Exit Payment Cap enforced quickly

Latest Update

The legislation has been signed into law and will come into effect from 4 November 2020. Sandwell MBC will be contacting individuals affected who currently have planned leaving agreements in place. Please contact UNISON if you need to.


The Westminster Government has tabled, at short notice, the final votes on the
regulations that will impose a £95,000 cap on all exit payments in the public sector.
As branches know, this has been a Government plan for several years. The draft
regulations on an absolute cap of £95,000 on all public sector exit payments, including
pension elements, were consulted on last year and, as with previous consultation rounds
on this topic, UNISON responded robustly on the many concerns this punitive measure
Despite this and, despite many of you raising this issue with your MPs, alongside many
employer organisations, to highlight the very real concerns affecting our members, none of
the concerns were taken on board.
The final vote in Parliament will be next week – probably on 30 September.
Although the Government has a large majority, it is vital that we put as much pressure as
we can, to encourage MPs to vote against the regulations.

The £95k cap would be particularly punitive in local government, because Local Government Pension Strain costs are included as part of the£95k (except in Scotland), and could affect many workers being made redundant after the age of 55 or retiring early.
The result is that many members on very moderate salaries could be affected, if they have
long service.
Branches should also be aware that based on initial informal advice from the Treasury, if
these regulations are passed, there will be a window of just 21 days for redundancies to
be finalised, before the cap comes into force. If an individual’s leaving date is after the
regulations are agreed, but within 21 days of it, then the cap would not apply. From 21
days after the regulations are agreed, the cap would apply, even if discussions or
negotiations about the redundancy have already finished.

Members concerned about this situation are asked to contact their MPs immediately. A model letter to do so it attached below.





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