JobKeeper – Alternative decline in turnover tests

The Commissioner of Taxation has released several different (alternative) tests to assess decline in turnover when applying for JobKeeper payments. Previously the government released what is known as the “basic test” to assess a fall in revenue compared to a previous comparable period e.g March 2020 compared to March 2019.  Where businesses have special circumstances which make this comparison difficult these new  “alternative tests” may be used.

The alternative tests apply in the following cases:

• commencement of a business;
• acquisition or disposal of a business;
• business restructures;
• substantial increases in turnover during a prior period;
• drought or natural disasters;
• irregular turnover periods that are not cyclical;
• where there is sickness, injury or leave of a sole trader or a partner of a small partnership.

Basically, the taxation commissioner may apply these tests if  “some event or circumstance … outside the usual business setting” makes the relevant comparison of turnover used in the ‘Basic Test” inappropriate. If these new tests are satisfied, businesses may still meet the decline in revenue test which (subject to other criteria)  may make the $1500 a fortnight JobKeeper payment available to all eligible employees.

Further reading can be found at JobKeeper Decline in Turnover tests.

Next Steps
The application of the Alternative Test Rules is very fact specific and requires a number of GST turnover calculations to be made. Due to the wide reaching nature of the alternative tests, clients will likely be able to test using at least one of these alternative methods. Given the deadline for access to the first two JobKeeper payments is drawing near, clients should start looking at these alternative tests now. Please contact your Economos partner or manager for further information or for assistance in applying these measures.