Aug 08, 2025

Hundreds of Annecto employees may miss out on redundancy and leave pay

Hundreds of Annecto employees may miss out on redundancy and leave pay

Hundreds of aged care and disability support workers face uncertainty over their entitlements after the long-standing provider Annecto collapsed under debts exceeding $19 million.

The organisation, which had been operating for more than 70 years, entered voluntary administration in July following its announcement in June that it would wind down operations. Administrators from McGrathNicol have since confirmed that pre-appointment employee entitlements – including annual leave, long service leave, redundancy and notice pay – total more than $11 million.

While wages and superannuation immediately due at the time of administration were largely covered to keep essential services running, the remaining entitlements may only be partially recovered. Current estimates suggest staff could receive between 21 and 55 cents in the dollar, depending on how much can be realised from Annecto’s assets.

Administrators have warned there is no certainty that assets will cover all claims. If the organisation moves into liquidation and funds fall short, eligible workers may need to rely on the Federal Government’s Fair Entitlements Guarantee (FEG). This safety net can assist with unpaid wages, leave and redundancy but does not cover superannuation, excludes non-Australian residents, and can take months to process.

At the time of its collapse, Annecto employed nearly 1000 people and supported more than 3500 clients across Victoria, New South Wales, Queensland and the ACT. The organisation delivered aged care, disability and veterans’ services, as well as running several community enterprises.

A report to creditors cited poor cash flow forecasting, delays in collecting revenue, and a lack of clear strategic direction from the board as key factors in the financial downfall. Changes to government funding models and the timing of payments also played a significant role in depleting reserves.

Currently, 264 staff remain employed to assist with winding down services and transitioning clients to other providers. These employees are being paid by the administrators.

Unsecured creditors – including trade suppliers and statutory bodies – are owed millions and are unlikely to see any return. A creditors’ meeting next week will decide whether Annecto is formally placed into liquidation, which would end any hope of a rescue deal.

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