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  • Should I come become a Contractor/subcontractor, Contract Employee (casual employee), or an Employee.
    Contractor/subcontractor First thing is to fully understand the PSI implications of a contractor/subcontractor. Personal Services Income - is income produced, mainly from your personal skills or efforts as an individual. When working out if your income is PSI, you need to look at the income received from each separate contract or invoice. It is common for Sole Traders or individuals through an interposed entity to earn PSI, and thus be subject to PSI rules and structures. There are four tests you should consider when determining if your income is subject to PSI. If you meet one or more of these tests, your PSI income will be considered a result of conducting a Personal Services Business. Moreover, if the PSI income is paid to your trust, partnership, or company, rather than directly to you, then the entity will be considered your personal services entity which provides the tax benefits discussed in the previous email to you. If you aren't able to pass any of these tests, then the PSI rules may apply to you. This means: You won't be able to claim certain deductions against the PSI. This includes deductions for rent, mortgage interest, land tax, rates, and certain payments to associates. You will find there are some restrictions on super payments for associates. You will need to meet certain obligations for reporting your taxes. Below is a summary of the particulars involved in each test. Test 1: The Results Test If you receive any personal services income, you will meet the results test for a given year if, for at least 75% of this income: You are paid to achieve a specific outcome or result under a contract or agreement and will only be paid when that result is achieved. You have to provide your own tools, materials, and/or equipment (if any) to do the work. If no tools, materials, and/or equipment is required, answer "yes" to this question. You are completely liable for rectifying any defects in your work (at your own time & cost). If your answer is yes to all of these questions, then you pass this test and the PSI rules do not apply. If you don't pass the results test, you can only move onto the next test if less than 80% of your PSI comes from a single client. If more than 80% of your income comes from a single client, the PSI rules apply to you unless you request a special determination from the ATO. Test 2: Unrelated Clients Test You'll satisfy this second test if you answer yes to all of these questions: Do you receive PSI from at least two unrelated clients? Do you provide services as a direct result of inviting or making offers to the public? Note that "unrelated" clients are not directed or controlled by the same entity or individual. If you can't answer yes to both of these questions, you need to look at the employment test. Test 3: Employment Test You'll satisfy this third test if you can answer yes to at least one of these questions: Do the partners, employees, or contractors perform at least 20% of your principal work (determined by market value)? Don't include incidental work like issuing invoices, bookkeeping, or running the home office. Do you have at least one apprentice for more than half the income year? If you don't pass this test or the unrelated clients test, you need to pass the business premises test. Otherwise, the PSI rules will apply to you. Test 4: Business Premises Test If you can answer "yes" to all of these questions, you will pass the business premises test for a given income year. For all times of the income year, were your premises: Leased or owned by you; Used for personal services at least 51% of the time; Used exclusively by you; Physically separate from your residence and the residence(s) of your associate(s); Physically separate from the business address of your clients and their associates. If you can answer yes to all of these questions, the PSI rules do not apply to you. If you are interested in becoming a subcontractor, following steps are a guideline to start the process. ABN - TFN - If you're operating your business as a sole trader, then you can use your personal TFN. For other business structures, you can get a TFN when you apply for an ABN. Directors ID - Register Company - Business name - GST registration - Once you have an ABN, you can register for GST. Insurance – Professional indemnity and public liability insurance are indispensable for contractors and subcontractors. It's crucial that both types of insurance policies are active and valid from the initial day of work. These insurances protect against liabilities and risks associated with professional services and public interactions, ensuring comprehensive coverage from the outset of engagements. Contract Employee In the context of our employment structure, a contract employee is akin to a casual employee. At SENSE, we extend fixed-term casual employment, the duration of which depends on the specific task requiring professional services. Our payment system is structured around billable hours, representing the time allocated to business projects billable to clients at an agreed-upon rate. Please note, as part of our casual positions, there are no provisions for sick leave or annual leave entitlements. Information to be provided: Full Name Residential Address DOB Bank Account Superannuation Fund Employee Sense engaged employees as a salaried employee – as a salaried employee, you'll receive a fixed amount of pay on a regular basis. The standard hours of work typically amount to 40 hours per week. However, you might be required to work additional hours beyond this if it's necessary to fulfill your duties or as requested by the employer, within reasonable bounds. Employee entitlements encompass various aspects such as wages or salary (your pay), annual leave, long service leave, sick leave, redundancy pay, superannuation, and other associated benefits. These factors contribute to the comprehensive compensation and benefits package provided to employees. All employer obligations will be IAW “Fair Work Act 2009” Information to be provided: Full Name Residential Address DOB Bank Account Superannuation Fund
  • Does this moratorium apply to all contractors in Defence?
