Leo Varadkar (Dublin West, Fine Gael)
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Question 251: To ask the Minister for Finance the tax treatment of a redundancy payment made to an employee made redundant and then rehired, known as leave and return; and if he will make a statement on the matter. [1101/09]

Leo Varadkar (Dublin West, Fine Gael)
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Question 252: To ask the Minister for Finance the terms under which a redundancy payment made to a person rehired by the same company may be exempt from tax; and if he will make a statement on the matter. [1102/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 251 and 252 together.

I am informed by the Revenue Commissioners that the question of whether or not there is a "redundancy" is a question of fact to be established by examining the circumstances of each individual case. Where a worker receives a lump sum payment on the termination of his/her employment and returns to the employment a short time later Revenue would have to have regard to all the facts and circumstances of the particular case. In circumstances where Revenue are not satisfied that there has, in fact, been a genuine termination the lump sum payment would be regarded as normal income of the employment and taxed as such.

The issue of redundancy and re-engagement of employees was addressed in an article published in Tax Briefing 54 (Dec 2003), a copy of which is available in the Revenue website at http://www.revenue.ie/en/practitioner/tax-briefing/archive.html A detailed explanation of the reliefs available in respect of lump sums on retirement or removal from an office or employment is outlined in Revenue Leaflet IT 21 — a copy of this leaflet is available on the Revenue website at http://www.revenue.ie/en/tax/it/leaflets/it21.html.