10% decline in turnover test

Legacy employers could previously use some of the JobKeeper provisions from 28 September 2020 (with some changes) until 28 March 2021, if they demonstrated a 10% decline in turnover (turnover test).

To satisfy the turnover test, a legacy employer needed to demonstrate at least a 10% decline in their actual GST turnover for the previous 2020 completed quarter when compared to the same quarter from 2019. Legacy employers needed:

• a certificate confirming this from an eligible financial service provider, or
• if they were a small business employer, they could choose to make a statutory declaration.

Legacy employers who wanted to use the JobKeeper provisions from 28 September 2020 needed to get a certificate first.

In order to continue using the JobKeeper provisions for the next relevant period, legacy employers needed to:

• satisfy the turnover test for the next quarter
• get a new certificate or make a new statutory declaration confirming this decline for that quarter.

The Fair Work Regulations were amended to ensure that the 10% decline in turnover test under the Fair Work Act and the actual decline in turnover test under the JobKeeper Payment Rules (that employers need to satisfy to qualify for JobKeeper payments) operated consistently with each other.

Under the Fair Work Regulations, any changes made to the way actual GST turnover was calculated under the JobKeeper Payment Rules also applied to the way actual GST turnover was calculated for the turnover test under the Fair Work Act.

Decline in turnover certificate

Employers needed to get a certificate from an eligible financial service provider that confirmed the employer had satisfied the turnover test for the quarter. The certificate was issued under section 789GCD of the Fair Work Act only for the purpose of qualifying for the extended JobKeeper provisions as a legacy employer.

Small business employers could have made a statutory declaration instead of getting a certificate.

In order to have used the JobKeeper provisions in the periods below, legacy employers needed to have a certificate for the relevant quarters before the start of each period.

The certificate needed to:

• be issued by an eligible financial service provider
• be issued in relation to the employer
• confirm that the employer has satisfied the turnover test for the relevant quarter.

An eligible financial service provider meant:

• registered tax agents
• registered BAS agents
• qualified accountants.

An eligible financial service provider couldn’t be:

• a director or employee of the employer
• an associated entity of the employer
• a director or employee of an associated entity of the employer.

A certificate was issued based on the information provided by the employer. In providing a certificate, an eligible financial service provider needed to comply with their usual legal and professional obligations. Eligible financial service providers weren’t required to complete an audit or assurance engagement of the employer’s accounts and records in order to issue a certificate.

Penalties may have applied for employers who:

• knowingly provided false or misleading information to the eligible financial service provider, or
• knowingly made or kept false or misleading employee records.

The requirements of the 10% decline in turnover certificate were outlined in section 789GCD of the Fair Work Act.