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Could JobMaker help your NFP organisation?
In October 2020, the Federal Government announced the introduction of the JobMaker Hiring Credit Scheme (JobMaker).
The scheme is an incentive for businesses to employ additional young job seekers aged 16–35 years. Eligible employers can access JobMaker for each eligible additional employee they hire between 7 October 2020 and 6 October 2021.
The hiring credit provides:
- $200 per week for new employees from 16 to 29 years of age; and
- $100 per week for new employees from 30 to 35 years of age.
The scheme hopes to help sectors recover from the impact of the COVID-19 pandemic. With so many restrictions enforced during 2020, the scheme is intended to financially assist organisations and encourage further employment. The goal is to create opportunities for people who were previously unemployed.
JobMaker is available to not for profit organisations and social enterprises that meet the eligibility requirements. The first round of claims opened on 1 February 2021 and today we take a closer look at the details.
JobKeeper vs JobMaker
Two completely different schemes but there is an interaction in that you cannot ‘claim for a JobKeeper fortnight which starts in a JobMaker period.’
This is not so much of an issue now that the JobKeeper scheme is winding up, but it is important to note that if you have added to your payroll headcount and are eligible to claim JobMaker, you can’t claim for a period that you claimed JobKeeper for.
To put it another way, if you have remained eligible for JobKeeper through to the end of the scheme in March, you can’t make a JobMaker claim until the JobMaker period beginning 7 April 2021.
Access to JobMaker
There are various steps an NFP must take in order to access the JobMaker scheme. The first of these is to register with the ATO – either via their online services, the Business portal or through your registered tax agent.
Once registered, you can nominate eligible employees by creating a payroll event through your Single Touch Payroll (STP) software. And finally, you need to claim your payments by entering your headcount and relevant payroll for the specific JobMaker period, via the ATO online service.
When you have submitted your claim, the ATO calculates the amount payable based on the details you provide.
The JobMaker credit is paid directly to the employer, three months in arrears. Currently, the period open to claims is 7 October 2020 to 6 January 2021, and claims for this period can be made up to 30 April. Unlike JobKeeper, the JobMaker payment is not payable to employees. It is designed to support wages and other costs involved in employment.
Currently, the JobMaker subsidy is available for eligible employees for up to 12 months from their employment start date – provided that they are hired prior to 6 October 2021.
Eligibility
As with most Government subsidy programs, there are strict eligibility requirements. JobMaker has specific criteria for both employers and employees.
The ATO states,
Employers may be eligible for JobMaker Hiring Credit payments if all of the following apply.
The employer:
- has registered for the JobMaker Hiring Credit scheme
- either
- operates a business in Australia
- is a not-for-profit organisation operating in Australia
- is a deductible gift recipient (DGR) endorsed either as a public fund or for a public fund you operated under the Overseas Aid Gift Deductibility Scheme (DGR item 9.1.1) or for developed country relief (DGR item 9.1.2)
- holds an Australian business number (ABN)
- is registered for pay as you go (PAYG) withholding
- has not claimed JobKeeper payments for a fortnight that started during the JobMaker period
- is 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
- satisfies the payroll increase and the headcount increase conditions
- satisfies reporting requirements, including up to date Single Touch Payroll (STP) reporting
- does not belong to one of the ineligible employer categories.
And with regards to employees,
Employees are eligible if they:
- are an employee of the entity during the JobMaker period
- are between 16–35 years old (inclusive) when they started employment
- started employment on or after 7 October 2020 and before 7 October 2021
- worked or have been paid for an average of at least 20 hours per week they were employed in the JobMaker period
- have completed a JobMaker Hiring Credit employee notice for the employer
- have not already provided a JobMaker Hiring Credit employee notice to another current employer
- received one of the following payments for at least 28 consecutive days (or two fortnights) in the 84 days (or six fortnights) prior to starting employment
- JobSeeker Payment
- Parenting Payment
- Youth Allowance (except if they were receiving the allowance because they were undertaking full-time study or are a new apprentice).
This final point of employee eligibility is critical, as it relates to the previous employment status of your new team member. They cannot have been employed – either by you or another organisation, immediately prior to you hiring them. They need to have been receiving a Government benefit to meet the JobMaker criteria.
Payroll and headcount
Creating new employment opportunities is central to the JobMaker program. To receive your payments, it’s essential that you are able to demonstrate that you have genuinely increased your payroll and headcount.
The ATO has stipulated that an employer is not eligible and could face disqualification from the scheme if they attempt to artificially boost their headcount. This could be by terminating or reducing the hours of any existing employee in order to access or increase JobMaker payments.
As an employer, you must prove you are creating new employment positions to receive payments.
Reporting requirements
In addition to meeting eligibility requirements, employers must also meet STP obligations. A claim is required for each separate JobMaker period and the STP report is due three days before the end of the relative JobMaker claim period.
Employers must provide information such as tax file number, employment start and end dates and whether your employee met the required number of work hours.
Talk to an NFP accounting expert
Navigating new Government programs can be challenging, but the JobMaker scheme has the potential to offer opportunities to not for profit organisations.
It could be a chance to turn some of your volunteer roles into more permanent positions and enable you to bring some vibrant new energy into your organisation.
If you’d like to find out more or discuss how to access the scheme please contact one of our NFP accounting experts today. We are always here to help you.
Read more not for profit accounting articles.
