Not-for-profits and charities | Australian Taxation Office

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Not-for-profits (NFPs) may be entitled to JobKeeper payment to help them pay their employees. This information will help you to understand how the rules apply to NFPs. It should be read in conjunction with the other general advice the ATO has issued on JobKeeper for employers.

Eligible NFPs

NFP entities, like other employers, must meet eligibility requirements to qualify for JobKeeper.

Registration with the Australian Charities and Not-for-profits Commission (ACNC) is not one of the requirements to qualify for JobKeeper.

NFP entities must be established on or before 1 March 2020 to qualify for JobKeeper. If they are established after 1 March 2020, they are not eligible.

An NFP entity may be eligible for JobKeeper if it pursued its objectives principally in Australia. An NFP entity will generally pursue its objectives principally in Australia when the activities that achieve its purpose mainly occur in Australia.

An NFP entity that is endorsed under the Overseas Aid Gift Deductibility Scheme or for developed country disaster relief does not need to pursue its objectives principally in Australia to qualify for JobKeeper.

See also:

  • TR 2019/6 Income tax: the ‘in Australia’ requirement for certain deductible gift recipients and income tax exempt entities (see paragraphs 63 to 69 for further discussion of where objectives are pursued)

Turnover

One of the requirements of the JobKeeper scheme is that the decline in turnover test is satisfied.

The decline in turnover test is applied to the employer entity. The JobKeeper scheme does not recognise non-profit sub-entities and the decline in turnover test must apply to the NFP entity as a whole. The entity must include the turnover of all its branches and non-profit sub-entities. A non-profit sub-entity cannot choose to participate in the JobKeeper scheme and assess its eligibility for JobKeeper payments based on the sub-entity’s turnover.

ACNC-registered charities

A charity, that is not a university or a school, can apply the 15% decline in turnover threshold to receive JobKeeper payments for the first JobKeeper fortnight beginning 30 March 2020 provided the charity:

  • has an ACNC registration date of effect that is on or before the end of the first JobKeeper fortnight (12 April 2020)
  • receives a notification of its ACNC registration and enrols for the JobKeeper payment before 31 May 2020
  • meets other requirements including paying their eligible employees by a certain date.

Gifts

In working out its turnover, a deductible gift recipient (DGR) must include gifts (other than from an associate) whether they are tax deductible to the donor or not. This includes testamentary gifts or gifts from an overseas donor.

An ACNC-registered charity is considered a DGR even if it is not endorsed as a DGR as a whole but operates a fund, authority or institution that is endorsed as a DGR.

An ACNC-registered charity that is not a DGR must include gifts (other than from an associate) of money, property with a market value of more than $5,000 or listed Australian shares.

A gift is a voluntary transfer of property by way of benefaction with no material benefit or advantage received by the donor.

See also:

  • TR 2005/13 Income tax: deductible gifts – what is a gift

National Disability Insurance Scheme

An ACNC-registered charity cannot exclude payments received for providing National Disability Insurance Scheme (NDIS) services from its turnover. Payments received for providing NDIS services are considered to be made from the NDIS participant’s funds, even if an NDIS participant selects the National Disability Insurance Agency (NDIA) to manage their plan and pay the charity.

Government grants

Government grants that require an ACNC-registered charity to make supplies (whether the supply is taxable or GST-free) are included in the charity’s turnover, unless the charity makes an election not to include the consideration for all supplies from government grants. For more information, see GSTR 2012/2 Goods and services tax: financial assistance payments.

If a charity, other than a university or a school, has enrolled for JobKeeper on or before 13 June 2020, it can provide an election to exclude government grants from its turnover by 20 June 2020. The charity can calculate its turnover to exclude government grants on the basis that the election will be given to us by that date.

If a charity has enrolled for JobKeeper after 13 June 2020, it can provide an election to us within seven days of its enrolment.

Fully government funded employees

A charity must inform its relevant employees of its election to participate in JobKeeper within seven days of enrolment and detail the steps the employee must take to agree to be nominated.

Where a charity has elected to exclude government grants from its turnover, its fully government funded employees are not relevant employees. Therefore, the charity does not need to notify these employees of its election to participate in JobKeeper and the steps for nomination. However, the charity can choose to receive JobKeeper payments for these employees. Where the charity makes this choice, it must notify the employees and they must agree to be nominated by the charity.

Where a charity has not elected to exclude government grants from its turnover, all employees, including fully government funded employees, are relevant employees, unless the charity reasonably believes they would not be eligible employees on 1 March 2020.

See also:

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