Many international students are facing the challenge of being unable to go home, or being unable to travel to Australia.
Schools are currently dealing with navigating changes to homestay arrangements, for example for one family to have a break, or contemplating students going on holidays with homestay families.
The National ESOS Code and supplementary requirements of state regulators, which, in the case of the VRQA in Victoria, are extensive, prescribe a number of strict documentary and standard-based requirements.
There is a heavy emphasis on child safety in living arrangements, with schools no longer permitted to outsource the vetting or review of homestay arrangements.
None of these requirements changes as a result of the COVID-19 global pandemic.
Indeed, there are new additional clarifications and requirements to take account of the fact that many students will not be going home for holidays.
The VRQA has published a resource which assists schools to meets these requirements in the current climate. (refer to VRQA guidance)
It is an ongoing obligation of schools to monitor the government’s advice in relation to COVID-19 and to take this into account regarding the care, welfare and safety of students.
A few key matters to note:
Schools must continue to keep:
For more information or guidance regarding your obligations and duty of care, please do not hesitate to contact us.
We are often asked by clients what they can do to reduce the risk of challenge to their Will.
We see many cases where parents have been estranged from their children, or one child has particularly supported parents in old age. These parents often wish to provide more for one child than other in their Wills.
As a starting point, we have “testamentary freedom” under Australian law. This means we can give our assets however we want after death. However, each State has laws which limit this freedom by requiring proper provision for eligible family members. This is referred to a “family provision” claim in Victoria, under Part IV of the Administration & Probate Act, and is based on the obligation to fulfil a “moral duty”.
But what about the case of an estranged child? Is it proper to leave them out, or give them less in your Will?
In general, the answer may be yes. Courts hearing family provision claims are required to have regard to the totality of the relationship, but unusual factors such as hostility, estrangement or other disentitling conduct are given additional weight. However, as the following case demonstrates, estrangement is just one factor. and may not be decisive.
Joss v Joss was a claim by an adult daughter, Jessica, from the estate of her very wealthy father. The deceased, Peter Joss, died aged 93 leaving his surviving wife Judith and a son Ronald. His estate was valued at $12.4m, but that appears to have been a fraction of the overall family wealth, as no other family member claimed competing need. Judith was the sole beneficiary of his Will.
Jessica identified as a transgender female. She had a traditional Jewish upbringing and a close relationship with her parents as a child. She began identifying as female at the age of 10 but did not talk about her gender dysphoria with her parents. She had no friends at school and was expelled twice. She was depressed, prone to violent anger, lied and stole from her parents on several occasions, but refused to see a psychiatrist.
Despite this Jessica maintained a relationship with her parents. She worked in her father’s office during University holidays. In 1984, at age 25, she found a job in Sydney and her parents furnished an apartment for her. She moved to London in 1986, saying she was not coming home again, but returned to Melbourne in 1987. Again, her parents furnished an apartment for her. However, in 1987 she sought a move to Germany, which deeply upset her father and he did not speak to her for 2 years. Nevertheless, her father continued to provide financial help to her, including legal costs of divorce and immigration proceedings in the USA in the 1990s. Around this time, she revealed her gender identity to her family.
Jessica ultimately returned to Melbourne. Her family bought her an apartment and gave her a job in their business. In 1998, she began receiving $500 per month from her father. In 1999, aged 40, Jessica began taking feminisation hormones and quit her job, which was the last time she had been in paid employment.
By this stage, Jessica began making increased demands from money. She sought to have her parents pay for her gender reassignment surgery, which they refused to do. A number of further incidents, offending and embarrassing her family, ultimately led to her parents ceasing to have contact with her. This in turn led to Jessica threatening to kill herself, and acquiring a cross-bow with plans to kill Peter at their Synagogue. She was admitted to hospital and diagnosed with mixed personality disorder.Her parents took out an intervention order against Jessica. However, her father still paid her legal costs of that proceeding. Over the following years, despite not seeing her father, he also paid off her credit cards, bought her a car, gave her $6,000 to move residences, and continued to pay her a weekly allowance (which increased to $1,600 tax free).
