This topic provides information on the following items that relate to partnerships only:

  •       assessable income for partnerships, and
  •       partnership salaries.
Assessable income for partnerships

Assessable income is the pensioner's share of the gross income of the partnership, less allowable deductions. If the partnership makes a loss, the loss cannot be offset against income from unrelated sources.

Partnership salaries

Any salary paid by a partnership to one or more of the partners, is an allowable business deduction for income test purposes. The following table describes how salary paid to a partner, who is a pensioner, is treated for the income tests.

If salary is paid to a pensioner...


and the partnership makes a profit

the salary is added to the pensioner's profits from the partnership to determine their business income.

and the partnership makes a net loss

the partner's share of the loss can be offset against any salary paid to them by the partnership.

For example, if the pensioner's salary is $6,000 and their share of the partnership loss is $3,500, then their assessable income is $2,500.