{"id":539511,"date":"2026-06-17T08:09:14","date_gmt":"2026-06-17T08:09:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/539511\/"},"modified":"2026-06-17T08:09:14","modified_gmt":"2026-06-17T08:09:14","slug":"facing-redundancy-here-are-the-smart-money-moves-to-make-before-you-leave-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/539511\/","title":{"rendered":"Facing redundancy? Here are the smart money moves to make before you leave \u2013 The Irish Times"},"content":{"rendered":"

Redundancies are part of a working life<\/a> these days. Tech, pharma, finance and consulting workers can go from being indispensable to unemployed in a matter of weeks when shareholders pressure companies to respond to ever-shifting forces. <\/p>\n

One minute you\u2019re leading a critical project, collecting bonuses and enjoying workplace perks, the next you\u2019re sitting in a meeting with HR discussing your exit.<\/p>\n

Instagram owner Meta<\/a> announced it was cutting 350 roles, or 20 per cent of its Irish operations, in May. That followed 150 job losses at tech giant Oracle<\/a> in April. There were between 300 and 325 cuts at Amazon<\/a>\u2019s Irish operations in January. <\/p>\n

Industry sources say they are seeing a steady flow of \u201csilent\u201d redundancies \u2013 a company isn\u2019t required to notify the Government of its plans where under 30 staff are let go. <\/p>\n

You can\u2019t control whether your role is cut, but you can be prepared. Having a plan can cushion the blow, strengthen your negotiating position and ensure you walk away with the best possible package.<\/p>\n

Severance package<\/p>\n

A severance package can usually be broken down into three elements. The first includes things like holidays you haven\u2019t been paid for, or pay in lieu of a notice period. <\/p>\n

\u201cIt\u2019s the only time you must be paid for holidays you have not taken. Normally you are obliged to take them and can\u2019t be paid in lieu,\u201d says Caroline Reidy, head of HR solutions at NFP.<\/p>\n

Maybe you have a bonus due, too. All of these payments go through as a normal salary payment. If you are earning over \u20ac44,000, this is going to be taxed at the top rate.<\/p>\n

The second element is the statutory redundancy payment \u2013 this is the minimum an employer must pay, but it only applies to staff who have been working for the company for two years or more. This part is tax-free. It equates to two weeks\u2019 gross pay for each year of your service, plus another one week gross pay. <\/p>\n

The weekly pay, however, is capped at \u20ac600. So even if you have a big salary, this will equate to \u20ac1,200 multiplied by your number of years of service, plus \u20ac600. <\/p>\n

[\u00a0\u2018I got a \u20ac10,000 bonus. What\u2019s the smartest thing to do with it?\u2019Opens in new window<\/a>\u00a0]<\/p>\n

The third element is an ex gratia redundancy payment. This bit isn\u2019t a given \u2013 it\u2019s paid at your employer\u2019s discretion. An ex gratia payment of a number of weeks\u2019 pay per year of service as a lump sum would be typical, but companies do various things.<\/p>\n

Meta is reported to be offering departing employees 16 weeks, or four months of pay, health insurance coverage for 18 months, immigration assistance and access to three months of assistance in finding a new job. <\/p>\n

There can sometimes be wiggle room to negotiate a higher ex gratia payment, says Reidy.<\/p>\n

\u201cSome people will have contributed a huge amount to the organisation, they might have significant length of service, or have had quite a unique role meaning it will take them longer to find a commensurate job. They might be in a position to make a case for why they should be getting an enhanced package,\u201d she says.<\/p>\n

\u201cWorst-case scenario, they are going to say no, but they might say yes. And if they do say no, then ask them to pay for financial advice for you. I would try to negotiate an outplacement support with CV and interview assistance too.\u201d<\/p>\n

Ex gratia payment and tax<\/p>\n

Part of an ex gratia payment is tax-free and part can be taxable at your marginal tax rate. There are three ways to determine the tax-free part under Revenue rules.<\/p>\n

The first is the \u201cbasic exemption\u201d \u2013 this is where you are entitled to \u20ac10,160, plus \u20ac765 tax-free for each year of service. <\/p>\n

The second is the \u201cincreased exemption\u201d, where an extra \u20ac10,000 may be claimed if you haven\u2019t received any redundancy payments in the past 10 years, you\u2019re not a member of an occupational pension scheme, or you waive your right to a tax-free lump sum from your pension scheme relating to that employment.<\/p>\n

Finally, there\u2019s the Standard Capital Superannuation Benefit (SCSB) \u2013 this is a tax relief that is best suited to workers with longer service or higher earnings. <\/p>\n

Your employer will typically crunch the numbers for you and the highest answer will determine how much of the ex gratia payment is tax-free.<\/p>\n

If when calculating the tax-free part of your ex gratia payment the increased exemption or the SCSB is giving the highest tax-free payment, going this route can mean waiving your right to any future tax-free pension lump sum associated with the specific employment that is paying the redundancy. <\/p>\n

