Redundancy – Frequently Asked Questions

Is a redundancy lump sum payment taxable?
A statutory redundancy lump sum, which under the law must be paid, is entirely tax-free. Only a payment above and beyond the statutory payment (an ex-gratia payment) is taxable –and only when it goes over a certain limit. For information on this, contact the Telephone Information Office of the Revenue Commissioners at 1890 60 50 90.

What is the situation regarding workers on what is called “fixed-purpose” contracts?
The Redundancy Payments Act 2003 safeguards the right to redundancy of a worker employed under a “fixed-purpose” contract i.e. where the exact duration of the contract was incapable of being determined at the beginning. If the contract is not renewed following the fulfilling of the purpose, with the fixed-purpose contract therefore ceasing, a redundancy situation can arise. There is already provision under Section 9(1)(b) of the Redundancy Payments Act, 1967 regarding fixed-term contracts under which a redundancy situation exists where a fixed-term of employment expires without being renewed under the same or a similar contract.

What is the position regarding the redundancy rights of Part-Time Workers?
The Redundancy Payments Act 2003 has secured the rights of part-time workers to a statutory redundancy payment through amending insurability requirements for redundancy to bring them into line with the Social Welfare Acts and the Protection of Employees (Part-Time Work) Act 2001. This is in line with the provision of the 2001 Act that part-time employees cannot be treated in a less favourable manner than comparable full-time employees in relation to conditions of employment. In particular, there is recognition for the rights of workers to statutory redundancy in the following cases – (a) casual employment, (b) subsidiary employment (where a person depends on another employment for his/her livelihood) and (c) employment of inconsiderable extent i.e. very low wage.

Mairead Griffin, Career Coach & Outplacement Specialist, Career Mentors – Phone 01-2160880

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What to do if you cannot afford your rent or mortgage after post redundancy……

The most important thing is that you’re open and honest with your bank before you get to the point of financial despair. It is critical that you protect your future credit rating as much as possible. You should speak to your lender before your bills mount up!! Before approaching your bank read the Irish Mortgage Federations Code of Practice on Mortgage Arrears on the www.ibf.ie website. Ensure you have all the facts and entitlements in advance of meeting your bank

Option 1
Request a payment holiday whereby you will not have to make any repayments of capital or interest. This is what you should ask for first.

Option 2
Ask to be moved to interest only until you are back on your financial feet

Option 3
The Mortgage Interest Supplement. provides short term support to help you pay your mortgage interest repayments. You will only get assistance with the interest portion of your mortgage repayments. You will not get help with the portion that pays off the actual loan and house insurance. You should contact your lender to discuss repaying the actual loan.

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Coping with Redundancy

1. Allow time to grieve the loss

It is helpful to acknowledge how you feel, notice the feelings it brings up and
to accept yourself for the feelings you do have.

2. Dont take it personally

It was you ROLE that was made redundant

3. Dont buy into negative thoughts

When you notice you are having negative thoughts, do your best to let them go rather than allow yourself to get carried away with them.

4. Keep active

keeping your body moving keeps your energy high, your blood circulating and blocks you from falling into apathy

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