8th June 2026
Minister for Enterprise, Tourism and Employment, Peter Burke, has today commenced part of the Protection of Employees (Employers’ Insolvency) (Amendment) Act 2026, significantly strengthening protections for workers whose employers cease trading.
The Insolvency Payments Scheme protects employees’ pay-related entitlements if their employer becomes insolvent.
The 'Deemed Insolvent Process' has launched today and 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 December 2024.
The Deemed Insolvent Process will provide 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.
Welcoming the launch of the new Deemed Insolvent Process, Minister Burke said:
“The Deemed Insolvent Process is an important new protection for workers who find themselves in a very difficult position when their employer ceases trading without going through formal insolvency. Although not a common occurrence, affected employees now have a clear pathway to ensure they are paid their statutory entitlements including outstanding wages, holiday pay and sick pay. I encourage anyone who thinks they might be eligible to go to gov.ie/deemedinsolvency where we have clear information about the Deemed Insolvent Process and how to apply.”
Minister of State for Small Businesses, Retail and Employment, Alan Dillon commented:
“This new process has been designed to be straightforward and accessible for employees, while also ensuring fairness. Employers will have an opportunity to respond to claims, and robust safeguards are in place to protect public funds.
"Importantly, a determination of ‘deemed insolvency’ applies only for the purposes of accessing the Insolvency Payments Scheme and does not affect an employer’s legal status under company or bankruptcy law.”
Minister for Social Protection, Dara Calleary said:
“I welcome the announcement of the Protection of Employees (Employers' Insolvency) Act 2026 commencement of the ‘Deemed Insolvent Process’ from the 8th June 2026, which will expand access to the Insolvency Payments Scheme, that will be administered by my Department to protect employees of employers who cease trading without entering into liquidation, receivership or bankruptcy.
"Officials from my department have engaged with officials from the Department of Enterprise, Tourism and Employment regarding the measures to be implemented, which are reflected in these new legislative and operational changes."
The new Deemed Insolvent Process is provided for in the Protection of Employees (Employers’ Insolvency) (Amendment) Act 2026, which was signed into law in March 2026.
A separate Historical Deemed Insolvent Process, for employees in similar situations that arose between 22 October 1983 and 7 June 2026, is also provided for in the Act. It is anticipated it will open for applications in Q1 2027.
Notes to editors
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.
The Insolvency Payments Scheme is administered by the Department of Social Protection on behalf of the Minister for Enterprise, Tourism and Employment. Payments from the Insolvency Payments Scheme are made from the Social Insurance Fund.
Deemed Insolvent Process
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 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.
Detailed guides to help employees and employers navigate this new process have been made available on gov.ie. A number of new Forms have also been made available to help streamline the process.
Legal background
State protections for employees if their employer becomes insolvent are set out in EU law (currently Directive 2008/94/EC). The Directive is transposed into national law via the Protection of Employees (Employers’ Insolvency) Acts 1984 – 2026.
Under Article 2(1) of Directive 2008/94/EC, Member States are required to provide for a scenario where an employer has ceased trading but has not formally wound up their business (for example by entering into liquidation or bankruptcy) because the available assets are insufficient to warrant the opening of proceedings. In December 2018, the Supreme Court decision in Glegola ruled that Ireland had not properly transposed the Directive.
The Deemed Insolvent Process addresses this by providing employees a new path to access the Insolvency Payments Scheme. A finding of deemed insolvency does not mean an employer is insolvent under the Companies Act 2014, Bankruptcy Act 1988, Personal Insolvency Act 2012 or for any other purpose.
Further information
Insolvency Payments Scheme: www.gov.ie/insolvency
Deemed Insolvent Process: www.gov.ie/deemedinsolvency
Protection of Employees (Employers’ Insolvency) (Amendment) Act 2026: Protection of Employees (Employers' Insolvency) (Amendment) Act 2026 – No 7 of 2026
ENDS
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