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
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 legally insolvent means 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.
Please contact the liquidator, receiver or employer 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 Redundancy and Insolvency Payments Schemes service on Welfare Partners.
To access this service, the employer representative, liquidator or receiver will require a Department of Social Protection (DSP) Sub-Cert which is issued by Revenue. More information on how to apply for a DSP Sub-Cert can be found here.
Further information for employer representatives on how to access and use this service on Welfare Partners can be found here.