The Treasurer has announced a series of amendments to the JobKeeper rules – introducing a new decline in turnover test for service entities, and excluding some full time students amongst other changes.
Alternative test for service entities
An alternative decline in turnover test will apply to special purpose employment entities such as service entities. In circumstances where an employment entity is utilised within a group of companies, and that employment entity is unable to demonstrate a sufficient decline in its own turnover, the employment entity will be able to refer to the decline in turnover of the operating entities it services. This should allow some special purpose service entities that provide employee labour to group members to access the JobKeeper scheme, although we are still waiting to see the detail of these new rules. See Treasury fact sheet.
The alternative test will refer to the combined GST turnovers of the related group members using the services of the employer entity.
Integrity provisions will allow the Commissioner to prevent access to JobKeeper where there are “material compliance or integrity concerns with an entity’s use of the test.”
Eligibility changes for 16 & 17 year olds
Full time students who are 17 years or younger and not financially independent have been excluded from receiving JobKeeper payments. This change will apply prospectively so employers who have already paid employees will not be out of pocket. Clients should take this change into account before making further payments to these employees.
‘One in, all in’ principle strengthened
The controversial ‘one in, all in’ principle is being strengthened. Where an employer has agreed to be a part of the JobKeeper scheme and the employee has agreed to be nominated, employers cannot select which employees will participate in the scheme. The Treasurer states that this feature of the scheme will be made clearer – although does not specify how.
Changes for charities and religious institutions
- To meet the decline in turnover test, eligible charities will be able to choose to use either their total turnover or turnover excluding government revenue to assess their eligibility for JobKeeper.
- Eligible religious institutions will be able to receive JobKeeper payments for each eligible religious practitioner (ministers of religion or a full-time member of a religious order) for which they are responsible under the tax law.
- Changes will be made to enable entities endorsed under the Overseas Aid Gift Deductibility Scheme or for developed country relief to meet the requirement that not-for-profits “pursue their objectives principally in Australia”. Employee eligibility remains subject to the residency requirements.
The full details of these changes are not yet available but we will bring you these as soon as they are released