Employers will be eligible for the Job Keeper subsidy if:
- their business has a turnover of less than $1 billion and their turnover has fallen by more than 30 per cent; or
- their business has a turnover of $1 billion or more and their turnover has fallen by more than 50 per cent; and
- the business is not subject to the Major Bank Levy.
Since this measure was announced, we’ve been inundated with questions around how a business can establish that it has suffered a 30 per cent downturn.
Ultimately, this won’t be clear until at least next Wednesday when the legislation is introduced into Parliament.
The latest guidance from Treasury is as follows:
To establish that a business has faced either a 30 (or 50) per cent fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier. Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established or their turnover is typically highly variable) the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of the Coronavirus. The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business has ceased or significantly curtailed its operations). There will be some tolerance where employers, in good faith, estimate a greater than 30 (or 50) per cent fall in turnover but actually experience a slightly smaller fall.
With the legislation to be unveiled next week, we will keep you updated on this very important matter.