Jessica sought provision of $5.56m at trial (having offered to accept $2.5m before trial). In opposition to her claim, the Estate submitted that the estrangement and Jessica’s plans to kill her father nullified his moral duty to her. However, the judge did not accept this submission. Whilst her conduct reduced the extent of the moral duty, the judge found Peter still had a moral obligation to provide for her. This stemmed from the fact that Jessica had been wholly maintained by her father since at least 1999, and this meant she had become unable to provide for herself.
The judge awarded Jessica a sum of $3.225m. This represented provision for all of Jessica’s needs, given that the estate was very large, and there were no competing needs. The amount was broken down as follows:
In summary, it appears that the estrangement had minimal impact. The judge did not allow for a lavish house, upmarket furniture, or travel-related expenses connected with having surgery in Sydney, which arguably could have been awarded for the estrangement. However, the key feature of the case was the extreme family wealth and extent of Jessica’s reliance on it. Where the estate is smaller, or there are competing needs, then estrangement of a claimant remains a highly relevant factor.
For more information or advice on reducing the risk of challenge to your Will, please do not hesitate to contact us.
[2020] VSC 424 (Hollingworth J)
It is important to understand the effect of your relationship on your Will. Whether you are married or in a de facto relationship, divorced or separated, your Will should reflect your current circumstances.
If your relationship status changes and you do not update your Will (or have a Will in place), there is a chance your assets will not pass as you intend. This could be costly and cause unnecessary stress to your loved ones in order to attempt to give effect to your intentions.
You may not know that marriage actually revokes a Will. If you do not update your Will once you have married, your assets may pass to your new spouse. Whilst this may be your intention, if you have children from a previous relationship or other people you may wish to provide for, this could be unfavourable.
Whilst marriage revokes a Will, the clauses in the Will that provide for the spouse, whether it be an executor appointment or a gift, are not revoked. Again, this means whilst your spouse could still inherit, other beneficiaries, such as your children, may miss out.
There is also an exception in that your Will is not revoked by your marriage if the Will is made in contemplation of your marriage. We would recommend you seek advice if you have a Will in place and intend to marry.
When spouses or de facto partners separate, it is common for them to finalise a property settlement to divide the assets between them. However, separation does not have any legal effect on your Will, whether or not you have finalised a property settlement.
If your Will provides for your spouse or partner and you do not update your Will after separation, then upon your death your spouse or partner will still inherit from your estate in the manner provided in your Will. Similarly, if you do not have a Will in place and you have separated, then your assets will be distributed as per the Rules of Intestacy whereby your assets will highly likely pass to your spouse or partner.
Whilst there may be avenues available to your loved ones to challenge this, it would be costly and stressful and could be avoided by updating your Will once you separate.
Whilst parties may separate and finalise a property settlement to divide their assets, divorce is a further and final step people may choose to take to finalise a relationship. Whilst some may find they do not need to go down the path of divorce, there may be reasons to do so, for example, ensuring that your former spouse does not benefit from your estate once you have died.
The law in Victoria provides that if you divorce, the clauses in your Will that refer to your former spouse, such as their appointment as executor or distribution of assets to them, will be invalid. Whilst this may appear be in line with your intentions, it is not necessarily that simple and could cause expense and delay in dealing with your estate.
An out of date Will (or not having a Will) can be costly, time consuming and unnecessarily stressful for your loved ones. We always recommend you review your estate planning arrangements every three to five years or as your personal or financial circumstances change.
Whilst actually updating your Will may not be necessary each time, by having it reviewed, you can be certain that your assets will pass as you intend. For more information, please do not hesitate to contact us.
In October, the federal government announced that a specific CGT exemption for granny flats with family members would apply so long as a detailed written agreement is prepared. The announcement is expected to apply from July 2021.
Moores welcomes the announcement. When granny flat arrangements work well, it enables families to care for ageing or disabled family members and can strengthen multi-generational relationships. But it is often legally complex to deal with undocumented granny flat arrangements that are no longer working. Undocumented arrangements leave all parties at risk if the living arrangements don’t work out or relationships break down, and can also cause complications in administration of deceased estates where there are undocumented or uncertain interests in property.
