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ATO Announces New Move On Employee Super Entitlements

by Carla Johnson, Investors Offshore.com, London

04 January 2008

The Australian Taxation Office (ATO) has announced that recent changes to the Corporations Act 2001 mean that employees of failed companies have a better chance of getting their super entitlements back.

Deputy Tax Commissioner, Raelene Vivian explained that 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.

“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,” Ms Vivian revealed, continuing:

“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.”

The new rules apply to companies that go into liquidation, administration or receivership from 31 December 2007.

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