Department of Health and Social Security SD Letter (74) 9

Department of Health and Social Security SD Letter (74) 9 Health Services Superannuation Branch (SD Letter (74)7 was Hesketh House 200-220 Broadway issued to ECs only) Fleetwood Lancs FY7 8LG Telex 67586 Telephone 039-17 (Fleetwood) 4331 Regional Health Authorities Area Health Authorities Family Practitioner Committees The Welsh Health Technical Services Organisation The Prescription Pricing Authority Our reference SD555/11/Pt D Date 2 April 1974 Dear Sirs NATIONAL HEALTH SERVICE REORGANISATION - COMPENSATION FOR LOSS OF EMPLOYMENT OR LOSS OR DIMINUTION OF EMOLUMENTS Advance information about the arrangements to provide compensation for loss of employment or loss or diminution of emoluments as a result of National Health Service reorganisation was given in SD Letter (74)1. This letter encloses a copy of an explanatory leaflet for officers affected and described the procedure for claiming compensation. CLAIM FORMS AND LEAFLET 1. The forms for use for claiming compensation are Comp NHS 1 for resettlement compensation and Comp NHS 2 for long-term and retirement compensation. The explanatory leaflet is leaflet SD Comp. There will be no bulk issue of claim forms or leaflets to employing authorities but they will be supplied by the Division to employing authorities or to any individual applicant, on request. CLAIMS PROCEDURE 2. The Department proposes to issue a letter shortly giving guidance to employing authorities on the procedure to be followed before a transferred officer who has not been confirmed in his pre-transfer post is finally declared redundant. Where an officer cannot be offered or does not accept an offer of a reasonably comparable or suitable alternative employment and he is given notice of termination of his employment he should be given a copy of the explanatory leaflet and the forms on which compensation may be claimed if he considers that he is eligible. If, at the date of termination he will be over the age of 55 and have at least 5 years' superannuable service, he should also be given form AW8(ADP) on which the claim the superannuation benefits mentioned in paragraph 10.2 of the leaflet. For an officer under age 55 the necessary action in regard to the preserved benefits mentioned in paragraph 10.3 of the leaflet will be taken by the Division on receipt of form SD55(ADP) or SD55F. 3. Form AW8(ADP), if appropriate, and form SD55(ADP) or SD55F should be submitted by the authority in the usual way; claims for compensation may be submitted through the authority or direct to the Division. In all cases where the officer claims or is expected to claim compensation form AW8(ADP) or SD55 should be accompanied by a letter from the authority stating the circumstances in which his employment is being terminated, whether he has been offered any alternative employment and, if so, giving full details of the employment, the salary or salary scale applicable and the reasons, if any, given by the officer for not accepting the employment. A copy of the letter in which the offer

was made should also be forwarded. If no suitable alternative employment is available, or the authority considers that the officer's refusal to accept an offer of alternative employment is not unreasonable, and a redundancy payment under Section XXV of the General Council Handbook appears to be due, the procedure in paragraphs 15 to 17 of HM(66)9 should be followed. No payment should be made until the Division has advised the appropriate reduction on account of the superannuation benefits. 4. Where an officer accepts an alternative employment at reduced pay or otherwise suffers a diminution of emoluments he should be given a copy of the explanatory leaflet and a form Comp NHS 2 on which he may claim compensation either via the authority or direct to the Division. 5. The compensation arrangements extend to cover staff of Local Professional Committees and Associations representative of Health Authorities who suffer loss of employment or loss or diminution of emoluments as a result of National Health Service reorganisation. Any resettlement compensation for loss of employment will be reduced by the amount of any redundancy payment made by the Committee or Association under the Redundancy Payments Act 1965. STAFF OF LOCAL PROFESSIONAL COMMITTEES 6. The compensation arrangements apply to persons employed by Local Medical, Optical and Pharmaceutical Committees. Family Practitioner Committees are asked to bring the contents of this letter to the notice of their local professional committees if any of their staff suffer loss of employment or diminution of emoluments in consequence of the Act. CLAIMS, ENQUIRIES AND REQUESTS FOR FORMS OR LEAFLETS 7. Claims, enquiries about this letter or requests for forms or leaflets should be addressed to Awards D, Room 136, at the above address (telephone enquiries to extension 252 or 253). 8. A copy of this letter is enclosed for the Treasurer/Finance Officer. Additional copies are also enclosed for distribution to Districts by Area Treasurers. Yours faithfully R P POLE

