The Australian Childcare Alliance (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 2020.
The ATO's advice to ACA is as follows:
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 early childhood education and care (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 2020.
| ADDENDUM: In plain English, this means the Australian Tax Office will EXCLUDE the Government Subsidy received via the Federal Government's Early Childhood Education and Care Relief Package when calculating the entity's income/turnover. |
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 Payments 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 2020, in order to receive the first reimbursement in early May 2020.
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 Payments.
PUBLISHED: 22 APRIL 2020
UPDATED: 23 APRIL 2020