In January 2016 the Department of Employment announced that it will assume the responsibility for making FEG payments (previously known as GEERS) directly to employees in July 2016.
As a result, the software includes the ability to record payments made for FEG by the DOE and adjust the outstanding claims owed to employees. The process of processing FEG claims operates in much the same way FEG payment journals were entered prior to this software release, but, without the cash component.
Direct FEG payments may still be made using the software, in case you need to retrospectively enter or change previous direct employee FEG payments.
Filtering
Additional filtering has been made to the recording of FEG payments.
When a filter is applied to the creditor register, and a dividend payment is made, including a FEG distribution, only those creditors included the filter will participate in the dividend.
If a creditor is selected as “Include in Dividend”, when you click the FEG button the included employees will be displayed in the FEG form.
NB The creditor claim must be admitted to be included in the Dividend run.
This gives the user flexibility to select which employees to include in the FEG process, if you need to filter employees.
FEG Claim Form
The FEG Claim Form is shown below:
Clear FEG amounts
The “Clear FEG amounts” button allows users to set all the FEG Amounts to zero and key in their own values.
If you enter an amount in the FEG column, the amount is preserved if you drill-down to the employee claim.
After clicking OK
How Proof of debt amounts are split
The Proof of debt entry fields are based around the statutory categories for employee priorities based on the Corporations Act s556. For example there is a claim for wages that may be made up of several components. To calculate the component of each claim type (for example to split wages between ordinary wages and PILN) enter the components into the ADV/EST fields on the preferred employee claim form. The total claim represented by the POD amount claimed amount is pro-rated between the ADV/EST amounts for each component.
To update the employee claim you may drill-down from the FEG payment form by double-clicking on the employee.
Import FEG spreadsheet
The DoE issues Insolvency Practitioners with a summary spreadsheet of payments made to FEG claimants (employees).
The FEG spreadsheet may be imported to the grid. A sample spreadsheet here. The colour groupings therein indicate which columns in the spreadsheet are mapped to which insolvency claim types.
To import the spreadsheet click “Import FEG Spreadsheet” and select the spreadsheet detailing the payments made by DOE.
Import Validation
To match employee records when importing the software requires an exact match on Last Name, First Name and Date of Birth. The FEG Import form has had DOB added to the grid to make this easier.
If an item in the spreadsheet is not matched to the grid you will see the following validation warnings. Note that if the user is not in the grid (i.e.: is filtered out). A match will not be made. If a user attempts an import with a filter applied, a warning message is given before import.
A warning where an employee record does not match
Clicking Print will allow you to produce a list of un-matched or un-imported employees.
A warning showing a filter is applied
Warning to advise that the entered amounts will be cleared from the grid if you proceed with import
Claims that don’t match
The employee must have claims entered that correspond to the FEG payments in the spreadsheet otherwise you will get red validation errors:
The user can proceed past the validation and assuming that valid matched records exist, the import can proceed.
If the user selects OK, the amounts will be populated from the spreadsheet:
Recording FEG amounts
To record the FEG payment choose the payment option from the Make Payment button.
Enter payment from this company
NB Since the payment is being made from the Company an STP submission will be required.
The enter payment option will create distributions to employees. This option exists for backward compatibility. This is the same functional it that existed in version prior to version 2016.07.
The summary of the process is as follows:
1.Create a distribution payment to each employee
2.Create a payment approval batch
This step is optional depending upon the current user’s permissions
3.Update the employee distributed amount to reduce their claim
4.Create a corresponding claim for the Department of Employment summarising the same claim types.
Enter direct FEG Payments
NB FEG direct payments do not result in a STP submission for the company. The batch will list in the STP tab as No Payroll events - Submission not possible. FEG will report STP.
Where payments have been directly paid to employees by DOE the direct payment method would be chosen.
The summary of the process is as follows:
Create a payment approval batch
This step is optional depending upon the current user’s permissions. If the user chooses to create a batch for authorisation the journal entries are created for posting.
Upon creation of the batch:
1.The FEG amount paid is updated to the employee’s claim record
2.The DoE claim is created and updated with the DoE claim
Posting of the batch
Upon Posting of the batch, the Amounts Distributed are updated in the Employee Claim. And a new creditor for FEG is created claiming the distributions made to the employees.
Undo FEG Payments
You may undo the FEG distribution using the standard dividend cancellation procedure.
Entries
Once the dividend is authorised, journals are generated instead of payments. An example FEG direct payment journal is pictured below:
You will note that the FEG creditor lines are not allocated to DOE. The creditor adjustments are not allocated as the effect of allocating would decrease the distributed amount to DOE in the creditor claim record. Instead the entry lines have a reference to the DOE Counterparty. Entries of this type increase the DOE claim and admitted amounts in the DOE creditor claim record
Tax Treatment of Further Dividends
As the insolvency practitioner no longer produces payment summaries for employees receiving a direct FEG payment, only the balance of the claim (not covered by DOE will be paid).
This may have tax implications for the secondary payment to ensure the tax treatment is matched with the original payment issued by the DOE.
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