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Insolvency Payments Scheme

From: Department of Employment Affairs and Social Protection

What an Insolvency Payment is

The Insolvency Payments Scheme protects the former employees of companies that have become legally insolvent.

Employees may claim, through an employer representative, such as the official liquidator or receiver, various outstanding debts including:

  • Arrears of wages and sick pay
  • Outstanding holiday pay
  • Unpaid statutory minimum notice
  • Certain arrears of pension contributions
  • Various statutory awards made by the Workplace Relations Commission (WRC)

Some limitations and conditions apply.

There is a limit of 8 weeks for:

  • arrears of wages
  • holiday pay
  • minimum notice.

Gross weekly wage is capped at €600 per week.

The debt outstanding must have become due in the 18 months prior to the date of insolvency or employment termination.

What does legally insolvent mean for the purposes of the Scheme?

  • the business is in liquidation and a liquidator has been formally appointed
  • the business is in receivership and a Receiver has been formally appointed
  • the employer is legally bankrupt, and an Official Assignee has been formally appointed
  • the employer has died and the estate is being administered under the relevant legislation
  • the employer is insolvent under the legislation of another EU Member State

How to qualify

The scheme covers employees who are insured for all benefits under social welfare legislation. Generally this means an employee who pays class “A” PRSI.

Rates of payment

In most cases the gross weekly wage, subject to a limit of €600, is used to calculate the amount that can be paid under the scheme.

The maximum payment for arrears of wages or holiday pay or minimum notice is €4,800.

Apply

Please contact the liquidator, receiver or employers representative in order to make an application.

Applications for debts payable under the insolvency payments scheme must be made by the employer representative, liquidator or receiver and will be submitted by them using the online application form.