The Fair Entitlements Guarantee (FEG) is a government safety net that helps eligible employees recover certain unpaid entitlements when an employer enters liquidation or bankruptcy. Employees can get financial support through this after job loss. Directors should maintain accurate records, seek advice early, and understand how insolvency affects employee obligations.
On This Page
- Introduction
- What is the Fair Entitlements Guarantee?
- When Does FEG Apply?
- How Do Employees Make a FEG Claim?
- How Long Does a FEG Claim Take?
- FEG Checklist for Directors
- FAQs
Introduction
When a company is in financial trouble, employees are often worried about unpaid wages, leave, redundancy and superannuation. Many employees have misconceptions about what the Fair Entitlements Guarantee (FEG) covers, leading to frustration when they discover that unpaid superannuation is not included.
Directors, meanwhile, need to understand how employee entitlements are treated if the company enters voluntary administration, liquidation or a deed of company arrangement.
This guide explains what the Fair Entitlements Guarantee (FEG) is, when it applies, what it covers, what it does not cover, how employees can claim, and what company directors should know before making insolvency decisions.
What is the Fair Entitlements Guarantee?
Definition
The Fair Entitlements Guarantee (FEG) is an Australian Government safety net that may help eligible employees recover certain unpaid employment entitlements when their employer enters liquidation.
FEG is managed by the Department of Employment and Workplace Relations (DEWR).
Note that employees of a company in voluntary administration or subject to a DOCA are generally not eligible for FEG unless the company later enters liquidation.
Who Benefits from FEG?
FEG is designed to assist eligible employees where there is no other practical way to recover certain unpaid entitlements from an insolvent employer.
For employees, FEG can be an important source of financial support if they have lost their job and the employer cannot pay what is owed. The FEG scheme provides advance payments for specific unpaid workplace entitlements, subject to strict caps.
Company directors should seek advice early, keep accurate employment records, and understand how employee entitlements will be treated in case the company enters voluntary administration, liquidation or another formal insolvency process.
What FEG Covers
FEG may cover certain unpaid employee entitlements, such as:
- Wages (the maximum weekly wage cap for FEG payments is $2,921)
- Annual leave
- Long service leave
- Payment in lieu of notice
- Redundancy pay
However, it does not cover every amount an employee may be owed. In particular, FEG does not cover unpaid superannuation guarantee amounts. More on this below.
What FEG Does Not Cover
While FEG may cover certain unpaid employee entitlements, it does not apply to every amount an employee may be owed.
FEG generally does not cover:
- Unpaid superannuation
- Contractors, except limited exceptions
- Some excluded employees
- Entitlements beyond FEG caps
- Amounts that may be paid by the liquidator soon
- Claims lodged outside the deadline
In short, FEG does not cover unpaid superannuation guarantee amounts, bonuses, commissions, or reimbursement for expenses.
Employees with unpaid superannuation concerns should generally contact the Australian Taxation Office (ATO) separately, as unpaid super is dealt with outside the FEG scheme.
Key Takeaways
- FEG is administered by the Australian Government.
- It applies to eligible employees, not all workers.
- It is generally connected to liquidation for companies and bankruptcy for individual employers.
- It does not erase the company’s underlying insolvency issues.
- It is separate from the director’s duties and the company’s obligations to employees.
When Does FEG Apply?
FEG does not apply simply because a company is struggling financially, insolvent, or in voluntary administration. It only becomes relevant if the company enters liquidation.
An employee may be eligible for FEG if certain conditions are met, including:
- The employer is in liquidation or bankruptcy.
- The employee’s employment has ended.
- The employee is owed eligible employment entitlements.
- The employee meets citizenship or eligible visa requirements.
- The claim is lodged within the required timeframe.
Employer Is in Liquidation or Bankruptcy
FEG is generally linked to:
- Liquidation for companies, or
- Bankruptcy for individual employers and sole traders.
This is an important because employees are generally not eligible for FEG merely because a company has entered voluntary administration or is operating under a DOCA.
Employment Has Ended
In most cases, the employee’s employment must have ended before a FEG claim can proceed.
