Liam Kavanagh
Question:33 Mr. Kavanagh asked the Minister for Social Welfare the reason for introducing the regulation which effectively penalises workers who received redundancy payments; and if he will make a statement on the matter.
Written Answers. - Social Welfare Eligibility.
Section 29 of this year's Social Welfare Act provides that a person aged 55, who receives a redundancy payment in excess of a prescribed amount, may be disqualified from receipt of unemployment benefit for a period of up to nine weeks. I made regulations on 20 July 1992 which prescribed an amount of £12,000 for the purposes of that disqualification.
The necessity for this measure was prompted by evidence that the Social Insurance Fund was being used to top up redundancy packages, based on the premise that there would be an automatic right to unemployment benefit for 15 months. Indeed, I am aware of situations where severance packages were being openly advertised within companies on the basis of an automatic right to a weekly top-up payment in the form of unemployment benefit.
It is not appropriate that the Social Insurance Fund be used in this way. The fund is financed by PRSI contributions and the unemployment benefit scheme is intended to compensate people for loss of income when, through no fault of their own they become unemployed.
In the circumstances, I am satisfied that my approach with regard to this measure is a reasonable one, namely, that some account be taken of the amount of redundancy paid when determining entitlement to unemployment benefit in post-redundancy or voluntary severance situations. The limit of £12,000 fixed in regulations is well in excess of average statutory redundancy payments and the measure does not apply to persons over the age of 55 years.