NATIONAL HEALTH SESRVICE (ENGLAND AND WALES) Leaflet SD COMP COMPENSATION FOR LOSS OF EMPLOYMENT OR REDUCTION OR LOSS OF PAY AS A RESULT OF NATIONAL HEALTH SERVICE REORGANISATION 1. Introduction AN EXPLANATORY GUIDE FOR CLAIMANTS 1.1 This leaflet gives a general outline of the main features of the scheme for compensating persons who suffer loss of employment or diminution of emoluments as a result of National Health Service reorganisation. It is for general guidance only and nothing said in it can override the statutory provisions which will be laid down in regulations. 1.2 The conditions affecting eligibility for compensation are explained in paragraphs 3 and 4 below. There are three kinds of compensation: resettlement compensation (for loss of employment only), long-term compensation and retirement compensation. Details of the various kinds are given in paragraphs 5 to 8 and the time limits for claiming compensation are set out in paragraph 12. 2. Meaning of expressions 2.1 Some of the words and phrases used in this leaflet have special meanings which are explained below:- "Emoluments" means gross salary or wage, immediately before loss or diminution, including any fees and the money value of any accommodation or other allowances in kind appertaining to the employment but excluding overtime (unless it is a usual incident of the employment) and any temporary allowance for additional work occasioned by the reorganisation. "Minimum pensionable age" is the earliest age at which the person could have received an unreduced pension solely by virtue of his age and service. "Normal retiring age" is the age of compulsory retirement applicable to the person by the conditions of the lost employment or by any Act or regulations, or, where there is no compulsory age, age 65 for a man or age 60 for a woman. "Service" means any whole-time or part-time employment under or for the purposes of the Crown; in the National Health Service, or with a local professional committee or association representative of health authorities, and any other employment which is reckonable as service for superannuation purposes or is approved by the Secretary of State, including certain war service or national service. 3. Persons able to claim compenation 3.1 A claim may be made by any person employed in the National Health Service or by a local professional committee or an association representative of health authorities who as a result of National Health Service reorganisation is dismissed by his employer or has his emoluments reduced. A claim may also be made by employees of local health authorities and local education authorities who suffer reduction of emoluments on transfer to the employment of a new National Health Service authority. The arrangements do not apply to local health authority or local education authority employees who do not become employed 1

in the National Health Service. Corresponding local government arrangements will apply to such persons. 3.2 Entitlement to compensation is not automatic and in determining eligibility for, or the amount of, compensation account is taken of the extent to which other employment is sought and of any offers of alternative employment in the National Health Service, or under the Crown, or with a local authority or a recognised local professional committee or an association representative of health authorities. 3.3 A person who is offered but does not accept a reasonably comparable employment (which would carry with it full salary protection but may be concerned with a different service or involve a transfer to a place anywhere in England or Wales) is not eligible for compensation. 3.4 If the employment offered is not reasonably comparable but is a suitable alternative to the person's former employment, non-acceptance will not rule out compensation; but the resettlement lump sum will not be payable (unless the employment is in a different locality, or is outside the National Health Service and the duties are substantially different from the person's former duties) and long-term compensation will not exceed the amount, if any, but which the person's emoluments would have been reduced had the employment been accepted. 3.5. The fact that a person has not sought, or has been offered, a new post before he has been notified that his employment is to be, or is likely to be, terminated will not affect his eligibility for compensation. But if an employing authority, when making an offer, informs the person that refusal might lead to termination of employment, or, when notifying actual or likely termination of employment, renews a previous offer, the offer will be taken into account unless the person can show that acceptance would have involved undue hardship or that he was prevented from accepting it by reason of ill-health or other circumstances beyond his control. 3.6 A person who is claiming compensation for loss of employment and who does not immediately obtain other employment should register at once at an Employment Exchange and take all other possible step to obtain employment. Failure to do so without reasonable cause may result in compensation being reduced or withheld. 4. Person who has reached normal retiring age 4.1 Compensation is not payable to or in respect of a person who has reached normal retiring age at the date of loss or diminution, except that a non-pensionable officer who would have continued in employment for a substantial period beyond that age may be paid compensation at half the long-term rate. 5. Resettlement compensation for loss of employment 5.1 Resettlement compensation is a lump sum payable to an eligible person (whether pensionable or not) for loss of employment only, provided the loss occurs before "normal retiring age". Qualifying service - 2 years continuous service disregarding breaks up to 6 months in aggregate. Amount - Whichever is the greater of the following two alternatives - 2

