The Government has released a legislative instrument outlining seven alternative eligibility tests for its JobKeeper subsidy payments. When the JobKeeper package was originally announced, under the basic eligibility test the Government said businesses would be eligible if they have seen a 30% decline in turnover due to Coronavirus (COVID-19). Businesses with annual turnover of $1 billion or more would have to prove a 50% decline. This revenue drop would be calculated based on a comparative period 12 months ago.
However, for many businesses, including startups, high-growth businesses, or businesses affected by drought this time last year and many others, a year-on-year comparison didn't work. For example, if a business is less than 12 months old it just wouldn't have revenue figures from a year ago.
In response to that, Treasury released new rules that outline the scenarios in which a business might be able to apply alternative turnover tests, and what those tests will be.
They cover new businesses, high-growth businesses, sole traders who have taken leave, and more. Unfortunately, the one group that is still not covered even in these additional rules is those businesses that are pre-revenue and therefore cannot prove a drop in turnover.
So, in what circumstances can you use an alternative turnover test?
Circumstances where an alternative test applies:
- the entity commenced business after the relevant comparison period (the business did not exist in that period)
- the entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now)
- the entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now)
- the entity’s turnover substantially increased by:
- 50% or more in the 12 months immediately before the applicable turnover test period; or
- 25% or more in the 6 months immediately before the applicable turnover test period, or
- 12.5% or more in the 3 months immediately before the applicable turnover test period.
- the entity was affected by drought or other declared natural disaster during the relevant comparison period
- the entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or
- the entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.
For more details, check ATO's Alternative Decline in Turnover Test Rules 2020
Extension of time to enrol for the JobKeeper Scheme
In order to provide more time and ensure the scheme’s efficiency, the ATO announced over the weekend that the Commissioner of Taxation will now allow businesses to enrol for the first two JobKeeper fortnights by 31 May, an extension from 30 April.
'If you enrol by 31 May, you will still be able to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights,' the ATO’s notice reads.
Crucially, the ATO also clarified that for the first two fortnights — 30 March to 12 April and 13 April to 26 April — it will now accept the late payments of the minimum of $1,500 per fortnight, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.
The ATO’s updated guidance on enrolment date and payment date can be viewed here.
Azure Group centres of Excellence
To manage the ongoing technical issues for all of our clients including the JobKeeper eligibility and payment plus other Stimulus measures and the Fair Work changes Azure Group have established the following two centres of excellence:
- COVID-19 Stimulus Centre of Excellence; and
- Fair Work Centre of Excellence.
Each of the above centres of excellence has a dedicated team of technical specialists. If you have any specific questions about these measures please contact our centres of excellence via email: email@example.com
Have you noticed our #FridayExpertTips... here's one that relates to #CoVID-19: Contingency Planning
“At some point the Government will diminish their Public health orders and we will be able to go back to the office. Things are not going to be the same on the other side of COVID-19. Businesses that address the issues head on through Contingency Planning, will be far more likely to create resilience and be able to revive quickly.”
COVID-19: How to motivate your team while working remotely? published May 18, 2020
Expanding globally during COVID-19: Risky business or perfect timing? published May 07, 2020
Cashflow is a lifeblood of your Business, especially during a pandemic such as Coronavirus, published April 22, 2020
Finding opportunities in a crisis and how to recover on the other side of COVID-19?, published April 20, 2020
COVID-19: What does 'Standing Down my team' mean to my Business?, published April 16, 2020
JobKeeper Payment: Eligibility Rules have been released! Who is Eligible?, published April 15, 2020
COVID-19: EMDG extra funding of $49.8 million to help Exporters, published April 7, 2020
Startups and Scaleups: R&D Tax Incentive FY2019 deadline extended due to Coronavirus, published April 6, 2020
What is the difference between JobSeeker and JobKeeper? Do you know what you're eligible for?, published April 2, 2020
JobKeeper Allowance: New Government financial measure as a response to COVID-19, published Mar 31, 2020
A second CoVID-19 Stimulus for Businesses, published Mar 24, 2020
Financial relief for business experiencing difficulty due to CoVID-19 and State Government Support, published Mar 21, 2020
What are the benefits of Coronavirus Stimulus Package for businesses?, published Mar 13, 2020
This information is accurate on the day it’s published and is subject to change as the situation around Coronavirus (COVID-19) evolves. Our conclusions may not be valid if there is any change in those facts, circumstances and assumptions. Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused.