Seán Fleming (Laois, Fianna Fail)
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589. To ask the Minister for Employment Affairs and Social Protection the level of contact between her Department, in respect of trading businesses in which employers owe a debt to the Social Insurance Fund, and the Revenue Commissioners to establish if they are continuing to actively trade; if she will provide a copy of the memorandum of understanding between the two organisations with regard to following up debts by these employers; and if she will make a statement on the matter. [43959/17]

Seán Fleming (Laois, Fianna Fail)
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590. To ask the Minister for Employment Affairs and Social Protection the level of debt owed by employers to the Social Insurance Fund in circumstances in which these employers are continuing to trade; the number of such debts owed by band (details supplied); and if she will make a statement on the matter. [43965/17]

Regina Doherty (Meath East, Fine Gael)
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I propose to take Questions Nos. 589 and 590 together.

A debt is raised against the employer when a payment is made under the Redundancy and Insolvency Payment scheme from the Social Insurance Fund. The total employer debt to the SIF at 31 December 2016 stood at €462 million.

A comprehensive analysis on the trading status of all companies and businesses with a debt to the Social Insurance Fund was completed in April 2017. Approximately 13,400 individual employers owe a debt to the Social Insurance Fund.

A total of 9,305 of Irish registered companies account for the vast majority of employer debt (91%). The profile of these indebted companies indicates that the majority (63%) are either dissolved or are in the process of being wound up through receivership or liquidation. These account for almost €345 million of the total debt.

A third of indebted companies (c 3,450) has filed annual returns in recent years and are categorised as “normal” by the Companies Registration Office. These companies account for c €72 million of employer debt. While these companies continue to exist as a legal entity, it does not necessarily mean that they are trading.

A further 4,093 indebted employers are classified as sole traders and partnerships. These account for just over €41 million in employed debt (9% of the total). There is no central information source on the trading status of these non-registered businesses.

The Department has a dedicated debt management team in the redundancy and insolvency section which has responsibility for managing employer debt in line with the Department’s debt management policy. The team engages directly with employers who are categorised as normal, and with the non-registered sole traders and partnerships, with a view to recovering debt. The team makes contact with these employers to establish their financial position and ability to repay the debt in full or as part of an agreed debt repayment plan. In these cases the Department is mindful that an overly aggressive process in pursuing debt with employers that are still trading, but are nevertheless in a financially precarious position, might result in those companies being pushed into an insolvency situation which could result in further job losses. Accordingly the unit engages with employers to establish the situation on a case by case basis and seeks to recover debt on a mutually agreed basis, including setting up repayment by instalment where appropriate.

A total of €10.7 million in funds paid out of the SIF to cover redundancy related payments was recovered by the Department in 2016. Approximately 400 employers are continuing to repay debt by instalment arrangements.

The Department of Social Protection and the Revenue Commissioners have a Memorandum of Understanding which governs the exchange of all information between the two bodies, including all redundancy and insolvency scheme liaison and communication. A copy of this Memorandum of Understanding, entitled “Memorandum of Understanding on co-operation and mutual assistance between the Department of Social Protection and the Office of the Revenue Commissioners” will be forwarded to the Deputy.

The employer PAYE number provided by the Revenue Commissioners is primarily used to identify a company or business which is subject to redundancy or insolvency. The Department’s main source of information on the status of companies with debt is from the Companies Registration Office (CRO).

The following tables give a breakdown of employer debt owed by ‘normal’ companies and sole traders/partnerships.

Table 1-Breakdown of employer debt with trading status as “normal” per CRO