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The Treasury revokes exit payment legislation

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​In a substantial win for NAHT members, HM Treasury has confirmed they are revoking the legislation, brought in at the end of last year, that set a £95,000 cap on exit payments ("the cap") for public sector authorities and offices.

"After an extensive review of the application of the cap, the government has concluded that the cap may have had unintended consequences and the regulations should be revoked."

NAHT has long campaigned against the proposals, setting out our opposition in numerous responses dating back to the original proposals in 2015; which we believed would erode the value of redundancy compensation and settlement agreements for school leaders, and represent another, very real worsening of terms and conditions for members.

NAHT was particularly concerned about the inclusion of the cost of any pension strain created as part of an unreduced early retirement entitlement being included in the cap and the impact this was having on members covered by local government schemes and had already seen examples of members with long-service, being disproportionately impacted by these changes.  Given the concerning issues raised here, NAHT had been exploring with a Public Law QC what additional legal challenges could be made regarding the application of the cap generally and also specifically looking at the disproportionate impact on our members whose pensions are in the local government pension scheme.

NAHT, therefore, welcomes the government's decision to revoke this unnecessary and damaging legislation.

For those members who may have been affected by the exit payment legislation and had their exit payments capped (this will be individuals with an exit date between 4 November 2020 and 12 February 2021; not all individuals with such an exit date will have been affected by the exit cap), you should contact your employer to request the amount you would have received had the cap not been in place. NAHT is here to support any members with these conversations. 

First published 15 February 2021