Assumed pensionable pay

Assumed pensionable pay (APP) is used to work out the increase to your pension when you’re given tier 1 or 2 ill health benefits. APP is the average pensionable pay you get before you leave due to ill health retirement. It’s based on three months’ pay if you’re paid monthly or 12 weeks’ pay if you’re not paid monthly.

There are sometimes changes to how your employer works out APP:

• If your pensionable pay was reduced because you were away from work, your employer will normally calculate the average of the pensionable pay you received in the three months before your pay reduced.
• You may have been working reduced hours before you left because of the condition that led to your ill health retirement. The independent doctor must agree that was the case. If they agree, your employer will work out your APP based on the pay you would have had if your hours hadn’t been reduced.