The expiration of Coronavirus Act powers in March 2022 threatens to drive thousands of nurses and doctors out of the NHS in order to avoid financial penalties, according to data from the wealth manager and financial adviser Quilter.
The UK government published their coronavirus action plan on March 3, 2020, outlining measures to respond to the Covid-19 outbreak. One measure was to allow recently retired NHS employees to return to work and combat the pandemic without incurring pension penalties.
The temporary suspension will end on March 24, 2022, and data indicates that over 7,000 doctors and nurses may be affected by the changes and may choose to retire as a result.
Some NHS pension scheme members can retire at the age of 55 with no reduction in their pension. Nurses with ‘special class’ status and psychiatrists with ‘mental health officer’ (MHO) status are included.
If they re-enter the NHS, their NHS pension is reduced pound for pound if their earnings plus the ‘unearned’ component of their NHS pension exceed their pre-retirement NHS pensionable earnings, a process known as ‘abatement.’
According to NHS Business Services Authority (NHSBSA) data, it has mailed 10,729 NHS pension scheme members about upcoming legislative changes, of which 7,470 may be negatively impacted by the return of abatement.
Those who retired after March 25, 2020, would normally have been exempt but were not because of the changes. When the regulations reapply next year, these people will be exempt.
The issue was raised in Parliamentary questions on January 10th, when Labour MP Gill Furniss asked if changes to the abatement rules were being considered. In response, Edward Agar, UK Minister of State for Health, stated, “The Department will keep this under review.”
Quilter NHS pension specialist Graham Crossley says: “There is a real risk of thousands of doctors and nurses leaving the NHS unless urgent action is taken. Although recent headlines about pandemic have been more positive, there are still significant pressures on the NHS and the prospect of thousands of NHS staff leaving in March to understandably avoid a financial penalty will add to an already challenging situation.
“There is an easy fix to this looming problem. The Coronavirus Act 2020 includes provisions to allow the extension to any of the powers contained within the bill and this issue should be raised urgently in government.
“While it is good to see that this problem is being debated in the House of Commons, Edward Agar’s comment that the department will keep it under review is not good enough as time is running short. Many workers have already received their letters and will need to make their decisions now as to whether they will keep working after 25th March.
“This should be the least that is done to help hard-working doctors and nurses continue to battle Covid during one of the worst health crises in a generation.”