Employees who are still employed during a voluntary administration process may not yet be eligible to apply, even if wages or entitlements are outstanding.
Employee Is Owed Eligible Entitlements
The employee must be owed entitlements covered by FEG, such as unpaid wages, annual leave, long service leave, payment in lieu of notice, or redundancy pay.
The department assessing the claim will rely on information verified by the liquidator or bankruptcy trustee, including payroll records, leave balances and employment documentation.
Citizenship or Visa Requirements Apply
To qualify for FEG, employees generally need to be:
- An Australian citizen, or
- The holder of an eligible permanent visa or special category visa.
Supporting identification and residency documents are usually required as part of the application process.
Claims Are Lodged Within the Time Limit
FEG claims must generally be lodged within 12 months of the later of:
- The date employment ended, or
- The date the employer entered liquidation or bankruptcy.
Late claims may not be accepted unless exceptional circumstances apply, which is why employees should seek advice and prepare documents as early as possible.
Can Employees Claim FEG During Voluntary Administration?
Usually, no.
During voluntary administration, the company’s future is still being assessed. Creditors may decide to:
- Return the company to the directors,
- Approve a DOCA, or
- Place the company into liquidation
Because of this, employees should not assume that FEG automatically applies during the voluntary administration process, even if wages or entitlements are outstanding.
If the company later enters liquidation, eligible employees may then be able to apply for FEG for unpaid entitlements covered by the scheme.
Further reading:
- Voluntary Administration Employee Entitlements
- What Happens After Voluntary Administration?
- What Is a DOCA?
- Voluntary Administration vs Liquidation
How Do Employees Make a FEG Claim?
Employees can apply for FEG through the Australian Government once their employer has entered liquidation or bankruptcy and their employment has ended.
The claim process generally involves confirming eligibility, preparing supporting documents, and lodging the claim within the required timeframe.
Step 1: Confirm the Employer Is in Liquidation or Bankruptcy
Before making a claim, employees should confirm that:
- The company has entered liquidation, or
- The employer has entered bankruptcy.
Employees are generally not eligible for FEG merely because the company is in voluntary administration or operating under a DOCA.
Step 2: Gather Supporting Documents
The FEG application process requires employees to provide documentation proving their eligibility, including details of their unpaid entitlements and the circumstances of their employer’s insolvency.
The documents include:
- Payslips,
- Employment contracts,
- Leave records,
- Termination letters,
- Bank account details,
- Tax File Number details, and
- Proof of Australian citizenship or eligible visa status.
Incomplete records may delay the assessment process.
Step 3: Lodge the FEG Claim
Claims can generally be submitted through the Government’s FEG Online Services portal or by using the approved claim form.
Employees should ensure all information is accurate and that supporting documents are included where required.
Step 4: The Claim Is Assessed
The department assessing the claim will usually rely on information provided or verified by the liquidator or bankruptcy trustee, including:
- Payroll records,
- Leave balances,
- Employment details, and
- Termination information.
If additional information is needed, the employee may be contacted during the assessment process.
Read more about the claim assessment process here: The claim assessment process – Department of Employment and Workplace Relations, Australian Government
Step 5: Wait for the Outcome
Processing times can vary depending on:
- The quality of company records,
- The complexity of the employment arrangements,
- Missing documents, or
- Delays in receiving information from the insolvency practitioner.
Employees should keep copies of all submitted documents and respond promptly to any requests for further information.
How Long Does a FEG Claim Take?
It can take between 14 to 16 weeks to process an FEG claim. However, this timeline can vary depending on the complexity of the claim and the quality of the company’s records.
Delays are more common where:
- Employment records are incomplete,
- Supporting documents are missing, or
- The liquidator or bankruptcy trustee is still verifying employee entitlements.
Employees can help reduce delays by lodging claims early, providing complete documents, and responding quickly to requests for further information.
For directors, accurate payroll and employment records can make the assessment process smoother for both employees and the insolvency practitioner.
FEG Checklist for Directors
If your company is facing financial difficulty, employee entitlements should be addressed early.
Directors should consider the following:
- Review unpaid wages, leave, redundancy, notice and superannuation exposure.
