Overview of the Rural & Regional Teaching Infrastructure Grant (‘RRTIG’) Key Dates Application Process Relevant Forms Eligibility Criteria

Overview of the Rural & Regional Teaching Infrastructure Grant (‘RRTIG’)

Key Dates Application Process Relevant Forms Eligibility Criteria Selection Criteria Key Items to Assist the Application Tax Implications

Overview

$52.5 million provided to enable regional and rural general practices to build facilities to take on more trainees.

A minimum of 175 infrastructure grants available, each capped at $300,000

Provided to General Practices in Australian Standard Geographical Classification – Remoteness Area (‘RA’) 2 – 5.

Overview of the RRTIG

Successful applications will need to match the Cth’s grant. E.g. The Cth provides a grant of $300k, the practice needs to match that by at least $300k.

One application round, but funds available for 3 years from the 2014-15 year.

Grant aims to upgrade and/or extend existing premises to provide additional rooms and space for teaching students and supervising GP registrars.

Overview of RRTIG (cont.)

Application process for RRTIG is currently open

Applications must be submitted by 2pm on 23 February 2015

Late applications will not be accepted.

Key Dates

Register on the Department of Health Website RRTIG page.

Will be redirected to the download page with the application documentation.

The Application Process is very detailed. You need to comprehensively address each criteria to be successful.

Application Process

Application Documents: Department of Health Registration Form RRTIG Application Form Application Attachments RRTIG Programme Explanatory Notes Funding Agreement Schedule RRTIG Guidelines

Will need to apply to the Department for a Registration Number before applying for the RRTIG.

Relevant Forms

Need to address the following in the Application Form: - Eligibility Criteria 1- Selection Criteria 1- Selection Criteria 2- Selection Criteria 3- Selection Criteria 4- Selection Criteria 5- Selection Criteria 6

Eligibility Criteria

Must meet the following criteria for the application to be considered: 1. At the time of the application the General

Practice is registered to supervise GP registrars and teach medical students / are in the process of seeking registration to supervise.

2. Must be an existing GP

3. Must be operating from existing premises in ASGC-RA 2-5

Eligibility Criteria 1

http://www.doctorconnect.gov.au/internet/otd/publishing.nsf/content/locator

Eligibility Criteria 1



4. Must be an accredited GP or registered for accreditation to achieve full accreditation within 12 months of joining PIP.

5. Registered with appropriate accreditation from a Regional Training Provider to be allocated GP registrars, or are in the process of applying for appropriate accreditation.

6. Have tenure over the proposed property.

7. Provide evidence of equal financial commitment.

Eligibility Criteria 1 (cont.)

Tenure: In application provide following evidence:

Title deed and a rates notice / evidence of unconditional purchase; or

Signed lease and written permission from landowner for proposed works to be undertaken (Tenure covers 3 years following estimated complement of project).

Funding recipients must agree to operate the GP and report to Department of Health for 3 years following completion of works. Funding Agreement can be terminated if not complied with.


Evidence of Financial Commitment: Director’s Financial Guarantee Bank Guarantee Co-contributions could include direct cash

injection, loan of offer from bank. Co-contribution cannot be an in-kind contribution

(i.e. Cannot be provision of goods or services). Funding recipient may contribute above the

Government’s contribution. Government’s contribution will be capped at $300,000.

Eligiblity Criteria 1 (cont.)

If apply for lesser amount and change mind, you cannot later increase the funding sought.

Must satisfy the Eligibility Criteria 1 before the rest of the application will be considered further.

Note – Individuals are not eligible to apply for funding. Must be incorporated, partnership, trust or other specifically listed entity.


Six Selection Criteria to be addressed.

Each Criteria has a number of questions that need to be addressed for the application to be successful.

Selection Criteria

- Selection Criteria 1: What additional space for students / registrars will be provided.

- Selection Criteria 2: How will the Practice increase clinical placements for registrars and students.

- Selection Criteria 3: How will it increase access to additional health professions in the region

Selection Criteria (cont.)

- Selection Criteria 4: How will this increase supervisory opportunities for GPs?

- Selection Criteria 5: How the funds will be used efficiently and effectively.

- Selection Criteria 6: Whether you have project management capability and sustainability of the project.


Weighting:

*This must be satisfied for the application to be considered.

**Must score 50% or more against each selection criteria to be eligible for funding.

Applications in RA 4 or 5 will receive an additional 3% weighting on their overall score.


Selection Criteria Weighting**

Eligibility Criteria 1* 0%

Selection Criteria 1 25%






Compliance Requirements (mandatory): Total funding sought is $300,000 or less;

Sufficient information addressing application questions addressed.

Application is for an infrastructure project,

Application is written in English.


