COVID-19 support for Australian freelancers
What support is available to Australian freelancers and sole traders? What does it really mean? How can you access it? We break it down so that we can navigate this tricky and weird situation together.
If you’re a freelancer in Australia, your normal business flow has likely been impacted by COVID-19 in some way. There’s a lot of information out there, so my clever bookkeeper (Megan Velo from Coda Numbers) and I got together to break down the government-speak and bring you the most important opportunities currently available to the freelance community operating as sole traders.
What’s available as a freelancer?
To get by in the short term, we need cash money. The good news is you may be able to access some much-needed moolah under the new Job Seeker or even newer Job Keeper payments.
Income support
If you’re a sole trader without any employees and your income has reduced, there’s a number of ways the Government is offering relief.
JobKeeper or JobSeeker?
A new JobKeeper supplement was announced on 30th March 2020, this was in addition to the recent announcement on expanded eligibility for the JobSeeker payment and additional “Coronavirus Supplement”. Both of these are available to sole traders which have created a little confusion around which one to apply for. You can only apply for and receive ONE payment.
“JobKeeper is about $400 a fortnight more than the $1,100 JobSeeker payment with the coronavirus supplement for those out of work.” - The Guardian
From what we can gather so far, the JobKeeper payment may be the better option for many sole traders. We don’t have much information on this and will know more when applications open. Also to note, if you have applied for JobSeeker already but find out the JobKeeper is a better option for you, you will be able to change this later.
JobKeeper
What we know so far is that the goal of the JobKeeper payment is to incentivise employers to retain (hence the name “keep”) employees. It offers $1500 per fortnight per eligible employee for up to 6 months. But the announcement also mentioned that sole traders ARE eligible for these payments too. Eligibility includes:
“Businesses with a turnover of less than $1bn that have lost 30% or more of their revenue compared to a comparable period a year ago … Gig economy workers will be covered, as they are sole traders.” - The Guardian
You will need to nominate an individual to receive the payment (that’s you). Monthly reporting is required and payment will go directly into your bank account. If eligible, cash will start arriving from May 30th 2020 (but we understand this will be backdated to the date of the announcement). The exact process to claim has not been finalised yet for sole traders.
JobSeeker
The Government has temporarily expanded eligibility for income support payments. This new supplement means you could get $550 per fortnight for six months from JobSeeker plus $550 per fortnight from the Coronavirus Supplement, totalling $1100 per fortnight.
“Sole traders who are currently making less than $1,075 a fortnight will be eligible to receive the full supplement.” - ABC news
So how does it work? Eligibility has been expanded for the JobSeeker Payment category and now applies to sole-traders, self-employed, casual and contract workers who have seen their income decrease or stop altogether because of the Coronavirus pandemic.
“Sole traders that become eligible for the Jobseeker Payment will automatically meet their mutual obligation requirements during this period by continuing to develop and sustain their business.” - business.gov.au
This means that standard conditions of the allowance (like having to actively seek a job or be in training) no longer apply. You will need to continue to build and develop your business to receive this support. So keep reaching out to potential clients and work on your business during this time.
How to apply for the JobKeeper payment
At this stage, the Government has announced its intention to pass this legislation until that happens all you can do is register your interest in this payment and you will be sent updates. Register for updates here.
How to apply for the JobSeeker and Coronavirus Supplement
Visit myGov and apply for a Jobseeker Payment through Centrelink. If you do not already deal with Services Australia you will need to set up a myGov account, call to verify your identity and get a link to your Centrelink online account.
To apply for the Jobseeker Payment, you need to be making less than $1,075 a fortnight and show that your business’ revenue and profit has decreased.
If you anticipate this occurring in the near future, it may be worth starting your application now.
Centrelink will request various documents to support your claim including:
Bank balances for all bank accounts (must include BSB, account number and account holder names for all accounts including business and joint accounts).
Balance sheet (ideally covering at least three months prior and including the date you submit your claim).
A profit and loss statement for the previous financial year for your business.
Your latest personal tax return.
It’s believed you will also be required to report your earnings. A few ways you might be able to demonstrate a decrease in revenue and profit could be to:
Tally up the amounts you’ve paid yourself this financial year so far, then estimate your weekly payments to confirm your earnings and if you’re eligible.
Look at those same earnings since the outbreak to see if there has been a change.
Review your revenue and net profit on a monthly basis to look for changes since the outbreak.
Keep a record of client contracts, sales or bookings that have been cancelled or postponed since the outbreak.
If you are impacted as a sole trader and require support, begin the application process now to establish if you can receive the payments which will start from 27 April 2020. You can also enter a future date that you believe you might be impacted when you claim, so even if it isn’t impacting you this week, but you think it might next month, get onto it.
Other things to note
If you are already supported under a category including Jobseeker Payment, Partner Allowance, Widow Allowance, Sickness Allowance, Wife Pension, Youth Allowance Jobseeker, Parenting Payment (Partnered and Single), Farm Household Allowance, Special Benefit recipients, you will automatically get the payment - so don’t need to do anything.
Standard criteria including asset testing will be waived for JobSeeker. This means the things you own, like your house, car and investments, will not be taken into account when deciding if you’re eligible for JobSeeker Payment for the period of the Coronavirus Supplement. *Update 31st March* And the partner income test has been increased to $79,762 p/year (an increase from around $48K) which will help more people access this payment.
