Government’s $4 billion JobMaker scheme referred to Senate inquiry, as tight eligibility rules emerge


Finance Minister Mathias Cormann and Treasurer Josh Frydenberg look over the 2020 budget. Source: AAP/Mike Bowers.

The federal government’s $4 billion JobMaker hiring credit scheme has been referred to a Senate committee for inquiry.

Elsewhere, JobMaker’s eligibility criteria states it is not available to businesses claiming JobKeeper payments, or for those simply replacing employees who have left the company.

While several new bills from Federal Budget 2020 — including the loss carry-back scheme, asset write-off and changes to the R&D Tax Incentive — passed through parliament last week, the Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 is facing a little more scrutiny.

The bill has been referred to the Senate Economics Legislation Committee, with a report now due on November 6, 2020.

As it stands, the proposed amendments seem to clarify some of the language in the bill, rather than make any changes to the overall structure.

However, the scheme has come under fire for potentially discouraging businesses from hiring Australians over the age of 35.

From October 7, eligible employers will be able to claim a wage subsidy of $200 per week for new hires aged between 16 and 29, and $100 per week for those aged between 30 and 35.

The hiring credit will apply to new hires up until October 6, 2021, and up to 12 months from the date the position is created.

In order to be eligible, employees must work for more than 20 hours per week, on average, over the quarterly reporting period.

JobKeeper and JobMaker don’t mix

The inquiry comes as more detailed eligibility criteria for the new scheme comes to light.

Employers cannot claim the JobMaker hiring credit at the same time as any other Commonwealth wage subsidy program. That includes both the JobKeeper wage subsidy and apprentice wage subsidy payments.

In order to be eligible, employees must have received either the JobSeeker subsidy, Youth Allowance or Parenting Payment for at least one of the prior three months at the time they’re hired.

This means the scheme does not apply to temporary visa holders, who are not eligible for these schemes.

Headcount requirements

Further, a business must increase its overall headcount in order to be eligible.

It must demonstrate an increase in total employee headcount, compared to a reference date of September 30. It must also show an increase in payroll, compared to the three months leading up to September 30.

The amount of credit claimed cannot exceed the cost of the additional payroll.

For new businesses that have zero employees as of September 30, the minimum baseline headcount is one. So, the first employee hired will not be eligible for the subsidy, but all subsequent hires will be.

Employers must also be reporting through Single Touch Payroll; be up to date with tax lodgement obligations; be registered for PAYG withholding; and have kept ‘adequate records’ of the paid hours worked by the employee they are claiming for.

You can learn more about the eligibility criteria here.

A small business subsidy?

This legislation was always billed as something to boost jobs, and therefore, kickstart the economy.

While it provides incentives for all businesses to hire, there’s no revenue loss threshold to meet, and it’s not designed specifically to support small businesses.

However, as first reported in The Sydney Morning Herald this week, supermarket giant Woolworths has declined to take the government up on its offer.

In a memo to all staff, Woolworths chief Brad Banducci and chief people officer Caryn Katsikogianis said they support the “spirit and design” of the initiative.

“However, we believe our current circumstances — where we’re fortunate to be trading strongly, and are entering our usual business cycle of hiring for Christmas and Summer — requires us to be thoughtful in what government programs we access,” they wrote.

“Accordingly, we do not believe it would be appropriate for us to seek any benefit from JobMaker.”

The COVID-19 crisis has led to a spike in revenue for the supermarket — up 8.1% on the 2018-19 financial year.

Woolworths will be hiring in the coming months, welcoming “Australians of all ages”, the memo adds.

But, the decision to forgo the JobMaker subsidy also recognises the desire for more hours among existing employees.

“This year has been incredibly challenging and we know there is strong appetite among our existing team members for more hours in these uncertain times.

“It’s another driver behind our decision. We’re absolutely committed to supporting our existing store team members with additional hours wherever possible during the upcoming Christmas and summer period.”

Coles has said it is planning to use the scheme, and today The Sydney Morning Herald reports that hardware giant Bunnings will not rule it out.

Big businesses have previously come under fire for making use of the COVID-19 JobKeeper subsidies, while also dishing out millions in director bonuses and shareholder dividends.

Do the JobMaker eligibility requirement change things for your business? Do you think this scheme should be geared towards SMEs? Let us know.

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