Nov 092010
An annual report recently tabled in Parliament reveals that under the Australian Government’s “safety net” scheme over $154 million had to be paid out in 2009/10 to compensate 15,565 Australian workers who lost their jobs as a result of their employers’ insolvency.
This $154 million takes the total paid since the scheme began in 2001 to about $1,083 million.
The Department of Education, Employment and Workplace Relations (DEEWR) runs a scheme called the General Employee Entitlements and Redundancy Scheme (GEERS).  The scheme is officially described as follows:
   “GEERS is a safety net scheme which protects the entitlements of employees who have lost their jobs as a result of the bankruptcy or liquidation of their employers.  Eligible entitlements under GEERS consist of up to three months unpaid or underpaid wages for the period prior to the appointment of the insolvency practitioner (including amounts deducted from wages, such as for superannuation, but not passed on to the superannuation fund), all unpaid annual leave, all unpaid long service leave, up to a maximum of five weeks unpaid payment in lieu of notice and up to a maximum of 16 weeks unpaid redundancy entitlement.  Payments made under GEERS are subject to an annually indexed income cap, which was $108,300 for 2009–10.”     
In its  2009/10 Annual Report the department lists the “notable achievements” of GEERS as:

  “A total of $154,058,670 was advanced under GEERS to 15,565 eligible claimants. Of claimants who received assistance under GEERS, 87.3 per cent were paid 100 per cent of their verified employee entitlements by GEERS. More than 45,632 enquiries were received by the GEERS Hotline. Over $18 million advanced under GEERS was recovered during 2009–10.”

Note: After  a payment is made from GEERS, the Government seeks to recover the payment through the liquidation or bankruptcy process (as a priority debt).  As stated, the amount recovered in this way was $18 million, which apparently means that the net outlay of taxpayers’ money was $136 million. 

GEERS was introduced in 2001.  The following chart – prepared for this article using figures extracted from past DEEWR  annual reports, and an article in the Australian Journal of Management (June 2009, pages 51-72, authors Jeannette Anderson and Kevin Davis) – shows amounts paid out over past years:



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