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COVID-19 Business Continuity – 13 January 2021 – wage subsidies

I’m here with insights for Australian businesses on 13 January 2021.

Government support payments to Australian businesses for wages in 2021

JobKeeper was a life saver for many Australian businesses in 2020, but with the qualification criteria tightening and the benefit lessening, I wanted to summarise for you the other wage support payments on offer.

But first, a note: I don’t think we’ll ever again see a bigger handout from government for business than JobKeeper. Keep that in mind and keep your expectations in check when considering these other wage supports that I discuss below (and any other government subsidies in the future). However, it is wise to be aware of what is on offer as you move forward and consider employing new team members.

 

Federal government wage supports

 

JobKeeper Extension 2 (a quick refresh):

JobKeeper is in its final extension, which covers the period 4 January 2021 to 28 March 2021.

You could be eligible for this extension even if you haven’t previously qualified for JobKeeper. The payment rates in this extension have been reduced. For a refresher on JobKeeper extension 2, please refer to my briefing of 2 December 2020.

There is discussion in the media around extending JobKeeper beyond March 2021, but the prevailing view is that any potential further extension/s would be targeted to specific industries like travel and tourism or specific geographic areas that might be locked down for an extended period of time.

 

JobMaker Hiring Credit

JobMaker Hiring Credit is a wage subsidy from the Federal government to incentivise businesses to employ younger, unemployed job seekers. The key here is ‘unemployed job seekers’. Many businesses will be ineligible based on the requirement for your new employee to have been on an unemployment benefit for at least a full month before you employ them.

Keep this incentive in mind when employing in 2021, but be aware it will mostly benefit low skill industries like retail and hospitality more than other sectors.

Benefit to business:

  • $200 per week for eligible employees between 16 to 29 years old
  • $100 per week for eligible employees between 30 to 35 years old

Criteria:

  • The employee must be between 16-35 years old – as above, and
  • The new employee must have received JobSeeker payment, Youth Allowance (other) or Parenting Payment for at least one month out of the three months prior to when you hire them, and
  • Your total employee headcount must increase by at least one by the end of the quarter, and
  • Your business can’t be in the JobKeeper scheme.

There are other boxes you need to tick to apply – for more information, see my briefing of 6 November 2020.

The ATO has a tool to calculate the amount of JobMaker Credit you may be entitled to – see here: https://www.ato.gov.au/Calculators-and-tools/JobMaker-Hiring-Credit-payment-estimator/

Bringing new people onto your team is an important step in growing your business, and it can have a significant impact on your results. Speak to an experienced Tenfold business coach about the proven methods we use for attracting, recruiting and retaining the best talent in the market.

 

Apprentices & trainees

Small businesses employing apprentices have fared well with wage subsidies throughout the pandemic. The lucrative benefits continue and so those in a position to employ tradespeople should seriously consider increasing their ratio of apprentices to qualified technicians. Speak to your Tenfold coach about matching the labour skill levels with the type of work you have.

For businesses with larger office teams, keep in mind the opportunity to employ a trainee to be supervised and assist with basic office administration tasks.

There are two wage subsidy packages for employing apprentices and trainees:

1. Supporting Apprentices and Trainees (SAT)

2. Boosting Apprenticeship Commencements (BAC)

Benefit to business:

  • Up to 50% of the apprentice/trainee’s wages up to $7,000 per quarter, per apprentice or trainee

Criteria:

  • Small business with less than 20 employees, or
  • Medium business with less than 200 employees, or
  • Any size business who re-engages an apprentice/trainee who had been displaced by a small business; and
  • The timing of employment/re-hire.

There are specifics around the timing of employing your apprentice/trainee – refer to my briefing of 16 October 2020.

 

State government wage support options

 

VIC government wage support

 

New job tax credit

This Victorian incentive will apply to those of you who increase your workforce this financial year and next. For those who do, it could see you receiving a full refund of your payroll tax for the 2020/21 and 2021/22 years.

