25th March, 2020

What stimulus support is available for freelancers and sole-traders during COVID-19?

The Government has announced several stimulus initiatives to support businesses during the COVID-19 lockdown, but what’s in there for sole traders or self-employed workers? We asked a local chartered accountant, Joe Kaleb, for his insight.

Prime Minister Scott Morrison has announced that, included in the stimulus package, are benefits for welfare recipients, pensioners, households and employers and small to medium sized business.

But what exactly applies to all those who are self-employed around Australia?

One the most significant measures that the Australian government has introduced is what they’re calling the ‘Coronavirus supplement’ – an ongoing fortnightly payment of $550 for up to six months. These payments will begin on 27 April 2020.

If you run a business as a sole trader or in a partnership, you are considered to be self-employed – the business may operate with or without employees.

1. Being self-employed, how do I become entitled to the full Coronavirus Supplement?

If you are an “existing” or “new” recipient of one of the eligible payment categories which includes the current Parenting Payment, you will be entitled to the full rate of the supplement of $550.00 per fortnight.

A new category of JobSeeker Payment and Youth Allowance JobSeeker will become available for eligible individuals who are financially impacted by the Coronavirus and satisfy certain requirements.

The Government says that this includes permanent employees who are stood down or lose their job, sole traders, (presumably also includes partners in partnerships), and casual and contract workers who meet certain income tests.

You should enquire with Centrelink about the relevant income tests that apply to your situation.

Asset testing for the JobSeeker Payment, the Youth Allowance Jobseeker and the Parenting Payment (partnered and single) will be waived for the period of the Coronavirus supplement.

Typically, if a sole-trader or freelancer has built up enough assets to run their business over the years, this would make them ineligible for these payments. But with this expanded supplement, those restrictions no longer apply.

In addition to existing recipients of eligible Government payments, where you have lodged a claim for one of the above eligible payments at any time during the period 12 March 2020 to 13 April 2020, you will also receive a tax-free payment of $750 from 31 March 2020 if the claim is granted.

“You will still be eligible for the Coronavirus supplement if you receive either the JobSeeker Payment, the Youth Allowance JobSeeker or the Parenting Payment.” said chartered accountant Joe Kaleb.

“The Government assistance payments made to supplement income, like the JobSeeker Payment are taxable in the year of receipt.

“Presumably the Coronavirus Supplement is also taxed. While the $750 economic support payment is tax-free.”


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2. Is my business entitled to the Instant Asset Write-off?

Yes, self-employed people are entitled to this measure.

The Instant Asset Write-off threshold has been increased from $30,000 to $150,000 and expands access to businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.

This measure applies to both new and second-hand assets first used or installed ready for use in the period beginning 12 March 2020 and ending on 30 June 2020.

3. If I employ staff, can I get the PAYG withholding relief?

Yes. Where the aggregated turnover of the business is less than $50 million, you are eligible to receive total payments of up to $100,000 (with minimum total payments of $20,000) based on your PAYG withholding obligations for the period 1 January 2020 to 30 June 2020.

The payments are tax free and will be applied as a credit to the BAS account with the ATO upon lodgement of your activity statements from 28 April 2020. Any resulting refund will be paid into the bank account of the business.

The timing of these payments will differ depending on whether you lodge monthly or quarterly activity statements.

4. Can I get access to my superannuation?

It depends.

The Government will introduce a new compassionate ground of release allowing certain individuals (including the self-employed) to access their super entitlements to assist them to deal with the financial impacts of the novel coronavirus, COVID-19.

Individuals will be entitled to access as a lump sum up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21 if their business has been suspended, or there has been a reduction in the turnover of their business of at least 20 percent.

These lump sum super withdrawals will be tax free and will not affect Centrelink or Veterans’ Affairs payments, if a self-employed person already has these payments applied.

If you access part of your superannuation early, it won’t impact your contribution levels.

“Your regular super contributions continue as normal,” said Kaleb.

Whether you operate as a sole trader, or in a partnership, there are multiple ways to take advantage of government assistance so you can get your business through the COVID-19 crisis.


MYOB has provided this guidance with the assistance of chartered accountant and chief executive of AustralianBiz, Joe Kaleb. It does not constitute financial advice, and we encourage anyone who believes their business is impacted by COVID-19 to get in touch with an accredited advisor to discuss their options.

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