Chapter 9. Monitoring Participants in Small Business Coaching

Supporting Documents for this Chapter:

• Types of External Income Supporting Document

• Quarterly Reportsign-in required (sign-in required)

Providers must assess the progress of each Participant accessing Small Business Coaching to ensure they are providing the Participant with appropriate support to establish and run their small business, and to confirm that each Participant remains eligible for and engaged in Small Business Coaching.

Providers must assess the progress of each Participant’s Business on a quarterly basis to ensure the Business has the best chance at Operating Commercially. This involves the Provider assessing at the end of each Financial Quarter the Business’ cash flow against the cash flow projected in the Participant’s Business Plan.

This Chapter outlines the obligations of Providers to monitor Participants accessing Small Business Coaching.

Providers must review the circumstances of each Participant accessing Small Business Coaching on a quarterly basis by running the External Income Test, checking the currency of the Participant's Business Insurance, and checking whether the Business is likely to be Operating Commercially 12 months following the Participant’s Small Business Coaching Commencement.

• Documentary evidence — The Provider must retain the following Documentary Evidence proving the currency of the Participant's Business Insurance following each quarterly review which is either:

• a certificate of currency (issued within the relevant Financial Quarter)

• proof of monthly payments, or

• a statutory declaration from the Participant that their business insurance is current. A statutory declaration is only appropriate if a certificate of currency for a 12-month insurance policy was provided at the initial visit.

Providers must ensure that Participants accessing Small Business Coaching are aware of their obligation to submit a Quarterly Report no later than 10 Business Days following the end of each Financial Quarter. Participants may submit their Quarterly Report using the Department’s template or the Provider’s template containing the same information.

However, Participants who commenced Small Business Coaching less than 4 weeks before the end of a Financial Quarter are not required to submit a Quarterly Report for that first Financial Quarter.

• System step — The Provider must (in accordance with Suspending a Participant) recommend the suspension of a Participant accessing Small Business Coaching who fails to submit a Quarterly Report (if required) in the Department’s IT Systems.

If a Participant is suspended for not submitting a Quarterly Report, before recommencing the Participant in Small Business Coaching the Provider must:

• ensure the Participant submits a Quarterly Report

• ensure the Participant has business insurance in place

• check whether the Business is on track to be Operating Commercially, and

• update the Department’s IT Systems and record details against each of these requirements.

(Deed Reference(s): Clause 91)

Following a Participant’s submission of a Quarterly Report, the Provider must assess whether the Business is likely to be Operating Commercially 12 months following the Participant’s Small Business Coaching Commencement. To make this assessment, the Provider must compare the Business’ actual cash flows against the forecast cash flow set out in the Participant’s Business Plan.

If the Business is underperforming compared to the forecast, the Provider must discuss the reasons why with the Participant. The Provider must also assess the likelihood of the Business Operating Commercially at the completion of the Participant's Period of Small Business Coaching. If the likelihood is less than 50 per cent, the Business is not on track to be Operating Commercially (refer to: Businesses that are not on track to be Operating Commercially).

If a Participant is suspended for part of a Financial Quarter, they are still required to submit a Quarterly Report. In this case, unless the suspension was for failing the External Income Test the Provider should take the suspension timeframe into account when checking whether the Business is on track to be Operating Commercially. This is done by comparing:

• the Business' forecast cash flow (reduced on a pro rata basis based on the proportion of the Financial Quarter that the Participant was not suspended for), and

• the Business' actual cash flow.

• System step — The Provider must complete in the Department’s IT Systems all required fields, including a ‘yes’ or ‘no’ selection for Business Viability and enter the Net Income field, within 10 Business Days of receiving a Quarterly Report from a Participant following the end of each Financial Quarter.

• Documentary evidence — The Provider must retain the following documentation on file:

• the Participant's Quarterly Report

• written assessment of whether the Business is on track to be Operating Commercially, including a short statement and/or calculation to support the outcome recorded in the Department’s IT Systems.

  Note: The Department may request evidence of the Provider’s Business Viability assessment at any time including evidence that the business will operating full-time within 12 months.

If a Business is identified as at risk of failure without remedial action, but potentially on track to be Operating Commercially 12 months following the Participant’s Small Business Coaching Commencement, the Provider must:

• develop an action plan in consultation with the Participant to improve the performance of the Business, and include a timeframe to reassess (for example, this could include reassessing the Business in the third Financial Quarter, if the assessment at the second Financial Quarter showed that the Business was potentially not on track to be Operating Commercially), and

• regularly review the action plan, including at Business Mentoring contacts and, if the issue cannot be resolved, recommend termination of the Business.

If the Business is identified as not on track to be Operating Commercially, the Provider:

• must recommend termination of the Business within 5 Business Days and advise the Participant of the recommendation to terminate their Small Business Coaching Agreement, and

• should note the communication or conversations with the Participant and keep the note on file.

