Can an employer pay PRSI contrib for laid off staff

avs0020

Our employer is looking for voluntary redundancies, career breaks, short time and lay off options. One of the fears is that this will reduce SW benefits in the future. If it was a point of negotiation and our employer agreed to it, is it permissable for them to keep paying SW to keep up the stamps even though there are no wages. I know SW contributions are calculated on wages. Can emp pay standard contrib on standard wages even though they're not paying wages at all.

Also is the time spent on lay off's or short time included when calculating redundancy entitlements.

Nil about any of this in our T&C but I know employer's trying to do his best. Looks like around 15% of our staff have to go in stages.

Thanks for any advice?

wexford202

Hi there,

With regards to your PRSI Contributions if you were to sign on with Social Welfare next week the calculations will be based on your 2007 contributions not 2009. The only time your 2009 contributions will come into play would be 2011; and at that stage I don't think you would be entitled to stamps anyway you would just be entitled to dole.

Your employer would not legally have to make a contribution of PRSI for you and it is highly unlikely that he/she will as there is also an employees contribution that you make yourself every week.

With regard to redundancy the answer is as long as you are on your employers books whether working or not your redundancy will still increase as it is from your termination or P45 date. You can calculate this yourself by googling revenue.ie redundnacy calculator an dthis will give you an idea of what you are owed.

But the PRSI contributions at the moment for 2009 are of no benefit to you so I wouldn't ask for that and it will also make it look like you are there for your employer during these though time.

Sorry for waffling on but I hope I answered your questions

leeroybrown

In order to get a full PRSI contribution against your name you must earn €42 in any given week. Your employer would then have to pay employers PRSI on this amount. An arrangement where the employer continued to pretend that an employee was working and pay their contribution would effectively be welfare fraud. In any event, if you are on temporary lay-off presumably you would want to make a jobseekers benefit claim to cover the short fall. This would prevent you from being in a position to simultaneously earn contributions.

The time spent on temporary lay-off or on short time won't affect your redundancy payment. The only situation where it would is if you willingly spent over 12 months on short time, in which case these hours would be used for redundancy calculation.

Mrs OBumble

leeroybrown wrote: »

if you are on temporary lay-off presumably you would want to make a jobseekers benefit claim to cover the short fall. This would prevent you from being in a position to simultaneously earn contributions.

If I understand things correctly, you get a "stamp" for the week if you're on either JA or JB.

I very much doubt that you will be able to negotiate for anything where - the only option might be to prefer a longer number of short-hours-weeks rather than some unpaid weeks.

The first response is correct in that 2009 contributions are relevant only in 2011. However I wouldn't say that are unimportant: you don't know what life-circumstances you might be facing in 2011 for which having enough "stamps" might be useful.

(Personally, I've decided that the system is fundamentally flawed, there are just too many "gotchas" if people decided to do totally reasonable things. For example, if someone had taken a few months unpaid leave in 2007, but now in 2009 was being made unemployed, they could now find themselves not entitled to anything at all, despite having worked for the last 20 years.)

leeroybrown

JustMary wrote: »

If I understand things correctly, you get a "stamp" for the week if you're on either JA or JB.

That probably makes sense for JB given that it's classed taxable income. It could be the same for JA. As usual it's not exactly easy to find out.

JustMary wrote: »

(Personally, I've decided that the system is fundamentally flawed, there are just too many "gotchas" if people decided to do totally reasonable things. For example, if someone had taken a few months unpaid leave in 2007, but now in 2009 was being made unemployed, they could now find themselves not entitled to anything at all, despite having worked for the last 20 years.)

Eligibility for 2009 can be calculated using a second method where 26 credits were earned in both 2007 and 2006. That said, I definitely agree that it can sometimes be a little too easy to refuse some otherwise genuine claims where others (who 'know the system') have no problem maximising their benefits less deservedly. Hopefully whatever cost saving reforms are required in the near future will do something to help move away from the situation where the whole system appears to be about stalling and minimising claims in a slightly underhand fashion.