VEA ? [2]
This topic provides information on the following:
If a business runs at a loss, a nil amount is included in the income [3] tests. Only the pensioner's share of the net result from a partnership, trust or company [3] is assessed.
Business losses from the current year, or from previous years, are not allowed as deductions from other profits [3] or income derived from unrelated sources, such as:
Although the Taxation Office allows losses to be deducted from other income, this is not the case for income testing of pensions..
Losses within a partnership can be offset against the profits of other necessarily related activities if a pensioner is involved in:
Necessarily related means that if the activity which made a loss had not occurred, then the income from the other activity would:
If a pensioner has an interest in a partnership that consists of a farm operation and a quarrying operation.
The following table describes when the losses can and cannot be offset.
If the farm and quarry operation are carried out on... |
then the losses from the farm... |
the same site and the farm tractor is used on the farm and to transport material and equipment to and from the quarry site |
that relate specifically to the use of the farm tractor can be offset against the business income from the quarry operation. Even though the farm and quarry are two separate operations, they are necessarily related, as the income from the quarry would not have been generated without the use of the farm tractor. |
different sites and are run as unrelated businesses not using equipment in common |
cannot be offset against the quarry. They are separate operations which are not necessarily related. |
For the purposes of income and assets assessment, a sole trader is a business owned by one person.
The business:
The owner is:
For the purposes of income and assets assessment, a partnership is the relationship which exists between people carrying on business in common, with a view to making a profit. A partnership agreement may be oral OR written. The business may be run:
The business is not a separate legal entity, which means that although the partnership lodges a tax return, the profit or income is assessable in the hands of the individual partners.
Each partner:
According to section 5H of the VEA [6] income is:
Company has the same meaning as in the Income Tax Assessment Act 1997.
Profit, for a business, is the amount of earnings in excess of its expenses over 12 months.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16321%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16321#tgt-cspol_part10_ftn361
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[5] https://clik.dva.gov.au/book/export/html/16321#ref-cspol_part10_ftn361
[6] http://clik/health-procedure-library/health-information-and-management-notes-himn/vhc/072014-vhc-veterans-home-care