Acts of Parliament assented to - Act No. 96 and 97 of 2020

Overview

The Economic Recovery Package (JobMaker Hiring Credit) Amendment Act 2020 was enacted to address the economic challenges posed by the COVID-19 pandemic by amending the Coronavirus Economic Response Package (Payments and Benefits) Act 2020. This Act was introduced to provide further support to employers, particularly small and medium-sized businesses, to encourage the hiring of new employees. The policy objective behind this amendment was to stimulate job growth by offering financial incentives, specifically the JobMaker Hiring Credit, to employers who hire eligible employees. This measure aimed to mitigate the adverse effects of the pandemic on employment and aid in economic recovery. The Social Services and Other Legislation Amendment (Coronavirus and Other Measures) Act 2020 was enacted to amend various laws relating to social security, family assistance, paid parental leave, child support, and veterans' entitlements. This Act was introduced to provide additional support and flexibility in response to the challenges posed by the COVID-19 pandemic, aiming to ensure that vulnerable populations receive the necessary assistance during this period of economic uncertainty. The policy objective was to offer a comprehensive response to the multifaceted impacts of the pandemic on social and economic structures. Both Acts were assented to by the Governor-General on 13 November 2020, following passage by the Senate and the House of Representatives.

Scope and Application

The Economic Recovery Package (JobMaker Hiring Credit) Amendment Act 2020 applies to eligible employers, which include businesses, not-for-profit organisations, and public sector entities, that are engaged in hiring new employees under the JobMaker Hiring Credit scheme. This scheme is designed to stimulate employment by incentivising the hiring of young people through wage subsidies. The Act extends the application of the original Coronavirus Economic Response Package (Payments and Benefits) Act 2020, thereby providing a continued financial support mechanism for employers during the economic downturn caused by the COVID-19 pandemic. The geographic reach of the Act is national, as it pertains to all employers within Australia who meet the eligibility criteria. Exclusions and exemptions are detailed within the Act itself, but generally, the scheme does not apply to employers who are ineligible due to various factors such as the size of their business or their existing workforce. The Act may also be extended or restricted through subordinate instruments, allowing for further clarification or adjustment of the scheme parameters as needed.

Key Provisions

The primary operative sections of the Economic Recovery Package (JobMaker Hiring Credit) Amendment Act 2020 (section 3) introduce a JobMaker Hiring Credit aimed at encouraging employers to hire new employees, specifically targeting those who have been unemployed for at least six months. Employers are entitled to claim a credit for wages paid to new employees who meet these criteria. This credit is designed to reduce the overall tax payable by the employer, thereby incentivising the hiring of long-term unemployed individuals. The Social Services and Other Legislation Amendment (Coronavirus and Other Measures) Act 2020 (section 4) modifies various social security laws, including adjustments to the rates of JobSeeker Payment and other benefits to account for the economic impact of the COVID-19 pandemic. It also introduces temporary measures to provide additional support to families and individuals facing financial hardship due to the pandemic. These measures include increases in payments and the introduction of new support schemes. These Acts impose several obligations and requirements on the parties they govern. Employers who wish to claim the JobMaker Hiring Credit must ensure that the new employees they hire meet the eligibility criteria, specifically that they have been unemployed for at least six months. They must also maintain proper records of the wages paid to these employees and accurately claim the credit when lodging their business activity statements. The Acts also require individuals who receive benefits to meet certain eligibility conditions and to accurately report their circumstances to the relevant authorities to continue receiving payments. Failure to comply with the obligations and requirements set out in these Acts can lead to various consequences. For the JobMaker Hiring Credit, employers who make false claims or fail to maintain proper records may face penalties, including fines and additional tax liabilities. Under the social security provisions, individuals who provide false or misleading information to obtain benefits may be subject to penalties, including financial penalties and the requirement to repay any overpaid benefits. Additionally, there are provisions for civil and criminal sanctions for more serious breaches, such as fraudulent behaviour, which can result in substantial fines and imprisonment.