Latest Changes to Eligibility for JobKeeper and Boosting Cash Flow Programs

Latest Changes to Eligibility for JobKeeper and Boosting Cash Flow Programs

The Australian Tax Office (ATO) has released details of alternative tests that can establish an entity’s eligibility for the JobKeeper program in the instance that turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year).

In addition, eligibility for the Boosting Cash Flow for Employers scheme has been expanded.

Boosting Cash Flow for Employers:

You will be eligible to receive the cash flow boost if you are a small or medium business entity, including not-for-profit organisations, sole traders, partnership, company or trust that:

  • held an ABN on 12 March 2020 and continues to be active
  • has an aggregated annual turnover under $50 million (generally based on prior year turnover)
  • made eligible payments you are required to withhold from (even if the amount you need to withhold is zero)

 Eligible payments include:

  • salary and wages
  • director fees
  • eligible retirement or termination payments
  • compensation payments
  • voluntary withholding from payments to contractors

In addition, on or before 12 March 2020 you must have lodged at least one of the following:

  • a 2018–19 income tax return showing that you had an amount included in your assessable income in relation to you carrying on a business.
  • an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that you made a taxable, GST-free or input-taxed sale.

Previously you needed to have lodged both to be eligible.

JobKeeper Program – Alternative Tests to Calculate Turnover

For most businesses, your aggregated turnover broadly includes your annual turnover, plus the annual turnover of all the entities that are connected or affiliated with you, subject to specific adjustments (for example, for transactions between you and those other entities). These connected entities or affiliates may be based in Australia or overseas.

The turnover calculation is based on GST turnover. This applies even if an entity is not registered for GST. To work out your fall in turnover, you can compare either:

  • GST turnover for March 2020 with GST turnover for March 2019
  • Projected GST turnover for April 2020 with GST turnover for April 2019
  • Projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019

Where a business can show a fall in turnover of:

  • 30% or more for an aggregated turnover of $1 billion or less
  • 50% fall or more (for an aggregated turnover of more than $1 billion) or
  • 15% fall in turnover (for ACNC-registered charities other than universities and schools)

An alternative test is not required.

Where your business operations in March / April 2019 were not ordinary circumstances (such as your business commenced operations after this time period), the ATO has provided a range of alternative tests to determine your average business turnover. The test that is applied is dependent on your particular business situation.

Where you believe your entity would need to use an alternative test, please contact us for more information.