Coronavirus Self-employed, Small Business Support

Coronavirus support extension – Announced 22 July 2020

The Morrison government has announced an extension to the support packages:

JobKeeper until the end of March 2021
JobSeeker until the end of December 2020

Payments are lower and eligibility is tightened.
See here for details.

Current 15 April 2020
(This update covers JobKeeper details)
First version 1 April 2020

The following summary is to assist SEA members and supporters understand the key Coronavirus emergency assistance available through the Federal government and more. We’ve collated this from official government sources and checked with our government contacts.

The assistance support is available for self-employed, small business people who:

Are sole traders and don’t employ anyone
Employ people

And covers (details and links below):

1. JobSeeker—Access to payments—no work
2. JobKeeper—Income Support – General Rules
2a. JobKeeper—Income Support – No Employees
2b. JobKeeper—Income Support – You have Employees
3. Where you have employees—Cash flow Support
4. Accessing superannuation
5. Apprenticeship subsidies
6. Deferred payments on existing loans
7. New government backed loans
8. New tax investments subsidies
9. Help if going broke

We also have links to:

10. State governments’ support
11. Business tips during Coronavirus
12. Low income households
13. Cancellations—Travel, events, etc—Scams

Federal government Business Help Hotline 13 28 46 (open 7 days 7am to 11pm)

A guide to what you will get per fortnight

	JobSeeker $	JobKeeper $
Existing Jobseeker allowance Base Rate	565.70
Coronavirus Support Payment	550.00	1,500.00
Total Fortnightly Payment	1,115.70	1,500.00
Less tax (approx.)*	100.00	192.00
In your hand base	1,015.70	1,308.00
Plus earn extra (maximum)	1,000.00
Less tax (approx.)*	404.00
In your hand if earning extra	1,711.70	1,308.00

*Actual tax will depend on your situation

Tax scales taken from ATO website and here
JobSeeker info from Centrelink website

1. JobSeeker—Access to Payments—No Work

Sole traders/self-employed people now have access to the social security system, specifically the Job Seeker or Youth Allowance. You can receive a $550 fortnightly Coronavirus supplement. You can earn up to $1,000 a fortnight before the payment cuts out. Assets tests and other restrictions have been removed.

This is a change from existing rules. Currently if you are running a small business as a self-employed person but on low income you could not get social security. Now you can.
Examples are:

An artist can do shows and receive a social security top up.
An IT contractor can to do phone support work and receive a social security top up.
A café owner will be able to still serve coffee but receive social security support.
The partner income test has been relaxed. Your partner/spouse can now earn up to $3,068 per f/n before you become ineligible for JobSeeker.

Info here.

2. JobKeeper—Income Support—General Rules

On Thursday 9th April 2020 Parliament passed around five Bills setting the rules for the JobKeeper scheme. On Saturday 11 April Treasury released several Fact Sheets explaining the rules. Probably the most helpful is Frequently Asked Questions.

This JobKeeper summary (2, 2a, 2b) is based on the legislation and Fact Sheets.
(NB: There is quite a lot of detail. We believe this summary is accurate. However we’d appreciate being informed if there are any errors to enable correction.)

Rules for both Self-Employed and Employer small business

Business income/turnover has dropped or is likely to drop by more than 30%*
- Turnover is what you declare for GST on your BAS.
- The turnover period is assessed from 1 March.
- Business income/turnover does not include overseas operations.
- To assess the percentage drop in business income/turnover, compare now (month/quarter) to same time 1 year before.
- You can estimate the expected percentage drop but you must report the actual drop to the ATO.
- Are you a new business? Is your business income ‘lumpy’? The ATO has discretion. Talk to ATO.
- *Once you have shown that your turnover has dropped 30% plus you do not have to prove that again for the rest of the 6 months that the JobKeeper scheme is in operation. (E.g., If your turnover drops in April but not March you will receive 5 months of JobKeeper.)
Report your business income/turnover monthly to ATO (Single Touch or manual). (This is for government data collection. It does not affect your JobKeeper entitlement)
The JobKeeper payment periods are from 30 March to 27 September 2020 (26 weeks).
You will be paid by ATO monthly in arrears. The first payment is early May. The last payment is the end of October:
- That is, first Jobseeker money is paid by ATO early May
- See your bank if you need credit to tide you over until the first payment in arrears is made.
Jobseeker payments are for self-employed and employee income. This income is taxed – see table above for an approximate guide to the tax implications.
A self-employed person or an employee can only receive one JobKeeper payment stream (see below)

Fraud
Fraud is likely if a person/business claims JobKeeper payments:

When your turnover has not dropped the required amount (e.g. 30% for small business)
On employees that you do not actually have.
More than once for a given employee

Honest mistake? Talk to the ATO fast. You must repay any wrongly claimed amount. Penalties and interest may apply.
The Australian Federal Police will investigate fraud. Criminal charges could apply.

2a. JobKeeper—Income Support—No Employees

As a self-employed person you have access to JobKeeper. The General Rules (2) apply plus

You must have an ABN on or before 12 March 2020.
Turnover is based on your 2018-19 tax return or other information you had supplied the ATO by 12 March 2020. (The ATO can extend this deadline.)
You must provide your Tax File Number to receive the $1,500.
The $1,500 a fortnight is paid to you by the ATO.

If you are a …, who receives the money?

Sole trader – you
Partnership – only one partner
Company – only one director
Trust – only one beneficiary

More Info here.
Apply to the ATO here.

2b. JobKeeper—Income Support—You have Employees

As a self-employed person who also employs people your business has access to JobKeeper. The General Rules (2) apply plus

You can receive JobKeeper as a self-employed person as well as your employees.
Report employee numbers as of 1 March 2020.

