Catherine Byrne (Dublin South Central, Fine Gael) | Oireachtas source

I am taking this matter on behalf of the Minister for Social Protection, Deputy Varadkar, who cannot be present. Under the Redundancy Payments Acts 1967 to 2013, eligible employees who lose employment as a result of redundancy are entitled to two weeks' statutory redundancy payment for every year of service, plus a bonus week. In the first instance, it is the responsibility of the employer to pay statutory redundancy to all those eligible. However, the Social Insurance Fund provides a safety net for employees in situations where the employer is insolvent or in financial distress to the extent that it cannot fund the redundancy payments.

In situations where an employer becomes insolvent or is in financial difficulties, and is unable to make these payments, the Social Insurance Fund steps into the shoes of the employer and makes statutory redundancy payments directly to the employees concerned. In such situations, a debt is then created on the employer for the full amount and the Minister, Deputy Varadkar, can confirm that the Department of Social Protection actively pursues the recovery of the debt to the extent that it is able to do so.The fact that a firm is in such severe financial difficulty that it becomes insolvent or is otherwise unable to fund statutory redundancy payments means that much of the debt is unlikely ever to be recovered. This position is recognised by the Comptroller and Auditor General and noted in the statutory accounts of the Social Insurance Fund. Nevertheless, the Department of Social Protection has an employer debt management policy in place which it actively implements. In support of this policy a new debt recovery and accounting IT system was introduced in 2014 which provides structured support for the debt recovery process. As part of this policy, when redundancy payments have been made from the Social Insurance Fund, the Department of Social Protection liaises with those employers continuing to trade in a constructive manner in order to recover the debt. In doing this, it takes account of the financial position of each company and tailors the debt management process to suit individual circumstances, balancing the requirement to recover the debt on behalf of the fund with the concern not to further jeopardise the financial position of the employer. This is both to protect remaining jobs and to enhance the prospects of ultimately recovering the full debt. For this reason, the debt management policy does not include an exclusion from tendering for public contracts. It is not in the interests of the Department of Social Protection to put barriers in the way of employers in obtaining contracts for work, rather it is important that those companies with a debt to the Social Insurance Fund continue to trade in order that they remain viable and in a position to repay that debt.

Debt owed to the Social Insurance Fund by employers is only written off where the Department of Social Protection is completely satisfied, in line with the Comptroller and Auditor General's requirements, that the debt is not recoverable and debt write-offs are only carried out with the sanction of the Department of Public Expenditure and Reform.