When does the £95,000 cap on exit payments in the public sector come into force?
The £95,000 cap on exit payments in the public sector is in force from 4 November 2020.
The Restriction of Public Sector Exit Payments Regulations 2020 (SI 2020/1122), which introduce the cap, do not provide for a transition period. Therefore, all payments made on or after 4 November 2020 will be covered, including those relating to exits that were already in progress, with the exit payment agreed before that date. There is a discretionary power to waive the cap if the exit was agreed to take place before the Regulations came into force, but was delayed for reasons outside the employee's control.
The Government has published guidance on the operation of the Regulations, including on when the power to waive the cap can be exercised.
The schedule to the Regulations sets out which public-sector organisations are covered by the cap. These include local government, including fire authorities and maintained schools; the NHS; police forces; the civil service, its executive agencies, non-ministerial departments and non-departmental public bodies; and academy schools.
A £95,000 cap is already in force in Scotland for exit payments made by devolved bodies.