JobMaker Hiring Credit

As part of the Federal Government’s $74 billion JobMaker Plan announced in the 2020-21 Federal Budget, $4 billion has been allocated to what is called ‘JobMaker Hiring Credit’.  This is aimed at providing businesses with an incentive to take on employees aged between 16 and 35 years old.

The JobMaker Hiring Credit will be available from 7 October 2020 to eligible employers for each new job created over the next 12-month period where the employer hires an eligible young person.  Details regarding registration, lodgement and payment of claims is available through the Australian Taxation Office (ATO).

Employer Eligibility

While employers do not need to meet a fall in turnover test, employers are only eligible to receive the JobMaker hiring credit if they meet the following criteria:

• 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);
• met the additionality criteria
• 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.

Government and sovereign entities are ineligible employers for the JobMaker Hiring Credit along with entities in liquidation (or entered bankruptcy) or are subject to the major bank levy.

Critically, an employer cannot access more than one Commonwealth wage subsidy.  For example, an employer receiving JobKeeper Payment for any employee is ineligible for JobMaker Hiring Credit.   An employer can choose to opt out of the JobKeeper payment scheme to become eligible but must no longer be receiving JobKeeper payments (or any other Commonwealth wage subsidy).

The Additionality Criteria

The “additionality criteria” means that the position must be an “additional” job created from 7 October 2020.  The following baseline values apply to meet the additionality criteria:

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

Note: As at 30 September 2020 the minimum baseline headcount is one employee.  New businesses or businesses with no employees as at 30 September are only eligible for the second and subsequent eligible employees hired by an eligible employer.

Employee Eligibility (Young Person)

A permanent, casual or fixed term employee may be eligible if the employee meets the following criteria:

• age requirement:
  • 16 to 29 years – attract the payment of $200 per week (from commencement of employment); and
  • 30 to 35 years – attract the payment of $100 per week (from commencement of employment);
• worked over an average of at least 20 paid hours per week for the full weeks they were employed over the reporting period;
• commenced employment between 7 October 2020 and 6 October 2021;
• received JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one month within the past three months before commencement;
• in their first year of employment with the employer; and
• employed for the period that the employer is claiming.

Note: An employee will be ineligible if the employee is aged under 16 years or over 35 years at commencement.  The employee will also be ineligible where the employer is already in receipt of a government wage subsidy or another employer is already claiming the JobMaker Hiring Credit for the employee.

Aitken Legal strongly recommends that employers review all eligibility criteria and seek specialist employment law advice before recruiting to attract age specific candidates.