I propose to take Questions Nos. 138 and 139 together.
When a payment is made from the redundancy and insolvency payments schemes from the Social Insurance Fund a debt is raised against the employer, which is reported in the Social Insurance Fund (SIF) financial accounts. The total employer debt to the Social Insurance Fund at 31 December, 2016 stood at €459 million. Almost two-thirds of the debt originated during the recession years of 2008 to 2013 and three-quarters of current outstanding employer debt is in respect of insolvent companies – companies who are no longer trading.
The total expenditure and recoveries for the redundancy and insolvency payments schemes for the years 2014-2016 is outlined in the table below. Total expenditure on the schemes over the three years was €170 million. Total recoveries in the same period were €29 million.
The Department of Social Protection liaises with the Insolvency Unit of the Revenue Commissioners in respect of insolvent companies. This liaison is governed by a Memorandum of Understanding between the department and the Revenue Commissioners.
The Department has a dedicated debt management unit in the redundancy and insolvency section which has responsibility for managing employer debt in line with the Department’s debt management policy and for the provision of statistical information. The debt is managed through the department’s Debt Recovery and Accounting System (DRAS), which issues automated reminders and annual statements on outstanding debt.
In most cases, recovery of debt is pursued with liquidators through the liquidation process. In cases where employers are not insolvent and are still trading the Department engages directly with the employers concerned. In these cases the Department is mindful that an overly aggressive process in pursuing debt with companies that are still trading, but are nevertheless in a financially precarious position, might result in those companies being pushed into an insolvency situation which could result in further job losses. Accordingly the unit engages with employers to establish the situation on a case by case basis and seeks to recover debt on a mutually agreed basis, including setting up repayment by instalment where appropriate.
The unit has a staff of six (5.1 fte) and the total cost of running the unit (including management costs) is €310,000 per annum. One of the duties of the staff in the unit is to gather and monitor data on employer debt, including data on trading status from third parties such as the Companies Registration Office.
Total Expenditure and Recoveries on the Redundancy and Insolvency Payment Schemes for 2014-2016
|
|
2014
|
2015
|
2016*
|
|
EXPENDITURE
|
€m
|
€m
|
€m
|
|
Redundancy Payments Scheme
|
64.6
|
34.9
|
31.0
|
|
Insolvency Payments Scheme
|
23.6
|
8.2
|
7.3
|
|
TOTAL EXPENDITURE
|
88.2
|
43.2
|
38.3
|
|
RECOVERIES
|
|
|
|
|
Redundancy Payments Scheme
|
7.9
|
5.5
|
8.2
|
|
Insolvency Payments Scheme
|
2.3
|
1.9
|
2.3
|
|
TOTAL RECOVERIES
|
11.2
|
7.4
|
10.5
|
*The 2016 figures are provisional pending the finalisation of the SIF Financial Statements.
