In order to end the issue of pensions with doctors, the government has announced new proposals for Wales and England.
Previous incidence involved doctors’ refusal to work in overtime shifts since they were being charged with bills with an amount that could be received tax-free. Additionally, some of the doctors also received unexpected heavy tax bills. However weeks after reviewing the rules, the ministers have finally agreed to the measure.
Theresa May’s government launched a consultation that offered to overview pension flexibility and to replace the measure with radical solutions. According to reports, previous consultation was published on July 22.
However the consultation was reassessed as a result of the appointment of the new Prime Minister, Boris Johnson. He had promised to acknowledge the issue during the Tory leadership.
With doctors refusing to work beyond planned hours, the issue of pensions has been associated with the waiting time for routine surgery.
According to the latest reports, the government has now put forward a plan which will provide doctors with flexibility with regards to scaling down of pension contributions, in addition to avoiding the breach of annual tax-free allowance.
The doctors’ allowance has been reduced from £255,000 a year in 2010-11 to £40,000. Experts hint on a further drop for the highest earners. This trend is likely to affect the earnings of those with more than £110,000, which is around a third of senior doctors and GPs.
The government initially favoured a 50:50 option, allowing the public sector to forsake half of the amount which was paid into pension. However, ministers have now stated that they will publish a consultation in the upcoming weeks, which will allow the public sector the ability to reduce contributions to zero.
This measure will also enable doctors with contributions which the employer would have had; this will further augment their pay to thousands of pounds a year. The treasury has also given a heads up in reviewing the taxation of public sector workers on their pension plans and if there is a possibility for relaxation of the rules.
Following the announcement, consultation plans will be launched during summer with the intention of introducing them in April.
According to Health Secretary Matt Hancock, he said: “NHS doctors do extraordinary life-saving work every day – they should not have to worry about the tax impacts if they choose to go the extra mile by taking on additional work to help patients.”
Dr Chaand Nagpaul, of the British Medical Association, also commented in connection with the announcement: “We acknowledge this step forward by the government.”
“After tireless lobbying on the damaging effect that perverse and ill-thought out tax legislation is having on our NHS, its doctors and patients, it is good to see the government finally sitting up and taking notice and proposing action.”
Sara Gorton from the union Unison on the contrary reported: “Introducing measures to help only a small proportion of the millions of active NHS scheme members looks alarmingly like the beginning of a ‘clinicians-first’ approach to pension strategy.”