The role of the Section is to administer the Insolvency Payments Scheme to ensure payment of certain outstanding debts to employees in cases where the employer is insolvent for the purposes of the Scheme.
The Insolvency Payments Section processes claims from employees for the payment of various entitlements owed to them where their employment has been terminated because of their employer’s insolvency. These payments cover such entitlements as arrears of wages, holiday pay, minimum notice payments, contributions to an occupational pension scheme which were deducted from pay but not put into the scheme, and other entitlements. There are statutory limits on the amounts of payments and the periods to which they apply. Payments are made from the Social Insurance Fund.
Claims under the Insolvency Payments Scheme can only be processed if the company is insolvent within the definition of the
Protection of Employees (Employers’ Insolvency) Act 1984 and a “relevant officer” – in this case, a receiver or liquidator – has been appointed and certifies the claims.
Employees make their claims on statutory forms through the relevant officer. The Section liaises with the relevant officer where necessary in relation to the verification of the claim data, and payments and follow-up are conducted via the relevant officer.