Written Answers - Redundancy Payments

Tuesday, 1 June 2010

Dáil Éireann Debate
Vol. 711 No. 1

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  86.  Deputy Martin Ferris  Information on Martin Ferris  Zoom on Martin Ferris   asked the Minister for Enterprise, Trade and Innovation  Information on Batt O'Keeffe  Zoom on Batt O'Keeffe   when redundancy will be awarded in respect of a person (details supplied) in County Tipperary. [23161/10]

Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Dara Calleary): Information on Dara Calleary  Zoom on Dara Calleary  My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social Protection. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation.

I can confirm that my Department received a lump sum claim for the individual concerned on 17 May, 2010. This claim awaits processing. In respect of redundancy lump sum payments paid directly to employees, such as in this instance, the Section is, in general, processing claims dating from September/October 2009.

The impact on business of the severe economic circumstances currently pertaining has resulted in an unprecedented increase in the level of Redundancy Payment claims lodged with [139]my Department. This has impacted significantly on the capacity to maintain the customer service targets that previously obtained. On the Redundancy side the scale of the challenge is evident from the statistics that show incoming redundancy claims in 2009 amounted to 77,001 which represents a threefold increase over the level of claims lodged in 2007 and earlier years. In 2007, claims received were of the order of 25,000.

Efforts continue to be made by my Department to deliver more acceptable turnaround processing times for Redundancy payments given the difficulties that this gives rise to for both individual employees and the business community. Measures already taken in the Department in 2009 to alleviate the pressures on the Payments area include:

almost doubling the number of staff through reassignment to a current level of 52 full time equivalents; prioritisation of the Department's overtime budget towards staff in the Section to tackle the backlog outside normal hours; establishment of a special call handling facility in NERA to deal with the huge volume of telephone calls from people and businesses concerned about their payments; better quality information relating to current processing times on the Department's website; and engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against existing outstanding tax liabilities which those employers owe to the Revenue Commissioners.

The backlog and waiting times remain at unacceptable levels. However, improvements are evident. I should point out that my Department has, in 2009, processed 50,664 claims, up 70% on 2008. During the period 1 January 2010 to 30 April, 2010, 23,593 claims were received and 27,592 were processed. In the year to date, inroads have been made on the backlog of claims on hand, which reduced from 41,168 at the end of January to 36,333 at the end of April2010.

Responsibility for the payment functions arising under the Redundancy and Insolvency payment schemes is due to be transferred to the Department of Social Protection with effect from 1 January 2011. In transferring the functions between Departments, it is the intention that this will operate seamlessly and without any adverse impact on the service levels being experienced by individuals or the business community awaiting payment of redundancy claims.

  87.  Deputy James Reilly  Information on Dr James Reilly  Zoom on Dr James Reilly   asked the Minister for Enterprise, Trade and Innovation  Information on Batt O'Keeffe  Zoom on Batt O'Keeffe   the number of redundancies and insolvencies each month from January 2007 until May 2010; and if he will make a statement on the matter. [22718/10]

Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Dara Calleary): Information on Dara Calleary  Zoom on Dara Calleary  My Department administers the Social Insurance Fund (SIF) in relation to both the Redundancy and Insolvency Payments Schemes on behalf of the Department of Social Protection.

Table 1 sets out the number of redundancy claims received by my Department in each month from January 2007 to end April 2010 under the Redundancy Payments Scheme. These figures reflect the number of employees who qualified and applied for statutory redundancy entitlements. They do not reflect those who lost their jobs with less than two years service in employment.

The number of claims received under the Insolvency Payments Scheme from January 2007 to end April 2010 is detailed at Table 2.

The impact on business of the severe economic circumstances currently pertaining has resulted in an unprecedented increase in the level of Redundancy Payment and Insolvency [140]claims lodged with my Department. This has impacted significantly on the capacity to maintain the customer service targets that previously obtained.

In relation to Insolvency Payments, this has resulted in a significant rise in the level of company receiverships and insolvencies, creating an unprecedented increase in the number of claims being submitted to the Insolvency Payments Section of my Department as Table 2 shows. My officials endeavour to process all claims as quickly as possible and claims are dealt with in order of date of receipt. A total of 20,172 claims were processed in 2009, which represents an increase in productivity of 108% over 2008, and the Insolvency Payments Section is constantly endeavouring to achieve earlier completion and payment dates.

On the Redundancy side the scale of the challenge is evident from the statistics in Table 1, that show incoming redundancy claims in 2009 amounting to 77,001 representing a threefold increase over the level of claims lodged in 2007 and earlier years. In 2007, claims received were of the order of 25,000.

Efforts continue to be made by my Department to deliver more acceptable turnaround processing times for Redundancy payments given the difficulties that this gives rise to for both individual employees and the business community. Measures already taken in the Department in 2009 to alleviate the pressures on the Payments area include:

almost doubling the number of staff through reassignment to a current level of 52 full time equivalents;

prioritisation of the Department’s overtime budget towards staff in the Section to tackle the backlog outside normal hours;

establishment of a special call handling facility in NERA to deal with the huge volume of telephone calls from people and businesses concerned about their payments;

better quality information relating to current processing times on the Department’s website;

engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against existing outstanding tax liabilities which those employers owe to the Revenue Commissioners.

The backlog and waiting times remain at unacceptable levels. However, improvements are evident. I should point out that my Department has in 2009, processed 50,664 claims, up 70% on 2008. During the period 1 January 2010 to 30 April, 2010, 23,593 claims were received and 27,592 were processed. In the year to date, inroads have been made on the backlog of claims on hand, which reduced from 41,168 at the end of January to 36,333 at the end of April 2010.

Responsibility for the payment functions arising under the Redundancy and Insolvency payment schemes is due to be transferred to the Department of Social Protection with effect from 1 January 2011. In transferring the functions between Departments, it is the intention that this will operate seamlessly and without any adverse impact on the service levels being experienced by individuals or the business community awaiting payment of redundancy claims.

[141]Table 1: Redundancy claims received from January 2007 to April 2010

Actual Redundancy claims received from January 2007 to April 2010 Monthly Breakdown
2007 2008 2009 2010
January 2,777 2,764 6,588 6,649
February 1,587 2,838 6,212 5,680
March 2,214 2311 7,680 5,515
April 2,155 3,114 7,131 5,749
May 1,942 2,462 7,948
June 2,046 2,914 6,764
July 2,287 3,852 6,285
August 2,319 3,147 5,831
September 1,859 3,971 5,989
October 2,174 4,623 6,561
November 2,380 5,261 5,891
December 1,719 3,350 4,121
Total 25,459 40,607 77,001 23,593

Table 2: Insolvency Payments 2007 to April 2010

Insolvency claims received from January 2007 to April 2010 Monthly Breakdown
2007 2008 2009 2010
January 656 1,219 1,485 2,523
February 260 804 1,215 2,031
March 418 282 2,484 2,509
April 1,191 1,189 1,662 2,121
May 454 705 2,663
June 369 668 2,452
July 508 981 3,136
August 359 614 1,504
September 390 904 1,332
October 462 2,069 999
November 400 1,570 1,295
December 428 1,023 1,184
Total 5,895 12,028 21,411 9,184


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