Employment Fund Wage Subsidy Guideline
Employment Fund Wage Subsidy Guideline Document change history Version Start date Effective date 1.0 01 07 15 01 07 15 End date Change and location Original version of document Explanatory Note All capitalised terms have the same meaning as in the jobactive Deed 2015–2020. In this document, ‘must’ means that compliance is mandatory and ‘should’ means that compliance represents best practice and that compliance is discretionary. Disclaimer This Guideline is not a stand-alone document and does not contain the entirety of Providers’ obligations. It must be read in conjunction with the Deed and any relevant Guidelines or reference material issued by Department of Employment under or in connection with the Deed. Summary This Guideline details the core elements and requirements for Providers in managing Wage Subsidies. This document sets out the general rules that apply to all Wage Subsidies under the jobactive Deed 2015–2020 (the Deed) as well as specific rules (where applicable) for individual Wage Subsidies. Under the Deed, the Wage Subsidy Account, which forms part of the Employment Fund, will be accessible to Providers to seek Reimbursement for: the Restart Programme the Youth Wage Subsidy the Long Term Unemployed (LTU) Wage Subsidy and the Tasmanian Jobs Programme. Information about the Employment Fund General Account is available in the Employment Fund General Account Guideline. Policy Intent Wage Subsidies encourage Employers to hire job seekers in sustainable positions by contributing to the costs of recruitment, including training and wages. Providers are expected to build strong relationships with Employers and use Wage Subsidies to broker employment opportunities for eligible job seekers so that they can be retained in sustainable employment. Relevant Deed clause/s Relevant clauses in the jobactive Deed 2015-2020 (the Deed) include: Annexure A1—Definitions Annexure B1—Transition in Annexure B2—Payments and Employment Fund credits Section A3—Some basic rules about financial matters Clause 76—Transition in jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 1 Clause 80—Relocation of Stream Participant between Provider’s Sites Clause 81—Transfer of stream Participants from the Provider Clause 82—Transfer of Stream Participants to the Provider Clause 88—Employment Fund Clause 89—Wage Subsidies. Relevant References Reference documents relevant to this Guideline include: Learning Centre website Documentary Evidence Guideline Employment Fund General Account Guideline Wage Subsidy information Process Details Promotion and management of Wage Subsidies with Employers Providers must promote Wage Subsidies to job seekers and Employers in a targeted and appropriate way to maximise employment opportunities corresponding with the job seeker’s difficulties in finding a job in the labour market. Deed clause references: Clause 89.1 Wage Subsidies must be negotiated and approved in line with the principles of: providing value for money complying with any work, health and safety laws that may apply withstanding public scrutiny and not bringing Employment Provider Services or the Government into disrepute. The Department may, at any time, instruct the Provider to modify or end a Wage Subsidy Agreement if it finds that either party has not met the terms of the Deed, Guidelines or the Wage Subsidy Agreement. A number of communication resources to help Providers promote Wage Subsidies are available through the Provider Portal and the Department’s website. Participant eligibility Specific Wage Subsidy Participant eligibility Deed clause references: Clause 89.2 The four Wage Subsidies each have specific eligibility criteria to ensure that the assistance is targeted. Providers must only enter into a Wage Subsidy Agreement and pay Wage Subsidies for eligible job seekers. The Department’s IT Systems will help determine a job seeker’s eligibility; however, the Provider will still be required to determine general suitability in accordance with the Deed and Guidelines. If a Provider believes that the Department’s IT Systems have incorrectly determined eligibility, they should contact the Department either directly through a respective mailbox or through the Account Manager or Contract Manager to discuss. Eligibility requirements are detailed below based on the different categories of Wage Subsidies. Restart Programme A job seeker is eligible for a Wage Subsidy under the Restart Programme if they: are 50 years of age or older and have been continuously