March 1, 2021

Sir Gar Ar-Lein : Carmarthenshire Online

Newyddion gyda Sir Gar – News for Carmarthenshire

New £95,000 limit for departing public sector workers

EXIT payments of over £95,000 for public sector workers have been banned.

The new cap applies to organisations like councils, health boards and police forces.

A cap on six-figure exit packages was first proposed by the UK Government in 2015.

Now HM Treasury has implemented a limit of £95,000, which includes employer contributions to pension costs.

The new cap came into force on November 4, although a consultation with linked proposals is still ongoing.

Three Swansea Council and two Carmarthenshire Council employees were awarded exit packages of £100,000 to £150,000 in 2019-20.

If those posts aren’t filled, councils can save money on salaries after a year or two.

Payments specifically excluded from the new cap include death in service payments, injury compensation, and pay in lieu of un-taken holiday.

Some unions, including Unison, remain strongly opposed to the £95,000 limit.

Unison’s head local Government, Jon Richards, said the £95,000 cap included “pension strain payments” – money paid by the employer to the pension fund if someone aged 55 or over is made redundant and hence takes an unreduced early pension.

“This is money that the individual never sees – but they will be penalised anyway,” he said.

The British Medical Association said it felt the cap was unlawful, and has applied for a judicial review.

Speaking in September, Treasury minister Theodore Agnew said it was right for the new regulations to come into force.

“I believe the Government is right to take this course,” said Lord Agnew.

“We are strongly of the view that these regulations will deliver value for money for taxpayers and put a stop to excessive payouts, which we have unfortunately seen too often in recent times.”

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