PART A – Introduction JobKeeper and Churches
A series of legislation relating to the JobKeeper scheme has come into force upon the royal assent on 9 April 2020 until its planned end on 27 September 2020.
The Federal treasurer further issued a series of rules governing the relevant matters on the same date. The application of these principles to churches will be discussed below.
- The principles for deducing the eligibility of an entity seeking JobKeeper assistance is set out by the Treasurer by way of legislative instrument in Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) (‘the rules’) can be found – here
- The explanatory memorandum of the rules can be found – here
- Of relevance, the Coronavirus Economic Response Package Omnibus (Measure No. 2) Bill 2020 (Cth), soon to be the Coronavirus Economic Response Package Omnibus (Measure No. 2) Act 2020 (Cth) can be found – here
- See also:
- https://www.ato.gov.au/general/jobkeeper-payment/employers/eligible-employers/ for the ATO’s simplified explanation of the relevant matters in relation to employers;
- https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Your-eligible-employees/ for the ATO’s simplified explanation of the relevant matters in relation to employees;
- https://treasury.gov.au/coronavirus/jobkeeper for the Federal Treasury’s resources on JobKeeper, including a Frequently Asked Questions fact sheet.
Please note that this fact-sheet is orientated towards Churches and Not-For-Profits.
If you are operating a for-profit business, our JobKeeper Fast Facts publications may be more relevant for you.
PART B – JobKeeper Assistance for Churches: Eligibility Requirements
In order to be eligible for accessing JobKeeper assistance, a church would have to be an eligible employer (part A); and have an eligible employee (part B).
(1) Employer eligibility
In order to be eligible for accessing JobKeeper assistance, the employer would have to be: (a) a business or not-for-profit organization (which would include churches); (b) registered under Australian Charities and Not-for-profits Commission (‘ACNC’); (c) principally pursuing its objectives in Australia; (d) had at least 1 eligible employee on 1 March 2020 who is currently still on the church’s payroll; and (e) for the church to satisfy the ‘decline in turnover test’.
Decline in turnover test
Of particular concern, the ‘decline in turnover test’ will be discussed in detail. There are 2 ways to satisfy this test.
(i) Basic test
First way to satisfy the turnover test is through the ‘basic test’ set out under s 8(1)-(4) of the Rules. The test will require churches to show that there has been at least a 15% fall in turnover within the turnover test period.
Tithing relevantly, as explained by the explanatory memorandum by the treasurer, are included in the calculation of turnover; this includes “certain donations that ACNC-registered charities… receive or are likely to receive (including non-monetary value of gifts)… This means that when such ACNC-registered charities… have a significant decline in donations they may qualify for the Scheme”.
Practically there are 3 ways churches can show a 15% fall in turnover:
- Firstly, they can demonstrate this by comparing the GST turnover for March 2020 with the GST turnover for March 2019;
- Secondly, they can show that there will likely be a 15% fall in GST turnover in April 2020 compared to April 2019;
- Lastly, churches may show this by comparing the projected turnover for quarter starting in April 2020 with GST turnover for quarter starting in April 2019.
*Note that how churches choose to compare and demonstrate a 15% fall in turnover is not dependent on whether the church reports quarterly or monthly; though it would likely be easier to stick to that.
(ii) Alternative test
Under the alternative test, the commissioner may, by legislative instrument, determine that an alternative decline in turnover test applies to churches. The commissioner must be satisfied that here is no appropriate relevant comparison period to satisfy the basic test.
Are churches required to be retested?
Churches only need to satisfy this requirement once. There is no need to retest the turnover each month. There are obligations however to continue reporting on a monthly basis.
Reporting obligations are set out in division 5 s 16 of the rules. For churches, it indicates that churches that have qualified for the JobKeeper scheme in accordance to s 7, must:
- Subsection (1) notify the Commissioner in the approved form of relevant matters within 7 days of the end of a calendar month if the church is an entity to JobKeeper payment for a fortnight that ends in the month
- Subsection (2) ‘relevant matters’: include:
- (a) the entity’s current GST turnover for the reporting month; and
- (b) the entity’s projected GST turnover for the following month.
Churches will not be eligible for JobKeeper assistance if:
- the church has entered into bankruptcy
- the church is in liquidation
- the church is a sovereign entity
- is a government owned entity
When can churches enroll for JobKeeper assistance?
Churches will be able to enrol in JobKeeper assistance from 20 April 2020 using the online form from the ATO website to identify eligible employees and submit to ATO.