- Keep payroll, leave and employment records accurate and up to date.
- Preserve employment contracts, award and EBA documentation.
- Understand whether VA, DOCA, SBR or liquidation is being considered.
- Avoid telling employees that FEG will automatically cover unpaid entitlements.
- Seek advice before employee entitlements continue to deteriorate.
- Cooperate with the administrator or liquidator by providing complete records.
- Communicate clearly and accurately with employees about the company’s position.
- Understand that unpaid employee entitlements may increase scrutiny of the company’s affairs.
- Get professional advice early to understand the most appropriate insolvency or restructuring pathway for the business.
At Halo Advisory, we work for you — the director. Financial expert Greg Bartels offers a no-obligation, consultation to help you understand where you stand, what risks exist, and what options are realistically available before deadlines reduce control. Get in touch today.
FAQs
What is the Fair Entitlements Guarantee?
The Fair Entitlements Guarantee (FEG) is an Australian Government safety net that may help eligible employees recover certain unpaid employment entitlements when their employer enters liquidation.
The Fair Entitlements Guarantee was introduced in 2012, replacing the previous General Employee Entitlements and Redundancy Scheme (GEERS), and is designed to provide financial assistance to eligible employees.
Can I claim FEG if my employer is in voluntary administration?
No. Employees are generally not eligible for FEG merely because a company is in voluntary administration or operating under a DOCA. FEG may become available if the company later enters liquidation.
Does FEG cover unpaid super?
No. FEG does not cover unpaid superannuation guarantee amounts.
Employees with unpaid super concerns should generally contact the Australian Taxation Office separately.
How much unpaid wages can FEG cover?
FEG may cover up to 13 weeks of unpaid wages, subject to the Maximum Weekly Wage cap ($2,921 till 30th June 2026) that applies at the time of the claim.
Does FEG cover redundancy pay?
Yes. FEG may cover redundancy pay of up to 4 weeks per full year of service, subject to eligibility requirements and payment caps.
What are the citizenship and visa requirements for FEG assistance?
To claim FEG assistance, one must be an Australian citizen, a permanent resident, or a Special Category Visa holder.
How long do I have to make a FEG claim?
FEG claims generally need to be lodged within 12 months of the later of:
- The date employment ended, or
- The date the employer entered liquidation or bankruptcy.
Late claims may not be accepted unless exceptional circumstances apply.
FEG support is not initiated automatically; individuals must proactively manage their claims.
Can contractors claim FEG?
No. FEG generally applies to employees, not contractors, except in limited circumstances.
Can directors claim FEG?
Not always. Company directors and their relatives are generally excluded from claiming FEG.
Directors, relatives of directors and related-party employees may face special eligibility issues. They should not assume they can claim FEG in the same way as ordinary employees.
Specific advice should be obtained before relying on eligibility assumptions.
What happens if a DOCA is proposed?
A DOCA may propose how employee entitlements will be dealt with.
Employees should understand:
- How their entitlements will be treated,
- Whether employee priority rights are affected, and
- Whether the company may later enter liquidation.
FEG generally does not apply while the company remains under a DOCA.
More on this: What Is a Deed of Company Arrangement (DOCA)?
Who pays employee entitlements during voluntary administration?
If the administrator continues trading the business, wages for work performed after the administrator’s appointment are generally treated as an expense of the administration.
Pre-appointment employee entitlements are dealt with through the outcome of the voluntary administration process, such as:
- A DOCA,
- Liquidation, or
- The company being returned to the directors.
Further reading:
How does FEG interact with a DOCA?
FEG generally does not apply while a company remains under a DOCA.
A DOCA may set out how employee entitlements will be paid, and employees retain priority rights unless eligible employees agree otherwise.
If the DOCA later fails and the company enters liquidation, eligible employees may then be able to access FEG.
What happens after FEG pays employees?
FEG may help employees recover certain unpaid entitlements, but it does not make the company’s insolvency issues disappear.
After FEG payments are made, the Commonwealth may become a creditor in the liquidation and seek recovery through the insolvency process.
