The Centrelink recipients fighting for survival who you mightn't have heard of
Over the years, I've written a lot about Australians who receive Centrelink support.
I've written about robodebt, mutual obligations, the cashless debit card, devastating dole-bludger narratives and the general struggle of trying to make ends meet while looking for work.
But there's a cohort of Centrelink payment support recipients that I haven't touched on: those of us who are "pulling ourselves up by our bootstraps", often juggling family or carer or other responsibilities with work obligations through creating their own careers. I'm talking about sole-traders.
For many Australians, self-employment is an opportunity to build something of their own; a business that provides financial independence, flexibility, and, hopefully, long-term stability.
But for sole-traders reliant on Centrelink support to close the survivability gap, the reality is far harsher.
Under current mutual obligation requirements, self-employed individuals must generate enough profit - not revenue, but actual take-home profit - to meet the equivalent of the national minimum wage for their required reportable fortnightly hours.
This means any investment back into their business is classified as an expense on their profit-and-loss statement, effectively making it so much harder to grow their business and eventually no longer need Centrelink support by restricting their capacity to invest in future growth.
This profit-versus-growth equation feels like an impossible balancing act.
“The end result? Sole-traders are forced to sacrifice reinvestment, stunting their ability to grow, and to work far beyond their designated hours to meet Centrelink’s rigid criteria, leaving them exhausted and financially vulnerable.”
Unlike traditional employees, whose wages are fixed and predictable (not to mention paid for all hours worked), sole traders face inconsistent income, fluctuating expenses, and the need for reinvestment.
Every dollar spent on marketing, equipment, or materials to expand a business, reduces the profit margin Centrelink considers "earnings."
For example, a sole trader required to work 30 hours per fortnight needs to generate at least $723.00 in profit - not revenue - every two weeks to meet their obligations.
If they invest $200 back into their business for growth, that money is written off as an expense and no longer contributes to their minimum earnings target.
The end result? Sole-traders are forced to sacrifice reinvestment, stunting their ability to grow, and to work far beyond their designated hours to meet Centrelink's rigid criteria, leaving them exhausted and financially vulnerable.
Further complicating things, Centrelink's reporting framework asks if the sole-trader has met the minimum fortnightly hours "worked" rather than how many hours they have been able to pay themselves. This means a sole trader may have worked 50 hours in a fortnight, but only earned enough to scrape together 25 reportable hours.
If they select "yes" to having worked the minimum expected hours (which they have), but can't back that up with paid hours on a P&L report, when that three-monthly P&L submission requirement hits for Centrelink, it won't add up and they will be penalised.
If they fudge the numbers to use their wages to invest back in their business, the cross-agency reporting at tax time will pick this discrepancy up and they'll either be slammed with a Centrelink debt or a higher tax bill.
Compare this to a salaried worker earning minimum wage. Their hours are counted regardless of business performance, their wage is unaffected by operational expenses, and their financial security remains intact. The disparity is glaring.
Instead of encouraging self-employed individuals to scale their businesses into sustainable ventures, the current framework locks them into survival mode.
It forces them to prioritise immediate profit over long-term stability, discouraging reinvestment, innovation, and financial planning for sustainable independence in the medium term.
If the goal of employment services is to help people achieve self-sufficiency, then sole traders should be given the same runway for success that employees enjoy.
Possible reforms could include:
Recognising reinvestment as a legitimate factor in earnings calculations rather than writing it off as an expense.
Adjusting reporting criteria to reflect hours worked in business development, not just hours generating profit.
Creating opportunities for business phase recognition with different obligations for self-employed individuals, allowing them to scale their income without being penalised for reinvesting.
Without meaningful changes, Centrelink will continue trapping sole traders in an impossible loop: forced to sacrifice growth to meet profit requirements, while watching their businesses struggle to survive under rigid conditions that don't reflect economic reality.
Sole-traders make up 30 per cent of our country's business market. It should be seen as a pathway to independence, and not a bureaucratic obstacle course.
Otherwise, we're not only failing to support entrepreneurship and flexible financial independence, we're sabotaging it.
Zoë is a regular op-ed columnist for Australian Community Media, with her column syndicated across their papers. This blog post first appeared in The Canberra Times on 25 June 2025.
