The JobKeeper Payment is an initiative by the Australia Government to help businesses and their staff through the Coronavirus pandemic. The Government has released a series of Alternative Tests for JobKeeper Payment which means more businesses and individuals may now qualify for the subsidy.
Businesses can claim $1,500 per fortnight per eligible employee provided they have suffered a 30% decline due to the pandemic when compared to the relevant month or quarter in 2019.
April 2020 Turnover $70,000
April 2019 Turnover $100,000
Decline -30%
Simple.
BUT… What about newly established businesses? or businesses that have expanded and put more staff on?
These alternative tests provide businesses the fairest method of showing the true effects of Coronavirus for those businesses that don’t fit in to the normal test.
New Businesses
If the entity commenced before 1 March 2020 but after the relevant comparison period (March 2019).
Alternative Test #1 – Use the average Monthly Turnover for the entities existence for the comparison period.
Alternative Test #2 – Use the average monthly turnover in the quarter immediately preceding the test month.
Business Acquisition or Disposal
If the entity acquired or disposed of part of their business, which has effected the turnover, between the test period and the comparison period (April 2019 – Feb 2020 for March 2020 test month).
Alternative Test #3 – Use the month immediately after the acquisition or sale as the comparison period. If the comparison period is a quarter multiple the month after the acquisition or sale by 3.
Entity Restructure
If the entity has restructured and the restructure has altered the entity’s turnover.
Alternative Test #4 – uses the current GST turnover from the month immediately after the month in which the restructure as the comparison period. If the comparison period is a quarter multiple the month after the restructure by 3.
Business Expansion
If the entity has experience an increase in turnover of at least:
- 50% in the 12 months immediately before the test period, or
- 25% in the 6 months immediately before the test period, or
- 12.5% in the 3 months immediately before the test period.
Alternative Test #5 – Uses the monthly average of the 3 months immediately before the test period as the comparison period.
Effected by natural disaster (Drought, Bush Fires, Floods)
If the entity conducted business in a declared natural disaster zone in the comparison month:
Alternative Test #6 – Use the same period in the year immediately before the disaster declaration as the comparison period.
Irregular Turnover
For entities with irregular non-cyclical turnover – where the quarters for the previous 12 months the lowest quarters turnover is no more than 50% of the highest quarters turnover.
Alternative Test #7 – Use the monthly average turnover for the previous 12 months as the comparison period
Sole Trader or Small Partnership with leave
Where the entity is a sole trader or small partnership with no employees and the turnover was effected as the sole trade or one of the partners did not work for part of the year due to leave, sickness or injury:
Alternative Test #8 – Use the month immediately after the sole trader or party returned to work
What if more than one alternative test applies?
If an entity is eligible under the basic test – it does not need to consider the alternative tests.
Similarly, the entity only has to satisfy that the decline in turnover meets the requirement in one alternative test to apply to the JobKeeper Scheme.
Additional Alternative Tests – Special Consideration?
If you have been affected by bushfires and eligible for ATO concessions or received Drought Help Concessions there are additional alternative tests. Please contact to discuss if this is applies to you.
How can Walsh Accountants Help?
Specialising and Entrepreneurial and Business Support – we’re here to help you throughout this period of instability. This is uncharted territory for all of us but we are here to assist you with all the knowledge we have to help you adapt to the changing environment and keep your business afloat
If you are in need of our assistance, we encourage you to contact us as soon as possible. If cost is a concern to you, we can work with you.
