According to latest ATO update, entities such as partnerships, trusts or companies may be entitled to JobKeeper Payment scheme under the ‘Business Participation entitlement’.
These entities will be eligible, if they meet the following criteria:
- Carried on a business in Australia on 1 March 2020;
- Experience the fall in turnover requirement
- Had ABN on 12 March 2020
- Had lodged either a 2018-19 income tax return, or GST return for any period that started after 1 July 2018 and ended before 12 March 2020.
These entities then need to nominate an eligible business participant, who needs to meet all of the following:
- Must not be employed by the entity
- Actively engaged in the business
- Either a partner in partnership, a shareholder or director in the company, an adult beneficiary of the trust
Unlike employers who need to pay minimum of $1,500 per fortnight to each eligible employee to receive the JobKeeper Payment, there’s no equivalent requirement for these entities based on the Business Participation Entitlement.
There is no requirement for these entities to register for PAYG withholding, start reporting through Single Touch Payroll, or pay salaries to the business participant.
The JobKeeper Payment received from ATO will part of assessable income of the business entity.
Enrolment to JobKeeper payment will begin from 20 April via ATO website. Eligible entities will need to complete enrolment by the end of April, to receive the JobKeeper payment for fortnight starting 30 March 2020 and 13 April 2020.
Example – Adult beneficiary of a trust
Fabian is a personal trainer and operates both a gym and an online training program. Fabian runs his Australian business through a discretionary trust where he is a beneficiary and receives trust distributions.
The trust was settled and acquired an ABN in 2011. Fabian is not employed by his business but actively manages the business, and is not employed elsewhere. He also has one permanent part time employee.
The gym closed on 20 March 2020. The online personal training platform is still operating and Fabian is focusing on growing this part of his business. As a result of the gym closure, the trust’s turnover is expected to fall by 70% in April 2020 compared with April 2019.
Fabian is 36 years old and an Australian resident. Fabian is an eligible business participant and the trust qualifies under the JobKeeper scheme, with the trust receiving the JobKeeper payment.
The trust could also qualify for an additional JobKeeper payment if the part time employee is eligible.
Feel free to reach out if you have any questions.