Colm Burke
Question:248. Deputy Colm Burke asked the Minister for Enterprise, Trade and Employment if his Department would consider reintroducing the statutory redundancy rebate; and if he will make a statement on the matter. [33564/23]
View answerTuesday, 11 July 2023
Questions (248)
Written answers
By law, It is the employer’s responsibility to pay statutory redundancy to eligible workers. Up to 2011, the Redundancy Payments Scheme provided a rebate of 60% to employers who made statutory redundancy payments to their employees. The Government first reduced, then abolished, the rebate in Budgets 2012 and 2013 for a number of reasons.
The rebate was paid to employers regardless of a company’s financial situation and ability to pay or ongoing commitment to the Irish economy, thus benefitting viable and profitable companies, including multinational companies. Some employers were incorporating the value of the rebate in business cases to relocate outside of Ireland. The rebate also incurred a high cost to the Social Insurance Fund. At the time the rebate was ceased it was not deemed a targeted use of State resources. Furthermore, the rebate scheme was out of line with other EU member states as other countries had already closed their rebate schemes some years previously.
In contrast, the Redundancy Payments Scheme as it now operates is a much more targeted use of State fiscal resources.
If an employer cannot make statutory redundancy payments to eligible employees due to financial difficulties or insolvency, the State provides a safety net for both employers and employees and may make the statutory redundancy payment from the Social Insurance Fund (SIF) on behalf of the employer.
When such a redundancy payment is paid from the SIF, a debt is raised against the employer by the Department of Social Protection, which operates the scheme on behalf of my Department. In order to support employers, a flexible and discretionary approach is taken to recovery of the redundancy debt by engaging with employers to mutually agree a repayment plan. No interest or penalties are applied on the amounts owed and the debt can be repaid over a number of years in order to minimise financial hardship.
The Scheme considers both an employer’s ability to pay and that the Social Insurance Fund can be reimbursed in the future through debt repayment if an employer’s financial position improves.
Therefore, there are no plans for the reintroduction of the rebate scheme.