The Government legislated for a cap of £95,000 on exit payments in the public sector in the Small Business Enterprise and Employment Act 2015 as amended by the Enterprise Act 2016. The 2015 Act sets out the duty to implement the cap through secondary legislation. HM Treasury have commenced a consultation which sets out the proposed draft regulations, schedule to the regulations, accompanying guidance and directions. It should be noted that there is an issue with Reg 3, which defines an “exit payment” as “’a’ payment of a description prescribed in regulation 6(1)”. The use of the singular ‘a’, arguably applies the cap to each type of exit payment and not the total payment, whereas Reg 8 refers to the total amount. Hopefully, the final Regulations will clarify the position. 

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