Income Support for Sole Traders
A sole trader is a business
structure where the individual owner is legally responsible for all aspects of
the business including any debts and losses and day-to-day business decisions.
A sole trader may or may not employ other people in their business.
Sole traders may be eligible to
receive the JobKeeper Payment if their turnover has reduced. Following
registration by the eligible business, the Government will provide $1,500 per
fortnight for Business Participants. A sole trader is considered a Business Participant
as part of the Jobkeeper Scheme. Payments
will be from 30th March to 27 September divided into 13
fortnights. Payments will generally be made at the end of the each
month. A declaration will need to be made through the Business, BAS Agent
or Tax Agent Portal as to your monthly turnover and projected turnover for the
following month. This will support
sole traders to maintain their income and connection with employees.
The Government is also temporarily
expanding the eligibility criteria for the JobSeeker Payment to support sole
traders if their income is negatively affected by the economic impact of the
Coronavirus. For example, as a member of a couple you could receive up to
$1060.80 per fortnight through the JobSeeker Payment and Coronavirus
supplement, although the precise amount will depend on the amount of income you
and your partner continue to earn.
Receiving the JobSeeker Payment may also
make you eligible for other Government payments like Rent Assistance and the
Energy Supplement. If you receive the JobKeeper Payment as a non-employing sole
trader, this may affect your eligibility for payments from Services Australia
as you must report your JobKeeper Payment as income.
Sole Traders are also eligible to receive early access to their superannuation. Find out more details on our Access to Superannuation page.
Eligibility for JobKeeper Payment
Sole traders (including those who
are self-employed or have employees) will be eligible for the subsidy if:
- their business has a
turnover of less than $1 billion and their turnover will be reduced by
more than 30 per cent relative to a comparable period a year ago (of at
least a month); or
- their business has a
turnover of $1 billion or more and their turnover will be reduced by more
than 50 percent relative to a comparable period a year ago (of at least a
Self-employed individuals will be
eligible to receive the JobKeeper Payment where they have suffered. Sole
traders must elect to participate in the scheme. They will need to make an
application to the Australian Taxation Office (ATO) and continue to provide
information to the ATO on a monthly basis, including the number of eligible
employees employed by the business.
Eligible sole traders with employees
will receive the payment for each eligible employee that was on their books on
1 March 2020 and continues to be engaged by that sole trader – including
part-time and stood down employees. To be eligible, the employee must be an
Australian citizen, or the holder of a visa that would allow them to be
eligible for the JobSeeker Payment, or a Special Category (Subclass 444) visa
holder. Casual employees are not eligible for the JobKeeper Payment, except
those employees who had been with their employer on a regular basis for at
least the previous 12 months as at 1 March 2020.
Eligibility for JobSeeker Payment
Previously if a sole trader was trying to access income support payments they had to be willing to seek, and
be available to take up, alternative work which effectively would have required them to close their
Under these new arrangements, this test will be temporarily removed to allow sole traders to continue
operating and receive the JobSeeker Payment if they are eligible to do so.
A sole trader who is eligible for a
payment can meet their mutual obligation requirements during this period by continuing to sustain their
Income testing will apply consistent with current arrangements. So the level of support you will receive will
depend on your ongoing income and that of your partner if you are in a relationship.
However the assets test will not apply – so you will be eligible for assistance even if you have other assets
such as shares and savings.
There will be no waiting period applied before you can receive this payment.
For further details on the expanded eligibility for income support payments, and the new time-limited
Coronavirus supplement, please see the Income Support for individuals fact sheet.
The information in this document is for general information only. This is Shoebox Tax’s interpretation of the law as recently
passed in the Australian Parliament. This may or may not align with the views of the ATO. Until our understanding has been
confirmed by the ATO this remains Shoebox Tax’s interpretation only.
This should not be taken as constituting profession advice from Shoebox Tax. You should access other advice to check how the
law relates to your unique circumstances. This information is offered in good faith and Shoebox Tax is not liable for any loss
caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or
indirectly , in this document.