The European Social Insurance Platform (ESIP) highlights some concerns over the European Commission's proposed Directive on the harmonisation of insolvency law, published in December 2022. While the directive is intended to reduce fragmentation in national insolvency laws and encourage cross-border investment, ESIP emphasises that specific provisions have the potential to disrupt national social security systems. The directive is particularly focused on the potential to retroactively void payments made during a "suspect period" before insolvency which could undermine social security contributions.
ESIP underscores the importance of social security contributions in the maintenance of national social protection systems and cautions against equating them with commercial creditor claims. Allowing avoidance actions to retroactively reclaim contributions paid by insolvent companies might erode funds that are legally designated for employee benefits and social insurance obligations. Unlike commercial creditors, social security institutions are statutory creditors and lack the same options to secure their claims. Consequently, they are at a disadvantage under the proposed framework.
ESIP advocates for an amendment to the proposed Directive that explicitly excludes social security contributions from avoidance actions in order to prevent additional strain on national social security systems. They contend that contributions that are lawfully paid by insolvent companies should not be subject to retroactive clawback, thereby ensuring that funds intended for the protection of employees and insured persons remain within the social security system.
You can find ESIP's position here.