Peadar Tóibín (Meath West, Aontú)
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325. To ask the Minister for Employment Affairs and Social Protection the provision that her Department made for redundancy payments accruing from postponed redundancies from 2020 and to date in 2021; and the estimated number of persons that will apply for this facility. [49418/21]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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As the Deputy will be aware, Section 12A of the Redundancy Payments Act 1967 was introduced as a COVID related emergency provision in March 2020. It suspended an employee’s right to claim redundancy from their employer following certain periods of layoff and short-time work. During periods of COVID related public health restrictions and sectoral shut downs, Government was concerned that the financial impact of significant redundancy claims on employers would have a serious impact on the potential for businesses to recover post COVID, resulting in insolvency situations and exacerbating the risk of further permanent job losses. With the successful roll-out of the vaccination programme, the public health situation has improved and with the economy re-opening, the emergency provision was considered no longer necessary. This provision expired on 30th September 2021.

In situations where employers are genuinely unable to meet their financial obligations to pay statutory redundancy to their employees due to financial difficulties or insolvency, the State can fund statutory redundancy payments under the redundancy payments scheme from the Social Insurance Fund (SIF) on their behalf on an interim basis. The employee entitlements are paid from the SIF and a debt is raised against the employer. In order to support employers, a flexible and discretionary approach is taken in relation to recovery of the redundancy debt over a phased basis.

The estimate of SIF expenditure for the redundancy payments scheme included in the Revised Estimate for 2021 was €43.3m. This was based on an expected earlier economic reopening in 2021 than actually transpired. At this time, it is difficult to estimate how many redundancies in the economy are likely following the expiry of Section 12a at the end of September. This will largely depend on the level and pace of economic recovery. Many people have returned to employment as the economy re-opened over the summer. For example, the number of people on the PUP has fallen to just over 101,000 in the first week of October, its lowest level to date. While many sectors are rebounding relatively quickly once restrictions are lifted, redundancies in some businesses will regrettably arise. However, with 2021 expenditure to date on redundancy running at €15m, it is not anticipated that the full provision for this year will be required. It will be later in the year and into 2022 before the impact of lifting of Section 12A in terms of the number of redundancies and its implications for SIF expenditure will become apparent.