Just when the public sector is coping with the knock on effect of the recent changes to IR35 legislation, and is getting to grips with the new apprenticeship levy, there is more significant change looming in the form of the anticipated Public Sector Exit Payments Regulations. There is still no firm date for implementation or confirmation as to how it will work in practice. And what impact will they have on the public sector's current workforce and access to a flexible talent pool in the future? In summary, the Public Sector Exit Payments Regulations were initially intended to tackle 'fat cat' exit payments to public sector employees, who could then walk straight into another well paid role elsewhere in the public sector. The reforms propose a maximum cap of £95,000 of the value of any exit payment (including pension top-ups which enable early retirement, sometimes known as 'strain payments'); the calculation of all exit payments to be done according to a new, reduced set of limits; and crucially, the recovery of exit payments by the Government from anyone earning over £80,000 or above at the time of exit who returns to a public sector role within 12 months.
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