DGSC and Commissioner of Taxation (Taxation)
[2021] AATA 4816
•24 December 2021
DGSC and Commissioner of Taxation (Taxation) [2021] AATA 4816 (24 December 2021)
Division:Small Business Taxation Division
File Number:2020/8634
Re:DGSC
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:Senior Member R Olding
Date:24 December 2021
Place:Sydney
The decision under review is affirmed.
.......................[sgd].................................................
Senior Member R Olding
CATCHWORDS
CORONAVIRUS ECONOMIC RESPONSE PACKAGE – JOBKEEPER SCHEME – where applicant gave nomination notice to employer – where applicant subsequently applied for Jobkeeper payments as a business participant – where applicant purported to withdraw the nomination notice given to the employer – whether notice could be withdrawn – whether notice could be set aside under non est factum doctrine – held notice could not be withdrawn or set aside – decision affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975, s 43(1)
Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, ss 6, 9, 11, 12, 14CASES
Re Boscolo and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 794
Re Sharma and Commissioner of Superannuation [2007] AATA 1129
REASONS FOR DECISION
Senior Member R Olding
24 December 2021
WHAT IS THIS CASE ABOUT?
The Jobkeeper scheme was introduced as part of the Australian Government’s response to the Coronavirus pandemic. It provided for payments to employers who had suffered a substantial decline in turnover, in respect of eligible employees including long-term casual employees, who gave a nomination notice to their employer. The scheme also provided for similar payments to sole traders and other business participants who provided a nomination notice to the Commissioner of Taxation.
The applicant is an individual who at relevant times was both a long-term casual employee of her employer and a sole trader conducting her own, separate business.
Under the Jobkeeper rules, the applicant in her capacity as an employee could provide a nomination notice to her employer. This would enable her employer to receive Jobkeeper payments in relation to the applicant, conditioned upon continued payment of equivalent amounts to the applicant. Alternatively, as a sole trader whose business suffered a substantial decline in turnover, the applicant could provide a nomination notice to the Commissioner and receive Jobkeeper payments directly.
To avoid double-dipping, the rules prevented payment of Jobkeeper payments to a business participant who also gave a nomination notice to their employer. The issue at the heart of this matter arises out of that rule.
On 30 April 2020, the applicant provided her employer with a Jobseeker nomination notice under the mistaken understanding that she needed to as a prerequisite to receiving Jobkeeper payments if she were to be stood down by her employer. On this basis, the employer applied for and received Jobkeeper payments for the first two fortnights in relation to which the Jobkeeper scheme applied.
The applicant subsequently received advice from her accountant that she would be entitled to Jobkeeper as a business participant. Acting on this advice, on 25 May 2020 the applicant purported to withdraw the nomination notice she had given to her employer. The employer accepted the purported withdrawal and did not claim Jobkeeper payments in relation to the applicant for any further fortnights.
Having purportedly withdrawn the nomination notice given to her employer, on 26 May 2020 the applicant then gave a nomination notice to the Commissioner in her capacity as a business participant and claimed Jobkeeper payments in respect of subsequent fortnights.[1]
[1] The factual findings in this summary are based on the unchallenged evidence provided in the applicant’s witness statement.
DECISION UNDER REVIEW
The Commissioner took the view that the applicant, having already given a nomination notice to her employer, was not entitled to Jobkeeper payments as a business participant. On this basis, the Commissioner denied the applicant’s application for Jobkeeper payments.
The applicant objected against the Commissioner’s decision denying her Jobkeeper payments for the third to sixth Jobkeeper fortnights inclusive. The Commissioner disallowed the objection. It is that objection decision that is before the Tribunal for review.
LEGISLATIVE FRAMEWORK
The legislative provisions governing entitlement to Jobkeeper payments are found in the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.[2] Section 7 outlines the requirements for an entity to be eligible for the Jobkeeper scheme. One such requirement is satisfaction of a decline in turnover test.
[2] All legislative references in these reasons are to those Rules unless otherwise indicated.
The rules relating to employers’ entitlement to Jobkeeper payments for employees are set out in s 6. That section specifies the requirements for an employer to be entitled to a Jobkeeper payment ‘for an individual for a fortnight’. The individual must be ‘an eligible employee of the employer for the fortnight’. The expression ‘eligible employee’ is defined in s 9.
