Small business ombudsman Kate Carnell says business partners are working without pay because of “inflexible” JobKeeper arrangements leaving them in the lurch.
Appearing at a Senate committee hearing into the federal government’s response to COVID-19 on Wednesday, Carnell said the $70 billion wage subsidy scheme had delivered a vital lifeline to thousands of businesses, but there were a number of areas where it was failing small operators.
One such area is the arrangements for business partnerships. Under current JobKeeper rules, only one partner is allowed to claim wage subsidy payments, leaving other partners working in the business but unable to secure government assistance.
“Only one of them can get JobKeeper even though all of them work full-time in the business,” Carnell said.
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“Which is a huge problem when you’ve got, potentially brother, brother-in-law and the others … have nothing because they’re actually still in the business and working so they can’t apply for JobSeeker.”
Partnerships — a structure where two or more people distribute income or losses between them — are particularly popular in trade-based industries connected to the construction industry, which Prime Minister Scott Morrison himself has conceded was hit hard by the coronavirus outbreak.
Because partnerships are not allowed to employ partners in the business, Carnell said there is concern some people are missing out on income all together amid the pandemic.
Some partnerships have expressed surprise in recent months when they were unable to access the full breadth of support under the JobKeeper program, which equate to $1,500 a fortnight.
But it appears the Morrison government is unlikely to change on the rules, with small business minister Michaelia Cash describing arrangements as an “integrity measure” on Tuesday.
Appearing in a webinar organised by Intuit Quickbooks, Cash was asked about the owner of a cafe and live music venue in Melbourne, who had not been able to access wage subsidy payments because their business is structured as a partnership.
“The reason we had to put them in place, it was an integrity measure,” Cash said.
“One partner in the business was able to access JobKeeper … employees in the business were also still able to access JobKeeper.”
“Only one partner could, and potentially the other partner may have had to go onto JobSeeker, the employees of the business structured through a partnership may also be eligible for JobKeeper,” Cash said.
Cash provided no further detail about the government’s integrity concerns related to partnerships and JobKeeper.