[\u00a0\u2018I am witness to a will and worried something could spark dispute. Do I get involved?\u2019Opens in new window<\/a>\u00a0]<\/p>\n

So, the employee has to tick either option A to waive their right and take more of their redundancy payment tax-free now, or else tick option B and retain the right to take a tax-free lump sum from their pension on retirement and, in turn, take less of their redundancy payment tax-free now.<\/p>\n

It\u2019s a case of deciding, do I want more tax-free now or later?<\/p>\n

You might think you should take as much as you can tax-free now, but you can end up shooting yourself in the foot down the line, particularly if you have a decent pension.<\/p>\n

Where the pension amount with your employer is small, however, it might make sense to waive the right to the retirement lump sum for that part of your pension and to take more tax-free now as it won\u2019t have a big bearing on your pension.<\/p>\n

\u201cIt\u2019s hugely important, particularly for older workers, to get individual advice on the tax-free cash exemptions for redundancy and how they interact with your tax-free cash options when it comes to your pension,\u201d says Tom McLoughlin, a financial planner with Imperius Wealth.<\/p>\n

\n

We are definitely finding redundancy isn\u2019t as generous as it used to be<\/p>\n

\u2014 \u00a0Caroline Reidy<\/p><\/blockquote>\n

\u201cThere tends to be just a blanket, don\u2019t waive your right to future tax-free cash from your pension, but we believe it\u2019s a bit more nuanced than that. Especially if you are at a certain age.<\/p>\n

\u201cBefore signing it, get someone to evaluate the two circumstances as they relate to you. People invariably don\u2019t get individualised advice and it\u2019s a pity in a lot of circumstances is all I would say.\u201d<\/p>\n

It can come down to cash flow, too. If you don\u2019t have savings and are concerned about being out of work for a long time, you may need to prioritise other things.<\/p>\n

\u201cWe are definitely finding redundancy isn\u2019t as generous as it used to be. Now two weeks, plus two weeks is more typical,\u201d says Reidy.<\/p>\n

Redundancies are affecting a younger cohort, says Nick Charalambous, managing director of Alpha Wealth. <\/p>\n

\u201cIt used to be people with longer service, in their 50s typically, but recently its people in their 30s and 40s and payments are smaller,\u201d he says. <\/p>\n

For those earning salaries north of \u20ac70,000 or \u20ac80,000, it\u2019s not uncommon to see payouts of over \u20ac100,000, says Charalambous.<\/p>\n

\u201cOnce you take into account a possible lesser future salary, and six to 12 months looking for a new job, that money can quickly go, so it\u2019s important to get advice,\u201d he says. <\/p>\n

When you come into a big lump sum, there will be plenty to spend it on. Projects like doing up the house can seem possible. <\/p>\n

\u201cI always say to people, be conservative in your estimates of how long it will take you to get that new job,\u201d says Charalambous. <\/p>\n

A new role could mean less flexibility to work remotely too, which can impact on other household overheads. <\/p>\n

Pension boost<\/p>\n

If your role is being made redundant, try to make pension contributions before you go, says Charalambous.<\/p>\n

\u201cYou can\u2019t do it when you leave the company, and you could find yourself in a period of six to 12 months where you have no contributions,\u201d he says.<\/p>\n

He encourages departing staff to max out their tax-free thresholds for the current and previous year with additional voluntary contributions before they leave. Unless you use the generous tax relief on contributions for those years, you will lose them.<\/p>\n

If you\u2019re on \u20ac50,000 and are in your 40s, you can pay 25 per cent, or \u20ac12,500 into a pension. <\/p>\n

The \u20ac12,500 goes into your pension where it can grow tax-free, but it only costs you \u20ac7,500 as you get \u20ac5,000 back in tax relief.<\/p>\n

\u201cMost people wouldn\u2019t have contributed anywhere near that, so if you have the capacity, use some of your redundancy money for your pension to give you that 40 per cent tax relief and make up for the pension shortfall over the coming months,\u201d he says. <\/p>\n

Financial advice can help you strike the right balance between cash flow, pension or paying down debt, says Charalambous. <\/p>\n

Bear in mind, your potential to borrow when you are not working will be compromised.<\/p>\n

McLoughlin says: \u201cOptimise the amount you are getting and once you get it, be careful in evaluating your options for how to use it. Don\u2019t do anything rash.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Redundancies are part of a working life these days. Tech, pharma, finance and consulting workers can go from…\n","protected":false},"author":2,"featured_media":539512,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[73],"tags":[1463,79,18,19,876,17,1722,12094,12602,2987,1900,80],"class_list":["post-539511","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-amazon","tag-business","tag-eire","tag-ie","tag-instagram","tag-ireland","tag-meta","tag-money-matters","tag-oracle","tag-pension","tag-revenue-commissioners","tag-work"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116764434267804710","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/539511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=539511"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/539511\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/539512"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=539511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=539511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=539511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}