These provisions for employers’ entitlement to Jobkeeper payments are substantially mirrored in s 11 which governs the entitlement of ‘eligible business participants’ to Jobkeeper payments. The definition of ‘eligible business participant’, which substantially mirrors the definition of eligible employee in s 9, is found in s 12.
For ease of reference, ss 6, 7, 9, 11 and 12 are extracted in the appendix to these reasons, along with s 14 which is also relevant to one of the applicant’s submissions.
It is common ground that the applicant satisfies all but one of the requirements for eligibility for Jobkeeper for the third to sixth fortnights. That includes the requirement that the individual gave the Commissioner a nomination notice.
The disputed requirement is in s 12(4)(b)(iii) which it is convenient to set out here:
(4) The requirements are that:
. . .
(a)at the time the individual gives the entity [in the case, as here, of a sole trader, the entity is the Commissioner: s 12(5)(b)] the nomination notice:
. . .
(iii) the individual has not given any other entity, or the Commissioner, a nomination notice under this subsection or subsection 9(3) or 12B(4);
(Emphasis added.)
THE ISSUES AND THE PARTIES’ SUBMISSIONS – IN SUMMARY
The applicant puts forward alternative bases on which the applicant says the s 12(4)(b)(iii) requirement is satisfied in respect of the fortnights under review.
The applicant’s primary submission – the notification notice was withdrawn
The applicant’s primary submission is that the applicant effectively withdrew the nomination notice she gave to the employer before she gave her nomination notice to the Commissioner. On that basis, the applicant says, the applicant could not be said to have given a nomination notice to the employer in respect of the fortnights under review.
The Commissioner says that once a nomination notice is given it cannot be withdrawn. Consistent with the plain words of s 12(4)(b)(iii), the applicant has given the employer a nomination notice.
The applicant’s alternative submission – the notification notice was attended by mistake and should be set aside
Invoking principles drawn from the contract law doctrine of non est factum, the applicant submits in the alternative that the nomination notice should be set aside.
The Commissioner says the Tribunal has no power to set aside a nomination notice. Even if the Tribunal had such power, the Commissioner says the circumstances in which the applicant’s mistake arose would not attract the non est factum defence.
CONSIDERATION OF THE APPLICANT’S PRIMARY SUBMISSION – THE NOMINATION NOTICE WAS WITHDRAWN
Much of the debate at the hearing centred upon whether the s 12(4)(b)(iii) requirement that the applicant had not given a nomination notice to the employer is tested on a fortnight-by-fortnight basis, as the applicant submitted, or is in the nature of a one-off, irrevocable election, as the Commissioner maintained.
While textual considerations relating to whether the various statutory requirements are to be satisfied in respect of a particular fortnight are significant, in my view it is important not to be distracted by such considerations from the question posed by s 12(4)(b)(iii): at the time the applicant gave the nomination notice to the Commissioner, is it correct to say the applicant ‘has not given’ a nomination notice to the employer.
Unquestionably, the applicant had given a nomination notice to the employer. On that basis, unless the notice is set aside or found to be a nullity, the applicant could not satisfy a requirement that she had not given such a notice.
But the requirement is that at the time she gave the notice to the Commissioner the applicant had not given a notice to the employer. By the time the applicant gave her notice to the Commissioner, she had advised her employer that she wished to withdraw the nomination notice she had previously given to the employer.
In those circumstances there would be, in my view, an element of approaching of the matter in a way that is blinkered from reality in maintaining that, at the time the applicant gave the notice to the Commissioner, she had given a notice to the employer. If one gives something to another person, but subsequently takes it back, is it correct to say that at that later time the person has given that thing to the person? In my view, it is certainly arguable that it is not. Indeed, but for the contextual considerations discussed below, I would prefer the view that the applicant had not, at the time she gave the nomination notice to the Commissioner, given a notice to the employer.
The applicant says the s12(4)(b)(iii) requirement is ambiguous and, each view being reasonably open, the Tribunal should favour the view that achieves the beneficial objects of the Jobkeeper rules. Those objects would be achieved, the applicant says, by paying the Jobkeeper payments to the applicant and would not be achieved by denying her the payments. As the applicant points out, this is not a case of double-dipping in which both the applicant and the employer would receive Jobkeeper payments in relation to the applicant for the same fortnights. The employer has not sought Jobkeeper payments for the contested fortnights in relation to the applicant. Applying the approach she submits should be adopted, the applicant says that only the applicant would receive Jobkeeper payments for the disputed fortnights.
