The Financial Assistance Scheme for Employers unable to pay statutory redundancy payment
As an employer, if your plan to Survive the Covid Crisis requires workforce reduction, the Government has a scheme in place to help fund the costs of statutory redundancy.
The Financial Assistance Scheme for Employers unable to pay statutory redundancy payment can be accessed via a part of the Government’s Insolvency Service; the Redundancy Payments Service (“RPS”).
If an employer cannot afford to pay their employees’ redundancy pay they can apply to the RPS for financial assistance, if the application is approved the RPS will make payment directly to the redundant employees.
The assistance takes the form of an interest free loan.
To be eligible, an employer must provide evidence that they cannot afford to pay their employees statutory redundancy pay and that the employee has a valid claim.
The application requires disclosure of full financial information, including robust business forecasts demonstrating a repayment plan and evidence that you have taken all reasonable measures to raise the necessary funds.
This scheme may prove to be a very useful tool available to business as part of an overall plan to restructure and to build a healthy business model for the future.
If you have any questions or would like to discuss the impact of Coronavirus on your business, please get in touch.
The information in this update should not be regarded as financial advice. This is based on our understanding on 01 June 2020. Laws and tax rules may change in the future.