Social Welfare Consolidation Act 2005 section 18

Priority debts to Social Insurance Fund in a company winding–up

Section 18 deals with how unpaid employer PRSI contributions are treated when a company goes into liquidation, giving them priority status alongside other employee-related debts.

• When a company is wound up, employees have preferential creditor status for certain debts owed to them. This section extends similar priority treatment to unpaid employer PRSI deductions that should have been made in the 12 months before liquidation.
• The preferential amount includes both the PRSI contributions the employer should have deducted from employees' pay and any interest that has accrued on late payments under the 1996 Regulations.
• Even where the employer obtained a deferral of payment under Article 9 of the 1996 Regulations (which allows delayed remittance in certain circumstances), the underlying PRSI liability still counts as a preferential debt in the liquidation.
• The "relevant date" for calculating the preferential amount is deemed to be the ninth day after the end of the income tax month in which the actual relevant date (typically the commencement of winding up) falls—this aligns with the normal PRSI payment deadline.