Can you apply for JobKeeper where your decline in turnover is slightly less than the required percentage decline?
The Government has indicated in the FactSheet “JobKeeper Payment: Supporting business to retain jobs” that “there will be some tolerance where employers, in good faith, estimate a 30 per cent or more or a 50 percent or more fall in turnover but actually experience a slightly smaller fall”. However, the business, in good faith, must expect to satisfy the decline in turnover test at the time they apply. Stating that business passes the test when it does not would constitute a false statement subject to sanctions.
Are salaried directors eligible for JobKeeper?
Yes, provided that the directors were employees of the company on 1 March 2020, have been receiving at least $1,500 per JobKeeper fortnight and satisfy the other eligible employee criteria.
Note that as employees of the company the directors cannot also be eligible business participants of the company.
Additionally, if the directors are also employees of another business they must nominate which employer they wish to see JobKeeper assistance through.
Can a company director receiving directors fees qualify for JobKeeper support?
If the directors fees constitute salary and wages for the director and are treated as such by the company, and the director meets the other eligible employee criteria, the director may be eligible for JobKeeper assistance as an employee.
Note that the employer will also need to meet the wage condition and the other eligibility criteria.
Alternatively, if the directors fees do not constitute salary and wages for the director, but the director meets the eligible business participant criteria, the company may be eligible for JobKeeper support based on business participation.
Do employees who were aged 16 or 17 years on 1 March 2020 and not financially independent and/or full-time students, satisfy the age test when they turn 18?
No. The employee will remain ineligible for the entire period of the JobKeeper scheme as they did not meet the eligibility criteria on 1 March 2020.
In determining its decline in turnover, how should a business choose between the Basic Test and the Alternative Test?
The business should look to the Basic Test first. If there is an appropriately comparable period in 2019 and the business has not met the decline in turnover test, the business will not qualify for JobKeeper assistance under the Basic Test.
If it is considered that there is no appropriately comparable period in 2019, the business should work through the Alternative Decline in Turnover Test Rules to see if the business is of a class defined in those Rules.
Can a trust make a JobKeeper claim for both an eligible business participant and an employee?
Yes, provided that:
They are different individuals;
The eligible business participant is not an employee (other than a casual employee) of another entity and satisfies the other eligible business participant criteria;
The employee meets the 1 March 2020 requires together with the other eligible employee criteria;
The trust satisfies the employer entitlement requirements.
If a business satisfies the Basic Test for its decline in turnover should it also consider the Alternative Tests?
No. If a business satisfies the Basic Test there is no requirement to additionally consider the Alternative Tests.
Where a business was registered prior to 1 March 2020 (but after the relevant comparison period), but did not start trading until after 1 March 2020, will the business be able to use an alternative decline in turnover test?
Section 6 of the Alternative Decline in Turnover Test Rules provides for business that commenced before 1 March 2020 but after the relevant comparison period.
However, the entity must first meet the test of carrying on a business on 1 March 2020. Guidance as to when the ATO considers an entity is carrying on a business can be found in Taxation Ruling 2019/1 “Income tax: when does a company carry on a business?”
What is the appropriate alternative decline in turnover test and appropriate comparison period where the turnover of a sole trader or partnership was impacted by the absence of the sole trader or a partner?
Section 12 of the Alternative Decline in Turnover Test Rules provides for sole traders or partnerships impacted by the absence of the sole trader or a partner.
Are employees who have returned from maternity leave eligible for JobKeeper assistance, even if there is no actual work for the employee to do?
Yes, provided they meet the “eligible employee” test for each employee.
Also note that employees who are currently on maternity leave with paid parental leave from their employer may also be eligible for JobKeeper assistance.
However if the employee receives paid parental leave or dad and partner pay under the Paid Parental Leave Act 2010 and the person’s paid parental leave period overlaps with or includes a fortnight in respect of which a JobKeeper payment may be paid, the person is not an eligible employee for JobKeeper for that fortnight.
If an employee is on unpaid maternity leave prior to the commencement of the JobKeeper scheme and then switches to parental leave pay under the Paid Parental Leave Act after the JobKeeper scheme commences, does the employee have an entitlement to JobKeeper support?
Where an employee is on paid or unpaid maternity leave from their employer, provided they meet the eligible employee criteria, the employer will be able to claim JobKeeper assistance on the employee’s behalf.
However, where an employee in a JobKeeper fortnight received parental leave pay under the Paid Parental Leave Act the employee is excluded from being an eligible employee for that fortnight.
Is an “eligible business participant” required to be paid a minimum of $1,500 per JobKeeper fortnight to be eligible for JobKeeper assistance?
No. Unlike for an employee, there is no “wage condition” to be satisfied for an eligible business participant. The entity that receives the $1,500 on behalf of the individual can choose to do what it likes with that amount.
Is there a minimum turnover test for sole traders?
No, however the normal rules around business v. hobby would apply.