Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

69. To ask the Minister for Social Protection to report on the management of the redundancy scheme fund for the period 1967 to 2015, during which time it was known as the redundancy fund, 1967 to 1984, the redundancy and employer’s insolvency fund, 1984 to 1991, and the redundancy and employer’s insolvency fund and which merged with other funds within the social insurance fund, 1991 to date; and if the fund was in surplus on 31 December 2013. [8350/16]

Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

70. To ask the Minister for Social Protection the characteristics of the redundancy scheme fund for 1967 to 2016 to date including the income into the fund, the costs borne by the fund, the year-end surplus and deficit and the cumulative reserve built up over the years; and if she has used the cumulative reserves for the purposes set out in the redundancy and the employer insolvency legislation. [8351/16]

Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

71. To ask the Minister for Social Protection if she has managed the redundancy scheme fund in an accountable and transparent manner; if this is subject to independent third-party scrutiny; and if she will make a statement on the matter. [8352/16]

Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

72. To ask the Minister for Social Protection to consider the operation of the redundancy scheme fund as a vital measure in providing mitigation by way of rebates on the statutory payment made to employees for enterprises, especially small and medium sized enterprises, as providers of employment and as revenue collectors for the Exchequer, as a vital component of the economy and as creators of wealth. [8353/16]

Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

73. To ask the Minister for Social Protection her assessment of the redundancy scheme fund as a governance stabilising measure for the employment market, especially in the small and medium enterprise sector; and if she will make a statement on the matter. [8354/16]

Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

74. To ask the Minister for Social Protection if she has acted effectively as trustee of the redundancy scheme fund and managed its funds and surpluses properly and prudently; and if she will make a statement on the matter. [8355/16]

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 69 to 74, inclusive, together.

The purpose of the redundancy payments scheme is to compensate workers for the loss of their jobs by reason of redundancy, as provided for under the Redundancy Payments Acts, Compensation is based on the worker’s length of reckonable service and reckonable weekly remuneration, subject to a ceiling of €600 per week.

It is the responsibility of the employer to pay statutory redundancy to its eligible employees. Where an employer can prove to the satisfaction of the Department that it is unable to pay the statutory redundancy to its eligible employees, the Department will make lump sum payments directly to the eligible employees from the Social Insurance Fund (SIF). Amounts paid under such circumstances are sought back from employers. In addition where employers become insolvent, certain other outstanding statutory entitlements (arrears of wages, holiday pay etc.) may be paid from the SIF. The Minister for Social Protection becomes a preferential creditor in the winding-up of companies in respect of monies paid from the SIF.

Under the provisions of Section 24(4) of the Social Welfare Act 1990 all moneys standing to the credit of the Redundancy and Employers’ Insolvency Fund on 30 April 1990 were transferred to the SIF on 1 May 1990.

The SIF was established by the Social Welfare Act 1952 (as amended) and operates under the terms of the Social Welfare Consolidation Act (SWCA) 2005. Under section 9 of that Act the SIF comprises of a current account which is managed and controlled by the Minister for Social Protection and an investment account which is managed and controlled by the Minister for Finance. The annual statutory accounts of the SIF are prepared in the form and manner approved by the Minister for Finance. There is a separate account prepared for the current account and the investment account. These accounts are audited by the C&AG and are laid on an annual basis before the Houses of the Oireachtas and are subject to PAC examination.

The income of the SIF derives mainly from Pay Related Social Insurance (PRSI) contributions. In addition to redundancy payment entitlements, social insurance benefits and occupational injury benefits are paid out of the SIF.

SWCA 2005 allows for PRSI to be paid into either the investment account or the current account of the SIF. It requires surplus funds in the current account not required for expenditure purposes to be transferred to the investment account for investment purposes. In accordance with section 9 (9) of SWCA 2005, the SIF has received a state subvention since 2010 in order to bridge the gap between its PRSI income and its social insurance related expenditure. As at the 31 December 2015 the SIF had no surplus funds on hand. A table is attached which shows the SIF income and expenditure for the period 2006-2015.

Significant and increasing amounts were paid out in redundancy rebates to employers from the SIF during the economic crisis. While the SIF is constituted primarily from employer contributions, the taxpayers’ contribution is also significant. One of the factors which influenced the Government’s decision in Budget 2013 to abolish the rebate was the increasing cost of rebates to often profitable companies. I acknowledge the contribution made by these enterprises in the creation of employment. However, the cost of making rebates is very significant and any consideration given to the provision of rebates for employers in the future must have regard to the overall budgetary parameters available.

SIF Income and Expenditure 2006-2015

*The 2010-2015 cumulative surplus represents the book value of the Departments HQ premises vested in the Minister for Social Protection on behalf of the Fund.

** In this period Vote Subvention commenced in mid-2010.

*** The 2015 figures are provisional and are subject to audit by the C&AG.