The difficulty with this argument is that it is not the case that the beneficial objects of the rules would only be achieved by adopting the applicant’s approach. On the Commissioner’s approach, the employer would have been entitled to Jobkeeper payments for the disputed fortnights. This is because, so the Commissioner says, the applicant could not withdraw the nomination notice. On this premise, the applicant gave the nomination notice to the employer and, assuming the employer continued to meet the other eligibility requirements, the employer would have been entitled to Jobkeeper payments in relation to the applicant for the disputed fortnights. Thus, financial support would be provided on either view; it is a question of which entity – the employer or the applicant – would receive the support.
Turning to the contextual considerations, a number of aspects of the rules weigh against the applicant’s submission that the applicant, once having withdrawn the nomination notice given to the employer, satisfied the nomination requirements for the subsequent fortnights.
The first appears starkly in s 12(1) where each of the requirements in ss 12(1)(a), (b) and (d) is expressed by reference to a time in or for ‘the fortnight’ in question, but the notification requirement imposed by s 12(1)(c) does not. That is strongly suggestive that only some of the eligibility requirements are tested for each fortnight, and not the s 12(4)(b)(iii) requirement.
Additionally, there is no express provision for withdrawal of a nomination notice. This would not necessarily be fatal to the applicant’s case if a right to withdraw a nomination notice could be implied. That course was considered by the Tribunal, although ultimately rejected in the particular circumstances, in a case involving an employee seeking to revoke an election between participation in the Commonwealth Superannuation Scheme and the Public Sector Superannuation Fund: Re Sharma and Commissioner of Superannuation.[3]
[3] [2007] AATA 1129, [59]-[61].
There is little in the way of positive contextual indicators in the Jobkeeper rules pointing to whether or not a right to withdraw a nomination notice should be implied. There is, in s 6(1)(g), contemplation of an employer notifying the Commissioner that the employer no longer wishes to participate in the Jobkeeper scheme and an equivalent provision in s 11(1)(g) for a business participant to do so.
The Treasurer, having provided for a person in the applicant’s circumstances to notify that they no longer wish to participate as a business participant, but not for notification that they no longer wish to be nominated in respect of an employer’s participation, might be thought to provide some indication that the latter was not intended to be available. Additionally, ss 6(1)(g) and 11(1)(g) provide a mechanism – notifying in the approved form – to give effect to the change in participation. No such mechanism is provided for an employee to withdraw their nomination notification.
Further, s 9(4) provides for circumstances in which an individual is to be excluded from being an eligible employee ‘for a fortnight’, but those circumstances do not include when the employee has withdrawn their nomination notification in respect of that fortnight or subsequent fortnights.
Perhaps most compellingly, if a right to withdraw a nomination notice were implied, there would be significant uncertainty regarding the consequences of withdrawal unless further specific rules were also implied. When would a withdrawal take effect? For all claims? If so, what would be the consequences for an employer who had claimed Jobkeeper payments in relation to the employee before receiving notice of the withdrawal? For claims made after receipt of the notice? For the fortnight in which notice of withdrawal is given? From the next fortnight? These matters are not addressed in the rules. Filling in these gaps, so to speak, would in my view involve the drawing of inferences without a clear foundation for doing so and, as such, venture outside the permissible bounds of statutory construction.
Further, there may be good policy reasons why the Treasurer did not provide for withdrawal of nomination notices. An employer who otherwise qualified for Jobkeeper payments and who received a nomination notice from an employee could plan their response to the pandemic with confidence that the employer would receive the intended financial support. If an employee could have unilaterally withdrawn their nomination notice, such certainty would have been undermined. Employers would have been left in the situation of making crucial decisions regarding the survival of their business in circumstances where the available support could later be unilaterally withdrawn.
Taking into account these matters, I accept the Commissioner’s submission that, the applicant having given the nomination notice to the employer, she could not satisfy the s12(4)(b)(iii) requirement unless the nomination notice is set aside. I therefore turn to consider the applicant’s submissions founded on the doctrine of non est factum.
