Foreword

The Victorian Jobs Fund is providing $250 million in wage subsidies to help Victorian businesses employ at least 10,000 people who are looking for work. The Fund will support employer growth and recovery while helping Victorians looking for work to find stable employment.

If you are a Victorian employer ready to take on new staff, the Victorian Jobs Fund can provide you with financial support to help you employ the people most affected by the epidemic economy.

Subsidy details

Employers can apply to the Jobs Victoria Fund for a 12-month wage subsidy to cover the cost of hiring a new eligible employee.

There are two levels of wage subsidies. Tier 1 Wage Subsidy is available up to $20,000 per employee and Tier 2 Wage Subsidy is available up to $10,000 per employee (all wage subsidies are exclusive of GST).

The amount of wage subsidy available depends on each employee and whether the job is full time or part time (see below).

If an employee fits into more than one group at the same time, only the higher wage subsidy applies.

Employers claiming wage subsidies for more than three employees must offer women at least 60% of the subsidised position.

Tier 1 wage subsidy

(For every 1 unit of full-time manpower FTE, the subsidy is A$20,000)

Employers employing the following groups of people are eligible for a maximum subsidy of A$20,000

– Women over 45 years of age

– Long-term unemployed (unemployed for more than six months)

– Job seekers registered with ” Jobs Victoria Partner”.

– Aboriginal and/or Torres Strait Islander people

– People with disabilities

– Asylum seekers/refugees

– Newcomers from non-English speaking backgrounds.

Tier 2 wage subsidy

(For every 1 unit of full-time manpower FTE, the subsidy is A$10,000)

Up to A$10,000 is available to employers employing

– Young people under the age of 25

– People over 45 years of age

– Veterans

– Those previously employed under the Working for Victoria initiative

Full-time or part-time employment

Benefits are prorated according to whether the work in question is full-time or part-time.

– Full-time is 38 hours per week

– Part-time must be a minimum of 19 hours per week.

Employer requirements

Must be the employee’s direct employer (i.e. an agent cannot represent the employer)

Must hold a WorkCover from the time the employee was employed.

Must be operating in Victoria and be registered with ABN (and ACN).

For private businesses, sole traders, social enterprises and/or Aboriginal businesses, the applicant must have paid less than $20 million in salary in the financial year prior to the date of application.

Charitable and not-for-profit organisations must be registered with the Australian Charities and Not-for-Profit Commission (ACNC).

Employers who do not meet the requirements

1. Victorian Public Service and Victorian Public Sector b. Australian Public Service and Federal Public Sector

Employee requirements

New employees must start working for an eligible employer on or after 16 March 2021.

At the time of application, the employee must have been employed by the qualifying employer for no more than 12 weeks.

The employee must be unemployed or underemployed* (*”underemployed” is defined as working no more than 16 hours per fortnight) at the time of commencing work for the employer. Unless the employee has previously been employed.

Worked under the Working for Victoria initiative scheme; or

has worked no more than 16 hours per fortnight and has transitioned to permanent or regular work of at least 19 hours per week.

The employee must meet the following residency status.

Resident of Victoria

entitled to work for the applicant as: an Australian citizen; a person who holds an Australian permanent residence visa with the right to work; a person who holds an Australian temporary work visa; a person who holds a student visa and is enrolled in a qualifying course in Australia; or a person who holds an Australian refugee and humanitarian visa with the right to work.

The employee consent form must be completed and signed by each eligible employee and forms part of the application.

Employment requirements

Duration of employment

Employment must be for a period of 12 months or more.

Number of jobs

Applicants may apply for this grant to increase the number of existing employees by up to 20%. For example, if an applicant employs 60 full-time equivalent employees (excluding eligible employees), they can apply for a wage subsidy for up to 12 full-time employees. Each eligible employer can receive a maximum of 20 full-time employees.

Type of employment

All jobs must be permanent or fixed-term positions (i.e. full-time or part-time) with a minimum of 19 hours of work per week.

Wages and entitlements

Employers must offer at least the statutory minimum wage and entitlements.

Replacement of existing employees

No replacement of existing employees (i.e. must not result in any existing employee being dismissed or working reduced hours).

Work that does not meet the requirements

– Temporary workers

– Permanent or fixed term employment where the working hours are less than 19 hours per week.

– Fixed-term employment, such as short-term employment (e.g. weekly employment)

– Jobs offering a full time salary or an annual salary in excess of $120,000 (excluding pensions)

Benefit payment cycle

Tier 1 Wage Supplement         Tier 2 Wage Supplement

Paid directly to eligible employers in three parts.

– On submission of initial payslip: $6,000 is paid.

