Recovering public sector exit payments - our response

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19 / 2 / 2016 9.47am

The Government is proposing to introduce a common position on the 'claw back' of compensation payments, in the public sector, for employees earning £80,000 or more per annum.

As part of the Small Business, Enterprise and Employment Bill 2014-2015, the Government intends to introduce new legislation to mandate the recovery of compensation, including redundancy payments, across the public sector when an individual takes new employment in the public sector (e.g. NHS or local government) within 12 months of receiving a compensation payment.

During December 2015 and January 2016, the Government consulted on the details of how these proposals should be implemented before taking any final decisions in relation to the final content of the legislation.

The key points made in the consultation paper were:

  • The minimum earnings threshold for individuals subject to the recovery provisions is to be reduced from £100,000 to £80,000 per annum.
  • The policy will apply to returning to employment in any part of the public sector, instead of only returning to the same part of the public sector.
  • The recovery amount will be reduced over time for a return at any point up to 12 months from exit.
  • Recovery will include employer funded pensions "top-up" payments made under the local government pension scheme to align with the recovery of other similar payments.

Read our collective response on behalf of NHS employers in England.  We would like to thank all those employers who took the time to respond to our request for feedback.

The Government is now in the process of laying regulations which will come into effect from 1 April 2016.

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