unemployed for the previous six months or more and have been in receipt of any of the following income support payments for the previous six months or more: Newstart Allowance, Parenting Payment, Disability Support Pension, Bereavement Allowance, Widow Allowance, Carer Payment, Special Benefit, Partner Service Pensioners, War Widow(er) Pension, Age Pension, Mature Age Partner Allowance, Wife Pension and Widow B Pension. jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 2 Process Details Youth Wage Subsidy A job seeker is eligible for a Youth Wage Subsidy if they are subject to the Stronger Participation Incentives (SPI) for Job Seekers under 30 measure and from the end of their first Work for the Dole Phase. LTU Wage Subsidy A job seeker is eligible for a LTU Wage Subsidy if they: are a Fully Eligible Participant are not eligible for the Youth Wage Subsidy or Restart Programme are registered with a Provider and have been registered with an employment service provider (including a Provider, Job Services Australia, Disability Employment Services or Remote Jobs and Community Programme provider) continuously for at least the previous 12 months or, in the case of a job seeker who is Aboriginal and Torres Strait Islander, for at least six months and have been out of employment (that is, they have not had a job placement as recorded in the Department’s IT Systems) for at least the previous 12 months (or, in the case of a job seeker who is Aboriginal and Torres Strait Islander, for at least six months). Tasmanian Jobs Programme A job seeker is eligible for a Wage Subsidy under the Tasmanian Jobs Programme if they: are registered as a Fully Eligible Participant with a Provider for at least the previous six months have been a resident in Tasmania and receiving Newstart Allowance, Youth Allowance (Other) or Parenting Payment and have Mutual Obligation Requirements at the time they commence in a Wage Subsidy Placement. Family members Except for job seekers who are eligible for a Wage Subsidy under the Tasmanian Jobs Programme, Wage Subsidy Participants must not be immediate family members of the Employer (that is, a spouse, de facto partner, child (biological or adopted), parent, grandparent, grandchild or sibling). Job seekers with a Partial Capacity to Work A Partial Capacity to Work (PCW) job seeker must not be compelled to undertake more than their PCW hours with intervention unless the job seeker chooses to do so. The position must also take into account the job seeker’s Employment Services Assessment. However, eligibility criteria for each of the Wage Subsidies still apply. For example, a Restart placement would still need to be for a minimum of 15 hours per week, regardless of any PCW. Additionally, a job seeker who has a PCW can only participate in the Tasmanian Jobs Programme if they choose to undertake more than their capacity and work full time. Note: As job seekers assessed as having PCW are not in scope for the SPI measure, they are not eligible for the Youth Wage Subsidy. Placement Eligibility General Wage Subsidy Placement eligibility Deed clause reference: Clause 89.2 Across all four Wage Subsidies, a Wage Subsidy Placement must: be declared by the Employer (in the Wage Subsidy Agreement) as a sustainable, ongoing position where the Employer knows of no reason why jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 3 Process Details the job would not continue indefinitely comply with minimum standards for Employment as established under relevant Commonwealth (for example, Fair Work Act 2009), state or territory law (including any award conditions applicable to the position) be recorded by the Provider in the Department’s IT Systems not be in pre-existing employment with the Employer not displace an existing employee not be a commission-based, self-employment or subcontracted position and not otherwise be a Non-Payable Outcome as defined in the Deed. Across all four Wage Subsidies, a Wage Subsidy Placement may: be an apprenticeship or traineeship and be found by the Provider or directly by the job seeker. Placement Types Restart, Youth and LTU For the Restart Programme, Youth Wage Subsidy and LTU Wage Subsidy, Wage Subsidy Placements can be in full-time (30 hours or more) or part-time (15–29 hours) positions paid on a pro-rata basis (see ‘Wage Subsidy Periods and instalment amounts’ below). Positions under an average of at least 15 hours per week are not permitted. Where the a Wage Subsidy Agreement has been entered into, the Wage Subsidy is not payable where average