What is CIRT
The Contracting Industry Redundancy Trust (CIRT) is a redundancy trust and a worker entitlement fund operating under the Fringe Benefit Tax (FBT) legislation. CIRT was established in 1991 to preserve the redundancy entitlements of workers in the electrical contracting industry.
CIRT (QLD) PTY LTD ABN 49 011 050 329 is the Trustee of Contracting Industry Redundancy Trust (CIRT) ABN 18 414 343 407 which has equal employer/employee representation consisting of the MEA and the ETU together with an independent Director.
How Does CIRT Support Employers
While the primary role of CIRT is to preserve the redundancy benefits of workers in the electrical construction industry, contributing to the fund does provide benefits to employers including those outlined below.
Reduction of Accrued Liabilities
Any employer who employees fifteen (15) or more employees, is required to provide their employees with a redundancy payment in the event they are made redundant after a minimum of 12 months employment. Depending on the length of service, and the number of employees within the company, this liability can accrue to significant levels.
By contributing to a worker entitlement fund such as CIRT, this liability can be contained. Funds contributed to CIRT are held in trust until such time as an employee is made redundant and the employee claims the benefit from CIRT. These contributions are deducted from any redundancy entitlement the employee is owed. In many cases, depending on the contribution rates and length of services, the redundancy entitlement may be completely offset.
The full value of the CIRT contribution is held to offset the future redundancy entitlement. All administration and associated costs are funded through investment returns.
Cash Flow and Taxation Benefits
By providing employers with a facility to make progressive redundancy payments, the employers may be better able to manage cash flow whilst also more accurately allocating staffing costs to each project or job. As an approved worker entitlement fund, an employer is also able to claim a tax deduction for these contributions as they are paid to CIRT.