Eligibility for JobSeeker Payment (JSP) and Youth Allowance (job seeker) when self-employed 001-03010030

A job seeker who is substantially engaged in running a business would generally not be regarded as unemployed. It is irrelevant whether the business is being run at a profit or loss, or whether any income is currently being received.

However, there are situations where a self-employed person can be granted an allowance.

Job seekers running a business can be regarded as unemployed when:

• the business is on a small scale
• the business is designed to be a supplement rather than an alternative to wages
• the job seeker is a 'sleeping partner' - for example, has invested capital but not time and effort
• the business is a contracting or sub-contracting enterprise

A job seeker must continue to meet their mutual obligation requirements, for example, prove that work is being sought in fields other than those purely related to their business.

Note: the fact that a person spends a fair amount of time associated with their business and does not earn enough income from the business does not necessarily entitle them to JSP or YA (job seeker). The customer needs to meet their mutual obligation requirements and must be willing and able to undertake any suitable work or study.

Job seekers who have an Australian Business Number (ABN) are not automatically assumed to be self-employed. There is no requirement for customers with an ABN to have this cancelled to qualify for JSP or YA (job seeker).

A job seeker with part-time or full-time mutual obligation requirements may be able to satisfy their requirements by undertaking self-employment, if the work meets the sufficient work test.

For self-employment to be regarded as sufficient work both the following conditions must be met:

• the person must be able to show that they are working at least their required number of hours under their mutual obligation requirements, and
• their assessable, net income from their business provides the equivalent of the national minimum wage rate for the minimum required hours

Where the self-employment does not satisfy the sufficient work test, the person will be required to look for alternative work. If their commitment to their business interferes with their ability to meet their mutual obligation requirements, the person will usually not be considered to be unemployed.