Hi S2000 (are you driving one?),
Firstly the method used to calculate the actual redundancy amount can vary depending on company policy. In such circumstances common practice would be to average, say, the last 12 pay periods to calculate the average weekly salary. It's probably best to ask the employer which method they are using to value a persons weekly wage.
Depending on how much your wife receives she may be taxed on some of the redundancy. The obligation is on the employer to tax the redundancy payment correctly, under the PAYE system. (Sorry I can't remember the section of TCA 97 off the top of my head, I'd guess at S123)
The basic exemption is as follows:
€10,160 + (765 X Number of complete years of service) = The tax free entitlement.
The second exemption is known as the increased basic exemption:
In this case a person can increase the basic exemption by €10,000, subject to satisfying a number of conditions.
1. If an individual holds a life interest in a Superannuation pension scheme then they must subtract the present day value of the individuals lump sum entitlement from the €10,000 increase. Clearly, this is only of benefit were a persons lump sum entitlement is less than €10,000. If above €10,000 the individual may waive the right to a lump sum payment from the pension scheme.
2. This relief can only be claimed once every ten years.
3. Prior approval must be obtained from the Revenue Commissioners. Again the obligation is on the employer to obtain approval.
The third exemption is SCSB:
This is generally of benefit in an instance where someone is on a high salary.
Formula used to calculate SCSB: (A X B/15) - C
A= Average of last three years salary
B= Number of complete years service
C= Any lump sum entitlement from a Superannuation Pension Scheme, which as not been waived.
With regard to the question about the dole; Sorry I can't help you with that one. My knowledge of the dole is, thankfully, quite limited.
Other tax implications:
If your wife is taxable on some of her redundancy then she can claim Top Slicing Relief on the taxable portion.
I'll detail top slicing relief if you think she will be taxable.....
Hope the above helps.
Regards,
Mini