8Decline in turnover test

8 Decline in turnover test

Basic test (1) An entity satisfies the decline in turnover test at a time (the test time) if: (a) the entity’s projected GST turnover for a turnover test period in which the test time occurs falls short of the entity’s current GST turnover for a relevant comparison period (the comparison turnover); and (b) the shortfall, expressed as a percentage of the comparison turnover, equals or exceeds the specified percentage for the entity (see subsection (2)).

Note 1: See subsection (7) for the meanings of turnover test period and relevant comparison period.

Note 2: Current GST turnover and projected GST turnover are modified for the purposes of this section and section 8A: see subsection (8).

Note 3: For provisions about contrived schemes, see section 19 of the Act.

Note: Example: Patrick Enterprises assesses its eligibility for jobkeeper payments on 6 April 2020 based on a projected GST turnover for April 2020 of $6 million. It considers that the comparable period is the month of April 2019 for which it had a current GST turnover of $10 million. The April 2020 turnover falls short of the April 2019 turnover by $4 million, which is 40% of the April 2019 turnover. This exceeds the specified percentage, so the decline in turnover test is satisfied.

(2) The specified percentage for an entity is: (a) if the lower threshold applies to the entity (see subsection (3))—15%; or (b) if the higher threshold applies to the entity (see subsection (4))—50%; or (c) otherwise—30%. (3) For the purposes of paragraph (2)(a), the lower threshold applies to an entity if the entity is an ACNC‑registered charity other than: (a) an entity that is a Table A provider or a Table B provider; or (b) a school.

Note: Paragraph (b) affects only non‑government schools, as government schools do not qualify for the jobkeeper scheme because of paragraphs 7(2)(b) to (d).

(4) For the purposes of paragraph (2)(b), the higher threshold applies to an entity if: (a) the lower threshold does not apply to the entity (see subsection (3)); and (b) either: (i) the entity’s aggregated turnover for the income year in which the test time referred to in subsection (1) occurs is likely to exceed $1 billion; or (ii) the entity’s aggregated turnover for the previous income year exceeds $1 billion. Alternative test determined by Commissioner (5) An entity also satisfies the decline in turnover test if: (a) an alternative decline in turnover test determined by the Commissioner under subsection (6) applies to the entity; and (b) the entity satisfies the alternative test. (6) The Commissioner may, by legislative instrument, determine that an alternative decline in turnover test applies to a class of entities, if the Commissioner is satisfied that there is not an appropriate relevant comparison period for the purpose of an entity in the class of entities satisfying the decline in turnover test under subsection (1). Meaning of turnover test period and relevant comparison period (7) For the purposes of this section and sections 8A and 8B: (a) unless paragraph (aa) applies—the turnover test period must be: (i) a calendar month that ends after 30 March 2020 and before 1 January 2021; or (ii) a quarter that ends on 30 June 2020, 30 September 2020 or 31 December 2020; and (aa) if the entity is a Table A provider—the turnover test period must be a period of 6 months starting on 1 January 2020; and (b) the relevant comparison period must be the period in 2019 that corresponds to the turnover test period.