Historically adapting a family home for multi-generational living – typically called a granny flat arrangement – has risked a portion of the family home becoming subject to capital gains tax whether the granny flat was a separate structure or by way of extended family members contributing a cash sum to hold an interest in or to extend the same home. The potential tax liability has been a barrier to families formalising these arrangements.
Having formal written agreements in place means that all parties can enter into the arrangement with eyes open, including as to any impact on estate planning. Written agreements will also help to protect the older person from elder financial abuse while living in a multi-generational household. Enforceable agreements will also protect older people – who often make a significant financial contribution to the property – if the arrangement does break down.
Formal granny flat agreements usually need to consider some of the following matters:
If you or your clients would like further guidance or advice on granny flat arrangements, please do not hesitate to contact us.
This is the damages bill that ASX-listed company, TechnologyOne, has been ordered to pay its former senior executive who was dismissed for having raised complaints of bullying.
It is understood to be a record compensation order in the Fair Work Division of the Federal Court, and an important reminder that adverse action claims give rise to uncapped compensation.
In Roohizadegan v TechnologyOne Limited (No 2) [20250] FCA 1407, the Court was satisfied that TechnologyOne’s former Victorian State Manager, on seven separate occasions, exercised a workplace right by making complaints in relation to bullied by his superiors (in the form of, among other allegations, being sworn at and exclusion from management meetings).
Critically for the employer, it failed to conduct any investigation in relation these matters before dismissing him, leading the Court to give a rather a scathing portrayal of TechnologyOne’s CEO and ultimate decision maker concerning the employee’s dismissal:
“He twice rejected professional HR advice that it would be unfair to dismiss Mr Roohizadegan on the basis of mere allegations. In the end, his choice was to stand with the bullies rather than the bullied. To achieve effective deterrence, CEOs in like positions need to know that such temptations as he faced are to be resisted: and that there will be a not insubstantial price for failing to do so.”
TechnologyOne has indicated it will appeal the decision.
In most cases, former employees looking to challenge a dismissal will invariably have a choice as to one of the following avenues:
Since the introduction of the general protections provisions in 2010, there has been a growing trend in ex-employees favouring adverse action claims at the expense of the unfair dismissal regime. We expect the trend to now continue in light of this judgement.
Roohizadegan demonstrates that the remedies for a successful adverse claim can be significant and seemingly limitless.
The $5.2 m order for damages was comprised of:
This is a stark contrast to claims in the unfair dismissal jurisdiction, whereby compensation is strictly capped by legislation at a maximum of six months’ lost wages (and is rarely more than 8 weeks’ lost wages).
Given that the adverse action arena is becoming increasingly popular and heavily litigated, it’s important that employers understand their legal obligations and how to successfully navigate the legal landmines when responding to a complaint or claim.
Employers should:
For more information or guidance regarding your legal obligations, please do not hesitate to contact us.
Even in the midst of COVID-19, schools continue to navigate issues relating to separated families and complex family arrangements. Indeed, rules around travel and distancing have, in many cases, exacerbated existing issues and made matters more challenging for schools and families.
It’s common for parents to interact with schools and assert their “rights” to access children or to require the schools to take certain steps they want. Parents may also do this via a lawyer. It is worth noting that the Family Law Act carries the overarching obligation that the best interests of the child is the paramount consideration when considering what time each child should spend with each parent.
Parents do not have “rights” under this legislation. This is consistent with a school’s duty of care, which provides that protection of students, rather than meeting demands of parents, is the school’s primary obligation.
The court considers that the best interests of the child are met by
Parental responsibility is defined as all the duties, powers, responsibilities and authority which, by law, parents have in relation to their children.
Equal Shared Parental Responsibility:
The legislation provides a presumption of equal shared parental responsibility.
This requires both parents to consult the other regarding any major long-term issue and make a genuine effort to reach a resolution in relation to their child, including education.
From a practical perspective, it is important that both parents be provided with all information regarding the child including school reports, newsletters and be able to attend school functions that parents would normally attend.
