Direct Payments Factsheet 

Redundancy 

Introduction 

As an employer, there may be an occasion that gives rise to having to make 
your PA redundant. This will be because your circumstances have changed 
and you no longer need a PA. Examples are: 

. 
You are moving to residential care and you no longer need a PA 
. 
Your care package has been reviewed and you no longer receive 
Direct Payments to employ a PA 
. 
Your care package has been reviewed and your PA does not have the 
skills to meet the requirements of the new role 
. 
You are moving house and therefore changing the location of the job 

Also, you may be reading this because you are acting on behalf of a Direct 
Payment recipient who has died and therefore the job has ceased to exist. 

Such 
situations are unusual and 
KDC’s Direct Payments Support Service will 

normally be involved from the outset to take the worry away. This FACT 
sheet has been designed to give guidance should the unexpected arise. 

Frequently asked questions 

Here are the answers to some common questions asked which you may find 
helpful. 

What is redundancy? 

Redundancy is when you dismiss a PA because you no longer need them to 
do their job. This is what is known as compulsory redundancy. 

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For a redundancy to be genuine, you must demonstrate that the PA’s job will 
no longer exist. 

Section 139 Employment Rights Act 1996 describes redundancy: 

"... an employee who is dismissed shall be taken to be dismissed by reason of 
redundancy if the dismissal is attributable wholly or mainly to: 

. 
the fact that his employer has ceased, or intends to cease, to carry 
on the business for the purposes of which the employee was 
employed by him, or has ceased, or intends to cease, to carry on 
that business in the place where the employee was employed, or 

. 
the fact that the requirements of that business for employees to 
carry out work of a particular kind, or for employees to carry out 
work of a particular kind in the place where he was so employed, 
have ceased or diminished or are expected to cease or diminish". 

Important: You cannot simply make your PA redundant because you are 
unhappy with them or their work -you must follow a disciplinary and 
dismissal procedure. 

My PA needs to be made redundant, what should I do? 

If you believe that you may be involved in a redundancy situation, the first 
thing you should do is contact the KDC Direct Payments team (unless they 
are already involved) to inform them of the situation and get their help and 
guidance. Simply phone 0151 480 8873 

What is redundancy pay? 

All employees have certain rights and may be entitled to redundancy pay if 
they are made redundant. To be eligible, your PA must: 

. 
be an employee working under a contract of employment, and 
. 
have at least 2 years’ continuous service, and 
. 
have been dismissed, laid off or put on short-time working 

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If you are making your PA redundant and they are eligible, they will be 
entitled to what is called 
a ‘statutory redundancy payment’. 

What is the rate for statutory redundancy payments? 

Calculations of the amount of statutory redundancy payments due based on 

an 
employee’s age 
and 
length of 
employment and 
are counted 
back 
from 

the date of dismissal. 

Your PA will get: 

. 
1.5 weeks’ pay for each 
year of 
employment after their 41st birthday 


. 
1 week’s pay for each 
year of 
employment after their 22nd 
birthday 


. 
half a week’s pay for each 
year of 
employment up 
to their 22nd 

birthday 

A redundant employee also has the right to a written statement setting out 
the amount of any redundancy payment and how you worked it out. 

Length of service is capped at 20 years. 

If you were made redundant on or after 6 April 2018, your weekly pay is 
capped at £508 and the maximum statutory redundancy pay you can get is 
£15,240. If you were made redundant before 6 April 2018, these amounts 
will be lower. 

The redundancy payment will be taken care of as part of the KDC Payroll 
Service so 
you don’t 
need 
to worry. 
You will receive a pay slip setting out the 
amount you need to pay your PA. 

Does my PA have to pay tax on their redundancy payment? 

Redundancy pay is not taxable if it is less than £30,000. Nor will the 
payment be subject to National Insurance. 

Other termination payments, like payment in lieu of a holiday or notice, 
must have tax and National Insurance deducted. 

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My PA is a close member of my family. Are they still entitled to a 
statutory redundancy payment? 

Yes. If a member of your family is working for you as a PA under a contract 
of employment, then they have the same entitlement to redundancy pay as 
anyone else. 

What if I have to make a statutory redundancy payment but don’t 


have enough money in my Direct Payments account? 

The team at KDC will support you to make sure that you can fund statutory 
redundancy payments properly. You must tell us about the situation us as 
soon as you can. 

What period of notice of redundancy must I give my PA? 

You will need to give your PA notice of redundancy and agree a leaving date. 
You should give your PA at least the statutory notice period, based on how 
long they have worked: 

Length of service Notice you must give 
1 month to 2 years At least a week 
2 years to 12 years One week’s notice 
for every year employed 
12 or more years 12 weeks 

Do I need to pay the PA their wages for the period of notice? 

Yes, you must give staff notice pay -based on their pay rate and notice 
period. 

You can allow PAs to leave earlier than the planned leaving date, i.e. without 
notice, by offering payment in lieu of notice. 

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When you make payments in lieu of notice, you have to pay your PA the 
basic pay they would have got during the notice period and these payments 
will be subject to deductions for tax and National Insurance contributions. 

You must make the payment in lieu of notice when you dismiss the PA, or 
soon after. The KDC Payroll Service will take care of this for you and the 
amount due will be included on the final pay slip. 

Your PA will also be entitled to pay in lieu of annual leave/holidays which 
they entitled to at the time of their dismissal. Again this will be worked out 
by the KDC Payroll Service and will show on the final pay slip. 

Where do I go for help? 

In the first instance you should contact the Direct Payments team here at 
KDC on 0151 480 8873. We will give you all the help you need. We 
understand that the situation may be very difficult for you, particularly if the 
circumstances giving rise to the redundancy are about the death of the 
direct payments recipient. KDC has lots of experience in such situations and 
will guide you through the process and take away the worry. 

What about help for my PA who is being made redundant? 

Your PA can contact the local Jobcentre and ask for their Rapid Response 
Service: 

. 
if you suspect you’re 
going to be made redundant 


. 
during your notice period 

. 
up 
to 13 
weeks after you’ve 
been 
made 
redundant 


They may also be able to pay for things like vocational training, if no other 
funding is available and it helps them get back into work quickly. You must 
have started your notice period first. 

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KDC also operates a special website called KDC Connections that can help 
PAs to find jobs. 

They can register the details so that people seeking to employ a PA can get 
in touch with them. They can also search the jobs advertised on the website 
and get in touch to apply for them. Go to www.kdc-connections.org.uk 

ACAS has an on line redundancy helpline. Go to www.acas.org.uk and click 
on Advice and Guidance. 

Remember, if you are unsure, have any queries or need additional support; 
please contact the Direct Payments Team here at KDC. 

Telephone: 0151 480 8873 Email: andy.gilbert@kdc.org.uk 

You can find this Factsheet along with others covering a variety of topics by 
visiting us at www.kdc.org.uk/factsheets 


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