Deemed Insolvent Process Launched

Minister for Enterprise, Tourism and Employment, Peter Burke, has today commenced part of the Protection of Employees (Employers’ Insolvency) (Amendment) Act 2026, strengthening protections for workers whose Employers cease trading.

Insolvency Payments Scheme

The Insolvency Payments Scheme protects certain outstanding pay-related entitlements due to Employees in the event of the insolvency of their Employer. The entitlements covered include wages, holiday pay, sick pay, payment in lieu of minimum notice and certain pension contributions. Various other statutory employment rights awards made by the Workplace Relations Commission and Labour Court are also covered by the scheme.

Deemed Insolvent Process

The ‘Deemed Insolvent Process’ is a new process under the Insolvency Payments Scheme. It is designed to support Employees who are owed money by their former Employer, where the Employer ceased trading without formally entering liquidation, receivership or bankruptcy, and these debts fell due on or after 8^th December 2024. Employees can use the Deemed Insolvent Process where all of the following apply:

• their employment was terminated by the Employer
• the Employer owes them money, such as wages or holiday pay, that became due on or after 8^th December 2024
• the Employer has ceased trading without entering liquidation, receivership or bankruptcy
• the employment was fully insurable under the Social Welfare Acts (generally meaning Class A PRSI)
• Under the Deemed Insolvent Process, the Employee will first have to seek payment from their former Employer. If the Employer does not pay after 8 weeks, the Employee can then apply under the Insolvency Payments Scheme.
• Employers will be notified of any Deemed Insolvent Process claims and will have 4 weeks to respond.

The Deemed Insolvent Process provides a new pathway for Employees in such circumstances to seek access the Insolvency Payments Scheme and claim their outstanding pay entitlements from the Social Insurance Fund.

Should you require specific advice and guidance, the experienced Consultants in Adare Trusted People Partners would be happy to discuss and support you.

For further information, please contact Neil McCormack at nmccormack@adarehrm.ie today.