As part of Budget 2012, the rebate to employers on statutory redundancy payments made to their employees is to be reduced from 60% to 15%, This is effective from 1st January 2012.
This reduction in the rebate applies to all payments made to employees on or after 1st January 2012. Therefore employers who have issued notice to employees and agreed severance terms before this date will not be able to avail of the 60% rate, unless the date of termination is prior to 1st January 2012.
The change to the rebate has been widely criticised, particularly for its impact on small to medium sized organisations who may find it difficult to cover the additional cost. Employers groups have called for a transition period for its implementation, to allow for the higher rebate in situations where notice of redundancy has already been served on employees or where a collective redundancy has been notified to the Minister for Jobs, Enterprise and Innovation.
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