ACA has received some very important advice from the Australian Tax Office (ATO) in relation to employer eligibility for the JobKeeper Payment.
The ATO has recently made a ruling that relates to how early learning service providers account for Business Continuity Payments through the month of April.
ACA's senior contact at the ATO has provided the following advice:
Further to our meeting yesterday, I can confirm that we do not consider the Business Continuity Payment and Exceptional Circumstances Supplementary Payment made by the Department of Education, Skills & Employment (DESE) to a childcare provider (under the Early Childhood Education & Care Relief Package) consideration for a supply.
The conditions that are set for these payments are eligibility requirements rather than the entering into any legally binding obligations. There are no legally binding obligations to provide a service or to spend the money in a particular way. In accordance with GSTR 2012/2 we do not consider these payments are consideration for a supply.
Accordingly, the payments would not be included by a childcare provider in calculating their projected GST turnover for the purposes of the JobKeeper provisions.
This ruling ensures that all ECEC employers that are eligible for JobKeeper fit the criteria of reduction in revenue from the beginning of April. This means they can claim the JobKeeper Payment from the beginning of April.
The ATO has informed us that they will be providing further public guidance urgently on this issue.
Please feel free to share this information with your accountant or whoever may be managing the JobKeeper Payment application on your behalf.
We appreciate this clarification today from the ATO, which allows all eligible employers to make the relevant payments to their eligible employees prior to the end of April, in order to receive the first reimbursement in early May.
We hope this update provides the clarity you need to make immediate decisions and resolves any uncertainty about when you may have become eligible for the JobKeeper Payment.
You can visit the ATO webpage about the JobKeeper Payment here.