Employees have a better chance of getting their superannuation entitlements if their employer goes broke – under new laws that came into effect on 1 January. The changes to the corporations law means that superannuation will be given the same priority as other debts and will rank equally with employee entitlements such as unpaid wages and annual leave.
Deputy Tax Commissioner Raelene Vivian said: “This means that any outstanding superannuation contributions and superannuation guarantee charge will be paid to employees before payments to ordinary unsecured creditors and once priority creditors’ and liquidators’ fees are paid.
“Excluded employees such as directors and their relatives will also be entitled to claim the super guarantee charge debt, but this will be capped at $2000.”
However the changes do not mean that employee entitlements rate ahead of secured creditors.
The new rules apply to companies that go into liquidation, administration or receivership from 31 December 2007.