Losing access to JobKeeper? Expert advice for sole traders and small business owners

In two weeks, the federal government’s JobKeeper wage subsidy program will move into its second phase, kicking tens of thousands of businesses off the program under tighter eligibility criteria.

For many small business owners, the start of JobKeeper 2.0 will be the end of their participation in the program, leaving them on the hook for paying staff for the first time since late March.

This could mean anywhere from a few hundred to a few thousand dollars in extra costs each week, just as business is getting going again.

So what can business owners do to make sure they’re ready to move off the program and back into paying their own staff? We asked some experts.

Could you still be eligible for JobKeeper?

First things first, you’re going to want to make sure your business is actually ineligible for JobKeeper 2.0.

SmartCompany already has a handy guide for working that out, but as Allied Business Accountants’ David McKellar explains, there may be yet-to-be announced alternative tests your business can take advantage of.

“Business owners should also keep a lookout for the rules relating to JobKeeper 2.0 that are yet to be released,” McKellar tells SmartCompany.

“It is still possible that there may be alternative tests available, which would make some businesses eligible for JobKeeper past September who don’t currently think they will be eligible.”

Don’t forget to opt-out

Lisa Greig, founder of tax and business advice service Perigee Advisers, says businesses losing access to the program need to make sure the ATO doesn’t think they’re still looking to claim payments under the scheme.

This involves opting employees out of the program in your payroll software after the last payment fortnight in September.

“If all your costs are labour and you have little other overheads than you’re basically just going to lose profits,” Greig tells SmartCompany.

“You’ve got to be able to morph your business to work in this new paradigm.”

You may retain some JobKeeper provisions

Jane Rennie, general manager of external affairs at CPA Australia, says businesses should check and see whether they’re still eligible to benefit from JobKeeper flexibility provisions inserted into the Fair Work Act.

“If your business is facing the loss of JobKeeper, seek advice from your trusted professional adviser. If you no longer qualify for JobKeeper, you may still have access to some of the JobKeeper provisions in the Fair Work Act,” Rennie tells SmartCompany.

“For example, the ability to make agreements with their employees to change their days or times of work. Your adviser can help you with understanding your entitlements.”

Plan now to avoid headaches later

McKellar says businesses need to be planning for what they’re going to do now, to avoid running into cashflow headaches in a few weeks.

“It will be important for business to set a budget and monitor it regularly along with cashflow. Without support, it may be necessary to change staffing levels or make other changes to the business to ensure it is sustainable,” he says.

And if things are going poorly, address the situation immediately.

“It’s important to make changes and seek assistance sooner rather than later. The worst thing a business owner can do is bury their head in the sand,” he says.

“Business owners and company directors need to be aware of their obligations in relation to solvency. We don’t want to see the worst case scenario of business problems leading to bankruptcy and loss of personal assets such as the family home.”

Develop a cashflow plan

Financial coach, accountant and Healthy Business Finance owner Stacey Price says businesses losing access to JobKeeper should try to stay positive about losing access to the wage subsidies because, after all, it means business is picking up again.

“Speak to your accountant and work out a cashflow plan together,” Price tells SmartCompany.

“What does the next three-to-six months look like? What income do you know will come in the door, and how can you make that work for you?

“Yes, some hard business decisions will likely need to be made, but make them business decisions and not emotional decisions.”

Don’t forget to be upfront with staff either, particularly if losing access to JobKeeper is going to have ramifications for their employment.

“Leaving them [staff] in the dark until the last hour wins you no favours,” Price says.

“Be up front, talk about any changes coming their way. If you find that confronting, type up an internal memo to send out to all staff.

“If you do have to let staff go, give them as much notice as possible so they are not floundering come the end of September.”

NOW READ: Explained: What sole traders and small businesses must do to access JobKeeper 2.0

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