If your business is thinking of hiring new staff, now is the time, the Government will pay employers a subsidy of sorts for each eligible young worker employed over the next 12 months. The amount of the payment depends on the age of the employee, but may be up to $200 per week for those aged 16 to 29. The rules are not overtly complex, but the scheme is limited to certain types of employees and there are several key conditions that apply to both employers and the new employees so care should be taken.

The Government has released details of what it calls its “JobMaker” hiring scheme. It will take the form of a payment to employers for each new job they create over the next 12 months. It is estimated that the scheme will cost $4 billion and support about 450,000 employees. So it could help a lot of businesses and there is quite a bit of money up for grabs – up to $200 for each “new” employee each week!

It is available for eligible individuals who commence work between 7 October 2020 and 6 October 2021. Note the use of the term “eligible” – there are certain conditions that must be met before an employer can receive the payment.

First up, the employee must be aged between 16 and 35 years at the time they start work. One crucial thing to note is that the payment rate is higher for those aged 16 to 29 years than it is for those aged 30 to 35 years. Further, each employee must work an average of 20 hours a week for the JobMaker period (a rolling 3-month period).

There are other important conditions to be met. For example, the new employee must, for 4 out of the 12 weeks preceding the employment start date, have received either the parenting payment, the youth allowance or the JobSeeker payment. In other words, individuals must have come from having had recent government support to employment. Hence, people who are changing employers, eg switching from one full time job to another, will not be eligible.

The type of employer who can benefit from the scheme is pretty broad. It is open to those who are carrying on a business at the time they elect to participate in the scheme. The employer must already have an ABN and be registered to withhold PAYG. Those who are intending to start a business must be well advanced from the planning stage – they should seek advice.

The ATO has flagged that the requisite information will be provided through the Single Touch Payroll system, so if you are not using STP, then you cannot participate in the scheme.

To participate in the scheme, employers must be up to date with their tax return and BAS lodgments. If there are any outstanding income tax returns or BAS’s, the employer will not be eligible. Employers must also have an overall headcount increase as a result of taking on more employees. This is measured by comparing the employee count in the JobMaker period to the number of employees on the books at 30 September 2020 (this reference point will change over time).

In addition, employers must have what is termed a “payroll increase” in the JobMaker period. This is worked out by comparing the total payroll in a JobMaker period to the payroll for the period that ended immediately before 6 October 2020 (and, again, this will change over time). This test is designed to stop employers cutting the wages of existing staff so as to access JobMaker. So if you are changing the pay arrangements of your staff as a result of the pandemic, eg to facilitate cash flow, then you’ll need help to navigate this particular test.