Willie O'Dea (Limerick City, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

214. To ask the Minister for Social Protection if it is now costing the taxpayer more after the decision of the Government to withdraw 60% rebate from statutory redundancy payments; and if he will make a statement on the matter. [33310/16]

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is the statutory responsibility of employers to make redundancy payments to employees when their jobs cease to exist. Where an employer cannot pay redundancy due to financial difficulty or insolvency, payments can be made from the Social Insurance Fund under the redundancy payments scheme.

Up to 2011, a rebate of up to 60 per cent was paid to all employers who made statutory redundancy payments. The rebate was initially reduced and then abolished with effect from January 2013. This decision was taken to reduce expenditure on the redundancy payments scheme for employers who otherwise could afford to make the payments.

Claims under the redundancy payments scheme fell by over 70 per cent after the rebate was abolished, with the result that expenditure from the Social Insurance Fund was reduced from over €300 million in 2011 and 2012 to €126 million in 2013. In 2014 and 2015, claims and expenditure have continued to decrease, mainly because job losses have fallen (see table attached).

It is clear that the decision to abolish the rebate has resulted in significant savings in expenditure and has helped to stabilise the Social Insurance Fund.

I hope that this clarifies the matter for the Deputy.

Table 1: Claims and Expenditure in the Redundancy Payments Scheme 2011 – 2015

(rebates and lump sums)