For example, if an individual was running a landscaping business and is unable to work because of an accepted disability, suffers a loss of earnings and subsequently sells their landscaping equipment and lets insurances lapse or cease, then it may be taken as evidence that they are no longer self employed. The person is taken to be no longer engaged in an occupation for which they have suffered a loss of earnings, therefore the individual is not eligible for the LOE Allowance.
However, if a self employed person had intended to return to work after the period of incapacity and had taken reasonable steps to maintain the business entity during their period off work then they would be eligible for the LOE Allowance. Delegates will need to examine the facts and merits of each individual case and considerations may include, but are not limited to the following:
- Evidence of maintaining business insurances;
- Evidence of maintaining lease(s) of business premises;
- Evidence of maintaining lease(s) of capital associated with the business including of vehicles and machinery;
- Significant changes in staffing levels of the business;
- Completion of quarterly Business Activity Statements (BAS);
- Continued advertising and marketing activities; and
- Evidence of core components of business activity where possible.
A self employed person can be eligible for the LOE Allowance even if they personally have not suffered a loss of earnings but the business they operate has had a reduction in revenue. More information can be found under The Amount of Lost Earnings.