Separated families are frequently unable to reach an agreement regarding spend time arrangements for their child and will apply to the Family or Federal Circuit Court for orders.
Typically, Court Orders will stipulate if the parents have equal shared parental responsibility and what time each child spends with what parent. This includes which parents collects which child on which day. Notably, step-parents are allowed to have time with their step-child during their spouse’s time/days, so requests from parents that step parents “should not be allowed” to collect children will often need to be disregarded.
Critically, it is not the job of the school to “police” the separated families’ parenting arrangements. The onus is on the parents to continue to provide updated orders to the school. If they continue to disagree and give conflicting instructions to the school, the school can require the parents to sort matters out between them and then report back.
If there is no formal documented agreement between the parents, the school should request a parenting plan or an agreement in writing between the parties about the spend time arrangements for the children.
For example, if the parent who does not have primary care of a child requests they be allowed to collect the child on a Tuesday afternoon, you should ask for an agreement in writing between them and the other parent.
Intervention orders are becoming increasingly common in family law proceedings. Most of our education community will be familiar with family violence intervention orders which is typically an order, in place between family members.
An intervention order is a civil order and can be applied for by an individual personally or Victoria Police can apply for an intervention Order on behalf of a person and their children. An Intervention Order is made in the Magistrates Court, not the Family or Federal Circuit Court
Typically, the interaction between intervention orders and family law orders can be complex, however, they do exist together. Importantly, a family law order will typically prevail over an intervention order to the extent of any inconsistency between the two documents.
This means that it is possible a parent, who is subject to an intervention order prohibiting that person from attending school, may still be permitted to collect their children on their spend time day under Family Court orders.
Because of this, and especially where family violence is of concern, it is important for the school to seek independent legal advice about how best to manage that family and the safety of the child and protected parent.
In an emergency situation where a school fears for the safety of a child (for example, when a parent who is clearly agitated or affected by drugs or alcohol is insisting they pick up their child), the safety of the child comes first. If necessary, keep the child in a secure location while seeking advice and contacting the primary caregiver and police.
Enrolment Procedure:
Wherever possible, both parents sign the enrolment agreement so they are jointly and severally liable for fees. A school is not obliged to “re-jig” payment arrangements where one parent contacts the school, notifying of a separation and advising they intend to cease payment. The school may change arrangements if it chooses, or may need to if there are interim orders or other evidence as to the parents’ agreement regarding fees.
In most circumstances, no. Given the parents will likely have equal shared parental responsibility they need to consult the other before making any long term decisions regarding that child, such as changing their school enrolment.
A subpoena is a document that is issued by the Court for either the production of documents or attendance of a staff member to give evidence at a contested hearing.
A subpoena, similar to court orders, will always have basic form requirements such as being addressed correctly to your organisation, comply with timeframes for service and be accompanied by conduct money.
Parents who are before the court often want access to confidential material such as counselling records, to gain evidence about a child’s wellbeing.
In certain circumstances, your school may be able to object to a subpoena on specific grounds – most commonly if a subpoena is too broad or compliance may adversely impact a student’s wellbeing. Please note, the inconvenience of complying will not be considered adequate basis for a school to refuse. If you are responding, you should always seek independent legal advice, and this includes regarding privacy, so you do not inadvertently breach privacy of staff or students by complying with the subpoena.
Please note, if you do not raise an objection to a subpoena, you need to comply in full or risk being in contempt of court.
COVID-19:
All separated families have a continuing obligation to act in accordance with Court Orders. COVID-19 is no excuse. If parents are making demands on the school and failing to agree, the school can advise parents to apply to the COVID-19 list at the Family Court to seek urgent orders.
If you would like any further assistance managing separated families, responding to subpoenas or assistance with enrolment documentation, please do not hesitate to contact us.
There is no doubt that 2020 has been eclipsed by COVID-19 and the shift to remote learning (and back) for schools in Victoria. However, as we approach COVID-normal, schools need to start looking ahead and preparing for the year to come. Next year brings with it significant new legal requirements for schools, many of which were postponed from this year. Regulators will become less lenient and forgiving of schools using COVID-19 as an excuse for being unprepared.
