The Employee must:

• be aged either:
  – 16 to 29 years old, to attract the payment of $200 per week; or
  – 30 to 35 years old to attract the payment of $100 per week at the time their employment started;
• have received JobSeeker, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring, but must not be receiving other wage subsidies such as apprenticeship funding;
• have worked an average of at least 20 hours per week over the quarter to qualify for the payment;
• commenced their employment between 7 October 2020 and 6 October 2021;
• be in their first year of employment with this employer, reflecting that the hiring credit is only available for 12 months for each additional job; and
• be employed for the period that the employer is claiming for them and employees may be employed on a permanent, casual or fixed-term basis.

The Employer must:

• hold an Australian Business Number (ABN)
• be up-to-date with their tax lodgement obligations
• be registered for Pay As You Go (PAYG) withholding
• use Single touch payroll (STP) for reporting
• have an increased total employee headcount from 30 September 2020 to prove a new/additional job was created in the business; and
• the payroll of the business must be greater in the reporting period compared with the three months to 30 September 2020.

Employers do not need to satisfy a fall in turnover test.

Employers can claim the JobMaker hiring credit quarterly in arrears from 1 February 2021, by reporting to the Australian Taxation Office that they are eligible every quarter.

An employer needs to create a new or additional job and so can not lay off a full-time worker and hire two part-time workers on lower wages to claim credits because, although their headcount has increased, their payroll has not.

The amount of the hiring credit claim cannot exceed the amount of the increase in payroll for the reporting period. The baseline of 30 September 2020 will be adjusted in the second year of the program.

This will help the youth unemployment which is now sitting at 14.3% being more than double the general rate of unemployment (6.8%). Interestingly, young people suffered the biggest spike in unemployment during the global financial crisis. Even before the Covid-19 recession, young people were more than twice as likely to be unemployed.

Please find the government’s factsheet here for more information.

• JobTrainer – growing Australia’s workforce: see our newsletter here.
• New apprenticeships to help the recovery
• Support for job seekers
• More job-ready graduates
• Short courses to re-skill and up-skill Australians

If you had missed them we have also brought out other budget newsletters, which can be found here.

• The ability to deduct the full cost of eligible depreciable assets of any value in the year they are installed.
• Costs of improvements to existing eligible depreciable assets made during this period can also be fully deducted.

For more details please check out our factsheet.

Losses incurred up to 2021-22 can be carried back against profits made in or after 2018-19.

Eligible companies may elect to receive a tax refund when they lodge their 2020-21 and 2021-22 tax returns. Allowing them to access their losses earlier will provide a much-needed cash flow boost to their businesses, keeping them running, retaining their workers and investing with confidence into the future.

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This means that currently, non-corporate entities are not eligible for this tax offset. The government has been pushed to revise the eligibility criteria as many small business owners do not use a corporate structure to run their business. We will provide an update if the criteria are amended.

• Bob the Builders Pty Ltd has an aggregated annual turnover of $50 million for the 2021–22 income year.
• On 1 July 2021, Bob the Builders Pty Ltd purchases a truck-mounted concrete pump for $1 million, exclusive of GST.
• The company’s taxable income for 2021–22 was $600,000 before the purchase.

Bob the Builders Pty Ltd would claim a tax deduction of around $300,000,

resulting in a taxable profit of $300,000,

and a tax bill of $90,000.

Bob the Builders Pty Ltd will instead deduct the full cost of the asset of $1 million,

resulting in a tax loss of $400,000.

Under temporary Loss Carry-Back, Bob the Builders Pty Ltd offsets this tax loss against profits in 2018–19,

resulting in a tax refund of $120,000.

We will be releasing more information on this initiative shortly.

The Budget did confirm that the increase in the maximum number of members of SMSFs from four to six members will go ahead.

That’s it… so let’s move on.

The reforms will reduce the number of duplicate accounts held by employees as a result of changes in employment and prevent new members joining underperforming funds.

From 1 July 2021, the Your Future, Your Super package will improve the superannuation system by:

So, the ATO will develop systems so that new employees are able to select superannuation products which would:

• Provide a table of simple super products (MySuper) through a ‘YourSuper’ portal;
• Rank MySuper funds by fees and investment returns;
• Establish links to MySuper websites to choose a suitable product; and
• Help anyone to consolidate multiple superannuation fund accounts.

