The government will provide an alternate decline in turnover test for the eligibility of special purpose service entities, those that have not met the basic test for decline in turnover, the Treasurer announced late on Friday.
According to Josh Frydenberg, changes will address the circumstances where business structures use a special purpose entity to employ staff rather than staff being directly employed by an operating entity.
“This alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties,” the Treasurer said.
“The alternate test will be by reference to the combined GST turnovers of the related entities using the services of the employer entity.”
Mr Frydenberg’s announcement comes a day after the ATO published a list of alternative tests for fall in turnover for classes of entities where there is not an appropriate relevant comparison period.
The ATO is now expected to update its guidance to reflect the latest change.
‘One in, all in’
The Treasurer also touched on the “one in, all in” principle, reiterating that once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated, the employer must ensure that all of these eligible employees are covered by their participation in the scheme.
Mr Frydenberg clarified: “This includes all eligible employees who are undertaking work for the employer or have been stood down.
“The employer cannot select which eligible employees will participate in the scheme.”
He pointed out that, as noted in the explanatory statement to the existing rules, the “one in, all in” principle is already a key feature of the scheme and will be made clearer in the rules.
Mr Frydenberg pointed out that further changes to the JobKeeper rules allow charities, other than school and universities, to elect to exclude government revenue from the JobKeeper turnover test.
“This will allow employing charities receiving revenue from government to use either their total turnover, or their turnover excluding government revenue, for the purposes of assessing eligibility for the JobKeeper payment,” the Treasurer clarified.
Further changes will also allow JobKeeper payments to be made to religious institutions, recognising that many religious practitioners are not “employees” of their religious institutions.
Moreover, Mr Frydenberg confirmed that full-time students who are 17 years old and younger, and who are not financially independent, are not eligible for JobKeeper.