Redundancy in Ireland: What You Need to Know & How to Navigate It
Losing a job - whether expected or out of the blue - is one of life’s biggest financial curveballs. If you’ve recently been made redundant, or you’re worried about what might be coming down the line, you’re not alone. Thousands of people in Ireland go through redundancy every year, and while it can be a stressful experience, it can also be an opportunity to reset, plan, and take control of your financial future.
At Financial Planning Matters, we help people make sense of their redundancy payments, manage tax implications, and put smart financial strategies in place for the next chapter. Here’s what you need to know.
Step 1: Know Your Redundancy Rights in Ireland
First things first - understand what you're entitled to. If you’ve been with your employer for at least two years, you’re entitled to a statutory redundancy payment, which is:
✅ Two weeks' pay for every year of service (capped at €600 per week)
✅ An extra one week’s pay on top of that
✅ Tax-free up to certain limits
If your employer offers an enhanced redundancy package, even better—but make sure you fully understand the terms before signing anything. Read more about your rights over at Citizen’s Information here.
Step 2: Mind the Tax Traps
Not all redundancy payments are tax-free! While statutory redundancy is fully tax-free, any additional severance pay could be taxable. However, you may be able to reduce or eliminate the tax hit using one of these exemptions:
Basic Exemption – You can receive €10,160 + €765 for every year of service tax-free.
Increased Exemption – If you haven’t used your pension tax-free lump sum, you may be able to increase your exemption by up to €10,000. But be careful here, as using this exemption at a time of redundancy means you cannot use it again when it’s time to access your pension. It’s so important to seek advice before deciding whether to pull this lever or not.
Standard Capital Superannuation Benefit (SCSB) – A more complex formula, but useful for long-service employees with high salaries.
💡 Key takeaway: Before signing any redundancy agreement, speak to a financial advisor or tax consultant to ensure you’re making the most of available exemptions.
Step 3: Plan Your Next Move (Before You Panic!)
Redundancy often leads to knee-jerk financial decisions, but taking a pause to plan can help you feel more in control.
💰 Emergency Fund Check – If you have savings, work out how long they’ll last. If not, you may need to prioritise cutting costs or seeking short-term financial support.
📊 Mortgage & Loan Options – Some lenders offer mortgage payment holidays or reduced payments if you’ve been made redundant.
📅 Claim What You’re Entitled To – You may be eligible for Jobseeker’s Benefit or social welfare supports. Read more about that here.
📈 Pension & Investment Decisions – If you had a pension through your employer, don’t just leave it sitting there. You may have options like transferring it to a PRSA or a personal retirement bond.
Step 4: Set Yourself Up for the Future
Redundancy can feel like the end of the road, but for many people, it’s actually a new beginning. Whether you’re considering a career pivot, freelancing, or starting your own business, now is the time to take control of your financial future.
💡 Think of redundancy as a financial reset—not just a setback.
Need Help Making Sense of It All?
If you’re navigating redundancy and want personalised financial advice, Financial Planning Matters is here to help. From understanding your tax-free entitlements to planning your next financial steps, we can guide you through the process with clarity and confidence. Get in touch today, or down the track and we’ll be here to guide you.