To be eligible for JobSeeker you must not be getting any employer entitlements (like annual leave and/or sick leave) or Income Protection Insurance. This shouldn’t impact you as a freelancer unless you were on a fixed contract with a company where you received entitlements like super contributions, annual leave and sick leave. If you were employed for 12-months or more even casually, you may be eligible for JobKeeper instead.
If you are not an Australian citizen and have not lived in Australia for 10 years or more, you may not be able to access JobSeeker payments. I had a kiwi friend who really needed it turned away because of this. Join over 100,000 kiwis and sign this petition to ask the Australian Government support contributing New Zealanders in relief packages. *Update 31st March* New Zealanders on a 444 visa are eligible for the new JobKeeper payments. 👏🏾
Additional support for freelancers
Here are just some of the other things that may be beneficial to you and your situation as a freelancer/sole trader from formal institutions around Australia.
Bank loan repayment break
If you have a business loan, you will get some sweet relief with a 6-month loan repayment break. Your bank may have already reached out to you with this information, but if not, you can contact your bank directly. Learn more >Easier access to credit
The Government is providing an exemption from responsible lending obligations for lenders providing credit to existing small business customers. This exemption is for 6 months and applies to new credit, credit limit increases, credit variations and restructures. This is designed to help small businesses get access to credit quickly and efficiently. Talk to your bank directly. Learn more >Tax support
The Australian Tax Office (ATO) is providing relief for some tax obligations for businesses affected by the outbreak on a case-by-case basis. Contact the ATO’s Emergency Support Infoline for businesses on 1800 806 218 for more information or to request this help. You can also email questions to COVID-19Taxissues@ato.gov.auEarly access to superannuation
You can access up to $10,000 of your superannuation in 2019-20 and a further $10,000 in 2020-21. You will be able to apply for early release of your superannuation from mid-April 2020. I understand you will need to show that your turnover has reduced by 20% or more as a result of the coronavirus. You might want to use this as a last resort, but if you need it, it’s there for you.Rent Assistance
If you are applying for the Jobseeker payment, you can also declare the amount of rent you pay in this declaration and potentially qualify for Rent Assistance at the same time through Centrelink. Learn more >
It is also worth noting that the Government has now placed a moratorium (aka a ban) on evictions for 6-months (as of 29th March). This applies to both commercial and residential leases. There is an useful and up-to-date blog called ‘Renting and COVID-19’ available on tenants.org.au.Mortgage Relief
There are some measures in place to support homeowners. The big banks announced home-owners in financial difficulty could defer mortgage repayments for up to six months. Discuss this with your bank directly.Parenting Payment
If you are a parent and you may be able to access additional income support. This will particularly apply if you (or your partner) have become the primary caregiver (perhaps due to taking your child out of school or childcare due to coronavirus) Learn more >
Your rights on refunds & cancellations relating to COVID-19
The Australian Competition and Consumer Commission (ACCC) - whose job it is to protect consumers and the marketplace - has released guidance regarding cancellations and refunds. It relates to subscriptions, memberships, events, pricing and ordering. Learn more >
Other Financial Grants
Facebook Small Business Grants Program
Facebook is offering $100M in cash grants and ad credits to help businesses experiencing disruptions resulting from the global outbreak of COVID-19. Details haven’t been released yet. Learn more >Bumble Business Grants
Bumble is giving away £5,000 grants to 150 small businesses as part of its global initiative: The Bumble Community Grant. Grants will be awarded across the world. Bumble says it will ‘prioritise businesses led by women and non-binary founders’. You need to be a Bumble user to nominate a business (self-nominations are accepted too) before 5th April. Learn more >
Conclusion
These support measures are useful and very necessary for some people, so if you are stuck, use them. But remember it is still up to YOU to move through these challenges. As are a freelancer, consultant, business owner, creative entrepreneur, you are already proven to be a naturally resourceful human being - so be PROACTIVE. Revise packages. Market yourself. Support other freelancers. And stay strong. You’ve got this.
Over to you
Please share this with your freelancing network and any friends who need it. The more small businesses we can keep operating the better.
Let us know if there are any other financial grants emerging for freelancers so we can keep this article up to date. Email hello@coolwowcollective.com.
To ensure freelancers and solo operators are supported through the pandemic, Rebekah Lambert (of Freelance Jungle) has started a petition that has already collected over 16,000 signature. Add your voice, sign the petition.
Megan from Coda Numbers is kindly offering free 20-minute calls to chat further about some of these support measures in relation to your financial situation. Book a call >
Further reading via business.gov.au
Support available for sole traders: https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/what-support-is-available-to-your-business
Increased and accelerated income support: https://www.business.gov.au/Risk-management/Emergency-management/Coronavirus-information-and-support-for-business/Increased-and-accelerated-income-support
JobKeeper Payment for sole traders: https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/jobkeeper-payment-for-sole-traders
Disclaimer
This blog and the content within it has been based on publicly available information and should be used solely as general guidance. It may not be right or applicable for you and your personal situation. It does not substitute professional legal, financial or other professional advice.