Determining Severe Financial Hardship - Drawings from an Unincorporated Business | Compensation and Support Policy Library, Part 3 Income Support Eligibility, 3.10 Financial Hardship, 3.10.5 Severe Financial Hardship

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Determining Severe Financial Hardship - Drawings from an Unincorporated Business

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What constitutes an unincorporated business

An unincorporated business is generally a partnership or pastoral company. A person is not in severe financial hardship if their unincorporated business drawings plus other income (exceeds the maximum pension or benefit payment.

Drawings from unincorporated business included in assessment

The severe financial hardship test includes a person's drawings from an unincorporated business. A person cannot be considered to be in severe financial hardship if their unincorporated business drawings plus other income exceeds the maximum pension payment.

Drawings from unincorporated business not sustainable

A person may be in severe financial hardship if substantial evidence shows:

  • that significant drawings are no longer sustainable, and
  • the liquid assets of the business are not significant.
Evidence required if drawings unsustainable

If a person claims that an unincorporated business is unable to sustain their drawings they must provide:

  • a full personal income tax return, and
  • a full business income tax return.

Substantial evidence may include:

  • a significant industry downturn, or
  • an environmental disaster such as:
  • bushfire,
  • flood, or
  • drought, or
  • a significant change in business operations.

A person is not considered to be in severe financial hardship if these returns show that the business can sustain the drawings.