Questions & Answers on Redundancy Payments and Procedures

Questions & Answers on Redundancy Payments and Procedures

What is “Statutory redundancy entitlement”?

The redundancy payments act 1967 – 2007 obliges employers to pay redundant employees “statutory redundancy entitlement”. The amount depends on the employees’ length of service and earnings.

Read more on a brief guide to redundancy payment scheme

I am an employer and I am looking for information on redundancy payment scheme?

The Department of Enterprise Trade and Innovation issued a Guide to the Redundancy Payments in May 2010. This publication covers all areas you need to know in relation to the redundancy payment scheme including:
• Employees covered
• How much statutory redundancy is an employee entitled to?
• What exactly is redundancy
• Situation regarding “voluntary redundancy”
• Lay off / Short time

The Appendices cover • Guide to completing the redundancy form RP50
• How to calculate a week’s pay for redundancy payment
• Time table for employers and employees for dealing with redundancies
• Sample redundancy calculations


What happens if I cannot afford to pay my employees their full statutory entitlement?

If you are unable to pay the full statutory entitlement to your employees you should contact the department for further information.


Is a redundancy lump sum taxable?

The amount you receive a statutory redundancy lump sum is Tax Free
However a payment over and beyond the statutory redundancy payment (ex-gratia payment) is taxable when it goes over a certain limit.

For further information read more on taxation on redundancy payments

What rebates are available to employers?

An employer who has paid his/her employee their correct statutory redundancy lump sum can apply to the Department for a rebate within six months of payment.
Read more

For information on the time limits on applying for a rebate or lump sum
Read for more information


What happens if alternative work is offered?

If the employer makes a reasonable offer of alternative work and the employee refuses it, the employee may lose their entitlement to a redundancy payment

Where do I find the relevant forms & Downloads?

For copies of the relevant forms and downloads on redundancy on the Department of Enterprise, Trade and Innovation.

It is important to be aware of the options and entitlements in a redundancy situation.

Citizens information in Ireland provide a checklist which is a quick guide to procedures involved in redundancy.


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