Mutually agreed resignation scheme (MARS) 2023

1. Introduction

A mutually agreed resignation scheme (known as MARS) has been approved by the Trust and will be open for applications from 23 October 2023 to 15 December 2023.

The scheme is intended to support the Trust post acquisition through rapid change and redesign of its services by creating vacancies in the Trust that can be absorbed at no cost, filled by redeployment from other jobs or as a suitable alternative job for those at risk of redundancy. 

MARS is a time limited scheme under which an individual employee, in agreement with their employer, chooses to leave employment in return for a severance payment. A MARS is not a redundancy1 or a voluntary redundancy, which would currently be covered by Section 16 of the NHS Terms and Conditions of Service Handbook.

To be eligible an employee must have a minimum service of 12 months continuous NHS service (continuous NHS service being defined as NHS service with no break greater than 12 months).

The Trust will use the scheme to enable potential volunteers who meet the eligibility criteria at Appendix 1 to leave the Trust on beneficial terms. 

The Trust reserves the right to determine whether an application is viable in terms of creating a vacancy that can be absorbed, at no cost, or can be filled by redeployment from a post that in turn need not be filled. Executive directors will have sole discretion regarding those individuals who are offered MARS payments and there will be no right of appeal on the part of those staff whose applications are not successful.

Where costs are incurred to free up a post, a judgement will be made as to whether the extent of those costs is justified against the recurring saving.

It is important that the MARS scheme is affordable and as such it is not possible, nor appropriate, to fund any arrangements which require enhanced pension costs. There is no age limit for applications under this scheme; however, staff should be aware that this scheme does not allow access to any enhanced pension benefits. With this in mind, the best deal on offer will equate to a one off payment of no more than 12 months basic salary of the total cost of the post in question.

The Trust will base the MARS calculation on continuous NHS service and only this will be included when calculating a MARS payment (eg. previous local authority service will not be included), unless previous service outside of the NHS has been contractually agreed (e.g. as part of TUPE).

Any employee who has total earnings of more than £80,000 will have their MARS payment capped at £80,000.

MARS payment will be inclusive of notice and holiday pay and there will be no additional payments in those respects; therefore, any accrued holidays must be taken before the leaving date or the holiday pay in respect of those days will be lost. The date of resignation will be individually agreed and will be no later than 30 September 2024.

An employee taking MARS is not dismissed by the Trust, whether on the grounds of redundancy or for any other reason. It is termination of employment by consent and so applicants who wish to apply under this scheme should also consider if there is any effect on their ability to access state benefits or any insurance policies they may have.

No employee has a right to a MARS payment. It is always a matter of discretion for the Trust.


This MARS scheme, in itself, has no link to the entitlement to or value of benefits available to members of the NHS Pension Scheme. However, any member of the NHS Pension Scheme, who is aged 50 years and over and who has had a request for a MARS arrangement approved, may be entitled to benefits under the Voluntary Early Retirement arrangements. Details are available from the Trust’s payroll provider, Mersey and West Lancashire Teaching Hospitals NHS Trust on 0151 430 1980. If the employee decides to access their pension no contribution will be made by the Trust to this pension.  Payroll will be able to request information for individuals on any reductions they may receive to their pension as a result of early release of benefits.

The Trust will not provide employees with an estimate of the MARS payment to applicants. However, a MARS calculator is available for employees to estimate their payment, see table in paragraph 11 below. To estimate a MARS payment the employee will need to be clear about their length of continuous NHS service.

The full process for making a formal application is set out in Appendix 2.  A summary of the key steps are outlined below:

  • An employee interested in applying for MARS needs to discuss with their line manager in the first instance.  The divisional HR team can also be contacted to discuss potential applications
  • The employee then fills in section A of the application form set out in Appendix 3 and submits this to a senior manager
  • The senior manager completes section B of the application form in conjunction with a senior manger who is an authorised signatory
  • Divisional management in receipt of these applications will ensure that applications are complete and submit these to a dedicated e-mail address - 
  • The Trust will then consider applications through a MARS panel
  • All applications will be subject to approval by the Trust’s Remuneration Committee
  • Applicants will be informed of the decision.

It is a condition of the MARS Scheme that a successful applicant does not seek to return to the employment of Mersey Care NHS Foundation Trust within 12 months of his/her last day of employment, or that at the date their employment ends, or within 4 weeks of the end of employment, they have not accepted or commenced employment with any NHS organisation.

Where a former employee returns to work in the NHS in England within six months and before the expiry date of the period for which they have been compensated (measured in equivalent months/part months salary) they will be required to repay any un-expired element of their MARS payment.  This would be reduced if the appointment was at a lower band/grade.  The settlement agreement (see section 8) below) will specify the requirement to repay monies in such circumstances.

All successful applicants for MARS will be required to sign a settlement agreement.  This will ensure that all parties are clear as to the voluntary agreement they have entered into, which does not give access to NHS redundancy provisions, or NHS Pension provisions, which apply in the event of redundancy.

The Trust will organise group consultation sessions for applicants with an independent legal adviser that has been endorsed by staff side. Dates and venues for these consultation meetings will be circulated in advance, which applicants can book onto.

Applicants retain the right to make arrangements for their own legal advice and the Trust will be pay legal fees up to £300 including VAT for this.

The Trust will ensure that the MARS scheme is applied fairly and without regard to any unlawful discrimination whether on the grounds of age, disability, sex, race, religion and belief, sexual orientation, gender reassignment, pregnancy and maternity and marital and civil partnership status.  Monitoring of this scheme will be undertaken.

