The duration of income support individuals receive on the federal government’s New Enterprise Incentive Scheme has been cut from a year to 39 weeks.
The scheme is available to eligible job seekers that are interested in starting and running a small business or startup.
It provides those jobseekers with accredited small business training, business mentoring and the aforementioned income support in order to help them become a self-employed business owner.
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Those whose business plans are approved under the program receive an allowance for 39 weeks, which is equivalent to the single, 22 or over, no children rate of Newstart Allowance, the advantage being that the payment is not affected by the income from the individual’s NEIS business.
A spokesperson for the Department of Employment says the number of weeks the allowance was available was reduced because many participants in the scheme didn’t need assistance for the full year.
“After nine months in the scheme, many job seekers are generating sufficient income for their businesses to be commercially viable and, in many cases, are also working part-time,” the spokesperson says.
“The reduction to 39 weeks also allows the government to make savings that can go towards repairing the budget.
“It is important to note that despite the change NEIS participants will continue to receive support and advice from experienced small-business mentors on organisational, financial and marketing issues to help their new business develop and succeed.”
The program is a valuable resource for those entrepreneurs who need financial support while launching their startup.
It helped well-known Australian startup figure Dean McEvoy when he was taking his first steps towards becoming the successful entrepreneur he is today.
He would eventually sell his second company, the daily deal site Spreets, to Yahoo! for $40 million, and his current startup Icon Park is attracting considerable attention.
Those individuals who started the program before July 1 2014 will be unaffected by the change and will continue to receive the NEIS allowance for 12 months.
There were no other changes made to the scheme.
The spokesperson says the government did not undertake any formal consultation prior to the change.
This piece originally appeared at StartupSmart.