Public coffer swells to cover rise in collapses
More than $300 million has been set aside for government payments to workers who lose their job through the liquidation or bankruptcy of their employer. This is an increase on estimates of $202 million, and well above the $195.5 million spent last financial year.
Estimates from the Department of Education, Employment and Workplace Relations show $304 million has been budgeted for the scheme, called the Fair Entitlements Guarantee, but known last year as the General Employee Entitlements and Redundancy Scheme. GEERS payments comprised the bulk of the budget, at $248.4 million compared with $55.63 million for FEG.
A department spokeswoman said: "GEERS and FEG are demand-driven schemes and additional funding was made available to reflect demand being experienced over the first quarter of 2012-13." Corporate collapses since July last year include printing company Geon, confectionery company Darrell Lea and Gourmet Food Holdings, owner of the tomato sauce brand Rosella.
The federal government recently fast-tracked FEG payments to Geon employees owed $10 million "The government's action means families will have money in their bank accounts within weeks to pay mortgages, school fees and put food on the table. Without this, about 678 workers across the country would have otherwise been out of pocket," Workplace Relations Minister Bill Shorten said.
The guarantee provides unpaid or underpaid wages, unpaid annual leave and up to five weeks' payment in lieu of notice and up to four weeks' redundancy pay per year of service. Corporate collapses rose 21 per cent year-on-year to 628 in January.
Frequently Asked Questions about this Article…
The Fair Entitlements Guarantee (FEG) is the government safety-net scheme that helps employees of collapsed companies get unpaid entitlements. The article notes FEG was previously known last year as the General Employee Entitlements and Redundancy Scheme (GEERS), so FEG is effectively the renamed continuation of that scheme.
Estimates from the Department of Education, Employment and Workplace Relations show $304 million has been budgeted for the combined safety-net schemes. Of that, GEERS payments make up about $248.4 million and FEG about $55.63 million. This is more than earlier estimates of $202 million and well above last financial year's $195.5 million spent.
The department says GEERS and FEG are demand-driven schemes, and additional funding was made available because demand rose in the first quarter of 2012–13 — driven by a higher number of corporate collapses that created more claims on the safety-net.
The article cites several corporate collapses since July last year that increased demand, including printing company Geon, confectionery maker Darrell Lea, and Gourmet Food Holdings, the owner of the Rosella tomato sauce brand.
Yes — the federal government fast-tracked FEG payments to Geon employees who were owed about $10 million. Workplace Relations Minister Bill Shorten said the action meant roughly 678 workers would have money in their bank accounts within weeks to cover essentials.
The guarantee covers unpaid or underpaid wages, unpaid annual leave, up to five weeks' payment in lieu of notice, and up to four weeks' redundancy pay per year of service, subject to the scheme's eligibility rules.
Corporate collapses rose 21% year-on-year to 628 in January, signalling an increase in insolvency activity and greater demand on the government safety-net for employee entitlements.
The schemes are managed by the Department of Education, Employment and Workplace Relations (DEEWR). The department describes GEERS and FEG as demand-driven — payments and additional funding are made available based on the number of eligible claims arising from corporate collapses.
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