“Claw-back” of exit payments


In addition, the government is to enact new regulations to allow public-sector employers to “claw back” exit payments made to departing public sector employees who begin working again for the public sector within 12 months.


Under revised draft Repayment of Public Sector Exit Payments Regulations 2016, these “claw back” provisions are intended to affect all public sector employees who, before leaving their job, were earning a minimum of £80,000 a year, who return to any part of the public sector, in any role (including on a lower salary) within twelve months of leaving their job. The regulations are expected to come into force some time after April 2016.


Individuals who return to work for the public sector will be required to repay the whole or part of any severance payment, including “top up” payments under the Local Government Pension Scheme. Payments in lieu of notice and holiday pay are excluded. The provisions will affect anyone who re-joins as a direct employee and also anyone who spends more than 50% of their time working for the public sector in a self-employed capacity, or as the employee of another person. There is to be a tapering formula to calculate the amount of the repayment, taking into account the number of days since leaving the public sector up to twelve months and the number of hours work in the new role, compared with the former role.