We have developed this guide to provide you with information and direction on providing wage subsidies to employers who are considering employing a person with disability. It is a starting point for a range of matters you may wish to consider. Australian Government employment service providers are advised to consult the relevant program guidelines for further information and guidance.
What are wage subsidies?
Wage subsidies are payments made to eligible employers to help cover the costs of paying wages in the first few months of employment of a person with disability or a person experiencing other barriers to employment. They aim to increase the competitiveness of workers, including those with disability.
Wage subsidies are available to assist job seekers, including those with disability, into employment through a number of programs including:
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Wage Subsidy Scheme for job seekers registered with a Disability Employment Service
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Employment Pathway Fund for Job Services Australia to deliver services to job seekers such as additional contacts, post placement support, mentoring and reverse marketing
- Wage Assistance for Indigenous job seekers participating in Community Development Employment Projects, or registered with Centrelink or a Job Services Australia provider as actively seeking work.
Each of the wage subsidy programs has its own eligibility and other criteria to enhance the likelihood of employment for the job seeker target group and, as a result, allow them to achieve sustainable employment. The money paid is not considered a wage payment.
Australian Government employment service providers can also use their service and outcome fees to add to the above funding sources to increase the amount of the wage subsidy.
The Department of Education, Employment and Workplace Relations reimburses Australian Government employment service providers for the provision of wage subsidies to employers, provided that they have complied with all eligibility requirements and relevant program guidelines.
You should check your relevant secure site for further details.
Why use wage subsidies?
A wage subsidy provides a financial incentive to employers when considering the employment of job seekers with disability or with other barriers to employment. It may be provided to increase the competitiveness of a job seeker with disability when seeking employment in open labour market conditions. It can also be used to address any additional demands an employer may perceive exist or experience in establishing an employee with disability into the workplace compared to other employees.
You should determine the provision of wage subsidies on a case by case basis depending on the needs of the individual job seeker and the employer. For example, some service providers may offer a wage subsidy to assist employers with the additional cost of training and settling in a new employee. Other service providers may offer subsidies when it is recognised that the person with disability may take some time to learn the job or to understand all the requirements of the job.
It is important to recognise that the long term success of the worker with disability maintaining their employment depends on factors other than the payment of the wage subsidy given that the period for which a wage subsidy is paid is limited. Consequently the notion of buying a job by payment of a wage subsidy is not appropriate and it does not guarantee sustainable employment.
Matching the right person to the right job contributes more to sustainable employment than a wage subsidy. Subsidies can be effective in encouraging an employer to give someone a go, but the employer must be prepared to offer on going employment after the subsidy period ends.
Who can receive wage subsidies?
Australian Government employment service providers may negotiate wage subsidies with eligible employers when employment is offered under normal employee and employer arrangements, including the use of a relevant industrial agreement, an award, or other mechanism recognised by the Australian Government.
The employer must agree that the employment arrangement will continue for the period required by the relevant wage subsidy criteria. For example, under the Wage Subsidy Scheme, the employment must have a reasonable expectation of exceeding 13 weeks.
You should refer to the relevant guidelines of the wage subsidy being used for finer details on employer eligibility criteria.
Employer responsibilities
Employers are required to pay all wages and meet all other entitlements for their employee as required by state or federal law and include payments such as superannuation, insurance costs, occupational health and safety requirements, tax and so on.
How do employers access wage subsidies?
Employers must make arrangements for the payment of wage subsidies directly with an Australian Government employment service providers. In most instances, wage subsidies should be arranged
prior to commencing the new employee. However, in some cases, you may identify that a wage subsidy is appropriate after placement. For example, this may occur where it is identified a new employee requires more support than initially anticipated. You should check the wage subsidy guidelines to determine whether negotiation of a wage subsidy after placement is appropriate.
Wage subsidies are paid to eligible employers, and only after receiving verification of employment and the wage payments to the employee. Payments may be made in instalments during the subsidy period or at the end of the subsidy period depending on the arrangements agreed between the employer and the service provider.
You are required to maintain appropriate documentation to support the wage subsidy arrangement. The relevant documentary evidence guidelines and wage subsidy guidelines provide more information.
How much is paid?
This will depend on the wage subsidy program and the service provider administering the program. You should determine the appropriate subsidy amount based on the program criteria and the individual circumstances of the job seeker or worker and the employer’s needs.
There are circumstances where it is not appropriate for you to pay wage subsidies, or where approval must be sought from the Department of Education, Employment and Workplace Relations before proceeding. This may vary between wage subsidy programs so check the relevant guidelines for the details.
Do all jobs for people with disability attract a wage subsidy?
Not all jobs attract a wage subsidy. It is up to the individual service provider to determine when a wage subsidy is required and the level of the wage subsidy depending on the job seeker’s and employer’s needs. Jobs that don’t attract a subsidy will depend on the particular wage subsidy program. However, some common exclusions are:
- jobs not under an industrial agreement, for example, piece rate work or self employment
- jobs where there was a pre-existing business arrangement between the worker and the potential employee, for example, partnerships.
Other less common exclusion criteria may also apply. See relevant guidelines.
How do service providers gain reimbursement of wage subsidies?
The reimbursement process may be different depending on the wage subsidy program being used. Refer to the relevant guidelines for specific details.