The government will temporarily suspend pension tax charges for all retired NHS employees who decide to work during the Covid-19 (Coronavirus) pandemic.
This is to ensure that there are not any significant tax charges to employees’ pension income for retired individuals due to their change in circumstances, especially those aged 50 to 55-years-old.
This is an addition to the announcement in March 2020 confirming that retired NHS staff who return to work will not have their pensions reduced.
These two new policies will ensure that the pensions of returning employees will not be affected during the pandemic.
The tax changes will be effective for payments made from 1 March 2020 until 1 June 2020 and HM Revenue and Customs (HMRC) aims to set out more guidance in the coming months.
Although these tax changes currently only apply to those returning to work in direct Coronavirus-related roles, the government plans to identify similar workforces that should also benefit from these.
John Glen, the economic secretary to the Treasury, said: “At this time, it is important that key public sector workforces can bring back employees with relevant and valuable experience to ensure that the government can continue to provide critical public services. I am working with colleagues across government to ensure we remove any potential barriers to those who wish to return to work to help in our fight against Coronavirus.
“The government’s actions will provide relevant public sector staff associations with the assurance that their members with pensions in payment and pension benefits will be unaffected if they wish to play their part in our response to this virus.”