CONSIDERATION OF THE APPLICANT’S ALTERNATIVE SUBMISSION – THE NOMINATION NOTICE SHOULD BE SET ASIDE
The applicant’s submission that the nomination notice she gave to her employer should be set aside on the basis of the doctrine of non est factum gave rise to debate on two fronts. The first is whether the Tribunal would have the power to set aside the notice if the circumstances were such as to attract the application of the doctrine. The second is whether, if so, the circumstances of this case are such that the doctrine would apply.
The Tribunal has no inherent jurisdiction. The decisions the Tribunal is empowered to make on an application for review are not at large. They are relevantly prescribed by s 43(1) of the Administrative Appeals Tribunal Act 1975 (‘AAT Act’) in these terms:
Tribunal’s decision on review
(1) For the purposes of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing:
(a)affirming the decision under review;
(b)varying the decision under review;
(c)setting aside the decision under review and:
(i) making a decision in substitution for the decision so set aside; or
(ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.
On the face of this provision, the Tribunal has power to set aside the objection decision, which is the reviewable decision, but no power to set aside a notification notice. There is no suggestion that the Commissioner had such a power so that the Tribunal could, under the opening words of s 43(1), also exercise that power.
Mr Sievers, who appeared for the applicant, sought to overcome this considerable hurdle in two ways.
First, Mr Sievers said ‘it has been done before’, pointing to the decision of a Deputy President of this Tribunal in Re Boscolo and Secretary, Department of Education, Employment and Workplace Relations.[4] In that case, the decision of the Tribunal is relevantly expressed in these terms:
The decision under review is that the decision of the Social Security Appeals Tribunal
. . .
(2) is set aside in relation to the 1997 loan agreement, with the substitution of a decision that the 1997 loan agreement is unenforceable against Ms Boscolo by reason of the common law principle of non est factum.
[4] [2009] AATA 794.
That decision concerned a student loan scheme in relation to which enforceability was in issue. It is not apparent that it was based on any overarching principle that the Tribunal could set aside or disregard any document, including a non-contractual document, on the basis of the non est factum doctrine. That doctrine has its foundation in the law of contract allowing a potential defence against enforcement of a contract entered into in fraudulent or other circumstances where, translated literally, the party seeking to invoke the doctrine asserts that ‘it is not my document’.
I am, with respect, quite unable to see how that doctrine can assist in the circumstances of this case involving a statutory notice. As Deputy President Forgie observed in Sharma:
72. It is clear that the doctrine of non est factum is directed to contractual arrangements between two parties. It is used as a defence, to an action brought by the other party to enforce the contract. It is not used as a basis for avoiding duties and obligations. It is underpinned by the notions that a person should consent to entering contractual arrangements and that a person cannot properly consent if under a misapprehension as to what is going on. At the same time, it is underpinned by notions that a person must take responsibility for that person’s own actions and that the status quo should generally be retained. . . An election is the exercise of a statutory right to make it rather than the result of a choice to enter a contract with another.[5]
[5] [2007] AATA 1129, [72].
Accordingly, I conclude that the Tribunal has no power to set aside or disregard the applicant’s notification notice on basis of the non est factum doctrine. That being so, it is not necessary or appropriate[6] to embark upon a detailed analysis to resolve the controversy between the parties as to whether, if the doctrine were capable of assisting the applicant, the circumstances of this case would fall within the limits of the doctrine as articulated in relevant case law.
[6] This matter being decided in the Small Business Taxation Division requires a decision to be provided in 28 days of the hearing. Further, the Commissioner indicated a degree of urgency related to the time limits for payment of Jobkeeper payments by the Commissioner.
The second basis on which Mr Sievers sought to overcome the hurdle posed by the limited range of decisions the Tribunal may make on an application for review is founded upon s 14(2) of the Jobkeeper rules, which states:
(2) The Commissioner may, for the purposes of determining whether the Commissioner is satisfied under subsection (1) in relation to an entity, accept, either in whole or in part, a statement in the approved form lodged with the Commissioner by the entity under this Part.
The essence of the submission seemed to be that the Tribunal, being empowered by s 43(1) of the AAT Act to exercise relevant powers of the Commissioner, could, under s 14(2), decline to accept a statement by the employer (in the approved form for reporting as required under s 16) that the applicant had given the employer a nomination notice.
