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Insights

November 09, 2020

From JobKeeper to JobMaker

Published by:
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James Morris
From JobKeeper to JobMaker

Supporting Australian small business to create jobs.

With JobKeeper 2.0 now in place and on the countdown to end in March 2021, the Treasury has announced a new initiative in the 2020/21 Federal Budget…. JobMaker!

Draft rules have been announced for the hiring credit scheme, which outlines eligibility criteria and the ineligibility of sole traders. The program has been designed to assist 450,000 young people back to work. $4 billion has been allocated to businesses who hire eligible employees between now and 6 October 2022, with payments effective for 12 months after the hire date. Effectively requiring funding until October 2023.

JobMaker payments will be paid in what has been labelled ‘JobMaker Periods’ – three-month blocks over a 12 month period.

Entitlement for the JobMaker hiring credit payment will depend on if the entity notifying the commissioner of its election to participate:

  • uses the approved form
  • does so by the end of the period that the entity first elects to participate.

In practice, that means an entity who elects to participate for the JobMaker period of 7 October 2020 to 6 January 2021, notifies the commissioner by 6 January 2021.

As with previous schemes, if an employer is entitled to receive a JobKeeper payment, they are unable to participate in JobMaker, unless JobKeeper participation has ceased.

Draft rules allow prohibition on JobKeeper fortnights that begin during a JobMaker period. Allowing an entity to have a single JobKeeper fortnight end at the start of JobMaker period.

This overlap will allow an entity to cease JobKeeper participation, and begin the JobMaker scheme without requiring a gap.

The following rules apply for entities to participate in JobMaker:

  1. Continue conducting business in Australia or pursue objectives as a non-profit body principally in Australia or be a certain public fund.
  2. Have an ABN.
  3. Be registered as a withholder in accordance with the Taxation Administration Act 1953
  4. Not have any outstanding income tax or GST returns due in the past two years.
  5. Have at least one employee who is not entitled to the JobMaker hiring credit (an entity may not be a sole trader and employ themselves).

The JobMaker scheme will allow entities who qualify to receive payments for eligible additional employees.

Additional employees must:

  • Be aged between 16 and 35.
  • Commence employment between 7 October 2020 and 6 October 2021.
  • Work a minimum of 20 hours per week.
  • Have received the JobSeeker payment, Youth Allowance (other) or parenting Payment for at least 28 of the 84 days before commencement of employment.

More information on the scheme can be found here.

Is your business eligible for JobKeeper? Click here to find out.

Government Stimulus in a COVID world is complex. If you need help to navigate the JobKeeper and JobMaker maze, or if you would like a second opinion to help you get back on track, contact us on 1300 888 803. We are here to help Australian small business owners during these difficult time.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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