Support for Sole Traders

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 30^th 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 month).

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 business. 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 business. 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.