Eligibility – How is NDIS revenue treated for JobKeeper purposes?

The ATO has recently clarified the treatment of NDIS revenue for JobKeeper purposes.

One of the many issues an employer needs to determine when considering eligibility to receive JobKeeper payments was whether the requisite decline in turnover could be established.

A ‘concession’ provided by the Government in relation to how an employer should determine ‘turnover’ allowed certain Government funded services to be excluded from turnover calculations by ACNC registered charities.

The concession was a further modification to the rules regarding determining turnover that were originally announced. The original rules were modified (clause 8 (8) refers) allowing:

‘ …for an entity that is an ACNC‑registered charity (other than a Table A provider, a Table B provider, or a school)—a supply made by the entity is to be disregarded, if:

(i)  the consideration for the supply is provided by an Australian government agency, a local governing body, the United Nations, or an agency of the United Nations; and

(ii)  the ACNC‑registered charity elects, in accordance with subsection (9), for this paragraph to apply.’

Where an employer sought to apply the exclusion an election as required.

The election must be in the approved form and given to the Commissioner within 7 days of notifying the Commissioner of the entity’s election to participate in the JobKeeper scheme or such later time as the Commissioner allows.

The election cannot be revoked.

An issue arose as to how National Disability Insurance Scheme (NDIS) funding received directly by a NDIS provider could be excluded.

The ATO has now confirmed that NDIS funding cannot be excluded when determining turnover. The ATO position was stated in a Frequently Asked Questions guidance released on 14 May 2020. The ATO position is explained below.

‘When an NDIS participant selects the National Disability Insurance Agency (NDIA) to manage their plan and pay for their support, these payments are made from the participant’s NDIS funds to the provider. These payments are not payments provided by an Australian government agency. This means that these payments cannot be disregarded from the JobKeeper turnover because the consideration for the supplies made by the provider (an ACNC registered charity) to participants is not provided by an Australian government agency. Similarly, when an NDIS participant chooses to self-manage their own funding or chooses another Plan Manager (other than the NDIA) to pay a provider (an ACNC registered charity), on their behalf, these payments cannot be disregarded from the JobKeeper turnover.’

Where an employer has entered the JobKeeper scheme and calculated turnover by excluding NDIS revenue urgent reconsideration of the position is recommended.

This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.

This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.