If your employer goes bust, you can make a claim to be paid out of the National Insurance Fund. You can find out more about claiming redundancy and other payments if your employer goes bust on the GOV.UK website.
Whatever your contract says, all payments out of the National Insurance Fund are capped at the weekly pay levels of the statutory redundancy scheme (£508 per week from April 2018). The weekly cap goes up every year. Any payment above the weekly cap must be claimed as a preferential creditor in the winding up of your employer.
If your gross weekly pay was below £508 (April 2018) the payment you receive will be based on your actual pay.
If your employer was paying below the National Minimum Wage, payments out of the National Insurance Fund will be at the National Minimum Wage rate.
The total amount you can claim from the National Insurance Fund is limited as follows (all weeks of pay are capped at a maximum of £508 per week):
- statutory redundancy payment;
- statutory notice pay (the full number of weeks based on your service);
- unpaid wages (up to eight weeks); and
- holiday pay (up to six weeks).
Often, when a company collapses, the most recent pension contributions have not been paid over by the employer into the pension scheme and, in some circumstances, the scheme trustees can make up these unpaid contributions from the National Insurance Fund.
When a worker was being paid a statutory employment benefit such as Statutory Sick Pay, or Statutory Maternity Pay when the company went bust, these payments become the responsibility of HMRC. HMRC has a helpline to call: 0191 225 5221.