The context in which s 14(2) appears in s 14, which is set out in full in the appendix, makes it clear that it is intended to facilitate prompt payment of Jobkeeper payments by allowing the Commissioner to accept representations made by claimants, but with the power to subsequently recover overpayments if the representations proved to be inaccurate.
Section 14(2) does not, in my view, provide a basis for the Tribunal to treat a notification notice which appears on its face to be a valid notice as if it were not a valid notice. That would be an improbable intended outcome where, as in this case in respect of the employer’s claims for the first two fortnights, there is no suggestion that the giving of the notice was attended by any circumstance that might have alerted the employer to any potential issue affecting the validity of the notice.
That would be a harsh outcome for the employer. Even if, contrary to my view, the Tribunal could exercise such a power, to do so would be inappropriate without hearing from the employer.
I acknowledge that the outcome for the applicant in this case is harsh, particularly when there is evidence, which I accept, that she was pressed to make the decision whether to give the notification notice to the employer in a relatively short space of time and in difficult personal circumstances. However, it is the outcome mandated by the legislation; the Tribunal has no discretion to allow Jobkeeper payments to be made where the requirements of the rules are not satisfied.
DISPOSITION OF APPLICATION FOR REVIEW
It follows from these conclusions that the objection decision must be affirmed.
I conclude by recording my appreciation of the helpful oral and written submissions provided by counsel for both parties.
I certify that the preceding 52 (fifty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member R Olding.
.....................[sgd]...................................................
Associate
Dated: 24 December 2021
Date of hearing: 21 December 2021 Counsel for the Applicant: Mr C. Sievers Solicitors for the Applicant: O'Rourke Legal Counsel for the Respondent: Ms A. Wilson Solicitors for the Respondent: Litigation and Legal Services, Australian Taxation Office APPENDIX 1:
6Employer’s entitlement to jobkeeper payment for an employee
(1) An entity (the employer) is entitled to a jobkeeper payment for an individual for a fortnight if:
(a) the fortnight is a jobkeeper fortnight (see subsection (5)); and
(b)the employer qualifies for the jobkeeper scheme at or before the end of the fortnight (see section 7); and
(c)the individual is an eligible employee of the employer for the fortnight (see section 9); and
(d)the employer has satisfied the wage condition in section 10 in respect of the individual for the fortnight; and
(e)the employer has notified the Commissioner in the approved form at or before the time referred to in subsection (2) that the employer elects to participate in the jobkeeper scheme; and
(f)the employer has given information about the entitlement for the fortnight, including details of the individual, to the Commissioner in the approved form; and
(g)the employer has not notified the Commissioner in the approved form that the employer no longer wishes to participate in the jobkeeper scheme.
Note 1:Some provisions of the Act also affect whether an entity is entitled to a jobkeeper payment: see section 14 of the Act (about record keeping) and section 19 of the Act (about contrived schemes).
Note 2:The approved form may require further information: see paragraph 388‑50(1)(c) in Schedule 1 to the Taxation Administration Act 1953.
(2) For the purposes of paragraph (1)(e), the time at or before which the employer must notify the Commissioner that the employer elects to participate in the jobkeeper scheme is:
(a)for an entitlement arising in the first or second jobkeeper fortnight—the end of the second jobkeeper fortnight; or
(b)for an entitlement arising in any other fortnight—the end of the fortnight.
Note:The Commissioner may defer the time for giving an approved form: see section 388‑55 in Schedule 1 to the Taxation Administration Act 1953.
No other entity to be entitled for the same individual
(3) An entity cannot be entitled under this section to a jobkeeper payment for an individual if another entity is entitled under this section or section 11 to a jobkeeper payment for the individual.
Employer must notify individual
(4) An employer must notify an individual in writing within 7 days of giving the Commissioner details of the individual under paragraph (1)(f).
Meaning of jobkeeper fortnight
(5) Each of the following is a jobkeeper fortnight:
(a)the fortnight beginning on 30 March 2020;
(b)each subsequent fortnight, ending with the fortnight ending on 27 September 2020.
