Lay Employees of the Methodist Church

Permanent Health Insurance Scheme

Introduction

If you are unable to work for a long time because of sickness or injury you and your family may have many problems and one of these may be how to pay bills. The Permanent Health Insurance Scheme (“the PHI Scheme”) provides you with a regular income if you are away from work because of sickness or injury for a long time.

This leaflet is a summary of the provisions of the PHI Scheme. Your employer pays the whole cost of the PHI Scheme.

When You Join

You will be included in the PHI Scheme if you are:-

  1. a Lay employee ordinarily employed and resident in Great Britain.
  2. aged not less than 16 but less than State Pension Age
  3. a contributing member of the Pension and Assurance Scheme for Lay Employees of the Methodist Church (“the Pension Scheme”)

In certain circumstances evidence of your insurability (for example information about your health and about participation in any hazardous pursuits away from work) may be required when you join PHI Scheme or at the time of any future increase in the amount of your benefit. Your benefit will be restricted if you are unable to produce satisfactory evidence when required.

If you do not join the Pension Scheme at your first opportunity, or join as a result of the auto enrolment regulations you will be required to provide medical evidence before you are accepted for membership of the PHI Scheme. If you are unable to provide satisfactory evidence of your health, your benefits will be restricted.

The PHI Scheme is insured with Unum Limited. If the insurance company, after considering your medical evidence, refuses to insure you, you will not be admitted into the PHI Scheme.

Amount of Benefit

Subject to the overriding limit set out in the Note below your benefit will be an annual amount equal to:

(a)75 per cent of your Scheme Earnings (as defined below)
less

(b)the annual rate of the Employment and Support Allowance (ESA) at the Work Related Activity Component (WRAC) levelapplicable when you become entitled to payment from the PHI Scheme

Scheme Earnings are your basic annual earnings you are receiving from your employer. Your Scheme Earnings are calculated at the 1 September before your last day at work. If, however your employer has awarded a general cost of living pay increase after your last day at work this will be taken into account in your Scheme Earnings if a 1 September occurs during your period of absence and before you become entitled to payment of your benefit.

Your benefit will be reduced by any other regular income paid to you by your employer and any benefit for sickness or injury paid to you under an insurance policy.

If you are a married woman who has elected to pay reduced National Insurance contributions your benefit will be calculated as if you were paying the full amount.

Payment of Benefit

You will become entitled to benefit after you have been unable to work because of sickness or injury for 26 continuous weeks.

The benefit will be paid to you by monthly instalments in arrears (less tax and National Insurance contributions) and will be increased each year by 5 per cent compound on the anniversary date of commencement of payment.

Payment of benefit will continue until you are able to return to work, or until you reach State Pension Age when you can startto receive your pension from the Scheme.

If you have been unable to work because of sickness or injury but have become well enough to return to work with your employer either on a part-time basis or in a less well paid job then either:

  1. you will become entitled to a partial benefit which will become payable 26 weeks after you first become unable to work, or
  2. if you are already receiving benefit this will continue but at a reduced rate.

The amount of partial or reduced benefit will be calculated to take into account the difference between your new earnings and your previous earnings.

NOTES

  1. You will be required to produce evidence which is acceptable to the insurance company of your inability to work because of sickness or injury before any benefit becomes payable. You will also be required from time to time to provide evidence of your continuing sickness or injury.
  2. The decision of the insurance company with regard to evidence of inability to work or continuing inability to work and with regard to payment and continued payment of benefit shall be final.
  3. Benefit will not be paid if your sickness or injury is caused by active participation in a war whether declared or not.
  4. While you are receiving benefit and are still employed by your employer an additional amount will be paid which will be used to continue to provide benefit for you under the Pension Scheme. You will not be required to pay pension contributions during this period.

What happens if you leave

If you leave the employment of your employer you will no longer be included in the PHI Scheme and if you are receiving benefit, it will cease.