According to Mr Frydenberg, the change 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,” Mr Frydenberg 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 after the ATO determined alternative tests last Thursday for fall in turnover for classes of entities where there is not an appropriate relevant comparison period.

It is understood that the ATO is now developing further guidance on Mr Frydenberg’s announcement and will update its website “as soon as possible”.

Rule clarifications

Mr Frydenberg also announced that the “one in, all in” feature of the JobKeeper payment scheme will be made clearer in the rules.

The explanatory statement had specified that employers were not able to selectively nominate employees, with the ATO confirming that all eligible employees had to be nominated for the $1,500 per fortnight payment.

Further changes to the JobKeeper rules will allow charities, other than schools and universities, to elect to exclude government revenue from the JobKeeper turnover test. 

Religious practitioners will also be eligible for the JobKeeper payments, in recognition that many religious practitioners are not “employees” of their religious institutions.

There will also be clarification to the rules to provide that full-time students who are 17 years old and younger, and who are not financially independent, are not eligible for the JobKeeper payment.

Enrolment time extension

Despite over 900,000 businesses having expressed interest in the JobKeeper scheme since it was announced on 30 March, just over 400,000 businesses have now enrolled in the first week of enrolments, covering 2.4 million employees.

The Commissioner of Taxation will now allow businesses to enrol for the first two JobKeeper fortnights by 31 May, an extension from 30 April.

The first two fortnights run from 30 March to 12 April, and 13 April to 26 April, with the ATO to accept the late payments of the minimum $1,500 per fortnight as long as they are paid by the end of April.

“If you enrol by 31 May, you will still be able to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight,” the ATO said.