The potential impact of the administration’s proposal to raise the government-wide buyout amount from $25,000 to $40,000 remains uncertain.

Some employees have said that the $25,000 amount would not be enough to sway them into leaving–particularly if they are not retirement-eligible–in part because taxes reduce the take-home value, commonly to around $18,000 depending on the individual’s tax status. Increasing the pre-tax amount to $40,000 would raise the average take-home amount to perhaps something over $30,000, but the proposal included no projection of how that would affect the take-up rate.


On the other side of the question is whether agencies could afford to pay the higher amount, since a main motivation for making the offers is a response to a tight budget, or the prospect of one. Further, since agencies could pay up to that amount at their discretion, the result might be a patchwork of differing amounts among agencies.

So far only the EPA has announced definite plans to offer buyouts, with a still-undetermined starting date but a September 2 deadline for employees who accept to resign or retire. Other agencies have suggested they also will make offers, potentially beginning in the fall, but much depends on the budget process for the fiscal year that begins in October.

In terms of timing, offering buyouts makes the most sense for agencies early in a fiscal year, since they would have time to recoup the up-front costs within that same budget year by not filling the vacancy created–or by restructuring so that the departed employee is replaced by one making substantially less.

However, an increase, should Congress approve it, likely would not be effective at least until the enactment date of the DoD bill, and potentially later. That measure often is not finished until late in the calendar year, already several months after the fiscal year has started. That too would raise uncertainty regarding how widely a higher amount would be offered.