The Agreement Breaches, Suspensions and Terminations Chapter has further information on suspensions, recommencements, and terminations.

• System step — If a Participant’s Business is identified as not on track to be Operating Commercially, the Provider must recommend termination of the Business in the Department’s IT Systems within 5 Business Days.

• Documentary evidence — The Provider must retain an action plan on the Participant’s file if the Business is identified as at risk of failure.

• Documentary evidence — The Provider should keep a note on file of any discussions with the Participant about their concerns regarding the Participant’s Business.

(Deed Reference(s): Clause 91.5)

Participants receiving Self-Employment Allowance may earn income separate to their allowance and their Business, but only up to a certain amount. The External Income Test checks the total gross External Income earned by a Participant during a Financial Quarter and is used to confirm a Participant’s continuing eligibility for Self-Employment Allowance.

The Provider must run the External Income Test within 5 Business Days of a Participant in receipt of Self-Employment Allowance submitting their Quarterly Report.

Sources of External Income are listed in Types of External Income Supporting Documentsign-in required (sign-in required).

A Participant will not pass the External Income Test if their total gross External Income during the Financial Quarter exceeds twice the rate of Self-Employment Allowance for that same period.

If a Participant fails the External Income Test, their Self-Employment Allowance and Self-Employment Rental Assistance (if applicable) is suspended for the remainder of the Financial Quarter in which the test was conducted. If the Participant is still accessing Small Business Coaching following the end of that Financial Quarter, they will be required to submit another Quarterly Report within 10 Business Days. Following the usual process, the Provider must then run the External Income Test to assess whether to continue the suspension or reinstate the Participant’s Self-Employment Allowance and Self-Employment Rental Assistance (if applicable) for that Financial Quarter.

• System step — If the Participant fails, the External Income Test the Provider must advise the Department via the Department’s IT Systems within 5 Business Days.

• Documentary evidence — The Provider must retain records related to the External Income Test on the Participant’s file and enter the Income in the ‘Net Income Field’ in the Departments IT Systems.

(Deed Reference(s): Clause 91.3)

Calculating the amount of Self-Employment Allowance in a Financial Quarter

To determine how many pay cycles fall within a given Financial Quarter, please refer to the Self-Employment Allowance Payment Dates Calendarsign-in required (sign-in required) on the Provider Portal.

The Provider can determine the approximate figure by doubling the current fortnightly rate and multiplying the result by the number of pays in that Financial Quarter. If the Provider requires an exact figure, they should use the Self-Employment Allowance Calculatorsign-in required (sign-in required).

Participants are obligated under their Small Business Coaching Agreement to advise their Provider directly about any changes to their circumstances, as this could affect their entitlement to Small Business Coaching, including Self-Employment Allowance and Self-Employment Rental Assistance (if applicable).

Participants should immediately complete a Change of Circumstances Notification Form – Small Business Coachingsign-in required (sign-in required) and submit it to their Provider when there is a change in the Participant’s circumstances. This can include:

• a change of business name

• a change of bank details

• a change of Commonwealth benefit

• a change of capacity

• the Participant closing their business

• any change that may affect the Participant’s eligibility for Small Business Coaching and/or entitlements to Self-Employment Allowance and Self-Employment Rental Assistance.

Participants may also update their personal details via the Workforce Australia website, accessible via MyGov.

In the event of the death of a Participant, the Provider must view confirmation (for example an email or letter from a relative, or a death notice from a newspaper or website).

• System step — The Provider must notify the Department in the Department’s IT Systems of a Participant’s change of circumstances, including where a Participant is not complying with the terms of their Small Business Coaching Agreement. The Provider does this by entering a recommendation to suspend, recommence or terminate the Participant’s Small Business Coaching Agreement.

The Provider may be liable for any overpayment of Self-Employment Allowance and/or Self-Employment Rental Assistance to a Participant if they fail to notify the Department of any changes to a Participant’s circumstances within 5 Business Days. Failure to notify may also result in the recovery of any Business Progress Fees paid to the Provider following their failure to Notify.

• Documentary evidence — The Provider must retain Documentary Evidence on the Participant’s file about the change of circumstance. For example, this may include:

• written advice from the Participant of medical certificate dates

• External Income Test assessment

• written correspondence about changes in circumstances

• file note of verbal communication about changes in circumstances

• suspension or termination recommendations

• the Participant no longer pays rent

• death notice or certificate (where applicable).

(Deed Reference(s): Clauses 54, 91.6)

Participants may amend their Business Plan after their Small Business Coaching Commencement if the circumstances of their Business changes.

Before approving amendments to a Participant’s Business Plan, the Provider must ensure the proposed changes will not jeopardise the likelihood of the Business Operating Commercially 12 months following the Participant’s Small Business Coaching Commencement.

The Department only requires a summary of the changes. A copy of the Business Plan may be requested on a case-by-case basis if required.