State Loans For Redundancy Payments

21 Sep 2021 | 01.43 pm

State Loans For Redundancy Payments

And redundancy top-up for employees too

21 Sep 2021 | 01.43 pm

The government has announced a special payment for employees made redundant who have lost reckonable service while in receipt of the PUP or dole payments over the pandemic.

The move comes ahead of employees being able claim redundancy payments from their employer from September 30. This right had been suspended since last year due to the Covid pandemic.

The state will make a special payment of up to a maximum of €1,860 to workers who have lost out on reckonable service while temporarily laid off over the course of the pandemic and who are made redundant.

To support employers, where they are unable to meet their financial obligations in paying statutory redundancy to their employees, the government will also fund statutory redundancy payments from the Social Insurance Fund on their behalf.

“A flexible and discretionary approach will be taken in relation to recovery of the redundancy debt and in many cases the debt can be repaid over a number of years,” said a government statement.

Enterprise minister Leo Varadkar (pictured) commented: “The emergency provision was put in place at a time when many thousands of businesses were forced to close or severely reduce their operations because of Covid-19. Throughout the pandemic, our economic priority has been to reduce the number of jobs lost and permanent business closures.

“Our objective here is to ensure workers aren’t left short and employers aren’t burdened with heavy costs. I want to reassure workers who have spent the last few months on the PUP or another jobseeker payment because of the pandemic, that in situations of redundancy we will provide you with a payment up to a maximum of €1,860, to compensate for the reckonable service that you have lost due to no fault of your own.

“I also know many businesses are still struggling to get back on their feet and I want to assure them that the Social Insurance Fund is available to help if an employer is unable to pay, and we will be very flexible when it comes to repayments.”

‘Reckonable service’ is the service that is taken into account when calculating a redundancy lump sum payment, and is a separate and distinct matter from the qualification threshold.

An individual must first meet statutory qualification criteria before becoming eligible to receive a lump sum. As matters stand, a period of lay-off within the final three years of service before redundancy is not allowable as reckonable for the purposes of the calculation of this payment. Furthermore, it is the employers’ responsibility to pay statutory redundancy payments in the first instance.

According to Varadkar, the Department of Enterprise, Trade and Employment has received legal advice to the effect that imposing the cost of the layoff period (if it were to be allowable as reckonable service) on employers would give rise to constitutional issues and is fraught with legal risk.

 

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