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Public Sector Exit Payment Cap Revoked

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The government has announced that it will be revoking the Public Sector Exit Payments Regulations 2020, which place a £95,000 cap on public sector exit payments.

The Regulations came into force - in the face of considerable criticism - in November 2020. Three months later, the government has recognised serious deficiencies in the Regulations and has issued a Treasury Direction to suspend them, whilst the process of formal revocation can take place.

The accompanying Guidance Notes provide:

"2.1 If you have been directly affected by the cap whilst it was in force, you should request from your former employer the amount you would have received had the cap not been in place by contacting your employer directly. Employers are encouraged to pay to any former employees to whom the cap was applied the additional sums that would have paid but for the cap."

In the words of leading legal employment law commentator, Darren Newman:

"A policy 5 years in the making has collapsed overnight. Government really needs to reflect on its refusal to listen to those advising them that the Regs were a mess."