Existing Superannuation

• Anyone with existing superannuation will have their account linked when changing employment to avoid the creation of new multiple accounts. This would occur where an employee does not nominate a fund at the time of changing employment. The employer would make contributions to the employee’s existing fund which is made available via the ATO’s website.
• For anyone without a superannuation account, the employer would make the employee’s contributions to the employer’s nominated default superannuation fund. Some think this is an indirect shot at the very powerful union movement & the increasing influence of Union & Industry Funds… these:
• From 1 July 2022, non-MySuper funds will be added to the performance benchmarking review lists.

• No further mention of the proposed change to increase the age for non-concessional contribution (NCC) bring-forward purposes to 67 years of age. The bill to enact this previously announced measure is still currently before parliament;
• No change to the COVID-19 temporary early release of super measure. Eligible Australian and New Zealand citizens and permanent residents continue to be allowed just one withdrawal opportunity of up to $10,000 from 1 July 2020. The application must be made for release by 31 December 2020;
• The temporary reduction in minimum pension drawdown rates by 50% for the 2019-20 and 2020-21 years. Minimum payment amounts are calculated on the basis of asset values on 1 July of each income year.
• Confirmation of the deferred start date for a number of previously announced SMSF measures:
  • Increasing the maximum number allowed members in an SMSF (or Small APRA funds) from four to six – start date deferred to the date of Royal Assent of the enabling legislation. This bill has been referred to the Senate Economics Legislation Committee, due to report on 4 November 2020.
  • Changes to the calculation of exempt current pension income have also been deferred from 1 July 2020 to 1 July 2021, to apply for the 2021/22 financial year.

One thing is for certain, SMSFs members are considered engaged and interested.

This includes:

• The performance of their fund
• A considered choice that provides a competitive advantage to other funds
• Provides transparency in investment selection.

All small, medium and larger businesses in Australia with a turnover of up to $5 billion a year will be eligible for tax write-offs of the depreciation value for the full value of the asset. This allows businesses to write-off the full cost of any asset purchased during this financial year. The Government has announced it will foot the whole cost until June 30, 2021. So, we strongly encourage all eligible clients to consider utilising the opportunity.

• Multiple assets can be written off in the one year;
• Items can be New or Used;
• Asset must be first used, or installed and ready for use, by 30 June 2021; and
• Existing assets that have been ordered before 6th Oct 2020, but not yet installed, can now have the asset installed by 30 June 2021, to claim the write-off.

Through our finance division (working alongside the Accounting and Tax Team), we assist clients to obtain the finance, and also the structure to maximise the tax deductions and the GST refund (where your business is registered for GST).

The tax benefit looks like this:

Based on an example of a current vehicle finance interest rate of 3.5% per annum, the monthly repayments for the truck and trailer are approximately $3,307.60 per month

So, the tax and GST savings totalling $68,819 are the equivalent of over 18 months of your finance repayments. Also by financing it in this way, you receive back your GST in your next quarterly BAS, which means you are seeing actual cash flow back into your business.

We’ve been assisting clients to get their finance approved before going out to find their equipment, as this makes it easier to negotiate a better price and better overall deal with the dealers.

Immediate personal income tax relief for individuals providing an indicative tax savings of $1,935 if you earn $45k or a savings of $2,295 if you earn $90k (compared to 2017/18 tax year).

This is effective from 1 July 2020 having been brought forward from 1 July 2022.

From 1 July 2020, the maximum amount of the Low Income Tax Offset will increase from $445 to $700 and is summarised below.

Even with quick passage of legislation, the tax measures will be backdated by around four months. As a result, reduction in PAYG tax for the remainder of the financial year will be around 1.5 times the ongoing rate giving you instant tax savings without having to wait until lodgement of your 2021 personal income tax return.

• • For singles, the threshold has increased from $22,398 to $22,801.
  • The family threshold has increased from $37,794 to $38,474.
  • For single seniors and pensioners, the threshold has increased from $35,418 to $36,056.
  • The family threshold for seniors and pensioners has increased from $49,304 to $50,191.
  • For each dependent child or student, the family income thresholds increase by a further $3,533, instead of the previous amount of $3,471.

• • $200 a week if a business hires an eligible young person aged 16 to 29 years; or
  • $100 a week if a business hires an eligible young person aged 30 to 35 years.

A news post is available here.

A Questions and Answers page is here.