Part 3ELIGIBLE TRAINING EXPENDITURE AND PROGRAMS

PART 3—ELIGIBLE TRAINING EXPENDITURE AND PROGRAMS Meaning of net eligible training expenditure 24. (1) The net eligible training expenditure of an employer in a year is the amount (being an amount not below 0) calculated, in relation to the employer and the year, using the formula: | total eligible trainingexpenditure | – | total eligible training subsidiesand reimbursements. | | ---------------------------------- | --- | ---------------------------------------------------- | (2) Total eligible training expenditure is the total of the eligible training expenditure incurred by the employer in the year. (3) Total eligible training subsidies and reimbursements is the total of the subsidies and reimbursements received by the employer in the year in relation to eligible training programs. Meaning of eligible training expenditure 25. (1) Eligible training expenditure of an employer is expenditure incurred by the employer that is directly attributable solely or principally to eligible training programs. (2) Without limiting subsection (1), the employer’s eligible training expenditure includes expenditure incurred by the employer that is directly attributable solely or principally to: (a) determining the need for eligible training programs; and (b) preparing and reviewing strategic and other plans in relation to eligible training programs; and (c) developing, providing, evaluating and administering eligible training programs; and (d) developing and administering accounting and information systems in relation to eligible training programs. (3) Without limiting subsection (1), but subject to subsection (4), the employer’s eligible training expenditure includes amounts paid, and the value of property provided, during the year concerned, to another person (whether voluntarily or by requirement of law) solely for the purpose of enabling the other person or a third person to carry out (whether or not on behalf of the employer) an activity referred to in paragraph (2) (a), (b), (c) or (d). (4) An employer’s eligible training expenditure does not include an amount paid in relation to, or in relation to the reduction or discharge of, any liability to pay payroll tax. Examples of eligible training expenditure 26. (1) Examples of eligible training expenditure of an employer include: (a) expenditure incurred by the employer by way of salary or wages paid to an employee that is directly attributable to a period during which the employee was solely or principally engaged in participating in an eligible training program; and (b) expenditure incurred by the employer in relation to: (i) meals and accommodation; or (ii) child care; for an employee or other person that is directly attributable to a period during which the employee or other person was solely or principally engaged in participating in an eligible training program; and (c) expenditure incurred by the employer for travel for an employee or other person that is solely or principally for the purpose of enabling the employee or other person to participate in an eligible training program; and (d) expenditure incurred by the employer by way of: (i) payment or reimbursement of: (a) fees; and (b) contributions payable or paid under Chapter 4 of the Higher Education Funding Act 1988; and (ii) payments made in relation to, or in relation to the reduction or discharge of, any indebtedness to the Commonwealth under that Chapter; in relation to eligible training programs; and (e) expenditure incurred by the employer by way of salary or wages paid to an employee that is directly attributable to a period during which the employee was solely or principally engaged in an activity referred to in paragraph 25 (2) (a), (b), (c) or (d); and (f) expenditure incurred by the employer in relation to: (i) travel, meals or accommodation; or (ii) child care; for an employee or other person that is directly attributable to a period during which the employee or other person was solely or principally engaged in an activity referred to in paragraph 25 (2) (a), (b), (c) or (d); and (g) expenditure incurred by the employer in relation to consumables whose consumption is directly attributable solely or principally to an activity referred to in paragraph 25 (2) (a), (b), (c) or (d); and (h) capital expenditure incurred by the employer that is directly attributable to the acquisition, construction, extension, alteration or improvement of a building or depreciable property intended solely or principally for use, or used solely or principally, for the purpose of engaging in an activity referred to in paragraph 25 (2) (a), (b), (c) or (d); and (j) expenditure incurred by the employer that is directly attributable to rent paid for a building used solely or principally for the purpose of engaging in an activity referred to in paragraph 25 (2) (a), (b), (c) or (d); and (k) expenditure incurred by the employer that is directly attributable to the hiring or leasing of equipment used solely or principally for the purpose of engaging in an activity referred to in paragraph 25 (2) (a), (b), (c) or (d). (2) If, in any year, an employer incurs capital expenditure of a kind referred to in paragraph (1) (h) in relation to depreciable property, the employer may, instead of claiming all the expenditure as eligible training expenditure for the year, claim as eligible training expenditure for that year and subsequent years an amount equal to the amount (if any) that is, for the year concerned, an allowable deduction in relation to the property under subsection 54 (1) of the Income Tax Assessment Act 1936. (3) The examples are not exhaustive. (4) If an example is inconsistent with section 25, the example prevails. Meaning of eligible training program 27. (1) A training program is an eligible training program if: (a) the program is a structured training program; and (b) the sole or principal object of the program is to develop, maintain or improve employment related skills of employees or other persons, and a significant object of the program is not recreation or another matter that is not employment related. (2) A training program is a structured training program if it satisfies the following conditions: (a) the program is designed or approved by a person who is appropriately qualified or experienced to design a training program