As schools begin their final term, we have set out some of the key changes that schools in Victoria need to factor into their planning for 2021.
In the first half of 2021, registered schools will be captured by the second phase of the Child Information Sharing Scheme (CISS) as Information Sharing Entities (ISEs). The change is set out under the proposed Child Wellbeing and Safety (Information Sharing) Amendment Regulations 2020 (Regulations) and allows the sharing of information about children and parents to better support children and families and prevent harm. You can read more about the CISS generally at our previous article.
The application of the CISS to schools was delayed due to the impact of COVID-19 and will now occur by July 2021. The implications for schools are significant, particularly as they are not familiar with the similar Family Violence Information Sharing Scheme. The CISS will allow schools to share and request information with other ISEs in a manner that would previously have been a breach of privacy laws.
Schools will also be able to contribute and request information from a centralised Child Link Register which includes a key set of factual information relating to children in Victoria. The CISS will have significant child safety, privacy and regulatory implications and risks for schools. Schools need to begin upskilling their staff and preparing to participate in the CISS.
The Victorian Registration and Qualifications Authority (VRQA) has released updated Guidelines to the Minimum Standards and Requirements for School Registration (Guidelines) commencing on 1 January 2021 for new school registrations or 1 July 2021 for existing registered schools.
Some of the key changes include:
Schools should refer to the VRQA’s updated Guidelines and ensure that they are taking steps to be compliant by the required dates. This is particularly important as the VRQA is due to release their updated strategic plan from 2021 onwards and it is anticipated that compliance reviews and audits will continue to be an area of focus for the regulator.
At the end of 2019, a review of the Victorian Child Safe Standards (Standards) was completed and recommended amendments to the Standards to align with the National Principles for Child Safe Organisations (National Principles). The Standards are applied to schools through the Ministerial Order 870.
It is anticipated that the Standards will be amended in 2021 to align with the National Principles, with the Ministerial Order 870 to be amended shortly after this. While it was recommended that organisations be given 12 months to comply with any amended Standards, schools should be cognisant of this upcoming change. It aligns with the continuing focus on child safety and scrutiny of organisations that fail to keep children safe.
The Education and Training Reform Amendment (Regulation of Student Accommodation) Bill 2020 (Bill) has passed the Legislative Assembly and is now with the Legislative Council where it is likely to pass. The Bill will expand the VRQA’s powers to include school boarding premises, including requiring boarding schools to register. The VRQA will have the power to take compliance or enforcement action against school boarding premises if they fail to comply with the Child Safe Standards or other requirements.
While the initial date for these changes was the beginning of 2021, this is now likely to be delayed. Once the Bill is passed, all boarding schools will be required to go through a registration process and then subject to five-yearly reviews.
The significant upcoming changes demonstrate an ongoing prioritisation of child safety with many of the changes implementing the recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse.
To mitigate the risk of regulatory scrutiny and prepare, we recommend that schools take the following next steps.
For more information or guidance regarding the upcoming changes, please do not hesitate to contact us.
In the Office of the Australian Information Commissioner’s Notifiable Data Breaches Report January – June 2020, the number of data breach notifications attributed to ransomware attacks increased by more than 150% compared with the previous six months — increasing from 13 to 33. We are aware of a number of our Victorian school clients which have been subject of ransomware attacks in recent months.
The increase in ransomware attacks is due to a perfect storm created by COVID-19 of depressed economic circumstances, criminal groups being able to piggy-back off COVID-19 themes for phishing or whaling attacks and disruption or delay in usual processes for IT security due to workforce changes, crisis management needs and working from home arrangements.
Furthermore, remote working significantly increases success rate of ransomware attacks, due to weaker controls on home IT systems and a higher likelihood of users clicking on ransomware lure emails when outside an office environment and its training and policy focus.
Ransomware is a form of malware that encrypts a target’s files. There are a number of ways that ransomware can access a computer:
Once the computer has been taken over, the attacker will encrypt some or all of the user’s files. The attacker then demands a ransom from the target to restore access to the data upon payment. Users are shown instructions for how to pay a fee to get a decryption key. The costs can range from a few hundred dollars to thousands, payable to cybercriminals in Bitcoin.
