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I was recently asked this question by a business owner in his late 40’s. He was fortunate enough to have built up quite a large pension fund and he assumed that in the event of becoming ill and unable to work that he could access his pension early. So, is this possible?

The short answer is that it is very tricky, if not impossible. There are so many criteria that have to be satisfied (criteria which are specified by Revenue) that accessing a pension early is this context is far from certain.

There are different definitions of ill health depending on the type of pension you might have. One of the definitions for example is that it requires the individual to be ‘permanently incapable through infirmity of mind or body of carrying on his or her own occupation or any occupation of a similar nature for which he or she is trained or fitted’. To even have a chance of satisfying the illness criteria in this context the nature of the illness would have to be very severe, with no chance of the individual ever returning to work, and even then the chances of a successful claim for early access is slim.

Also, in order for it to be worth your while to access your Pension early, you would need a pension fund to be worth a considerable sum of money. It is unlikely that in your late 40s for example you would have a Pension fund built up that will take care of your income needs for a further 40 years.

As you can see, there are many restrictions and hurdles that you have to cross in order to access your Pension early on grounds of ill health. I would recommend that if this issue is important to you, you should have a separate tailored income protection policy in place to cater for this eventuality. My advice would be to keep your pension plan in place for the purpose for which it was intended, your retirement, and set up an Income Protection policy to cater for ill health before retirement.

If you have pension access questions, please feel free to contact me, Michael Coburn, using the contact details listed below.

Dublin 01 5267770
Wexford 053 9110380
mcoburn@guardianwealth.ie
www.guardianwealth.ie