About to be made Redundant/Unemployed? Some things to consider:

For anyone who believes they are about to be made redundant, there are some issues you should always be aware of:

  • Ensure you get your proper notice or if not a payment in lieu of notice if applicable. The longer you have been with an employer, the more notice you are entitled to. (You should be entitled to at least 2 weeks notice).
  • Ensure you also receive your full holiday pay.
  • Check out your entitlement to Statutory Redundancy. Once you have been with your current employer 2 years + you are entitled to statutory redundancy on leaving. You can calculate your payment yourself on www.entemp.ie. On the main homepage you will find a link to a calculator. If your employer cannot make this payment due to financial difficulties the Dept Enterprise, Trade & Employment can through the social insurance fund.
  • Ensure you get your P45 on leaving your employment. You will need these for social welfare and tax claims.
  • Keep a photocopy of these documents, you may be asked for Part C of your P45 by your local social welfare office.
  • You can claim a refund of your tax paid during the same year by completing Form P50 (www.revenue.ie) and submitting same to your local PAYE office 4 weeks after finishing your employment. You should submit this form every 4 weeks until Revenue inform you that you have received your full tax refund.
  • Ensure you make your jobseekers benefit claim immediately after finishing your employment.
  • If you want to start up your own business (after previously being an employee) check out the Short Term Enterprise Allowance, where you can start up your business and retain your full social welfare payment for 9 months (back dated to first jobseekers payment received). If you want to start a business after 12 months being unemployed, you may be entitled to the Back to Work Enterprise Allowance (100% of your social welfare payment for 1 year and 75% in year 2).
  • You will need to prepare a business plan, consider starting this in advance to avoid any delays.
  • You may also be able to receive some funding for your business by contacting your local enterprise board. Again you will need a business plan so be prepared.
  • If you were self employed you may be entitled to jobseekers assistance but you need to ensure your accounts are up to date and will need proof that you are no longer earning income as a self employed individual i.e. by having your accounts up to date, copies of last 6 months bank statements etc
  • If you are currently renting, you may wish to avail of rent allowance. Ensure your landlord is registered as you are required to provide proof that you have been renting for at least 6 months.
  • If you have a mortgage you may also be entitled to some help with the interest payments. Contact your local community welfare officer for an application form.
  • If you have mortgage protection insurance or even loan protection insurance on a term loan don’t delay in making your claim straight away as there are time limits on making these claims.
  • Apply for a medical card immediately, due to the backlog in applications.
  • If you receive a large redundancy payment, your first instinct may be to repay part of your mortgage? This is not always a good idea. You may currently have a low interest rate say 2 – 3%. You could invest the lump sum at say 4% with many banks and you will also be covering the interest. You  also still have the lump sum to help with the loan repayments if you are still without work for a long time. You may notice paying a large lump sum off a 30 year mortgage means a small reduction in the monthly repayments E.G. Loan €250,000 with 30 year term@ 3% interest rate, currently monthly repayment €1,063. Repay €50,000 and monthly repayments are now €850 … a saving of only €213 per month. If you had kept €50,000 and invested same even at 4% ( net of DIRT 3%) you would have earned €125 per month and you still have savings of €50,000 or a cushion of almost 4 years mortgage payments. However, please speak to a financial/tax advisor, accountant, your own bank before making a decision, explore all your options.
  • Check out MABS (1890-283438) for advice in relation to budgeting, help with restructuring loan repayments etc. This is a free service.
  • Are you overpaying for life assurance, life cover etc. Speak to a financial advisor they may be able to get you a lower premium. They may also be able to help you with any investment you may want to make with any redundancy payment.
  • If you had a pension scheme in place with your company ensure you get details of all your options prior to leaving. You can move your pension (unless defined benefits) if you are not happy with the current scheme, investment options, level of charges etc. A financial advisor can give you some options.