JobKeeper 2 eligibility rules

JobKeeper2 has been made more difficult to qualify for than JobKeeper1. While some tests are similar, the 30 percent fall in turnover applies to a tighter period, a three month block rather than any one of three months, but the good news is that it allows alternate tests which weren’t allowed first time round.

Are you eligible?

To receive JobKeeper2, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (for payments between 28/09/20 – 03/01/21) and again for the December 2020 quarter (for payments between 04/01/2021 – 28/03/2021).

The broad eligibility tests to access JobKeeper remain the same, with an extended decline in turnover test.

So:

• On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia; and
   
  • Before the end of the JobKeeper fortnight, it met the decline in turnover test*:

• ≥ 15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)

• ≥ 50% for large businesses:

– aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).

• ≥ 30% for all other qualifying entities.

• And, was not:

• On 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or

• A government body of a particular kind, or a wholly-owned entity of such a body; or

• At any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.

1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

*Additional tests apply from 28 September 2020.

Additional decline in turnover tests

To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover.

Decline in turnover:

30 March to 27 September 2020

Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*

28 September to 3 January 2021

Actual GST turnover in the June and September 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019.The decline for both of the quarters needs to be met to continue receiving JobKeeper payments.

4 January 2021 to 28 March 2021

Actual GST turnover in the June, September and December 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019. The decline for all three of the quarters needs to be met to continue receiving JobKeeper payments.

* Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).

Alternative tests

The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.

Please call in at your local TaxAssist Accountants for more information.

Last updated: 5th November 2020