Dáil Éireann Debate, Thursday - 23 February 2017
241. Deputy Niall Collins asked the Minister for Social Protection his views on restoring redundancy rebates to businesses which previously facilitated small businesses to hire staff; and if he will make a statement on the matter. [9439/17]
Amharc ar fhreagra254. Deputy Niall Collins asked the Minister for Social Protection the cost of restoring redundancy rebates to businesses by 25%, 50%, 75% and 100% based on 2016 figures; and if he will make a statement on the matter. [9438/17]
Amharc ar fhreagraI propose to take Questions Nos. 241 and 254 together.
The purpose of the redundancy payments scheme is to compensate employees for the loss of their jobs, where the employer is unable to pay statutory redundancy due to financial difficulties or insolvency. The scheme is funded from the social insurance fund.
Up to 2013, 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. This expenditure peaked in 2011, when the total cost of redundancy rebate payments to employers was in excess of €214m. These payments were often benefitting viable and profitable companies at the cost of the social insurance fund. To the best of my knowledge no other EU member state or OECD member state provides for redundancy rebates to businesses that continue to trade.
It is not possible to estimate the cost of restoring redundancy rebates to businesses on a prospective basis however, as an indication, expenditure on redundancy payments (including payments made in the cases of insolvencies) from the social insurance fund has fallen from €312m in 2011 to €31m in 2016, in part because of the abolition of the rebate and in part because of the improvement in the economy.
I acknowledge the contribution made by small enterprises in the creation of employment. I note the fall in unemployment to just under 7%. I see no justification for re-introducing rebates either from an employment perspective or in terms of the cost-effective use of the social insurance fund.
I trust this clarifies the matter for the Deputy.
