When Your Employer Goes Broke: Redundancy Pay and the FEG

If your employer is in liquidation or bankrupt and can't pay what it owes you, the federal Fair Entitlements Guarantee (FEG) is the safety net. It covers unpaid wages, annual leave, long service leave, notice and redundancy pay, but with limits: a wage cap of $3,032 a week in 2026–27, 13 weeks of wages, 5 weeks of notice and 4 weeks of redundancy per year of service. It never covers super.

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Who can claim

You can usually claim FEG if all of these are true:

You can't claim if you were one of the following:

What FEG covers, and the limits

EntitlementFEG limit
Unpaid wagesUp to 13 weeks
Annual leaveAll of it owed
Long service leaveAll of it owed
Payment in lieu of noticeUp to 5 weeks
Redundancy payUp to 4 weeks per full year of service
SuperannuationNot covered

On top of those limits, every amount is worked out at a wage rate no higher than the maximum weekly wage: $3,032 for 2026–27 (it was $2,921 in 2025–26, and it is indexed each financial year). If you earned more than that, FEG pays as though you earned the cap.

Redundancy is paid at what your award, agreement, contract or the NES actually gave you, then capped at 4 weeks per year. For most people on the NES scale the weeks cap never bites (the NES tops out at 16 weeks); it matters for generous contract or enterprise-agreement redundancy schemes. FEG also leaves out bonuses, reimbursements and irregular commissions.

Worked example 1: under the wage cap

A 50-year-old on $1,800 a week with 9 years' service is owed 3 weeks of wages, 5 weeks' notice, 16 weeks' NES redundancy and 4 weeks of annual leave.

ItemOwedFEG pays
Unpaid wages$5,400$5,400
Pay in lieu of notice$9,000$9,000
Redundancy pay$28,800$28,800
Unused annual leave$7,200$7,200
Total$50,400$50,400

Pay is under the cap and every item is inside its limit, so FEG covers the lot.

Worked example 2: above the wage cap

A 52-year-old manager on $3,600 a week with 12 years' service is owed 2 weeks of wages, 5 weeks' notice, 12 weeks' NES redundancy and 6 weeks of annual leave. FEG works it all out at $3,032 a week instead of $3,600.

ItemOwedFEG pays
Unpaid wages$7,200$6,064
Pay in lieu of notice$18,000$15,160
Redundancy pay$43,200$36,384
Unused annual leave$21,600$18,192
Total$90,000$75,800

The $14,200 gap doesn't disappear: you can still claim it from the liquidator as a creditor. How much comes back depends on what is left in the company.

How to claim

  1. Give the liquidator or bankruptcy trustee your details and what you are owed. They verify it from the employer's records.
  2. Lodge a FEG claim online (FEG Online Services) or with the claim form. The FEG hotline is 1300 135 040.
  3. Claim within 12 months after the later of the insolvency event or the end of your employment. If your employer is a bankrupt individual, also claim before they are discharged.

What about my unpaid super?

FEG doesn't cover it. The liquidator must report unpaid super to the ATO through a super guarantee charge statement, and in the winding up that charge ranks equally with employees' wages. You can also report unpaid super to the ATO yourself, and check your super fund's records in myGov to see which contributions are missing.

Frequently asked questions

My employer went into voluntary administration. Can I claim FEG?

Not yet. FEG needs an insolvency event: a liquidator appointed, or the employer becoming bankrupt. Voluntary administration alone is not one. If the business later goes into liquidation, you can claim then, as long as your job ended within the time the rules allow.

Does FEG pay my unpaid super?

No. FEG does not cover superannuation. The liquidator has to report unpaid super to the ATO, which pursues it through the super guarantee charge. That debt ranks equally with wages in the winding up.

I worked for a small business. Do I still get redundancy pay through FEG?

Possibly. Employers with fewer than 15 employees are usually exempt from NES redundancy pay, but since 15 December 2023 that exemption does not apply where the business shrank below 15 because of redundancies made while it was bankrupt or in liquidation. FEG pays the redundancy you were actually entitled to, so this matters.

I am on a temporary visa. Am I eligible?

No. When your employment ended you must have been an Australian citizen, a permanent visa holder or a special category visa holder (New Zealand citizens in Australia). Temporary visa holders can still claim against the liquidator as a creditor.

How long does a FEG claim take?

The department aims to decide claims in an average of 14 weeks, and pays within a couple of business days of a decision. It can take longer if the liquidator is slow to provide employee records.

Is FEG money taxed?

Yes. The department withholds tax: wages and leave at 32%, and notice and redundancy treated as a genuine redundancy payment (tax-free up to the $13,598 + $6,801-per-year limit) if you are under age-pension age. Without a TFN, withholding is 47%.

Related

Sources

Figures on this page come from the following primary sources. The date is when we last checked the page against the source.

Independent guide — not a government service, and not financial, legal or tax advice.