Commencing next week (first week of May), the Morrison Government’s $130 billion JobKeeper payment is intended to support millions of Australian jobs and help cushion the severe economic impact of COVID-19.

With more than 400,000 businesses, covering 2.4 million employees, enrolling for the $1500 per fortnight payments since the start of last week, the Treasurer has provided the following clarifications:

• Employees employed through a special purpose entity, rather than an operating entity:
  Changes will address the circumstances where business structures use a special purpose entity to employ staff rather than staff being directly employed by an operating entity. The Government will provide an alternate decline in turnover test for the eligibility of special purpose service entities that provide employee labour to group members and that have not met the basic test for decline in turnover.This alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties. The alternate test will be by reference to the combined GST turnovers of the related entities using the services of the employer entity.(More information on the alternative turnover test provided below).

• ‘One in, all in’ principle:
  Once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme.This includes all eligible employees who are undertaking work for the employer or have been stood down. The employer cannot select which eligible employees will participate in the scheme.
  As noted in the explanatory statement to the existing rules, this ‘one in, all in’ principle is already a key feature of the scheme and will be made clearer in the rules.

Various other updates provided of less relevance to AREEA members were provided, including in relation to religious practitioners, charities, full-time students and international aid organisations.

The full statement can be found here.

The Alternative Decline in Turnover Test

The Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020 (“Rules”) took effect from Friday 24 April 2020.

The Rules provide alternative bases for a class of entities to satisfy the decline in turnover test for the purposes of JobKeeper eligibility, when there is not an appropriate relevant comparison period in 2019.

The Rules set out a range of alternative decline in turnover tests in relation to the following scenarios:

1. An entity that commenced business before 1 March 2020 but after the relevant comparison period (Rule 6).
2. If there was an acquisition or disposal of part of the business after the relevant comparison period and before the applicable turnover test period, and the acquisition or disposal changed the entity’s turnover (Rule 7).
3. If there was a restructure of the entity’s business, or part thereof, after the relevant comparison period and before the applicable turnover test period, and the restructure changed the entity’s turnover (Rule 8).
4. If the entity had an increase in turnover of (Rule 9): a) 50% or more in the 12 months immediately before the applicable turnover test period; or b) 25% or more in the 6 months immediately before the applicable turnover test period; or c) 5% or more in the 3 months immediately before the applicable turnover test period.
5. If the entity conducted business or some of the business in a declared drought zone, or declared natural disaster zone, during the relevant comparison period, and the drought or natural disaster changed the entity’s turnover (Rule 10).
6. Where, for the quarters ending in the 12 months immediately before the applicable turnover test period, the entity’s lowest turnover quarter is no more than 50% of the highest turnover quarter, and the entity’s turnover is not cyclical (see Rule 11).
7. An entity applies the alternative test under this section if (Rule 12): a) the entity is a sole trader or small partnership that has no employees; b) the sole trader or at least one of the partners did not work for all or part of the relevant comparison period due to sickness, injury or leave; and c) the turnover of the sole trader or partnership was affected by the sole trader or partner not working for all or part of that period.

See the Rules for full details of the alternative tests, and the Explanatory Statement for background on each provision as well as examples.

Extension of time to enrol for JobKeeper

The time to enrol for the JobKeeper scheme has been extended until 31 May 2020.

The Australian Taxation Office (ATO) announced the extension which allows businesses to enrol by 31 May and still be able to claim for the fortnights in April and May. The business must meet all the eligibility requirements for each of those fortnights, including paying all employees by the appropriate date each fortnight.

For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept that the minimum $1500 payment for each fortnight has been paid by the business even it has been paid late, provided it is paid by 8 May 2020.

AREEA members seeking advice on the JobKeeper turnover test or any other matter related to the scheme should contact 1800 627 771 to speak with a specialist workplace consultant.