a great concern.
That is why I advise all my GP locum clients to consider life protection as a standalone issue, rectified with a quality but affordable life assurance policy that takes the onus away from the NHS and gives the family a known, controllable and quantifiable income and/or lump-sum on death.
No matter what happens, you can guarantee the mortgage is paid off and the family can carry on living the life you dreamt of.
Our articles are designed to be informative but do not constitute financial advice. We recommend seeking specialist advice before making a decision.
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