Redundancy
When a client receives a redundancy payment, it can be difficult to determine what counts as income (and therefore subject to a contribution) and what vests in the trustee as ‘acquirenda’ (see here). The AiB guidance helps clarify this for advisers. •Statutory pay In lieu of notice (PILON): income.
•Enhanced or voluntary PILON: acquirenda vested in the trustee.
•Statutory redundancy pay: icome.
•Enhanced or voluntary redundancy pay: acquirenda vested in the trustee.
•Other ex-gratia payments: acquirenda vested in the trustee.
Once a client has received their statutory redundancy payment, the trustee should consider whether a contribution or increased contribution should be sought.
Where this occurs, or is likely to occur, seek guidance from the AiB before making an application.