Is there any further information to be released?
There is still further information that will soon be updated.
- Firstly, in calculating the fall in turnover, further information are to be released with regards to GST grouping (where two or more associated business entities operate as a single GST group)
- Secondly, in relation calculating fall in turnover, the Commissioner of Taxation will develop additional tests in the near future.
(2) Employee test
The following set out the requirements to be met in order for the church to have eligible employees.
(a) Employed by the church
The employee must be employed by the church. This includes employees who have been stood down as a result of the COVID-19 and those that have been rehired.
(b) Meet the minimum age requirement
The employee must be at least 16 years of age on 1 March 2020 
(c) Permanent or long term casual employe 
The employee must be a permanent full-time or part-time employee at 1 March 2020; OR a ‘long term casual’ as at 1 March 2020 and not a permanent employee of another employer. ‘Long term casual’ means an employee that has been employed on a regular and systematic basis for at least 12 months prior 
(d) Residency requiremen 
The employee must have been an Australian resident as at 1 March 2020 within the meaning of the Social Security Act 1991, which requires that they:
- reside in Australia; and
- are one of:
- an Australian citizen;
- the holder of a permanent visa;
- a Protected Special Category Visa Holder; or
- Australian tax resident who is a ‘Special Category Visa Holder 
More information about these requirements can be found from the Services Australia website under residence descriptions.
(e) Agreement requiremen 
The employee must agree to be nominated by the church to receive JobKeeper assistance. If an employee has multiple employers, they can choose one employer (only one) they want to nominate (if the employee has nominated the first employer, this disqualifies them from accessing JobKeeper with the second employer) 
Nomination notice to be found here
Factors that may disqualify an employee includes:
- If the employee received any of the following payments during JobKeeper fortnight:
- Government parental leave or dad and partner pay; or
- A worker’s compensation payment due to incapacity in accordance with compensation law throughout the fortnight due to incapacitation.
- If the employee:
- Was employed after 1 March 2020; or
- Resigned before 1 March 2020; or
- Have agreed to be nominated by another employer.
- (noted again) casual employees who were not employed on a regular or systematic basis for at least 12 months as at 1 March 2020.
How does it apply if pastors are receiving exempt fringe benefits?
Little information has is available in relation to pastors that receive exempt fringe benefits, and its interaction with JobKeeper payments. The explanatory memorandum and the relevant legislation do not address this specifically.
Some guidance can perhaps be taken in the Treasury’s Frequently Asked Questions Fact Sheet, and is as follows:
I CURRENTLY HAVE A SALARY SACRIFICE ARRANGEMENT WITH MY EMPLOYER. CAN IT CONTINUE?
Yes. The JobKeeper Payment may be paid to an employee in cash or as a fringe benefit or an extra superannuation contribution where the employee and employer agree.
PART C – Conclusion
If the church is an eligible employer, and they have eligible employees, they will be able to qualify under the JobKeeper scheme. Churches will be required to continue paying their employees at least $1,500 per fortnight (before tax) and continue to pay to keep claiming until the end of the scheme (on 27 September 2020).
Have more questions on JobKeeper assistance for Churches?
If you need to apply for JobKeeper assistance and you’re a Church or associated member of Churches, please do not hesitate to contact us. We have special discounted offerings for Churches and not-for-profit entities, as well as employer and employees, see our COVID-19 page.
Authors: James Tan & Ervin Hii (student placement)
 In accordance to s 20 of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth).
 The Act itself does not provide rules governing eligibility.
 See s 7 of the Rules.
 Falling under subsection 3 as an ACNC-registered charity.
 S 8(2)-(3) of the Rules.
 Turn over test period means: (i) a calendar month that ends after 30 March 2020 and before 1 October 2020; or (ii) a quarter that starts on 1 April 2020 or 1 July 2020 (s 8(7)(a) of the Rules).
 See explanatory memorandum linked above.
 See s 8(5)-(7).
 The approved form is yet to be available.
 See s 9 of the Rules.
 S 9(2)(a) of the rules.
 See s 9(2)(b) of the Rules.
 See s 9(5) of the Rules.
 See s 9(2)(c) of the Rules.
 A ‘Special Category Visa Holder’ (Subclass 444) means a NZ citizen working/visitng/studying in Australia. This remains valid unless the employee loses their NZ citizenship.
 See ‘nomination requirements’ s 9(3) of the Rules.
 See: Division 2 s 6(3) of the Rules.
 S 9(4)(a)-(b) of the Rules.
 S 9(4)(c).