Whilst handing down the Federal Budget in October 2020, the Federal Government introduced another wage subsidy scheme aimed at addressing the increase in unemployment due to the ongoing Covid-19 pandemic and called the JobMaker scheme.
The purpose of the JobMaker scheme is to support and incentivise employers to create new jobs within their business and employ additional people, with eligible employers to receive the following ‘hiring credits’:
- $200 a week for each eligible employee hired who is aged 16-29 (up to a maximum credit of $10,400)
- $100 a week for each eligible employee hired who is aged 30-35 (up to a maximum credit of $5,200)
The hiring credit is payable weekly for a period of 12 months following the date on which the employee was hired, provided they are employed by the employer between 7 October 2020 and 6 October 2021.
Amongst other things, the employer must be able to demonstrate:
- an increase in their total employee headcount from 30 September 2020 (the ‘reference date’)
- an increase to their payroll compared to the three month period up to the reference date
In addition, the employer must be registered for PAYG withholding, report to the ATO via Single Touch Payroll, and be up-to-date with their tax lodgement obligations.
Whilst the JobMaker scheme does not exclude a business or employer based on GST turnover, any employer that is registered for the JobKeeper 2.0 scheme will automatically be ineligible for the JobMaker scheme.
Where an employer meets the eligibility requirements, hiring credits will only be paid for a new employee where the following conditions are met:
- the employer has already employed one additional employee during the scheme period (ie, the hiring credits are only payable for new employees following the first new employee)
- the employee is aged between 16 and 35 as at the date of commencement of employment
- the employee had received some other Federal Government unemployment benefit (eg, JobSeeker payment, Youth Allowance (Other), or Parenting Payment) within the three month period prior to employment
- the employee is employed to work an average of at least 20 hours per week
If the eligible employee ceases employment with the employer, the employer will no longer be able to claim hiring credits for that employee following the date of cessation.
Action Items
An employer who wishes to take advantage of the JobMaker scheme must:
- ensure they are not registered with any other disqualifying subsidy scheme (eg, JobKeeper 2.0)
- register online with the ATO
- create and fill as many suitable positions as possible with new eligible employees during the period between 7 October 2020 and 6 October 2021
- commence submitting claims for wage subsidies from 1 February 2021 (for all new roles created in the first reporting period up to 6 January 2021)
- submit all claims for wage subsidies within three months of each new position being filled (supported by all relevant substantiating documentation)
