Public sector exit payment recovery regulations

06 January 2016

The Government has published a consultation on the draft regulations that will give effect to the powers enacted in the Small Business, Enterprise and Employment Act 2015, which allow for the recovery of exit payments when a high earner returns to the public sector shortly after exit.

These regulations will then go through Parliamentary scrutiny with the intention that the policy will take effect from April 2016.

Since the last public consultation, the government has modified some elements of the policy to ensure that the recovery provisions are fair and consistent.

These changes include:

  • lowering the minimum earnings threshold for individuals subject to the recovery provisions from £100,000 to £80,000
  • applying the policy to qualifying returns to any part of the public sector, instead of only returns to the same part of the public sector
  • the recovery amount will be reduced over time for a return at any point up to 12 months from exit
  • and recovery will include employer funded pension ‘top up’ payments made under the Local Government Pension Scheme to align with the recovery of other similar payments.

The draft regulations also list the public sector organisations that are in scope of the regulations and those that are proposed to be exempt.