Benefit to business: A payroll tax credit of 10 cents for every dollar of Victorian taxable wages above the previous year’s wages.

The tax credit will apply for the next two years. This means eligible businesses will pay no payroll tax on these increased Victorian wages and will also get a refund of tax already paid.

Criteria:

  • Your total Australian wages (i.e. Victorian taxable wages plus interstate wages) for the financial year must be lower than $10 million, and
  • Your business paid or was due to pay Australian wages before 1 January of the previous claiming year.

There are additional eligibility requirements if your business is a member of a payroll tax group as at 30 June of the relevant designated financial year.

If you are eligible for the credit, it will be applied against your payroll tax liability for the designated year after you have lodged your annual return for that year. You don’t need to apply for the tax credit.

For more info, see this page on the State Revenue Office website: https://www.sro.vic.gov.au/coronavirus-payroll-tax-relief#waiving-20-22-ptx

 

Jobs for Victoria

There were several commitments in the Victorian state budget for funding for jobs, including $50 million for funding jobs for women over age 45, and $5 million for Women in Construction program.

Aside from the Premier’s media announcement in November 2020, there are no further details on these programs at this time. I will keep a watching brief and will bring you more information as it becomes available.

 

NSW government wage support

 

Jobs Plus

While this program sounds attractive for a NSW business, the criteria to generate at least 30 net new jobs makes it more relevant to medium and large sized businesses.

Benefit for business: Payroll tax relief for up to 4 years for every new job where a business has created at least 30 net new jobs.

Criteria:

  • Your business is an ABN registered business that has been operating for at least two years, and
  • Your business must currently employ at least 20 full-time employees, and
  • Your business must commit to the creation of 30 new FTE jobs in NSW by 30 June 2024. All new staff must live and be paid in NSW.

 

Apply on the NSW Jobs Plus page here: https://mybusiness.service.nsw.gov.au/jobs-plus-program/requirement/domestic

 

Qld government wage support

 

Back To Work – Employment Support Payment

For a business with operations in regional Queensland or South East Queensland, this could be a decent incentive, especially if you can also receive the JobMaker payment.

Benefit to business: Employment support payment of up to $15,000 to hire an unemployed Queenslander in regional or South East Queensland.

Criteria:

  • The job you are employing must be mainly located in the designated areas within regional QLD or SEQ, and
  • The new hire must have been previously unemployed for a minimum of four weeks, and
  • The job must be an ongoing full-time or part-time role.

For more information, click here: https://backtowork.initiatives.qld.gov.au/for-employers/employer-support-payment/

 

Back to Work – Youth Boost

With the incentives proposed by the federal and Queensland governments, you could effectively employ a young person and have their wage 100% offset by support payments.

Benefit for business: up to $20,000 to hire an unemployed young Queenslander in regional Queensland or parts of South East Queensland.

Criteria:

  • The new hire must be between 15 -24 years old, and
  • The new hire must have been previously unemployed for a minimum of four weeks, and
  • The job must be mainly located in the designated areas within regional QLD or SEQ

For more information see: https://backtowork.initiatives.qld.gov.au/for-employers/youth-boost-payment/

 

Back to Work – Apprentice/Trainee Boost

Benefit for business: up to $20,000 to hire an unemployed Queenslander as an apprentice or trainee in regional QLD or eligible areas of SEQ.

Criteria:

  • The new hire must be undertaking an eligible apprenticeship or traineeship, and
  • The new hire must have been previously unemployed for a minimum of four weeks, and
  • The job must be mainly located in the designated areas within regional QLD or SEQ

For more information, see: https://backtowork.initiatives.qld.gov.au/for-employers/apprentice-and-trainee-boost/

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While some businesses may not be immediately eligible for these support payments, it is good for you to know what is on offer and factor that into your growth plans going forward. I’ll update this summary if/when any significant new announcements are made.

 

Ash

Ashley Thomson B.Eng(Hons), Grad. Dip. Mgmt, MEI
Managing Director
Tenfold Business Coaching

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