How does medical boarding work?

The long answer

Generally, before medical boarding is considered, the employer is required to see if your job could be modified to accommodate you, or if there is another job within the company that you would be able to do. 

Deale Attorneys says that if it is not financially or practically possible for an employer to accommodate an employee in those circumstances, the employer should consider early ill-health retirement if that is available. 

If there is no disability benefit provided in your pension or provident fund, and there is no job you could do, the employer can terminate your employment for ill health or permanent incapacity, which is known as a “no-fault dismissal”.

Being able to be medically boarded would depend on the rules of the pension or provident fund of your company, and whether it provides disability benefits. It seems that companies mostly have a policy linked to the pension or provident fund, where the insurance company decides whether an employee qualifies or not. If the insurer agrees with the claim, they will pay the person a monthly stipend of whatever amount the policy provides for. 

Buddies for Life says that an individual would have to prove that they were unable to work. They say that the bar for medical boarding is set “quite high” and that very often the insurer is looking for definite proof that the person will never be able to work again. 

There are different rules that apply to different funds. For example, Old Mutual says that if you are entitled to receive a disability benefit, it will be treated as a retirement benefit and the new annuitisation rules at retirement will apply. This means that it is no longer possible for provident fund members to take their entire disability benefit as a lump sum, should they be declared disabled, and a portion of it may have to be used to pay them a monthly income. 

Old Mutual also says, “The rules for who gets disability are very strict and are laid out in the fund’s rules. The employee (fund member) must be unable to do any occupation they are qualified for in the open labour market and the insurer decides whether the employee qualifies or not.” 

The Allan Gray umbrella fund says that if you become permanently disabled (due to an injury or illness), you may apply for early retirement (i.e. before your 55th birthday), if you are an Active Member, or before your Normal Retirement Date, (if your employment was terminated before that date) by submitting the “Request for approval of early retirement” form, together with the necessary supporting documents. They say, “The Board needs to approve your application for early retirement based on medical evidence obtained at your cost.” 

Abrahams & Gross also say that an employee may directly apply to be medically boarded through the fund or scheme they belong to. The relevant forms must be requested from the specific fund/scheme and completed by the employee. The employee’s application to be medically boarded must have a doctor’s report motivating the reason for permanent incapacity and the insurer will decide whether to approve the claim or not. 

The risk is, though, as one person wrote in an online letter, what if the company terminates your services and the insurer does not approve your claim? 

So, there is a lot to consider, and it may be worth discussing it with your doctor before applying to be medically boarded.

Wishing you the best,
Athalie