The Australian government’s Aged Care Education and Training Incentive (ACETI) Program is a vital initiative designed to support and enhance the skills of aged care workers. This program provides financial incentives to eligible individuals undertaking approved education and training, aiming to boost the quality of care within the aged care sector. This article delves into the guidelines of the ACETI Program, offering a comprehensive understanding for aged care workers and stakeholders alike. It is based on official rulings and aims to clarify the program’s details and implications, particularly concerning income tax.
What is the Aged Care Education and Training Incentive (ACETI) Program?
The ACETI Program was established as a national incentive to encourage professional development within the aged care workforce. It offers two distinct payments to eligible aged care workers who enroll in and complete approved education and training programs. These programs are designed to elevate their skills and career prospects as personal care workers, enrolled nurses, or registered nurses.
The program was active for courses commencing between 1 July 2010 and 30 June 2014. Even though the application period has closed, understanding the program’s structure and guidelines remains relevant for those who participated or for historical context and potential future initiatives.
Who is Eligible for ACETI Program Payments?
To be eligible for the ACETI Program, applicants had to meet specific criteria. These eligibility requirements ensured that the incentive reached individuals genuinely committed to the aged care sector and actively working within it. The key eligibility criteria included:
- Citizenship or Residency: Applicants needed to be Australian citizens or permanent residents.
- Employment Status: They must have been employed in an eligible aged care service, providing direct care on a full-time, part-time, or casual basis, both at the time of application and throughout their training course.
- Commitment to Aged Care: A demonstrated commitment to a career in the aged care sector was essential. This commitment was confirmed by the employer on the application form.
- Course Commencement Dates: The eligible training course had to commence on or after 1 July 2010 and before 30 June 2014.
Eligible aged care services encompassed a range of Commonwealth-funded services, including:
- Residential aged care services
- Aboriginal and Torres Strait Islander flexible care services
- Community care or flexible aged care services like Community Aged Care Packages, Extended Aged Care at Home, and Extended Aged Care at Home – Dementia programs.
Payments were specifically tied to undertaking eligible courses as defined in the ACETI Guidelines.
Eligible Courses under the ACETI Program
The ACETI Program recognized various courses crucial for professional development in aged care. These courses were delivered by Registered Training Organisations or Australian Universities and included:
Vocational Education and Training (VET) Courses
These courses aimed to provide foundational and specialized skills for aged care workers.
| Course Code | Name of Course |
|---|---|
| CHC30208 | Certificate III in Aged Care |
| CHC30308 | Certificate III in Home and Community Care |
| CHC40108 | Certificate IV in Aged Care |
| CHC40208 | Certificate IV in Home and Community Care |
| CHC40608 | Certificate IV in Leisure and Health |
| BSB40807 | Certificate IV in Frontline Management |
| CHC52208 | Diploma of Community Services Coordination |
Enrolled Nurse Training Courses
These courses were designed for individuals seeking to become Enrolled Nurses, a critical role in aged care.
| Course Code | Name of Course |
|---|---|
| HLT51607 | Diploma of Nursing (Enrolled/Division 2 Nursing) |
| HLT43407 | Certificate IV in Nursing (Enrolled/ Division 2 Nursing) |
Registered Nurse Training Courses
For those aspiring to become Registered Nurses, the program supported undergraduate Bachelor of Nursing degrees.
| Course Code | Name of Course |
|---|---|
| N/A | Undergraduate Bachelor of Nursing |
ACETI Program Payment Amounts and Structure
The ACETI Program provided financial incentives through two payments: a commencement payment and a completion payment. The amounts varied depending on the level of study being undertaken.
- Vocational Education and Training Courses:
- $500 upon commencement of the course.
- $500 upon successful completion of the course.
- Enrolled Nurse Training Courses:
- $1,000 upon commencement of the course.
- $1,500 upon successful completion of the course and registration as an Enrolled Nurse.
- Registered Nurse Training Courses:
- $2,000 upon commencement of the course.