of the relevant type; (b) the skills to be acquired by the participants in the program are clearly identified before the program begins; (c) the means of imparting the skills to the participants are clearly identified before the program begins; (d) before the program begins: (i) the expected program outcomes are clearly formulated; or (ii) the means of identifying the extent to which the program has enhanced the participants’ productivity are clearly formulated. (3) Subject to subsection (4), a training program may be an eligible training program whether or not: (a) it is provided personally by the employer concerned; and (b) it consists of or includes on-the-job training. (4) An eligible training program that consists of or includes on-the-job training: (a) must include periods of instruction; and (b) may include related periods of closely supervised practice; but (c) cannot include any generally supervised practice or work experience. (5).A reference in paragraph (1) (b) to other persons is a reference to other persons who are residents of Australia during the whole or a part of the year concerned. Election by employer for application of minimum allowable apprentice or trainee amount 28. (1) If an employer has employees who are apprentices or trainees at any time in a year, the employer may elect that this section applies to the year. (2) If the employer makes an election, the portion of the employer’s net eligible training expenditure in the year attributable to each apprentice or trainee is (instead of the amount that would, apart from this section, be attributable to the apprentice or trainee under this Part): (a) if the employee is an apprentice or trainee in relation to the employer for the whole of the year—the minimum allowable apprentice or trainee amount for the year; and (b) in any other case—the amount calculated, in relation to the employer and the year, using the formula: <table cellspacing="0" cellpadding="0" style="margin-right:auto; margin-left:auto; border-collapse:collapse"><tbody><tr><td style="border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif; font-weight:bold">N</span></p></td><td rowspan="2" style="padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif">×</span></p></td><td rowspan="2" style="padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif; font-weight:bold">M</span></p></td></tr><tr><td style="border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif; font-weight:bold">12</span></p></td></tr></tbody></table> ``` where: N is the number of months in the year in which the employee is, during the whole or a part of the month, an apprentice or trainee in relation to the employer; and M is the minimum allowable apprentice or trainee amount for the year. Election by employer in relation to approved entry-level training arrangement 29. (1) If an employer has employees to whom an approved entry-level training arrangement applies at any time in a year, the employer may elect that this section applies to the year. (2) If the employer makes an election, the portion of the employer’s net eligible training expenditure in the year attributable to each employee to whom the training arrangement applies is (instead of the amount that would, apart from this section, be attributable to the employee under this Part): (a) if the training arrangement applies to the employee for the whole of the year—the approved amount applicable to the training arrangement for the year; and (b) in any other case—the amount calculated, in relation to the employer and the year, using the formula: <table cellspacing="0" cellpadding="0" style="margin-right:auto; margin-left:auto; border-collapse:collapse"><tbody><tr><td style="border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif; font-weight:bold">N</span></p></td><td rowspan="2" style="padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif">×</span></p></td><td rowspan="2" style="padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif; font-weight:bold">A</span></p></td></tr><tr><td style="border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:11pt"><span style="font-family:'Times New Roman', serif; font-weight:bold">12</span></p></td></tr></tbody></table> ``` where: A is the approved amount applicable to the training arrangement for the year; and N is the number of months in the year in which, during the whole or a part of the year, the training arrangement applied to the employee. Guidelines by Minister in relation to eligible training programs etc. 30. (1) The Minister may make guidelines, to be followed in the administration of this Act, in relation to the requirements to be satisfied in relation to a training program for the program to be an eligible training program and, in particular, requirements in relation to: (a) the objectives of training programs; and (b) the conditions set out in subsection 27 (2) (Meaning of structured training program); and (c) training programs that consist of or include on-the-job training. (2) The Minister may also make guidelines, to be followed in the administration of this Act, in relation to: (a) the training arrangements that are approved entry-level training arrangements to which section 29 applies; and (b) the employees to whom such an approved entry-level training arrangement applies; and (c) the approved amount applicable to such an approved entry- level training arrangement. (3) The Minister may make guidelines, to be followed in the administration of this Act, in relation to the records to be kept by employers for the purposes of this Act. (4) Before making guidelines, the Minister is to take into consideration any relevant recommendation made to the Minister by the training advisory body. (5) A guideline is a disallowable instrument for the purposes of section 46a of the Acts Interpretation Act 1901. Application of Part to training institutions 31. (1) In applying this Part to a training institution in its capacity as an employer, any expenditures, subsidies and reimbursements of the training institution that are not directly attributable solely or principally to employees of the training institution are to be disregarded. (2) Subsection (1) does not apply to eligible training expenditure to which subsection 25 (3) applies. (3) In this section: “employee”, in relation to a training institution, includes a prescribed person.