Help! What happens now - PHI T&C don’t match those in my contract

[PanickingAgainNow]

I’m on long term sick leave and my contract says that I am covered by income protection insurance which kicks in after 26 weeks and has payment period up to NRA.
As I’ve been off sick for 5 months now and don’t know if I will be able to go back to work, I asked my employer for the T&C of the policy and they have said that the company group policy has payment period of 5 years.
I’m panicking because I have over 10 years til retirement age so what happens now that the company policy doesn’t match that specified in my contract?
The potential lose of over 5 years payments at 65% of my salary is massive but what can the company do to fix this when they have taken out the policy with the wrong payment period?

Help please, I feel sick at the thought of contesting this.

They will pay you to be off sick for that long, wow. Surely you would be better leaving and getting a new job at 100% salary once better? I guess present them with your offer letter and you will have to come to some arrangement.

Thanks for your response @Doggymummar
The point is that I’m not likely to be able to work again so the payments are intended to cover that loss until I retire.
Do I need to speak to a lawyer to help me deal with this?

I don’t think you need to speak to a lawyer. If the contract says it pays out for 5 years, it pays for 5 years.

The contract says it pays out til retirement age but now HR have said the group policy only covers 5 years so there will be a massive shortfall there.

But that's your employers problem? I'd start by asking them how they intend to meet the gap given your contract provides it till NRA.

Thanks. I feel sick at the thought of having to challenge it when I’m not well.

Do you still have written proof that is said it will pay out until retirement? If you do they don't have a leg to stand on. That's what I meant about reaching a compromise with them. They will either need to pay it from their own coffers or perhaps offer you a lump sum to leave, one you can agree to together. If you can't compromise then you might need a mediator, and if that fails a contract or employment lawyer. You can maybe have someone advocate for you if pain or mental health prevent you from doing this yourself, my partner had to do it for me one time when I had a breakdown. I am guessing you are not in a union?

Thanks @Doggymummar
Yes, it is in my TUPE contract. I’m not in the union but they were involved in negotiating the TUPE terms including the terms of this PHI.
i feel like I do need some support negotiating with them so I might start with CItizens Advice.

Do you have legal cover on your home insurance? You might be able to get advice on this via them.

Oh, yes, good idea, thanks I’ll try that.

My understanding of TUPE is that contracts which are carried over from the previous company can not be amended for a period of time (it was 1 year for us). After that time the new company can put you on the sane terms as the workforce you joined (that's what happened to us - people lost extra holiday, generous sick and maternity pay etc). They may say that's what's happened here so you should probably get some legal advice.

You could look into whether you can claim an ill-health retirement pension from any occupational pension scheme you are a member of.

Yes, I think I can get my final salary pensions paid earlier due to ill health but they are only a small amount so the main source of income will be from this income protection plan.

So if it was specifically negotiated as part of a TUPE arrangement then perhaps the company self insures for the shortfall. If it wasn't a large number of people they may not have bothered to insure for it.
Just clarify it with HR?
However just to warn you that these things are typically policy not contractual so can be changed. If you have it specifically written in a contract then that is a very strong position so you should just write back to HR saying you note the PHI only covers 5 years but to remind then that your contact requires payment until retirement.

There are 2 contracts in play here.

1. The employment contract between you and your employer. if this says that you should have cover up until NRA then that is what you should get. But if it says something different like you will be covered by a group policy then that could more difficult.

1. The contract between the employer and the insurance company. If that says 5 years then that is that the company will be able to claim for.

I would review your contract carefully and consider taking some legal advice.

If there is a gap between 1 and 2 then the employer will have to bear that cost. It is not uncommon for companies to choose to bear some risk in order to keep insurance premiums within an acceptable range. So they might decide to only have 5 years insured because they have done the sums and determined that the risk of someone needing that much cover is not worth paying the premium for all employees.

I suspect that they forgot to set up the policies for the TUPED staff or they decided not to bother because they knew they were making most of them redundant straight after the TUPE (not me though). They have been quite evasive since I asked for the full T&C of the policy.
I have responded saying what my contract says and asking for them to confirm that the payment period is to NRA rather than for the 5 years they told me.

Thanks @FanSpamTastic, that is really helpful.
The PHI that the company offers to its employees is for a maximum of 5 years but the TUPE terms were agreed as to NRA so there does seem to be a gap between 1 and 2 in this case.
I will wait to see what the response is from HR and then get some legal advice if necessary.

Thanks everyone for your help. I don’t feel so panicky now 😀

This is wrong.

Under TUPE, an employee's contract cannot be amended if the main reason for the change is the transfer unless either the amendment improves the employee's terms (e.g. giving more holiday entitlement or better sick pay) or the new employer can show an economic, technical or organisational (ETO) reason for the change. This protection is permanent. The company cannot simply put you on the same conditions as the workforce you joined no matter how long ago the transfer took place. Unless they could show a good ETO reason for the change, the changes your employer made to your employment contract were void and you could have insisted on your original terms.

An example of this is a college that had staff on 6 different sets of terms and conditions as a result of TUPE transfers. They wanted to put everyone on the same terms to make administration easier and cut costs. They dismissed and rehired an employee who refused to accept the changes. The employee took it to employment tribunal where the dismissal was found to be automatically unfair as the reason for the dismissal was the transfer and there was no valid ETO reason for the proposed changes.

I advise on PHI and other products for a living. Do not negotiate to take your pension early on medical grounds until you know you need to.

I say this because pension income can reduce the amount of income received from the PHI negatively.

Thank you so much @Toooldtoworry
I was literally about to contact my final salary pension schemes to ask about early payment on medical grounds.
I am already getting one small pension so do I need to declare that to the PHI insurance company?

One other question if you don’t mind - My employer has said that it is a group insurance policy so am I correct in thinking that I will be paid by them as if it was income and taxed on it? Whereas if it was a personal policy, I would be paid by the insurance company and it would be tax free?

There are a few variants here that could mean tax is paid, etc. I'm going to pm you because its quite complex.