Employee super given higher priority
Employees of failed companies will now have a better chance of getting their superannuation entitlements back, thanks to recent amendments to the Corporations Act 2001.
Under the changes, 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 will mean that any outstanding super contributions will be paid to employees before payments to ordinary unsecured creditors, but after 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 $2,000,” Vivian said.
The new rules will apply to companies that go into liquidation, administration or receivership from December 31, 2007.
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