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Restriction of Public Sector Exit Payments Regulations 2020 in force from 4 November

Makbool Javaid, Partner - Simons Muirhead & Burton

The Restriction of Public Sector Exit Payments Regulations 2020 will come into force on 4 November. The Regulations impose restrictions on the amount of an exit payment a listed public sector authority can make in connection with the exit of an employee or office holder, where that exit takes place after the Regulations come into force. The restrictions cap an exit payment at a prescribed amount, currently £95,000 except in specific circumstances as set out in the Regulations. The cap will apply to payments of a prescribed description which are not exempt, including payments arising from a contractual entitlement such as redundancy payments. The Regulations also make specific provisions in relation to statutory redundancy payments and early retirement related payments, as well as provide flexibility by allowing exit payments to be paid in excess of the cap with HM Treasury consent or in compliance with HM Treasury directions.

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