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?

The Federal Government has recently announced several measures that apply to sole traders, with more information arriving regularly.

These include the Coronavirus Supplement, the JobSeeker payment, the JobKeeper payment, and extended the Instant Asset Write-off purchase incentive, among others.

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.

Here is each stimulus measure that’s currently available from the Federal Government to sole traders, and how you can get them.

UPDATE: The information contained in this article is specific to support measures introduced in 2020. For information on new grants and support in 2021, click here.

1. The Coronavirus Supplement

The Coronavirus Supplement is an ongoing $550 payment, delivered fortnightly.

Sole traders who receive any of the below payments will also receive the payment:

  • JobSeeker Payment, Partner Allowance, Widow Allowance, Sickness
  • Allowance and Wife Pension
  • Youth Allowance for job seekers
  • Youth Allowance for students and apprentices
  • Austudy for students and apprentices
  • ABSTUDY for students getting Living Allowance
  • Parenting Payment partnered and single
  • Farm Household Allowance
  • Special Benefit

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

2. JobSeeker Payment

The JobSeeker Payment is available for any person, including sole traders, who satisfies the Government’s JobSeeker test. That means you must either:

  • Meet the definition of unemployed and you’re looking for work
  • Be sick or injured and are unable to do your usual work or study for a short time

How much you earn depends on how much you make. As a sole trader, you may still earn some income as a casual or part-time employee, but you’ll need to satisfy income tests.

Further information relating to the JobSeeker payment is available here.

3. JobKeeper Payment

Sole traders are able to claim the Government’s new JobKeeper payment.

Even if a sole trader doesn’t employ anyone, they’re able to access the payment if they meet the eligibility criteria.

In order to access the scheme, business owners must prove a 30 percent or more revenue decline.

Additionally, businesses need to:

  • Register an intention to apply on the ATO website
  • Provide information to the ATO on eligible employees
  • Continue to provide information to the ATO on a monthly basis
  • Pay the full $1500 payment to the respective employee
  • Notify all eligible employees they will receive the payment

Read more about the JobKeeper payment and how it works.

IMPORTANT: You can’t claim the JobSeeker and JobKeeper Payments at the same time.

4. The Instant Asset Write-off

Sole traders can access the increased Instant Asset Write-off.

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.

5. PAYG Withholding relief

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.

As mentioned earlier in this article, the information provided here is changing week-to-week. Be sure to stay updated by checking the ATO website and take the time to consult with an accredited business advisor.