The Fair Entitlement Guarantee (FEG) regime expansion in July last year has not yet resulted in a significant recovery of unpaid dues. A discussion led by the Department of Employment and Workplace Relations (DEWR) highlights the ongoing difficulties, with data indicating that nearly 39% of large FEG cases in 2023-24 involved questionable transactions that circumvented employee entitlements.
During this period, the total amount disbursed through FEG cases reached $52.7 million, representing almost a quarter of the total advances. Notably, the average unpaid Super Guarantee Charge in these incidences was approximately $258,982, compared to the average FEG advance of $431,980 per case.
Even though the FEG Recovery Program has been expanded from July 2024 to target the recovery of superannuation contributions from insolvent companies, there is still no concrete evidence of substantial recoveries being achieved, according to ASFA.
ASFA argues for the equal treatment of unpaid Superannuation Guarantee and unpaid wages, as both constitute essential employee remuneration. Moreover, it suggests that any Super Guarantee Charge collected by the Australian Taxation Office (ATO) that stems from employer liabilities should counterbalance payments made within the FEG structure. Furthermore, any interest or penalties collected by the ATO should be channelled to employees to cover any deficits in their superannuation contributions.
ASFA also recommends prioritizing the settlement of Superannuation Guarantee Charge obligations over other payments under the FEG Recovery Program, citing equity and consistency with governmental initiatives in 2024 to substantially recover unpaid super contributions from insolvent firms.
