- Article by Online Editor
While JobKeeper was the Australian Federal Government’s principal scheme for helping businesses to survive the economic impacts of COVID-19, now that it has ended, a new incentive to kick-start the economy has been launched. But what is JobMaker and can it benefit your practice?
Launched on 7 October 2020 in line with the Federal Budget, JobMaker is a scheme that gives financial incentives directly to companies that take on new staff aged between 16 and 35.
The question of whether this is leading or will lead to further age discrimination from employers is for another time, but the thinking is that with younger and less experienced employees the ones that experienced the most negative impacts of pandemic related lay-offs, the scheme will have two main advantages – helping those potential employees get started or back into full time employment and financially rewarding the businesses that give them work.
The scheme was conceived with hospitality, retail assistants and the like in mind, but it could equally benefit recent graduates and other early career employees in the A&D industry.
There are two tiers, with eligible employers able to receive up to $10,400 a year for each new hire aged between 16 and 29, and up to $5200 for each new hire aged between 30 and 35. Employers have been able to register for the scheme since December 2020 and can access it until 6 October 2021.
To be eligible for the JobMaker Hiring Credit payments and receive the Credits, employers must first register with the scheme and tick off a number of criteria, including the following. The employer must:
- be a business in Australia, not-for-profit organisation operating in Australia or deductible gift recipient (DGR)
- hold an ABN (Australian Business Number)
- be registered for Pay As You Go (PAYG) withholding
- be up-to-date with income tax and GST returns for the two years up to the end of the JobMaker period for which they are claiming
- satisfy payroll increase and headcount increase conditions
- satisfy reporting requirements, including up-to-date Single Touch Payroll (STP) reporting, and
- not belong to an ineligible employer category.
There are a number of considerations that would preclude an organisation or practice from receiving JobMaker Hiring Credits. They include the following.
If the employer:
- had the Major Bank Levy imposed on it, or a member of its consolidated group, for any quarter before 30 September 2020
- is wholly owned by an Australian government agency or a local governing body
- is a company in liquidation or provisional liquidation
- is an individual who has entered bankruptcy, or
- is disqualified because the entity terminated the employment or reduced the hours of work of an existing employee or employees for the sole or dominant purpose of receiving increasing payments under the JobMaker Hiring Credit scheme.
It’s important to stress that applicants will be ineligible or disqualified if they enter an arrangement to artificially inflate their headcount or payroll in order to fraudulently increase JobMaker Hiring Credits. If this happens, that employer will lose all entitlements for any JobMaker period that ends after the termination or reduction in hours occurred, or any subsequent periods.
Applying for JobMaker
Employers must first lodge before making a claim and to do this they need to meet their lodgement obligations – and all due tax returns, business activity statements (BAS) and any other GST returns (if registered for GST) – for the two years up to the end of the JobMaker period for which they are claiming. If they’re not up-to-date at the time of making a claim, that claim will be denied.
Note, that all payments under the JobMaker Hiring Credit scheme are assessable as ordinary income, but they are not subject to GST and do not need to be included in BAS.
The first reporting date for the JobMaker period from October last year to January 2021 was in April 2021, but the next seven are listed below:
|Period||JobMaker period||STP reporting due date||Claim period|
|2||2 January 2021 – 6 April 2021||28 July 2021||1 May 2021 – 31 July 2021|
|3||7 April 2021 – 6 July 2021||28 October 2021||1 August 2021 – 31 October 2021|
|4||7 July 2021 – 6 October 2021||28 January 2022||1 November 2021 – 31 January 2022|
|5||7 October 2021 – 6 January 2022||27 April 2022||1 February 2022 – 30 April 2022|
|6||7 January 2022 – 6 April 2022||28 July 2022||1 May 2022 – 31 July 2022|
|7||7 April 2022 – 6 July 2022||28 October 2022||1 August 2022 – 31 October 2022|
|8||7 July 2022 – 6 October 2022||28 January 2023||1 November 2022 – 31 January 2023|
Note that employers must meet the STP reporting obligations for each JobMaker period for which they wish to claim and the STP reporting is due three days before the end of the particular JobMaker claim period.
Also, employers only need to register once and this must be done before the due date of the first JobMaker period subject to a claim. For example, to to claim for the second JobMaker period, as detailed above, an employer needs to register by 31 July 2021.
For employers worried that they may have missed the boat there is some leeway. To access the scheme they need to hire eligible young staff between 7 October 2020 and 6 October 2021, but since 1 February 2021 it has been possible to claim payments in arrears, every three months for up to 12 months.
For practices that are ineligible, it’s good to note that there still are other grants or support payments that they may be able to access.
The Department of Education, Skills and Employment (www.dese.gov.au) has further information about these.
Further information about JobMaker and eligibility to receive it can be found at www.ato.gov.au/General/JobMaker-Hiring-Credit.