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Cap on public sector exit payments set to be £95,000

Exit payments for public sector workers will be capped at £95,000, the Government has confirmed, following the results of a consultation.

The cap will be applied to all forms of exit payments, including voluntary and compulsory redundancy pay, cash lump sums, early access to unreduced pensions, payments in lieu of notice, additional paid leave, and non-financial and other benefits.

Exemptions and waivers

Certain bodies will be exempt from the cap, such as the Armed Forces, National Museums, public broadcasters, the Bank of England and other public financial bodies.

But the Government has re-emphasised that it has a 'strong expectation' that exempt bodies will 'come forward with their own, commensurate cap on exit payments'.

Caps may also be waivered with consent from the relevant minister, where it can be demonstrated that it would provide value for money to do so.

Getting value

In the two financial years ending in 2014, the cost of exit payments in the public sector was around £6.5 billion, with more than £1 billion of it coming from payments costing more than £100,000.

The Government said that it did not believe that six-figure exit payments were fair or offered value for money to taxpayers.

 

The cap will be brought in as part of the Enterprise Bill and details will be implemented through secondary legislation.

Acas publications and services

There's Acas support for public sector organisations undergoing change as well as our detailed help on Redundancy issues, including Redundancy payments and notice.

Acas experts can also visit your organisation and help you develop your redundancy procedures and policies. See Redundancy and notice: how Acas can help for more information.

Practical training is also available on Redundancy, Contracts and terms and conditions and Employment law update.

For free, impartial advice and guidance visit Acas Helpline Online.

Visit the Acas Training Courses, Workshops and Projects area for more information.


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