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Supplement payment for Sole Traders and Casuals

In response to the economic downturn caused by COVID-19, the federal government has made amendments to current social security rules for the six-month period 27 April 2020 to 27 October 2020.

 

Essentially, sole traders and self-employed persons now become immediately eligible to receive benefit payments should their income go below certain thresholds for any particular fortnight. Waiting periods, liquid asset tests and mutual obligation requirements (ie looking for a new job) have been substantially relaxed or removed.

For Hire

Registration process

Individuals who are casual workers or self-employed are generally required to apply to Services Australia (also known as Centrelink) for a JobSeeker payment if over 22 years of age or a Youth Allowance payment if under 22.

Individuals registering are required to meet residency tests.

New applicants will be able to verify their identity via a phone call with a relevant support officer. Generally, the identity and application will be linked to an individual’s MyGov account. If you don't have a MyGov account it could be worth setting one up before applying for benefits.

On the initial application, an individual will need to make declarations. This will assist the department with ensuring their eligibility is legitimate, and the correct entitlements are being received. The declarations required are:

  • The individual has been made redundant, or had their hours reduced as a result of the economic downturn due to Coronavirus.
  • The individual is not receiving employer entitlements (annual/sick leave) or income protection insurance. If they are, you may need to specify an end date so there is no overlap.
  • Sole traders and self-employed need to declare that their business has been suspended or their turnover is significantly reduced.
  • People who are paying rent can declare the amount of rent they pay, which determines their eligibility for rent assistance.

Unlike usual applications for benefit payments, individuals will not be required to provide an employment separation certificate. Also, individuals will not be required to provide proof of rental arrangements or verify their relationship status.

Individuals seeking to claim JobSeeker allowance will not be required to attend an employment meeting prior to receiving payments.

Payments and eligibility criteria

Under the new rules, if an individual is eligible to receive any amount of JobSeeker or Youth Allowance, they will receive the entire Coronavirus supplement payment of $550 per fortnight.

Usually, eligibility for JobSeeker or Youth Allowance is based on both an asset test and income test. However, for the purposes of receiving benefits due to the COVID-19 economic downturn, the asset tests has been removed. This also includes waiving the Liquid asset test waiting period and Seasonal work preclusion period. Also, the ordinary waiting period of one week has been waived.

The income cut off points for eligibility for JobSeeker are the following amounts. Please note - the income cut off point is the amount per fortnight.

Domestic situationIncome cut off point

Single with no children

$1,086.50

Single and principal carer of a dependent child

$1,673.25

Single with a dependent child, but not principal carer

$1,164.84

Partnered, and partner receives a pension

$1,987 (combined)

Partnered, and partner does not receive a pension

$993.50

Note for partnered individuals: The partnered payment of $510.80 (see below) is reduced where the claimant's partner earns more than $993.50. The reduction is 60 cents per dollar over this amount. Therefore, if a claimant’s partner earns more than $1,844.83 for fortnight ($47,966 annually), the $510.80 payment is reduced to nil. Thus, making the claimant ineligible to receive any payment including Coronavirus supplement.

Given Albo's comments yesterday and the governments awareness of the affect of family income on the eligibility for Coronavirus supplement, we would not be surprised to see changes to the earnings threshold to receive the Coronavirus supplement.

For sole traders and self-employed individuals, “income” is defined by Centrelink to be the amount you receive before tax or any other deductions. However, as waiting periods do not apply for the six-month period, a self-employed individual only needs to be under the income cut off point once to be eligible for a payment.

Mutual obligation requirements

Generally, individuals receiving JobSeeker are required to meet the “Activity test” by applying for a number of jobs each fortnight to get the benefit payment.

An exemption from the Activity test obligation requirements apply for individuals over the next six months where the individual:

  • has caring responsibilities, or
  • is required to self-isolate

without the need to supply medical evidence.

Individuals may undertake training or volunteer work within their community to meet the Activity test requirements.

Sole traders automatically meet the Activity Test requirements by continuing to develop and sustain their business.

Maximum fortnightly payments for JobSeeker

Domestic situationMaximum fortnightly payment

Single, no children

$565.70

Single, with dependent children

$612.00

Partnered

$510.80 (each)

However, as noted above, an individual only has qualify for the payment to receive the full Coronavirus supplement payment of $550. Qualifying for a payment also allows individuals to access to other benefits such as the Energy Supplement or Rent Assistance.