Trust Deed Forum - Medical Pension Lump Sum
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abacus123
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3 Posts

Posted - 30 December 2020 :  02:46:44  Show Profile  Reply with Quote
Iím looking for some advice please. I am in the armed forces and about to be medically discharged with a medical pension lump sum. I have been in my trust deed since 2018. Do I have to hand my medical pension lump sum over to my trust deed? Or is it exempt because itís medical related? Thanks

TDA (Debt Adviser)
Trust Deed Expert



13618 Posts

Posted - 30 December 2020 :  09:19:31  Show Profile  Reply with Quote
Welcome to the trust deed forum abacus123.

I'm sorry to hear that you're due to be medically discharged from the armed forces.

A pension lump sum will be viewed as income, so unfortunately your trustee is going to have an interest in the funds and you should inform them about this.

You may well want to make a case that you should be allowed to retain some of the funds in order to be able to get yourself back on your feet after this major change in your life. Think about the one-off costs you may be about to face, and the time you'll need to find new employment, so that you can help to justify your argument.

Will you face any medical costs related to the reason that you have been medically discharged? If there will be extra medical costs this could be another argument you could advance to retain a part of the pension payment to cover this need.

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abacus123
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3 Posts

Posted - 04 January 2021 :  14:00:39  Show Profile  Reply with Quote
quote:
[i]Originally posted by TDA (Debt Adviser)[/i]
[br]Welcome to the trust deed forum abacus123.

I'm sorry to hear that you're due to be medically discharged from the armed forces.

A pension lump sum will be viewed as income, so unfortunately your trustee is going to have an interest in the funds and you should inform them about this.

You may well want to make a case that you should be allowed to retain some of the funds in order to be able to get yourself back on your feet after this major change in your life. Think about the one-off costs you may be about to face, and the time you'll need to find new employment, so that you can help to justify your argument.

Will you face any medical costs related to the reason that you have been medically discharged? If there will be extra medical costs this could be another argument you could advance to retain a part of the pension payment to cover this need.



Hi TDA, thanks for your response. I was under the impression that because the lump sum is only awarded to individuals medically discharged as part of a medical pension that it would be exempt from being interpreted as a Ďwindfallí. A bit like insurance, you lose or break something and you receive a replacement or money from the insurance company. I lose me job due to medical injury and I receive a medical pension to replace that void?
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TDA (Debt Adviser)
Trust Deed Expert



13618 Posts

Posted - 04 January 2021 :  14:51:08  Show Profile  Reply with Quote
Hi abacus123,

It appears to me that the medical pension will be seen as income rather than a windfall.

However, I'm afraid I still think it's likely that your trustee will have an interest in at least some of any lump sum you receive.

As mentioned in my previous reply, there are a number of things you might want to consider before making a case to your trustee that you should be able to keep at least part of this payment.

Sorry I cannot offer you a more positive response.

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Kevin Mapstone
Trust Deed Expert



3932 Posts

Posted - 04 January 2021 :  19:18:17  Show Profile  Reply with Quote
Hi abacus123.

I would tend to agree with TDA I'm afraid. Is there the option to defer taking the lump sum until a later date?

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