Another variation of ransomware occurs in which the attacker threatens to publicise sensitive data on the target’s hard drive unless a ransom is paid.
In order to prevent a ransomware attack occurring to your organisation, we recommend taking key steps including:
It is critical that if your organisation collects and stores personal information, including the information of clients, customers, business partners, employees and contractors, you fully understand how and where this information is stored on your network. Organisations should also consider network segmentation, additional access controls and encryption to reduce the risk of personal or commercial information being exposed by a ransomware attack.
Australian Information Commissioner and Privacy Commissioner Angelene Falk states that the growing trend of ransomware attacks “has significant implications for how organisations respond to suspected data breaches — particularly when systems may be inaccessible due to these attacks”. This statement by Ms Falk highlights the importance of having an up-to-date Data Breach Response Plan which members of your organisation are aware of and know how to enact quickly.
Moores is committed to helping our clients respond to the critical and immense changes in the current pandemic. As part of this commitment, Moores has developed a complimentary privacy policy template in partnership with Our Community.
Is your Data Breach Response Plan up-to-date? If not, Moores is able to assist you with preparing or amending this crucial document. We also offer in-house privacy training for staff. For more information, please do not hesitate to contact us.
In a landmark case, the Supreme Court of Victoria has set aside a deed of settlement between the plaintiff, known as WCB, and the Catholic Church for historical child abuse. It was the first case decided after amendments in 2019 to the Limitation of Actions Act 1958 (Vic) (the Act) which allowed courts to set aside previous settlements if it was ‘just and reasonable’ to do so. The judgment has significant implications for all organisations that previously settled historical child abuse claims for sums that in the current environment could be viewed as insufficient. It also carries important lessons for organisations on ensuring their settlements are ethical and align with legal requirements in the current environment.
Several important legislative changes have occurred in light of the findings and recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse (Royal Commission) and the Betrayal of Trust Report. This included removing the limitation periods that applied to civil actions for damages related to child abuse and allowing the identification of proper defendants, particularly where there are unincorporated structures.
In 2019, further changes were made to the Act to allow courts to set aside prior deeds of settlement in historical sexual or physical child abuse and related psychological abuse claims where it is ‘just and reasonable’ to do so. This only applies to matters which were settled prior to 1 July 2015. The purpose of the amendments is to remove barriers to actions for personal injury resulting from child abuse.
The plaintiff in the case, known as WCB, was a former altar boy. He was abused by late priest Daniel Hourigan in Gippsland from 1977 to 1980 when WCB was aged between 11 and 14. WCB brought a claim against the Bishop of the Catholic Diocese of Sale for compensation for the post-traumatic stress he suffered as a result. The claim was settled for $32,500 in 1996 and a deed of settlement was signed (the Deed).
The recent legislative changes have allowed WCB to bring a claim against the Roman Catholic Trusts Corporation. However, the Trust argued that WCB was barred from bringing a claim due to the previous deed of settlement. WCB sought relief under the Act to have the Deed set aside. WCB stated that he felt bullied into accepting the settlement and that he felt like he “had no choice” because the Church had “all the power”, even though he knew at the time that it was a “terrible settlement”.
Justice Keogh had to decide if it would be ‘just and reasonable’ to set aside the Deed. Justice Keogh stated that the applicant seeking relief under the Act to have a deed set aside bears a positive burden of demonstrating that it is just and reasonable that the Court exercise its discretion to do so. While the Act did not prescribe the relevant considerations, Justice Keogh made the following comments:
In this particular case, Justice Keogh noted that legislative changes have removed many of the legal barriers that existed at the time of the Deed. He noted that WCB struggled to identify a proper defendant and argue vicariously liability at the time of the Deed. These led to WCB having a disadvantaged bargaining position. Legal developments now mean that the prospects of WCB succeeding are greatly improved.
