An update on the Lump Sum Exit Scheme and delinked payments

Lump Sums

RPA plan to offer farmers in England who wish to exit the industry the option of applying in 2022 for a lump sum payment.  They expect farmers will be able to apply from April 2022 until the end of September 2022. 

The Rural Payments Agency will send information to BPS applicants this month to explain how they can request a forecast statement showing the lump sum amount they could receive. The forecast statement will show the amount you could receive as a lump sum payment if you meet the Lump Sum Exit Scheme rules. This will help you decide if you want to apply when the scheme opens in April 2022.

The lump sum payment is based on a ‘reference amount’, which is based on the average BPS payments (including any young farmer payment or greening payment) made to your business for the BPS 2019, BPS 2020 and BPS 2021 scheme years. We will add up your BPS 2019, BPS 2020 and BPS 2021 payments and divide by 3. 

Lump sum payment (£) = reference amount (capped at £42,000) x 2.35

Delinked Payments

The RPA intend to replace the Basic Payment Scheme with delinked payments in 2024. 

When payments are delinked, recipients won’t have to farm the land to receive the payments. Delinked payments will be phased out by the end of 2027. Delinking will make things simpler for farmers and the Rural Payments Agency (RPA). 

We plan to replace BPS in England with delinked payments in 2024. This means BPS will end after the 2023 scheme year. We plan to make delinked payments in each of the years 2024 to 2027.

When payments are delinked, you won’t need any land or entitlements to receive the payments. This will simplify the payments as we phase them out by the end of 2027. You cannot apply for delinked payments if you have received a payment under the Lump Sum Exit Scheme.

Delinked payments will be based on your BPS payments in a reference period, which is the BPS 2020 to 2022 scheme years. Your delinked payments for 2024 to 2027 will not be affected if your farm size changes, or if you change what the land is used for, after BPS 2022. You can receive delinked payments even if you choose to stop farming. However, you must claim, and be eligible for, BPS payments in the 2023 scheme year to receive delinked payments for 2024 to 2027.

Delinked payment = delinked reference amount (£) x progressive reductions for that year

For full details see RPA announcement

Feel free to contact HNR to discuss your situation further