Industry funds urge SG inclusion in last resort | Australian Markets
Major industry funds consultant group, Super Members Council (SMC) is arguing for an extension of the Fair Entitlements Guarantee (FEG) scheme to make sure staff of bancrupt companies are compensated for unpaid superannuation guarantee (SG) contributions.
The FEG is a security internet scheme of last resort which permits staff to assert their unpaid wages for up to 13 weeks, unpaid annual go away and long service go away, cost of lieu of discover up to 5 weeks and redundancy pay for up to 4 weeks.
The scheme doesn’t presently cowl unpaid superannuation however is in the method of being “recalibrated to recalibrated to also actively pursue unpaid superannuation guarantee charge (SGC) amounts owed by employers who have entered liquidation or bankruptcy where certain criteria are met (including where a FEG advance had been made to former employees)”.
Consultation across the “recalibration” is being run by the Department of Employment and Workplace Relations (DEWR) and the SMC has used a submission that it’s critical that SGC quantities are added to the precedence regime for the cost of money owed.
“While unpaid superannuation is one element of the SGC, it also captures amounts for nominal interest that workers would have earned if their super had been paid to their accounts, and an administrative penalty to deter employers for non-compliance,” it mentioned.
“While not all unpaid super is because of company insolvency, we all know that unpaid super impacts round 2.8 million staff annually, costing the impacted staff an average of $1,800 in 2021-22.
“Adding the superannuation guarantee charge at section 596AA of the Corporations Act 2001 will improve workers’ balances and help to deter those pernicious actors who aim to avoid paying what they owe. It will also strengthen the integrity of the FEG Recovery Program and reinforce employers’ super obligations,” the SMC mentioned.
“In addition, we recommend that the FEG advance scheme itself be extended to include super amounts owing to workers to ensure that they receive their entitlements sooner and are paid regardless of the Recovery Program achieving a successful outcome.”
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