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29 August 2006

Increased redundancy pay under GEERS

On 22 August 2006, the Minister for Employment and Workplace Relations, Kevin Andrews, announced that the amount of unpaid redundancy pay under the General Employee Entitlements and Redundancy Scheme (GEERS) is to be doubled to 16 weeks.

Mr Andrews stated that this increase brings GEERS “into line with the community standard for redundancy provisions now in awards and agreements”.

In summary, eligible claimants will now be entitled to the following under GEERS:

  • Unpaid wages - the definition of which includes underpaid wages within three months prior to the appointment of an insolvency practitioner (subject to a cap - see below).
  • Unpaid annual leave (the employment instrument must specifically state that the entitlement is payable upon termination).
  • Unpaid long service leave.
  • Unpaid pay in lieu of notice.
  • Unpaid redundancy pay up to a maximum of 16 weeks.

Payments made under GEERS are subject to an annual income cap (which is $98,200 for 2006-2007). Eligible employees who earned more than the GEERS cap will be paid as if they earned a rate equivalent to the GEERS cap.

Employees who are directors or principals of the employer, or a relative of a director or principal are only entitled to receive up to a maximum of $2000 for unpaid wages, and $1500 total for unpaid annual leave and long service leave.