With the release of the alternative tests for eligibility for the JobKeeper extension, businesses are now in a position to begin to assess their eligibility. Failing to consider the application of the alternative tests could cost your business up to $14,400 per employee for the term of the JobKeeper extension, ending 28 March 2021. We encourage all businesses to review their eligibility now.
To be eligible for the JobKeeper extension, businesses must experience a decline in actual GST turnover for the September quarter (and December quarter for the second extension) with reference to the corresponding quarter in 2019.
Where this doesn’t apply, the alternative tests may be able to be used to access the JobKeeper extension payments.
The alternative tests
The alternative tests are:
- Business commenced test;
- Business acquisition or disposal test;
- Business restructure test;
- Substantial increase in GST turnover test;
- Natural disaster test;
- Irregular turnover test; and
- Sole trader or small partnership with extended leave test.
Once again, we encourage all businesses to explore their ability to apply one of the alternative tests to satisfy the decline in turnover requirement of the JobKeeper extension.
Substantial increase in turnover test
One of the most used alternative tests under the original JobKeeper scheme was the substantial increase in GST turnover test. Once again, it will be worth reviewing whether your business satisfies the requirements of this test.
In order to be eligible for this test, an employer must satisfy one of the following increases in turnover:
- 50% or more in the last 12 months;
- 25% or more in the last 6 months; or
- 5% or more in the last 3 months.
Note that the 3, 6 and 12 month periods are for those prior to 1 July 2020 (or 1 October 2020 for the second extension), or 1 March 2020. The entity is able to elect which period applies.
I satisfy an alternative test, what next?
Once an alternative test is satisfied, an actual decline in turnover for the September quarter (or the December quarter for the second extension) will need to be established with reference to averaged or normalised figures, as determined by the alternative test legislative instrument.
In the case of the substantial increase in turnover test, the current GST turnover for the September quarter will be compared to, either:
- The GST turnover for the 3 months immediately prior to 1 July 2020; or
- The GST turnover for the 3 months immediately prior to 1 March 2020 (if the 3, 6 or 12 months prior to 1 March were used to satisfy the increase in turnover).
If the requisite decline in actual GST turnover is met (i.e. a decline of at least 30% for businesses with turnover not exceeding $1 billion), the entity will be eligible to enrol in the JobKeeper extension. The next step will be to ensure that your eligible employees are correctly classified as Tier 1 or 2 and meet the minimum wage conditions.
If you require any assistance in applying the alternative tests or to check your ability to claim the JobKeeper extension, please contact Murray Howlett or your Pilot advisor on 07 3023 1300.