Class 1 NICs: earnings of employees and office holders: retirement benefits schemes from 6th April 2006: employer-financed retirement benefits schemes: payments from such schemes: authorised member payments: serious ill-health lump sums
Paragraphs 8(b), 10(4)(b) and (5)(c), and (6) of Part 6 of Schedule 3 to the SocialSecurity (Contributions) Regulations 2001 (as inserted by regulation 8(7) of the SocialSecurity (Contributions) (Amendment No. 2) Regulations 2006)
Sections 164(b) and 166(1) of, paragraph 1 of Schedule 28 and paragraphs 1-3 ofSchedule 29, as modified by paragraph 10 above, to Finance Act 2004
NIM02765 explains that, subject to the satisfaction of other conditions, a paymentout of an employer-financed retirement benefits scheme is disregarded in the calculationof earnings if, had the scheme been a registered pension scheme (“RPS”;NIM02715), the payment would have been an authorisedmember payment of the type shown there. One of those types of payment is aserious ill-health lump sum which would have satisfied the following conditions:
- before it is paid, the responsible person (NIM02765) has received written medical evidence from a registered medical practitioner that the employee is expected to live for less than one year
- the payment extinguishes the employee’s entitlement to benefits under the arrangement
- it is paid before the individual has reached age 75.
Unlike a pension commencement lump sum (NIM02770),there is no limit on the amount of a serious ill-health lump sum that may be disregardedin the calculation of earnings.
|Words in bold are defined in the Glossary to the Registered Pension Schemes Manual (RPSM20000000). They have the same meaning for NICs purposes unless otherwise stated.|