126.96.36.199 Income from Fair Entitlements Guarantee (FEG) or General Employee Entitlements & Redundancy Scheme (GEERS)
Employees who are owed certain employee entitlements after losing their job because their employer went bankrupt or into liquidation may be able to get financial help from the Australian Government. This help is available through the FEG, if their employer went bankrupt or entered liquidation on or after 5 December 2012, or through the GEERS, if their employer went bankrupt or entered liquidation before 5 December 2012.
Fair Entitlements Guarantee
To be eligible for FEG, claimants must meet the conditions of eligibility as prescribed by the Fair Entitlements Guarantee Act 2012 (the FEG Act). The conditions are:
- the claimant's employment has ended,
- the claimant's former employer entered liquidation or bankruptcy on or after 5 December 2012,
- the end of the claimant's employment:
- was due to the insolvency of their employer, or
- occurred less than 6 months before the appointment of an insolvency practitioner for the employer, or
- occurred on or after the appointment of an insolvency practitioner for the employer,
- the claimant is owed employment entitlements,
- the claimant has taken steps to prove those debts in the winding up or bankruptcy of the employer,
- at the time the claimant's employment ended, they were an Australian citizen or, under the Migration Act 1958, the holder of a permanent visa or special category visa, and
- the claimant has made an effective claim for assistance. To make an effective claim, the claimant must lodge a FEG claim form and include all mandatory information and documentation. Claims must also be made:
- no more than 12 months after the claimant's employment or the date of the insolvency event (whichever is later) and
- before the discharge of the claimants' former employer's bankruptcy (if their employer was bankrupt).
General Employee Entitlements and Redundancy Scheme
To be eligible for GEERS, claimants must meet all of the eligibility requirements outlined in the GEERS Operational Arrangements.
To receive GEERS assistance:
- The claimant must be an employee of an employer who has entered liquidation or bankruptcy before 5 December 2012.
- The termination of the claimant's employment must be linked to the insolvency of their former employer. The link between termination of employment and insolvency will usually be clear when their employment has ceased in one of the following ways:
- their employment was terminated because an insolvency practitioner was appointed to their employer,
- they resigned after the appointment of an insolvency practitioner to their employer, or
- they resigned or their employment was terminated in the 6 month period before an insolvency practitioner was appointed to their employer.
- They must be owed eligible employee entitlements by their employer and their entitlements must be provided for in an industrial instrument, such as legislation, an award, an agreement or a written contract of employment.
- They must be an Australian citizen or the holder of a permanent resident visa.
DEEWR must receive a GEERS claim within 12 months of one of the following events (whichever occurred last):
- the termination of the claimants employment,
- resignation from employment, or
- the date the insolvency practitioner was appointed to their employer.
FEG or GEERS assistance is not available for 'excluded employees' (including company directors, principals of bankrupt employers and their relatives), contractor, subcontractor, agent, shareholder, investor, volunteer or are owed money by the employer for any reason other than in respect of eligible employee entitlements.
What assistance is available under FEG and GEERS?
FEG and GEERS cover the following unpaid employment entitlements:
- wages - up to 13 weeks,
- annual leave,
- long service leave,
- payment in lieu of notice - up to a maximum of 5 weeks, and
- redundancy pay - up to a maximum of 4 weeks per full year of service.
The amount of assistance claimants may be eligible for is calculated based on the terms and conditions they were employed under (e.g. industrial award, collective agreement, contract of employment etc.).
Note: If the employer entered liquidation between 22 August 2006 and 31 December 2010, the maximum redundancy entitlement that a claimant will be eligible for under GEERS is 16 weeks.
For more information about FEG or GEERS:
Treatment of income
For social security purposes, payments received under FEG or GEERS are treated in the same way as if the employer paid them to the employee.
Income maintenance period
Payments made under the FEG or GEERS for unpaid entitlements owed to an employee following the termination of their employment are termination payments for the purposes of the IMP. Under the IMP, termination payments received by a person or their partner are treated as ordinary income and apportioned evenly across the period covered by the IMP.
Policy reference: SS Guide 188.8.131.52 Application of the Income Maintenance Period (IMP)
Liquid assets waiting period
Payments made as a consequence of redundancy, including payments under the FEG or GEERS, may be assessed as a liquid asset under the LAWP for new claims.
Policy reference: SS Guide 184.108.40.206 Liquid Assets Waiting Period
Last reviewed: 13 May 2013