The Fund provides monetary relief to employees when their employers become insolvent. Currently, employees of insolvent employers may apply to the Fund for ex-gratia payment of sums owed to them by their employers under the heads of wages, wages in lieu of notice and severance payment.

The EU Decision

The EU Commission has held on January 26, 2011 that the so called restructuring privilege offered by German corporate tax law, which allows corporations in a distressed financial situation to continue to set off tax loss carry forwards against future profits even if their shareholder structure has substantially changed, is incompatible with EU State Aid provisions.

The recipients, which have applied the restructuring privilege, are now threatened with the reclaim of the tax benefits.