The legislation basically says that the measures cannot apply if the entity (or an associate or agent of the entity) has entered into or carried out a scheme or part of a scheme for the sole or dominant purpose of achieving any of the following:
(i) making the entity entitled to the cash flow boost for the period when it would otherwise not be entitled; or
(ii) increasing the amount of the cash flow boost to which the entity is entitled for the period.
No administrative guidance has been issued, but the Australian Taxation Office (ATO) has provided the following comments:
“This may include restructuring your business or the way you usually pay your workers to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.
Any sudden changes to the characterisation of payments made may cause the ATO to investigate whether the payments are in fact wages. If the payments are wages, the ATO may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made. You may also have FBT obligations that have not yet been met.”
Also the eligibility conditions require that the employer must have held an ABN on 12 March 2020 and must have in practical terms either lodged a 2019 tax return or an activity statement for a tax period that started on or after 1 July 2018 and ended prior to 12 March 2020. This is an integrity measure which prevents contrived arrangements designed to create entitlement to the payment by creating a new employer entity.