About the Insolvency Payments Scheme

Legislative Basis

The Insolvency Payments Scheme implements the provisions of EU Directives 80/987and 2002/74/EC on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer. The legislative basis for the Scheme is the Protection of Employees (Employers' Insolvency) Acts, 1984 – 2004 and associated regulations.

Purpose of Scheme

The Scheme provides for the payment of certain outstanding entitlements relating to the pay of an employee where employment has been terminated because of an employer's insolvency. Payments are made from the Social Insurance Fund.

Insolvency

For the purposes of the Scheme, Insolvency includes liquidations, receiverships, resolutions to wind-up companies, bankruptcies, petitions filed or deeds executed for particular arrangements and insolvency under succession legislation. The Scheme also covers employees working in Ireland for employers who become insolvent under the laws of another EU Member State.

What Entitlements may be claimed?

The Scheme covers arrears of pay, holiday pay and pay in lieu of statutory notice and a range of other entitlements that might be owed to employees by the employer. These include awards made under employment rights legislation covering such issues as unfair dismissal, discrimination, working time and the minimum wage. Certain unpaid pension scheme and personal retirement savings account (PRSA) contributions are also covered.

Who is covered?

The Scheme covers employees who

• are in employment which is insurable for all benefits under the Social Welfare Acts (in general this means employees who pay full P.R.S.I. contributions)
• are between 16 and 66 years of age or, if over 66 years, in employment which, but for their age, would be insurable for all benefits under the Social Welfare Acts.

For more details on the Insolvency Payments Scheme, please see the Guide to the Insolvency Payments Scheme (PDF, 102KB).