- $3,000 upon successful completion of the course and registration as a Registered Nurse.
Applicants applied for these payments through Medicare Australia, which validated applications and assessed eligibility. Payments were made directly to the recipient’s bank account. Recipients were not required to spend the payments in any specific way or enter into any funding agreements.
Workers could change employers within the eligible aged care sector and still remain eligible for payments. Failure to complete a course or leaving the aged care sector before completion would result in ineligibility for the completion payment, but there was generally no requirement to repay the commencement payment, except in cases of fraud or administrative error. Similarly, leaving the sector after receiving the completion payment did not trigger a repayment obligation, barring fraudulent activity.
Tax Implications of ACETI Payments: What the Ruling Says
A critical aspect for recipients of ACETI payments is understanding their tax implications. According to the Class Ruling CR 2011/69, the payments received under the ACETI Program are not considered ordinary income and are therefore not assessable under section 6-5 of the Income Tax Assessment Act 1997.
However, the ruling clarifies that ACETI payments are assessable as statutory income under section 15-2 of the same Act. This distinction is crucial for correctly reporting income and understanding tax obligations.
Explanation of the Tax Ruling
The Australian Taxation Office (ATO) ruling provides detailed reasoning behind this classification.
Not Ordinary Income
The ruling explains that ‘ordinary income’ is generally understood through case law and considers factors like periodicity, regularity, and connection to employment or services rendered. ACETI payments are lump sum amounts, not regular or periodic, and while related to employment, they are not directly payments for employment or services rendered in the typical sense. Therefore, they do not fit the definition of ordinary income.
Statutory Income under Section 15-2
Section 15-2 of the Income Tax Assessment Act 1997 includes in assessable income the value of allowances, gratuities, compensation, benefits, bonuses, and premiums provided in respect of, or for services rendered by a taxpayer.
The ruling argues that ACETI payments, while not ordinary income, have a clear connection to the recipient’s employment in the aged care sector. Employment in aged care is a prerequisite for program participation. There is a direct and ongoing relationship required between employment and study to maintain eligibility. The payments aim to enhance the recipient’s career in aged care, directly linking the incentive to their professional role.
Even though payments are made by Medicare Australia, not the employer, the ruling cites legal precedent stating that the source of the payment is less important than its connection to employment. The ruling concludes that the “employment on commencement, during and on completion of the eligible course is a substantial reason for the payment,” thus making it assessable as statutory income under section 15-2.
Deductibility of Expenses and PAYG Withholding
The ruling also briefly touches on related aspects:
- Self-education expenses: Recipients may be able to deduct self-education expenses related to their eligible courses, subject to standard deductibility rules and limitations. Reference is made to Taxation Ruling TR 98/9 for further guidance.
- Pay As You Go (PAYG) withholding: ACETI payments are not subject to PAYG withholding. This means Medicare Australia was not required to withhold tax from these payments. Recipients are responsible for managing their tax obligations related to this assessable statutory income.
Conclusion
The Aged Care Education and Training Incentive (ACETI) Program was a significant initiative to bolster the aged care workforce by providing financial support for education and training. Understanding the program guidelines, including eligibility, payment structures, and crucially, the tax implications as clarified by Class Ruling CR 2011/69, is essential for those who participated. While the program’s active period has ended, its principles and the tax rulings associated with it offer valuable insights and precedents for future initiatives aimed at supporting education and training in the aged care sector. For specific tax advice, individuals should always consult with a registered tax professional or refer to the latest guidance from the Australian Taxation Office.
References:
- Class Ruling CR 2011/69 – Income tax: Aged Care Education and Training Incentive Program payments
- Income Tax Assessment Act 1997 (ITAA 1997) – Sections 6-5, 6-10, 10-5, 15-2
- Taxation Administration Act 1953 (TAA 1953)
- Taxation Ruling TR 98/9 – Income tax: deductibility of self-education expenses
- Taxation Ruling TR 2006/10 – Public Rulings
