Unexpected downturn of a business 043-03130070

Discuss the downturn in business with the customer. If the customer's business has ceased trading (even temporarily), see Business has ceased or has been sold.

Does the customer need to be supply documents to Centrelink to support their advice that there has been a downturn?

Consider the type of business operated by the customer and the current circumstances.

Example

The customer is operating a tourism or hospitality business impacted by COVID-19. They will not be required to provide documentation to prove there is a downturn in their business. The customer may still be required to provide a revised Profit and Loss Statement.

Supporting documentation

This could include:

• a contract of sale
• a letter from the customer's accountant confirming downturn
• confirmation a lease on a shop has expired
• confirmation plant and equipment have been sold
• a copy of the last contract
• a copy of notice showing expiration of contract
• an updated profit and loss statement and/or balance sheet

If the customer is claiming or receiving JobSeeker Payment or Youth Allowance (job seeker), consider the customer's circumstances.

Is the customer required to be unemployed?

Are they able to satisfy their mutual obligation requirements?

Take further action to reject or cancel if qualification for payment is not met.

For more information, see Eligibility for JobSeeker Payment (JSP) and Youth Allowance (job seeker) when self-employed.

Does the customer feel there has been a sufficient change in the financial situation of the business to have their income reassessed?

• Yes, customer must provide a revised/interim profit and loss statement which incorporates the effect of the change to the business identified by the customer and reflects the current financial position of the business. Go to Step 3
• No, go to Step 2

If the customer is currently in receipt of a payment and the downturn will not result in a change to the financial situation of the business, no reassessment is required.

Tell the customer that a reassessment is only required if the downturn will result in a change to the business income or assets.

Record the details in a DOC or Note on the customer's record.

• Yes, go to Step 4
• No:
• Direct the customer to the Profit and Loss Statement form (SU580) page on the Services Australia website. This may assist them with providing a profit and loss statement. See Steps to assess an interim profit and loss statement
• If the customer is still unable to supply a profit and loss statement, suggest they contact their accountant for assistance
• Until a revised profit and loss statement can be provided procedure ends here

• If customer is current, go to Step 5
• If customer is making a new claim, go to Step 6

If the business operates through a private trust or private company (entity), scan the documentation to the entity record and refer to a Complex Assessment Officer (CAO). The CAO will reassess the entity record based on the current financial statements provided and scanned for processing.

If the business operates through a partnership or sole trader, the Service Officer is responsible for reassessing the customer's business income based on the current profit and loss statement. Scan the documentation to the customer's record.

Refer the case to the CAO if there are:

• Multiple unrelated business activities. This excludes investment and rental income. See Offsetting of profit and losses between businesses
• Trading partnerships of more than 2 members and trading partnerships/sole traders that hold multiple encumbrances and secured loans

The customer's estimate of the anticipated business profit or loss from the current period of reduced business activity should be converted to an annual rate. Multiply the estimated profit or loss by the period for which the business reduced activity is undertaken.

For more information on assessing income and expenses, see Steps to assess an interim profit and loss statement.

Go to Step 7.

The customer's estimate of the anticipated business profit or loss from the current period of reduced business activity should be converted to an annual rate by multiplying the estimated profit or loss by the period for which the business reduced activity is undertaken. For more information on assessing income and expenses, see Steps to assess an interim profit and loss statement.

A 3, 6, 9 or 12 month income review to request documents is required. For a change in business income:

• the customer must supply a new profit and loss statement after 3, 6, 9 and 12 months
• the profit and loss statement must cover the full period from the initial date of the change in business income

In Customer First, create a manual review on the Review Registration (RVR) screen and complete the fields as follows:

• Service Reason: customer's payment type
• Review Reason: BUS (Sale/Income from Business)
• Due Date: the maturity date of the review (allow extra time for delivery of a notice if appropriate)
• Source: INT
• Date of Receipt: today's date
• Notes: relevant details including business name and the date range for the next profit and loss statement, if required
• Keywords: SELFEMP
• Workgroup: leave blank
• Position: leave blank
• Transfer to Region: leave blank

The review will mature on the Due Date coded in the RVR activity. Workload Management will allocate the review for manual action.

Tell the customer to provide the following when prepared:

• annual business income tax return
• financial statements, and
• personal (and partner’s) tax return

At each contact with the customer:

• check if they need to revise their current family assistance income estimate, see Updating income estimates for the current financial year
• advise choices available to help reduce the chance of an overpayment during the reconciliation process.