Pensioned off - Have an outstanding IVA

Chopper78_2

Hi, can anybody please offer any advice. My mum has been diagnosed with Lupus and has been off work sick with the illness for the past few months. She works within the NHS & has recently had as meeting with her boss & HR who have informed her she is being retired on medical grounds. She has an outstanding IVA that still has a little while to run with about £5,000 outstanding. She has been told she may need to use a lump sum from her pension to settle the IVA as she can no longer afford the monthly payments. Is this true or is her pension not protected from the IVA especially when she is being retired off it is not her choice to retire? Any advice would be gratefully appreciated.

xylophone

Has she consulted her IP?

Chopper78_2

I think she has had a brief conversation with them, not entirely sure what they said but I believe they said it would be a possibility that she would have to use a lump sum, otherwise the IVA would be deemed unsatisfied & unsettled & my parents would have to go through the whole process again.

sleepless_saver

Does the paperwork for her IVA say anything about her pension?

Chopper78_2

I am not sure, I will get her to check. Does there need to be a reference to her pension within the IVA paperwork in order for them to take it?

I can't imagine the paperwork does make any reference to her pension as the IVA was started at least 3 or 4 years ago.

brewerdave

As a layman - once the pension is taken the lump sum just becomes a sum of money that your mother has, the same as if she had a win on the lottery -can't believe it has any special protection from creditors.
Can she not opt out of a lump sum in order to get a bigger monthly pension payment ???

xylophone

Can she not opt out of a lump sum in order to get a bigger monthly pension payment ???

There might be a compulsory lump sum with no reverse commutation?

GunJack

xylophone wrote: »

There might be a compulsory lump sum with no reverse commutation?

probably correct if it's the nhs ps.....

brewerdave

Re reading the original thread, I don't think that she can be forced to take her pension early-normally it would be dismissal on the grounds of incapacity to do the job.
Presumably,however, they are offering enhanced terms which makes it sensible to take the pension.
Certainly worth asking the Q re reverse commutation especially if she has reduced life expectancy?? Don't know how much flexibilty there is in the NHS scheme?

sleepless_saver

Chopper78 wrote: »

I am not sure, I will get her to check. Does there need to be a reference to her pension within the IVA paperwork in order for them to take it?

I was thinking more about checking whether the IVA conditions explicitly exclude lump sums from any future pension.

PennyForThem_2

Does she belong to a Union? If so - could she ask for advice there?