7When an entity qualifies for the jobkeeper scheme
(1) For the purposes of paragraphs 6(1)(b) and 11(1)(c), an entity qualifies for the jobkeeper scheme at a time if:
(a)on 1 March 2020, the entity carried on a business in Australia, or was a non‑profit body that pursued its objectives principally in Australia; and
(b)the entity has satisfied the decline in turnover test at or before the time (see section 8).
Note: Qualifying entities must report monthly turnover information to the Commissioner for the duration of the scheme: see section 16.
Exceptions
(2) However, an entity does not qualify for the jobkeeper scheme at a time if:
(a) an amount of levy under the Major Bank Levy Act 2017 was imposed for any quarter ending before 1 March 2020 on:
(i) the entity; or
(ii) if the entity is a member of a consolidated group—another member of the group; or
(b) the entity is an Australian government agency; or
(c) the entity is a local governing body; or
(d) the entity is wholly owned by an entity covered by paragraph (b) or (c); or
(e) the entity is a sovereign entity; or
(f) if the entity is a company—a liquidator or provisional liquidator has been appointed in relation to the company; or
(g) if the entity is an individual—a trustee in bankruptcy has been appointed to the individual’s property.
9Meaning of eligible employee
(1) An individual is an eligible employee of an entity for a fortnight if:
(a)the individual is employed by the entity at any time in the fortnight; and
(b)the individual satisfies the requirements in subsections (2) and (3); and
(c)the individual is not excluded from being an eligible employee of the entity for the fortnight under subsection (4).
1 March 2020 requirements
(2) The requirements are that, on 1 March 2020:
(a)the individual was aged 16 years or over; and
(b)the individual was:
(i) an employee (other than a casual employee) of the entity; or
(ii) a long term casual employee of the entity; and
(c)the individual:
(i) was an Australian resident (within the meaning of section 7 of the Social Security Act 1991); or
(ii) was a resident of Australia for the purposes of the Income Tax Assessment Act 1936 and was the holder of a special category visa referred to in the regulations under the Migration Act 1958 as a Subclass 444 (Special Category) visa.
Note: See subsection (5) for the meaning of long term casual employee.
Nomination requirements
(3) The requirements are that:
(a)the individual has given to the entity a notice (the nomination notice) in the approved form stating that:
(i) the individual satisfies the requirements in subsection (2) and in paragraph (b) of this subsection in relation to the entity; and
(ii) the individual agrees to be nominated by the entity as an eligible employee of the entity for the purposes of the jobkeeper scheme; and
(b)at the time the individual gives the entity the nomination notice:
(i) the individual is not excluded under subsection (4) from being an eligible employee of the entity for the fortnight in which the time occurs; and
(ii) if the individual is a long term casual employee of the entity—the individual is not also an employee (other than a casual employee) of another entity; and
(iii) individual has not given any other entity, or the Commissioner, a nomination notice under this subsection or subsection 12(4).
Note:If an overpayment results from an individual nominating with more than one entity, the individual may be jointly and severally liable to pay the overpayment and any general interest charge on the overpayment: see section 11 of the Act.
Exclusions
(4) An individual is excluded from being an eligible employee of an entity for a fortnight if:
(a)parental leave pay is payable to the individual and the individual’s PPL period overlaps with, or includes, the fortnight; or
(b)at any time during the fortnight, the individual is paid dad and partner pay; or
(c)all of the following apply:
(i) the individual is totally incapacitated for work throughout the fortnight;
(j) an amount is payable to the individual under, or in accordance with, an Australian workers’ compensation law in respect of the individual’s total incapacity for work;
(k) the amount is payable in respect of a period that overlaps with, or includes, the fortnight.
Meaning of long term casual employee
(5) An individual is a long term casual employee of an entity at a time if:
(a)at that time, the individual was a casual employee of the entity; and
(b)the individual had been employed by the entity on a regular and systematic basis during the period of 12 months that ended at that time.
Businesses that change hands etc.
(6) For the purposes of this section, treat an entity (the later entity) that employs an individual at a time (the later time) as having also employed the individual at an earlier time if:
(a)the individual was employed at the earlier time by another entity in the same wholly‑owned group as the later entity; or
(b)both of the following apply:
(i) at the later time, the individual is employed in a business carried on by the later entity or in a non‑profit body the purposes of which are carried on by the later entity;
(ii) at the earlier time, the individual was employed in the same business or non‑profit body, but that business was, or the purposes of that non‑profit body were, carried on by a different entity.
