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The New Flexible Parental Leave Pay Rules

From 1 July 2020, parents accessing the Government's parental leave pay (PPL) scheme will have greater flexibility and options.

Targeting the self-employed and small business owners, the changes introduce a new 30 day flexible paid parental leave pay period.

Previously, new parents could apply for PPL for a continuous block of up to 18 weeks. The changes split this time period into two:

  • A continuous period of up to 12 weeks, and
  • 30 flexible days.

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Minimum Wage Increases by 1.75%

An increase to the minimum wage of 1.75% will start rolling out for the first full pay period from 1 July 2020.

The increase applies to minimum rates in awards in 3 stages:

Group 1 Awards - from 1 July 2020

  • Frontline Heath Care & Social Assistance Workers
  • Teachers and Child Care
  • Other Essential Services

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JobKeeper & Termination Payments

An employment termination payment (ETP) is a lump sum payment made to an employee when their job is terminated. ETPs are generally made up of unused sick leave or unused rostered days off, payment in lieu of leave, or genuine redundancy payments, etc.

For some employers, JobKeeper will not be enough to keep the employee employed. If you do need to let staff go, the ATO has stated that from JobKeeper fortnights from 8 June onwards until the end of the scheme, ETPs cannot be included as part of the $1,500 an employer needs to pay to eligible employees to access JobKeeper payments.

If any JobKeeper payments include an ETP to a terminated employee between 30 March to 7 June, the ATO has stated that it will not recover an overpayment.

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The ATO on COVID-19 Fraud Warpath

We always knew that a Government scheme swiftly distributing cash during a crisis was going to come with equally swift compliance and review measures, particularly when eligibility was self-assessed. Two major Australian Taxation Office (ATO) initiatives are searching out fraud and schemes designed to take advantage of the Government's Coronavirus Economic Response Package.

Tip lines, tax returns and STP

The tip line, tax returns, and single touch payroll are just a few of the data sources the ATO is using to identify "inappropriate behaviour."

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Will the Prime Minister's targeted $250 million package of funding to support cultural and creative projects and initiatives save the industry?

The arts funding is aimed at kick starting the sector with funding preferencing commercial initiatives that generate jobs and are expected to have a positive economic impact. That is, this is an economic package as opposed to creative or cultural funding.

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1st July Company Tax Rate Reduction

Despite the current economic environment, the company tax rate will reduce to 26% for small and medium businesses from 1 July 2020.

 

2018-19 and 2019-20

2020-21

2021-22

Base rate entities*

27.5%

26%

25%

Other corporate tax entities

30%

30%

30%

aggregated turnover less than $50m and no more than 80% of the company's assessable income is base rate entity passive income.

The 1 July change is part of a larger progressive plan to reduce the company tax rate to 25% from 1 July 2021 and applies to base rate entities (BRE) - companies, corporate unit trusts, and public trading trusts - with an aggregated turnover of less than $50 million where 80% or less of the entity's turnover for the year is classified as base rate entity passive income. Larger companies will continue to pay the 30% rate.

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The ATO’s JobKeeper Audit Targets

The JobKeeper subsidy has progressed beyond the rush for eligibility and entered its second phase: compliance. Late last month, the Australian Taxation Office (ATO) released guidance highlighting where the regulator will focus its compliance resources.

The JobKeeper estimates error

Hindsight is a dangerous lens as Treasury discovered last month announcing that the number of employees expected to be covered by the JobKeeper scheme was overstated in the original announcement by approximately 3 million. The overstatement reflects "the level and impact of health restrictions not having been as severe as expected and their imposition not having been maintained for as long as expected at the time," the Treasury statement says.

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Dealing with the ATO in this Digital Age…….

Sometimes there can be some confusion regarding access to the Government at an electronic level.  So here, we have put together a summary of hints to help you on your way, in order to face the digital world we now live in:

 

For All Other Business……

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How to create a myGov Account

Dealing with the ATO in this Digital Age…….

Sometimes there can be some confusion regarding access to the Government at an electronic level.  So here, we have put together a summary of hints to help you on your way, in order to face the digital world we now live in:

For Individuals (including Sole Trader's)……

 

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Have Casual Workers Been Granted Annual Leave?

News headlines recently stated that casual workers have won the right to paid leave following a decision in the Federal Court. As usual, the devil is in the detail.

At present, there is no global change granting Australian casual workers paid leave. The case however, highlights the long running problem of determining over time, who is a permanent staff member and entitled to paid leave and other benefits, and who is a casual worker entitled to a casual loading.

In the WorkPac v Rossato case, WorkPac, a specialist mining and engineering labour hire company, employed Mr Rossato as a casual worker across six consecutive employment contracts for a continuous period of approximately three and a half years. Over that time, Mr Rossato was paid a casual loading of 25% of the minimum rate of pay payable under the Enterprise Agreement, which was in part, paid in lieu of leave.

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