Public Sector: Redundancy Pay

(asked on 3rd July 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what comparative assessment the Government has undertaken on the restriction of exit payments on public sector staff in (a) local authorities, (b) the Civil Service (c) the NHS, (d) the armed forces and (e) police forces.


Answered by
Elizabeth Truss Portrait
Elizabeth Truss
This question was answered on 8th July 2019

The government has previously consulted and legislated on the policy for a cap of £95,000 on exit payments in the public sector. The consultation published on 10 April 2019 sought views on the draft regulations to implement this policy. An impact assessment was conducted and published in the 2016 consultation ahead of the primary legislation. Following the current consultation, a further equalities assessment will be conducted on the final version of the legislation.

The government believes it is right to include all payments related to exit within the cap. The cap does not affect any pension that a person has earned through their years of service or have any impact on accrued pension rights. Instead the cap ensures that any additional contribution to that pension made by the employer to fund early access to a pension is limited to no more than £95,000, on account these costs are ultimately funded by the taxpayer.

We accept that there will be some circumstances where it will be necessary or desirable to relax the cap. As such, a waiver system will be in place for use in exceptional situations, including where imposing the cap would cause genuine hardship.

At the request of the Trade Union Congress (TUC), HM Treasury officials met with the TUC and their members during the consultation period. The government is currently considering responses to the consultation on the draft regulations to implement the public sector exit payment cap. The government will respond to the consultation and finalised regulations will be laid before Parliament in due course.

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