Calculation Of Compensation
Compensation payments will be based on details of eligible depositors and their accounts provided to the Deposit Guarantee Scheme (DGS) by the liquidator of the defaulting credit institution. The maximum amount of compensation from the DGS will be €100,000 per person per credit institution. Compensation will be based on the balance held in accounts on the date that the liquidator was appointed and will include any interest due on this date. All balances held in the depositor’s name (including balances held in a joint account or in a beneficiary account) will be aggregated and one compensation payment will be issued to the depositor for the total of all their deposits.
Mortgages & Loans
As a general rule, liabilities such as mortgages and overdrafts are not set off against deposits when calculating DGS compensation. The liquidator, where entitled to do so, may set off arrears.
As a general rule, joint account balances will be divided equally between each account holder, unless another arrangement is in place for the account. The amount each account holder receives in respect of a joint account will be aggregated with any other balances held by that account holder. The maximum amount of compensation from the DGS will be €100,000 per person.
Foreign Currency Accounts
Compensation payments will be denominated in euro. If a depositor holds a foreign currency account the account balance will be converted to euro using the reference exchange rates applicable on the day of appointment of the liquidator.
Temporary High Balances
The maximum amount of compensation payable by the DGS is €100,000 per person per credit institution. In addition certain deposits, known as temporary high balances may qualify for compensation in excess of €100,000. For a deposit to qualify as a temporary high balance it must stem from at least one of the following:
- deposits relating to real estate transactions for private residential property i.e. deposits lodged in preparation for purchase, sale proceeds and proceeds of equity release
- deposits that serve social purposes laid down in national law and are linked to particular life events of a depositor such as marriage, civil partnership, divorce, retirement, dismissal, redundancy invalidity or death
- deposits that serve purposes laid down in national law and are based on the payment of insurance benefits or compensation for criminal injuries or wrongful conviction
Qualifying deposits are protected up to a limit of €1 million (although unlimited cover is provided for claims relating to personal injury) for a period of 6 months after the deposits have been credited to an account or from the moment when such deposits become legally transferable.