The Redundancy Payments Act 1967, as amended, provides for the making of payments by employers to employees in respect of statutory redundancy. It is an employer’s responsibility in the first instance to pay a redundancy payment to all eligible employees; should a redundancy situation arise. In the event that an employer is unable to pay the statutory redundancy lump sum due to financial difficulties, an application for payment from the Social Insurance Fund may be submitted by the employer on behalf of the employee to our Department.
We have reviewed the details supplied and confirm that we received an application on the 27th March 2012 from this employer under the Redundancy Payments Scheme on behalf of an employee.
As part of this process, we were able view the signed declarations received from both the employee and the employer. And a signed letter on headed paper from the employer advising us of the reason they were submitting the application and that the company was aware of their liability to repay the statutory redundancy lump sum payment, once made by the Department.
When such a redundancy payment is made from the Social Insurance Fund, a debt is immediately raised against the employer. The Department is obliged to make every effort to recover the debt owed to the Social Insurance Fund, in accordance with Section 32 and 43 of the Act.
Where a debt exists, the Department engages directly with the employer to ascertain their financial situation and their capacity to repay this debt and where appropriate, an agreed repayment plan can be put in place to minimize financial hardship; for example, the debt can be recovered by way of instalments over a period of time.
The relevant correspondence issued to the employer once the debt was raised in 2012 and has continued including associated phone calls between this employer and the employer’s accounting firm on the matter.
The latest correspondence to issue from DSP to this employer was in October 2022 and was the Employer Annual Debt Statement. This correspondence issues to all Employers who may have a debt liability to the Social Insurance Fund with respect to a redundancy payment and indicates the value of their current balance that is outstanding and asking them to make contact and engage with us.
We would encourage the employer to engage with the Debt Management Unit directly (0818 111 112 Menu Option 5 or debtmanagement@welfare.ie) to discuss the details further.
Finally, should an employer have any reason to consider that potentially their application could have been made without their knowledge or suspected fraud, then the employer should report this to the relevant authorities.
