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Close to one in three accountants says that over half of their client base on JobKeeper are still suffering the requisite decline in turnover, as eligibility rules are set to be tightened.
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2.5m workers to be weaned off JobKeeper
23 July 2020
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A new study by Tax & Super Australia has revealed that of 480 tax and accounting professionals surveyed, 11.3 per cent said that close to all of their business clients were still meeting the requisite decline in turnover for JobKeeper — 15 per cent, 30 per cent or 50 per cent depending on size and entity type.
A further 18.7 per cent said that between half and three-quarters of their client base were still experiencing the turnover shortfall.
The survey results come as the government looks to tweak eligibility for JobKeeper 2.0 after 27 September, with entities now needing to satisfy meeting the decline in turnover test for both the June and September quarters using actual GST turnover, rather than projected turnover deployed in the first iteration of the wage subsidy scheme.
Entities will be required to retest their eligibility again to remain on the program after 4 January, needing to demonstrate that they have met the decline in turnover test for each of the June, September and December 2020 quarters.
While there are currently 3.5 million workers covered under JobKeeper, the Treasury expects just 1.4 million workers to be covered by the end of the year under the new eligibility rules.
The number will then drop to 1 million for the March 2021 quarter.
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Tax & Super Australia senior tax counsel John Jeffreys said many businesses, including those impacted by the second Melbourne lockdown, will face extra difficulties meeting the tougher eligibility tests.
“For those businesses that are already claiming the JobKeeper subsidy, a requirement to satisfy the actual decline in turnover test for the quarters June 2020, September 2020 (and later December 2020) will mean that many businesses will fail the test and the business will no longer receive the JobKeeper subsidy.
“This could occur, for example, in Melbourne where a business has been able to partially reopen and must now close down. It may be that for the June 2020 quarter, the business will not have suffered a 30 per cent decline in turnover, but in following quarters it continues to have a significant decline in turnover.
“Given that the effect of COVID-19 on the Australian economy continues to be severe, such businesses could struggle to survive without the JobKeeper subsidy.”
Mr Jeffreys also believes accountants and small businesses will be challenged to assess their eligibility based on actual GST turnover ahead of lodging their BAS.
The Treasury’s new fact sheet notes that entities “will generally be able to assess eligibility based on details reported in the business activity statement (BAS)”.
It states that because the deadline to lodge a BAS is generally due the following month, “businesses and not-for-profits will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition”.
“Businesses will need to assess their eligibility for the JobKeeper subsidy at the end of September and December, in advance. This will be a major challenge for small businesses and for those maintaining their accounting systems,” Mr Jeffreys said.
“Because the September and December turnover must be based on actual GST supplies, the accounting for hundreds of thousands of businesses will need to be kept up to date.
“This will place a good deal of pressure on small-business owners, BAS agents, tax agents and accountants.”
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