Insolvency Act 2006

If you need more information about this Act, please contact the administering agency: Ministry of Business, Innovation, and Employment
276 Provisions concerning preferential payments to employees


The total sum to which priority is to be given under any, or all, of paragraphs (a) to (e) of section 274(2) must not, in the case of any one employee, exceed $25,480 or any greater amount that is prescribed under subsection (2) at the date of adjudication.


The sum stated in subsection (1) must be adjusted as follows:


subject to paragraph (d), an adjustment must be made, by the Governor-General by Order in Council, after the 3-year period starting on 1 July 2006 and ending on 30 June 2009 and after every 3-year period following that (an adjustment period):


subject to paragraph (d), the Order in Council must be made within 3 months of the end of an adjustment period:


each adjustment must reflect any overall percentage increase, over the relevant adjustment period, in average weekly earnings (total, private sector), calculated by reference to the last QES within the relevant adjustment period:


if, in an adjustment period, there is no change, or an overall decrease, in the percentage movement in average weekly earnings (total, private sector), as so calculated, no adjustment may be made for that adjustment period:


if, in accordance with paragraph (d), no adjustment is made, the next adjustment made for any succeeding adjustment period must reflect any overall percentage increase in average weekly earnings (total, private sector) between the date of the last adjustment and the end of the relevant adjustment period for which the adjustment is to be made:


all adjustments are cumulative and must be rounded to the nearest $20:


any correction to the QES on which an adjustment is based must be disregarded until the adjustment that takes effect in the following adjustment period, which must reflect the corrected information in the calculation of that adjustment and must otherwise be made in accordance with this subsection.


The sum stated in subsection (1), or any greater amount prescribed under subsection (2) that applies on the date on which a debtor is adjudicated bankrupt, continues to apply to that bankruptcy regardless of any change to that sum that is prescribed after the date on which the debtor is adjudicated bankrupt.


For the purposes of this section and section 274,—


remuneration in respect of a period of holiday or of absence from work through sickness or other good cause is to be treated as wages in respect of services rendered to the bankrupt during that period:


employee means any person of any age employed by an employer to do any work for hire or reward under a contract of service (including a homeworker as defined in section 5 of the Employment Relations Act 2000):


holiday pay, in relation to a person, means all sums payable to that person by the bankrupt under subpart 1 of Part 2 of the Holidays Act 2003, and includes all sums that by or under any other enactment or any award, agreement, or contract of service are payable to that person by the bankrupt as holiday pay:


QES means the Quarterly Employment Survey published by Statistics New Zealand or, if that survey ceases to be published, any measure certified by the Government Statistician as being equivalent to that survey.


An order under subsection (2)(a) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

Compare: 1967 No 54 s 104(1A), (1B), (3); 1993 No 105 Schedule 7 cls 6, 6A, 12

Legislation Act 2019 requirements for secondary legislation made under this section
PublicationPCO must publish it on the legislation website and notify it in the GazetteLA19 s 69(1)(c)
PresentationThe Minister must present it to the House of RepresentativesLA19 s 114, Sch 1 cl 32(1)(a)
DisallowanceIt may be disallowed by the House of Representatives LA19 ss 115, 116
This note is not part of the Act.

Section 276(1): $25,480 is the maximum priority amount, on 30 September 2021, by clause 3 of the Insolvency (Maximum Priority Amount) Order 2021 (LI 2021/257).

Section 276(2)(c): amended, on 1 September 2022, by section 107(1) of the Data and Statistics Act 2022 (2022 No 39).

Section 276(2)(g): amended, on 1 September 2022, by section 107(1) of the Data and Statistics Act 2022 (2022 No 39).

Section 276(4)(d): inserted, on 1 September 2022, by section 107(1) of the Data and Statistics Act 2022 (2022 No 39).

Section 276(5): inserted, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).