The JobMaker hiring credit scheme, announced in the 2020-21 Budget, has been passed in Parliament. The aim of the scheme is to help reverse the rising youth unemployment bought on by the COVID crisis.

Overview:

From 7 October 2020, eligible employers will be able to claim a credit for each eligible employee they hire.

The payment rates are as follows:

• $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 35 years.

A maximum amount of $10,400 will apply per additional new position created. The credit will apply for up to 12 months from the date of employment of the eligible employee, with the scheme in place for new jobs created until 6 October 2021.

To be an eligible employer: 

Employers are eligible to receive the JobMaker Hiring Credit if they:

• Have an Australian Business Number (ABN);
• are up to date with tax lodgement obligations;
• are registered for Pay As You Go (PAYG) withholding;
• are reporting through Single Touch Payroll (STP);
• meet the additionality criteria;
• are claiming in respect of an eligible employee; and
• have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of.

What is an additional eligible employee:

Employees that qualify for the credit are ones that:

• commenced employment on or after 7 October 2020;
• at the time of being employed met the above age requirements;
• have not been employed for more than 12 months (really only relevant in later JobMaker periods);
• have worked an average of 20 hours a week;
• have provided the relevant notifications to the employer;
• were in receipt of parenting payment, youth allowance (except if they were receiving it as a fulltime student or apprentice), or JobSeeker payment for at least 4 out of the 12 weeks prior to being employed; and
• are not an excluded employee.

Other additionality Criteria:

To claim the credit, there must be an ‘additional’ job created. The following criteria must be satisfied to demonstrate that:

There is an increase in:

• the business’ total employee headcount (minimum of one additional employee) from the reference date of 30 September 2020; and
• the payroll of the business for the reporting period, as compared to the three months to 30 September 2020.

Other important criteria:

• The amount of the hiring credit claim cannot exceed the amount of the increase in payroll for the reporting period.
• Total employee headcount on 30 September 2020 and payroll in the three months to 30 September 2020 represent the baseline values for the employer.
• The baseline headcount will be adjusted in the second year of the program to ensure an employer can only receive the JobMaker Hiring Credit for 12 months for each additional position created.
• ‘Non-arm’s length’ employees will not be considered eligible employees. This includes family members of a family business, directors of a company, and shareholders of a company.

Do not hesitate to contact our office if you need any support or assistance in determining your entitlement to this scheme.