The NHS Cost Claim Back Scheme is for members affected by the Public Service Pensions Remedy
Every Public Service Pension Scheme is working through significant complexity to put in place the Public Service Pensions Remedy for all affected members.
As the largest Scheme, the NHS Pension Scheme has made substantial progress towards implementing the remedy so affected members can make their choice with confidence. However, the challenges facing all Schemes mean we need to update the timings for when this choice will be available, and when members can expect to receive their choice communications. We recognise that this means members are waiting longer than planned, and apologise for the delay.
Members affected by the Public Service Pensions Remedy (PSPR), sometimes called the McCloud remedy, will have a choice of 1995/2008 Scheme or 2015 Scheme pension benefits for their membership during the remedy period.
Affected members with membership in the 2015 Scheme during the remedy period have had this membership rolled back into the 1995/2008 Scheme - you can find out more in our page on rollback.
Where Annual Allowance charges are affected by roll back, members can correct these via the HMRC Digital Service. More information is at the end of this article.
The remedy period is from 1 April 2015 to 31 March 2022.
This Cost Claim Back Scheme allows members directly affected by the remedy to apply to claim back some types of direct financial losses incurred as a result of the discrimination or the application of the remedy.
We will provide information to assist your choice of benefits and to correct any Annual Allowance charges
If you’re affected by the remedy, we’ll send you a Remedial Service Statement (RSS), which will help you decide which pension benefits are best for your membership during the remedy period.
Active and deferred members will be sent their RSS when they retire. If you’ve already retired, you’ll be sent your RSS. You can find out when you'll make your decision to see when to expect to make your choice.
If the remedy or roll-back of membership affects your Annual Allowance position, we will automatically send you a Remedial Pension Savings Statement (RPSS).
When you have your RPSS, you’ll be able to input the information into the HMRC Digital Service to see if you have over or underpaid an annual allowance charge, for any of the remedy period tax years or you have to pay a charge for tax year 2022-23.
There are some other circumstances we know are affected by the McCloud remedy and we’ll be writing to members in these situations automatically. These are described at the bottom of the page.
Who is covered by the NHS Cost Claim Back Scheme?
The scheme covers individuals with membership in the period from 1 April 2015 to 31 March 2022, which is subject to the McCloud remedy.
The information we provide to assist members, along with HMRC’s Digital Service, means that choosing pension benefits or correcting any Annual Allowance charges in the remedy period should be straightforward for the vast majority. Most members shouldn’t need to seek professional advice for these purposes.
A small minority of remedy members may have more complex situations so they may need to pay for professional services or advice, such as an accountant or independent adviser (IFA). If so, they can apply to recover certain costs or other direct financial or tax losses, using the NHS Cost Claim Back Scheme.
Types of costs you can claim back
If you:
- needed to pay for professional services or advice about the move to the 2015 Scheme which no longer applies because of the McCloud ruling and the rollback or remedy, or;
- need to pay for additional professional services or advice due to the application of the remedy;
you can apply to recover costs of these services under the NHS Cost Claim Back Scheme, subject to certain limits. You can find out more information in the full NHS Cost Claim Back Scheme rules (PDF: 227KB).
For example, these could be costs incurred where your pension situation is complex, such that you needed to employ an IFA or accountant for advice about the move to the 2015 Scheme, that no longer applies due to the remedy.
Also, if pension complexities meant that you needed advice about your choice of benefits after receiving your RSS, or the effect of rollback on your tax position after you’ve received your RPSS.
Costs not covered by the Cost Claim Back Scheme
You cannot use the Cost Claim Back Scheme to claim back the cost of:
- a payment for professional services or advice that, in the opinion of the scheme manager, the applicant could have reasonably obtained from the NHS Pension Scheme without charge. This includes information that has been, or will be provided in their RPSS or their RSS.
- general advice about your pension not linked to the remedy.
- costs you’ve already had a payment for through a court order, another scheme, or those where you’ve previously submitted a claim.
When a claim can be made
You can apply up to 12 months after receiving your RPSS or your first Remedial Service Statement.
How much can be claimed?
A claim for IFA services to help you make your decision about your choice of pension benefits for the remedy period is limited to £500 including VAT, per piece of advice.
The maximum payment under this Scheme for accountancy services, where the service relates to the use of the HMRC Digital Service for the completion of applications, is £1,000 including VAT per piece of advice.
Where to find the scheme rules and application form
The full details of the NHS Cost Claim Back Scheme are explained in the scheme rules (PDF: 227KB). You should read these rules before completing a claim form (PDF: 292KB). Due to some functionality in the form, you will need to open this in your browser to complete it.
The types of losses this claim form covers need to meet conditions 1 or 2 in paragraph 5 of the scheme rules.
Condition 1 - the financial loss must be as a direct result of the discrimination that took place, or the remedy taken to put right that discrimination.
Condition 2 - payments for professional services or advice, including, but not limited to, accountancy and IFA services. This condition doesn’t include payments for information or services that the applicant could have obtained from the NHS Pension Scheme free of charge.
Use the HMRC Digital Service to correct tax
Members whose annual allowance or lifetime allowance tax position changed because of the rollback or their choice, should use the HMRC Digital Service. Follow the process on the HMRC website for how to claim overpaid tax, or ways to pay tax you may owe.
You need to wait for your Remediable Pension Savings Statement before you can use the HMRC Digital Service.
If you’ve already retired before you receive your RPSS, you should also have made your choice of 1995/2008 Scheme or 2015 Scheme pension benefits for your membership during the remedy period.
Your RPSS will include your revised pension growth and the pension input amount for the remedy tax years your pension was affected. We’ll be sending the majority of active and deferred remedy members their RPSS by October 2024 - find out when remediable pension savings statements will be issued. There’s no need to ask us for your RPSS in advance, as we’ll make sure you have the information you need in good time.
Circumstances where we’ll contact members automatically
- Ill Health Retirement benefits
- Early Retirement Reduction Buy-outs (ERRBO) contributions paid during the remedy period
- practitioners who paid part-year contributions to the 2015 Scheme during the remedy period
- those who chose to move their pension benefits into the 2008 Section as part of the 2015 Choice 2 exercise
- those who purchased additional pension during the remedy period
- those who were subject to a pension sharing order after March 2015
We’ve updated the Contingent decisions page with details of the process for members who decided to opt out of the NHS Pension Scheme because they did not want to move to the 2015 Scheme. These members can apply to reinstate opted-out remedy period membership into the 1995/2008 Scheme.
We’ll also be updating our website over the coming months with processes for remedy members whose finances were affected due to:
- being in a worse tax position because of transitional protections that were in place
- a decision not to purchase Additional Pension due to the 2015 changes
More details about the NHS Cost Claim Back Scheme and examples of different types of applications can be found on our factsheet (Word: 203KB). We’ll continue to add updates about the NHS Cost Claim Back Scheme to our website. You’ll find the latest information on this page in our Member Hub.