On Friday afternoon, (24/04) the Government announced further changes to the JobKeeper program, and clarified some rules. We have highlighted them below:
GST turnover: Cash vs accruals – Everyone can choose!
After the rules initially suggested that everyone was required to use accruals method to calculate “GST Turnover” for the decline test, the ATO clarified on their website that they would accept that cash BAS reporters could use either Cash or Accruals method to calculate decline in GST turnover.
The ATO has now further amended their website to effectively say that EVERYONE may choose between cash or accruals regardless of how you report your BAS.
Note: as at 28/04 the ATO have provided further guidance that if you choose a method different to how you report your BAS, they may ask you to explain why you chose a different method…
Decline in turnover test: An additional alternative test which may be able to be used by services trusts and group employers
After saying they would not release any additional alternative tests, the Government bowed to pressure and Treasury has created a test for service trusts.
We do not seem to have the legislative instrument from the Commissioner yet, but the Treasury Fact Sheets were updated sometime Saturday afternoon/evening to add the following:
An alternate decline in turnover test will apply to special purpose employment entities. In circumstances where an employment entity is utilised within a group of companies, and that employment entity is unable to demonstrate a decline in its own turnover because, for example, it has had its full year of staffing fees paid in advance, the employment entity will be able to refer to the decline in turnover of the operating entities it services. This will provide for 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.
However, until we see the detail in the legislative instrument, we cannot be sure exactly how this will work.
One-in All-in – Clarification
This has been an ongoing area of contention, as the different components of the rules (Treasury, ATO and Fair Work Act) have been inconsistent on whether an employer has to pay JobKeeper to all employees. Treasury has now effectively said that all eligible employees MUST be paid JobKeeper – that is = you can’t pick and choose which employee gets it. Their press release said:
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.
Registration and payment dates
The ATO has confirmed that you have until 31 May to register to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This means that while you can register until 31 May, and you can make your $1,500 payments for the first two fortnights any time before 30 April, after that you need to be making payments in each fortnight to qualify for that fortnight.
More importantly, it means that if you want to, you can effectively wait until the end of April (and/or May) to ensure that your actual figures satisfy the decline in turnover test – noting though that any projection you use if you want to register now only needs to be based on what you know as at the date you register. There is no penalty if a projection is incorrect.
Eligible employees: 17 year olds excluded
Treasury has now updated its fact sheet to say that eligible employees:
…were are at least 16 years of age at 1 March 2020, with the exception of full time students who are 17 years old and younger and who are not financially independent