The JobMaker Hiring Credit is a key part of the Government’s JobMaker Plan and was announced in the 2020-21 Budget. The Government committed to 4.0 billion over three years from 2020-21 to accelerate employment growth by supporting organisations to take on additional employees through a hiring credit.
The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 9) 2020 (Amending Rules No. 9) amend the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Rules) to establish the JobMaker scheme and specify details about the scheme.
Overview of Program
The JobMaker Hiring Credit will be available to eligible employers over 12 months from 7 October 2020 for each additional new job they create for an eligible employee. Eligible employers who can demonstrate that the new employee will increase overall employee headcount and payroll will receive $200 per week if they hire an eligible employee aged 16 to 29 years or $100 per week if they hire an eligible employee aged 30 to
The JobMaker Hiring Credit will be available for up to 12 months from the date of employment of the eligible employee with a maximum amount of $10,400 per additional new position created.
To be eligible, the employee will need to have worked for a minimum of 20 hours per week, averaged over a quarter, and received the JobSeeker Payment, Youth Allowance (other) or Parenting Payment for at least one month out of the three months prior to when they are hired.
Eligible Employers and Employees
The JobMaker Hiring Credit payment is only available to eligible employers. An employer is entitled to a JobMaker Hiring Credit payment if:
- the period is a JobMaker period;
- the employer qualifies for the JobMaker scheme for the period;
- the employer has one or more eligible additional employees for the period;
- the employer has a headcount increase for the period;
- the employer has a payroll increase for the period;
- the employer has notified the Commissioner of Taxation (Commissioner) of its election to participate in the scheme;
- the employer has given information about the entitlement for the period to the Commissioner in accordance with the reporting requirements; and
- the employer is not entitled to a JobKeeper payment for an individual for a fortnight that begins during the period.
a. JobMaker periods
Entitlement to a JobMaker Hiring Credit payment is assessed in relation to three month periods known as JobMaker periods.
The JobMaker scheme commence on 7 October 2020 and ends on 6 October 2022, with each period being 3 months.
Accordingly, each of the following is a JobMaker period (inclusive):
- 7 October 2020 to 6 January 2021;
- 7 January 2021 to 6 April 2021;
- 7 April 2021 to 6 July 2021;
- 7 July 2021 to 6 October 2021;
- 7 October 2021 to 6 January 2022;
- 7 January 2022 to 6 April 2022;
- 7 April 2022 to 6 July 2022; and
- 7 July 2022 to 6 October 2022.
b. The employer qualifies for the JobMaker scheme for the period
An entity is excluded from being a qualifying entity if any of the following applies:
- it is an entity that has been subject to the levy imposed by the Major Bank Levy Act 2017 for any quarter ending before 1 October 2020, or it was a member of a consolidated group and another member of the group had been subject to the levy;
- it is an Australian government agency, local governing body or a wholly-owned entity of those;
- a sovereign entity; or
- at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.
c. Participation and general notification requirements in the JobMaker scheme
To be entitled to the JobMaker Hiring Credit payment in relation to a JobMaker period, the entity must have notified the ATO in the approved form of its election to participate in the scheme by the end of the period that the entity first elects to participate.
For example, for an entity that elects to participate for the JobMaker period of 7 October 2020 to 6 January 2021, the notice must be provided to the ATO by 6 January 2021.
The entity must also comply with all reporting obligations of the scheme as determined by the ATO. The ATO will also specify that the information must be provided through the single touch payroll reporting regime.
d. Eligible Additional Employees
Under the JobMaker scheme, qualifying entities can only receive the payment for a JobMaker period in respect of eligible additional employees.
An eligible additional employee is an individual who:
- was employed by the qualifying entity at any time during the JobMaker period;
- commenced employment between 7 October 2020 and 6 October 2021;
- was aged between 16 and 35 years at the time they commenced employment;
– employers are eligible for the ‘higher rate’ of credit for individuals aged 16 to 29 (inclusive) at the commencement of their employment; and
– employers are eligible for the ‘lower rate’ of credit for individuals aged 30 to 35 (inclusive) at the commencement of their employment;
- commenced employment no more than 12 months before the start of the JobMaker period;
- has worked an average of 20 hours a week for each whole week the individual was employed by the qualifying entity during the JobMaker period;
- meets the pre-employment conditions;
- meets the notice requirement; and
- is not excluded as an eligible additional employee.
Employers can only claim the JobMaker Hiring Credit payment for a given employee for up to 12 months from the time they commence employment. After 12 months, the employer can no longer receive payments in relation to that employee, but they can continue to qualify for payments in relation to another eligible additional employee.
To be eligible the employee must have been receiving the following payments under the Social Security Act, for at least one of the previous three months (28 of the 84 days).
- Parenting Payment;
- Youth Allowance (except if the individual was receiving thus payment on the basis that they were undertaking full time study or was a new apprentice); or
- JobSeeker Payment.
The individual must give written notice to the employer that the individual:
- met one of the applicable age requirements at the time they commenced employment (either aged between 16 and 29, or between 30 and 35);
- meets the pre-employment condition; and
- has not provided a similar notice to another entity.
Excluded as an eligible additional employee
An individual is excluded from being an additional employee:
- if the entity is a sole trader – the sole trader;
- if the entity is a partnership – a partner of the partnership;
- if the entity is a trust – the trustee or beneficiary of that trust; or
- if the entity is a company (other than a widely-held company as defined in subsection 995-1(1) of the ITAA 1997) – a shareholder in the company or a director of the company.
- For the purposes of the exclusion, the term ‘relative’ is
– the person’s spouse; or
– the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal
– descendent or adopted child of that person, or of that person’s spouse; or
– the spouse of the parent, grandparent, brother, sister, uncle, aunt, nephew,
– niece, lineal descendent or adopted child of that person, or of that person’s spouse.
- an individual is also excluded from being an eligible additional employee if at any time between 6 April 2020 and 6 October 2020, the individual was engaged by the entity as a contractor or a
subcontractor where they worked in a substantially similar role or performed substantially similar functions or duties.
The entity must have created additional employment during the period
Additional employment is measured by reference to the number of employees that were employed by the entity on 30 September 2020.
The baseline headcount increase means that the entity may only receive the JobMaker Hiring Credit payment in respect of each additional headcount for a period of twelve months. This ensures that an entity does not have an incentive to separate from an eligible additional employee at the end of twelve months and hire a new eligible employee in order to claim for a further twelve month period.