Insights

My business operates through a unit trust. The units in the trust are held by family discretionary trusts. Can my business get access to the JobKeeper payment via the business participant rules?

April 27, 2020

No.

The business participant rules in the JobKeeper legislation potentially make the JobKeeper payment available in respect of business owners who work in the business but are not necessarily employed in the business.  

One of the requirements of the JobKeeper business participant rules is that one individual who is actively engaged in the business, but not employed in it, must be nominated as the business participant for that entity.  In the case of a business operated through a trust, that individual must be an adult beneficiary of the trust.

This presents a problem for businesses operated through unit trusts where all the units in the trust are held by family discretionary trusts.  This is a very common structure where there is more than one family involved in the business.  This is a problem because the unit trust does not have an adult beneficiary and therefore cannot satisfy the business participant nomination requirement.  As a result, it will not be entitled to the JobKeeper payment under the business participant rules.

This should not be confused with the unit trust’s eligibility for JobKeeper payments for eligible employees.  Assuming it has satisfied the decline in turnover test, and has at least one eligible employee (essentially an employee employed on 1 March 2020 and who continues to be employed by the trust) the unit trust will be eligible for JobKeeper in respect of that (or those) employees.