Payroll tax for certain providers will require a solution
June 3, 2014 | Aged Care Management
The announcement that the payroll tax supplement is being halted could cause negative effects for WA residents, a leading industry body has warned.
Leading Age Services Australia (LASA), an organisation focusing on representing aged care providers, has called attention to the changes to payroll tax and the effects they’re likely to have further down the line.
The change was announced along with the other budget adjustments, with the government stating that the payroll tax supplement, worth $653 million over four years, would be stopped from January 1 2015.
The supplement was designed to cover the state payroll tax bills of commercial providers, bringing them on a level playing field with non-profit competitors who are exempt from the tax.
LASA has estimated cutting the supplement to cost WA homes up to $15 million a year, with an average of $240,000 for 80-bed homes.
Potential consequences include staff loss, and the expansion to include more beds for new residents – something that’s desperately needed as the ageing population shows no sign of slowing down.
“It’s a huge blow. It’s a real threat to the viability of the sector,” said LASA WA Chief executive Beth Cameron.
Ms Cameron went on to explain that the announcement had come as a “complete shock” to WA-based providers, who were likely expecting further subsidies as part of the new 2014 budget. Certainly, increases are needed to keep up with the growing resident demand.
Aged care providers depending on the subsidy should take measures to cut back expenditure in other areas, and open new avenues of funding.
Ensuring a dedicated ACFI optimisation plan is implemented is great place for providers to start, coupled with ongoing education.
If you’d like assistance with ACFI optimisation or education, contact the helpful team at Mirus Australia who can get you on the right track.