On 7 October, the Federal Treasurer introduced the Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 (Cth) (‘the Bill’) to the House of Representatives.
The Bill is intended to provide the Treasurer with the power to make rules in order to establish the JobMaker Hiring Credit Scheme which was introduced as part of the 2020-2021 Budget. The Bill itself does not contain the details and rules for how the Scheme will operate in practice. Following the passage of the Bill, the Treasurer will formally establish the rules governing the Scheme as a form of delegated legislation. The rules will set out the eligibility criteria for employers and employees, the quantum and timing of payments, and the obligations of recipients of payments. However, in his announcement of the Federal Budget, the Treasurer has already outlined how the Scheme is proposed to operate.
According to the Federal Treasurer’s Media Release, the 2020-2021 Federal Budget has assigned $4 billion to the Scheme which will allow the Government to make payments to eligible employers who hire eligible employees aged 16-35. The Treasurer stated:
The Hiring Credit will be paid quarterly in arrears at the rate of $200 per week for those aged between 16-29, and $100 per week for those aged between 30-35. Eligible employees are required to work a minimum of 20 hours per week.
The Scheme is intended to operate from 7 October 2020 until 6 October 2022.
The Bill specifies that the Treasurer is to be provided powers to make rules in relation to Commonwealth payments primarily for two purposes:
The Treasurer stated in an October Media Release that the Treasury estimates that the Scheme will support around 450,000 jobs for young people.
The Australian Tax Office, which will administer the JobMaker Hiring Credit Scheme conditional to the passage of the Bill, has outlined the eligibility criteria under the Scheme:
To be eligible, employers must:
An eligible employer must employ an eligible employee in order to receive payments under the Scheme.
Similarly, the ATO has outlined the proposed eligibility criteria for employees under the Scheme:
For the employer to be eligible, new employees must:
Furthermore, the employee must work an average of at least 20 hours per week over the quarter in order for their employer to qualify for payment. If an employee begins and/or ceases their employment during a quarter, a similar test must be met based on the duration of their employment.
The ATO notes that further eligibility conditions will be established in relation to the employer's headcount and payroll on 30 September 2020. These statutory tests will ensure that credit is provided for the creation of additional jobs rather than the replacement of existing employees who are not eligible employees under the Scheme.
The ATO states that, conditionally on the passage of the Bill, an employer will not be able to claim JobKeeper and JobMaker Hiring Credit at the same time. However, the amendments within the Bill do not alter any of the existing provisions that authorise the JobKeeper scheme.
The Explanatory Memorandum clearly establishes that further amendments to the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth) would be required to either:
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Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 and explanatory memorandum, available from TimeBase's LawOne service
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