The purpose of the redundancy payments scheme is to compensate employees for the loss of their jobs when the employer is unable to pay statutory redundancy due to financial difficulties or insolvency. The purpose of the insolvency payments scheme is to pay outstanding wage-related entitlements due to employees in the event of the insolvency of their employer.
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 may be either a company, sole trader or partnership. The total employer debt to the Social Insurance Fund at 31 December, 2016 stood at €459 million.
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.
Debt recovery is an integral element of the Department’s debt management policy. It seeks recovery of debt directly from employers continuing to trade and as a preferential creditor in liquidations/receiverships. In 2016 an estimated total of €10.5 million was recovered and €12.8 million was written off.
The total expenditure, recoveries and write-offs for the period 2010 to 2016 is outlined in the table for each of the schemes.
Redundancy & Insolvency Payments Scheme
Payments, recoveries and write-offs for the following periods:
|
Debt and recovery in each category
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016*
|
|
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
|
Redundancy Payments Scheme
|
|
|
|
|
|
|
|
|
Payments (debt incurred)
|
40.9
|
68.6
|
95.6
|
76.5
|
58.5
|
32.7
|
30.9
|
|
Recovery
|
3.2
|
3.7
|
4.09
|
5.2
|
7.9
|
5.5
|
8.3
|
|
Insolvency Payments Scheme
|
|
|
|
|
|
|
|
|
Payments (debt incurred)
|
23.6
|
18.5
|
21.7
|
22.05
|
23.6
|
8.2
|
7.3
|
|
Recovery
|
0.6
|
.08
|
1.8
|
1.8
|
2.3
|
1.9
|
2.4
|
|
Write-offs in each category
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016*
|
|
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
|
Redundancy Payments Scheme
|
|
|
|
|
|
|
|
|
Amount written-off**
|
2.4
|
2.8
|
0
|
10.7
|
35.3
|
9.4
|
8.5
|
|
Insolvency Payments Scheme
|
|
|
|
|
|
|
|
|
Amount written-off**
|
5.9
|
6.1
|
0
|
13.5
|
28.2
|
9.3
|
4.3
|
*2016 figures are provisional, pending finalisation of the SIF Financial Statements.
**Write-off of redundancy and insolvency debt to the SIF only takes place where the Department has completed all appropriate checks and is completely satisfied that the debt is not recoverable.
The figures for 2017 are not yet available.
