Once and for all test for JobKeeper, combined with the ability to test quarterly based on projected GST turnover, leads to arguably generous result

May 4, 2020

It is widely understood that in order to be eligible for JobKeeper, employers must be able to demonstrate a decline in turnover of at least 30% (15% for charities or 50% for businesses with annual turnover in excess of $1 billion).  What might be less understood is that the ‘once and for all’ nature of the decline in turnover test, combined with the option to use the June quarter as the test period based on projected turnover, has the potential to allow employers that have experienced the required drop in turnover in only one of those months, access to JobKeeper for the entire duration of the scheme (April to September).

The following example shows how this could be so:

This employer is eligible for JobKeeper throughout the duration of the scheme, notwithstanding that June is the only month in which there is a drop in turnover of the required amount.  That is because GST projections for the quarter can be used to qualify the employer for JobKeeper not only for every month in that quarter, but also for the remainder of the scheme (July, August and September).  And as the decline in turnover test is based on ‘projected’ GST turnover, there is no requirement to wait until the quarter is over to work out whether the employer is eligible for the earlier months.  

And, more importantly, the employer’s eligibility for JobKeeper in those earlier months remains even if it turns out, once the end of the June quarter has come and gone, that their turnover for that quarter was not in fact at least 30% lower than for the same quarter in 2019.  

A note of caution – the employer’s projections for quarterly GST turnover must have been reasonable, and clearly defensible in the event the ATO makes enquiries.  Employers should therefore take extra care when making projections, and ensure the reasons for doing so are adequately documented.