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COVID-19: Important updates regarding the JobKeeper Alternative Test

3 min read

24 Apr 2020

Decline in Turnover Tests for JobKeeper

Essentially, job keeper is linked to a decline in turnover, set up to assist businesses in this difficult time and to encourage business owners to retain staff on the books for everyone’s benefit on the other side of this pandemic.

Firstly, the Basic Test in of decline in turnover is a corresponding period 12 months prior of a drop in turnover of 30% or more. If this test is met, then the entity qualifies for the JobKeeper program if not the Alternative Test can be used to determine if a business is eligible.

The Alternative Test is to be used where there is not an appropriate relevant comparison period in the 2019 that reflects the businesses downturn in turnover due to COVID-19.

Summary of the Alternative Test for the Government’s JobKeeper Program

The Alternative Test was released on 23 April 2020 and is known as the Alternative Test in the Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020.


The Alternative Test is available to businesses when they do not qualify under the Basic Test, details released earlier in April 2020.

Fortunately, the Alternative Test has a number of possible categories. It is only necessary to qualify for one of the categories, which are as follows:

Entity is new to business

The entity commenced business after the comparison period in 2019.

Disposals, acquisitions and restructures

An entity acquired or disposed of part of their business restructured part or all of their business after the relevant comparison period in 2019.

Entity had substantial increase in turnover

An entity has had an increase in turnover by 50% or more in the 12 months immediately before the applicable turnover test period, or 25% or more in the 6 months immediately before the applicable turnover test period, or 12.5% or more in the 3 months immediately before the applicable turnover test period. eg rapid growth.

Entity affected by drought or other natural disaster

An entity has been affected by a drought or other natural disaster in the relevant comparison period in 2019.

Business has an irregular turnover

An entity has an irregular turnover that is not cyclical, such as can occur in the building and construction sector.

Sole trader or small partnership with sickness, injury or leave

An entity is a sole trader or a small partnership and the sole trader or one of the partners did not work for all or part of the relevant comparison period because they were sick, injured or on leave during the relevant comparison period and those circumstances affects the turnover of the sole trader or partnership.

Applying the Tests

The tests are very complex.

In terms of receiving JobKeeper under the alternative test, it is a self-assessment system. What this means is that if you believe you qualify, you simply say so – and you will receive JobKeeper. You just need to be sure that you have all of your books and records in order to substantiate your position, should you be audited later on. We expect that a number of businesses will be audited under this regime, in the fullness of time. So it’s important to be not merely honest, but also very careful, in ensuring that you do in fact qualify, if you’re relying one of these alternative tests particularly. Getting this wrong will at a minimum mean that the payments will need to repaid.

The rules of the Alternative Test apply to businesses where the following circumstances apply:

If the entity cannot establish that there is an external or internal reason for the decline in turnover then the Commissioner cannot determine an alternative decline in turnover test.

If the alternative decline in turnover tests are met by the entity, and they satisfy the other eligibility criteria, then they will have access to the JobKeeper payment of $1,500 per fortnight for each eligible employee.

Get Advice Early

It is obviously critical that you understand very quickly as to whether you qualify for the Alternative Test, if you don’t qualify for the Basic Test. It is obvious the critical metric at this time to have clarity around your eligibility for JobKeeper, under the alternative method for the basic method.

Our tax lawyers can provide urgent assistance in interpreting the legislation, as it applies to your circumstances.

Please contact us on 1300 907 335 or, alternatively, please complete the contact form on this page will be in touch with you promptly. All enquiries will of course be treated confidentially.

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