i. 13 weeks' emoluments plus one week's emoluments for each year of age over 45 (subject to a maximum of 26 weeks' emoluments in all) but where the loss occurs within the 3 years before the person's normal retiring age the sum will be reduced by one-sixth for each complete period of 6 months within those 3 years and before the loss; or ii. in respect of each completed year of service (up to a maximum of 20 years): after age 41, 1½ weeks' emoluments; after age 22 but before age 41, one week's emoluments; and before age 22, ½ week's emoluments; but where the loss of employment occurs within one year before the person's normal retiring age the sum will be reduced by one-twelfth for each complete month within that year and before the loss. 5.2 Where the lost employment was whole-time or substantially whole-time, any earlier part-time service is reduced to the whole-time equivalent for the purpose of calculating the amount of resettlement compensation. 5.3 Resettlement compensation will not be less than 13 weeks' emoluments for a person who has less than 5 years' service and who is thus not eligible for long-term compensation. 5.4 Resettlement compensation will be reduced by the amount of any redundancy payment under section XXV of the General Council Handbook, or the Redundancy Payments Act 1965. 6. Long-term Compensation for loss of employment 6.1 Long-term compensation is an annual allowance payable to an eligible person (whether pensionable or not) from the date of loss up to "normal retiring age" unless retirement compensation becomes payable earlier (see paragraph 7.3 below). Qualifying service - 5 years (Periods of service are aggregated provided there has not been a break of more than 12 months between employments). Maximum Amount - 1/60th of emoluments for each year of service, and proportionately for part of a year, with additional 60ths for a person over the age of 40 at the date of the loss in accordance with the following table, subject to a maximum allowance of 40/60ths. Age Length of service Number of additional 60ths 40 or over but less than 50 50 or over but less than 60 Less than 10 years 10 years or more but less than 15 years 15 years or more but less than 20 years 20 years or more 60 or over - - 1/60th for each year of service after attaining age 40 1/60th for each year of service after age 40 plus 1/60th but not more than 10 additional 60ths 1/60th for each year of service after 40 plus 2/60ths but not more than 10 additional 60ths 1/60th for each year of service after 40 plus 3/60ths but not more than 10 additional 60ths 1/60th for each year of service after attaining age 40 but not more than 15 additional 60ths 1/60th for each year of service after attaining age 45 3

Where the lost employment was whole-time or substantially whole-time, any earlier part-time service is reduced to the whole-time equivalent for the purposes of calculating the amount of long-term compensation. 6.2 Where there is entitlement to social security benefits, long-term comp is restricted, if necessary, so that the aggregate of compensation, any pension, and personal social security benefit in any week, does not exceed two-thirds of the person's former emoluments. Long-term compensation is also restricted if the National Insurance retirement pension becomes payable before normal retiring age. 6.3 So that the claimant may retain the benefit of cost of living increases (eg improvements in social security benefit; pay increases that are primarily due to rises in the cost of living since the loss of employment; and annual increases in the pension and compensation under the Pensions (Increase) Act 1971) such increases will be disregarded for the purpose of calculating any reduction referred to in paragraph 6.2. 6.4 Long-term compensation may be reduced or withdrawn if any employment (including self-employment) is undertaken (see paragraph 11.1). 7. Retirement Compensation for loss of employment 7.1 Retirement compensation is payable from normal retiring age (but may be claimed earlier in certain circumstances - see paragraph 7.3 below). 7.2 Pensionable officer Qualifying service - 5 years without a break of more than 12 months Amount of compensation - An annual allowance and a lump sum calculated in the same way as retirement benefits under the superannuation scheme except that the pensionable service of an officer aged 40 or over at the date of the loss will be enhanced by 2 years, plus 2 years for each of first 4 years of service after age 40, plus one year for each further year of service. The enhancement must not exceed the least of the period between date of loss and normal retiring age; or the officer's pensionable service excluding any purchased years; or 15 years. 7.3 Payment before normal retiring age Payment of retirement compensation may be claimed (in lieu of long-term compensation) in event of permanent incapacity, or, on reaching minimum pensionable age. In such cases the enhancement will be restricted to the period that could be served up to the date of option to take retirement compensation in lieu of long-term compensation. 7.4 Non-pensionable officer A non-pensionable officer who is receiving long-term compensation for loss of employment when he reaches normal retiring age and would, but for the loss, have continued in his employment for a substantial period beyond that age may be paid compensation at half the long-term rate. 4