Note 1: Paragraph (b) means that an individual can be an eligible employee of an entity even if the business or non‑profit body in which the individual is employed changes hands after 1 March 2020.
Note 2:Paragraph (b) also means that, in working out if an individual is a long term casual employee of an entity at a time, employment in a business or non‑profit body during the period of 12 months that ended at that time can be counted even if the business or non‑profit body changed hands during that period.
11 Entity’s entitlement to jobkeeper payment for a business participant
(1)An entity is entitled to a jobkeeper payment for an individual for a fortnight if:
(a) the fortnight is a jobkeeper fortnight (see subsection 6(5)); and
(b) the entity is not a non‑profit body; and
(c) the entity qualifies for the jobkeeper scheme at or before the end of the fortnight (see section 7); and
(d) the individual is the eligible business participant for the entity for the fortnight (see section 12); and
(e) the entity has notified the Commissioner in the approved form at or before the time referred to in subsection (2) that the entity elects to participate in the jobkeeper scheme; and
(f) the employer has given information about the entitlement for the fortnight, including details of the individual, to the Commissioner in the approved form; and
(g) the entity has not notified the Commissioner in the approved form that the entity no longer wishes to participate in the jobkeeper scheme.
Note 1:Some provisions of the Act also affect whether an entity is entitled to a jobkeeper payment: see section 14 of the Act (about record keeping) and section 19 of the Act (about contrived schemes).
Note 2: The approved form may require further information: see paragraph 388‑50(1)(c) in Schedule 1 to the Taxation Administration Act 1953.
(2)For the purposes of paragraph (1)(e), the time at or before which the entity must notify the Commissioner that the entity elects to participate in the jobkeeper scheme is:
(a) for an entitlement arising in the first or second jobkeeper fortnight—the end of the second jobkeeper fortnight; or
(b) for an entitlement arising in another fortnight—the end of the fortnight.
Note: The Commissioner may defer the time for giving an approved form: see section 388‑55 in Schedule 1 to the Taxation Administration Act 1953.
Only one eligible business participant per entity
(3)An entity cannot be entitled under this section to a jobkeeper payment for more than one individual (whether for the same fortnight or a different fortnight).
No other entity to be entitled for the same individual
(4)An entity cannot be entitled under this section to a jobkeeper payment for an individual if another entity is entitled under either this section or section 6 to a jobkeeper payment for the individual.
Entity must notify individual
(5)Unless the entity is a sole trader, the entity must notify an individual in writing within 7 days of giving the Commissioner details of the individual under paragraph (1)(f).
Note: In the case of a sole trader, the entity and the individual are the same: see item 1 of the table in subsection 12(2).
Integrity rule
(6)An entity is not entitled to a jobkeeper payment under this section unless the entity had an ABN on 12 March 2020 (or a later time allowed by the Commissioner), and the requirement in subsection (7) or (8) is satisfied.
(7)For the purposes of subsection (6), the requirement in this subsection is satisfied if:
(a) an amount was included in the entity’s assessable income for the 2018‑19 income year in relation to it carrying on a business; and
(b) the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the amount should be so included.
(8)For the purposes of subsection (6), the requirement in this subsection is satisfied if:
(a) the entity made a taxable supply in a tax period that applied to it that:
(i)started on or after 1 July 2018; and
(ii) ended before 12 March 2020; and
(b) the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the entity had made the taxable supply.
(9)For the purposes of subsection (8), in determining whether the entity made a supply (within the meaning of the GST Act) that is a taxable supply:
10assume that the entity is registered (within the meaning of that Act); and
11assume that the supply is neither GST‑free (within the meaning of that Act) nor input taxed (within the meaning of that Act); and
12for an entity carrying on business solely in the external Territories—assume that the external Territories are part of the indirect tax zone (within the meaning of that Act).
12Meaning of eligible business participant
(1) An individual is the eligible business participant for an entity for a fortnight if:
(a)the individual is not employed by the entity at any time in the fortnight; and
(b)the individual satisfies the requirements in subsection (2) at a time in the fortnight; and
(c)the individual satisfies the requirements in subsections (3) and (4); and
(d)the individual is not excluded from being the eligible business participant for the entity for the fortnight under subsection (6).