If you would like further information or wish to discuss a possible application under this scheme, please email


Continuous Service (complete years) Scale of Payment

Years Continuous Service (Organisation/NHS)

Scale of Payment

1 year

3 months basic salary

2 years

3 months basic salary

3 years

3 months basic salary

4 years

3 months basic salary

5 years

3 months basic salary

6 years

3 months basic salary

7 years

3½ months basic salary

8 years

4 months basic salary

9 years

4 ½ months basic salary

10 years

5 months basic salary

11 years

5 ½ months basic salary

12 years

6 months basic salary

13 years

6 ½ months basic salary

14 years

7 months basic salary

15 years

7 ½ months basic salary

16 years

8 months basic salary

17 years

8 ½ months basic salary

18 years

9 months basic salary

19 years

9 ½ months basic salary

20 years

10 months basic salary

21 years

10 ½ months basic salary

22 years

11 months basic salary

23 years

11 ½ months basic salary

24 years

12 months basic salary


Notes: Continuous service is defined as service with no break of greater than 12 months.


Taxation Notes

In some cases, severance payments are not subject to deductions in accordance with the Income and Corporation Taxes Act 1998, but the individual circumstances of each case will need to be considered. As a guide, however, current legislation can allow for voluntary severance payments to be paid without deduction of tax and national insurance up to a maximum of £30,000. Any payment made above this amount will be subject to tax and national insurance.

This is subject to the Post Employment Notice Pay / Period (“PENP”) provisions of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) (sections 402D and 402E) which mean that all payments in respect of an employee’s contractual notice period must be subject to appropriate income tax and national insurance contribution deductions, whether the notice period is served or not. The MARS Scheme is drafted on the basis / assumption that employees will have sufficient time to serve their notice within the period before the employment ends and so will receive their notice pay subject to the necessary deductions accordingly. On that basis, PENP deductions will not need to be made to the MARS payment. If the individual does not serve their full notice before the employment ends, however, a portion of the MARS payment equivalent to the pay that would have been received during the “unserved” notice period, will be deemed by HMRC to be PENP and subject to income tax and national insurance contribution deductions. 


The scheme will run to the timescale outlined below.



Approval to run MARS obtained from NHS England

August 2023

MARS scheme opened

23 October 2023

MARS scheme closes

15 December 2023

Senior manager/divisional management to submit to dedicated e-mail address  no later than


15 December 2023

MARS panel consider applications and approve or reject by

11 January 2024

Remuneration Committee approve or reject applications by

24 January 2024

Applicants receive written confirmation of the outcome of their application by

2 February 2024

Employee accepts or rejects MARS

23 February 2024

Independent legal advice sessions run by

1 March 2024

Employee returns two signed copies of Settlement Agreement to HR

15 March 2024

Settlement agreements processed and signed off by

22 March 2024

Approved employees leave employment at the latest by


30 September 2024

This scheme will be reviewed by the Trust’s Audit Committee three years after ratification.


Criteria for making Mutually Agreed Resignation Scheme decisions

The overriding factor in deciding whether to accept an application for the Mutually Agreed Resignation Scheme is whether this fits in with the best interests of the Trust. In deciding what is in the Trust's best interests, it will consider a range of factors including:

  1. Is the post the employee holds in an area in which post reductions are necessary?
  2. Would the decision facilitate organisational change or allow the trust to address skill mix imbalances or free up vacancies for other redeployment?
  3. Can business continuity be maintained following the departure of the individual concerned, including an assessment of the employee’s skills and competencies?
  4. Is the cost of the mutually agreed resignation payment affordable within current resources?
  5. Can savings on management costs be made?


An employee would not normally be allowed to leave under this scheme if they:

  1. Have already formally given notice of their intention to resign/retire, prior to the date when applications are formally being sought (23 October 2023).
  2. Have already secured employment with another employer.
  3. Have been notified of the date of the termination of their contract of employment for any other reason.
  4. Are undergoing a performance management procedure to address poor performance.
  5. Are undergoing any disciplinary process.
  6. Are in shortage or hard to recruit to posts.
  7. Have been declared ‘at risk’ of redundancy prior to the closing date for applications for the scheme (15 December 2023).

All discussions and applications will be dealt with in strict confidence by all those involved with the process.

  1. Employee discusses interest in MARS with their line manager in the first instance. 
    The divisional HR team can also be contacted to discuss potential applications.
  2. Employee completes section A of the application form set out in Appendix 3 and submits this to a senior manager.
  3. Senior manager completes section B of the application form in conjunction with the appropriate senior manager and submits this no later than 15 December 2023 to a dedicated e-mail address - 
  4. HR confirms MARS calculations back to the division and populate the MARS tracker with the figures.
  5. HR carry out a verification check on NHS continuous service to ensure this is correct.
  6. MARS panel consider applications, which will be done by 11 January 2024
  7. Remuneration Committee approve or reject applications by 24 January 2024.
  8. HR informs employee of the outcome of their application by 2 February 2024.
  9. Employee accepts or rejects MARS by 23 February 2024.
  10. HR arrange for employee to access legal advice with an independent legal adviser, by 1 March 2024.
  11. Employee having obtained legal advice signs the two copies of the settlement agreement and returns these to HR by 15 March 2024.
  12. HR arrange for a representative of the trust to sign both copies, with the trust retaining one copy and one copy returned to the employee by 22 March 2024. (This will indicate the final acceptance of the offer by the employee and will be legally binding).