Self-employment as an approved activity to satisfy mutual obligation requirements 001-09070050

Some job seekers are able to fully meet their mutual obligation requirements by:

• participating in self-employment as an approved activity
• doing enough hours, and
• declaring enough business income to satisfy the sufficient work test

Where the job seeker is deemed to be fully meeting their mutual obligations requirements through self-employment, details of the self-employment income and assets (if applicable) must be recorded on Real Estate/Business Details (REBS) screen before consideration is made to code on the Activity and Exemption Summary (AEX) screen.

Job seekers may also use self-employment to meet their Work for the Dole (WFD) Phase requirements, if the Workforce Australia provider agrees to it.

Self-Employment Assistance assists eligible job seekers who wish to establish and run their own business or existing micro business to become self-supporting.

The Department of Employment and Workplace Relations administer Self-Employment Assistance. Services Australia should provide job seekers interested in Self-Employment Assistance with basic information and if already connected to an employment services provider direct them to their Workforce Australia organisation or Disability Employment Services (DES) provider for assistance accessing Self-Employment Assistance.

Self-employment that meets the sufficient work test can be used to fully satisfy mutual obligations requirements for job seekers who:

• are principal carers
• have a partial capacity to work (PCW) of 15 hours or more per week (0-7 hours per week or 8-14 hours per week) or a TRWC (0-7 hours per week or 8-14 hours per week) or
• are 55 years and over

The sufficient work test has 2 parts:

• the minimum hours requirement, and
• the minimum remuneration requirement

A job seeker must meet both requirements to satisfy the sufficient work test.

The minimum number of hours for job seekers aged 55 and over, and principal carer parents is 30 hours per fortnight. For job seekers with a reduced work capacity, the number of hours depends on their assessed work capacity.

A person will fully meet their mutual obligation requirements if:

• the total hours worked is at least the minimum number required for the person, and
• the remuneration from net business income is at least the applicable hourly rate (usually the national minimum wage or applicable occupation award wage), multiplied by the minimum number of hours required for the person

Job seekers who do not satisfy the sufficient work test must have the relevant updates to the Activity and Exemption (AEX) and the Real Estate/Business Details (REBS) screens, then be referred to a Workforce Australia provider because they cannot fully meet their mutual obligation requirements through self-employment only.

In these cases, use the sufficient work test to work out the additional hours of work required. This is assessed as follows:

• if the amount earned is already sufficient to meet the remuneration test, the person must undertake, or look for, at least the number of hours required to bring the work up to the minimum hours requirement, or
• if the amount earned is insufficient, the person must look for, or undertake, the number of hours required to meet the target remuneration amount

Job seekers aged 55 and over can use self-employment to fully meet their mutual obligation requirements if they satisfy the sufficient work test as follows:

• are working at least 15 hours per week (30 hours per fortnight), and
• have a net business income equal to or above the national minimum wage for the minimum number of hours required - 30 hours per fortnight at the relevant national minimum wage

Job seekers aged 55 and over must still meet the basic qualification for JobSeeker Payment (JSP) of being available and willing to do other paid work if it is offered to them, before self-employment is approved for the job seeker to fully meet their mutual obligation requirements.

Job seekers who are principal carers can use self-employment to fully meet their mutual obligation requirements if they satisfy the sufficient work test as follows:

• are working at least 15 hours per week (30 hours per fortnight), and
• have a net business income equal to or above the relevant national minimum wage for the minimum number of hours required - 30 hours per fortnight at the national minimum wage

Note: for principal carers with a dependent child:

• unless otherwise requested or agreed by the principal carer - activities and other mutual obligation requirements should be scheduled to occur during school hours (that is, generally between 9 am and 3 pm during school terms)
• mutual obligation requirements can be satisfied with a combination of suitable self-employment and other paid work, or approved study where this totals a minimum of 15 hours per week (30 hours per fortnight)
• participation in the Self-Employment Assistance components of Small Business Training and Small Business Coaching can be done on a part-time basis, consistent with part-time requirements of principal carers, where the job seeker is referred and placed by their Workforce Australia provider

Job seekers assessed as having a PCW (0-7 hours per week or 8-14 hours per week) or a TRWC (0-7 hours per week or 8-14 hours per week) can use self-employment to fully meet their mutual obligation requirements if they satisfy the sufficient work test as follows:

