Changes announced on 28 July to the Jobsaver Payment Program (the Program), and some additional previously unannounced changes, have now been reflected in the important published formal Terms & Conditions (Ts&Cs) for the Program as well as in updated published Program “Guidelines”.
The changes now reflected in the published Ts&Cs are as follows:
The payment to eligible businesses and not-for-profits equivalent to 40% of their weekly payroll is now capped at a maximum of $100,000 per week (up from $10,000 per week).
- The Turnover limit is now $75,000 to $250 million for the year ended 30 June 2020 (up from $50 million).
- Turnover for this purpose is aggregated annual turnover (AAT). This has been changed from national AAT, which now means the limit is based on ‘global’ AAT. On this basis, companies whose AAT in Australia is less than $250 million, but globally (including affiliates and connected entities) is more than $250m, would not be eligible, unless through the exercise of a Ministerial discretion.
Decline in Turnover
When the decline is experienced
The Required Decline in Turnover of 30% may be experienced over any 2 week period between 26 June 2021 and 31 August 2021 (extended from 31 July).
Additional comparison periods
- Two additional comparison periods against which the Required Decline in Turnover may be measured, have been included. The comparison periods are now:
- the same period in 2019 (as previously)
- the same period in 2020, or
- the 2-week period immediately before lockdown commenced (12-25 June 2021)
- These are significant changes which should make the scheme available to more businesses.
What is turnover for Required Decline in Turnover?
A new definition of Turnover confirms that for this requirement, turnover is based on the entity’s current GST turnover as defined in the GST legislation.
The “due to the Public Health Order” requirement
There is no clarification of the scope of this requirement. It remains unclear whether satisfaction of this requirement is to be inferred by satisfaction of the Required Decline in Turnover or whether a demonstrable causal nexus between that decline and the Public Health Order must be made out and, if so, how direct or strong the chain of causation must be. This is a significant issue of uncertainty and thus potential risk for applicant businesses.
Company income tax returns for the year ended 30 June 2020 did not have provision to disclose AAT on a ‘global’ basis. Companies will thus need to obtain “other documentation to demonstrate” their global AAT, including their affiliates and connected entities, is within the Turnover limit of $75,000 to $250 million. This may be an added compliance burden on these entities.
Turnover for decline in turnover test
The Turnover definition for the Required Decline in Turnover test, being based on current GST turnover under the GST legislation, means that turnover is to be measured by reference to the fortnight during which taxable supplies were actually made, not the fortnight during which the supplies were invoiced. Whilst appropriate, this will require qualified accountants and registered tax and BAS agents to base their confirmation letters on a deeper analysis than just BAS statements in many cases.
Status of the Ts&Cs and the Guidelines
The Ts&Cs formally express the conditions that will be imposed by the Minister for Customer Service, or the Minister’s delegate, on the making of JobSaver Payments, under section 5.7(2) of the Government Sector Finance Act 2018, which is the source of the power for making the JobSaver payments. The Tc&Cs therefore are the authoritative rules binding upon applicants and the three NSW Government departments delivering the Program.
The status of the Guidelines on the other hand is unclear. The only references to the Guidelines in the Ts&Cs are discrete references relating to the listing of ineligible businesses, potential prescription of an end date for the Program, and potential evidentiary requirements relating to carrying on business in NSW.
The Ts&Cs state that the Ts&Cs “must be interpreted in accordance wit the law of NSW”. The extent to which the Guidelines may be relied upon, particularly where there may be an apparent inconsistency with the Ts&Cs, is therefore questionable.
Businesses wishing to apply for JobSaver payments, and qualified accountants and registered tax and BAS agents, advising and assisting their clients with applications, should take care with how they interpret and apply the rules in practice, especially where the Guidelines appears to cover aspects or gaps not covered by the Ts&Cs.
If you have a question or would like to discuss your eligibility for relief, please do not hesitate to contact us:
+612 8599 8320