What payouts do ministers receive when they leave office?

8 July 2022
What was claimed

Ministerial departures that caused Boris Johnson to announce his resignation will lead to a total bill to the taxpayer of £423,000.

Our verdict

This figure comes from analysis by the Liberal Democrats, which they have since confirmed was not correct as it included some MPs not entitled to severance payments. The true figure will also be lower if ministers who’ve resigned return to a paid job in government within three weeks, as some have.

What was claimed

The Prime Minister is not entitled to a ministerial severance payment on leaving office.

Our verdict

Incorrect. The Prime Minister is entitled to this payment.

[This week’s government resignations] will lead to a total bill to the taxpayer of £423,000.

Liberal Democrats press release, 7 July 2022.

Coup has cost you £423,000

Boris Johnson and Tory ministers entitled to total £420,000 severance pay for resigning

The Prime Minister is not included in that arrangement [severance pay] due to having ‘preferential pension arrangements’, meaning Mr Johnson will not get an envelope of cash upon leaving No 10.

Following dozens of resignations from the government this week, we’ve seen multiple reports about the money ministers may receive as severance payments.

Boris Johnson will receive a severance payment for leaving office, contrary to a report in the Mirror.

Several newspapers have also reported, based on analysis by the Liberal Democrats, that this week’s government resignations would cost the taxpayer around £423,000 in severance pay. The Labour MP Rupa Huq has made a similar claim in Parliament.

This figure seems to be too high. Since we first published this fact check, the Liberal Democrats have confirmed that their list of severance payments includes some MPs who were not entitled to them, because they worked in unpaid jobs. 

The final figure also depends on how many of the people who resigned return to paying jobs in government within three weeks.

After we queried the figures with the Liberal Democrats, the party told Full Fact it agreed its estimates were flawed. In the place of their original list, the Liberal Democrats have shared a new list with us, which produces a much lower total. We are still checking some of the severance payments included in this new list to identify a reliable alternative estimate.

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What are the rules on severance pay for ministers?

The law says that people holding various eligible paid positions in government and the opposition are entitled to a quarter of their salary in severance pay when they leave the job. This includes all ministers, but not parliamentary private secretaries or trade envoys, who are unpaid.

This only applies to people who are under the age of 65, and who leave the job for any reason other than their death.

It also does not apply to people who hold one of the eligible positions again within three weeks (or six weeks following the dissolution of Parliament for an election). So if someone has resigned as a health minister then returns as an education minister within three weeks, they will not receive a severance payment.

In those cases, they will receive a payment when they eventually leave, unless they refuse it. (Former education secretary Michelle Donelan has said she will give hers to charity.)

Ministers who resigned this week, but who get another eligible job within three weeks, therefore won’t receive any extra severance money as a result.

The former children’s minister Will Quince, for example, resigned on 6 July, but has since returned as education minister. The former science minister, George Freeman, has also said he is willing to return. More positions may be announced in the coming days.

What are the payments worth? 

Based on the current figures:

  • the Prime Minister will receive £18,860 (a quarter of £75,440)
  • a Cabinet Minister will receive £16,876.25 (a quarter of £67,505)
  • a Minister of State will receive £7,920 (a quarter of £31,680)
  • a Parliamentary Under-Secretary of State will receive £5,593.75 (a quarter of £22,375)

The value of the payment depends on the last eligible job you were doing. So if someone leaves a higher-paying job and moves to a lower-paying one (for example, from a secretary of state to a minister), they will receive a smaller payment when they ultimately leave government altogether. 

What does the Prime Minister get?

The Mirror reported that the Prime Minister is not included in this arrangement, and does not receive a payment, but the Cabinet Office confirmed to Full Fact that this is not correct.

It seems that the Prime Minister has been entitled to this payment since the rules were changed in 2013.

The i newspaper has also reported that “among the pay cheques improving Mr Johnson’s bank balance in the months to come will be a contribution of £115,000 direct from the tax payer in the form of an allowance paid to former prime minister[s]”.

The i says it is referring to the Public Duty Cost Allowance (PDCA), which is not a simple grant or payment. It is a reimbursement—not paid in advance—for additional administrative expenses incurred by former Prime Ministers “arising from their special position in public life”.

Cabinet Office guidance explains: “Former Prime Ministers or their staff may only be reimbursed for legitimate salary or office expenses incurred in meeting the demands of the former Prime Minister’s public life up to the annual limit.”

Arguably this makes the i article misleading, because Mr Johnson may not receive all of the £115,000 allowance, if he does not submit that value in expenses. It’s also debatable whether the repayment of work expenses really ‘improves’ your bank balance.

Update 11 July 2022

The annual pay of a Parliamentary Under-Secretary of State was adjusted downwards by £100 following a correction by the House of Commons Library.

Correction 12 July 2022

This article has been corrected to account for further errors that we have since identified in the Liberal Democrats’ analysis.

We took a stand for good information.

After we published this fact check, we contacted The Mirror to request a correction regarding one of these claims. 

The Mirror amended its article and added a footnote. 

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