• are working within the hours for their bandwidth, and
• have a net business income equal to or above the relevant national minimum wage for the number of hours required for their bandwidth

Job seekers assessed as having a PCW (15-29 hours per week) can use self-employment to fully meet their mutual obligation requirements if they satisfy the sufficient work test as follows:

• are working a minimum of 15 hours per week, and
• have a net business income equal to or above the national minimum wage for the number of hours required - 30 hours per fortnight at the national minimum wage

For Ministers of Religion who are either a principal carer of a dependent child or a person assessed as having a PCW, and are doing at least 15 hours of paid pastoral work per week for their religious order, the amount of remuneration received does not have to be at the national minimum wage.

The Workforce Australia provider can approve self-employment to be done during the Work for the Dole (WFD) Phase. The provider will manage the commencement and compliance of the job seeker. Services Australia is advised when a job seeker has started the WFD Phase, and the start and end date of the WFD Phase will display on the Participation Summary screen.

Services Australia can approve self-employment as an approved activity for job seekers if the job seeker will become or remain Centrelink managed and fully meet their mutual obligation requirements. These job seekers will either be suspended or exited from employment services once notification has been received from DEWR.

If the job seeker does not fully meet their mutual obligation requirements through self-employment, they can do another approved activity in combination with their self-employment.

Services Australia can only approve combinations of activities that include paid employment, that is:

• part-time work and self-employment
• study and part-time work, or study and self-employment (for principal carers only); or
• self-employment and voluntary work for job seekers aged 55 and over

Any other combinations of approved activities that include voluntary work, like voluntary work and part-time study or voluntary work and self-employment (other than for job seekers aged 55 and over), must be negotiated between the job seeker and their Workforce Australia Employment Services Provider.

If the job seeker's self-employment fully meets their mutual obligation requirements, the approved activity must be recorded on the AEX screen. The job seeker must report and confirm their participation in the activity to keep getting an income support payment. The job seeker is automatically suspended from Employment Provider Services and there is no need for them to discuss this with their Employment Services Provider. However, if they want to continue to volunteer in Employment Provider Services, they must discuss this with their provider. Once Employment Provider Services are suspended, the job seeker will be Centrelink managed.

Sometimes a job seeker may not complete the specified hours to satisfy their requirements for the fortnight. Self-employment income does not need to be declared each fortnight, as it is assessed on an annual basis, and the assessed self-employment income on their record is to be used for checking the sufficient work test has been satisfied. The Service Officer should check if the job seeker has a reasonable excuse for not meeting the requirements of their Job Plan. The only acceptable reasonable excuses for not meeting requirements are:

• Illness or injury
• a sick child (or children)
• a cancelled shift
• a short term reduction in hours due to public holidays (for example, Easter or Christmas)
• pupil-free days/school holidays
• no longer undertaking activity, or
• other

There is an expectation working hours will return to normal in the next fortnight.

In addition, there are strict limits about how often to accept a reasonable excuse before renegotiating the Job Plan.

A failure to meet the requirements will not lead to compliance action. Instead, the job seeker should:

• be referred to an Employment Services Provider
• negotiate a new Job Plan with their provider

These actions do not stop Service Officers from assessing the job seeker's circumstances and deciding an exemption from the mutual obligation requirements is appropriate under any of the approved categories.

A principal carer job seeker or PCW job seeker may have a viable business, however it is operating at a loss or below the national minimum wage due to significant tax deductions available. In these cases, the income must be assessed as not meeting the job seeker's mutual obligation requirements for their required number of hours per fortnight, when calculated against the national minimum wage.

When job seekers are overseas and Services Australia has approved portability of their payment, they are exempt from mutual obligation requirements for the approved duration of the absence.

If a job seeker is fully meeting their mutual obligation requirements by being self-employed, and

• they are absent overseas for less than 6 weeks, and
• they recommence business trading at the same level of work or greater once they return

maintain the business income assessment that was in place before the overseas departure, for assessing if the job seeker is fully meeting mutual obligation requirements and calculating the rate of income support payable.

Job seekers absent for more than 6 weeks will have their business income set to zero until they recommence work and a new annualised estimate is calculated.