Eligible employees

Anyone stood down and re-hired since 1 March.
16 years or older on 1 March
Full or Part Time employees
Casual employed for 1 year or more.
Australian citizen or Specific Visa holder – Permanent. Protected, Non-Protected who has been in Aust 10+ years, Subclass 444.
Employees can only obtain a JobKeeper payment from one employer (that is, double dipping is prohibited. It is fraud.)
A JobKeeper payment is NOT available for new employees hired after 1 March or workers on Workcover.
You must include all eligible employees. You cannot pick and choose.

Payments

$1,500 a fortnight will be paid by ATO to you for each eligible employee.
You must pay the employee/s before the ATO pays you.
The payment period for JobKeeper starts 30 March until 27 September (26 weeks).

How much must you pay your employee/s

The full $1,500 must go to the employee if their wage is less than $1,500.
$1,500 subsidizes wages where the employees wage is greater than $1,500.
If the employee earns more than $1500 you can pay the employee only $1500 but you cannot pay them less than their normal hourly rate. (see below**)
If you rehire a stood-down employee, you must back-pay them to 1 March.

Withhold tax

You must pay PAYG income tax on each employee/s $1500.

Notices

You must give notice to the employees that you are accessing JobKeeper and they must agree in writing. (ATO forms)

Superannuation

You do not have to pay superannuation on the $1,500.

State Taxes/costs

All states are providing some type of payroll tax relief.
Workcover premiums must be paid on the $1500, it seems.

Labour hire

These rules apply to labour hire businesses for the workers they engage/supply.
The rules do not apply to the client/’host employer’.

Apprentices

You cannot receive the apprentice wage subsidy and JobKeeper on the apprentice.

**Note on paying employees less than their non-coronavirus fortnightly income but $1500 or more.
The legislation requires that someone cannot be paid less than their normal hourly rate.

Response Package Omnibus (Measures No. 2) Bill 2020 passed on Wednesday. The relevant section reads 789GDB Hourly rate of pay guarantee
(1) For the purposes of this Part, the hourly rate of pay guarantee consists of the rules set out in subsections (2) and (3). Minimum rate of pay—jobkeeper enabling stand down
(2) If a jobkeeper enabling direction given by an employer under section 789GDC (jobkeeper enabling stand down) applies to an employee of the employer, the employer must ensure that the employee’s base rate of pay (worked out on an hourly basis is not less than the base rate of pay (worked out on an hourly basis) that would have been applicable to the employee if the direction had not been given to the employee.

That is, say you were previously paying an employee $3000 a fortnight. That person can now be paid $1500 a fortnight but their hourly rate of pay cannot be less than what they were on when being paid the $3000. Say they worked 70 hours a fortnight on $3000, the equivalent of $43 an hour. On the $1500 JobKeeper Payment, they can only be required to work 35 hours in the fortnight ($1500 divided by $43).

More Info here.
Apply to the ATO here.

3. Where You Have Employees—Cash Flow Support

Tax free subsidy from $20,000 to $100,000 where you have employees.
Applies for the period March to September this year (2020)

The way it works is as follows as we understand it:

You lodge your normal PAYG statement (monthly/quarterly)
The ATO will apply a credit against your account up to 100% of your PAYG payments. It appears that this means you make your payment less the credit.
Or you will receive a subsidy payment from the ATO if you have low income employees who pay no tax.

The amount you receive will depend on the size of your business.
Minimum will be $20,000. Maximum $100,000.
Note: It’s confirmed that this is only intended if you employ people.

ATO info here.
General info here.

4. Access to Your Superannuation

Sole traders with reduced income (20% + reduction) can access $10,000 from super this financial year and $10,000 next year.
Info here.

5. If You Have Apprentices or Trainees

50% wage subsidy on each apprentice or trainee up to $7,000 per quarter (max $21,000).
Info here.

6. Defer Loan Payments

The banks are a deferring loan repayments for 6 months for small businesses needing help.
Info here and here.

7. Government-backed Small Business Loans

The Commonwealth is supplying a 50% guarantee on new small business loans up to $250,000 for terms up to 3 years. Loans are available through your bank from 1 April 2020 for 6 months. You don’t need to provide security and will not need to make repayments for the first 6 months.

Info here.

8. Instant Tax Asset Write-off

Any business assets you buy can be instantly written off against your tax. Now applies to purchases up to $150,000 (increased from $30,000).
ATO info here.
General info here.

9. If You Look Like You’re Going Broke

Temporary relief from creditors’ demands against you plus temporary relief for your personal liability as a director while trading insolvent.
Info here.

10. Links to Support from State Governments

Info here.
This table is a summary overview of the main efforts made by the States. It’s not a complete list. Check the link above for details.

	Payroll Tax	Fees on business	Fund /grants	Other
NSW	Relief	Waived
Vic	Refunds & deferrals	Liquor lic waived	Yes	Govt pay businesses 5 days Rent deferral on govt buildings.
Qld	Relief	Waived	Loans & Grants
SA	Relief	Liquor lic waived	Yes	Land tax relief Unemployed benefits
Tas	Waived	Waived	Loans & grants
WA	Waived		Grants
ACT	Waived	Waived		Electricity rebates
NT			Fund & grants

11. Business Tips During Coronavirus

Info here.

12. Low-income Households Support

Info here.

13. Cancellations—Refunds (Travel, Events, Gym etc)—Scams

The Australian Competition and Consumer Commission has provided official advice on legal obligations and rights of businesses and consumers.
Info here.

Watch out for Coronavirus scams.
Info here.