The purpose of the Redundancy Payments Scheme is to compensate workers, under the Redundancy Payments Acts, 1967 to 2007, for the loss of their jobs by reason of redundancy. Compensation is based on the worker's length of reckonable service and reckonable weekly remuneration, subject to a ceiling of €600 per week. It is the responsibility of the employer to pay statutory redundancy to all their eligible employees. Rebates to employers and lump sums paid directly to employees are paid from the Social Insurance Fund (SIF). The total amount paid out in redundancy rebates to employers was €152.2 million in 2006; €167.4 million in 2007; €161.8 million in 2008; €247.9 million in 2009; €373.2 million in 2010 and €186.2 million so far in 2011. Given the current economic climate, this level of rebate expenditure is not sustainable and, in Budget 2012, it was announced that the rebate will be reduced to 15%.
To give effect to this change, legislation was introduced and passed all stages in this House last week and is due to be debated in the Seanad this week. While I acknowledge that this change may cause difficulties for employers it should be noted that redundancy rebate payments to employers are not common in many EU and other jurisdictions.