Home Forums SME JobMaker – first employee otherwise eligible but second employee isn’t

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    • #1265
      John
      Participant

      Have a client whose first employee was put on recently, after being unemployed for a qualifying time.
      Unfortunately JobMaker is only for each employee after the first.

      Client is looking at a 2nd employee who it turns out has not been unemployed long enough to qualify.

      Appreciate any assistance. I can’t for the life of me find the relevant legislative instrument, and press releases are of course inadequate.

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    • #1267
      John
      Participant

      Posted a reply with links to legislation. Presumably that was filtered due to the links.

      On my reading of the legislation, this hiring credit can be paid on a business’ first employee (rather than each employee after the first, as initially mooted). Would appreciate your insights here @robyntax

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    • #1268
      John
      Participant

      Talking to myself here, but in case anyone reads this in future, I’m becoming increasingly confident that the first employee is also eligible. I can’t be the only person in Australia wondering about this…

      I called the ATO’s JobMaker helpline and they said it’s only for each employee after the first, but QC 64266 seems to support the idea that it can apply to the first:

      Increasing your headcount
      An increase in headcount means the number of employees employed by you at the end of each JobMaker period is higher than the number of employees in your baseline headcount. The difference is your headcount increase. This will be used in calculating your claim.

      Baseline headcount
      In the first year of the scheme, your baseline headcount is your headcount on 30 September 2020. If you did not have any employees on that date, your headcount is zero.

      https://www.ato.gov.au/General/JobMaker-Hiring-Credit/In-detail/Conditions-for-making-a-claim/

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    • #1270
      John
      Participant

      My last word on the matter. @robyntax has a great guide which doesn’t mention the first employee being ineligible that I can see. I can’t link because posts disappear with two links in them – see Complimentary Papers.

      It seems that this factsheet is incorrect / outdated:
      https://budget.gov.au/2020-21/content/factsheets/download/jobmaker_hiring_credit_factsheet.pdf

      If you are a new business or had no employees at 30 September 2020, you will not be eligible for the first employee hired, but will be eligible for the second and subsequent eligible hires.
      For example, Jack starts a new business on 10 October 2020. His first employee is Jeremy aged 31 years old who he hires on 15 October 2020. On 15 November 2020, Jack hires Tim who is an eligible employee. Because Jack’s headcount at 30 September 2020 was zero, he will not be able to claim the JobMaker Hiring Credit for Jeremy who was his first employee, but he may be eligible to claim for Tim.

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    • #1271
      zwender
      Moderator

      Thanks for sharing this John! @robyntax @taxpolicyteam

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    • #1311
      RobynTax
      Moderator

      Hi John
      The relevant legislation for the JobMaker Hiring Credit (JHC) is available here.

      • the Economic Recovery Package (JobMaker Hiring Credit) Amendment Act 2020;
      • the Treasurer’s legislative instrument, the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 9) 2020; and
      • the Commissioner’s legislative instrument, the JobMaker Hiring Credit Reporting Obligations Instrument 2020.

        The JHC rules do not contain any requirement that an employer must have at least one employee before they are entitled to the JHC on the employment of the second (eligible) employee. An employer can be eligible for the JHC in respect of their first employee.

        The confusion may have arisen from an earlier draft of the JHC rules that was consistent with the Treasury fact sheet which originally took the position that an employer would be eligible only if they already employed someone on 30 September 2020, at which time the headcount had to be at least one.

        The final form of the JHC rules allows the headcount at 30 September 2020 to be zero, which is consistent with the statement on the ATO’s webpage QC 64266 : “If you had no employees or started carrying on a business after 30 September 2020, your baseline headcount is zero.

        In short, the JHC is available from the first eligible employee, not the second employee.

        Regards
        Robyn Jacobson, CTA
        Senior Advocate
        The Tax Institute

        Disclaimer: The above response should not be treated as professional advice and readers should rely on your own enquiries in making any decisions concerning your own interests or those of your clients.

      • This reply was modified 1 month, 1 week ago by RobynTax.
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