What is the JobKeeper Alternative Test?
Wondering what to do if you don’t meet the Basic Decline in Turnover Test requirements for JobKeeper? The ATO has released its guidelines for the Alternative Decline in Turnover Test which are available now on the ATO website. In an effort to simplify the guidelines, we’ve summarised the rules for the test in this article.
It’s important to note, the alternative test only applies when an entity fails the basic test and like Magic: The Gathering, there are quite a few complex rules to understand. Case in point, the alternative test has been divided to reflect seven different business situations and there are sub-sections to boot.
We’ve found the best place to start (when understanding if you’re eligible), is to determine whether your situation reflects one or more of the following situations outlined by the ATO. These are:
I. Business commenced: If your entity commenced business before 1 March 2020, but after the relevant comparison period, your entity may be eligible under this section. Note, there are two alternatives under this section.
II. Business acquisition or disposal that changed the entity’s turnover: Your entity applies to this section if there was an acquisition or disposal of part of the business after the relevant comparison period and before the applicable turnover test period, and the acquisition or disposal changed the entity’s turnover.
III. Business restructure that changed the entity’s turnover: There was a restructure of the business, or part thereof, after the relevant comparison period and before the applicable turnover test period, and the restructure changed the entity’s turnover
IV. Business had a substantial increase in turnover: If the entity had an increase of the following immediately before the applicable turnover test period;
a. 50 per cent or more in the 12 months immediately before
b. 25 per cent or more in the six months immediately before
c. 12.5 per cent or more in the three months immediately before
V. Business affected by drought or natural disaster: The entity conducted business or some of the business in a declared drought zone or declared natural disaster zone during the relevant comparison period and if the drought or natural disaster changed the entity’s turnover.
VI. Business has an irregular turnover: For the quarters ending in the 12 months immediately before the applicable turnover test period, the entity’s lowest turnover quarter is no more than 50 per cent of the highest turnover quarter and the entity’s turnover is not cyclical.
VII. Sole trader or small partnership with sickness, injury or leave: If the entity has no employees and the sole trader or at least one of the partners did not work for all or part of the relevant comparison period due to sickness, injury or leave and the turnover was affected by the sole trader or partner working for all or part of that period.
If you’re still unsure about all of this, do feel free to contact the team at pmwPlus by clicking here, or to learn more about the Alternative Decline in Turnover test on your own, you can visit the ATO website here.