Business participation requirements
(2) The requirements are satisfied at a time if, at that time:
(a)the individual is actively engaged in the business carried on by the entity; and
(b)the individual is covered by column 2 of the applicable item of the following table.
1) Item
2) Column 1
If the entity is a …3) Column 2
The individual must be …1
Sole trader
The entity
2
Partnership
A partner in the partnership
3
Trust
An adult beneficiary of the trust
4
Company
A shareholder in or a director of the company
1 March 2020 requirements
(1) The requirements are that, on 1 March 2020:
(a)the individual was aged 16 years or over; and
(b)the individual satisfied the requirements in subsection (2); and
(c)the individual:
(i)was an Australian resident (within the meaning of section 7 of the Social Security Act 1991); or
(ii)was a resident of Australia for the purposes of the Income Tax Assessment Act 1936 and was the holder of a special category visa referred to in the regulations under the Migration Act 1958 as a Subclass 444 (Special Category) visa.
Nomination requirements
(2) The requirements are that:
(a) the individual has given a notice (the nomination notice) in the manner set out in subsection (5) stating that:
(i)the individual satisfies the requirements in subsection (3) and in paragraph (b) of this subsection in relation to the entity; and
(ii)the individual agrees to be nominated by the entity as the eligible business participant for the entity for the purposes of the jobkeeper scheme; and
(b) at the time the individual gives the entity the nomination notice:
(i)the individual satisfies the requirements in subsection (2) in relation to the entity; and
(ii)the individual is not an employee (other than a casual employee) of another entity; and
(iii)the individual has not given any other entity, or the Commissioner, a nomination notice under this subsection or subsection 9(3); and
(iv)no other individual has already satisfied the requirements in this subsection in relation to the entity
Note: If an overpayment results from an individual nominating with more than one entity, the individual may be jointly and severally liable to pay the overpayment and any general interest charge on the overpayment: see section 11 of the Act.
(3) For the purposes of subsection (4), the notice must be given, in the approved form, to:
(a) unless paragraph (b) applies—the entity; or
(b) if the individual is a sole trader—the Commissioner.
Exclusions
(4) An individual is excluded from being the eligible business participant for an entity for a fortnight if:
(a) parental leave pay is payable to the individual and the individual’s PPL period overlaps with, or includes, the fortnight; or
(b) at any time during the fortnight, the individual is paid dad and partner pay; or
(c) all of the following apply:
(i)the individual is totally incapacitated for work throughout the fortnight;
(ii)an amount is payable to the individual under, or in accordance with, an Australian workers’ compensation law in respect of the individual’s total incapacity for work;
(iii)the amount is payable in respect of a period that overlaps with, or includes, the fortnight
14Payment of Jobkeeper payment
(1) If the Commissioner is satisfied that an entity is entitled under section 6 or section 11 to a jobkeeper payment for a fortnight, the Commissioner must pay the entity the jobkeeper payment in accordance with this Division and the Act.
(2) The Commissioner may, for the purposes of determining whether the Commissioner is satisfied under subsection (1) in relation to an entity, accept, either in whole or in part, a statement in the approved form lodged with the Commissioner by the entity under this Part.
Transitional rule for first 2 jobkeeper fortnights
(3) The Commissioner may pay an entity a jobkeeper payment for a fortnight in accordance with this Division and the Act without being satisfied that the entity is entitled under section 6 or section 11 to the jobkeeper payment if:
a. the fortnight is the first or second jobkeeper fortnight; and
b.the entity has notified the Commissioner in the approved form that the entity elects to participate in the jobkeeper scheme (as referred to in paragraph 6(1)(e) or 11(1)(e)); and
c.the Commissioner is satisfied, on the basis of information provided in the approved form, that it is reasonable in the circumstances to pay the jobkeeper payment.
Overpayment
(4) To avoid doubt, the fact that the Commissioner pays an entity a jobkeeper payment under this section does not mean the entity is entitled under section 6 or section 11 to the jobkeeper payment.
Note: If the entity was in fact not entitled to a jobkeeper payment paid under this section, the provisions about overpayments would apply: see sections 9, 10 and 11 of the Act.
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