In his latest budget the Chancellor announced an increase to the ceiling on a week's pay used to calculate statutory redundancy payment.

The proposal is to increase the cap from £350 to £380. According to unconfirmed reports, this will come into effect on 1 October 2009.

The government seems to have rejected TUC calls to increase the level to £500 and remove the requirement for two years' service.

The change would increase the maximum redundancy payout from £10,500 to £11,400. The government has not yet clarified whether the increase will also apply to other statutory compensation (eg, the unfair dismissal basic award).