It has come to our attention that payments made under Targeted and Negotiated Voluntary Redundancy (TNVR) arrangements should correctly be treated as Employment Termination Payments (ETPs), rather than Genuine Redundancy Payments (GRPs), for taxation purposes.
These arrangements have operated within the State Service for decades and agencies and employees have entered into them in good faith in the understanding that a particular tax treatment would apply.
The Managing Positions in the State Service (MPSS) framework has been revised to reflect this and enable voluntary separations to continue as Targeted Voluntary Employment Separations.
The revised framework provides for a Head of Agency to approve an additional payment calculated to address the difference in tax withheld under current targeted separation processes.
The payment is intended to provide a comparable net financial outcome that which as in place under previous arrangements. Both the additional payment and Targeted Voluntary Employment Separation years of service payment will be treated as an ETP for taxation purposes.
