NHS pension and HMRC severe ill health test

Timber2

Hi, sadly I am having to retire from my NHS job due to ill health. My request has been accepted by the medical assessors for NHS Pensions to meet the Tier 2 requirement and also states it passes the HMRC "severe ill health2 test. I am not entirely sure what the latter part means. Can someone please put it into idiot language, ideally with a worked example!
 Also I understand that tier 2 pension means I cannot earn over the lower earnings limit for NI (around 5k I think) without risking my pension. Does the HMRC severe ill health test have any restrictions on it in terms of earnings? I was concerned that earning say, 2k a year may be OK with NHS pensions but get me in trouble with HMRC.
Many thanks

Nikkster

I'm not sure about for NHS pensions specifically but severe ill health means that you can take your entire pension entitlement as a tax-free lump sum. The pension scheme should write to you with the options. As far as I'm aware HMRC don't put limitations on working after that, though your oension scheme might.
Hope that helps.

xylophone

https://www.rcn.org.uk/get-help/rcn-advice/ill-health-retirement-nhs-pension-scheme

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm051200
https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm062100