By Ollie Visser and Steven Roberts
Taking the leap from salary and wage employment to starting your own business can be a very exciting time, it can however also be quite daunting and stressful.
There are many new factors to consider as a small business owner including meeting your tax obligations, superannuation, how to structure your business, the setup and running costs of the business and working capital requirements. Where you may have had a stable income and steady pipeline of work as an employee working for someone else, you are now also responsible for bringing in your own business.
You may have already put some money away to help with these initial expenses and personal day to day living, but what if this money doesn’t last as long as planned? What if the business takes longer to become self-sustaining than previously thought? These are all genuine concerns amongst new small business owners.
As you may already be aware, the Government has been trying to boost and support small business with recent tax changes such as the reduction in the corporate tax rate and the increase and extension of the low cost asset write off just to name a few. What you might not know is that the Government also provides financial assistance to new small businesses through government funded programs such as NEIS.
So what is the NEIS?
The New Enterprise Incentive Scheme (NEIS) is a Government incentive that provides assistance to new businesses in Australia through:
- Accredited small business training
- Support to implement business ideas
- Providing an allowance for up to 39 weeks and rental assistance for up to 26 weeks (where eligible)
How much is the allowance?
The NEIS allowance is equivalent to the single, 22 or over, no children rate of the Newstart allowance and is paid fortnightly in arrears for up to 39 weeks.
It is a condition that your new business has to be your primary fulltime activity in order to receive this allowance. You can still receive income from external sources such as casual employment or investments, however if this income is substantial it may affect the rate of the allowance you receive.
The rental assistance payment is a fixed amount and is paid for up to 26 weeks.
How do I qualify?
To qualify for new business assistance through NEIS you:
- Need to be at least 18 years of age;
- Are not prohibited by law from working in Australia;
- Are not an overseas visitor on a working holiday or an overseas student studying in Australia;
- Are available to attend NEIS training and work in your new business full time;
- Have not participated in NEIS in the past year;
- Are not an undischarged bankrupt.
What business ideas qualify for NEIS?
To be eligible for NEIS your new or proposed business:
- Cannot already be operating on a commercial basis;
- Needs to have an independent structure;
- Needs to be lawful and capable of withstanding public scrutiny;
- Needs to be assessed as being commercially viable by your NEIS provider;
- Needs to/ will be established, located and operated solely within Australia;
- Needs to be structured in a way that ensures you maintain the controlling interest in the business whilst participating in NEIS.
Where do I sign up?
You can apply for NEIS through your local NEIS provider who will assess your eligibility for the program. For more information please visit https://www.jobs.gov.au/self-employment-new-business-assistance-neis
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.