What you gain, and what you may be signing away

Many Irish employers offer enhanced redundancy — more than the statutory minimum — particularly in settlement situations.

Enhanced redundancy is discretionary

It is not set by law. It is at the employer's discretion and may be based on service, seniority or company policy.

In many senior cases, the statutory amount represents only a small percentage of the total termination payment — which is a direct consequence of the €600 weekly ceiling.

Before you sign

Have a solicitor review the terms. In particular, check whether you are being asked to waive future claims — such as unfair dismissal or discrimination claims — in exchange for the payment.

Settlement agreements typically require an independent legal advice certificate for the agreement to be binding.

That requirement exists to protect you. Use it rather than treating it as a formality.

You cannot waive statutory redundancy

You cannot contract out of statutory redundancy. Any waiver purporting to do so does not remove that entitlement.

What you can waive are claims — unfair dismissal, discrimination — which is a different matter.

The tax position

• Statutory redundancy: fully tax-free
• Ex-gratia top-ups: may be partially taxable, with a basic exemption of €10,160 plus €765 per year of service
• Lifetime tax-free cap: €200,000 on redundancy payments

Some payments may qualify for relief under the SCSB calculation, based on service, salary and pension rights, which can produce a tax-free entitlement above €200,000.

Where termination payments exceed roughly €219,800, a tax liability may arise.

Pension decisions

Redundancy often triggers important pension choices. Decisions made at this stage can permanently affect retirement income, so it is worth taking regulated advice.

What to establish before agreeing

1. How much of the offer is statutory versus ex-gratia
2. What claims you are being asked to waive
3. The tax treatment of each component
4. Any pension implications
5. Whether you have had genuine independent legal advice

The deadlines still run

Six months for most complaints, one year for redundancy-payment disputes. Do not let negotiations run past them without advice.