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Locums who work OOH shifts can avoid higher pension payments, reveals BMA

GP locums who work for out-of-hours (OOH) providers can get around new rules that force them to pay higher pension contributions, NHS Pensions has clarified to the BMA. 

Earlier this year the Government changed the rules for the way locum GPs pay into their pension by 'annualising' their earnings automatically - but the BMA warned this would push them into a higher tier of contributions.

The BMA has now revealed that locums who work one or more OOH shifts in a tax year will not see their earnings annualised as long as they work with an OOH organisation that uses SOLO forms to submit pensions information.

The National Association of Sessional GPs stressed this is only a 'technical loophole' and warned the rule change remains 'unfair' for many locum GPs who are unable to work OOH shifts.

Automatic annualisation of pensions contributions was brought in from April for locum GPs taking part in the 2015 version of the NHS pension scheme. 

As a result, members had their pension contributions tiered at a higher rate - because they were based on annualised earnings, which are an approximation, rather than their actual earnings.

Prior to the changes, locums were allowed three months of no work - compared with one month for salaried GPs on the same pension scheme - before their earnings were subject to annualisation.

Following a consultation on proposals to change NHS pension scheme regulations the Government removed the three-month rule so that all members of the scheme are subject to the same rules.

Discussions between the BMA and NHS Pensions have led to the revelation that locum GPs can get around the rules by working OOH shifts.

In a blog, BMA sessional GPs Committee chair Dr Ben Molyneux said: 'We have had confirmation from NHS Pensions that any GP who works one or more OOH sessions with a provider who is able to offer the NHS pension with SOLO forms will effectively be removed from annualisation for the year.

'You will be required to complete a type 2 practitioner form, which is no change if you have a salaried role, but may be new if you exclusively locum. The result will be that your pension contributions will be based on what you actually earned for the year with no "annualising effect".'

He added: 'If you are currently associated with an appropriate OOH provider, you just have to complete at least one session this year. If you aren’t registered at all, you should enquire whether they are able to register you from April 19 onwards as this would remove you from annualisation.'

But National Association of Sessional GPs chair Dr Richard Fieldhouse said this method will only benefit a small number of individuals, warning it could lead to a surge in demand for OOH shifts. 

He said: 'Someone here has found a technical loophole but it’s having to go through hoops and hurdles to avoid paying something that was unfair in the first place. It’s like papering over a crack with wallpaper.

'It’s not a solution. I think for the majority of people, such as parents with children, doing OOH it’s just not possible because it includes so many commitments. I imagine it would only help a small percentage of people.'

He added: 'There are not that many OOH shifts you can cover using form SOLO, bearing in mind that there are 20,000 locums subject to annualisation. It may well be that OOH services suddenly find themselves with a lot more sessions covered because locums are trying to do this.'

Dr Molyneux said the BMA will 'continue to lobby extensively for changes to annualisation and against the discriminatory impact of the regulations'.

The BMA previously announced that 'at least a dozen' of its members were set to take legal action against the Government as they believe to have been forced to join a pension scheme that will 'result in huge financial losses when they retire'.

Readers' comments (4)

  • National Hopeless Service

    When I was a boy locums had no access to pensions or crown indemnity. Locums were invariable retired GPs who didnt want to fully hang their stethescopes up. Its why in part we chose to be partners. Perhaps we need to review the entire locum model of pay before the whole system collapses.

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  • The situation has become so absurd that many newly qualified GPs only do Locum work and won’t even do a salaried job. The partnership model is doomed. I wish government would put it quickly out of its misery to save existing partners from taking on more and more.

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  • If they don't do OOH shifts at all they will avoid income tax an NI too. It seems penal rates of taxation can be a detriment to society for discouraging work.

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  • the article is incorrect. Locums are not entitled to 1 month of inactivity. That's why it is so unfair. if I work 2 days a week for 46 weeks of the year then my earnings (for the purpose of which tier of contributions I pay) are multiplied by 365/92. This will put every locum in the highest tier of 14.5% regardless of actual earnings.

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