    The moratorium only applies to ‘Above the Line’ contracting roles. It does not apply to outsourced service providers or consultants with specialist skills. The moratorium does not apply to the engagement of personnel who return to work for Defence within 12 months but are engaged as ‘Below the Line’ contractors – that is, technical specialists who are employed by an industry partner to deliver outsourced services to Defence.
  • Does this moratorium apply to all Defence personnel?
    The moratorium applies to continuous part-time and full-time members of the ADF (SERCAT 6 and 7, respectively) and APS employees seeking to return to Defence as an ‘Above the Line’ contractor within 12 months of their separation from Defence. The moratorium does not apply to: Part-time or full-time (SERCAT 6 and 7 respectively) ADF members who have transitioned as a result of a Command Initiated Transfer to the Reserves or redundancy; Part-time or full-time (SERCAT 6 and 7 respectively) ADF members who have medically transitioned out of the ADF; Other SERCAT categories including the reserve workforce; and APS employees who have retired on medical grounds and are engaged as part of a rehabilitation or return-to-work plan.
  • Are there any exceptions to the moratorium?
    There are circumstances in which an exception to the moratorium may apply: Compassionate or Special Measure: If engaging a recently separated ADF member or APS employee is deemed necessary for compassionate reasons or to meet special measures, such as addressing critical skill gaps or supporting individuals facing challenging circumstances, exceptions may be granted. It is expected that the basis for the decision be recorded. Commercial Necessity: In cases where contracting ‘Above the Line’ personnel is deemed essential for commercial necessity, such as for time-sensitive projects or unique expertise not readily available within the APS workforce, exceptions may be considered. Defence Capability Needs: When contracting ‘Above the Line’ personnel is crucial to meeting Defence’s operational capability needs where specialised skills and experience are required for specific missions or tasks, exceptions may be allowed. Pre-existing Negotiations: If Defence people are already in the process of negotiating separating from Defence and their contracting arrangements were established prior to the release of the Directive, exceptions may be made.
  • What is the moratorium on contracting recently separated Defence personnel?
    The moratorium will be issued as a Joint Directive from the Secretary and Chief of the Defence Force. It directs that any decision to contract an Australian Public Service (APS) employee or part-time and full-time Australian Defence Force (ADF) member (SERCAT 6 and 7 respectively) who has separated from Defence within the past 12 months into roles that can be performed by Defence personnel is made by exception. Roles that are able to be performed by an APS employee or ADF member but are instead delivered under a contracted arrangement are known as ‘Above the Line’ contractors.
  • Why has Defence introduced this moratorium?
    In April 2022, the Government committed to reduce reliance on contractors, consultants and labour hire companies as part of its commitment to restore the size and capability of the Australian Public Service. This follows from the Independent Review of the APS in December 2019 that reaffirmed the essential role of the APS. Defence committed to reduce its ‘Above the Line’ contractor workforce by 2,000 by the end of the calendar year 2024. The moratorium is a measure to retain its highly valued workforce and reduce Defence’s reliance on ’Above the Line’ contractors.
  • When will the moratorium come into effect?
    The moratorium will come into effect on 7 August 2023.
  • Who is an ’Above the Line’ contractor?
    An ‘Above the Line’ contractor is someone who is engaged to undertake work that would normally be performed within the APS. It is not someone who is working to deliver a capability for or on behalf of industry partners. An ‘Above the Line’ contractor delivers services for Defence, as part of the Defence workforce.