Application CANNOT be for a project that has commenced, contracted or completed prior to the execution of a funding agreement.

Application MUST be lodged by closing date and time.

Declaration is signed.

Applicant is the legal entity


Funding MAY be applied to:

Direct construction / fit-out, costs for labour and building materials

Supply and installing IT and communication equipment

Supply and installation of medical equipment

Selection criteria (cont.)

Funding MAY be applied to:

Professional fees for the design of the project

Legal and accounting professional fees

Application fees for DA and Building Permits


Funding may NOT be applied to: Constructing new premises to establish a new GP

business

Constructing a new building to house an existing GP

Project that has already been contracted, commenced or completed prior to funding

Ongoing operating costs (rent, utilities, salaries, maintenance)


Funding may NOT be applied to: Extending/fit out for premises with no tenure

Projects entirely for IT/medical equipment

Retrospective costs

Carrying on of a rental property


Understand the requirements of the contract:-- What documentation is required - ownership

documents, tenure of property, separate bank account

- Project plan, budget, insurance

What are you required to contribute – - Financially, initial information, match

Commonwealth contribution, if intending to borrow is this a clause in the contract?

Key Items to Assist with Application

What can you spend the grant funds on?- Per budget- Variance to budget may need to be explained

or evidence provided- Some costs maybe excluded- Can you allocate administration costs to the

grant or only direct expenses?- Only capital costs included


What are your reporting requirements to the government?- Progress reports- Audit report

Ensure costs are spent in the correct period- Are committed costs allowable under the

contract?


Ensure you obtain substantiation for expenses from suppliers- Must have adequate documentation to

support expenditure- Ensure correct treatment of GST

If funding not spent required to be returned?


What outputs does the government require to satisfy the contract terms?- Progress reports- Access to information as requested- Disposal terms- Asset maintenance


The funding must be predominantly spent (at least 75% of the funding) on direct construction and / or renovation costs

Do not commence work until after the executed Funding Agreement is received

Must carry out each activity in accordance with the Funding Agreement.

Don’t lose your RRTIG

Meet all milestones and timeframes in Funding Agreement

Operate the GP for 3 years after works complete and have tenure for this entire time

Report on Key Performance Indicators to the Department for the next 3 years post completion of project

Don’t lose your RRTIG

KPI 1 – Achieve the infrastructure upgrade

KPI 2 – Increased clinical placements

KPI 3 – Additional services to the local community / increased access to health Professionals

KPI4 – Increased opportunity to gain GP supervisory Experience

KPI Reporting

Income Tax Issues: - Ordinary Income: s 6-5- Bounty or Subsidy: s 15-10

Your assessable income includes a bounty or subsidy that:

(a) you receive in relation to carrying on a business; and

(b) is not assessable as ordinary income under section 6-5.

- Assessable Capital Gain

GST: Beware your GST obligation

Tax Implications

Tax Implications (cont.)

GP Entity / Service Trust

Building Entity / Building Trust

Ordinary Income

Bounty or Subsidy

Capital Gain

There has been no PBR, ATO Ruling, Determination or other guidance material issued on the RRTIG at the time of this presentation.

PBR 1012092180535 Landlord entity constructing a new training

facility, included fit-out to be leased to a related entity carrying on a business from the premises.

The Landlord entity applied to the Federal Government for funding under a grant to establish / enhance facilities and improve resources available.


PBR 1012092180535 Grant funds are to be directed to capital works

and/or refurbishments (i.e. New buildings and/or fit-out or renovations of existing buildings)

The improvements are to assist with additional and/or broader range of services, assist with training and increase access to and ability to recruit and retain workers.

Property to be retained for a specified number of years.


PBR 1012092180535 Grant is not ordinary Income:

- Does not posses the necessary elements of periodicity, recurrence or regularity.

- Per TR 2003/3: It does not constitute income from the provision of personal services, is not sourced from property and has not been derived directly from any existing business activity.


PBR 1012092180535 Not a subsidy or bounty:

- Activities are of a lessor. These types of activities align more with activities of an investor.

- Not carrying on a business nor a business of leasing properties, any grant receipts are on capital account and not assessable as bounties or subsidies


PBR 1012092180535 Any capital gain on payment of the grant will

be disregarded:- CGT event C2 applies as the recipient of the grant

was entitled to payment under the grant at certain milestones. That right was satisfied when the payments were made.

- Any capital gain / loss under CGT event C2 is disregarded under s 118-37(2)(a) of ITAA97. The grant program was announced by the Federal Government in the Federal Budget and is a reimbursement or payment of an expense incurred.


The material contained in this seminar is in the nature of general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act or rely upon any information contained in or implied by this seminar without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this presentation.

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