PHI age limit was not discriminatory

The Employment Appeal Tribunal (EAT) has recently upheld an earlier decision from an Employment Tribunal in regarding permanent health insurance payments. The employee benefit ceased when the employee reached the age of 65.  A claim of age discrimination was raised and the Employment Tribunal and now the EAT has found that this did not amount to unlawful age discrimination.


Many employers take out permanent health insurance policies with insurers, to provide benefits to employees if they become unable to work due to long-term illness.  This type of contractual benefit will often see an employee paid a percentage of their gross salary in the region of 50% to 70% whilst unable to work.


This case focussed on whether it was discriminatory of the employer to have stopped the employee’s PHI payments upon reaching the age of 65.  The employee had started sick leave in mid-2011 and did not return to work.  The employee subsequently received payments under the permanent health insurance scheme in accordance with the scheme terms.  However, in 2020, these payments stopped as the employee had reached the age of 65, which was the age at which the insurer stopped making payments under the policy in place.   During this period state retirement had increased to 66 and the employee claimed that the stoppage of the payments was discriminatory and they were financially disaffected.


The EAT decided that this did not constitute unlawful age discrimination by the employer as it was the insurer’s decision, rather than any decision by the employer.


Should you have any questions relating to contractual benefits please contact a member of our team to discuss further on 0800 995 121.

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