Federal Budget Update: Incentives/Subsidies for Engaging Apprentices

(View on wattsnext webpage HERE)

The Federal Government announced some exciting changes to incentive programs to attract and retain Apprentices, whilst supporting businesses with some of the associated costs. Broadly the 2022/2023 budget confirmed the following:

Apprentices – Priority Occupations

  • The Federal Government has not yet clarified what occupations will be included, but we can expect an update on this in the coming weeks/months.
  • Wage subsidies will be as follows:
    • Up to 10% of wages for 1st and 2nd-year apprentices; and
    • Up to 5% of wages for 3rd-year apprentices.
  • Employees engaged as apprentices may be eligible for up to $5,000 in direct payments over 2 years

Apprentices – Non-priority occupations

  • Employers may be eligible for direct payments of up to $3,500 as an incentive for hiring apprentices.

Unfortunately, the current wage subsidy of up to 50% of wages (capped at $28,000) for 1st-year apprentices will cease effective 30 June 2022, and the above incentives/subsidies will either cease or be revamped from 2024.

Changes to Government Paid Parental Leave

In good news, the Federal Government confirmed changes to Government Paid (at minimum wage) Parental Leave to encourage Dad to take more leave. The changes are as follows:

  • The current model of 18 weeks’ pay for Mothers, and 2 weeks’ pay for Dad will cease;
  • A new entitlement of 20 weeks per family will commence, meaning:
    • Parents will be able to choose who accesses the paid leave; and
    • Single parents will have access to the full 20 weeks of paid leave.
  • This does not have any impact/effect on the length of Parental Leave entitlements or Paid Parental Leave policies some employers may have in place currently.

Overall wattsnext does advise employers to review the internal policies/guidance for employees so that the information is accurate, and Dads are encouraged to access Parental Leave arrangements.

The Small Business Technology Investment Boost

For SMEs with an annual turnover of less than $50 million (AUD), businesses will be able to claim up to 120% of the total cost of investment in new technologies and/or external digital skills training for staff. Practically speaking this means:

  • A $100 investment into new technologies and/or external digital skills training will result in a $120 reduction in tax liability.
  • A $1,000 investment into new technologies and/or external digital skills training will result in a $1,200 reduction in tax liability.

The spending per annum will be capped at $100,000 and usual tax deductions for expenses will apply for any investments above $100,000 per annum. Some examples of technologies that would be eligible for the tax off-set include:

  • Portable payment devices
  • Cyber security systems
  •  Subscriptions to cloud-based services
  • New laptops and next-generation websites

In terms of digital skills training, there is no exhaustive list of what is/isn’t included; however, it’s been confirmed that training providers will need to be registered in Australia, and provide the service to employees based in Australia.

Most importantly, the scheme became effective on 29 March 2022 and will end on 30 June 2023 (for investment into technologies) and on 30 June 2024 (for investment into digital skills training). The incentives still require passing into legislation in Parliament, so the election could impact this coming into effect, although the ALP has formally backed most provisions of the budget.

Mental Health

Finally, the Federal Budget confirmed that under Mental Health Care Plans, individuals (covered by Medicare) will have access to 10 more subsidised psychologist sessions, taking the total available to 20 per annum.

This is a great inclusion in the budget and a much-needed investment following the consequences to Mental Health (particularly on young individuals) from COVID-19.

The Federal Budget announcement is always an exciting time of year when businesses learn what incentives they can access to improve their business. For more information on the Federal Budget or the measures visit https://budget.gov.au/

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