hours over the Wage Subsidy Period fall below 15 hours per week. Tasmanian Jobs Programme For the Tasmanian Jobs Programme, Wage Subsidy Placements can only be in fulltime positions in accordance with the relevant award classification with reference to the Fair Work Act 2009 and the National Employment Standards. A Tasmanian Jobs Programme Placement must be located in Tasmania. Work trials Wage Subsidies can be used after a paid work trial has occurred. Paid work trials are not considered pre-existing Employment. Placement start dates Placements for each of the Wage Subsidies must be after the following dates: Concurrency with other Wage Subsidies and funding sources Restart Programme—from 1 July 2014 Tasmanian Jobs Programme—from 1 January 2014 (closed to new applicants after 31 December 2015) LTU Wage Subsidy—from 1 July 2015 Youth Wage Subsidy—from 1 July 2015. Concurrency with other Wage Subsidies Only one type of Wage Subsidy can be claimed in respect of a Wage Subsidy Placement, except for the Tasmanian Jobs Programme, which can be used to supplement other Wage Subsidies. The combined total of the Wage Subsidy must not exceed 100 per cent of the job seeker’s wage). Concurrent funding (other government sources) Restart, Youth Wage Subsidy and LTU Wage Subsidy For the Restart Programme, Youth Wage Subsidy, and LTU Wage Subsidy, Employers must not access a Wage Subsidy if it receives a wage subsidy or similar funding from jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 4 Process Details other government sources (for example, other Commonwealth, state or territory government wage subsidy schemes). Tasmanian Jobs Programme Tasmanian Jobs Programme placements may receive other government funding where the placement meets all eligibility criteria for the respective programmes as detailed in the relevant programme Guidelines. The combined total of the Wage Subsidy must not exceed 100 per cent of the job seeker’s wage. Eligibility for Wage Subsidy—Employer Deed clause reference: Clause 89.2 General Wage Subsidy Employer eligibility Across all four Wage Subsidies, Wage Subsidy Employers: must be a legal entity with an Australian Business Number (ABN) must not be a Commonwealth or state/territory government agency (noting this does not necessary exclude local councils if the Wage Subsidy Placement is not directly funded by the state/territory government) can be a Related Entity of the Provider but must not be their own organisation and can be a labour hire company or group training organisation provided that the company is paying the job seeker’s wages and that any assignments meet the eligibility criteria of the Wage Subsidy Placement and Employer. Note: Where the labour hire company or group training organisation is considered the Employer of the eligible participant, they must disclose to host organisations that an Australian Government Wage Subsidy is potentially available for that particular placement. Tasmanian Jobs Programme In addition to the general criteria (above), a Tasmanian Jobs Programme Employer: must have a physical business location in Tasmania and must not have retrenched or reduced the number of workers within the three months preceding the employment of the relevant Wage Subsidy Participant. If the Employer has retrenched workers in the past three months, the Provider must have written Departmental approval before entering into a Wage Subsidy Agreement with that Employer. Change of business ownership Where a Wage Subsidy Employer’s business changes ownership, the new owner will be eligible to claim the remaining Wage Subsidy provided all other eligibility criteria and programme requirements are met. A new Wage Subsidy Agreement must be entered into. Negotiation of Wage Subsidy Agreement with the Employer Providers must enter into a Wage Subsidy Agreement with a Wage Subsidy Employer using the Wage Subsidy Agreement template created within the Department’s IT Systems within 28 days of the participant commencing a Wage Subsidy Placement. Deed clause reference: Clause 89.2 Providers must explain the Wage Subsidy Agreement’s terms and conditions to the Employer to ensure they fully understand their rights and obligations in accepting the Wage Subsidy. Both the Provider and the Employer must sign the Wage Subsidy Agreement either electronically through the Department’s IT Systems or offline. Employers can also approve Wage Subsidy Agreements online by logging into the Australian JobSearch website using an AUSkey. If the Wage Subsidy Agreement is signed