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Federal Budget 2021: HR Implications

The recent Federal budget contained a number of interesting provisions that employers should be aware of, particularly as you undertake your own budgeting and planning processes for the 2021-2022 financial year. For a full overview of the 2021-2022 budget provisions that potentially have implications for employees and employers, click here. Some of the highlights are:

1. Changes to Superannuation

This change has already been widely publicised, but is now upon us. From 1 July 2021, the superannuation guarantee rate will increase from 9.5% to 10%. It will continue to increase by 0.5% every year after this, until in reaches 12% (in July 2025).

A further announcement to keep an eye on is the proposed removal of the superannuation $450 per month minimum threshold at which employees become eligible for superannuation payments. This is likely to have a particular impact on those employing casual and part time employees. Essentially, employees will be entitled to employer-paid superannuation regardless of the amount they earn per month however this is not expected to come into effect before July 2022.

2. Changes to tax rates

There are a number of changes to tax rates and tax-free thresholds for employees that will take effect from 1 July 2021. Check that your payroll team and/or your book-keeper are across these changes. Details will be available shortly on the ATO website.

3. Employing workers from overseas

Whilst this one is dependent upon international borders opening up, another change is that the Government has introduced a new Global Talent visa and Temporary Activity visa, and will modernise the framework for individual tax residency, to encourage highly skilled individuals to relocate to Australia. Details can be found here.

Further, the Government has announced that the limit of 20 hours work per week which applies to international students working in hospitality and tourism will not be enforced until further advised, effectively allowing them to work up to full time hours. There are also a number of other industries, including health, aged care and NDIS, in which this will apply though there are conditions - further details are available via the Department of Home Affairs

4. Wage subsidies

The Government is increasing the wage subsidies available through Jobactive, Transition to Work, Restart (for workers over 50) and ParentsNext to up to $10,000 (GST inclusive) for eligible employees and employers. This will provide eligible job seekers, including youth, single parents, older Australians and the long-term unemployed, with greater opportunities to move into work and participate in the economic recovery. Conditions apply, more information is available here.

5. Increases to childcare subsidies

The budget also introduced a number of increases to childcare subsidies for eligible employees, which are designed to assist workers (particularly women) re-enter the workforce after parental leave.

6. Training and Upskilling

The JobTrainer program will be extended for a further 12 months, with up to $1 Billion available for people to access free or low-fee courses to work in sectors suffering shortages like aged care, IT, and childcare. Information on the JobTrainer program can be found here.

Check links for full details or, if you have any specific questions, chat with your accountant or give us a call – we'd be happy to help, or to point you in the right direction! 

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