The FEG is being reevaluated by the Department of Employment and Workplace Relations (DEWR) to possibly include unpaid superannuation guarantee charges (SGC) for businesses that have gone bankrupt. The SMC emphasizes that SGC amounts should become a priority in the debt repayment hierarchy.
According to the SMC, unpaid superannuation affects an estimated 2.8 million employees annually, costing each impacted worker an average of $1,800 as of 2021-22. Beyond unpaid super, the SGC also includes the nominal interest that workers would have earned and an administrative penalty to discourage employer non-compliance.
The SMC proposes that including superannuation in the FEG could improve employee financial balances and deter those employers who seek to sidestep their obligations. The push also seeks the extension of the FEG advance scheme to make sure workers receive their dues more quickly and consistently, regardless of a successful recovery from the employers' bankruptcy estates.
Ultimately, the inclusion of the superannuation guarantee charge into section 596AA of the Corporations Act 2001 is expected to strengthen both the integrity of the FEG Recovery Program and enforce stricter compliance with super obligations by employers.
