Are you eligible for the new payment?
On Tuesday (21 September), the government announced details of a special payment for employees laid off during the Covid-19 pandemic.
The payment, the government said, applies to employees who lost “reckonable service” while in receipt of the Pandemic Unemployment Payment (PUP) or another jobseekers payment over the course of the pandemic to date. It will be worth a maximum of €1,860 to eligible applicants.
The government also announced on Tuesday that the Section 12A provision of the Redundancy Payments Act 1967 (as amended) will end on 30 September 2021.
The provision was introduced as an emergency measure in March 2020 and has been extended six times.
Its purpose was to effectively suspend an employee’s right to seek redundancy if they had been laid off or put on short-time work due to the measures introduced to limit the spread of Covid-19.
This was to “reduce the pressure on employers who were already struggling and to reduce the number of insolvencies and permanent job losses over the course of the pandemic”.
Once section 12A is lifted, workers will be able to trigger redundancy and to access redundancy payments in the usual way.
It is intended payments will become operational in the first half of 2022.
Who is eligible for the new payment?
“Reckonable service” is the service that is taken into account when calculating a redundancy lump sum payment.
The new payment announced by the government will be made to workers who lost out on reckonable service while temporarily laid off over the course of the pandemic and who are made redundant.
The announcement of the payment comes as a response to concerns that many people could lose out on redundancy payments if their employment was terminated, as their time spent on the PUP during the pandemic would not be considered when calculating their redundancy entitlements.
This new payment will come from the State and will “ensure workers won’t be left short of their redundancy entitlements”, the government said in a statement.
However, it also noted that reckonable service is a separate and distinct matter from the qualification threshold and that an individual must first meet statutory qualification criteria before becoming eligible to receive a lump sum.
More information on qualification thresholds and criteria can be found here.
“Some jobs, unfortunately, will not return and some people may face redundancy,” said Minister for Social Protection Heather Humphreys on Tuesday.
“The new redundancy measure on reckonable service will provide further financial support to people in this difficult situation.”
What are they entitled to?
The government said the State will make a special payment of up to a maximum of €1,860 to workers who have lost out on reckonable service while temporarily laid off over the course of the pandemic and who are made redundant.
This payment will come from the Social Insurance Fund (SIF).
Meanwhile, to support employers unable to meet their financial obligations in paying statutory redundancy to their employees, the State will fund statutory redundancy payments from the SIF on their behalf.
The government said a “flexible and discretionary approach” will be taken in relation to recovery of the redundancy debt and in many cases the debt can be repaid over a number of years.
“The Section 12A emergency provision was put in place at a time when many thousands of businesses were forced to close or severely reduce their operations because of Covid-19. Throughout the pandemic, our economic priority has been to reduce the number of jobs lost and permanent business closures,” Tánaiste Leo Varadkar said.
“Our objective here is to ensure workers aren’t left short and employers aren’t burdened with heavy costs. I want to reassure workers who have spent the last few months on the PUP or another job seekers payment because of the pandemic, that in situations of redundancy we will provide you with a payment up to a maximum of €1,860, to compensate for the reckonable service that you have lost due to no fault of your own.
“I also know many businesses are still struggling to get back on their feet and I want to assure them that the Social Insurance Fund is available to help if an employer is unable to pay and we will be very flexible when it comes to repayments.”
Varadkar said that the government believes this solution is balanced and provides “the best outcome for both employers and workers, after what has been an exceptionally difficult and uncertain period”.
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