Justice Keogh noted that there was evidence that WCB was subjected to horrendous abuse by Hourigan over two and a half years and continues to suffer significant adverse impacts of the abuse. He found that the settlement sum in the Deed was “not a reasonable assessment of WCB’s loss and damage in 196 or adequate compensation by today’s standards”. Justice Keogh was therefore satisfied that it was just and reasonable to set the Deed aside.
This case sets an important precedent as it is the first case to be heard since changes to the Act have allowed courts to set aside previous deeds for historical child abuse. It provides a new pathway for survivors who have previously been barred from bringing a new claim due to previous settlements. For organisations, it also demonstrates the potential risks of previous settlements with inadequate sums of compensation.
We recommend that organisations:
For more information or guidance to ensure your organisations settlements are ethical and align with legal requirements in the current environment, please do not hesitate to contact us.
WCB v Roman Catholic Trusts Corporation for the Diocese of Sale (No 2) [2020] VSC 639.
The Morrison Government has delivered what has been touted the most significant budget since World War II. In this article, we focus on the key takeaways for Moores clients in the sectors we serve.
This year’s budget showed a continued commitment from the Federal Government to support independent schools, with $12.8 billion allocated under the Quality Schools Program. Funding levels in 2020 are stable compared with previous years, with more significant funding increases projected for 2021-2022 ($14.66 billion). In light of the fastest growing part of the sector being low fee (and therefore heavily funded) schools, this increase will be needed to meet demand.
Despite this, pressure on non-government schools continues. Many schools are still facing:
School management will see the relaxation of FBT requirements, including the elimination of FBT on re-training for people re-deployed due to COVID-19 and simpler means for schools to complete FBT returns.
On curriculum, the budget does provide a large STEM package of $27.3M over 5 years which will bolster the coffers of key industry groups partnering with schools to deliver STEM content.
There is also help for students and families, including:
Earlier in the year, the Federal Government injected $2.6 billion of funding into the sector as part of its COVID-19 Response Package through childcare subsidies. Victorian out-of hours-care and childcare centres will continue to have access to those subsidies (albeit at a reduced rate) until the end of January 2021.
Notwithstanding the importance of this sector to our economy, there are really no new other spending initiatives. There is a renewed one year commitment to the Universal Access National Partnership, which is an initiative designed to ensure that every child has access to a quality preschool education for 600 hours (15 hours a week) in 4 year old kinder. However, sustained capacity building is unlikely to be promoted without a multi-year commitment.
Moores welcomes the removal of red tape to new entrants to childcare operation. Part of the budget measures include “reducing red tape” in order to making it easier for early childhood education and care centres to get approval to operate. We look forward to the detail of this initiative.
COVID-19 has placed significant strain on the NFP sector. Moores’ clients report that demand for their services have never been higher, yet their funding sources are constrained, partly because their donors are also under financial pressure. Many flagship fundraising events and campaigns have been cancelled or modified, resulting in less revenue. Church and community halls which are normally booked with functions or after-school activities have been closed without any hire fees for the owner despite the ongoing costs of operation.
The Federal Government has earmarked $2.9 million over the next three years to strengthen the Australian Charities and Not-For-Profits Commission (ACNC) capacity to carry out field based compliance reviews of charities at high risk of failing. It appears that this may have been prompted in part by responses to natural disasters, including the much-publicised Celeste Barber appeal which arguably failed to meet the expectations of a significant proportion of its donors.
The ACNC Governance Standards are principle-based standards – each charity must carefully consider how to apply the standards in their own context to ensure compliance. With increasing ACNC oversight, charities must not only be compliant, but must be prepared to provide evidence of compliance if and when required.
Meeting increased demand for services, funding constraints and (in the case of charities) managing ongoing compliance obligations will place significant strain on some NFPs. This may result in increasing mergers and collaborations to maintain operational efficiency and impact. Regrettably, in some instances it may also result in winding up for some organisations that cannot continue to operate.
Many NFPs have not been eligible for JobKeeper, either because they do not meet the decrease in turnover test or because they pursue their objectives principally outside Australia (unless they are international aid organisations). Pleasingly, the JobMaker initiative discussed below may be available to NFPs who have not received JobKeeper.