– 26 weeks after date of employment (or 26 weeks from the most recent date of employment if there is more than one employee): a second payment of $6,000

– 52 weeks after date of employment (or 52 weeks from the most recent date of employment if more than one employee is employed): a final payment of A$8,000.

Paid directly to the eligible employer in three parts.

– On submission of initial payslip: A$3,000.

– 26 weeks after date of employment (or 26 weeks from the most recent date of employment if there is more than one employee): second payment of A$3,000

– 52 weeks after date of employment (or 52 weeks from the most recent date of employment if more than one employee is employed): a final payment of A$4,000.

Apply for this benefit

The Jobs Victoria Fund is open for applications from 26 February 2021. Eligible employers can apply for funding through the online application form on the Jobs Victoria website: https://businessvic.secure.force.com/PublicForm?id=jvofr1-2021#no-back-button

To conclude

If you have any questions or need assistance, please contact Zero2one and we will do our best to help you.

In the previous article we mentioned that the sale of a home by a non-tax resident is subject to full capital gains tax.

Non-tax residents in Australia include

Being in Australia for a holiday or visit of less than six months.

Choosing to leave Australia permanently to begin with.

Temporary and permanent residence visa holders and Australian citizens who visit Australia for more than six months and spend most of their time travelling and working in different parts of Australia.

However, if the life events test occurs while a non-tax resident, the application for the principal residence exemption will still be available. It is difficult to make a judgement on the ‘life events test’ and it is likely to be perceived as a political ‘talisman’ that can cause practical problems and injustice. The following case helps us to illustrate if the guideline is applied.

Case, Principal Residence Exemption – Life Events Test life events test

Joan purchased a home on 7 February 2015, moved into the home with her spouse, John, and identified the home as their primary residence in the first instance. Joan and John were Australian citizens when they purchased the property and in 2020, they retired to another country where they purchased a new residence, at which point they became non-tax residents. At this point they become foreign residents. In 2021, John dies, and Joan decides to sell their old home.

As Joan had been a foreign resident for less than six years when the capital gains tax CGT event occurred on the contracted sale of the property, and her spouse had died during her foreign residence, she was entitled to a partial principal residence exemption on the sale of the residence based on how long she had been a principal residence.

To summarize the above cases, the principal residence exemption remains available when the overseas resident can satisfy both of the following life events.

Has not been an overseas tax resident for more than six consecutive years

During that period, one of the following has occurred.

the person, or spouse, or child under the age of 18 suffers from a terminal illness

the death of the person, or spouse, or child under the age of 18

The assets giving rise to the VAT on assets may involve a division of assets between the person and the spouse in the event of divorce or separation, etc.

Failure – Primary Residence Exemption Denied

Vicki purchased a home in Australia on 10 September 2010 and moved in as soon as practicable and made it her primary residence. on 1 July 2018, Vicki left the home and moved to New York. vicki rented out the home while attempting to sell it. on 15 October 2020 Vicki finally signed a contract to sell the On 15 October 2020 Vicki finally signed a contract for the sale of the residence with a settlement date of 13 November 2020. At 15 October 2020, Vicki was a non-tax resident for tax purposes. The capital gain on the sale of the residence, CGT event A1, occurs at the time the sale contract is signed, i.e. 15 October 2020. As Vicki was non-tax resident at the time, she was not entitled to the principal residence exemption.

Even if Vicki previously used the residence as her principal residence; and between 1 July 2018 and 15 October 2020 (assuming all the requirements are met), the absence rule in section 118-145 is absent and the residence can be used as Vicki’s principal residence. Her primary residence exemption remains unsatisfied.

In this case, remember that any income from capital gains incurred under non-resident status is taxed at the ‘non-tax resident’ rate – the 32.5% threshold – and there is no exemption. Alternatively, you may choose to return to Australia, become an Australian tax resident again and then sell the property, thereby qualifying for the tax-free status of your principal place of residence.

Writing at the end

These recent proposed changes, and the withdrawal of the 50% CGT discount on capital gains tax for non-Australian citizens in 2012, will have a significant impact on whether or not you should continue to hold Australian property.

Based on the recent restrictions on making super non-concessional contributions, for Australian expats aged 65 and over selling their primary residence in Australia, from 30 June 2018, a maximum of $300,000 each in ‘downsizer” contribution into a superannuation, subject to certain eligibility requirements being met, which are only likely to become more stringent.

All in all, the government effectively continues to support domestic mobility and temporary resident status, while penalizing international mobility for its own citizens. It is clear that all the major political parties continue to abandon the support of the ‘no vote’ Australian diaspora. From a practical point of view, all Australian expatriates who maintain a primary residence in Australia should work with their tax advisors to consider in detail their disposition of the property and should not sell it without first receiving comprehensive tax advice.