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<p>The Government consulted on implementing a public sector exit payment cap in July
2015. The Government response to this consultation was published on 16 September 2015.
This response provides detail on which organisations and types of payments the Government
intends to capture within the scope of the public sector exit payment cap. This accords
with the Government’s manifesto commitment to end tax payer funded six figure payoffs
for public sector workers.</p><p>The response document can be found at the following
link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464367/Public_sector_exit_payments_response.pdf</p><p>The
exit payment cap will apply to payments made as a result of an employee leaving their
employment. It will <strong>not</strong> affect any pension a person has earned through
their years of service or have any impact on accrued pension rights or pension lump
sum entitlements on retirement. It will capture contributions, made by the employer,
to fund early access to an unreduced or partially reduced pension. This is because
such costs are ultimately funded by the tax payer.</p><p>The Government has been clear
that early retirements relating to ill health are outside the scope of the cap and
will not be affected. Additionally, any payments directed by a Court or Tribunal will
not be included in the scope of the cap.</p><p>Exits on compassionate grounds are
not such a clearly defined concept as exits related to ill health or redundancy. There
will generally be a large degree of employer discretion on the terms of such exits,
and on any payments. In these cases there will be discretion available to relax the
cap in individual cases, subject to relevant Ministerial or local council approval,
as will be set out in further detail in forthcoming Treasury guidance and directions.</p><p>
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