Following a consultation on exit payments, the new rules will require high earning public sector employees or office holders to repay a broad definition of exit payments should they return to the public sector within 12 months on a pro rata basis.

They will apply to employees moving between the same part (or ‘sub-sector’) of the public sector, with the exact definition of these sub-sectors to be determined and consulted upon at a later stage.

The regulations define higher earners as any individual earning above £100,000.  Below this threshold a taper would apply, down to a second earnings threshold (proposed to be in the region of £80,000).

The rules represent a baseline legal requirement. Where employers’ existing or proposed policies go further, these measures will support rather than replace them.

Following the consultation, however, the government has abandoned plans to reclaim payments in lieu of notice, as originally proposed, as these are not payments for a loss of employment.

In addition, those payments that have a potential, if not actual, monetary value will not be recovered because the difficulty of attributing a value would add an administration complexity and the likely cost of doing so could not be justified.

For similar cost and complexity reasons, a decision has also been taken not to include a lower earnings threshold for a taper.

Special severance payments will be subject to the recovery provisions because they include elements that are paid in respect of loss of employment such as payments made for efficiency reasons, as well as elements that could be attributable to employer fault.

Waivers from repayment could be used where these agreements relate to elements of employer fault, such as out of court settlement of an employee’s claims against an employer, the government says.

The Bank of England and public broadcasters will be excluded from the scope of the new rules.  These organisations are to operate their own proposals which adhere to the spirit of the policy, and the BBC and Channel 4 have already put in place more stringent proposals.

In relation to the Office of National Statistics and some regulators, they will operate as independent individual sub-sectors responsible for their own waiver regimes, in order to maintain their independence from central government.

As far as the waiver regime is concerned, there will be no option to waive recovery of payments made to ministers and their special advisers, and Parliamentary post holders.

The government will now take forward these proposals as part of the Small Business Enterprise and Employment Bill with the measures being implemented through secondary legislation no later than April 2016.

The government public sector exit payment response to the consultation is here