Civil Service – Redundancy compensation scheme reformedWednesday, December 9th, 2009
The Cabinet Office has announced substantial reforms to the Civil Service Compensation Scheme (CSCS) to take effect from 1 April 2010. They are intended to save up to £500 million over the next three years without impacting on the very lowest-paid civil servants.
The CSCS sets out how much compensation should be given to staff who are made redundant or who volunteer to leave under an early exit programme. A new maximum severance payment limit is imposed for all Civil Servants and all departments are required to follow the same rules on redundancy payments, with some flexibility to set compensation payable in other circumstances. The minimum qualifying period for redundancy payments is increased.
Key features of the reforms are:
- Anyone made compulsorily redundant will receive cash compensation of up to two years’ pay. For the lowest paid, cash payments will be capped at three years’ pay or £50,000, whichever is lower. This protects the 60% of civil servants that earn less than £25,000 a year.
- Anyone who receives a severance payment and then returns to work for the Civil Service will have to pay back their cash settlement on a pro-rata basis. In the future, the Civil Service will explore the feasibility of extending this policy to include anyone to returns to work as a consultant for the Civil Service.
- The minimum qualifying period for a redundancy payment will be increased from one to two years.
The new compensation scheme will have no effect on existing civil service pension schemes.
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