The new actual GST decline in turnover test
The new actual GST decline in turnover test only applies with respect to the six-month extension of JKP (i.e., JobKeeper 2.0) and is broken up into two separate extension periods, as follows:
(a) Extension Period 1 – applies to JobKeeper fortnights that start on or after 28 September 2020 and end on or before 3 January 2021. The additional test will be satisfied where the entity’s actual GST turnover has declined by the required percentage (i.e., either 30% or 50%) for the quarter ending 30 September 2020, relative to its September 2019 quarter.
(b) Extension Period 2 – applies to JobKeeper fortnights that start on or after 4 January 2021 and end on or before 28 March 2021. The additional test will be satisfied where the entity’s actual GST turnover has declined by the required percentage (i.e., either 30% or 50%) for the quarter ending 31 December 2020, relative to its December 2019 quarter.
Effectively, this test will require a business to have had a decline in its actual GST turnover for the September 2020 and/or the December 2020 quarter (as applicable), relative to the actual GST turnover of its comparable quarter in 2019 (being September 2019 and December 2019 respectively), unless an alternative period is determined by the Commissioner (refer below). For the new additional test, the applicable rate of decline in turnover required to qualify for the JKP in the extension periods is determined using the existing rules (i.e., 50% for entities with an aggregated turnover of more than $1 billion and 30% for entities with an aggregated turnover of $1 billion or less). This should be re-assessed when applying the new additional test as it may not be the same rate that was used in applying the original decline in turnover test (e.g., where there has been a substantial change in the entity’s turnover since the original test was applied).
TAX TIP – Additional test must be satisfied separately for each period
In addition to satisfying all the other qualifying conditions, the new actual decline in turnover test must be satisfied separately for Extension Period 1 and Extension Period 2.
Importantly, an entity is not excluded from qualifying for the JKP in Extension Period 2 simply because it did not qualify for the JKP in Extension Period 1 (or even where it did not qualify for the original JKP scheme prior to 28 September 2020). In other words, the new additional test for each period is not contingent on a business having qualified for any, or all, of the earlier periods.
Qualifying for the first time under JobKeeper 2.0
A business may not have participated in the original JKP scheme (i.e., between 30 March 2020 and 27 September 2020). However, if the business experiences the requisite decline in actual GST turnover for the September 2020 quarter, it may qualify for JKPs from 28 September 2020 to 3 January 2021 (i.e., Extension Period 1 of JobKeeper 2.0).
Note, as the business has not previously participated in the JKP scheme, it will also need to consider if it satisfied the original projected GST turnover test (as modified) as well as all the other eligibility criteria (e.g., business was being carried on in Australia on 1 March 2020).
For JobKeeper fortnights beginning on or after 4 January 2021 (i.e., Extension Period 2 of JobKeeper 2.0), the business will need to test its actual GST decline in turnover with reference to the December 2020 quarter to determine if it continues to qualify for JKPs.
Requalifying under JobKeeper 2.0
A business that originally qualified for the JKPs prior to 28 September 2020 may not qualify for Extension Period 1 of JobKeeper 2.0 (e.g., because it did not meet the actual decline in turnover test for the September 2020 quarter).
However, if they have the requisite decline in actual GST turnover for the December 2020 quarter (i.e., when compared to the corresponding quarter in 2019) the business may re-qualify for payments under Extension Period 2 of JobKeeper 2.0.
Source: National Tax & Accountants’ Association Ltd : September 2020