NIM02600 - Class 1 NICs : Earnings of employees and office holders : Payments made on termination of employment : Redundancy payments : Statutory and non-statutory payments
Redundancy payments can be :
- Statutory. The Employment Rights Act 1996 gives an employee who has been employed for the requisite minimum period, and who is dismissed by reason of redundancy, a statutory right to a minimum level of compensatory payment from their employer.
- Non-statutory. These are payments made in excess of the minimum statutory payment. Provided they constitute a part of the redundancy payment package in a genuine redundancy situation then they too are compensatory and free from NICs liability.
The elements of a redundancy payment, which together constitute the redundancy package,could include:
- PILONs which may be more than the statutory minimum
- compensation for loss of pension rights
- a general sum on account of loss of employment which may, or may not, be more than the statutory minimum.