Who can claim?

• Commonwealth Government bodies, including departments, agencies, business enterprises and corporations (but excluding the Department of Defence);
• State and Territory departments and agencies;
• Local Government bodies and organisations;
• Partnerships and professional practices;
• Trustees of discretionary or unit trusts;
• Public and proprietary companies; and
• Self-employed persons and sole traders.

Employment includes appointment to a paid office, self-employment, the conduct of a partnership, and a commission agency. It also includes apprenticeships and traineeships.

Types of employment

Full-time employment
ESP is payable to employers of Reservists in full-time employment. Full-time employment is where an employee normally works the agreed or award hours for full-time employment in their occupation and receives pay for any part of the period. If agreed or award hours do not apply, employees are regarded as full-time if they ordinarily work a minimum of 35 hours per week. Employees who satisfy this requirement are to be regarded as full-time whether or not they have permanent tenure or status, are employed for a fixed or unlimited period or are terminable by their employer with or without a period of notice.

Part-time employment
Unless the Reservist is also in full-time employment, the ESP is payable to employers of part-time employees on a pro rata basis. Part-time employment is employment on a regular basis where the employee works less than full-time ordinary hours (normally a minimum of 35 hours per week). It is also where the employee receives, on a pro rata basis, equivalent pay and conditions to those specified in an award or awards for full-time employees who do the same kind of work on a full-time basis. Employees who satisfy these requirements are to be regarded as part-time whether or not they have permanent tenure or status, are employed for a fixed or unlimited period or are terminable by their employer with or without a period of notice.

Casual employment
Casual employment is employment on an irregular or unreliable basis. ESP is not payable to employers of Reservists who are employed on a casual basis, unless they work on a regular and reliable basis.

Self-employment
ESP is payable to self-employed Reservists who meet the eligibility requirements. Self-employment means a person who conducts a recognised profession or business either as a sole trader or partner, is employed in an active role by a company in which the member has a controlling interest, or who is a director of a company in which the member has a controlling interest and plays an active role in the direction of the company. It also includes a member providing services, as an independent contractor, to a company in which the member has a controlling interest. In all cases the business or company must be the member's Principal Source of Income or must satisfy the Legitimate Business Test.

Controlling Interest
A member has a controlling interest in a company if the member and the member's associates (including relatives of the member) between them are able to control the exercise of more than 50% of the voting power in the company; receive more than 50% of the dividends of the company; or have the right to receive more than 50% of any distribution of capital of the company.

Multiple employment
Multiple employment refers to a Reservist who undertakes several employment categories (eg. a combination of full-time and part-time employment, full-time and casual employment or part-time employment with more than one employer).

Explanation of ESP entitlements in multiple employment situations

When a Reservist is employed in full-time employment and part-time employment or in full-time employment and casual employment, only the full-time employer of the Reservist is entitled to receive an ESP payment. When a Reservist is self-employed for less than 35 hours per week (in a business or company which is the member's principal source of income) and also works part-time, both the employer and Reservist will be entitled to a payment of the ESP on a pro rata basis. When a Reservist is employed in two or more part-time employments, each employer will be entitled to a payment of the ESP on a pro rata basis.

Independent Contractors
ESP is not payable to a person or business who employs an independent contractor under a contract for services. However, an independent contractor may be eligible to claim ESP when absent on Defence service.

Explanation of ESP entitlements for independent contractors

A person who contracts to perform work for another person under a contract for services (other than as an employee) is an independent contractor. The ATO information guide "Employee or Contractor - Status of Workers" (available from the ATO web-site) sets out a number of criteria which differentiate between an employee of a business and an independent contractor.

ESP is not payable to a person or business who employs an independent contractor under a contract for services. For example, where "A" engages an independent contractor "B", they have effectively not engaged an employee but rather another business. In this case, if the employee "C" is employed by "B" (which may or may not be their own business), "B" may be able to make a claim for ESP as the employer of "C" while "C" is absent on Defence service. "A" cannot make a claim.


Click here for the latest Claim forms.