New £95,000 cap on public sector exit payments

The new cap applies to the following exit payments:

• Any payment on account of dismissal by reason of redundancy (although there are exceptions in respect of statutory redundancy entitlements).

• Any payment to reduce or eliminate an actuarial reduction to a pension on early retirement or in respect of the cost to a pension scheme of such a reduction not being made.

• Any payment pursuant to an award of compensation under the Acas arbitration scheme or a settlement or conciliation agreement (although compensation in some circumstances may be exempt).

• Any severance payment or ex gratia payment.

• Any payment in the form of shares or share options.

• Any payment on voluntary exit.

• Any payment in lieu of notice due under a contract of employment (although a payment that does not exceed one-quarter of the relevant person's salary is exempt.

• Any payment to extinguish any liability to pay money under a fixed term contract.

• Any other payment, whether under a contract of employment or otherwise, in consequence of termination of employment or loss of office.

The following are not exit payments:

• Any payment in respect of death in service.

• Any payment in respect of incapacity as a result of accident, injury or illness (including injury to feelings payments).

• Payment under certain firefighters' pension scheme rules and regulations.

• Certain service awards to members of the judiciary.

• Any payment in respect of annual leave due under a contract of employment but not taken.

• Any payment in compliance with an order of a court or tribunal.

• Any payment in lieu of notice due under a contract of employment that does not exceed one-quarter of the relevant person's salary.

https://www.gov.uk/government/publications/restriction-of-public-sector-exit-payments#:~:text=Exit%20payments%20are%20important%20for,and%20react%20to%20new%20circumstances.&text=The%20Restriction%20of%20Public%20Sector,the%20taxpayers%20who%20fund%20them.