Death in service benefit

MovingForwards

PIP is fast-tracked where there's a terminal diagnosis. Doesn't matter if you're working or not, nor is it based on income / savings. It's worth looking in to as that will help financially.

Have you got a good sick pay policy eg full pay, then half pay, then SSP? If so would that cover you for a year? Then you'd still be employed and covered by DIS.

TVAS

Dwhitworth311 said:

If I stay employed but go on long term sick to spend time with family we will have no income to survive on between now and my death, 
It sounds like a call to citizens advice to see what benefits can be claimed if you have no income or savings. Unfortunately you cannot access death in service until your demise.  
If the employer had GPHI (Group Permanent Health Insurance) it is likely he would be on it but by all means ask.
If you say the pension is low in value all the more reason to have it as an ill health lump sum NOW knowing your wife will get the death in service benefit and you need some money NOW surely.
Ask your employer how much DIS your wife get tax free 4 x or 8 x as I am sure you can only get the former as a lump sum tax free.
Like I said before have you read the scheme booklet?
Quite frankly I do not like what your employer are doing, they have a DIS scheme and you unfortunately will qualify yet they are trying to avoid the forthcoming payment from that scheme.

Marcon

TVAS said:

Dwhitworth311 said:

Unfortunately you cannot access death in service until your demise.  
Quite frankly I do not like what your employer are doing, they have a DIS scheme and you unfortunately will qualify yet they are trying to avoid the forthcoming payment from that scheme.

You've contradicted yourself in your own post. OP has enough on their plate without this sort of ill-informed babbling. There is nothing to suggest the employer is doing anything of the sort.

TVAS said:

Dwhitworth311 said:

Ask your employer how much DIS your wife get tax free 4 x or 8 x as I am sure you can only get the former as a lump sum tax free.

OP really doesn't need misguided speculation. Please stop 'answering' questions until you have a much better grasp of the subject. Read and learn e.g. https://www.aviva.co.uk/adviser/documents/view/gr01089.pdf

If you've not yet done so, I suggest you read the helpful advice to you from @DairyQueen on 7 May: https://forums.moneysavingexpert.com/discussion/6265502/do-i-have-other-options-with-my-section-32-policy/p1

Marcon

Marcon said:

There are huge and probably insurmountable hurdles to overcome in trying to get an insurer to pay out in advance of an event which hasn't get happened and may never happen (i.e. you may not be an employee at the time of your death, and thus no valid claim could be made against the insurer). Whether your employer is prepared to take the risk of making a payment to you now/claiming under the insurance policy later is another matter - that's a discussion you need to have with them, but I can't pretend it is likely. 

I was thinking on about this. It might be worth asking your employer if they would be willing to make a loan to you and your wife jointly and severally (i.e. she would be liable to repay if you are not able to do so), repayable within 6 months of your death.

That would give your employer an incentive to ensure they keep you in service (although there's no suggestion they will do otherwise, based on what you've said), and your wife could then repay when the trustees exercise their discretion, as one would expect, in her favour.  They can only take a decision at the time of the event - they can't 'pre-promise' to pay her. Make sure you have an up to date Expression of Wish (aka Nomination) Form. 

The amount of the loan would obviously be whatever your employer is willing to stump up; hopefully they would be willing to do so interest free, or at least on a very low rate of interest. It would need to be formally documented, which wouldn't be onerous; and any tax consequences should be minimal or non-existent.

RetSol

Hello @Dwhitworth311.  You may be in touch with them already but, in case not, Macmillan Cancer Support offer financial support and advice, including a benefits helpline - have https://www.macmillan.org.uk/get-involved/campaigns/money-worries. 

Nikkster

Hello OP, sorry to hear about your situation. I'm almost 4 years into stage 4 cancer too. Sucks, doesn't it?

I don't have a huge amount to add to what's been said already but would definitely suggest calling Macmillan if you've not already. As has been said, PIP claims can be fast tracked in 'terminal' situations, your oncology team or GP can complete a 'DS1500' for you. You should then start getting paid the highest rate of PIP within 2 weeks, without an assessment (typically awarded for 3 years, can then reapply). Its horrible having this kind of prognosis put in writing (I found) but the money is inctedibly helpful. 

 I'm not sure if you have a mortgage, but if you do it might be worth speaking with your bank - mine (halifax) have recently put a note on my account to waive overdraft fees (I don't tend to use my overdraft but figured it would be useful if eg I ended up in hospital and couldn't keep my usual eye on things). They also waived the early repayment charges on my mortgage so I could remortgage to a better deal - saving a good few £ in interest every month.

I retired last year (at 38). My situation is somewhat different as I'm single with no dependents so 'lucky' to not have to worry about providing for anyone after I'm gone. It's worth double checking whether you have any pensions from previous jobs. I had 3 pots in total.

Something else to consider might be 'funeral plans' - I don't have one at the moment but quite a few people in one of my support groups do. For a monthly fee, if you survive 12 or 24 months (depending on the plan) a lump sum is paid out (or your fees back if you die before then). The money doesnt *have* to be spent on a funeral.

I guess the only other thing I want to say, and I hope this isn't insensitive, is that prognoses are really only educated guesswork. I'm trying to plan for the worst and hope for the best. I hope things turn out better than predicted for you too.

ian16527

Attendance Allowance will be fast tracked too. £60 pw lower rate at the minute.

Swoosh84

Suspect there will be tax implications here? I work for Standard Life and have a fair amount of knowledge on Group Life schemes. The benefit is paid out under trust upon death and is paid tax free to dependents.

It sounds like your employer is willing to settle early and pay this out now from their own pocket. Doubt this will be tax free? Sounds like this is more of a redundancy payment?

Marcon

Swoosh84 said:

Suspect there will be tax implications here? I work for Standard Life and have a fair amount of knowledge on Group Life schemes. The benefit is paid out under trust upon death and is paid tax free to dependents.

It sounds like your employer is willing to settle early and pay this out now from their own pocket. Doubt this will be tax free? Sounds like this is more of a redundancy payment?

From the sound of it OP is hoping for considerably more than the amount he'd be entitled to tax free as a redundancy payment, so there would be tax implications. Redundancy would also ensure he could no longer be included in the group life cover, which isn't the objective.

See my post above re any employer payment being a loan - that would get round the tax issue (or almost completely get round it). Edit - in reply to a PM asking me to clarify, it is possible that a loan, even if interest free, might have tax levied on a 'notional' rate of interest (i.e. treat the lack of interest as a benefit in kind), but not on the actual loan itself.

TVAS

Thank you for the link Macron I see things have changed and we now have registered and non registered Group Life Schemes now paying up to 10 x salary. However whether it is 4 x or 8 x does not detract from the fact that a claim will only be paid if the person was in service and has sadly died.
Others have mentioned employer loans but the person would have to contact DWP to claim income support if there is no sick pay beyond statutory sick pay.