Recently redundant

Losing your job is a difficult time and can bring huge changes. Whether you’ve got a redundancy payment or not, it’s natural to worry about how your finances may be affected. If you’re worried about how to deal with your household bills or debts, we can help.

This page has some simple steps you can take to help you manage your money.  

First steps after redundancy 

When you’ve been made redundant, your first step is to check what money you are entitled to get. This includes any redundancy payment (lump sum) and any other income you can bring into your household. You should:

• Check if you can get a tax refund 
• Check if you can get social welfare and other benefits 
• Check if you are covered by payment protection insurance (for loans and mortgages) 
• Ask every adult in your home to contribute 

Meeting with social welfare for the first time, or after a long time in employment, can feel uncomfortable and confusing. But remember, you can contact MABS or your local Citizens Information Centre for free support and guidance. 

How to manage redundancy pay (lump sums)  

Make sure you know the amount of the redundancy lump sum payment you are entitled to, if any.  

You can get 2 types of redundancy pay: 

• ‘Statutory’ redundancy payment – what the law says you’re entitled to 
• ‘Contractual’ redundancy payment – extra money your contract says you can get on top of the statutory amount 

If you’ve any questions about the redundancy money you are offered, check out the Workplace Relations Commission (WRC) website or you can contact Citizens Information. 

If you’re a member of a trade union, they can also help you through the process and make sure you get what you are entitled to. 

Will my redundancy payment be taxed? 

You won’t pay any tax on your statutory redundancy payment (there is a maximum lifetime tax-free limit of €200,000). However, you’ll have to pay tax on any non-statutory redundancy payment.  

Working out the tax on your redundancy payment can be complicated, contact Citizens Information if you need help.  

Note: Getting a lump sum payment could impact on any means-tested benefit you apply for. Remember to keep a record of every benefit you apply for, and if you are refused a benefit, ask for the refusal to be put in writing in case you need to appeal later.  

Redundancy pay and insolvency  

There is legislation in the area of personal insolvency as a way of dealing with debt. If you have already started a personal insolvency process, then being made redundant could have an impact on your arrangement.   

If you’re not in a personal insolvency arrangement but think you may need one at some time in the future, then your redundancy payment will be important. You need to think carefully before you make any decisions about how you will use your lump sum.  

If you’d like more information on personal insolvency and redundancy payments, contact MABS on 0818 07 2000, or the Insolvency Service of Ireland (ISI) at 01 764 4200.

How to manage debts 

Any form of credit is a debt, so most people have some debts. It is only when you are not able to keep up with the payments that your debt becomes a problem. If you are in this situation, it is vital to take action as soon as possible to stop it from getting any worse. Read more about how to tackle your debts or contact MABS to talk through your options. 

Contact MABS for free help 

If you’re struggling to manage your money or to make ends meet, or you feel like borrowing more is the only solution, help is available, contact MABS.