This resource covers how to provide services to self managed or plan managed participants as a Sole Trader.
Working as an Independent Support Worker or Sole Trader with an ABN is easy!
Why or when would a participant consider hiring you as an independent support worker?
It's WIN WIN - cheaper for the participant and you earn more.
Working as a contractor gives you the chance to negotiate your rates and hours directly with a participant.
It's more FLEXIBLE
You can work for someone you already know (not family members) or someone who lives nearby. The hours they need could vary and many agencies will have support worker minimum service times so you might be a better option for them.
Here are some examples of where MyCareSpace members have hired their own support workers who have their own ABN:
- Sue is able to hire her next-door neighbour, who is a good friend, to look after her son for just a couple of hours every afternoon between him finishing school and her getting home from work.
They don't need any disability certification if this is not important to you. Her son knows her neighbour well, and because they are next door, there is no travel issue for the short period she needs them. They are also flexible and she can call them up to stay on if she's running late.
- Tony hires the coaching assistant from their inclusive football club to take his son to footie matches on the weekends.
- Amy needs help in the morning to get showered and dressed. She pays her friend, who lives just down the road, to pop over for an hour in the early mornings to help her.
How to make sure you work as a contractor and not an employee
You need to look at the specific working arrangement you have with a single participant to determine whether that you are an employee or a contractor.
Why does this matter?
Because the legal, financial and tax obligations are different if you work as employee or a contractor.
A contractor (independent support worker) can typically:
- decide how the work will be done
- agree to the hours that make up the job
- be engaged for a specific task or time
- have their own insurance
- use their own tools and equipment
- pay their own tax and GST
- have an ABN and submits invoices
- don’t receive paid leave
Source: Dept of Fair Trading
The ATO website has a great tool that asks you a series of questions to determine whether you are engaging a worker as an employee or contractor for tax and superannuation purposes.
What do I need to start as an independent support worker, contractor or sole trader?
1. You need an ABN and Insurance
An independent contractor is a person who has an Australian Business Number (ABN) and is generally responsible for managing their own insurance, tax and superannuation.
You need to make sure you have:
- an ABN
- appropriate insurance - MyCareSpace has been working with insurers to provide insurances to disability support workers.
Find out more here.
If you are driving a participant's car, you will need to make sure you are listed as a nominated driver on your comprehensive motor vehicle insurance policy.
2. You need to invoice
Support workers who are contractors can charge per hour at a rate agreed upon by the participant. You will need to invoice them for your support hours.
An invoice should include:
- Description of service
- Number of hours at an agreed rate
- Total cost
Who do I send the Invoice to?
If the participant is self-managed, the invoice is sent directly to them.
If the participant is plan managed you will need to have the email address of the plan manager so you can send the invoice to them for payment.
3. What about a Police Check and Working with Children Check
You need both of these before working as a support worker (especially for a child).
Each state has their own police and service registry that processes these checks. Google it to find the website in your state that will process this.
4. A Service Agreement
Service agreements protect both you and your client by making sure that both parties agree on the terms of engagement. They cover elements like giving notice, cancellation and service expectations.
How can I apply for an ABN?
The ATO website has a quick and easy application process.
TIP: have your tax file number handy for quicker application as the ATO can identify you from that easily.