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The Commissioner of Taxation will now be given discretion to establish eligibility for the new JobKeeper payment as Treasury updates the reduction in turnover test.
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Treasury hands commissioner discretion to determine JobKeeper eligibility
02 April 2020
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While draft legislation has yet to be released for the government’s recently announced $130 billion JobKeeper payment, Treasury has now updated its fact sheet to give the Commissioner of Taxation discretion to determine eligibility where businesses are unable to demonstrate impact through turnover reduction test.
Treasury’s update comes as the profession expressed concerns over the original eligibility criteria, which had required businesses with less than $1 billion in turnover to demonstrate a fall of 30 per cent in revenue, or a 50 per cent fall in revenue for companies with a turnover of more than $1 billion relevant to the period a year earlier.
Under the change, 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, the commissioner will now be given discretion to consider additional information to determine eligibility.
The commissioner will also be given discretion to set out alternative tests to establish eligibility for specific circumstances, for example, where businesses have ceased operations or have significantly curtailed their operations.
“There will be some tolerance where employers, in good faith, estimate a greater than 30 per cent fall in turnover but actually experience a slightly smaller fall,” Treasury added.
Speaking to Accountants Daily, RSM associate director Tracey Dunn said she was pleased to see Treasury responding to concerns raised by practitioners and the professional bodies.
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“It is hoped this change will assist businesses who have not operated for a full year, businesses who have employees but do not generate revenue and businesses who engage employees via a related service entity to meet the eligibility criteria and enable them to register for JobKeeper payment,” Ms Dunn said.
“It is not clear yet how and when businesses will be able to seek the commissioner’s discretion, and given the cash-flow pressure on businesses to retain or re-engage employees, it would be helpful if the ATO could provide this guidance as a matter of urgency.”
With Prime Minister Scott Morrison looking to recall Parliament as soon as legislation is drafted, Ms Dunn believes practitioners should begin speaking with their clients to determine eligibility.
“Businesses are desperate for a lifeline; however, as the JobKeeper payments will not be paid until after 1 May 2020, it is essential business owners engage with practitioners immediately to consider cash-flow requirements and to identify any stimulus or ATO administrative concessions that may assist in continuing to engage employees and keep their business operating,” she said.
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