How do Redundancy Payment Loans work?
Direct payment is made to redundant employees from the National Insurance fund when an employer’s application has satisfied the qualifying criteria. Once an application is approved and claims are paid, the employer enters into a formal undertaking to repay the debt in fixed monthly installments. The repayment amount and the term are negotiable and no interest will accrue on the debt owed.
Applications can be submitted in circumstances where redundancies have already been made, however statutory entitlements can no longer be met upon staff leaving the business or thereafter.
The criteria for a company that wishes to make an application are:
- The business will continue to trade after roles are made redundant
- The business can save some of the jobs of its workforce by making some roles redundant
- The business can demonstrate it can repay the resultant debt in full
- The business has been refused a loan by its bank
- The business can provide documents to support it has no funds from which to make the redundancy payments itself
- The business can confirm that it has undertaken all possible cost-saving exercises
- If the business is part of a group, it would have to provide evidence that there are no funds within the rest of the group to assist with redundancy costs and the RPO would need a guarantee.
For more information get in touch with the Corporate Strategies team on email@example.com or 0800 002 9969.