Redundancy Payments

Dáil Éireann Debate, Tuesday - 24 May 2016

Tuesday, 24 May 2016

Questions (271)

Maureen O'Sullivan

Question:

271. Deputy Maureen O'Sullivan asked the Minister for Social Protection further to Parliamentary Question No. 62 of 28 January 2016, to review the decision announced in budget 2013 to abolish the redundancy rebate, given that its abolition not only affected profitable foreign owned companies, which seems to have been the intention, but has had a disproportionate negative effect on indigenous small and medium sized enterprises, many of which had contributed to the fund for decades; and if he will make a statement on the matter. [11193/16]

Written answers

Minister for Social Protection

Up to 2014, the State paid a rebate to all employers who provided statutory redundancy payments, regardless of a company’s ability to pay. As a result, very significant amounts were paid out in redundancy rebates to employers from the social insurance fund (SIF).

While the SIF is constituted primarily from employer contributions, the taxpayers’ contribution is also significant. One of the factors which influenced the Government’s decision in Budget 2013 to abolish the rebate was the high cost of these payments, which in turn were often benefitting profitable companies who were choosing to move operations abroad.

I acknowledge the contribution made by these enterprises in the creation of employment. However, the cost to the SIF of redundancy rebates would be very significant and could only be considered by Government having regard to the resources available in future Budgets.