30,000 redundancy claims stalled

MORE than 30,000 redundancy claims due to be paid from a state fund are waiting to be processed in the Department of Social Protection, according to latest figures obtained by the Irish Examiner.

Statutory redundancy lump sums are usually paid by employers who are then entitled to a rebate from the Social Insurance Fund (SIF) into which they make regular payments themselves through PRSI contributions. However, when an employer is unable to pay or refuses to pay, employees can apply directly to the fund.

According to the department, the figure of 30,500 is made up of both rebate claims and lump sum claims made directly by employees.

Workers from Cork company Vita Cortex who have been staging a sit-in at their former workplace, due to non-payment of redundancy by their employer, account for 34 of the applications.

The department said the applications from Vita Cortex had been submitted online on December 22 last and hard copies received yesterday.

Documentation from the company has also been received, a spokesperson said.

The department said straightforward redundancy claims submitted since October 2011 are generally processed within 6 to 8 weeks but this can “vary considerably” depending on the complexity of the claims. Last year many awaiting payments had to wait up to six months to get money owed to them. The job for processing claims used to fall under the remit of the old department of Enterprise, Trade and Employment but responsibility moved to Social Protection recently. There are 23 staff members currently dedicated to dealing with redundancy applications within the department.

Under old rules, the rebate paid to employers was 60% of the amount, but this was deemed unsustainable and reduced to 15% from January 1 under new budgetary measures.

The total amount paid out in redundancy rebates to employers was €161.8m in 2008; €247.9m in 2009; €373.2m in 2010 and more than €186m in 2011.

The Social Insurance Fund also pays out benefits such as jobseekers payments and the state pensions.

It has been in the red since 2008 and, at the end of 2011, the deficit was more than €1.9bn. Income in to the SIF last year was more than €7bn but expenditure was just over €9bn.