Insolvency payment claims
You might be entitled to claim certain payments from the National Insurance Fund if your employer is insolvent. In some cases, it might not be possible for you to claim all the money you are owed. Find out what arrangements there are to make sure you receive a minimum amount.
Making an insolvency payment claim
The insolvency practitioner will normally send you the necessary forms for claiming any money you are owed. If this does not happen, you should write to the insolvency practitioner setting out your claim. They should tell you how to claim payments from the NI Redundancy Payments Service and HM Revenue & Customs (HMRC).
If you do not know who your insolvency practitioner is, you can contact Companies House Northern Ireland who should hold their details and give you further support.
Who will pay you?
There is no guarantee all debts and claims you make can be paid in full. There are special arrangements to make sure you receive a basic minimum of the debts owed from the National Insurance Fund.
The Department for Employment and Learning's Redundancy Payments Service (RPS) is responsible for paying the following claims:
- redundancy pay
- wages (including protective awards)
- holiday pay
- notice pay
- basic award for unfair dismissal
- unpaid pension contributions
When you send the RPS an application form (or it is sent to RPS by the employer’s representative), it will generally work out the payment you should receive and send it to you direct. The Department for Employment and Learning will take over your rights in relation to the debt in the insolvency proceedings.
HMRC is responsible for continuing to pay the following payments you might be entitled to on or after the insolvency:
- Statutory Sick Pay
- Statutory Maternity Pay
- Statutory Paternity Pay
- Statutory Adoption Pay
- Statutory Sick Pay : an overview (HM Revenue and Customs website)
- Statutory Maternity Pay (money, tax and benefits section)
- Ordinary Statutory Paternity Pay (money, tax and benefits section)
- Statutory Adoption Pay (money, tax and benefits section)
What pay includes
- guarantee payments
- statutory payments for time off work, or suspension for medical or maternity reasons
- reasonable reimbursement of apprentices’ or articled clerks’ fees or premiums (Note: although wages, holiday pay and compensation are only covered up to the weekly limits, we can pay apprentices’ or articled clerks’ fees or premiums in full)
- holidays for which you were entitled to be paid under your contract of employment during the 12 months before the relevant date. Holiday pay may include holiday carried over from the previous year if your contract of employment allows this
- overtime and commission
However, not all commission or bonus pay is payable from the National Insurance Fund. Only commission or bonus pay based on the amount of work you have done in the weeks you claim from the Fund may be considered.
Working out payments
Holiday pay and wages are calculated up to the date of insolvency.
Redundancy and notice pay are worked out from either the date your employer became formally insolvent or when your employment ended, whichever is later.
For calculating a protective award or the basic award rate of compensation for unfair dismissal, the date used is that upon which your employer became formally insolvent or your employment ended or on which the award was made, whichever is the later.
If you and other employees have been paying into a pension scheme at work, the pension fund trustees can apply to the Northern Ireland Redundancy Payments Service for some of your employer's unpaid contributions to be paid into the scheme.
- Understanding company pensions (pensions and retirement planning section)
If your employer is insolvent and makes you redundant, you may be able to claim Statutory Redundancy Pay.
To qualify for payment you must:
- have been continuously employed by your employer for two or more years
- have made a written application to your employer or applied to an Industrial Tribunal for an award, within six months of your job ending
You can order a free copy of the RP1 Redundancy payments claim form from the Redundancy Payments Service website or telephone 0845 015 0010 quoting URN 10/708.
Compensation for not getting notice
If you did not get proper notice from your employer a form (IP2) will be sent to you by the Redundancy Payments Service (RPS) at the end of your notice period. Fill in and return this form as soon as your statutory notice period has ended.
When working out your compensation the following will be considered:
The payment must compensate you only for the actual loss you suffered during the statutory notice period. Your loss of earnings will be your wages or salary for that period before tax less:
- any state benefits to which you are entitled or earnings from a new job you have received or are owed for the notice period
- basic rate tax which you would have paid during the notice period
RPS cannot use tax codes because your employment has ended. RPS will not take off tax if it works out your payment and it appears that you would not have paid tax even if you had worked during the notice period. You must keep your loss to a minimum, for example, by taking your full wages or salary during the notice period in any new job you find.
If you are applying for a compensatory notice payment, you must declare on your application form any earnings you receive for the period covered by your application and the address of the government office at which you claimed benefits. This information will help RPS work out how much compensatory notice payment you are entitled to.
You must not fill in and return the notice payment application form (IP2) before the end of the notice period you are claiming for.
What to do next
If you do not agree with the amount of payment made from the National Insurance Fund, you might be able to make a claim to an Industrial Tribunal.
Where to get help
The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland. You can contact the LRA on 028 9032 1442 from 9.00 am to 5.00 pm Monday to Friday.
Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.
If your employer is legally insolvent, you may wish to contact the Insolvency Service and/or the appointed insolvency practitioner.
If you have a query about an ongoing application for payment under the Statutory Redundancy Scheme, you can contact the Redundancy Payments Service on 0800 585 811.