offline, the Provider must approve the Wage Subsidy Agreement in the Department’s IT Systems. Payments must not be made before the Wage Subsidy jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 5 Process Details Agreement is signed. If, during the term of the Wage Subsidy Agreement, the Provider is notified or determines that the placement has ended or updates are required (for example, hours or contact details), the Provider must update the Wage Subsidy Agreement in the Department’s IT Systems. Supporting Job Seekers on Wage Subsidies Providers should offer post placement support, including offering interventions such as professional services, to job seekers on Wage Subsidies if required. This support can be Reimbursed from the Employment Fund General Account. This will allow Providers to support the job seeker and the Employer to maximise the success of the placement, including after the job seeker is Suspended or Exited from the Provider’s caseload. Wage Subsidy Periods and instalment amounts All Wage Subsidy amounts are GST inclusive. The Employer and Provider must consider any tax liability implications of the payment and obtain their own taxation advice. All GST must be remitted in full to the Australian Taxation Office. Deed clause references: Clause 22 Clause 88.2 Clause 89.2 Clause 89.3 Restart Programme The total value of a Restart Wage Subsidy is up to $10,000 (GST inclusive) per Wage Subsidy Placement, payable for each Wage Subsidy Period as follows: $3000 after six months of continuous full-time employment (Wage Subsidy Period 1) $3000 after 12 months of continuous full-time employment (Wage Subsidy Period 2) $2000 after 18 months of continuous full-time employment (Wage Subsidy Period 3) $2000 after 24 months of continuous full-time employment (Wage Subsidy Period 4) from the commencement of the Wage Subsidy Placement. Payments are based on the actual average weekly hours worked over the six-month Wage Subsidy Period (as declared by the Employer) when the payment is due. For this reason, there can be a variance between the hours initially declared by the Employer in the Wage Subsidy Agreement and those claimed at the end of each Wage Subsidy Period. Pro-rata payments for hours worked between 15 and 29 hours per week are available based on the table below. Average hours Amounts of Wage worked Subsidy per Period 1 and 2 week 30+ $3000 $2000.00 29 $2900 $1933.33 28 $2800 $1866.67 27 $2700 $1800.00 jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Amounts of Wage Subsidy Period 3 and 4 Effective Date: 1 July 2015 6 Process Details 26 $2600 $1733.33 25 $2500 $1666.67 24 $2400 $1600.00 23 $2300 $1533.33 22 $2200 $1466.67 21 $2100 $1400.00 20 $2000 $1333.33 19 $1900 $1266.67 18 $1800 $1200.00 17 $1700 $1133.33 16 $1600 $1066.67 15 $1500 $1000.00 Youth Wage Subsidy The total value of the Youth Wage Subsidy is $6500 (GST inclusive) per Wage Subsidy Placement. LTU Wage Subsidy The total value of the LTU Wage Subsidy is up to $6500 (GST inclusive) per Wage Subsidy Placement, payable each Wage Subsidy Period as follows: $3250 after six months of continuous full-time employment (Wage Subsidy Period 1) $3250 after 12 months of continuous full-time employment (Wage Subsidy Period 2) from the commencement of the Wage Subsidy Placement. Payments are based on the average weekly hours worked over the six-month Wage Subsidy Period (as declared by the Employer) when the payment is due. For this reason, there can be a variance between the hours initially declared by the Employer in the Wage Subsidy Agreement and those claimed at the end of each Wage Subsidy Period. Pro-rata payments for hours worked between 15 and 29 hours per week are available based on the table below. Average hours worked per week Amounts of Wage Subsidy Period 30 jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 $3250.00 Effective Date: 1 July 2015 7 Process Details 29 $3141.67 28 $3033.33 27 $2925.00 26 $2816.67 25 $2708.33 24 $2600.00 23 $2491.67 22 $2383.33 21 $2275.00 20 $2166.67 19 $2058.33 18 $1950.00 17 $1841.67 16 $1733.33 15 $1625.00 Tasmanian Jobs Programme Tasmanian Employers will be eligible for a one-off payment of $3250 (GST inclusive) after the job seeker has remained in continuous full-time employment for the six month Wage Subsidy Period from the commencement of the Wage Subsidy Placement and the Employer has confirmed that they remain employed. Payment of instalments directly to Employers and claims for Reimbursement from the Employment Fund Wage Subsidy Account The Provider