Employers ‘waiting 8 months’ for redundancy rebates

ISME has claimed employers are being forced to wait up to eight months to receive redundancy rebates from the state, even though the normal waiting period is just 4-6 weeks.

The organisation, which represents small and medium enterprises, blamed the Department of Enterprise, Trade and Employment for the excessive delays, describing the eight-month waiting time as “punishing”.

It pointed out that under the Redundancy Payments Acts employers may reclaim 60% of the redundancy paid to employees from the Social Insurance Fund, which is directly funded by employers’ PRSI contributions.

ISME chief executive Mark Fielding said: “These disastrous delays are causing untold damage to many small businesses, as these are also suffering most from being starved of badly needed cash flow.

“By delaying these payments, the Government is exacerbating the problem, in that delays in redundancy rebates are actually leading to further redundancies”.

“As part of a solution, the association suggests current PRSI and PAYE tax liabilities of the business should be offset against the long overdue redundancy rebates.

“As taxes are being paid to the same source it makes absolute sense to offset the payments. This suggestion will help to reduce significantly the cash-flow burden of the companies concerned and free up badly needed funds for cash-starved enterprises,” Mr Fielding said.

Meanwhile, Fine Gael has proposed that up to 40% of dole costs be made available to employers as a “job creation subsidy”.

It has suggested that employers considering taking on new staff could avail of a €4,000 subsidy for one year to support those new jobs.

It said that subsidy, which is the equivalent of 37% of the annual jobseekers’ allowance in year one, would reduce to €2,000 in the second and final year of the subsidy and would be paid through deductions through the PRSI system for the employer.

“The back to work subsidy complements Fine Gael’s policy of exempting PRSI for employers recruiting new staff in 2009 and 2010 but is particularly targeted at companies considering recruiting younger workers,” Fine Gael said.