Dáil Éireann Debate, Tuesday - 20 October 2020
129. Deputy John Brady asked the Tánaiste and Minister for Enterprise, Trade and Employment his plans to restore the employer statutory redundancy rebate, which was abolished in 2013; and if he will make a statement on the matter. [31118/20]
View answerUp to 2011, the Redundancy Payments Scheme provided a rebate of 60% to employers who made statutory redundancy payments to their employees. In Budgets 2012 and 2013, the Government first reduced and then abolished the rebate payment. The rebate to employers was paid regardless of a company’s financial situation and ability to pay, and ongoing commitment to the Irish economy, thus benefiting viable and profitable companies, including multinational companies. At the time the rebate was ceased, Ireland was the only OECD country that offered a rebate mechanism for viable businesses with payments made of approximately €300m each year. At the time, it was not deemed a targeted use of the resources of the social insurance fund.
In situations where an employer cannot sustain the cost of redundancy payments due to financial difficulties, the Department of Social Protection can make the statutory redundancy payment to eligible employees from the Social Insurance Fund on behalf of the employer. When such a redundancy payment is made, a debt is raised against the employer. The Department will engage with employers to establish their financial situation on a case by case basis and will seek to recover the debt on a mutually agreed basis.
The Redundancy Payments Scheme as it now operates benefits employees whose employers are unable to make statutory redundancy payments. The Scheme takes into account 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.
Since March, the Government has put in place a major expansion of targeted measures in response to the Covid-19 crisis which will provide employers with the security of continued support for the rest of this year and well into 2021. Budget 2021 will help companies deal with both Brexit and Covid-19 and provides for additional significant measures tailored to those sectors who are most in need, thereby sustaining jobs. This week the EWSS was enhanced and aligned with PUP rates with the intention of retaining the link between employee and employer.
