The JobMaker Hiring Scheme was recently announced by the federal government as part of a wider plan to rebuild our devastated economy. The scheme will provide incentives to employ younger, unemployed job seekers. It is expected to support around 450,000 jobs.
Key points
- The aim of this scheme is to promote job creation whereas the aim of the JobKeeper scheme is to keep existing jobs alive and prevent further unemployment.
- Eligible employers will be able to claim $200 a week for each additional eligible employee they hire who is aged 16 to 29 years old (to a maximum credit of $10,400), and $100 a week for each additional eligible employee who is aged 30 to 35 years old (to a maximum credit of $5,200).
- The JobMaker Hiring Credit is to be claimed quarterly in arrears from the ATO by an employer commencing from 1 February 2021.
- Employers will need to report quarterly to the ATO in order to confirm that they continue to meet the eligibility requirements.
- This scheme commenced on 7 October 2020 and it is available to employers for each new job they create over the next 12 months for which they hire an eligible young person, aged 16 to 35 years old.
- JobMaker payments cannot be claimed for existing employees.
- Eligible employers will be able to receive JobMaker payments for up to 12 months for each new role created and for which they hire an eligible employee. The scheme itself will close to new participants on 7 October 2021. (Therefore an employee hired on 6 October 2021 could receive the payment until 6 October 2022).
- Employers currently participating in JobKeeper 2.0 will NOT be able to receive JobMaker payments. Only once an employer has ceased to receive JobKeeper payments for any of their employees, will they then become eligible to participate in the JobMaker scheme from the next reporting period.
How to register
- Employers may register online with the ATO from 7 December 2020.
- Employers don’t need to be registered at the time that they hire an employee in order to be eligible. ( i.e. registration can occur at any time in order for a payment to be made).
- Employers will be able to submit claims from 1 February 2021 for new roles created in the first reporting period (which is up to 6 January 2021).
- Employers will generally have three months in which to submit claims, following the opening of the relevant claim period.
- The JobMaker payment will be paid to an eligible employer quarterly in arrears.
- Employers will need to carry the full cost of any new employees until such time that they receive the JobMaker payment from the ATO.
Eligibility conditions
- Adequate records of the paid hours worked by the relevant employee must be kept.
- There must be 1 new employee after 30 Sep 2020 along with a legitimate increase in the payroll of the business.
- The business must have an ABN and:
- be up to date with all tax obligations;
- be registered for PAYG withholding (wages);
- be reporting through a Single Touch Payroll system.
A business is not eligible if:
- in receipt of JobKeeper.
- a state, local, or government agency or a sovereign entity.
- it is in liquidation or undergoing bankruptcy proceedings.
- it is subject to the major bank levy.
Eligible employees:
- Between 16 and 35 years old.
- Must be employed for at least 20 hours per week.
- Must have commenced employment between 7 October 2020 and 6 October 2021
- Must have received JobSeeker, youth allowance, or the parenting payment for at least 1 month within the 3 months prior to being hired.
- Must be within their first year of employment with this employer and an employee for the period being claimed.
- Must not be in receipt of a wage subsidy under another commonwealth program such as the Boosting Apprenticeship Commencements wage subsidy, the Australian Apprentice Wage Subsidy Trial and the Supporting Apprentices and Trainees subsidy.
- Must have an “arms-length” relationship with their employer (e.g. family members of a family business will not be eligible)
Additional points
- Newly established businesses with no employees on Sept 30, 2020 (the “reference date”) will potentially be eligible for their second and subsequent employees provided the above criteria are met. (The first employee will not be eligible).
- Companies in voluntary administration or receivership will be eligible (as long as they are not in liquidation or bankrupt)
Should you have any queries or require further information, don’t hesitate to contact our team.
