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JobMaker hiring credit scheme – how does it work?

 

On the 6th October 2020 as part of the 2020–21 Budget, the government announced a new incentive for businesses to employ additional young job seekers called the JobMaker Hiring Credit.

Job losses have been extensive during the COVID-19 pandemic and young people have been particularly hard hit, with more then half a million casuals losing work at the height of the pandemic.

The Government wants to get the economy making jobs for young people who are currently out of work and on welfare and aims to do so through JobMaker.

The JobMaker Hiring Credit will be available to employers for each new job they create over the next 12 months from October the 7th  2020 for which they hire an eligible young job seeker aged 16 to 35 years old.

For each eligible employee, employers will receive for a period up to 12 months:

  • $200 a week if they hire an eligible young person aged 16 to 29 years; or
  • $100 a week if they hire an eligible young person aged 30 to 35 years.

Eligibility

To be eligible, employers must:

  • hold an Australian Business number (ABN)
  • be up-to-date with their tax lodgement obligations
  • be registered for Pay As You Go (PAYG) withholding
  • be reporting through Single touch payroll (STP)

For an employee to then be eligible, they must have been receiving one of these three forms of welfare in the three months before they were hired: JobSeeker, Youth Allowance (Other) and the Parenting Payment.

They must also be working at least 20 hours a week on average in their new jobs.

An employer cannot claim JobKeeper and JobMaker Hiring Credit at the same time.

The major banks have also been specifically called out as ineligible.

Crucially, businesses do not need to have suffered a fall in turnover to be eligible for the scheme. But the new jobs must be additional — that is, the total employee headcount must have gone up at the business.

To be eligible for the new scheme, the new jobs must be created between October the 7th, 2020 and October the 6th, 2021.

The hiring credit is then available for 12 months for each of those new jobs (meaning the scheme is set to finally come to an end on October the 6th, 2022).

How to apply

Employers will be able to register for the scheme from December the 7th, 2020, via the ATO website and will make claims quarterly, with claims commencing in February 2021.

More information about registering can be found in the link below.

ATO – JobMaker Hiring Credit

The JobMaker Plan will aim to boost economic growth, create jobs, invest in our future industries and skills, remove red tape, guarantee essential services, and restore confidence in a stronger recovery.

The Federal Government says it expects about 450,000 jobs will be supported under the scheme.

Examples

Olivia is aged 24 and finished her Bachelor of Engineering in July 2020. Olivia started receiving JobSeeker Payment while she looked for work. Ben owns a small engineering firm which is innovatively manufacturing products for the health sector. Because of the JobMaker Hiring Credit, Ben decides to bring forward hiring for an entry-level engineering position. Olivia is the successful hire in November 2020, and Ben’s business will receive $200 a week for up to 12 months, provided the firm’s overall employment is higher over this period.

Miles completed secondary school in 2019 and recently finished a Certificate III in Music Industry. Miles has been supported by Youth Allowance (Other) while looking for a job. With many live events postponed, Miles looks for a job in podcasting. Naomi runs a podcast network, and decides to hire Miles as an assistant sound mixer in late October 2020. Naomi’s business will receive $200 a week for up to 12 months.