4.3.3.70 Income from Fair Entitlements Guarantee (FEG)

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.

FEG

To be eligible for FEG, claimants must meet the conditions of eligibility as prescribed by the Fair Entitlements Guarantee Act 2012 (the FEG Act). Key eligibility conditions are:

  • the former employer entered liquidation or bankruptcy on or after 5 December 2012,
  • the claimant's employment has ended due to, or less than 6 months before, the employer's liquidation or bankruptcy,
  • the claimant is owed employment entitlements,
  • the claimant has taken steps to prove those debts in the winding up or bankruptcy of the employer,
  • the claimant was an Australian citizen or the holder of a permanent visa or SCV (under the Migration Act 1958) at the time employment ended, and
  • the claimant has lodged an effective claim within 12 months (of either the redundancy or the liquidation/bankruptcy of the former employer). To be effective the claim, must include all mandatory information and documentation.

Note 1: Other arrangements apply if the insolvency event occurred before 5 December 2012. Please contact FEG at the Attorney-General's Department on 1300 135 040 if this applies.

Note 2: Claimants will not be eligible where they are contractors, or a director or relative of the director of the employing company at the time of (or within the 12 months before) liquidation or bankruptcy.

What assistance is available under FEG?

FEG covers 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 to receive under FEG is calculated based on the terms and conditions they were employed under (e.g. industrial award, collective agreement, contract of employment etc.).

More information

For more information about FEG:

Treatment of income

For social security purposes, payments received under FEG are treated in the same way as if the employer paid them to the employee.

IMP

Payments made under the FEG 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 4.3.4.10 Application of the income maintenance period (IMP)

LAWP

Payments made as a consequence of redundancy, including payments under the FEG may be assessed as a liquid asset under the LAWP for new claims.

Policy reference: SS Guide 3.1.2.20 Liquid Assets Waiting Period

Last reviewed: 9 November 2015