7.5 Policy scheme optant Retirement compensation and death benefits are normally not payable to an optant for a policy scheme (such as FSSN) but, for a person aged 40 or over at the date of the loss, payment of premiums to the scheme will continue at their previous level so as to provide benefits as if employment had continued for a period not exceeding the appropriate enhancement period in paragraph 7.2. If the policy benefits are taken earlier, payment of premiums will cease and any long-term compensation in payment will be reduced by the annuity value of the benefits. 8. Compensation for diminution of emoluments 8.1 Long-term and retirement compensation may also be payable when emoluments are diminished; there is no resettlement compensation for diminution. The maximum long-term compensation for diminution is calculated by reference to the emoluments before the diminution as if the person had lost his employment and then become re-employed at a lower salary; the amount payable can be equal to but will not exceed the amount of the diminution. Retirement compensation for diminution which is payable to a pensionable officer only will be the appropriate proportion of the retirement compensation that would have been paid if the employment had been lost. 9. Pensions (Increase) Acts 9.1 The Pensions (Increase) Acts apply to payments of long-term and retirement compensation in the same way as they apply to pensions under public service pension schemes. The increase is payable only to persons aged 55 or over. Where compensation is payable to an officer below age 55 the increase payable when he reaches age 55 will be related to the rise in the cost of living since the date of loss. 10. Compensation and Superannuation 10.1 Superannuation benefits are offset against long-term and retirement compensation and compensation payable to widows and dependants. 10.2 Under the National Health Service superannuation scheme, a person becoming redundant at or after age 55 who has a minimum of 5 years' superannuable service is entitled to receive immediate payment of his accrued pension and lump sum retiring allowance. If he is also entitled to receive compensation it is reduced by the amount of pension in payment, and when the retirement compensation lump sum becomes payable it will be reduced by the amount of the lump sum retiring allowance already paid. 10.3 Such a person under age 55 who becomes redundant may elect to have his accrued pension rights and lump sum retiring allowance preserved until minimum pensionable age under the scheme. 10.4 Where a married man dies before becoming entitled to retirement compensation, the widow's pension payable under the superannuation scheme will be supplemented for the first 3 months up to the rate of her husband's long-term compensation. Thereafter the widow's pension will be supplemented up to one-half of the rate of pension her husband would have received if he had died in service after completing additional service equal to the enhancement period mentioned in paragraph 7.2, or the period between the date of loss and the date of his death (whichever is the shorter); or he had retired on the grounds of ill-health at the date of loss; whichever is the greater. The death gratuity and any child allowance payable under the superannuation scheme will be similarily supplemented if appropriate. 5

10.5 Where the husband dies after becoming entitled to retirement compensation the widow's pension payable under the superannuation scheme will be supplemented for the first 3 months up to the rate of the husband's retirement compensation and thereafter up to one-half of that rate. 11. Review of Compensation 11.1 Long-term compensation is reviewed for 2 years and if employment of any kind or self-employment is undertaken the compensation is reduced or withdrawn if necessary so that the aggregate of the compensation, any pension in payment under the pension scheme and current earnings does not exceed the person's former emoluments. At the end of the 2 years the compensation is finalised and is then not liable to further reduction unless the person is engaged in employment in which his remuneration is paid out of public funds, eg in the National Health Service, or with any government department or a local authority, but not with the Post Office or any nationalised undertaking such as the National Coal Board, an Electricity, Gas or Water Board or the British Transport commission. No account is taken, either within or after the 2 year review period, if any increases in his current earnings which are primarily due to rises in the cost of living, or of annual increases i8n the pension or compensation under the Pensions (Increase) Acts. The 1974 pension increase supplement will be treated as part of the basic pension. 11.2 Retirement compensation for loss of employment is also reviewed for 2 years after the initial award and may be adjusted if the person obtains other pensionable employment in which his previous service is reckonable. 11.3 Long-term and retirement compensation are reviewed after the initial 2 year period if the person loses a new employment which had been obtained before the end of that period or obtains other employment paid out of public funds. 11.4 Awards for diminution of emoluments are subject to review at any time so long as the person retains the employment in which his emoluments were diminished. 12. Claims and Time Limits 12.1 A claim for resettlement compensation must be made within 13 weeks. 12.2 A claim for long-term or retirement compensation can be made up to 2 years after the loss or diminution but the award is not normally made retrospective to a date earlier than 13 weeks before the date of the claim. 12.3 Exceptionally, the 13 weeks limits may be extended if the delay in the claim was due to ill-health or other circumstances beyond the claimant's control. 12.4 Claim forms can be obtained from your employing authority or from the address below. 13. Appeals 13.1 A person who is dissatisfied with a decision about his claim may appear to an Industrial Tribunal. 6

14. Further information 14.1 If you need any further information, write to Department of Health and Social Security, Health Services Superannuation Division, Room 136, Hesketh House, 200/220 Broadway, Fleetwood, Lancashire, FY7 8LG. Please remember to give your full name, date of birth, job particulars, name of the employer and, if known, your superannuation reference number. 7