$20m bill: Taxpayers set to pay as 1200 workers left unpaid following Cocoon SDA Care scandal

Taxpayers have been left to foot the bill after a shonky NDIS provider was banned leaving 1200 workers without pay, and some unable to pay their mortgages.

Taxpayers will fork out up to $20 million to pay back 1200 workers ripped off when a dodgy NDIS provider went broke.

Cocoon SDA Care owes workers up to $30,000 each in unpaid wages after failing to pay them for up to four months before the company collapsed.

Workers have now applied to the Fair Entitlements Guarantee, which pays out up to 13 weeks unpaid wages, annual leave and redundancy pay.

There have been 225 applications to the scheme so far, but the total bill would be $20 million if all 1200 workers lodged a claim.

The NDIS provider, which had more than 400 clients across the country, was run by former bankrupt Zaffar Khan who spent more than $600,000 on luxury travel and hired former Bachelor contestant Marg Irving as an executive assistant.

The NDIS provider was run by former bankrupt Zaffar Khan.

The company was placed into the hands of liquidators David Mansfield and Philip Robinson of Deloitte in May.

Former employee Stephen Cooper has applied for the FEG scheme, saying he was at risk of losing everything.

“They stopped paying me the month after I had moved into my home and started paying my mortgage,” he said.

“I’m two months behind on my loan, I have a personal loan and a car loan.”

Former Cocoon SDA Care worker Stephen Cooper says he is behind on his home loan after he was shortchanged by Cocoon SDA Care. Picture: Supplied

He said he had to borrow money from friends to have enough petrol to get to work.

“I have been working with the same participant for a long time, I didn’t want to let him down,” Mr Cooper added.

Another former manager, who was owed $30,000 plus missing superannuation payments, said they had no confirmation of whether they would get money owed.

“I’m furious at not being paid, given the director has taken himself to Pakistan and the corporate strategist (Zaffar Khan) is swanning around like nothing has happened,” the source said.

“The liquidators have been very poor at communicating. They don’t even have all the details of staff who were affected and were asking people to send them an email.”

A third worker, who asked not to be named, was a single mother of four whose children were unable to go to school because she could not afford the transport costs.

She was unable to apply for Centrelink benefits because Cocoon SDA was still sending her pay slips but not depositing money into her account.

The FEG scheme was set up in 2012 in the wake of the car industry collapse in Australia, ensuring that redundant workers were looked after.

Tanya-Lee Quinn, a former Cocoon SDA Care chief executive who blew the whistle on the company, said the directors should be held to account.

“There’s no incentive to do the right thing,” she said.

The Department of Employment and Workplace Relations said: “As at 2 July 2025, 225 former employees of Horizon Solsolutions Australia Pty Ltd, formerly trading as Cocoon SDA Care have submitted a claim under the Fair Entitlements Guarantee (FEG).

“FEG is a legislative safety net scheme of last resort.”

Mr Khan’s voicemail said this week that he would “return the call within seven days”.

He did not respond to questions before deadline.

Originally published as $20m bill: Taxpayers set to pay as 1200 workers left unpaid following Cocoon SDA Care scandal