Release type: Media Release

Date:

Government seeks additional $70 million for redundant workers

The Rudd Government has sought an additional funding of $70 million to ensure appropriate funds are available to pay General Employee Entitlements and Redundancy Scheme (GEERS) claimants in 2008-09.

GEERS is a payment scheme established to assist employees who have lost their employment due to the liquidation or bankruptcy of their employer and who are owed basic employee entitlements.

$50 million has been sought to specifically support possible claims for GEERS assistance from employees of ABC Learning. This is the estimated value of employee entitlements that may be paid under GEERS, based on advice received from the Receiver of ABC Learning.

A further $20 million has been sought to support the expected increase in demand for GEERS assistance.

GEERS assistance provides for up to 3 months unpaid wages, annual leave, long service leave, up to a maximum of 5 weeks payment in lieu of notice and up to a maximum of 16 weeks redundancy entitlement. GEERS assistance is also available for up to three months unremitted employee superannuation contributions.

Future expenditure for the Scheme is difficult to estimate as GEERS is demand driven and affected by a number of factors, such as the number of liquidations, the number of claimants, the extent of their outstanding entitlements and the industrial instruments which determine their entitlements.

The most recent Budget provided $82.8 million for the scheme for 2008-09. The Rudd Government is seeking an additional $70 million for the rest of the financial year, taking total funding to $152.8 million.

In the December quarter of 2008, a 65.5 per cent increase in the number of individual claims lodged for GEERS assistance was recorded, when compared to the same period in 2007-08.

This general increase in demand, together with the anticipated demand from ABC Learning employees prompted the Government to act.

GEERS is not designed to act as an incentive for employers to do the wrong thing. Employers are required by law to put enough money away to cover employees’ entitlements. Beyond GEERS, the government has recently announced a $300 million measure to ensure redundant workers get assistance and support immediately rather than having to wait up to 3 months. 20,000 training places have also been made available for people made redundant to help them get the skills to get back into the workforce. In addition, someone on income assistance enrolling in a structured training course will now receive a $950 Learning and Training Bonus from the Rudd Government's $42 billion Nation Building and Jobs Plan.

$155 million has been targeted to encourage employers, Group Training Organisations and training providers to take on out-of-trade apprentices and trainees in these difficult economic times.

All affected workers are strongly encouraged to contact Centrelink as retrenched workers will be eligible for immediate access to intensive assistance with a Job Network member.

Quarter Number of claimants who received GEERS assistance
March 2008 1532
June 2008 2055
September 2008 2081
December 2008 2701

For more information on GEERS phone 1300 135 040, email or visit the website www.workplace.gov.au/geers. Centrelink can be contacted on 13 28 50.