As we enter the month of May, we will start to see the first of the JobKeeper Payments paid out to eligible businesses.
Due to the nature of announcing a stimulus package at short notice, details of the program have been developed and released progressively throughout the month of April. Treasury today announced that there will be no further JobKeeper eligibility changes. However there have been some significant changes or adjustments made recently.
Three significant changes that may affect your eligibility to the program are highlighted below:
Alternative Turnover Test
As well as the basic turnover test whereby an entity may be eligible to join the JobKeeper program if their turnover drops below 30% turnover, the ATO have released their alternative turnover test for those entities that were either
- new to business
- acquired or disposed of a part of the business
- experienced a restructure
- experienced a substantial increase in turnover
- affected by drought or natural disaster
- operates with irregular variance in their turnover
- a sole trader or partnership where sickness or leave impacted their ability to work
Cash or Accruals?
In an attempt to make things more simple to understand, the ATO originally indicated that entities can chose to report their turnover test using either the accruals or cash method, (i.e. when you issue invoices or when you are paid). This however makes it easier for entities to satisfy the turnover test by postponing their invoicing to the following month to show a lower turnover. This week the ATO revised this to say that they expect you to use the same method that you use in your BAS reporting.
So what does this mean? There may be entities that will no longer satisfy the turnover test. For all clients where we are handling the JobKeeper process for, we will review your eligibility and contact you as necessary. For those clients that have applied themselves, we recommend you review your figures to check you are still entitled to the payments.
Once enrolled in the JobKeeper program, entities need to provide monthly declarations to the ATO to reconfirm the eligibility of your business and your reported eligible employees if applicable. Currently the ATO states that “This is not a retest of your eligibility but rather an indication of how your business is progressing under the JobKeeper Payment scheme”.
However after recent discussions with the ATO, there is speculation that this may vary so that if you no longer satisfy the turnover test, then you may not receive the JobKeeper payments. We will keep you updated on any developments in this area.