JobKeeper 2.0 for sole traders


9th September, 2020

FAQ: JobKeeper 2.0 for sole traders

There are new eligibility requirements and other changes for JobKeeper coming into play, creating opportunity for error. Here’s what sole traders need to know and where to go for more information.

From 28 September 2020 there are some subtle changes to JobKeeper 2.0 that sole traders need to be aware of.

As quick refresher, JobKeeper 2.0 is the latest version of the Federal Government’s wage subsidy scheme, brought about by restrictions enforced to prevent the spread of COVID-19.

JobKeeper is available to all eligible business participants, and in some cases may be used in tandem with other stimulus, such as the JobSeeker scheme.

This article covers the main areas of interest if you’re operating as a sole trader. Bookmark the links shared in this article to keep up to date, as changes may still occur with little notice, or head over to see the ATO’s guide for sole traders.

Updates on sole trader eligibility for JobKeeper 2.0

1. Will sole traders still be eligible for JobKeeper 2.0?

From the 28 September 2020 a business (sole trader) will need to prove that they’ve actually sustained a drop of turnover to be eligible for any future JobKeeper payments.

See: Work out your eligibility on the ATO website.

READ: Company vs sole trader — key differences

2. What do I need to do as a sole trader to qualify for JobKeeper 2.0?

We know that sole traders (not their workers) are considered to be business participants so as to qualify for JobKeeper 2.0. But, you must also meet all eligibility requirements going forward.

Approved suppliers of child care services have specific arrangements from 20 July 2020 onwards.

Stricter qualification guidelines for sole traders

The Government wants to ensure that only businesses who actually qualify for JobKeeper after 28 September 2020 will be eligible. This means sole traders must satisfy the decline in turnover test based on current GST turnover for the relevant quarter.

3. I meet most of the eligibility criteria but not all, do I have any other recourse?

If you discover you meet most of the criteria, but not all of the categories, you can still appeal to the Commissioner to exercise his discretion to grant further time.

4. What if I was sick or injured myself during the qualifying dates, will I still qualify?

There’s an alternative test available that will allow you to still qualify for JobKeeper 2.0.

See the Coronavirus Economic Response Package under the subtitle ‘Sole trader or small partnership with sickness, injury or leave’.

The tiered JobKeeper 2.0 payment system

5. How much money can sole traders receive?

Sole traders will need to clarify which tier of payment they qualify for, based on the hours they work in their business.

See: JobKeeper Payment on the ATO website.

As a sole trader, did you work fewer than 20 hours a week in the four weeks leading up to 1 March 2020? If so you qualify for the lower tier of payments.

If you worked more than 20 hours per week in the four weeks leading up to 1 March 2020, you will qualify for the higher tier of payments.

Lower Tier

  • $1500 per fortnight up to the 27 September 2020
  • $750 per fortnight from 28 September 2020 to 3 January 2021
  • $650 per fortnight from 4 January 2021 to 28 March 2021

Higher Tier

  • $1500 per fortnight up to the 27 September 2020
  • $1200 per fortnight from 28 September 2020 to 3 January 2021
  • $1000 per fortnight from 4 January to 28 March 2021

6. Is there any flexibility as to the hour requirement of 20 hours per week?

Yes. There’s some discretion in the period prior to 1 March 2020 if the business did not have the usual work hours.

For example, if you volunteered in the bushfires or did not work during that time due to COVID-19 restrictions. .

See: Reduced work hours COVID-19 on the ATO Community website.

Other frequently asked questions on JobKeeper 2.0 for sole traders

7. What if I have put on new staff, will they qualify?

The short answer is “no”. Only staff that were actively employed before 1 July (originally March) 2020 will be eligible.

READ: Six types of insurance for sole traders

8. Do I still need to pay the JobKeeper amount in advance?

Yes. Many have appealed to the Government regarding the cash flow demands it places on sole traders and small business owners in general.

The reimbursement for JobKeeper 2.0 remains in arrears through the current system already implemented.

9. I think I qualify for Jobkeeper 2.0 as my turnover has declined, where do I go?

As a sole trader you may not have qualified the turnover test for JobKeeper 1.0, but your income has decreased from 1 March 2020 onwards. If you feel that you now qualify for JobKeeper 2.0, you can enroll via JobKeeper Guide — Sole Trader.

Other links:

This information is general in nature and is not intended as financial advice. MYOB advises any business owner impacted by COVID-19 to take steps to consult with an accredited tax agent or other specialist business advisor before making any decisions about their business. You can begin searching for an advisor here.