Much has been made in the media about the JobMaker credit. The credit is available for new jobs created between 7 October 2020 and 6 October 2021. The aim of the program is to encourage employers to create new jobs for individuals who have received a JobSeeker payment, Youth Allowance or Parenting Payment. Employers claiming the JobKeeper payment are not eligible for the credit.
The credit ($200 a week for 16 to 29 year olds, and $100 for 30 to 35 year olds) is for jobs involving at least 20 hours of work per week (on average), and the employee can be hired on a permanent, fixed term or casual basis. Employers need to report this and other tax and superannuation information to the ATO through “Single Touch Payroll (also known as “STP”).
The incentive does not make age discrimination lawful. The policy was framed in this way in order to encourage non-JobKeeper businesses to create entry level positions, which tend to attract younger candidates. Given that the labour market is in turmoil, employers might find older candidates applying for those positions. It will be important for employers to maintain records documenting their decisions to ensure that selection processes are meritorious and not discriminatory.
The centrepiece of the Federal Government’s budget is income tax cuts for lower and middle income Australians. Some businesses that are struggling in this environment may be dreading the prospect of another round of enterprise bargaining with locked in increases for the next three years.
For those employers, it will be worthwhile to crunch the numbers on the benefit their employees may receive as part of this package.
Enterprise bargaining under the Fair Work Act requires parties to engage in “Good Faith Bargaining”. There is no legal requirement to commit to pay increases that a business cannot afford. Particularly in these turbulent uncertain times, employers can legitimately take income tax cuts into account when bargaining for wage increases. (Note: in its most recent minimum wage determination, the Fair Work Commission took into account the impact of tax policy on low paid workers.)
Changes have also been announced to supported paid parental leave for new parents (by birth or adoption) who earn less than $150,000 a year.
The eligibility criteria relating to adoptions and births between 22 March 2020 and 31 March 2021 have been relaxed. Parents earning less than $150,000 a year will now be eligible for paid parental leave payments if they have been working during at least 10 months of the last 20 months before the birth/adoption (relaxed from 10 months out of the last 13 months previously). This initiative will help parents who have lost their job due to the pandemic remain eligible under the Scheme.
Moores commends the announcement that the Federal Government is supporting older Australians and their families by providing a targeted CGT exemption for granny flat arrangements where there is a formal written agreement in place. The CGT exemption will enable older Australians and their family members to protect their interests should they decide to live together.
Granny flat arrangements refer to an arrangement where an older person cohabits with their adult child and often their family. Commonly the older person contributes funds to acquire or renovate a property (or contributes the property itself) so that the extended family can live together. The arrangement often also includes provision of care or support to the older person. All too often, what seemed like a good idea at the outset becomes unmanageable over time due to a familial relationship breakdown, the increasing care needs of the older person or unexpected difficulties associated with cohabiting.
Historically, formally documenting a “granny flat” agreement or family agreement that documents the arrangement has had the potential to give rise to a CGT liability on the sale of the property. Moores has dealt with a number of instances where family members in dispute have entered into informal granny flat arrangements in order to avoid potential CGT consequences.
Implementing the CGT exemption will allow older Australians and their family members to document their arrangements and protect their interests should they decide to live together, without facing any significant tax consequences in future.
Although welcoming the additional funding for the National Housing and Finance Investment Corporation (NHFIC), the budget did not contain major announcements or new direct funding to increase the supply of social or crisis housing. This was a little surprising in the face of so many economists and experts encouraging government to stimulate the economy by building this kind of social infrastructure.
Perhaps a missed opportunity, the theory must surely be that better employment outcomes afforded to many will flow through to alleviate demand. It will now be for housing providers to seek funding opportunities directly through other means, including philanthropy, State or local governments, corporate partnerships and charitable donations.
Our clients in social and crisis housing continue to respond with innovation and grace to COVID-19, including re-purposing unused property for people experiencing homelessness and adapting face-to-face services so they can still be delivered in a safe way.
This budget was devised to get Australians employed and paying less tax. Moores supports initiatives which will improve employment and the economy, as, in doing so, key sectors which look after and support others will also thrive. For more information, please do not hesitate to contact us.