must make payments out of their own funds to the Employer provided the job seeker is still employed at the end of the Wage Subsidy Period. Providers must withhold payments where it is found that an Employer is not fulfilling its obligations under the Wage Subsidy Agreement. No payment, including any prorata amount, will be made to the Employer if the Wage Subsidy Participant ceases employment before the completion of the relevant Wage Subsidy Period. Deed clause references: Clause 88.2 Clause 89.2 Clause 89.3 Clause 89.4 Clause 89.5 Providers must only claim Reimbursement up to the same value, including pro-rata amounts that they paid to the Employer. Provision of Documentary Evidence In order to process a Wage Subsidy payment to a Wage Subsidy Employer and seek Reimbursement, Providers must have obtained sufficient Documentary Evidence. Please refer to the Documentary Evidence Guideline. Deed clause references: Clause 15 Providers may submit claims for Reimbursement in accordance with clauses 89.2–89.5 through the Department’s IT Systems. jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 8 Process Details Clause 16 Clause 89.2 Transferred Arrangements Deed clause reference: Clause 82.2 If a job seeker in a Wage Subsidy Placement transfers to another Provider then both the gaining and losing Providers must liaise with each other to ensure that both the job seeker and Employer continue to be supported. In some circumstances (for example, business reallocation or Provider novations), the Wage Subsidy Agreement may be copied to the gaining Provider in the Department’s IT Systems so they can continue to service the Wage Subsidy. The gaining Provider will be required to reapprove the Wage Subsidy Agreement. Where the gaining and losing Providers agree to transfer a LTU Wage Subsidy Agreement with a transferring job seeker, the transfer of any LTU Wage Subsidy credits (including those already committed) will be a matter to be agreed between Providers. The gaining provider will be required to reapprove the Wage Subsidy Agreement. LTU Wage Subsidy credits The LTU Wage Subsidy is the only Wage Subsidy that has credits allocated to the individual Provider. Deed clause references: Clause 81 Clause 82 Clause 88 Credits Providers will be credited $990 at the Site level for each eligible job seeker (see below). Providers will need to prioritise the eligible job seekers that require assistance through Wage Subsidies to secure a job from this pool of funding. Note: The $990 credit will be allocated to the Provider’s LTU Wage Subsidy Account for job seekers (Stream Participants) who have been in employment services for 12 months (or six months for Aboriginal and Torres Strait Islander job seekers). The credit will not be allocated where the job seeker is also eligible for the Youth Wage Subsidy or Restart Programme. Management of LTU Wage Subsidy Account The credit will be allocated at the Site level; however, Providers are able to move credits between Sites and Employment Regions using the Department’s IT Systems. In addition, if the LTU Wage Subsidy Account does not have sufficient funds, the necessary amount will be drawn from the General Account. Providers should consider their own business processes and practices that deal with how to manage the allocation of credits amongst their Sites (and the interaction with the General Account) so as to best meet the needs of Employers and job seekers across their organisation. Transfer of credits In most instances, where a job seeker is transferred between two Providers, both parties will agree on the amount to be transferred from the LTU Wage Subsidy Account. However, when a job seeker is transferred by the Department at the two-year interval (Stream A) or three-year interval (Streams B and C), 50 per cent of the LTU Wage Subsidy credit will be transferred to the gaining Provider regardless of funding spent. These automated transfers may result in a negative balance in the Provider’s LTU Wage Subsidy Account. In instances where the Provider’s LTU Wage Subsidy Account has a negative balance, the Provider may: transfer credits from another site draw the money from the General Account (The Department’s IT Systems will facilitate this) jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 9 Process Details defer entering into Wage Subsidy Agreements until additional credits have been accrued. jobactive Employment Fund Wage Subsidy Guideline TRIM ID: EM15/000993 Effective Date: 1 July 2015 10
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