How does dividend equalisation work? Paying dividend equalisation

The dividend equalisation works on the basis of whether a creditor was included at all in any previous dividends.

If a creditor has received any amount in any of the previous dividends then they will not be included in a dividend equalisation.

If there has been a dividend of 15c in the dollar (or 15p in the £) paid and then another dividend of 20c is declared the equalisation works as follows:

1st Dividend: 15c

2nd Dividend: 20c

	1st Dividend	2nd Dividend	Comments
Creditor A	15c	20c
Creditor B	10c	20c	If the creditor has received a payment (not a dividend) or has an increased claim the distribution for the second dividend will not have any equalisation
Creditor C	-	35c	All dividends combined

If you want to ‘equalise’ the amount received by a creditor who may have an updated claims where a creditor has previously received a payment or dividend that is less than what they would have otherwise received if the dividend was calculated on their final claim then you need to pay a manual dividend to that creditor.

To pay an equalisation select the "Equalise Claims to" option and select the c/$ to equalise all claims to.

In the example below a distributed 10c in the $ has already been made, and now you want to pay an equalisation dividend to the creditors who were previously excluded.

Tick Equalising Claims to and eg enter 10.00c/$. The system only calculates the 10c to the creditors who were previously excluded because the other creditors have already received 10c.

You could enter an equalisation dividend of 15c. When you do this, it calculates 5c to those creditors who have already received 10c in the $ and calculates the full 15c to those who were not included in the previous dividend.

NB: You cannot use equalisation for employee, because of the various different claim types etc and the order in which they are supposed to be paid.

It suggested you manually enter the equalising dividend for employees. Instructions on this option can be found in the article Choosing selected creditors for inclusion in a dividend