  • What happens to ‘Above the Line’ contracts that were in place prior to 7 August 2023?
    The moratorium does not apply to ‘Above the Line’ contracting arrangements that came into effect prior to 7 August 2023.
  • Who can make a decision to exempt an individual from the moratorium?
    All Defence personnel are responsible for complying with the moratorium when engaging ‘Above the Line’ contractors through the procurement process. The decision maker for an exemption to this moratorium is a 3 Star Service Chief / Band 3 Group Head. These decisions must be adequately recorded through the procurement process.
  • How long does it take to get a security clearance? Can I speed up the process?
    As of November 2022 AGSVA moved to a new portal, which has caused significant delays in processing security clearances. Baseline normally take 20 working days now approximately 60 working days. NV1 normally take 70 working days now approximately 120 working days NV2 normally take 100 working days now approximately 140 working days
  • Are there different levels?
    Baseline, Negative Vetting Level 1 (NV1), Negative Vetting Level 2 (NV2) and Positive Vetting (PV).
  • How do I get one?
    As an individual, you can’t sponsor yourself, or order and pay for a security clearance yourself. SENSE can sponsor clearances up to and including a NV2. Important: You must be an Australian citizen to get a security clearance and be able to prove this. If your application has errors it will be rejected and sent back, causing delays, so double check you’ve provided all information required and that it’s 100 per cent accurate.
  • How often does my security clearance need to be reviewed?
    All security clearances are reviewed at regular intervals. Review times vary depending on level and if you have continuous work with the same department: Baseline—15 years Negative Vetting 1—10 years Negative Vetting 2—7 years Positive Vetting—7 years Clearances will lapse if they have been inactive for more than 24 months AGSVA will email you when your security clearance is to be reviewed. Note: Keep your contact details up-to-date with AGSVA or they won’t be able to contact you. This can be detrimental to your clearance review. It’s your responsibility to keep AGSVA up-to-date.
  • What are my responsibilities as a holder of a security clearance?
    As a security clearance holder, you have many responsibilities. AGSVA has these on its website.
  • How do I know if I need one?
    Job applications specify if a security clearance is required, and what level.
  • I’m interested in a position requiring a security clearance but don’t have one. Can I still apply?
    Technically, yes. However, due to delays in processing your clearance would not be ready before your expected start date and you would need the clearance BEFORE you start your first day.
  • What is a security clearance?
    A security clearance, often referred to as vetting, assesses your suitability to handle classified information and resources within your job role. Clearance is only granted if you exhibit qualities such as honesty, trustworthiness, maturity, tolerance, resilience, and loyalty, which demonstrate your ability to safeguard Australian Government assets. It's important to note that a security clearance is not required to access information that lacks a security classification.
  • Does it cost anything to get a security clearance? Who pays?
    Yes, it does cost to obtain a security clearance. Cost’s range depending on the clearance level. Cost will be at your expense, if you where to secure work with SENSE within 6 months of being granted a clearance, SENSE will fully reimburse the cost.
  • I have a police check. Will this be enough to apply for a security clearance?
    No it’s not. You will need a police check as part of your security clearance application, but a police check alone isn’t enough. They are two different things.
  • Does an Inactive clearance mean I do not have one anymore?
    No, as your clearance is tied to a role, if you finish up the role your clearance will be made inactive until you start another role and the sponsorship is picked up again. Your clearance can remain inactive for 24 months.
  • Who issues them?
    The Australian Government Security Vetting Agency (AGSVA)—Australia’s central vetting agency—conducts security clearance assessments for federal, state and territory agencies.
  • What information do I need to provide?
    You will need to provide various documents, including tax details, referee information, and a statutory declaration signed by a Justice of the Peace, among others. The specific number and types of documents required vary based on the level of clearance you are applying for. Generally, as the security clearance level increases, the depth of background information you must furnish also increases, including a detailed history of your residential addresses over the past 15 years.


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