How does the Aged Care bonus affect you?

The Federal Government has recently announced an $800 bonus payment for Aged Care workers. But what exactly does this mean for aged care workers and their employers?

The instalments of up to $400 each will be payable to employed workers on 28th February and 28th April.

The amount of the bonus will depend on whether the worker is working in home care or residential care.

The bonus will be prorated based on the highest number of hours worked in a single week out of the four weeks leading up to those dates.

The rates are as follows (if a person qualifies for both instalments):

For an employer, there are a number of issues to consider.

Firstly, the employer must apply to the government to receive this payment for their employees.

It is believed this process will be similar to the previous Aged Care Workforce Retention Bonus Scheme.

Employers will be able to apply from the 1 March 2022.

On receipt of this payment, it is to be included in an employee’s normal wage as a bonus and is subject to income tax.

It’s important to note that since the first bonus has a payment date of 28 February 2022, the payment of the first bonus must be made before the employer has applied for the funds.

An employer must also be careful to correctly record the type of care setting an employee has worked in during the qualifying period, as the bonus payment is linked to hours and type of care setting as detailed above.

Additionally, an employer must consider if superannuation is payable.

Previous bonus payments have been made exempt from superannuation through specific legislation.

At this point in time, it is not clear whether this will occur.

Employers must also be aware that the bonus payment being paid to their employees will also need to be included in total wages for workers compensation insurance and potentially state payroll tax obligations.

This additional cost, together with additional administration time to apply and manage these payments, could be a deterrent to employers participating in the scheme.

The bonus payment has been announced by the government, but may require additional legislation to be passed and for the government to provide clarity on unresolved issues.

Aged Care employers need to ensure they are aware of all requirements in applying for and paying this bonus for Aged Care employees.

FOR MORE INFORMATION

If you would like more information please contact your local RSM adviser.