An employer is insolvent for the purposes of the Insolvency Payments Scheme if:
- The business is in liquidation
- The business is in receivership
- The employer is legally bankrupt
- The employer has died and the estate is being administered under the relevant legislation
The Insolvency Payment Scheme, operated by the Department of Employment Affairs and Social Protection, provides for the payment of certain outstanding entitlements to employees where their employment has ceased as a result of the insolvency of their employer. The Scheme also applies to employees working in Ireland where an employer becomes insolvent under the laws of another EU State.
Apart from arrears of pay, holiday pay and pay in lieu of statutory notice, the Scheme covers a wide range of entitlements that might be owed to employees by the employer, including awards made to them 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.
Further information and guidance on the Insolvency Payments Scheme may be obtained on the Department of Employment Affairs and Social Protection's website.