Date posted: 23/04/2020

Alternative test for JobKeeper

New test allows Commissioner to determine a different approach for proving the decline in turnover for a class of entities.

In brief

  • The JobKeeper legislation now contains an ‘alternative test’
  • The Commissioner may now determine a different approach for proving the decline in turnover for a class of entities
  • Explanatory statement offer examples of how the test will apply

A Legislative Instrument (plus explanatory statement) for an alternative test to apply for the Australian Government's JobKeeper payments has been published.

Many CAs in public practice and commerce had been struggling to apply the so-called 'basic test' for accessing the JobKeeper payments due to difficulties in establishing the required 15%, 30%, 50% decline in turnover under the rules for comparing current (2020) turnover with the prior year (2019) turnover.

To address this problem, the JobKeeper legislation now contains an 'alternative test'. Under this test, the Commissioner may determine a different approach for proving the decline in turnover for a class of entities. This determination is made by publishing a Legislative Instrument.

After an intensive period of lobbying by the professional associations and the Corporate Tax Association, this new Legislative Instrument caters for the following situations:

  1. start-up businesses
  2. businesses that have experienced a disposal acquisition or restructure
  3. an entity that actually had a substantial increase in turnover before COVID-19 struck
  4. an entity affected by drought or some other type of natural disaster
  5. an entity with irregular turnover
  6. a sole trader or small partnership impacted by sickness, injury or leave.

The accompanying explanatory statement gives examples on when the alternative test will apply as a result of this latest.

Alternative test

Access the alternative test here

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