By All Acconts

JobKeeper extension and alternative tests

The Treasurer has released the detailed rules governing eligibility for JobKeeper aft er September 28, 2020 (known as JobKeeper 2.0).

The Tax Commissioner has also issued a legislative instrument outlining the alternative tests for satisfying the additional decline in turnover test.

As a starting point, for an entity to be eligible for JobKeeper 2.0 it must satisfy the following conditions:

It must have carried on a business in Australia on March 1, 2020 (diff erent rules apply for non-profi t entities);

It must pass the original decline in turnover test; and

It needs to pass an additional decline in turnover test.

The original decline in turnover test is the same test as was necessary to access

Jonathan Hanaghan, JohnathanGrant Accountants

JobKeeper originally, and involves comparing projected month or quarter in 2020 with current GST turnover for the corresponding period in 2019 to determine if there is a decline in turnover of the relevant percentage (i.e. 15 percent, 30 percent or 50 percent depending on the entity). As part of the new rules, the periods in which entities can pass the original decline in turnover test have been expanded. The test will be satisfi ed if the entity can pass the test for any of the following periods: Monthly test: April, May, June, July, August, September, October, November, December

Quarterly test: June quarter, September quarter or December quarter

Once the original decline in turnover test has been met, it is necessary to confi rm that an additional decline in turnover test is met to access JobKeeper for each of the two additional periods (September 28, 2020 GST turnover for a particular

to January 3, 2021, and January 2021 to March 27, 2021).

For the fi rst period (September 28, 2020 to January 3, 2021), the entity must be able to show that current GST turnover for the September 2020 quarter has dropped by the required amount compared with current GST turnover for the September 2019 quarter.

For the second period (January 4, 2021 to March 28, 2021), the entity must be able to show that current GST turnover for the December 2020 quarter has dropped by the required

© sodawhiskey - stock.adobe.com amount compared with current GST turnover for the December 2019 quarter.

The way the rules are draft ed means that an entity can potentially access JobKeeper for the extended periods between September 28, 2020 and January 3, 2021 and/or January 4, 2021 and March 28, 2021 even if it doesn’t qualify for JobKeeper in an earlier period.

In relation to the new additional decline in turnover tests, it is important to note that these only use the concept of ‘current GST turnover’. This fi rstly means that entities will be using actual GST turnover fi gures rather than estimated or predicted fi gures. The ATO has also confi rmed that when applying the new turnover reduction tests for the September 2020 quarter and December 2020 quarter, entities that are registered for GST must use the same method that is used for GST reporting purposes. That is, if the entity is registered for GST on a cash basis then a cash basis needs to be used to calculate current GST turnover for the purpose of these new tests.

Entities that are not registered for GST can choose whether to calculate GST turnover using a cash or accruals basis but must use a consistent method.

As with the original JobKeeper rules, the ATO has the power to set out alternative tests where it is not appropriate to compare actual turnover for a quarter in 2020 with the corresponding quarter in 2019. The alternative tests for the additional decline in turnover test are broadly similar to the tests available for the original JobKeeper package. The tests cover for the following areas:

Where a new business commenced before March 1, 2020 but aft er the start of the comparison period.

A business making an acquisition or disposal of part of its business